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EXHIBIT 10.1

COMMON STOCK PURCHASE AGREEMENT

 

This Common Stock Purchase Agreement (this “Agreement”) is dated as of March 30, 2015 by and between PayNovi Ltd., an Irish limited liability company (the “Company”), Anch Holdings Ltd., an Irish limited liability company (the “Seller”), and World Media & Technology Corp., a corporation organized and existing under the laws of Nevada (the “Purchaser”) and a majority owned subsidiary of World Assurance Group, Inc., a Nevada corporation (“Parent”).

 

PRELIMINARY STATEMENT

 

WHEREAS, the Seller is the sole shareholder of the Company who owns and/or controls in the aggregate 1,000 common shares of the Company, which represents 100% of the total issued and outstanding capital stock of the Company.

On the terms and subject to the conditions set forth in this Agreement, the Seller desires to sell to the Purchaser, and the Purchaser desires to purchase from the Seller, Three Hundred Fifty (350) shares of the Company’s Common Stock which represents thirty five percent (35%) of the Company’s total issued and outstanding shares as of the Closing Date (the “Company Shares”), for a Purchase Price consisting of One Million Three Hundred Sixty One Thousand (1,361,000) shares of the Purchaser’s common stock which represents five percent (5%) of the Purchaser’s total issued and outstanding shares as of the Closing Date (the “Purchaser Shares”), and Three Million Nine Hundred Thirty Seven Thousand and Five (3,937,005) shares of the Parent’s common stock which represents five percent (5%) of the Parent’s total issued and outstanding shares of the Closing Date (the “Parent Shares”) (the Purchaser Shares and the Parent Shares together shall mean the Purchase Price), as set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company, the Seller and the Purchaser, intending to be legally bound, agree as follows:

 

Section 1.              Definitions.

 

1.1          Definitions.  In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Action” means any action, arbitration, audit, examination, investigation, inquiry, proceeding, hearing, litigation, arbitration or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, and whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or arbitrator.

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act; provided that (a) the Company and its Subsidiaries will not be deemed an Affiliate of Purchaser or its Subsidiaries and (b) the Purchaser and its Subsidiaries will not be deemed an Affiliate of the Company or its Subsidiaries.

 

A Person will be deemed the “Beneficial Owner” of, to “Beneficially Own” or have “Beneficial Ownership” of any securities (and correlative terms will have correlative meanings):

 

(a)           which such Person or any of such Person’s Affiliates beneficially own, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Regulations 13D and 13G thereunder;

 

(b)           which such Person or any of such Person’s Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time or the fulfillment of a condition or both) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants, options or otherwise or (ii) the right to vote, alone or in concert with others, pursuant to any agreement, arrangement or understanding (whether or not in writing);

  

(c)           which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of the Company; or

 

(d)           which are the subject of, or the reference securities for or that underlie any derivative transaction entered into by such Person, or derivative security (including options) acquired by such Person, which gives such Person the economic equivalent of ownership of an amount of such securities due to the fact that the value of the derivative is directly or indirectly determined by reference to the price or value of such securities, without regard to whether (i) such derivative conveys any voting rights in such securities to such Person, (ii) the derivative is required to be, or capable of being, settled through delivery of such securities or (iii) such Person may have entered into other transactions that hedge the economic effect of such derivative.

 

In determining the number of shares deemed Beneficially Owned by virtue of the operation of clause (d) above, the subject Person will be deemed to Beneficially Own (without duplication) the number of shares that are synthetically owned pursuant to such derivative transactions or such derivative securities. The number of shares that are synthetically owned will be the notional or other number of shares in respect of such derivative transactions or securities that is specified in a filing by such Person or any of such Person’s Affiliates with the SEC or in the documentation evidencing such derivative transactions or securities, and in any case (or if no such number of shares is specified in any filing or documentation), as reasonably determined by the Board of Directors in good faith to be the number of shares that are synthetically owned pursuant to such derivative transactions or securities.

   

“Change of Control” means, with respect to a Person, directly or indirectly (a) a consolidation, merger or similar business combination involving such Person in which the holders of voting securities of such Person immediately prior thereto are not the holders of a majority in interest of the voting securities of the surviving Person in such transaction, (b) a sale, lease or conveyance of all or substantially all of the assets, or of 35% or more of the outstanding voting securities, of such Person in one transaction or a series of related transactions, (c) any Person or group becomes the Beneficial Owner of 35% or more of the outstanding voting securities of such Person, or (d) a majority of the seats on the board of directors of such Person cease to be occupied by Persons who either (i) are members of the board of such Person on the date hereof or (ii) are elected by, or nominated by, the board of such Person (or a committee thereof) for election to the board of such Person.

    

“Confidential Information” means all confidential or proprietary information and data of the Disclosing Party or its Affiliates, disclosed or otherwise made available to the Recipient or its Representatives in connection with this Agreement, whether disclosed before or after the date of this Agreement and whether disclosed electronically, orally or in writing or through other methods made available to the Recipient or its Representatives.  Notwithstanding the foregoing, for purposes of this Agreement, Confidential Information will not include any information which the Recipient demonstrates by clear and convincing evidence is (a) at the time of disclosure in the public domain or thereafter enters the public domain without any breach of this Agreement by the Recipient or any of its Representatives, (b) known by the Recipient before the time of disclosure, as shown by prior written or electronic records, other than as a result of a prior disclosure by the Disclosing Party or its Affiliates or the Disclosing Party’s Representatives, (c) obtained from a Third Party who is in lawful possession thereof and does not thereby breach an obligation of confidence to the Disclosing Party regarding such information, or (d) developed by or for the Recipient or its Representatives through their independent efforts without use of Confidential Information; provided that, in each of the foregoing clauses (a) through (d), such information will not be deemed to be within the foregoing exceptions merely because such information is embraced by more general knowledge that is publicly known or in the Recipient’s possession, and no combination of features will be deemed to be within the foregoing exceptions merely because individual features are publicly known or in the Recipient’s possession, unless the particular combination itself and its principle of operations are in the public domain or in the Recipient’s possession without the use of or access to Confidential Information.

 

 “Contract” means any legally binding bond, debenture, note, mortgage, indenture, guarantee, license, lease, purchase or sale order or other contract, commitment, agreement, instrument, obligation, arrangement, understanding, undertaking, permit, concession or franchise (each including all amendments thereto).

  

“Disclosing Party” means the party disclosing or making available Confidential Information (either directly or indirectly through such party’s Representatives) to the Recipient or the Recipient’s Representatives.

 

“Disclosure Schedule” means the Disclosure Schedule of the Company delivered concurrently with this Agreement.

 

“Encumbrance” means any lien (statutory or otherwise), charge, encumbrance, mortgage, pledge, hypothecation, security interest, deed of trust, option, preemptive right, right of first refusal or first offer, title defect or other adverse claim of any third party.

  

“Equity Securities” means (a) capital stock or other equity interests (including shares of Common Stock) of the Company and (b) options, warrants or other securities that are directly or indirectly convertible into, exchangeable for or exercisable for capital stock or other equity interests of the Company.

  

“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

 

“Excluded Securities” means any securities that are issued by the Company (a) pursuant to any employment contract, employee or benefit plan, stock purchase plan, stock ownership plan, stock option or equity compensation plan or other similar plan where stock is being issued or offered to a trust, other entity or otherwise, to or for the benefit of any employees, potential employees, officers or directors of the Company or any of its Subsidiaries or (b) as consideration in a business combination or other merger or acquisition transaction.

 

“Governmental Authority” means any (a) nation, region, state, county, city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign or other government, (c) governmental or quasi-governmental authority of any nature (including any governmental agency, commission, branch, department or other entity and any court, arbitrator or other tribunal), (d) multinational organization exercising judicial, legislative or regulatory power, (e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature of any federal, state, local, municipal, foreign or other government, or (f) regulatory or self-regulatory organization (including the Nasdaq Global Select Market and the Financial Industry Regulatory Authority).

  

“Intellectual Property” means all (a) patents, patent applications, and invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof, (b) trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, design rights, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing, (c) copyrights and copyrightable subject matter, (d) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing, (e) trade secrets and all other confidential or proprietary information, ideas, know-how, inventions, processes, formulae, models, and methodologies, (f) rights of publicity, privacy, and rights to personal information, (g) moral rights and rights of attribution and integrity, and (h) all applications and registrations, and any renewals, extensions and reversions, for the foregoing.

 

“knowledge” means, with respect to the Company, the actual knowledge of the executive officers of the Company listed on Section 1.2 of the Disclosure Schedule after reasonable inquiry within the scope of their respective functional responsibilities.

 

“Laws” means any foreign, federal, state and local laws, statutes, ordinances, rules, regulations, orders, judgments, injunctions and decrees.

  

“Material Adverse Effect” means any event, change, circumstance, condition, state of facts, effect or other matter, individually or collectively with one or more other events, changes, circumstances, conditions, state of facts, effects or other matters, that have had, or reasonably would be expected to have, a material adverse effect on (a) the business, assets, liabilities, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company to consummate timely the transactions contemplated by the Transaction Documents; provided that, solely in the case of clause (a), none of the following events, changes, circumstances, conditions, state of facts, effects or other matters, either alone or in combination, will constitute, or be considered in determining whether there has been, a Material Adverse Effect: (i) any outbreak or escalation of war or major hostilities or any act of terrorism, (ii) changes in laws, rules, regulations, GAAP or the interpretation thereof, (iii) changes that generally affect the industry in which the Company and its Subsidiaries operate, (iv) changes in financial markets, general economic conditions (including prevailing interest rates, exchange rates, commodity prices and fuel costs) or political conditions, (v) changes in the trading price or trading volume of the Common Stock (it being understood that the facts and circumstances underlying any such changes that are not otherwise expressly excluded in (i) through (viii) herein from the definition of a “Material Adverse Effect” may be considered in determining whether there has been a Material Adverse Effect), (vi) failure by the Company to meet any published or internally prepared projections, budgets, plans or forecasts of revenues, earnings or other financial performance measures or operating statistics (it being understood that the facts and circumstances underlying any such failure that are not otherwise expressly excluded in (i) through (viii) herein from the definition of a “Material Adverse Effect” may be considered in determining whether there has been a Material Adverse Effect), in the case of each of (i) through (vi), solely to the extent arising after the date of this Agreement, (vii) any action taken by the Company or its Subsidiaries to the extent expressly required by this Agreement, (viii) the execution or delivery of this Agreement, the consummation of the transactions contemplated by this Agreement or the public announcement with respect to any of the foregoing (it being understood that for purposes of Sections 3.3 and 4.2, effects resulting from or arising in connection with the matters set forth in (vii) and (viii) of this definition will not be excluded in determining whether a Material Adverse Effect has occurred or reasonably would be expected to occur), or (ix) as set forth on Section  1.3 of the Disclosure Schedule, except, solely in the case of clauses (i) through (iv), to the extent those events, changes, circumstances, conditions, states of facts, effects or other matters, have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, as compared to other companies operating in the industry in which the Company and its Subsidiaries operate.

  

“Organizational Documents” means, with respect to any entity, the certificate or articles of incorporation and bylaws of such entity, or any similar organizational documents of such entity.

 

“Person” means an individual or firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Recipient” means the party receiving or otherwise having access to the Confidential Information (either directly or indirectly through such party’s Representatives) from the Disclosing Party or the Disclosing Party’s Representatives.

  

“Representatives” means, as to any Person, its Affiliates and its and their respective directors, officers, employees, agents, attorneys, accountants and financial advisors.

   

“SEC” means the United States Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.

 

 “Subsidiary” means, with respect to a specified Person, any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the specified Person or one or more of its Subsidiaries.  When used in this Agreement without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.

  

“Third Party” means any Person other than the Company, Purchaser or their respective Affiliates.

 

“Transaction Documents” means this Agreement, all exhibits and schedules to this Agreement, and any other documents, certificates or agreements executed in connection with the transactions contemplated by this Agreement.

  

1.3          Construction.  Any reference in this Agreement to a “Section,” “Exhibit” or “Schedule” refers to the corresponding Section, Exhibit or Schedule of or to this Agreement, unless the context indicates otherwise.  The table of contents and the headings of Sections are provided for convenience only and are not intended to affect the construction or interpretation of this Agreement.  All words used in this Agreement are to be construed to be of such gender or number as the circumstances require.  The words “including,” “includes” or “include” are to be read as listing non-exclusive examples of the matters referred to, whether or not words such as “without limitation” or “but not limited to” are used in each instance.  

  

Where this Agreement states that a party “shall,” “will” or “must” perform in some manner or otherwise act or omit to act, it means that the party is legally obligated to do so in accordance with this Agreement.  Any reference to a statute is deemed also to refer to any amendments or successor legislation as in effect at the relevant time.  Any reference to a contract or other document as of a given date means the contract or other document as amended, supplemented and modified from time to time through such date.  Any words (including capitalized terms defined herein) in the singular will be held to include the plural and vice versa and words (including capitalized terms defined herein) of one gender will be held to include the other gender as the context requires.  The terms “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.  All references to any period of days will be deemed to be to the relevant number of calendar days unless otherwise specified.  All references herein to “$” or dollars will refer to United States dollars, unless otherwise specified.

 

Section 2.              Purchase and Sale.

 

2.1          Purchase and Sale of Shares.  The Seller hereby agrees to sell to the Purchaser, and the Purchaser, in reliance on the representations and warranties contained herein, and subject to the terms and conditions of this Agreement, agrees to purchase from the Seller the Company Shares for a total purchase price of 1,361,000 shares of the Purchaser’s common stock which represents five percent (5%) of the Purchaser’s total issued and outstanding shares as of the Closing Date (the “Purchaser Shares”), and 3,937,005 shares of the Parent’s common stock which represents five percent (5%) of the Parent’s total issued and outstanding shares of the Closing Date (the “Parent Shares”) (the Purchaser Shares and the Parent Shares together shall mean, the “Purchase Price”).

 

2.2          Closing and Closing Date. The closing of the purchase, sale and transfer of the Company Shares in exchange for the Purchaser Shares and the Parent Shares (the “Closing”) will take place at the offices of Purchaser, at 10:00 a.m., local time, as soon as practicable but in any event not later than March 31, 2015 and the date on which the last of the conditions set forth in Section 7 has been satisfied or waived (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other time and place as the Company and the Purchaser may agree in writing. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date.”

 

2.3          Closing Deliveries.

 

(a)           At the Closing, the Seller will deliver or cause to be delivered to the Purchaser the following:

 

(i)            a certificate executed by a duly authorized officer of the Seller certifying (A) that the conditions set forth in Sections 7.1(a) and 7.1(b) have been satisfied and (B) the number of Company Shares calculated in accordance with this Agreement; and

 

(ii)           a certificate of the Company Shares duly endorsed for transfer or with executed stock powers medallion guaranteed attached to be released and delivered to Purchaser, evidencing the Company Shares registered in the name of the Purchaser.

 

(b)           At the Closing, the Purchaser will deliver or cause to be delivered to the Company the following:

 

(i)            a certificate executed by a duly authorized officer of the Purchaser and  the Parent certifying that the conditions set forth in Sections 7.2(a) and 7.2(b) have been satisfied; and

  

(ii)          a certificate evidencing the Purchaser Shares registered in the name of the Seller and a certificate evidencing the Parent Shares registered in the name of the Seller.

 

Section 3.              Representations and Warranties of the Company.  The Company and the Seller represent and warrant to the Purchaser and the Parent that, as of the date of this Agreement and as of the Closing:

 

3.1          Organization and Qualification.  The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own, lease, operate and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any of its Subsidiaries is in violation nor default of any of the provisions of its respective Organizational Documents.  The Company and each of its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to have a Material Adverse Effect, and no Action has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.  Complete and accurate copies of the Company’s Organizational Documents, each as in effect as of the date of this Agreement, have previously been made available to the Purchaser.

 

3.2          Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into the Transaction Documents and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of the Company and no stockholder approval or other proceedings on the part of the Company are necessary to authorize the Transaction Documents or to consummate the transactions contemplated hereby and thereby.  Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other Laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable Law.

 

3.3          No Conflicts.  The execution, delivery and performance by the Company of the Transaction Documents, the issuance and sale of the Company Shares and the consummation by the Company of the transactions contemplated hereby and thereby to which it is a party do not and will not (a) conflict with or violate any provision of the Organizational Documents of the Company or its Subsidiaries, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of the Company or its Subsidiaries pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, indenture or other instrument to which the Company or any of its Subsidiaries is a party or by which any property or asset of the Company or any of its Subsidiaries is bound or affected or (c) subject to obtaining the Required Approvals, conflict with or result in a violation, in any material respect, of any permit, license, Law or other restriction of any Governmental Authority to which the Company or any of its Subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of clause (b), for matters that would not, individually or in the aggregate, have a Material Adverse Effect.

  

3.4                               Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any Governmental Authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction 

Documents and the consummation of the transactions contemplated hereunder or thereunder, other than such filings as are required to be made under applicable country of incorporation, federal and state securities laws (collectively, the “Required Approvals”).

 

3.5                               Title to the Company Shares.  The Seller is the record holder and beneficially owns 100% of the capital stock of the Company, free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the Company Shares to Purchaser.  No person has any preemptive rights or rights of first refusal with respect to any of the Company Shares.  There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the Company Shares.  Other than disclosed by the Seller to the Purchaser, there are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the Company Shares.  The Seller has full power to transfer and deliver the Company Shares to the Purchaser in accordance with the terms of this Agreement.  The delivery to the Purchaser of certificates evidencing the transfer of the Company Shares pursuant to the provisions of this Agreement will transfer to the Purchaser good and marketable title thereto, free and clear of all liens, encumbrances, restrictions and claims of any kind.

 

3.6                               Capitalization.

 

(a)                                 As of March 30, 2015, the authorized capital stock of the Company consists of (a) 100,000 shares of  Common Stock, of which 1,000 shares were issued and outstanding. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable. There are no stockholders agreements, voting trusts, voting agreements or other similar agreements or understandings with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.  Except as contemplated under this Agreement, no Person has any outstanding commitments, rights of first offer or refusal, anti-dilution rights, preemptive rights, rights of participation or any similar right to participate in the transactions contemplated by the Transaction Documents.  There are no outstanding subscriptions, options, warrants, scrip rights to subscribe to, calls, phantom stock rights, rights of first offer or refusal, rights to require redemption or repurchase, preemptive rights, anti-dilution rights, registration rights, rights of participation, or commitments, or understandings of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any, Equity Securities or other securities of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional Equity Securities or other securities of the Company or its Subsidiaries. The issuance and sale of the Company Shares will not obligate the Company to issue Equity Securities or other securities of the Company or its Subsidiaries to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.

  

(b)                                 Section 3.6(b) of the Disclosure Schedule includes a list of all of the Subsidiaries of the Company.  All the outstanding shares of capital stock of, or other equity interests in, each such Subsidiary have been validly issued and are fully paid and non-assessable and are, except as set forth in Section 3.6(b) of the Disclosure Schedule, owned directly or indirectly by the Company, free and clear of all Encumbrances. Except as set forth in Section 3.6(b) of the Disclosure Schedule, neither the Company nor any of its Subsidiaries directly or indirectly owns any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for, any corporation, partnership, joint venture or other business association or entity, that is or would reasonably be expected to be material to the Company and its Subsidiaries taken as a whole.

 

(c)                                  The Company has no outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

 

3.7                               Financial Statements.  The Company has, at the date of execution of this Agreement, and will have at the Closing Date, certain management accounts as set forth in Disclosure Schedule 3.7, including monthly revenues, gross margins and net income (the “Management Accounts”).  The accounts receivable set forth in the 

Management Accounts, and all accounts receivable arising since the date of the Management Accounts, represent bona fide claims of the Company against debtors for sales, services performed or other charges arising on or before the date hereof, and all the goods delivered and services performed which gave rise to said accounts were delivered or performed in accordance with the applicable orders, contracts or customer requirements.

 

3.8                              Litigation.  There is not, and there has not been, any Action pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries or any of their respective properties, assets, officers or directors before or by any Governmental Authority which (a) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance or sale of the Shares, or (b) has had or would, if there were an unfavorable decision, reasonably be expected to have, a Material Adverse Effect, or  has resulted or would reasonably be expected to result in criminal liability with respect to the Company, any of its Subsidiaries or any of its or their directors or officers, nor is there, nor has there been, any judgment, order or decree outstanding against the Company or any of its Subsidiaries or any of their respective properties, assets, officers or directors that, individually or in the aggregate, has had or, if adversely resolved, would reasonably be expected to have, any of the effects described in clauses (a) or (b) above.

  

3.9                        Intellectual Property.

 

(a)                                 Section 3.9(a) of the Disclosure Schedule sets forth a complete and accurate list of all material U.S. and foreign applications and registrations (including issued patents) for any Intellectual Property owned by the Company and its Subsidiaries. The Company or one of its Subsidiaries is the sole and exclusive owner of each such application and registration, and the foregoing applications and registrations are in effect and subsisting and, to the knowledge of the Company, valid.

 

(b)                                 The Company and its Subsidiaries own, or have a valid right to use, all material items of Intellectual Property used or held for use in, or necessary to conduct, their respective businesses (i) as conducted as of the date of this Agreement and (ii) to the Company’s knowledge, with respect to material products as to which the Company has announced an intention to launch.  All material items of Intellectual Property owned by the Company are owned free and clear of Encumbrances.    To the Company’s knowledge, no Person is infringing, diluting, misappropriating or otherwise violating any Intellectual Property owned by the Company or its Subsidiaries, and no such claims are pending or threatened against any Person by the Company or its Subsidiaries.

  

3.10                        No Undisclosed Liabilities.  Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, known or unknown, whether due or to become due and whether or not required to be recorded or reflected on a balance sheet, except (a) to the extent accrued or reserved against in the Financial Statements of the Company and its Subsidiaries attached hererto, (b) for liabilities and obligations incurred in the ordinary course of business consistent with past practice, (c) for liabilities and obligations incurred in connection with or expressly contemplated by this Agreement and (d) for liabilities that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

  

3.11                        Compliance with Law.

 

(a)                                 Except for matters that, individually or in the aggregate, (A) have not and would not reasonably be expected to have a Material Adverse Effect or (B) has not resulted and would not reasonably be expected to result in criminal liability with respect to the Company, any of its Subsidiaries or any of its or their directors or officers, (i) the Company and its Subsidiaries are, and have been, in compliance with all applicable Laws and Company permits, (ii) the Company and its Subsidiaries hold all permits necessary for the lawful conduct of their business and the ownership and operation of their assets and properties as conducted as of the date of this Agreement and (iii) no Action, demand, inquiry or investigation has occurred or been pending or threatened in writing, alleging that the Company or any of its Subsidiaries is not in compliance with any applicable Law or permit.

 

(b)                                 (i) the Company and its Subsidiaries and, to the knowledge of the Company, its Affiliates, directors, officers and employees have complied in all material respects with the U.S. Foreign Corrupt Practices Act of 1977 and any other applicable foreign or domestic anticorruption or antibribery Laws (collectively, the “Fraud and Bribery Laws”), and (ii) neither the Company, nor any of its Subsidiaries or Affiliates, or its or their directors, officers or employees, nor, to the knowledge of the Company, any of its or their agents or other representatives 

acting on their behalf have directly or indirectly, in each case, taken action in violation of the Fraud and Bribery Laws.

 

3.12                        Contracts. (a) Each Material Contract is a valid, binding and legally enforceable obligation of the Company or one of the Company’s Subsidiaries, as the case may be, and, to the knowledge of the Company, of the other parties thereto, except, in each case, as enforcement may be limited by bankruptcy, insolvency, reorganization or similar Laws affecting creditors’ rights generally and by general principles of equity, (b) each such Material Contract is in full force and effect, and (c) none of the Company or any of its Subsidiaries is (with or without notice or lapse of time, or both) in material breach or default under any such Material Contract and, to the knowledge of the Company, no other party to any such Material Contract is (with or without notice or lapse of time, or both) in material breach or default thereunder.  None of the Company or its Subsidiaries is party to any Contract that would, after giving effect to the transactions contemplated by this Agreement (other than the potential transactions contemplated by Section 2.7 of the Commercial Agreement), restrict in any respect (including by way of exclusivity obligation) the ability of Purchaser or its Affiliates to compete in any business or with any Person or in any geographical area.

 

3.13                        Brokers and Finders.  No brokerage or finder’s fees or commissions are or will be payable by the Company or the seller to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

3.14

Own Account.  The Seller is acquiring the Purchaser Shares and the Parent Shares (for purposes of Sections 3.14 – 3.18 only, the “Shares”) as principal for its own account for investment only and not with a view to or for distributing or reselling the Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Shares and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of any of the Shares.

3.15

Seller Status.  At the time the Seller was offered the Shares, it was, and as of the date of this Agreement it is, and as of the Closing Date it will be, an “accredited investor” as defined in Regulation D, Rule 501(a), promulgated under the Securities Act, or (ii) not a U.S. Person as defined in Rule 902 of Regulation S promulgated under the Securities Act and as set forth in Exhibit 2 - Investor Suitability Questionnaire attached hereto and made a part hereof.

3.16

Experience of the Seller.  The Seller has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  The Seller has had the opportunity to review the SEC Reports and to ask questions of, and receive answers from, the officers of the Purchaser and the Parent concerning the Purchaser, the Parent and the Shares.  The Seller understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of the Seller’s investment.  The Seller understands that the market price of the Common Stock has been volatile and that no representation is being made as to the future value of the Common Stock.  The Seller is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment.

3.17

Restricted Securities.  The Seller understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities laws and that the Purchaser and the Parent is relying upon the truth and accuracy of, and the Seller’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Seller set forth herein in order to determine the availability of such exemptions and the eligibility of the Seller to acquire the Shares.  The Seller understands that, until such time as a Registration Statement has been declared effective or the Shares may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the certificates evidencing the Shares will bear a restrictive legend in substantially the following form:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION 

FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. THE TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A COMMON STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE PURCHASER OF SUCH SECURITIES.  THE COMPANY AND ITS TRANSFER AGENT WILL NOT BE OBLIGATED TO RECOGNIZE OR GIVE EFFECT TO ANY TRANSFER MADE IN VIOLATION OF SUCH RESTRICTIONS. A COPY OF SUCH RESTRICTIONS MAY BE OBTAINED FROM THE COMPANY UPON WRITTEN REQUEST.”

 

The Seller understands that no federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

3.18

Certain Transactions.  Since the initial date the Seller was contacted by or on behalf of the Purchaser and Parent regarding the offering of the Shares by the Purchaser and the Parent, neither the Seller nor any of its Affiliates, nor any “group” of Persons (as such term is used in and construed under Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of which it or any of its Affiliates is a member, has established or increased, directly or indirectly, a put equivalent position, as defined in Rule 16(a)-1(h) under the Exchange Act, with respect to the Purchaser’s  or the Parent’s equity securities.  Immediately prior to the entry into this Agreement, the Seller is not the Beneficial Owner of and does not have the right to acquire any Equity Securities

  

3.19                        No Other Representations and Warranties.  The representations and warranties set forth in this Section 3 are the only representations and warranties made by the Company and the Seller with respect to the Shares or any other matter relating to the transactions contemplated by this Agreement. The Company and the Seller each acknowledges that except as set forth in Section 4, neither the Purchaser nor any director, officer, employee, agent or Representative of the Purchaser makes any representation or warranty, either express or implied, concerning the transactions contemplated by this Agreement.

 

Section 4.                                           Representations and Warranties of the Purchaser and the Parent.  The Purchaser and the Parent, severally, represent and warrant to the Company and the Seller that, as of the date of this Agreement and as of the Closing:

 

4.1                               Organization; Authority.  The Purchaser and the Parent are each a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Purchaser.  Each Transaction Document to which it is a party has been (or upon delivery will be) duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof and thereof, will constitute the legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (a) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (c) insofar as indemnification and contribution provisions may be limited by applicable law.

 

4.2                               No Conflicts.  The execution, delivery and performance by the Purchaser of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not (a) conflict with or violate any provision of the Purchaser’s certificate or articles of incorporation, bylaws or other organizational documents, (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of the Purchaser pursuant to, or give to others any rights of termination, amendment, 

acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, indenture or other instrument to which the Purchaser or any of its Subsidiaries is a party or by which any property or asset of the Purchaser is bound or affected, or (c) subject to obtaining the Required Approvals, conflict with or result in a violation of any Law or other restriction of any Governmental Authority to which the Purchaser or any of its Subsidiaries is subject (including federal and state securities laws and regulations), or by which any property or asset of the Purchaser or any of its Subsidiaries is bound or affected; except in the case of each of clauses (b) and (c), such as could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Purchaser or (iii) a material adverse effect on the Purchaser’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

  

4.3                               Own Account.  The Purchaser is acquiring the Company Shares as principal for its own account for investment only and not with a view to or for distributing or reselling the Company Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Company Shares and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of any of the Company Shares .

 

4.4                               Purchaser Status.  At the time the Purchaser was offered the Company Shares, it was, and as of the date of this Agreement it is, and as of the Closing Date it will be, an “accredited investor” as defined in Regulation D, Rule 501(a), promulgated under the Securities Act, or (ii) not a U.S. Person as defined in Rule 902 of Regulation S promulgated under the Securities Act and as set forth in Exhibit 2 - Investor Suitability Questionnaire attached hereto and made a part hereof.

 

4.5                               Experience of the Purchaser.  The Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment.  The Purchaser has had the opportunity to review the Financial Statements of the Company and to ask questions of, and receive answers from, the officers of the Company concerning the Company and the Shares.  The Purchaser understands that its investment in the Shares involves a significant degree of risk, including a risk of total loss of the Purchaser’s investment.  The Purchaser is able to bear the economic risk of an investment in the Shares and is able to afford a complete loss of such investment.

 

4.6                              Restricted Securities.  The Purchaser understands that the Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of the Securities Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Shares.  The Purchaser understands that, until such time as a Registration Statement has been declared effective or the Shares may be sold pursuant to Rule 144 under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the certificates evidencing the Shares will bear a restrictive legend in substantially the following form:

  

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  THE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. THE TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A COMMON STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND THE PURCHASER OF SUCH SECURITIES.  THE COMPANY AND ITS TRANSFER AGENT WILL NOT BE OBLIGATED TO RECOGNIZE OR GIVE EFFECT TO ANY TRANSFER MADE IN VIOLATION OF SUCH 

RESTRICTIONS. A COPY OF SUCH RESTRICTIONS MAY BE OBTAINED FROM THE COMPANY UPON WRITTEN REQUEST.”

 

The Purchaser understands that no federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Company Shares or the fairness or suitability of the investment in the Company Shares nor have such authorities passed upon or endorsed the merits of the offering of the Company Shares.

 

4.8                               Certain Transactions.  Since the initial date the Purchaser was contacted by or on behalf of the Company regarding the offering of the Company Shares by the Company, neither the Purchaser or any of its Affiliates, nor any “group” of Persons (as such term is used in and construed under Sections 13(d)(3) and 14(d)(2) of the Exchange Act) of which it or any of its Affiliates is a member, has established or increased, directly or indirectly, a put equivalent position, as defined in Rule 16(a)-1(h) under the Exchange Act, with respect to the Company’s equity securities.  Immediately prior to the entry into this Agreement, the Purchaser is not the Beneficial Owner of and does not have the right to acquire any Equity Securities.

4.9

Issuance of the Parent Shares; Exemption from Registration.  The Parent Shares are duly authorized and, when issued and paid for in accordance with this Agreement will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Company, the issuance of the Parent Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, is exempt from registration under the Securities Act and otherwise issued in compliance with all Laws

4.10

Issuance of the Purchaser Shares; Exemption from Registration.  The Purchaser Shares are duly authorized and, when issued and paid for in accordance with this Agreement will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Company, the issuance of the Purchaser Shares in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, is exempt from registration under the Securities Act and otherwise issued in compliance with all Laws

4.11                               Brokers and Finders.  No brokerage or finder’s fees or commissions are or will be payable by the Purchaser or Parent to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

 

4.12                        No Other Representations and Warranties.  The representations and warranties set forth in this Section 4 are the only representations and warranties made by the Purchaser and Parent with respect to the transactions contemplated by this Agreement.  The Purchaser and Parent each acknowledges that, except as set forth in Section 3, neither the Company, the Seller nor any director, officer, employee, agent or Representative of the Company makes any representation or warranty, either express or implied, concerning the Shares or the transactions contemplated by this Agreement.

 

Section 5.                                           Covenants of the Parties.

 

5.1                               Public Disclosure. Neither the Company, the Seller nor the Purchaser nor Parent will, nor permit any of their respective Affiliates or Representatives to, issue any press release or make any other public announcement or disclosure relating to this Agreement without the prior written approval of the other party (such consent not to be unreasonably withheld, conditioned or delayed), unless required by applicable Law or securities listing standards (upon advice of counsel to the disclosing party) in which case to the extent practicable and permitted by applicable Law, the party will  provide the other party with an opportunity to review such press release or other announcement prior to issuance, distribution or publication.

  

5.2                               Confidentiality.

 

(a) 

The Recipient agrees to receive all Confidential Information in strict confidence and to use the Confidential Information for the sole purpose of performing its obligations under this Agreement in accordance with this Agreement and not to use the Confidential Information for any other purpose.  Without limiting the foregoing, 

the Recipient agrees to protect the Confidential Information against disclosure to Third Parties, using the same standard of care that the Recipient applies to protect its own most highly confidential information (which in no event will be less than a reasonable standard of care).  The Recipient agrees not to disclose the Confidential Information to any Person other than: (i) its Representatives who are directly concerned, working on, advising on or consulted in connection with the Recipient’s obligations hereunder and whose knowledge of the Confidential Information is reasonably considered to be necessary for such purposes, or (ii) as required by applicable Law or an order by a Governmental Authority or any requirements of stock market or exchange or other regulatory body having competent jurisdiction; provided, except where not permitted by Law, the Recipient will give the Disclosing Party reasonable advance notice of such required disclosure, and will reasonably cooperate with the Disclosing Party, in order to allow the Disclosing Party an opportunity to oppose, or limit the disclosure of the Confidential Information or otherwise secure confidential treatment of the Confidential Information required to be disclosed; provided further, that if disclosure is ultimately required, the Recipient will furnish only that portion of the Confidential Information which, based upon advice of legal counsel, the Recipient is required to disclose in compliance with any such requirement.  Recipient will ensure that Recipient’s Representatives are informed of the confidentiality provisions of this Agreement and are obligated to use and hold in confidence the Confidential Information in a manner consistent with the obligations of the Recipient under this Agreement prior to Recipient’s Representatives receiving any access to the Disclosing Party’s Confidential Information.  The Recipient hereby assumes full responsibility and liability to the Disclosing Party for any breach of this Agreement and any unauthorized use or disclosure of Confidential Information by any of Recipient’s Representatives.

 

(b)                                 Upon termination of this Agreement, the Recipient will, within 30 days after receipt of written notice from the Disclosing Party, at the election of the Recipient, return or destroy, or cause to be returned or destroyed (as applicable), all Confidential Information of the Disclosing Party provided to the Recipient or its Representatives hereunder and all copies thereof, as well as all copies of all documents made by the Recipient’s Representatives containing or based upon Confidential Information (which, for avoidance of doubt, constitute Confidential Information for purposes of this Agreement).  

  

If the Recipient elects that the Confidential Information be destroyed, then upon such destruction the Recipient will provide a certificate of destruction certifying compliance with this Section 5.2(d) to the Disclosing Party within 30 days after receipt of the original notice from the Disclosing Party requesting the destruction of Confidential Information.  For clarity, in the case of compilations or reports containing the Disclosing Party’s Confidential Information, only that part containing said Confidential Information will be destroyed or returned.  Notwithstanding anything to the contrary in this Section 5.2(d), the Recipient will not be required to return or destroy copies of Confidential Information solely to the extent (i) the Recipient is required by applicable Law to retain such Confidential Information, (ii) such Confidential Information is stored in automated electronic backup systems of the Recipient or its Affiliates (provided that no use or disclosure in violation of this Section 5.2 will be made of such Confidential Information retained or stored pursuant to clauses (i) or (ii) at any time), or (iii) such Confidential Information is reasonably necessary to enable the Recipient to enforce its rights or remedies, or otherwise comply with its obligations, hereunder (and then solely for such purpose and provided that no other use or disclosure in violation of this Section 5.2 will be made of such retained Confidential Information). Notwithstanding anything to the contrary herein, Recipient shall be permitted to disclose Confidential Information to actual or prospective lenders, acquirers, merger counterparties or investors in equity (including any of their respective advisors) to the extent reasonably required in connection with their respective evaluation of an actual or potential financing, acquisition, merger or investment transaction involving the Recipient or its Affiliates, subject to such Persons being bound by reasonably appropriate obligations of confidentiality (it being agreed that Recipient assumes full responsibility and liability to the Disclosing Party for any breach of this Section 5.2 and any unauthorized use or disclosure of Confidential Information by such Persons).

 

5.3                               Consents and Filings.

 

(a)                                 The parties will use their respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate and make effective in the most expeditious manner possible the transactions contemplated by this Agreement, including (i) the preparation and filing of all forms, registrations and notices required to be filed to consummate such transactions, (ii) taking all actions necessary to obtain (and cooperating with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Authority and 

(iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement. 

 

(b)                                 In furtherance of the foregoing, the parties to this Agreement will cooperate with each other in connection with the making of all such filings and use reasonable best efforts to (i) furnish all information required for any application or other filing to be made pursuant to any applicable Law in connection with the transactions contemplated by this Agreement, (ii) keep the other party informed in all material respects of any material communication received by such party from, or given by such party to, any Governmental Authority and of any material communication received or given in connection with any proceeding by a private party, in each case relating to the transactions contemplated by this Agreement, (iii) consult with the other party prior to taking a position, and permit the other parties to review and discuss in advance, and consider in good faith the views of the other in connection with any analyses, appearances, presentations, memoranda, briefs, white papers, arguments, opinions and proposals before making or submitting any of the foregoing to any Governmental Authority by or on behalf of either party in connection with any investigations or proceedings related solely to this Agreement or the transactions contemplated by this Agreement or given in connection with any proceeding by a private party and (iv) consult with the other party in advance of any meeting or conference with, any Governmental Authority relating to the transactions contemplated by this Agreement or in connection with any proceeding by a private party relating thereto, and give the other party the opportunity to attend and participate in such meetings and conferences (unless prohibited by such Governmental Authority).  

  

Notwithstanding the foregoing, the Company and the Purchaser may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other under this Section 5.3(b) as “Counsel Only Material.” Such materials and the information contained therein will be given only to the outside counsel of the recipient and will not be disclosed by outside counsel to employees, officers, directors or consultants of the recipient or any of its Affiliates unless express permission is obtained in advance from the source of the materials (the Company or the Purchaser, as the case may be) or its legal counsel. Each of the Company and the Purchaser will cause its respective outside counsels to comply with this Section 5.3(b). Notwithstanding anything to the contrary in this Section 5.3(b) materials provided to the other party or its counsel may be redacted to remove references concerning the valuation of the Company, privileged communications and competitively sensitive information.

  

5.4                               Information Rights.

 

(a)                                 From and after the date hereof and for so long after the Closing as the Purchaser holds any Company Shares, the Company will provide the Purchaser upon its request with (a) copies of all reports, schedules, forms, statements and other documents required to be filed with or furnished to the SEC, (b) other publicly available financial and news information produced by the Company, (c) such information concerning the Company and its Subsidiaries as the Purchaser may reasonably request (in a manner so as to not unreasonably interfere in any material respect with the normal business operations of the Company and without requiring the Company to incur any material cost not reimbursed by the Purchaser).  In addition, upon the request of the Purchaser from time to time, the Company will cause members of its senior management to meet with members of the senior management of the Purchaser (in person or by conference telephone as agreed by the parties) to provide the Purchaser with a presentation regarding developments relating to the Company’s business and to respond to questions from the Purchaser.  No investigation conducted, however, will affect or be deemed to modify any representation or warranty made in this Agreement.  Notwithstanding any other provision of this Agreement, neither the delivery of any notice or information pursuant to this Agreement, nor any information known or available to any party or inquiry conducted prior to or after the date of this Agreement, will limit or otherwise affect the remedies available to such party.

 

(b)                                 All information requested by Purchaser and provided by or on behalf of the Company under this Section 5.4 will be subject to the provisions of Section 5.2. Nothing contained in this Section 5.4 will require the Company to take any action that would, after consultation with counsel, constitute a waiver of the attorney-client or similar privilege or violate confidentiality obligations owing to third parties; provided that if any information is withheld by the Company or any of its Subsidiaries pursuant to the foregoing, the Company will (i) inform the Purchaser as to the general nature of what is being withheld and (ii) use its reasonable best efforts to (A) accommodate any request from the Purchaser for information pursuant to this Section 5.4 in a manner that does 

not result in such a waiver or violation or (B) obtain the required consent of such third party to provide such access or disclosure.

  

5.5

Conduct of Business by the Company. The Company agrees that, from the date of this Agreement until the Closing, neither the Company nor any of its Subsidiaries will, except as set forth in the Disclosure Schedule or as specifically contemplated in this Agreement, directly or indirectly:

 

(a)           amend or otherwise change its Organizational Documents in a manner adverse to the Purchaser;

 

(b)           issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, license, pledge, disposition, grant or encumbrance of, (i) any shares of any class of share capital or other ownership interest of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any such shares or any other ownership interest (including any phantom interest), of the Company or any of its Subsidiaries (other than (A) the issuance of shares of Common Stock upon the exercise or vesting of Equity Securities outstanding as of the date of this Agreement issued pursuant to the Equity Compensation Plans and (B) the grant of securities pursuant to employee or director stock award or incentive compensation or similar plans, or in connection with employment offers in the ordinary course, in all cases under this clause (B), in an aggregate amount not to exceed 1.0% of the issued and outstanding Equity Securities) or (ii) any material assets of the Company or any of its Subsidiaries;

  

(c)           take any action to adopt or implement a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization, other than any such actions taken with respect to the Subsidiaries of the Company in the ordinary course of business;

 

(d)           declare, set aside, make or pay any dividend or other distribution, payable in cash, securities, property or otherwise, or dividends by wholly-owned Subsidiaries of the Company to the Company or to other wholly-owned Subsidiaries;

 

(e)           reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;

 

(f)            knowingly take any actions or omit to take any actions that would or would reasonably be expected to (i) result in any of the conditions set forth in Section 7 not being satisfied, (ii) result in new or additional required approvals from any Governmental Authority that would reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by the Transaction Documents or (iii) materially impair, interfere with, hinder or delay the ability of the Company or the Purchaser to consummate the transactions contemplated by the Transaction Documents; or

 

(g)           enter into any agreement or otherwise make a commitment to do any of the foregoing.

 

Nothing contained in this Agreement will give the Purchaser, directly or indirectly, rights to control or direct the Company’s or its Subsidiaries’ operations.

 

5.6          Indemnification. Subject to Section 9.5, from and after the Closing, the Company will defend, protect, indemnify and hold harmless the Purchaser and each of the Affiliates of the Purchaser, and its and their respective directors, officers, employees, representatives and agents (the “Indemnitees”), to the fullest extent lawful from and against any and all Actions, causes of action, suits, claims, losses (including losses from the diminution of value of any securities issued to Purchaser pursuant to the Transaction Documents), costs, penalties, fees, judgments, amounts paid in settlement, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of or relating to (a) any inaccuracy in or misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents (other than in the Commercial Agreement, which matters are addressed therein) (in each case, without giving effect to any “materiality” or “Material Adverse Effect” qualifications) or (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents (other than in the Commercial Agreement, which matters are 

addressed therein). Notwithstanding the foregoing, except in the case of fraud, the Company will have no duty to indemnify the Indemnitees for Indemnified Liabilities (i) unless and until the aggregate Indemnified Liabilities for which it would otherwise be liable under this Agreement exceed an amount equal to 1% of the Purchase Price paid by the Purchaser for the Shares (at which point the Company will be liable only for Indemnified Liabilities in excess of such amount) or (ii) in the aggregate in excess of the Purchase Price paid by the Purchaser for the Shares.

 

Section 6

Intentionally Omitted.

 

Section 7.              Closing Conditions.

 

7.1          Conditions to the Obligation of the Purchaser. The obligation of the Purchaser to complete the transactions contemplated by this Agreement is subject to the satisfaction of, or compliance with, on or before the Closing Date, each of the following conditions (any of which may be waived by the Purchaser, in whole or in part):

 

(a)           the representations and warranties of the Company in Section 3 that are qualified by “materiality” or “Material Adverse Effect” must be true and correct in all respects and the representations and warranties of the Company in Section 3 that are not so qualified must be true and correct in all material respects (provided that the representations and warranties of the Company in Section 3.6 must be true and correct in all but de minimis respects), in each case, as of the date of this Agreement and as of the Closing (except to the extent any such representation or warranty speaks as of the date of this Agreement or any other specific date, in which case such representation or warranty must have been so true and correct as of such date);

(b)           all of the covenants and agreements the Company is required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

(c)

  there must not be in effect any federal, state, local, municipal, foreign, international, multinational or other law, statute, rule, regulation, ordinance or code or any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority that would prohibit or make illegal the consummation of the transactions contemplated by this Agreement or cause the transactions contemplated by this Agreement to be rescinded following consummation; and

 

(d)           since the date of this Agreement, no Material Adverse Effect shall have occurred.

  

7.2          Conditions to the Obligation of the Company.  The obligation of the Company to complete the transactions contemplated by this Agreement is subject to the satisfaction of, or compliance with, on or before the Closing Date, each of the following conditions (any of which may be waived by the Company, in whole or in part):

 

(a)           the representations and warranties of the Purchaser and the Parent in Section 4 that are qualified by “materiality” or “material adverse effect” must be true and correct in all respects and the representations and warranties of the Purchaser and Parent in Section 4 that are not so qualified must be true and correct in all material respects, in each case, as of the date of this Agreement and as of the Closing (except to the extent any such representation or warranty speaks as of the date of this Agreement or any other specific date, in which case such representation or warranty must have been so true and correct as of such date);

 

(b)           all of the covenants and agreements the Purchaser and Parent are required to perform or comply with under this Agreement on or before the Closing Date must have been duly performed and complied with in all material respects;

 

(c)

 there must not be in effect any federal, state, local, municipal, foreign, international, multinational or other law, statute, rule, regulation, ordinance or code or any order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Authority that would prohibit or make illegal the consummation of the transactions contemplated by this Agreement or cause the transactions contemplated by this Agreement to be rescinded following consummation.

 

Section 8.

Intentionally Omitted.

Section 9.              Miscellaneous.

 

9.1          Fees and Expenses. Whether or not the transactions contemplated by this Agreement are consummated, each party will pay its own direct and indirect expenses incurred by it in connection with the preparation and negotiation of this Agreement and the consummation of the transactions contemplated by this Agreement, including all fees and expenses of its advisors and representatives.

 

9.2          Notices.  All notices, requests, consents and other communications under this Agreement to any party must be in writing and are deemed duly delivered when (a) delivered if delivered personally or by nationally recognized overnight courier service (costs prepaid), (b) sent by facsimile with confirmation of transmission by the transmitting equipment (or, the first Business Day following such transmission if the date of transmission is not a Business Day) or (c) received or rejected by the addressee, if sent by United States of America certified or registered mail, return receipt requested; in each case to the following addresses or facsimile numbers and marked to the attention of the individual (by name or title) designated below (or to such other address, facsimile number or individual as a party may designate by notice to the other parties):

 

				
	If to the Company:

	PayNovi Ltd.

	 

	 

	 

	Address: 13 Classon House

Dundrum, Dublin 14

Ireland

	 

	Facsimile:

	 

	 

	Attention:

	Sean McVeigh

	 

	 

	 

	If to the Seller:

	Anch Holdings Ltd.

	 

	 

	 

	Address: 13 Classon House

Dundrum, Dublin 14

Ireland

	 

	Facsimile:

	 

	 

	Attention:

	Sean McVeigh

	 

	 

	If to the Purchaser:

	World Media & Technology Corp.

	 

	600 Brickell Ave., Suite 1775

	 

	Miami, Florida 33131

	 

	Facsimile:

	 

	 

	Attention:

	Fabio Galdi, CEO

	 

	 

	With a copy (which will

	World Assurance Group, Inc.

	not constitute notice) to:

	375 Park Ave., Suite 2607

	 

	New York, NY 10152

	 

	Facsimile:

	 

	 

	Attention:

	Chief Financial Officer

	 

	 

	 
	 
	 
	 

 

9.3          Entire Agreement.  The Transaction Documents and the Confidentiality Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

  

9.4          Amendments and Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement will be 

deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor will any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

9.5          Survival.  All representations and warranties contained in this Agreement will survive the Closing until the 18-month anniversary of the Closing Date; provided that the representations and warranties set forth in (and any claim arising from an inaccuracy or breach of) Section 3.1 (Organization and Qualification), Section 3.2 (Authorization; Enforcement), Section 3.5 (Issuance of the Shares; Exemption from Registration), Section 3.6 (Capitalization), Section 3.17 (Brokers and Finders), Section 4.1 (Organization; Authority) and Section 4.9 (Brokers and  Finders) will survive the Closing indefinitely. The right of any party to assert a claim for indemnification relating to the breach of any covenant or agreement contained in this Agreement to the extent required to be performed or complied with prior to the Closing Date will survive the Closing until the 18-month anniversary of the Closing Date.  All covenants contained in this Agreement required to be performed or complied with in whole or in part after the Closing Date will survive the Closing until the expiration of the applicable statute of limitations or for such shorter period specified in this Agreement. All claims for indemnification under this Agreement must be asserted pursuant to a written claim notice given prior to the expiration of the applicable survival period set forth in this Section 9.5; provided that any representation, warranty, covenant or agreement that is the subject of a claim for indemnification which is asserted pursuant to a written claim notice given after the Closing Date within the survival periods specified in this Section 9.5 will survive until, but only for purposes of, the resolution of such claim.

 

9.6          Successors and Assigns.  This Agreement will be binding upon the parties and their respective successors and assigns and will inure to the benefit of the parties and their respective successors and permitted assigns.  The Company may not assign or delegate this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser.  The Purchaser may not assign or delegate this Agreement or any rights or obligations hereunder without the prior written consent of the Company; provided that the Purchaser may assign and delegate any of its rights and obligations under this Agreement to an Affiliate of the Purchaser if such Affiliate agrees in writing to be bound by the terms of this Agreement. None of the rights granted to the Purchaser pursuant to this Agreement or any of the other Transaction Documents may be exercised by any Person, other than the Purchaser or any Affiliate of the Purchaser to which such rights are assigned in accordance with this Section 9.6 (so long as such assignee continues to be an Affiliate of the Purchaser); provided that the Purchaser may assign its rights under Section 6 to any Person that acquires Securities from the Purchaser (other than in a public offering or a sale pursuant to Rule 144) in compliance with the provisions of this Agreement representing more than 1% of the Company’s then outstanding Common Stock if such Person agrees in writing to be bound by the terms of this Agreement (in which case, the Purchaser will have no  liability or obligation with respect to the obligations of the assignee hereunder). Subject to the foregoing, the Purchaser will remain primarily liable for the performance of all obligations of the Purchaser under the Transaction Documents notwithstanding any assignment pursuant to this Section 9.6.

 

9.7          No Third-Party Beneficiaries. Except for the Indemnitees under Section 5.9, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

  

9.8          Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein will remain in full force and effect and will in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

9.9          Remedies.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed by any party in accordance with their specific terms or were otherwise breached by such party.  The parties accordingly agree that, in addition to any other remedy to which the parties are entitled at law or in equity, each party is entitled to injunctive relief to prevent breaches of this Agreement by the other party and otherwise to enforce specifically the provisions of this Agreement against the other party. Each party expressly waives any requirement that the other party obtain any bond or provide any 

indemnity in connection with any action seeking injunctive relief or specific enforcement of the provisions of this Agreement.

 

9.10        Business Days.  If the last or appointed day for the taking of any action or the expiration of any right required or granted in this Agreement or any other Transaction Document is not a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

9.11        Construction.  The parties agree that each of them and their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of the Transaction Documents or any amendments hereto.

 

9.12        Governing Law and Venue.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents will be governed by and construed and enforced in accordance with the internal procedural and substantive laws of the State of Florida, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the construction, validity, enforcement and interpretation of this Agreement or any other Transaction Document (whether brought against a party to this Agreement or its respective Affiliates, directors, officers, stockholders, employees or agents) will be solely and exclusively subject to the jurisdiction (a) in the United States District Court for the State of Florida and (b) in a state court of the State of Florida located in the County of Miami. Each party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the foregoing courts for the adjudication of any dispute arising in connection with this Agreement or any other Transaction Document and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service will constitute good and sufficient service of process and notice thereof.  Nothing contained herein will be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

9.13        WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY.

  

9.14        Counterparts and Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

9.15        Further Assurances.  At any time or from time to time after the Closing, the parties agree to cooperate with each other, and at the request of the other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated by this Agreement and to otherwise carry out the intent of the parties hereunder or thereunder.

 

(Signature Page Follows)

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized signatories as of the date first indicated above.

 

			
	PAYNOVI LTD.

	 

	 

	 

	 

	 

	By:

	/s/ Sean McVeigh

	 

	Name:

	Sean McVeigh

	 

	Title:

	President

	 

	 

	 

	ANCH HOLDINGS LTD.

	 

	 

	 

	 

	 

	By:

	/s/ Sean McVeigh

	 

	Name:

	Sean McVeigh

	 

	Title:

	President

	 

	

WORLD MEDIA & TECHNOLOGY CORP.

	 

	 

	 

	 

	 

	By:

	/s/ Fabio Galdi

	 

	Name:

	Fabio Galdi

	 

	Title:

	Chief Executive Officer

	 

 

			
	WORLD ASSURANCE GROUP, INC.

	 

	 

	 

	 

	 

	By:

	/s/ Alfonso Galdi

	 

	Name:

	Alfonso Galdi

	 

	Title:

	Chief Financial OfficerJM2015EmpAgr

AMENDED AND RESTATED 
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) by and between Alexandria Real Estate Equities, Inc., a Maryland corporation (“Corporation”) and Joel S. Marcus, an individual (“Officer”), is effective as of January 1, 2015 (the “Effective Date”).
RECITAL
WHEREAS, Officer has been employed by Corporation as its Chairman and Chief Executive Officer, most recently pursuant to an Amended and Restated Executive Employment Agreement effective as of January 1, 2014 (the “Prior Agreement”); and
WHEREAS, Corporation desires to continue to employ Officer as its Chairman and Chief Executive Officer, and Officer is willing to continue to accept such employment by Corporation, on the terms and subject to the conditions set forth in this Amended and Restated Executive Employment Agreement, which replaces in its entirety the Prior Agreement as of and following the Effective Date.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree to amend and restate this Agreement as follows:
1.Position and Duties; Location.
During the Term (as defined below), Officer and Corporation agree that Officer shall be employed by and serve Corporation as its full-time Chairman and Chief Executive Officer; provided that, effective April 1, 2018, Officer shall cease to hold the position of Chief Executive Officer and instead shall be employed as full-time Executive Chairman through December 31, 2018 or such later date as may be mutually agreed (the period during which Officer serves as Executive Chairman, the “Executive Chairman Period”).  In addition, Officer agrees to serve in such capacities for Corporation’s subsidiaries, and in such additional capacities consistent with Officer’s position as a senior executive officer as set forth above, as may be determined by the Board of Directors of Corporation (the “Board”).  Officer shall devote such of his business time, energy, and skill to the affairs of Corporation and its subsidiaries as shall be necessary to perform the duties of such positions.  Notwithstanding the foregoing, subject to any written policies of Corporation, nothing in this Agreement shall preclude Officer from (i) engaging in charitable and community affairs and not-for-profit activities, so long as they are consistent with his duties and responsibilities under this Agreement; (ii) managing his family and other personal investments; (iii) serving on the boards of directors of non-profit companies; and (iv) serving on the boards of directors of other for-profit companies; provided, however, that, prior to accepting a position hereafter on any such for-profit board of directors, Officer shall obtain the approval of the Board (or, if applicable, the appropriate committee thereof), which shall not be unreasonably withheld.  In his position as Chief Executive Officer or as Executive Chairman, Officer shall only report to and be responsible directly to the lead independent director and to the Board and at all times during the Term shall have powers and 

duties at least commensurate with his positions, including, without limitation, while serving as Chief Executive Officer, the right to hire or terminate any subordinate officers and any employees without the approval or consent of the Board or any other officer of Corporation; provided, however, that Officer shall consult with the Board before exercising his right, while serving as Chief Executive Officer, to hire or terminate the Chief Financial Officer, Chief Operating Officer, and President of Corporation; and provided, further, that Officer and Corporation acknowledge that nothing in this Agreement modifies the authority of the Compensation Committee of the Board (the “Compensation Committee”) to establish the aggregate compensation levels of executive officers who are officers for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.  Officer shall be based at the principal executive offices of Corporation in the Los Angeles, California metropolitan area, except for reasonable required travel on Corporation’s business.
2.    Term of Employment.
The Term of this Agreement (the “Term”) shall be for a period commencing on the Effective Date and ending on December 31, 2018 or a mutually agreed upon later date (the “Termination Date”), unless terminated earlier pursuant to this Agreement (the “Early Termination Date,” and, as the context so requires, a “Termination Date”).  The parties agree that, at the request of either, they shall, during the calendar quarter at the end of which the Term would otherwise expire, negotiate in good faith the extension of this Agreement, or the implementation of a new agreement, relating to Officer’s provision thereafter of full-time services as Executive Chairman.
3.    Compensation, Benefits and Reimbursement.
3.1.    Base Salary.  During the Term, Officer shall be entitled to the following base salary:
(a)    Minimum Base Salary.  During the Term and subject to the terms and conditions set forth herein, Corporation agrees to pay to Officer an annual “Base Salary” of $895,000, or such higher amount as may from time to time be determined by Corporation.  Unless otherwise agreed in writing by Officer and Corporation, the salary shall be payable in substantially equal semi-monthly installments in accordance with the standard policies of Corporation in existence from time to time.
(b)    Earned Base Salary.  For purposes of any early termination of this Agreement as provided in Section 4, the term “Earned Base Salary” shall mean all semi-monthly installments of the Base Salary which have become due and payable to Officer, together with any partial monthly installment prorated on a daily basis up to and including the applicable Termination Date.
3.2.    Increases in Base Salary.  Officer’s Base Salary shall be reviewed by the Compensation Committee no less frequently than on each January 10 occurring during the Term.  The Base Salary payable to Officer may be increased on each such anniversary date (and such other times as the Compensation Committee may deem appropriate during the Term) to an amount determined by the Compensation Committee.  Any increase in Base Salary or other compensation shall in no way limit or reduce any other obligations of Corporation hereunder and, once established 

2

at an increased specified rate, Officer’s Base Salary shall not be reduced unless Officer otherwise agrees in writing.
3.3.    Cash Bonus.  Officer shall be eligible to receive a cash bonus (each, a “Cash Bonus”) for each fiscal year of Corporation (or portion thereof) during the Term, with a threshold amount equal to 75% of Base Salary, a target amount equal to 150% of Base Salary, and a maximum amount equal to 225% of Base Salary.  Determination and payment of any Cash Bonus with respect to the 2014, 2015, 2016 and 2017 performance years (payable in 2015, 2016, 2017 and 2018, respectively) will be based upon the achievement of personal and corporate goals determined by the Compensation Committee in accordance with Exhibit A.  Notwithstanding the preceding sentence, Officer’s Cash Bonus in respect of calendar year 2018 and thereafter (including the portion of calendar year 2018 which precedes the commencement of the Executive Chairman Period) shall be determined in accordance with Section 3.4(i).
3.4.    Additional Benefits.  During the Term, Officer shall be entitled to the following additional benefits:
(a)    Officer Benefits.  Officer shall be eligible to participate in such of Corporation’s benefit and deferred compensation plans as are made available to executive officers of Corporation, including, without limitation, Corporation’s stock incentive and other equity-based compensation plans, annual incentive compensation plans, profit sharing/pension plans, deferred compensation plans, annual physical examinations, dental plans, vision plans, sick pay, medical plans, personal catastrophe and accidental death insurance plans, financial planning, automobile arrangements, retirement plans and supplementary executive retirement plans, if any.  For purposes of establishing the length of service under any benefit plans or programs of Corporation, Officer’s employment with Corporation shall be deemed to have commenced on January 5, 1994.
(b)    Vacation.  Officer shall be entitled to accrue a minimum of six weeks of paid vacation during each year during the Term and any extensions thereof, prorated for partial years.  Any accrued vacation not taken during any year may be carried forward to subsequent years; provided that Officer may not accrue more than 12 weeks of unused vacation at any time.  Unused vacation in excess of Officer’s allowable accrued vacation under the foregoing proviso shall be promptly paid to Officer at the end of each year in a cash amount equal to (i) the number of weeks of excess vacation time, multiplied by (ii) weekly Base Salary.
(c)    Life Insurance.  During the Term, Corporation shall, at its sole cost and expense, procure and keep in effect term life insurance (a minimum five-year term certain policy) on the life of Officer, payable to such beneficiaries as Officer may from time to time designate, in the aggregate amount of $5,000,000.  Such policy shall be owned by Officer or by a member of his immediate family.  Corporation shall have no incidents of ownership therein.
(d)    Disability Insurance.  During the Term, Corporation shall, at its sole cost and expense, procure and keep in effect long-term disability and short-term disability coverage (the “Disability Policy”) similar to Officer’s current disability insurance policy on Officer (or, if better, any subsequent policy), payable to Officer in an annual amount not less than 60% of Officer’s then existing Base Salary, Cash Bonus and other cash compensation, subject to such limitations as may 

3

be applicable under California law and under standard insurance underwriters requirements.  The premiums for the foregoing coverage shall be included in Officer’s gross income.
(e)    Long-Term Care Insurance.  During the Term, Corporation shall, at its sole cost and expense, procure and keep in effect an executive/premium long-term care policy with a reputable carrier, such policy to provide benefits for Officer and his spouse that include (for each of them), at minimum, (i) a $300 daily benefit, 100% of which  can be used for home health coverage, nursing home assistance and other adult daytime care, (ii) a five-year maximum benefit period, (iii) a 90-day elimination period, and (iv) a 3% inflation factor.
(f)    Reimbursement for Expenses.  During the Term, Corporation shall reimburse Officer for all reasonable out-of-pocket business and entertainment expenses incurred by Officer for the purpose of and in connection with the performance of his services pursuant to this Agreement.  Officer shall be entitled to such reimbursement upon the presentation by Officer to Corporation of vouchers or other statements itemizing such expenses in reasonable detail consistent with Corporation’s policies.  In addition, Officer shall be entitled to reimbursement for (i) dues and membership fees in professional organizations and industry associations in which Officer is currently a member or becomes a member; (ii) appropriate industry seminars and mandatory continuing education and (iii) membership in a health club or other health-related activity of Officer’s choosing up to a maximum annual fee of $24,000.  The amount of expenses eligible for reimbursement pursuant to this Section 3.4(f) during a calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year.  Without extending the time of payment that would apply in the absence of this sentence, Corporation shall reimburse Officer for any expense eligible for reimbursement pursuant to this Section 3.4(f) on or before the end of the calendar year following the calendar year in which the expense was incurred.  Corporation shall pay Officer for all reasonable attorney’s fees, disbursements and costs incurred by Officer in connection with the negotiation, preparation and execution of this Agreement, within 15 days following presentation of invoices which have been paid.
(g)    Withholding.  Compensation and benefits paid to Officer under this Agreement shall be subject to applicable federal, state and local wage deductions and other deductions required by law.
(h)    Certain Equity-Related Provisions.
(i)    Long-Term Incentive Grant.  With respect to each fiscal year of Corporation during the Term which ends prior to the commencement of the Executive Chairman Period, Officer shall be eligible to receive an annual long-term incentive compensation award in the form of restricted stock (an “LTI Grant”) pursuant to Corporation’s Amended and Restated 1997 Stock Award and Incentive Plan or any other long-term incentive plan(s) in effect from time to time, subject to the terms and conditions thereof to the extent not inconsistent with this Agreement, which grant shall be made annually no later than 10 days following the end of the Corporation’s fiscal year to which the LTI Grant relates (i.e., each January 10); provided that the LTI Grant with respect to 2014 (i.e., with respect to 2014 performance) shall be made as soon as reasonably practicable after the execution hereof  (but not later than June 30, 2015) and shall be based on the closing price 

4

of Corporation’s stock on the last trading day immediately prior to January 10, 2015.  For the avoidance of doubt, the LTI Grant with respect to 2015 shall be made in 2016 but no later than January 10, 2016; and the LTI Grant with respect to 2016 shall be made in 2017 but no later than January 10, 2017; and the LTI Grant with respect to 2017 shall be made in 2018 but no later than January 10, 2018.  Officer’s target LTI Grant with respect to each such fiscal year shall be for that number of shares of Corporation’s common stock obtained by dividing $5,500,000 by the closing price of such stock on the last trading day immediately prior to January 10 of the year following the year in respect of which such grant is made.  50% of the shares subject to the target LTI Grant (the “Time-Based Stock”) shall vest 1/36th each month over the 36-month period following the date of grant based solely on Officer’s continued service.  The remaining 50% of the shares subject to the target LTI Grant (the “Target Performance-Based Stock”) shall be increased by 56.4%, such that the number of shares granted shall be 156.4% of the Target Performance-Based Stock (the “Maximum Performance-Based Stock”), and all or a portion of such Maximum Performance-Based Stock shall vest on the date (each, a “Performance-Based Stock Vesting Date”) that is not later than 30 days following the end of the third fiscal year following the fiscal year with respect to which the grant of such Maximum Performance-Based Stock is made, based on the determination and written certification of the Compensation Committee as of the Performance Stock Vesting Date of the extent to which the corporate performance criteria set forth in Exhibit B hereto, which is hereby incorporated herein by reference, are met.  The corporate performance criteria (i.e., 3- year cumulative FFO/share growth and TSR) applicable to determining the vesting of the Maximum Performance-Based Stock granted with respect to 2013 were determined by the Compensation Committee in accordance with the guidelines set forth in Exhibit B, and the corporate performance criteria (i.e., 3-year cumulative FFO/share growth and TSR) applicable to determining the vesting of the Maximum Performance-Based Stock with respect to 2014, 2015, 2016 and 2017 shall be determined by the Compensation Committee in accordance with Exhibit B.  The number of shares of Maximum Performance-Based Stock in which Officer may become vested shall be determined based on the corporate performance criteria set forth in Exhibit B, but in no event may such number of shares exceed 156.4% of the number of shares of Target Performance-Based Stock.  
(ii)    Service Requirement.  Except as otherwise provided in Sections 3.4(h)(iii) and 4.3 hereof, vesting of the Time-Based Stock and the Maximum Performance-Based Stock shall be subject to Officer’s continued employment with Corporation on the applicable vesting date; and provided, further, that so long as Officer is employed by Corporation on the December 31 immediately prior to the applicable Performance-Based Stock Vesting Date, the portion of the Maximum Performance-Based Stock award that is scheduled by its terms to vest on such Performance-Based Stock Vesting Date shall not be subject to forfeiture as a result of any termination on or after such December 31 and shall be eligible to vest based on the Compensation Committee’s determination and certification as described in Section 3.4(h)(i).  
(iii)    Dividends; Vesting.  Officer shall receive the full cash dividends attributable to all nonforfeited shares of restricted stock (or units), regardless of whether 

5

such shares (or units) have become vested on or before the record date for such dividends on the shares (or, as applicable, the underlying shares).  Upon a Change in Control (as defined below):
(1)    Any and all equity or equity-based compensation granted prior to the Effective Date (including, without limitation, restricted stock and stock options), the vesting of which depends only upon the passage of time, shall vest.
(2)    Any and all awards of equity or equity-based compensation granted prior to the Effective Date (including, without limitation, restricted stock and stock options), the vesting of which depends upon the satisfaction of performance criteria, shall vest in an amount equal to (A) the amount of the award that would have been earned if the target level of performance had been achieved, multiplied by (B) a fraction (x) the numerator of which is the number of days during the performance period on which Officer was employed as of the date of the Change in Control and (y) the denominator of which is the number of days in the performance period.
(3)    Each award of equity or equity-based compensation granted on or following the Effective Date (including, without limitation, restricted stock and stock options), the vesting of which depends upon the satisfaction of performance criteria, including without limitation each outstanding award of Maximum Performance-Based Stock (each a “Pre-CIC Performance Award”), shall either be converted into an “Alternative Performance Award” (as defined in this clause (3)) or, if not so converted, treated in accordance with the immediately following clause (4); for this purpose, an “Alternative Performance Award” shall mean an award (i) in respect of stock which is actively traded on an established U.S. securities market, (ii) which vests on the applicable regularly scheduled vesting date or dates (without regard to performance) of the Pre-CIC Performance Award, or an earlier vesting date or dates, subject only to continued service through such date or dates other than as provided in this Agreement, (iii) which provides Officer with rights, terms and conditions substantially equivalent to or better than those of the Pre-CIC Performance Award, and (iv) which is economic equivalent of the Pre-CIC Performance Award as of the consummation of the Change in Control.
For purposes of clause (iv) of the preceding sentence, an Alternative Performance Award shall be the “economic equivalent” of a Pre-CIC Performance Award if it is subject to a number of shares of stock equal to the “Pre-CIC Performance Award Shares” multiplied by the “Conversion Ratio.”

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The Pre-CIC Performance Award Shares means a number of Company shares equal to the greater of (X) the target number of Company shares subject to the Pre-CIC Performance Award and (Y) that number of Company shares determined by applying to the terms of the Pre-CIC Performance Award immediately prior to the Change in Control (I) actual performance through the consummation of the Change in Control, in respect of a Pre-CIC Performance Award based on performance of the Company relative to that of a group or index (e.g., the Company’s total shareholder return ranking within that of the FTSE NAREIT Equity Office Index at the consummation of the Change in Control, in respect of an award of Maximum Performance-Based Stock), and (II) performance through the consummation of the Change in Control extrapolated through the entire applicable performance period, in respect of a Pre-CIC Performance Award based on absolute Company performance through the performance period (e.g., cumulative growth in the Company’s FFO/share  through the applicable three-year performance period in respect of an award of Maximum Performance-Based Stock).  By way of example of clause (II) of the preceding sentence, if a Change in Control occurs after exactly one-third of the performance period in respect of an award of Maximum Performance-Based Stock has elapsed, and the cumulative growth in the Company’s FFO/share through that portion of the performance period is five percent (5%), then the number of Company shares determined in accordance with such clause (II) shall be based on the attainment of cumulative FFO/share growth of fifteen percent (15%).
The Conversion Ratio means the sum of (A) with respect to that portion of the consideration paid to holders of Company common stock in the Change in Control transaction in the form of acquirer common stock, if any, the ratio as is used to determine the number of such shares of acquirer common stock paid to Company shareholders in respect of one share of Company common stock, plus (B) with respect to that portion of the consideration paid to holders of Company common stock in the Change in Control transaction in the form of cash, if any, the amount of cash paid per share of Company common stock divided by the opening price of acquirer common stock on the primary exchange on which it is traded on the trading day immediately following the Change in Control.  By way of example, if holders of Company common stock are paid in a Change in Control transaction, for each such share, .5 shares of acquirer common stock and $75 in cash, and if the opening price of acquirer common stock on the primary exchange on which it is traded on the trading day immediately following the Change in Control is $100, the Conversion Ratio is 1.25, computed as (A) .5, plus (B) $75/$100, or .75.
(4)    Each Pre-CIC Performance Award which is not converted into an Alternative Performance Award shall vest in an amount equal to the 

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number of Company shares equal to the pre-CIC Performance Award Shares.
(5)    Each award of equity or equity-based compensation granted on or following the Effective Date (including, without limitation, restricted stock and stock options), the vesting of which depends only upon the passage of time (each, a “Pre-CIC Service Award”), shall either be converted into an “Alternative Service Award” (as defined in this clause (5)) or, if not so converted, shall vest; for this purpose, an “Alternative Service Award” shall mean an award (i) in respect of stock which is traded on an established U.S. securities market, (ii) which vests on the applicable regularly scheduled vesting date or dates of the Pre-CIC Service Award, or an earlier vesting date or dates, subject only to continued service through such date or dates other than as provided in this Agreement, (iii) which provides Officer with rights, terms and conditions substantially equivalent to or better than those of the Pre-CIC Service Award, and (iv) which is economic equivalent of the Pre-CIC Service Award as of the consummation of the Change in Control.
For purposes of clause (iv) of the preceding sentence, an Alternative Service Award shall be the “economic equivalent” of a Pre-CIC Service Award if it is subject to a number of shares of acquirer stock equal to the number of shares to which the Pre-CIC Service Award is subject, multiplied by the Conversion Ratio.
(6)    Any and all options granted prior to the Effective Date shall be exercisable for their full terms without regard to the termination of Officer’s employment.
(7)    Any award which vests pursuant to the above upon a Change in Control shall vest in a manner which allows the shares subject to such award to participate in the Change in Control transaction on the same basis as shares of Company common stock generally.
Upon Officer’s termination of service on or after Officer’s attainment of age 72, unless such termination is for Cause, (i) all of Officer’s outstanding and unvested equity or equity-based compensation awards (including, without limitation, restricted stock and stock options), the vesting of which depends only upon the passage of time, shall fully and immediately vest; (ii) all of Officer’s outstanding and unvested equity or equity-based compensation awards (including, without limitation, restricted stock and stock options), the vesting of which otherwise depends upon the satisfaction of corporate performance criteria, shall fully and immediately vest if and when the applicable corporate or other performance goals are ultimately satisfied; and (iii) any and all outstanding options shall remain exercisable for their full terms without regard to the termination.  In addition, without limiting the generality of any other provision of this Section 3.4, Officer shall be eligible during the Term to participate in any other equity or 

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equity-based compensation plans of general applicability of Corporation on bases that are no less favorable than those applicable to other senior executives of Corporation.
(iv)    Pre-2013 Grants.  Equity and equity-based grants with respect to performance years before 2013 shall be governed by Section 3.4(g)(i) and (ii) of the version of this Agreement as in effect as of April 26, 2012, except that Section 3 of Exhibit C thereto shall, effective as of January 1, 2014, be of no future force or effect.
(i)    Compensation During the Executive Chairman Period.  Notwithstanding the above, during the Executive Chairman Period, Officer’s compensation shall be determined by the Compensation Committee, but (A) in no event shall the rate of compensation for the first year of the Executive Chairman Period be less than the sum of (x) Base Salary in effect immediately prior to the commencement of the Executive Chairman Period and (y) the amount of the Cash Bonus payable at target level of performance for the fiscal year ending immediately prior to the commencement of the Executive Chairman Period (and, for the avoidance of doubt and consistent with the last sentence of Section 3.3, Officer shall be entitled to a Cash Bonus pursuant to this clause (y) in respect of all of calendar year 2018, without pro-ration), and (B) awards of restricted stock and other equity and non-equity awards shall be made to Officer at the reasonable discretion of the Board or the Compensation Committee, based upon the performance of Officer and Corporation over the periods or applicable portions thereof.
4.    Termination of this Agreement; Change in Control.
4.1.    Termination by Corporation Defined.
(a)    Termination Without Cause.  Subject to the provisions set forth in Section 4.3, “Termination Without Cause” shall constitute any termination of Officer’s employment by Corporation other than termination for Cause (as defined below).
(b)    Termination for Cause.  Subject to the provisions set forth in Section 4.3, prior to the Termination Date, Corporation shall have the right to terminate this Agreement for Cause 30 days after written notice has been delivered to Officer, which notice shall specify the specific facts relating to and reason for, and the effective date of, such termination (which date shall be the applicable Early Termination Date).  For purposes of this Agreement, “Cause” shall mean the following:
(i)    Officer’s use of alcohol or narcotics which proximately results in the willful material breach or habitual willful neglect of Officer’s duties under this Agreement;
(ii)    Officer’s criminal conviction of fraud, embezzlement, misappropriation of assets, or any felony, but in no event traffic or similar violations; or
(iii)    Officer’s willful Material Breach (as defined below) of this Agreement, if such willful Material Breach is not cured by Officer within 30 days after Corporation’s written notice thereof specifying the nature of such willful Material Breach.  For purposes of this Section 4.1(b), the term willful “Material Breach” (A) shall mean the 

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substantial and continual willful nonperformance of Officer’s material duties under this Agreement resulting from Officer’s gross negligence or willful misconduct which the Board reasonably determines has resulted in material injury to Corporation and (B) notwithstanding anything in this Section 4.1(b) to the contrary, the term willful “Material Breach” shall include Officer’s  material and continual willful violation of any specific and proper material resolution passed by the Board (or a committee thereof) consistent with this Agreement.
Notwithstanding the foregoing, Cause shall in no event be deemed to exist except (i) as to any event or condition allegedly constituting Cause, as to which notice is given not more than 30 days following the date that such event or condition first becomes known to the Board, and (ii) upon a finding reflected in a resolution of the Board approved by at least two-thirds of the members of the Board, excluding Officer (whose finding shall not be binding upon or entitled to any deference by any court, arbitrator or other decision-maker ruling on this Agreement), at a meeting of which Officer shall have been given proper notice and at which Officer (and Officer’s counsel) shall have a reasonable opportunity to present Officer’s case.
For purposes of this Section 4.1(b), no act or omission or other conduct shall be considered “willful” if Officer believed in good faith that such act or omission or conduct was in or not opposed to the best interests of Corporation.
(c)    Termination by Reason of Death or Disability.  Subject to the provisions set forth in Section 4.3, prior to the Termination Date, Corporation shall have the right to terminate this Agreement by reason of Officer’s death or Permanent Disability.  For purposes of this benefit, “Permanent Disability” shall mean any physical or mental disability which causes Officer to be unable to perform all of Officer’s material duties as an employee of Corporation for 180 consecutive business days.  Notwithstanding the foregoing, if Corporation asserts that Officer has a Permanent Disability; (i) Corporation shall give Officer at least 15 business days’ advance written notice thereof; (ii) Officer shall have the right within 10 business days after such notice to dispute Corporation’s assertion; (iii) within 10 business days after exercising such right Officer shall submit to a physical examination by a physician affiliated with any major metropolitan hospital and selected by Officer; provided, however, that, prior to such physical examination, Officer shall obtain the approval of the Board (or if applicable, its designated committee) with respect to the selection of such physician, which approval shall not be unreasonably withheld; and (iv) if such physician shall issue his written statement to the effect that in his opinion, based on his diagnosis, Officer is capable of resuming his employment and devoting his full time and energy to discharging his duties within 10 business days after the date of such statement, Corporation shall not have the right to terminate Officer under this Section 4.1(c) without further dispute.
4.2.    Termination by Officer Defined.
(a)    Termination Other than for Good Reason.  Subject to the provisions set forth in Section 4.3, Officer shall have the right to terminate this Agreement for any reason other than for Good Reason (as defined below), at any time prior to the Termination Date, upon written notice delivered to Corporation 30 days prior to the effective date of termination specified in such notice (which date shall be the applicable Early Termination Date).

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(b)    Termination for Good Reason.  Subject to the provisions of Section 4.3, Officer shall have the right to terminate this Agreement prior to the Termination Date in the event of Good Reason.  For the purposes of this Agreement, “Good Reason” shall mean, without Officer’s express written consent, the occurrence of any of the following circumstances, and in the case of clauses (i), (iii), (v), (vi), (vii), (viii) and (ix) of this Section 4.2(b), failure of Corporation to cure such circumstances within 30 days after written notice thereof specifying the nature of such circumstances has been delivered to Corporation (it being agreed that, if Corporation effects a cure of an event or condition under any particular one of such clauses, it shall not again be permitted during the Term to cure an event or condition under that same clause); provided that Officer shall be required to provide such written notice to Corporation within 30 days following the date that such circumstance first becomes known to Officer:
(i)    (A) the assignment to Officer of any duties inconsistent with Officer’s positions as set forth in Section l, or an adverse alteration in the nature or status of Officer’s  title or responsibilities, other than by virtue of the commencement of the Executive Chairman Period (it being expressly acknowledged and agreed, for the avoidance of doubt, that a failure by Corporation to continue to employ or otherwise retain Officer as Executive Chairman for the Term (for any or no reason, on account of the action or inaction of any person or persons other than Executive, including, without limitation, the Board, the Compensation Committee, another committee of the Board, or Corporation’s shareholders) after the commencement of the Executive Chairman Period would constitute Good Reason); or (B) the failure of Officer to be elected to and to be continued as the Chairman (and a member) of the Board;
(ii)    upon or after a Change in Control (as defined below), a substantial change in the nature of the business operations of Corporation;
(iii)    a reduction by Corporation in Officer’s Base Salary or bonus opportunities (including, without limitation, any reduction (x) in the target Cash Bonus other than in accordance with Section 3.3 and Exhibit A hereto or (y) in the LTI Grant other than in accordance with Section 3.4(h)(i) and Exhibit B hereto) as in effect on the date hereof or as the same may be increased from time to time;
(iv)    the relocation of Corporation’s principal executive offices to a location outside the Los Angeles and Pasadena, California metropolitan areas, or Corporation’s requiring Officer to be based anywhere other than Corporation’s principal executive offices except for required travel on Corporation’s business to an extent substantially consistent with Officer’s business travel obligations immediately prior to the date hereof;
(v)    the failure by Corporation to pay Officer any portion of his current compensation, or to pay Officer any portion of an installment of deferred compensation under any deferred compensation program of Corporation, within seven days of the date such compensation is due;

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(vi)    upon or after a Change in Control, the failure by Corporation to continue in effect any compensation plan in which Officer participates immediately prior to the Change in Control which is material to Officer’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by Corporation to continue Officer’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of participation relative to other participants, as existed prior to the Change in Control;
(vii)    upon or after a Change in Control, the failure by Corporation to continue to provide Officer with benefits substantially similar to those under any of Corporation’s directors and officers liability insurance, life insurance, medical, health and accident, or disability plans in which Officer was participating at the time of a Change in Control, the taking of any action by Corporation which would directly or indirectly materially reduce any of such benefits or deprive Officer of any material fringe benefit enjoyed by him at the time of a Change in Control, or the failure by Corporation to provide Officer with the number of paid vacation days to which he is entitled on the basis of years of service with Corporation in accordance with Corporation’s normal vacation policy in effect at the time of the Change in Control;
(viii)    the failure of Corporation to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement; or
(ix)    a material breach of this Agreement by Corporation.
Officer’s right to terminate Officer’s employment for Good Reason shall not be affected by Officer’s incapacity due to physical or mental illness.  In addition, notwithstanding any other provision of this Agreement, any termination of employment by Corporation (other than a termination by Corporation for Cause), shall be treated as a termination by Officer for Good Reason.
4.3.    Effect of Termination.  In the event that this Agreement is terminated by Corporation or Officer prior to the Termination Date in accordance with the provisions of this Section 4, the obligations and covenants of the parties under this Section 4 shall be of no further force and effect, except for the obligations of the parties set forth in this Section 4.3, and such other provisions of this Agreement which shall survive termination of this Agreement as provided in Section 6.11.  Except as otherwise specifically set forth in this Agreement, all amounts due upon termination shall be payable on the date such amounts would otherwise have been paid had the Agreement continued through its Term; provided, however, that subject to the provisions of each plan governing Deferred Amounts (as defined below), including, but not limited to, provisions that may delay the payment of Deferred Amounts until six months and one day after Officer’s Separation From Service (as defined in Section 4.4(b)(i)), Deferred Amounts shall be payable within 30 days following the Early Termination Date.  In the event of any such early termination in accordance with the provisions of this Section 4.3, Officer shall be entitled to the following:

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(a)    Termination by Corporation.
(i)    Termination Without Cause.  In the event that Corporation terminates this Agreement without Cause pursuant to Section 4.1(a), Officer shall be entitled to: (i) Earned Base Salary; (ii) any earned Cash Bonus, for the fiscal year of Corporation immediately prior to the fiscal year in which Officer is terminated, that Officer is entitled to receive, pursuant to Section 3.3, but which has not been paid to Officer as of the Early Termination Date, in the amount in which such Cash Bonus either has been determined or approved by the Board or Compensation Committee or is readily ascertainable (in all cases without regard to any ability of the Board or Compensation Committee to exercise any negative discretion regarding payment), at the same time that other executive bonuses are determined, by reference to performance criteria previously established by the Board or Compensation Committee (an “Earned Bonus”); (iii) vested benefits pursuant to written employee benefit plans (“Earned Benefits”) and reimbursable expenses; (iv) any compensation earned but deferred (“Deferred Amounts”); (v) a pro rata Cash Bonus for the portion of the fiscal year in which Officer’s termination occurs based on the amount that would have been earned (as determined by an independent certified public accountant mutually acceptable to Officer and Corporation) if the target level of performance had been achieved, provided, that the Cash Bonus that is to be prorated for the applicable year shall not be less than the Cash Bonus for the immediately preceding year (a “Pro Rata Bonus”); (vi) the Severance Payment (as defined below); (vii) continued participation throughout the three-year period following Officer’s termination of employment in all medical and dental benefit plans, to the extent permitted by those plans (but at such costs no higher to Officer than as in effect immediately preceding such termination); provided that, after receiving reasonable request from Corporation reasonably in advance of the expiration of the election periods under COBRA (as defined in Section 4.4(c)(iii)) and analogous provisions of state law, as applicable, Officer and covered dependents shall make reasonable efforts to make applicable elections thereunder (to the extent available); and provided further, that Corporation shall in no event be required to provide any benefits otherwise required by this clause (vii) after such time as Officer becomes enrolled in a plan of another employer or recipient of Officer’s services under which he is entitled to receive benefits of the same type (e.g., medical or dental); (viii) continuation of the benefits set forth in Sections 3.4(c) (Life Insurance) and 3.4(e) (Long-Term Care Insurance) for a period of three years following Officer’s termination; (ix) payment of full salary in lieu of all accrued but unused vacation; (x) for a period of up to 180 days following Officer’s termination of employment, outplacement services (which shall be reasonable for an officer of Officer’s status at a company such as Corporation) through a bona fide outplacement organization acceptable to Officer that, at a minimum, agrees to supply Officer with outplacement counseling, a private office and administrative support, including telephone service (“Applicable Outplacement Services”); (xi) (A) full and immediate vesting of any and all outstanding and unvested equity or equity-based compensation awards (including, without limitation, restricted stock, stock options, and any other equity or equity-based awards contemplated by this Agreement, whether before, on, or after the Effective Date), the vesting of which otherwise depends only upon the passage of time, including without limitation any Alternative Performance Awards and Alternative Service Awards described in clauses (3) 

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and (5), respectively, of Section 3.4(h)(iii), (B) to the extent that the applicable personal, corporate or other performance goals are ultimately satisfied, the vesting of any and all awards of equity or equity-based compensation (including, without limitation, restricted stock and stock options), the vesting of which otherwise depends upon the satisfaction of personal, corporate or other performance criteria, and (C) exercisability of any and all outstanding options for their full terms without regard to the termination; and (xii) (A) to the extent an LTI Grant has not been made with respect to the fiscal year (i.e., fiscal year 2014, 2015, 2016 or 2017) prior to the fiscal year in which the termination occurs, a fully vested grant in an amount of shares equal to the sum of the Time-Based Stock and the Maximum Performance-Based Stock awarded in the year prior to the year in which the termination occurs, or, if higher, the average of the sum of the Time-Based Stock and Maximum Performance-Based Stock (or, if applicable, other equity or equity-based awards, in the case of awards in respect of fiscal years before 2013) awarded in the second, third, and fourth fiscal years prior to the fiscal year in which the termination occurs, and (B) with respect to the fiscal year in which the termination occurs, a fully vested grant in an amount of shares equal to the sum of the Time-Based Stock and the Maximum Performance-Based Stock awarded in the year prior to the year in which the termination occurs, or, if higher, the average of the sum of the Time-Based Stock and Maximum Performance-Based Stock (or, if applicable, other equity or equity-based awards, in the case of awards in respect of fiscal years before 2013) awarded in the second, third, and fourth fiscal years prior to the fiscal year in which the termination occurs.  Notwithstanding the foregoing, in the event Officer’s participation in any such plan, program or arrangement described in this Section 4.3(a)(i) is barred, or in the case of clause (vii), subjects Corporation or Officer to materially adverse penalties or excise taxes, Corporation shall arrange to provide Officer with substantially similar benefits (on a post-tax basis).
(ii)    Termination for Cause.  In the event that Corporation terminates this Agreement for Cause pursuant to Section 4.1(b), Officer shall be entitled to (i) Earned Base Salary; (ii) any Earned Bonus; (iii) Earned Benefits and reimbursable expenses; and (iv) any Deferred Amounts.  Officer shall not be entitled to any Pro Rata Bonus, future Cash Bonus or Severance Payment.
(iii)    Termination Due to Death or Permanent Disability.  In the event that Officer’s employment is terminated by reason of death or Permanent Disability, he shall be entitled to all compensation and benefits described in Section 4.3(a)(i).
(b)    Termination by Officer.
(i)    Termination Other than for Good Reason.  In the event that Officer terminates this Agreement other than for Good Reason, Officer shall be entitled to (i) Earned Base Salary; (ii) any Earned Bonus; (iii) Earned Benefits and reimbursable expenses; and (iv) any Deferred Amounts.  Officer shall not be entitled to any Pro Rata Bonus, future Cash Bonus or Severance Payment.  In addition, if the termination by Officer is on or after attainment of age 71, Officer shall be entitled to the payments and benefits described in clauses (vii), (ix) and (xii) of the first sentence of Section 4.3(a)(i).

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(ii)    Termination for Good Reason.  In the event that Officer terminates this Agreement for Good Reason, Officer shall be entitled to all of the compensation and benefits to which he would be entitled under Section 4.3(a)(i) in the event of a termination by Corporation without Cause; provided, however, that in the event that Officer terminates this Agreement for Good Reason pursuant to Section 4.2(b)(iii), Earned Base Salary shall mean all semi-monthly installments of Base Salary as in effect on the date of termination or the date immediately prior to any reduction under Section 4.2(b)(iii), whichever is greater, which have become due and payable to Officer, together with any partial monthly installment prorated on a daily basis up to and including the applicable Termination Date.
4.4.    Severance Payment; Post-Employment Consulting.
(a)    Definition of “Severance Payment.”  For purposes of this Agreement, the term “Severance Payment” shall mean an amount equal to three times the sum of (i) Base Salary as in effect on the date of termination; plus (ii) an amount equal to (A) the sum of the Cash Bonus paid to Officer with respect to each of the last three fiscal years of Corporation preceding the year in which the termination of this Agreement occurs, divided by (B) three; provided, however, that in the event that Officer terminates this Agreement for Good Reason pursuant to Section 4.2(b)(iii), Severance Payment shall mean three times the sum of (i) the greater of (A) Base Salary, as in effect on the date of termination, or (B) Base Salary, as in effect on the date immediately prior to any reduction described in Section 4.2(b)(iii); plus (ii) an amount equal to (A) the sum of the Cash Bonus paid to Officer with respect to each of the last three fiscal years of Corporation preceding the year in which the termination of this Agreement occurs, divided by (B) three.  In the event that Officer is entitled to a Severance Payment, except by virtue of death or Permanent Disability, Officer shall provide post-employment consulting services pursuant to Section 4.4(c)).  Notwithstanding the foregoing, if termination is after the commencement of the Executive Chairman Period, the Severance Payment shall mean the sum of (i) Officer’s Base Salary as in effect immediately prior to the commencement of the Executive Chairman Period, plus (ii) the amount of the Cash Bonus payable at target level of performance for the fiscal year ending immediately prior to the commencement of the Executive Chairman Period or, if higher, for the prior fiscal year.
(b)    Payment of Severance Payment and Pro Rata Bonus; Section 409A.  In the event that Officer is entitled to any Severance Payment or Pro Rata Bonus pursuant to Section 4.3, such Severance Payment and Pro Rata Bonus shall be payable in a lump sum within 10 days following Officer’s termination of employment; provided, however, that:
(i)    payment of such amounts and any other amounts or benefits provided under this Agreement in connection with Officer’s termination of employment that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Officer’s termination of employment unless and until Officer has also incurred a “separation from service” (as such term is defined in Treasury Regulations Section 1.409A-1(h) (a “Separation From Service”)), unless Corporation reasonably determines that such amounts 

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and benefits may be provided to Officer without causing Officer to incur the adverse personal tax consequences under Section 409A; and
(ii)    it is intended that (A) each installment of any amounts or benefits payable under this Agreement be regarded as a separate “payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i) (and each such installment is hereby designated as separate for such purpose), (B) all payments of any such amounts or benefits satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (C) any such amounts or benefits consisting of COBRA premiums also satisfy, to the greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v).  However, if any such amounts or benefits constitute “deferred compensation” under Section 409A and Officer is a “specified employee” of Corporation, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of such benefit payments shall be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after Officer’s Separation From Service and (ii) the date of Officer’s death (such applicable date, the “Delayed Initial Payment Date”), Corporation shall (x) pay Officer a lump sum amount equal to the sum of the benefit payments that Officer would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the benefits had not been delayed pursuant to this Section and (y) commence paying the balance, if any, of the benefits in accordance with the applicable payment schedule.
Officer and Corporation agree that one-half of any Severance Payment shall constitute consideration for Officer’s compliance with the post-employment consulting provisions of Section 4.4(c) and the noncompetition obligation of Section 5.
(c)    Post-Employment Consulting.
(i)    Consulting Period.  In the event that Officer is entitled to a Severance Payment, except by virtue of death or Permanent Disability, Officer shall continue to provide services to Corporation as a consultant for the period (the “Consulting Period”) from the termination of Officer’s employment through the earlier of (A) the end of the 12-month period following Officer’s termination of employment, and (B) the date of the termination of Officer’s service as a consultant by Corporation.
(ii)    Consulting Duties.  Officer shall be available to provide consulting services during the Consulting Period (or shorter period, if applicable) in Officer’s areas of expertise, as requested by the Chief Executive Officer of Corporation or the Board (or a committee of the Board).  Officer shall make himself available to provide such services for up to 20 hours per month for the first three months of the Consulting Period, and five hours per month for the remainder of the Consulting Period; provided that Officer shall not be required to provide services that would conflict with or otherwise interfere in any way with his duties or responsibilities (including, without limitation, as to the time, place and manner of services) for any subsequent employer or other recipient of his services.  Corporation 

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shall require such services at reasonable times and places mutually agreed upon by Corporation and Officer.  By way of example, it shall not be a breach of this Agreement if Officer has made himself available to render such services and Corporation does not require Officer to render all such services.
(iii)    Independent Contractor Status.  During the Consulting Period (or shorter period, if applicable), Officer acknowledges and agrees that he (A) shall be an independent contractor of Corporation and not an employee, and (B) shall not be entitled to any of the benefits that Corporation may make available solely to its employees, except as otherwise specifically set forth in this Agreement or to the extent that Officer elects continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or analogous provisions of state law.  Consultant shall execute Corporation’s standard form of independent contractor consulting agreement, which shall among other things, require Consultant to refrain from unauthorized use and disclosure of Corporation’s confidential and proprietary information (but which shall in no event be more restrictive than this Agreement as to such matters).
(iv)    Expense Reimbursement.  Corporation shall reimburse Officer for all reasonable out-of-pocket business expenses incurred by Officer for the purpose of and in connection with the performance of his consulting services pursuant to this Agreement.  Officer shall be entitled to such reimbursement upon the presentation by Officer to Corporation of vouchers or other statements itemizing such expenses in reasonable detail consistent with Corporation’s policies.  The amount of expenses eligible for reimbursement pursuant to this Section 4.4(c)(iv) during a calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year.  Corporation shall reimburse Officer for any expense eligible for reimbursement pursuant to this Section 4.4(c)(iv) on or before the end of the calendar year following the calendar year in which the expense was incurred.

4.5.    Change in Control.

(a)    Change in Control Defined.  For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if:
(i)    Any Person (as such term is used in section 3(a)(9) of the Securities Exchange Act of 1934 as amended from time to time (the “Exchange Act”), as modified and used in sections 13(d) and 14(d) thereof, except that such term shall not include (A) Corporation or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of Corporation or any of its affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the stockholders of Corporation in substantially the same proportions as their ownership of stock of Corporation) becomes the Beneficial Owner, as 

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such term is defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of Corporation (not including in the securities beneficially owned by such Person any securities acquired directly from Corporation or its affiliates other than in connection with the acquisition by Corporation or its affiliates of a business) representing 25% or more of the combined voting power of Corporation’s then outstanding securities; or  
(ii)    The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Corporation) whose appointment or election by the Board or nomination for election by Corporation’s stockholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or
(iii)    There is consummated a merger or consolidation of Corporation with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of Corporation outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of Corporation or any subsidiary of Corporation, at least 75% of the combined voting power of the securities of Corporation or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of Corporation (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Corporation (not including in the securities beneficially owned by such Person any securities acquired directly from Corporation or its affiliates other than in connection with the acquisition by Corporation or its affiliates of a business) representing 25% or more of the combined voting power of Corporation’s then outstanding securities; or
(iv)    The stockholders of Corporation approve a plan of complete liquidation or dissolution of Corporation or there is consummated an agreement for the sale or disposition by Corporation of all or substantially all of Corporation’s assets, other than a sale or disposition by Corporation of all or substantially all of Corporation’s assets to an entity, at least 75% of the combined voting power of the voting securities of which are owned by stockholders of Corporation in substantially the same proportions as their ownership of Corporation immediately prior to such sale.
(b)    Limitation on Payments.  If all, or any portion, of the payments provided under this Agreement, either alone or together with other payments or benefits that Officer receives or is entitled to receive from Corporation or an affiliate, would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then Officer shall be entitled to receive (i) an amount limited so that no portion thereof shall be 

18

subject to an excise tax under Section 4999 of the Code (the “Limited Amount”), or (ii) if the amount otherwise payable hereunder (without regard to clause (i)) reduced by the excise tax imposed by Section 4999 of the Code (the “Excise Tax”) is greater than the Limited Amount, the amount otherwise payable hereunder.  Any reductions under this Section 4.5(b) shall be made first from cash payments that are not payments of deferred compensation subject to Section 409A of the Code, next from other cash payments, and finally from the cancellation of the accelerated vesting of equity awards.
4.6.    No Mitigation or Offset.  Officer shall not be required to mitigate damages under this Agreement by seeking other comparable employment or otherwise, and the amount of any payment or benefit provided for in this Agreement, shall not be reduced by any compensation earned by or provided to Officer as the result of employment by an employer other than Corporation.
5.    Noncompetition.
During the Term and ending (i) 12 months following the date that Officer ceases to be an employee of Corporation other than in the event of a termination following a Change in Control pursuant to Section 4.5, or (ii) three years following the date that Officer ceases to be an employee of Corporation in the event of a termination following a Change in Control, Officer shall not engage in any activity directly and materially competitive, with a material adverse impact on Corporation, with the business of Corporation.  (By way of example and for avoidance of ambiguity, the noncompetition period in the preceding sentence is intended to run for the stated period (12 months or three years, as applicable) from termination of employment, regardless of whether Officer is consulting for all or part of that period pursuant to the terms of Section 4.4.)  This provision shall not be construed to prohibit Officer from owning up to 5% of the outstanding voting shares of the equity securities of any corporation whose common stock is listed for trading on any national securities exchange or on the NASDAQ system.
6.    Miscellaneous.
6.1.    Payment Obligations.  Corporation’s obligation to pay Officer the compensation and to make the arrangements provided herein shall be unconditional, and Officer shall have no obligation whatsoever to mitigate damages hereunder.  If arbitration after a Change in Control shall be brought to enforce or interpret any provision contained herein, Corporation shall, to the extent permitted by applicable law and Corporation’s Articles of Incorporation and By-Laws, indemnify Officer for Officer’s attorneys’ fees and disbursements incurred in such arbitration.
6.2.    Confidentiality.  Officer agrees that all confidential and proprietary information relating to the business of Corporation shall be kept and treated as confidential both during and after the Term, except as may be permitted in writing by the Board or as such information is within the public domain or comes within the public domain without any breach of this Agreement; provided, however, that this Section 6.2 imposes no obligation upon Officer with respect to information that (i) was in Officer’s possession before receipt from Employer; (ii) is disclosed to immediate family members, or to tax, financial, or legal advisors for purposes of obtaining such advice; (iii) is rightfully received by Officer from a third party who does not have a duty of confidentiality; or (iv) is disclosed as required by law or legal process.

19

6.3.    Waiver.  The waiver of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of the same or other provision hereof.
6.4.    Entire Agreement; Modifications.
(a)    Except as otherwise provided herein, this Agreement (together with the agreements and plans referred to herein) represents the entire understanding among the parties with respect to the subject matter hereof, and this Agreement supersedes any and all prior understandings, agreements, plans and negotiations, whether written or oral, with respect to the subject matter hereof, including without limitation the Prior Agreement and any and all of its predecessors.  All modifications to the Agreement must be in writing and signed by the party against whom enforcement of such modification is sought.
(b)    Notwithstanding the foregoing, nothing in this Agreement shall adversely affect any compensation or benefit earned for a period beginning prior to the Effective Date, or any incentive award granted on a date prior to the Effective Date.
6.5.    Notices.  All notices and other communications under this Agreement shall be in writing and shall be given by facsimile or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three days after mailing or 24 hours after transmission of a facsimile (if the receipt of the facsimile is confirmed) to the respective persons named below:
If to Corporation:    Alexandria Real Estate Equities, Inc. 
385 East Colorado Boulevard 
Suite 299 
Pasadena, CA 91101  
Phone: (626) 578 0777
If to Officer:    Joel S. Marcus, 
at the address shown on the execution page hereof.
Any Party may change such Party’s address for notices by notice duly given pursuant hereto.
6.6.    Headings.  The Paragraph headings herein are intended for reference only and shall not by themselves determine the construction or interpretation of this Agreement.
6.7.    Governing Law.  Other than with respect to Section 6.13, this Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to its principles of conflict of laws.
6.8.    Arbitration.  Any dispute arising out of or relating to this Agreement or its enforcement, breach, performance, or interpretation, that cannot be settled by good faith negotiation between the parties shall be submitted to Judicial Arbitration and Mediation Services, Inc. (“JAMS”), or its successor, for final and binding arbitration by a single arbitrator in Los Angeles, 

20

California, pursuant to JAMS’ then applicable arbitration rules (incorporated herein by reference), which arbitration shall be the exclusive remedy of the parties hereto.  By agreeing to this arbitration procedure, the parties waive the right to resolve any such dispute through a trial by jury or judge or by administrative proceeding.  The resulting arbitration shall be deemed equivalent to a final order of a court having jurisdiction over the subject matter, shall not be appealable, and shall be enforceable in any court of competent jurisdiction.  The arbitrator shall (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law, and (ii) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award.  Corporation shall pay all of JAMS’ administrative fees (including but not limited to arbitrator fees) for this arbitration.  Submission to arbitration shall not preclude the right of any party hereto involved in a dispute regarding this Agreement (each, a “Disputing Party” and collectively, the “Disputing Parties”) to institute proceedings for injunctive relief to prevent irreparable harm pending the arbitration of a matter subject to arbitration pursuant to this Agreement.  Subject to the exceptions contained in Section 6.2, any documentation and information submitted by any party in the arbitration proceeding shall be kept strictly confidential by the parties and the arbitrator.
6.9.    Severability.  Should a court or other body of competent jurisdiction determine that any provision of this Agreement is excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, and enforced along with all other provisions of this Agreement to the extent possible under applicable law consistent with the intent of the parties.
6.10.    Survival of Corporation’s Obligations.  Corporation’s obligations hereunder shall not be terminated by reason of any liquidation, dissolution, bankruptcy, cessation of business, or similar event relating to Corporation.  This Agreement shall not be terminated by any merger or consolidation or other reorganization of Corporation.  In the event any such merger, consolidation or reorganization shall be accomplished by transfer of stock or by transfer of assets or otherwise, the provisions of this Agreement shall be binding upon and inure to the benefit of the surviving or resulting corporation or person.  This Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, successors and assigns of the parties; provided, however, that except as herein expressly provided, this Agreement shall not be assignable either by Corporation (except to an affiliate of Corporation, in which event Corporation shall remain liable if the affiliate fails to meet any obligations to make payments or provide benefits or otherwise) or by Officer.
6.11.    Survival of Certain Rights and Obligations.  The rights and obligations of the parties hereto pursuant to Sections 4.3, 4.4, 4.5, 4.6, 5, 6.1 through 6.11 and 6.13, hereof shall survive the termination of this Agreement.
6.12.    Counterparts.  This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same Agreement.
6.13.    Indemnification and Insurance.  In addition to any rights to indemnification to which Officer is entitled under Corporation’s Articles of Incorporation and By-Laws, Corporation shall indemnify Officer at all times during and after the Term to the maximum extent permitted under Section 2-418 of the General Corporation Law of the State of Maryland or any successor 

21

provision thereof and any other applicable state law, and shall pay Officer’s expenses in defending any civil or criminal action, suit, or proceeding in advance of the final disposition of such action, suit, or proceeding, to the maximum extent permitted under such applicable state laws.  It is expressly understood and agreed that Corporation shall continue to indemnify Officer as provided above after the Term has ended for any claims that may be made against him with respect to his service as a director or officer of Corporation.  Corporation shall cover Officer, at Corporation’s expense, under director and officer insurance which provides coverage not less than the amount of coverage on the date hereof, covering any and all claims arising out of Officer’s tenure as an officer, director or manager of Corporation, both during and, at all times while potential liability exists, after the Term on a basis no less favorable in each and every respect as is applicable to any officer, director or manager (whether current or former), as applicable, of Corporation.

22

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

	
					
	 
	 
	CORPORATION:
	 

	 
	 
	 
	 
	 

	 
	 
	ALEXANDRIA REAL ESTATE EQUITIES, INC.,

	 
	 
	a Maryland corporation

	 
	 
	 
	 

	 
	 
	 
	 

	Date:
	April 6, 2015
	By:
	/s/ Dean A. Shigenaga
	 

	 
	 
	 
	Name: Dean A. Shigenaga
	 

	 
	 
	 
	Title: Chief Financial Officer
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	OFFICER:

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	Date:
	April 6, 2015
	By:
	/s/ Joel S. Marcus
	 

	 
	 
	 
	Joel S. Marcus
	 

EXHIBIT A
CASH BONUS
1.Cash Bonus.
With respect to each fiscal year of Corporation occurring during the Term after 2013, Officer shall be eligible to receive a Cash Bonus, 60% of which shall be payable based upon the achievement of certain corporate performance criteria (“Corporate Performance Criteria”), and 40% of which shall be payable based upon the achievement of certain individual performance criteria (“Individual Performance Criteria”).  The Cash Bonus payable, if any, shall have a threshold amount equal to 75% of Base Salary, a target amount equal to 150% of Base Salary and a maximum amount equal to 225% of Base Salary.  The Cash Bonus payable, if any, for any fiscal year shall be payable only following written certification by the Compensation Committee of the requisite corporate performance in two installments, with 50% payable on April 1 and the remaining 50% payable on July 1 of the year immediately following the fiscal year to which such Cash Bonus relates.  The Corporate Performance Criteria and Individual Performance Criteria shall be reasonably determined by the Compensation Committee in good faith following consultation with Officer, and shall be consistent with this Exhibit A and the other terms of the Agreement.
2.    Corporate Performance Criteria Generally.
The specific Corporate Performance Criteria to be achieved (i) with respect to 2014 are set forth in Section 3 of this Exhibit A, and (ii) with respect to any fiscal year of the Corporation during the Term after 2014, shall be the same as the fiscal 2014 criteria; provided, however, that the goals and metrics of Exhibit A may be modified for fiscal years after 2014 to conform to new business circumstances, all as determined reasonably and in good faith by the Compensation Committee in consultation with Officer.
3.    Corporate Performance Criteria for 2014:  Goal Categories, Weighting and Financial Metrics.
With respect to 60% of the Cash Bonus, annual Corporate Performance Criteria are to be established each year within the following categories and weightings:
50% balance sheet management goals 
50% profitability and NAV related goals
The respective weighting allocable to each of the Corporate Performance Criteria utilized for determining such 60% of the Cash Bonus for fiscal 2014 shall be as follows, with specific quantitative criteria and ranges of numerical metrics to be determined by the Compensation Committee for each of the threshold, target, and maximum amounts described in Section 1 of this Exhibit A (and the extent to which the numerical metrics determined by the Compensation Committee are satisfied with respect to the Corporate Criteria shall be determined by linear interpolation within such applicable ranges):

Ex. A-1

	
		
	Balance Sheet Goals
	Weighting

	Liquidity
	25%

	Net debt to adjusted EBITDA (the lower of 4Q14 annualized or trailing 12 mos.)
	25%

	Fixed charge coverage ratio (the greater of 4Q14 annualized or trailing 12 mos.)
	25%

	Appropriate balance of capital options (pricing, tenure, mix of capital structure, long-term capital alternatives, maturity profile)
	25%

	
		
	Profitability and NAV Related Goals
	Weighting

	Percentage of ABR from investment
grade tenants
	20%

	Net operating income growth
	15%

	Same property NOI growth: 
          Cash basis 
          GAAP basis
	15% Total
7.5%
7.5%

	Amount of RSF leased
	15%

	Growth in ABR in class A assets
	15%

	Operating margin (the greater of 4Q14 annualized or trailing 12 mos.)
	10%

	EBITDA margin
	10%

4.    Individual Performance Criteria.
The specific Individual Performance Criteria to be achieved shall be determined by the Compensation Committee with respect to 2015 not later than 90 days after the execution of the Agreement, and with respect to any fiscal year of the Corporation during the Term after 2015 not later than 90 days after the beginning of the fiscal year.  The Individual Performance Criteria shall relate to some or all of the following: (i) providing key leadership in the continued pursuit of Corporation’s strategy to ensure that shareholder value is maximized over the long-term, particularly with respect to (A) raising capital and further strengthening Corporation’s long-term capital structure; (B) supporting Corporation’s selective development strategy focused on high quality properties that are well-positioned within Corporation’s identified core markets, have high quality tenants in place and offer attractive yields; (C) rental rates upon renewal or re-leasing of space being consistent with prevailing market rates; and (D) driving the cost effective completion of Corporation development and redevelopment properties; (ii) fostering effective communication with the Board of Directors on matters of tactical and strategic importance, including risk management matters; (iii) actively communicating on a regular basis with investors and analysts, and (iv) effectively 

Ex. A-2    

managing the career development of high potential executives and addressing executive officer succession planning .
5.    Definitions.  
If, at any time, there is any change in (i) GAAP or (ii) any other definition, convention or calculation that would affect amounts to be paid pursuant to the terms of this Exhibit A, then such changed definition, convention or calculation shall not apply to either party’s performance of the Agreement unless both parties hereto consent in writing to the application of such changed definition, convention or calculation, and pending such written consent, the parties hereto shall endeavor to preserve the intent of the parties at the time of the execution of the Agreement with regard to all calculations pursuant to this Exhibit A.  The Corporate Performance Criteria set forth in Section 3 of this Exhibit A, as applicable, may be adjusted by the Compensation Committee to reflect (and, as applicable, may be adjusted to exclude) the impact of certain discontinued operations and certain real estate dispositions.

Ex. A-3    

EXHIBIT B
CERTAIN PERFORMANCE-BASED STOCK
1.    Performance-Based Stock.
In accordance with and subject to Section 3.4(h)(i) of the Agreement, with respect to each fiscal year of Corporation during the Term, Officer shall be eligible to receive and vest in an LTI Grant.  50% of the number of shares subject to the LTI Grant is referred to in the Agreement and in this Exhibit B as the Target Performance-Based Stock, and such number of shares, increased by 56.4%, is referred to in the Agreement and in this Exhibit B as the Maximum Performance-Based Stock.  The Maximum Performance-Based Stock shall vest based on the achievement of performance criteria specified in this Exhibit B.  For the avoidance of doubt, performance criteria shall not be based on or relate to Officer’s individual performance, and, in accordance with the terms of Sections 2 and 3.1 of this Exhibit B, the entirety of the Maximum Performance-Based Stock with respect to any LTI Grant may fail to vest and be forfeited.
2.    Vesting of Maximum Performance-Based Stock.  For each LTI Grant, the respective Maximum Performance-Based Stock shall vest (i) if Officer satisfies any service requirements specified in Section 3.4(h)(i) of the Agreement and (ii) to the extent the requirements of Section 3 of this Exhibit B are satisfied, after adjustment as set forth in Section 4 of this Exhibit B.
3.    FFO/Share Growth Requirements.
3.1.    The LTI Grant made with respect to the 2013 fiscal year of Corporation was made according to the following criteria.
(a)    Minimum FFO/share growth: the requirements of this Section 3 are not satisfied if Corporation achieves a cumulative three-year growth rate in FFO/share of less than a percentage level to be determined by the Compensation Committee;
(b)    Threshold FFO/share growth: the requirements of this Section 3 are met with respect to 50% of the number of shares of  Target Performance-Based Stock if Corporation achieves a cumulative three-year growth in FFO/share of a percentage level to be determined by the Compensation Committee;
(c)    Intermediate FFO/share growth: the requirements of this Section 3 are met with respect to 75% of the number of shares of Target Performance-Based Stock if Corporation achieves a cumulative three-year growth in FFO/share of a percentage level to be determined by the Compensation Committee; and
(d)    Target FFO/share growth: the requirements of this Section 3 are met with respect to 100% of the number of shares of Target Performance-Based Stock if Corporation achieves a cumulative three-year growth rate in FFO/share of a percentage level to be determined by the Compensation Committee.

Ex. B-1

(e)    Maximum FFO/share growth:  the requirements of this Section 3 are met with respect to 150% of the number of shares of Target Performance-Based Stock if Corporation achieves a cumulative three-year growth in FFO/share equal to or in excess of a percentage level to be determined by the Compensation Committee. 
3.2.    Interpolation.  If, for the LTI Grant made with respect to the 2013 fiscal year of Corporation, Corporation achieves a cumulative three-year growth rate in FFO/share within certain quantitive ranges to be determined by the Compensation Committee, then the extent to which the requirements of this Section 3 are satisfied with respect to the number of shares of Target Performance-Based Stock shall be determined by linear interpolation within such applicable ranges.   
3.3.    Calculation of FFO/Share.  For purposes of this Exhibit B, FFO will be computed as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciable real estate and land parcels and impairments of depreciable real estate (excluding land parcels), plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures, and then further adjusted to add back non-cash charges, impairments of land parcels, deal costs, unusual or non-recurring costs, and the amount of such items that is allocable to unvested restricted stock awards, and also, other than as determined by the Compensation Committee, excluding the effects of certain real estate asset dispositions.  The shares used for the calculation of FFO/share growth with respect to each LTI Grant will be the same as the weighted average shares used by Corporation in its calculation of FFO/share in Corporation’s public disclosures, as adjusted from time to time, for the relevant three-year performance period.  Growth in FFO/share will be calculated to one decimal point (e.g., 99.0%), over the three-year period that starts with January 1 of the year following the year to which the LTI Grant relates and ends on December 31 of the third year following the year to which the LTI Grant relates.
3.4.    LTI Grants with Respect to Fiscal Years after 2013.  With respect to fiscal years of Corporation after 2013, the FFO/share growth requirements for LTI Grants, points of interpolation, and method of calculation of FFO per share (in Sections 3.1, 3.2 and 3.3 of this Exhibit B) will be the same as those for fiscal year 2013; provided, however, that such FFO/share growth requirements may be modified to conform to new business circumstances, utilizing the same method of analyzing Corporation’s historical performance as used with respect to Corporation’s 2013 fiscal year, all as determined reasonably and in good faith by the Compensation Committee in consultation with Officer.
4.    TSR Provisions.
4.1.    Performance Below or at Target.  For each LTI Grant, the number of shares of Maximum Performance-Based Stock in which Officer shall vest (if he is otherwise entitled thereto under Section 3 of this Exhibit B) shall be: 
(a)    Minimum TSR: 50% of the number of shares of Target Performance-Based Stock with respect to which the requirements of Section 3 of this Exhibit B have been satisfied, if Corporation’s TSR is at or below the 25th percentile of the companies in the FTSE NAREIT Equity Office Index (the “Index”), when ranked by TSR for the applicable three-year period;

Ex. B-2

(b)    Target TSR: 100% of the number of shares of Target Performance-Based Stock with respect to which the requirements of Section 3 of this Exhibit B has been satisfied, if Corporation’s TSR is at or above the median of the companies in the Index for the applicable three-year period.
(c)    Maximum TSR:  150% of the number of shares of Target Performance-Based Stock with respect to which the requirements of Section 3 of this Exhibit B have been satisfied, if Corporation achieves TSR at or exceeding the 75th percentile of the companies in the Index, for the applicable three-year period.
4.2.    Interpolation.  If, for the year relating to any LTI Grant, Corporation achieves TSR between the 25th and 50th percentiles, or between the 50th and 75th percentiles, then the extent to which the requirements of this Section 4 are satisfied with respect to the number of shares of Target Performance-Based Stock specified in Section 3 of this Exhibit B shall be determined by linear interpolation within such applicable range.  By way of example, if the TSR over the applicable fiscal year of Corporation was at the 55th percentile of the companies in the Index, then the percentage of shares of Target Performance-Based Stock that is eligible to vest pursuant to Section 3 of this Exhibit B shall be increased by 10% (and consequently, 110% of the shares of Target Performance-Based Stock that have met the requirements of Section 3 will meet the requirements of this Section 4), calculated as follows:  N = 100 + (55-50)/(75-50) x (150 – 100) = 110%.
5.    Maximum Share Limitation.  Notwithstanding anything in this Exhibit B or the Agreement to the contrary, the Maximum Performance-Based Stock in which Officer may vest with respect to any fiscal year of Corporation shall not exceed 156.4% of the number of shares of Target Performance-Based Stock with respect to such fiscal year.
6.    Definitions.  If, at any time, there is any change in (i) GAAP or (ii) any other definition, convention or calculation that would affect amounts to be paid pursuant to the terms of this Exhibit B, then such changed definition, convention or calculation shall not apply to either party’s performance of the Agreement unless both parties hereto consent in writing to the application of such changed definition, convention or calculation, and pending such written consent, the parties hereto shall endeavor to preserve the intent of the parties at the time of the execution of the Agreement with regard to all calculations pursuant to this Exhibit B.

Ex. B-3

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