Document:

Exhibit 4.1

 

SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO LOAN AND SECURITY
AGREEMENT (“Second Amendment”)
is effective as of July 30, 2004, by and between VASTERA, INC.,
a Delaware corporation (“Borrower”),
and COMERICA BANK, successor by merger to Comerica Bank – California (“Bank”).

 

RECITALS

 

A.            Borrower and Bank entered into that certain Loan and
Security Agreement dated as of July 30, 2002 as amended by that certain First
Amendment to Loan and Security Agreement dated as of August 16, 2002 (the “Loan Agreement”), pursuant to
which Bank agreed to extend and make loans available to Borrower upon the terms
and conditions contained therein.

 

B.            Borrower and Bank desire to amend the Loan Agreement, all
in accordance with the terms set forth in this Second Amendment.

 

C.            This Second Amendment, the Loan Agreement and the other
Loan Documents (as defined in the Loan Agreement), together with all other
documents entered into or delivered pursuant to any of the foregoing, in each
case as originally executed or as the same may from time to time be modified,
amended, supplemented, restated or superseded are hereinafter collectively
referred to as the “Loan Documents.”

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the foregoing recitals and the mutual covenants herein set forth and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, Borrower and Bank
hereby agree to amend the Loan Agreement as follows:

 

1.             AMENDMENTS TO LOAN AGREEMENT.

 

1.1          Section 2.1 of the Loan Agreement is hereby amended by
adding the following Section 2.1(g) immediately following Section 2.1(f)
contained therein:

 

“(e)         New Equipment Advances.

 

(i)                            Subject to and upon the terms and
conditions of this Agreement, at any time from the Second Amendment Closing
Date through the Tranche C Availability End Date, and the Tranche D
Availability End Date, as applicable, Bank agrees to make advances to Borrower
in two tranches, Tranche C and Tranche D (each a “New Equipment Advance”
and collectively, the “New
Equipment Advances”).  Borrower may request New Equipment Advances
under Tranche C at any time from the Second Amendment Closing Date through the
earlier to occur of (a) the Tranche C Availability End Date and
(b) the termination of Bank’s obligation to advance money pursuant to
Section 9.1(b).  Borrower may

 

1

 

request New Equipment Advances under Tranche D at any
time from the date which is one day after the Tranche C Availability End Date
through the earlier to occur of (a) the Tranche D Availability End Date
and (b) the termination of Bank’s obligation to advance money pursuant to
Section 9.1(b).  The aggregate
outstanding amount of Tranche C Equipment Advances and Tranche D Equipment
Advances shall not at any time exceed the maximum principal amount of the
Committed New Equipment Line.  Each New
Equipment Advance shall not exceed 100% of the invoiced amount of new equipment
and software and related soft costs (“New  Permitted Equipment”),
which New Permitted Equipment Borrower shall have purchased within 90 days
prior to the date of the corresponding New Equipment Advance; provided however,
that solely with respect to the first New Equipment Advance made after the
Second Amendment Closing Date, Borrower shall have purchased the corresponding
New Permitted Equipment after March 1, 2004. 
The amount of all New Equipment Advances allocated to the purchase of
software and related soft costs (each a “New Software Advance”
and collectively, the “New
Software Advances”) shall be
limited to $2,500,000 in the aggregate.

 

(ii)                           Interest shall accrue from the date of
each New Equipment Advance at the rate specified in Section 2.3(a), and shall
be payable monthly on the first day of each month through the New Equipment
Maturity Date.

 

(1)           Tranche
C Equipment Advances.  Any New Equipment Advances that are
outstanding under Tranche C on the Tranche C Availability End Date shall be due
and payable, (i) with respect to New Equipment Advances which are not New
Software Advances, in 30 equal monthly installments of principal plus interest,
and (ii) with respect to New Software Advances, in 18 equal monthly
installments of principal plus interest, in each case, beginning on the first
day of the month following the Tranche C Availability End Date and continuing
on the first day of each month thereafter through the New Equipment Maturity
Date, at which time all amounts due in connection with Tranche C Equipment Advances
made under this Section 2.1(g) shall be immediately due and payable.

 

(2)           Tranche
D Equipment Advances.  Any New Equipment Advances that are
outstanding under Tranche D on the Tranche D Availability End Date shall be due
and payable (i) with respect to New Equipment Advances which are not New
Software Advances, in 24 equal monthly installments of principal plus interest,
and (ii) with respect to New Software Advances, in 12 equal monthly
installments of principal plus interest, beginning on the first day of the
month following the Tranche D Availability End Date, and continuing on the
first day of each month thereafter through the New Equipment Maturity Date, at
which time all amounts due in connection with Tranche D Equipment Advances made
under this Section 2.1(g) shall be immediately due and payable.

 

2

 

(iii)                         New Equipment Advances, once repaid, may
not be reborrowed.  Borrower may prepay
any New Equipment Advances at any time, in whole or in part, without penalty or
premium.

 

(iv)                          When Borrower desires to obtain a New
Equipment Advance, Borrower shall notify Bank (which notice shall be
irrevocable) by facsimile transmission to be received no later than 3:00 p.m.
Eastern Standard Time three Business Days before the day on which the New
Equipment Advance is to be made.  Such
notice shall be substantially in the form of Exhibit C.  The notice shall be signed by a Responsible
Officer or its designee and include a copy of the invoice for any Equipment,
furniture and/or software to be financed, and shall include the serial numbers
of such items.”

 

1.2          Section 2.3(a) of the Loan Agreement is hereby amended
by adding the following subsection (iv) immediately following subsection (iii)
contained therein:

 

“(iv)        New Equipment Advances.  Except as set forth in Section
2.3(b), the New Equipment Advances shall bear interest, on the outstanding
daily balance thereof, at a rate equal to the Prime Rate.”

 

1.3          Section 3 of the Loan Agreement is hereby amended by
adding the following subsection 3.3 thereto:

 

“3.3        Condition
to Advances after the Second Amendment Closing Date.  The obligation of Bank to make
Advances after the Second Amendment Closing Date is subject to the condition
that an audit of Borrower’s Accounts shall have been completed, at Borrower’s
expense, with results reasonably satisfactory to Bank in form and substance.”

 

1.4          Section 6.7(c) of the Loan Agreement is hereby amended
by deleting it in its entirety and replacing it with the following:

 

“(c)         Quarterly Pro-Forma Income/(Loss).  A Pro-Forma Income/(Loss) in an
amount of not more than (i) ($750,000) for the three month periods ending
September 30, 2004 and December 31, 2004, (ii) ($1,000,000) for the three month
period ending March 31, 2005, and (iii) ($750,000) for the three month periods
ending June 30, 2005 and each quarter thereafter during the term hereof.”

 

1.5          Section 11 of the Loan Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:

 

“11.        CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.

 

11.1        This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of California, without regard to principles of conflicts of
law.  Each of Bank and Borrower hereby
submits to the exclusive jurisdiction of the state and Federal courts located
in the County of Santa Clara, State of California.  EACH OF BANK AND BORROWER ACKNOWLEDGES

 

3

 

THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
ONE, BUT THAT IT MAY BE WAIVED.  EACH OF
THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM.  THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.

 

11.2        JUDICIAL REFERENCE.  If and only if the jury trial waiver set
forth in Section 11.1 of this Agreement is invalidated for any reason by a
court of law, statute or otherwise, the reference provisions set forth below
shall be substituted in place of the jury trial waiver.  So long as the jury trial waiver remains
valid, the reference provisions set forth in this Section shall be
inapplicable.

 

(a)           Each
controversy, dispute or claim (each, a “Claim”) between the parties arising out of or
relating to this Agreement or any other Loan Document, other than (i) all
matters in connection with nonjudicial foreclosure of security interests in
real or personal property; or (ii) the appointment of a receiver or the
exercise of other provisional remedies (any of which may be initiated pursuant
to applicable law) that are not settled in writing within fifteen (15) days
after the date on which a party subject to the Loan Documents gives written
notice to all other parties that a Claim exists (the “Claim Date”) shall be
resolved by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure, or
their successor sections (“CCP”),
which shall constitute the exclusive remedy for the resolution of any Claim
concerning the Loan Documents, including whether such Claim is subject to the
reference proceeding.  Except as set
forth in this section, the parties waive the right to initiate legal
proceedings against each other concerning each such Claim.  Venue for these proceedings shall be in the
Superior Court in the County where the real property, if any, is located or in
a County where venue is otherwise appropriate under state law (the “Court”).  By mutual agreement, the parties shall select
a retired Judge of the Court to serve as referee, and if they cannot so agree
within fifteen (15) days after the Claim Date, the Presiding Judge of the Court
(or his or her representative) shall promptly select the referee.  A request for appointment of a referee may be
heard on an ex parte or expedited basis. 
The referee shall be appointed to sit as a temporary judge, with all the
powers for a temporary judge, as authorized by law, and upon selection should
take and subscribe to the oath of office as provided for in Rule 244 of the
California Rules of Court (or any subsequently enacted Rule).  Each party shall have one peremptory challenge
pursuant to CCP §170.6.  Upon being
selected, the referee

 

4

 

shall (a) be requested to set the matter for a status
and trial-setting conference within fifteen (15) days after the date of
selection and (b) if practicable, try any and all issues of law or fact and
report a statement of decision upon them within ninety (90) days of the date of
selection.  The referee will have power
to expand or limit the amount of discovery a party may employ.  Any decision rendered by the referee will be
final, binding and conclusive, and judgment shall be entered pursuant to CCP
§644 in any court in the State of California having jurisdiction.  The parties shall complete all discovery no
later than fifteen (15) days before the first trial date established by the
referee.  The referee may extend such
period in the event of a party’s refusal to provide requested discovery for any
reason whatsoever, including, without limitation, legal objections raised to
such discovery or unavailability of a witness due to absence or illness.  No party shall be entitled to “priority” in
conducting discovery.  Either party may
take depositions upon seven (7) days written notice, and shall respond to
requests for production or inspection of documents within ten (10) days after
service.  All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding upon the parties.  Pending appointment of the referee as provided
herein, the Superior Court is empowered to issue temporary and/or provisional
remedies, as appropriate.

 

(b)           Except
as expressly set forth herein, the referee shall determine the manner in which
the reference proceeding is conducted including the time and place of all
hearings, the order of presentation of evidence, and all other questions that
arise with respect to the course of the reference proceeding.  Except for trial, all proceedings and
hearings conducted before the referee shall be conducted without a court
reporter unless a party requests a court reporter.  The party making such a request shall have
the obligation to arrange for and pay for the court reporter.  Subject to the referee’s power to award costs
to the prevailing party, the parties shall equally bear the costs of the court
reporter at the trial and the referee’s expenses.

 

(c)           The referee shall determine all issues in accordance
with existing California case and statutory law.  California rules of evidence applicable to
proceedings at law will apply to the reference proceeding.  The referee shall be empowered to enter
equitable as well as legal relief, to provide all temporary and/or provisional
remedies and to enter equitable orders that shall be binding upon the
parties.  At the close of the reference
proceeding, the referee shall issue a single judgment at disposing of all the
claims of the parties that are the subject of the reference.  The parties reserve the right (i) to contest
or appeal from the final judgment or any appealable order or appealable
judgment entered by the referee and (ii) to obtain findings of fact,
conclusions of laws, a written statement of decision, and (iii) to move for a
new trial or a different judgment, which new trial, if granted, shall be a
reference proceeding under this provision.

 

(d)           If
the enabling legislation which provides for appointment of a referee is
repealed (and no successor statute is enacted), any dispute between the

 

5

 

parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration conducted by a retired judge of the Court, in accordance with the
California Arbitration Act §1280 through §1294.2 of the CCP as amended from
time to time.  The limitations with
respect to discovery as set forth in this Section shall apply to any such
arbitration proceeding.

 

1.6          The definition of “Chattel Paper” in Exhibit A (Definitions) of the Loan
Agreement is hereby amended by deleting the reference to “Section 9105(1)(b)”
and inserting “Section 9102(a)(11)” in lieu thereof.

 

1.7          The definition of “Current Liabilities”
in Exhibit A (Definitions) of the
Loan Agreement is hereby amended by deleting it in its entirety and replacing
it with the following:

 

““Current
Liabilities” means, as of any applicable date, all amounts that
should, in accordance with GAAP, be included as current liabilities on the
consolidated balance sheet of Borrower and its Subsidiaries, as at such date,
plus, to the extent not already included therein, that portion of outstanding
Credit Extensions made under this Agreement that constitutes a current
liability under GAAP and, without duplication, all Advances.”

 

1.8          The definition of “Credit Extension” in Exhibit A (Definitions) of the Loan
Agreement is hereby amended by adding the phrase “, New Equipment Advance”
immediately following the phrase “Equipment Advance” contained therein.

 

1.9          The definition of “Deposit Accounts” in Exhibit A (Definitions) of the Loan
Agreement is hereby amended by deleting the reference to “Section 9105(e)” and
inserting “Section 9102(a)(29)” in lieu thereof.

 

1.10        Subsection (i) of the
definition of “Eligible
Accounts” in Exhibit A
(Definitions) of the Loan Agreement is hereby amended by deleting
the reference to “20%” and inserting “25%” in lieu thereof.

 

1.11        The definition of “Instruments” in Exhibit A (Definitions) of the Loan
Agreement is hereby amended by deleting the reference to “Section 9105(1)(i)”
and inserting “Section 9102(a)(47)” in lieu thereof.

 

1.12        The definition of “Pro-Forma Income/(Loss)”
in Exhibit A (Definitions) of the
Loan Agreement is hereby amended by deleting it in its entirety and replacing
it with the following:

 

““Pro-Forma
Income/(Loss)” means Net Income, plus interest expense, plus
taxes, plus non-cash charges (including depreciation, amortization, stock-based
compensation, research and development expense write-offs related to
acquisitions, and one-time restructuring charges), plus cash restructuring
charges (not to exceed $2,000,000 in the aggregate from the date of the Second

 

6

 

Amendment Closing Date through the Revolving Maturity Date), less
interest income, less one-time or non-recurring revenue.”

 

1.13        The definition of “Revolving Maturity Date”
in Exhibit A (Definitions) of the
Loan Agreement is hereby amended by deleting the reference to “July 30, 2004”
and inserting “July 30, 2006” in lieu thereof.

 

1.14        Exhibit A (Definitions) of the Loan Agreement is hereby
amended by adding the following definitions in their appropriate places
alphabetically:

 

““Committed New Equipment Line”
means a Credit Extension of up to $5,000,000.”

 

““New Equipment Advance”
has the meaning set forth in Section 2.1(g)(i).”

 

““New Equipment Maturity Date”
means July 30, 2007.”

 

““New Permitted Equipment”
has the meaning set forth in Section 2.1(g)(i).”

 

““New Software Advance”
has the meaning set forth in Section 2.1(g)(i).”

 

““Second Amendment Closing Date”
means July 30, 2004.”

 

““Tranche C” has the
meaning set forth in Section 2.1(g)(i).”

 

““Tranche C Equipment Advance”
means any New Equipment Advance made under Tranche C.”

 

““Tranche C Availability End Date”
means January 30, 2005.”

 

““Tranche D” has the
meaning set forth in Section 2.1(g)(i).”

 

““Tranche D Equipment Advance”
means any New Equipment Advance made under Tranche D.”

 

““Tranche D Availability End Date”
means July 30, 2005.”

 

1.15        Exhibit E (Compliance Certificate) of the Loan
Agreement is hereby amended by deleting it in its entirety and replacing it
with the attached Exhibit E.

 

2.             REAFFIRMATION OF EQUIPMENT ADVANCES. 
Borrower acknowledges that Bank has provided Equipment Advances to
Borrower under the Committed Equipment Line and that the current outstanding
principal balance of the Equipment Advances is $591,748.  Borrower will continue to repay the Equipment
Advances in consecutive monthly installments of principal plus accrued interest
in accordance with Section 2.1(c) of the Loan Agreement.  Borrower acknowledges that no further
Equipment Advances are permitted under the Committed Equipment Line.

 

7

 

2.             RATIFICATION AND REAFFIRMATION OF LIENS. 
Borrower hereby ratifies and reaffirms the validity
and enforceability of all of the liens and security interests heretofore
granted pursuant to the Loan Documents, as collateral security for the
Obligations, and acknowledges that all of such liens and security interests,
and all Collateral heretofore pledged as security for the Obligations,
continues to be and remains Collateral for the Obligations from and after the
date hereof.

 

3.             FULL FORCE AND EFFECT; ENTIRE
AGREEMENT.  Except to the extent expressly provided in
this Second Amendment, the terms and conditions of the Loan Agreement and the
other Loan Documents shall remain in full force and effect.  This Second Amendment and the other Loan
Documents constitute and contain the entire agreement of the parties hereto and
supersede any and all prior agreements, negotiations, correspondence,
understandings and communications between the parties, whether written or oral,
respecting the subject matter hereof. 
The parties hereto further agree that the Loan Documents comprise the
entire agreement of the parties thereto and supersede any and all prior
agreements, negotiations, correspondence, understandings and other
communications between the parties thereto, whether written or oral respecting
the extension of credit by Bank to Borrower and/or its affiliates.

 

3.             REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants that its
representations and warranties in the Loan Documents continue to be true and
complete in all material respects as of the date hereof after giving effect to
this Second Amendment and that the execution, delivery and performance of this
Second Amendment are duly authorized, do not require the consent or approval of
any governmental body or regulatory authority and are not in contravention of
or in conflict with any law or regulation or any term or provision of any other
agreement entered into by Borrower.

 

4.             COUNTERPARTS; EFFECTIVENESS.  This Second Amendment may be executed in any
number of counterparts, each of which when so delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument.  The effectiveness
of this Second Amendment is conditioned upon receipt by Bank of (a) this Second
Amendment, executed by Borrower, (b) payment by Borrower to Bank of a loan
restructuring fee of $27,500, which shall be in addition to, and not in lieu
of, any other facility fee, restructuring fee or any other fee under the Loan
Documents and (c) payment of any Bank Expenses due on the date hereof
(including without limitation, reasonable attorneys fees and expenses for the
preparation and execution of this Second Amendment).

 

 

[signatures on following page]

 

8

 

IN WITNESS WHEREOF, each of the
parties hereto has caused this First Amendment to be executed and delivered by
its duly authorized officer as of the date first written above.

 

 

	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VASTERA,
  INC.,

  
	
   

  	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMERICA BANK - CALIFORNIA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

9

 

EXHIBIT E

 

COMPLIANCE CERTIFICATE

 

	
  TO:

  	
  COMERICA BANK

  
	
   

  	
   

  
	
  FROM:

  	
  VASTERA, INC.

  

 

The undersigned authorized officer of [BORROWER]
hereby certifies that in accordance with the terms and conditions of the Loan
and Security Agreement between Borrower and Bank (the “Agreement”),
(i) Borrower is in complete compliance for the period ending                                   
with all required covenants, including without limitation Section 6.7, except
as noted below and (ii) all representations and warranties of Borrower
stated in the Agreement are true and correct in all material respects as of the
date hereof.  Attached herewith are the
required documents supporting the above certification.  The Officer further certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and
are consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

 

Please indicate compliance status by
circling Yes/No under “Complies” column.

 

	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly financial
  statements

  	
   

  	
  Quarterly no later than
  earlier of 45 days or 5 days after filing 10-Q

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  Annual (CPA Audited)

  	
   

  	
  FYE no later than
  earlier of 90 days or 5 days after filing 10-K

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  10K and 10Q

  	
   

  	
  (as applicable)

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  A/R & A/P Agings,
  Borrowing Base Cert.

  	
   

  	
  Monthly within 30 days

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  A/R Audit

  	
   

  	
  Initial and Annual

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  IP Report

  	
   

  	
  Upon request

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintain on a Monthly Basis:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Modified
  Quick Ratio

  	
   

  	
  2.00:1.00

  	
   

  	
  :1.00

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  Minimum Ratio of
  Total Liabilities to Tangible Net Worth

  	
   

  	
  1.50:1.00

  	
   

  	
  $

  	
   

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
	
  Minimum/Maximum Quarterly Pro-Forma Income/(Loss)

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  Yes

  	
   

  	
  No

  	
   

  
														

 

 

	
  Comments
  Regarding Exceptions: See Attached.

  	
   

  	
  BANK
  USE ONLY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Received by:

  	
   

  
	
  Sincerely,

  	
   

  	
  AUTHORIZED SIGNER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Verified:

  	
   

  
	
  SIGNATURE

  	
   

  	
  AUTHORIZED SIGNER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
  TITLE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Compliance Status

  	
   

  	
  Yes

  	
   

  	
  NoExhibit 10.1

 

SUBLEASE

 

THIS SUBLEASE (this
“Sublease”) is made and entered into as of the 12th day of October, 2004, by
and between GATEWAY, INC., a
Delaware corporation (hereinafter called “Sublandlord”), and NUVASIVE, INC., a Delaware corporation
(hereinafter called “Subtenant”).

 

W  I  T
N  E  S  S  E  T  H

 

WHEREAS, by that
certain Amended and Restated Lease dated as of April 15,1999 (the “Original
Lease”) as amended by that certain First Amendment to Amended and Restated
Lease Agreement dated as of April 17, 2000 (the “First Amendment”); that
certain Second Amendment to Amended and Restated Lease dated concurrently
herewith (the “Second Amendment”) and with the Original Lease, the First
Amendment and the Second Amendment are hereinafter collectively referred to as
the “Prime Lease”, a copy of which Prime Lease is attached hereto as Exhibit “A”
and by this reference made a part hereof, Carramerica Development, Inc., a
Delaware corporation (hereinafter, together with its successors and assigns,
called “Landlord”), leased to Sublandlord the entirety of a building located at
4545 Towne Centre Court in San Diego, California containing approximately
62,367 gross rentable square feet (the “Premises” and sometimes also referred
to herein as the “Building”); and

 

WHEREAS, subject to
the consent of Landlord, Subtenant desires to sublease from Sublandlord, and
Sublandlord desires to sublease to Subtenant, the entire Premises, all upon the
terms and subject to the conditions and provisions hereinafter set forth.

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Sublandlord and
Subtenant hereby agree as follows:

 

1.                                       Demise; Use.  Sublandlord hereby leases to Subtenant and
Subtenant hereby leases from Sublandlord the Premises for the term and rental
and upon the other terms and conditions hereinafter set forth, to be used and
occupied by Subtenant solely for medical and scientific research, development,
operating laboratory, machine shop, storage, warehousing and shipping relating
thereto (the “Medical Research

 

 

Use”) and general
office use and for no other purpose, subject to the limitations set forth in the
Prime Lease as may be amended and supplemented pursuant to the Consent
Agreement (as defined below), including, without limitation, the provisions of
paragraph 13 of the Schedule of the Prime Lease as well as the provisions of
paragraph 6 of the Prime Lease. 
Notwithstanding the foregoing, Subtenant shall be permitted to use the
Premises for the Medical Research Use only so long as Subtenant has obtained
Landlord’s consent thereto and complies with all of the terms and conditions
imposed upon the Medical Research Use as set forth by Landlord in the Prime
Lease, the Consent Agreement and as set forth in this Sublease.

 

2.                                       Term. 
The term of this Sublease shall commence (the “Commencement Date”) on
the later of (i) the date possession of the Premises is delivered to Subtenant,
(ii) one (1) day after the full execution and delivery to Subtenant of
this Sublease and the Consent Agreement by each party thereto and (iii)
December 1, 2004, and, unless sooner terminated pursuant to the provisions
hereof, shall terminate on the earlier of August 31, 2012 and the prior
termination of the Term of the Prime Lease. 
Notwithstanding the foregoing, Sublandlord agrees and acknowledges that
(a) Sublandlord will deliver possession of the Premises to Subtenant within two
(2) days after the full execution and delivery of this Sublease and the Consent
Agreement by each party thereto and (b) Subtenant shall have the right to
occupy the Premises solely for the purpose of commencing Subtenant’s Work (as
hereafter defined) in the Premises immediately upon delivery of possession of
the Premises to Subtenant (the “Early Occupancy Period”); provided, however, in
no event shall Subtenant be permitted to commence the conduct of its business
in the Premises prior to the Commencement Date and if Subtenant commences to
conduct its business in all or any portion of the Premises prior to the
Commencement Date then such date upon which Subtenant so commences the
performance of its business shall be deemed the Commencement Date and thereupon
the Early Occupancy Period shall be deemed to have expired.  The Early Occupancy Period shall be on all
terms and conditions as set forth in this Sublease except that Subtenant shall
have no obligation to pay Minimum Rent or Additional Rent during the Early Occupancy
Period.  As used herein, the phrase “Lease
Year” shall mean the twelve calendar month period commencing on the
Commencement Date (as hereinafter defined) (or, if the Commencement Date is not
the first day of a calendar month, then commencing on the first day of the
calendar month during which the Commencement Date occurs) and each anniversary
thereof, except that the last Lease Year may not be twelve calendar months and
shall terminate on the last day of the term of this Sublease.  Notwithstanding the foregoing, this
instrument shall be deemed and agreed to be a sublease only and not an
assignment.

 

3.                                       Minimum Rent.

 

(a)                                  Commencing
on the Commencement Date, Subtenant shall pay to Sublandlord minimum annual
rental (hereinafter called “Minimum Rent”) for the Premises as follows:

 

2

 

	
  Time Period

  	
   

  	
  Annual Minimum

  Rent Rate Per 

  Rentable Square

  Foot

  	
   

  	
  Annual Minimum

  Rent (based on

  62,367 Rentable

  Square Feet)

  	
   

  	
  Monthly

  Installments

  	
   

  
	
  First Lease
  Year*

  	
   

  	
  $

  	
  18.00

  	
   

  	
  $

  	
  756,000.00

  	
   

  	
  $

  	
  63,000.00

  	
   

  
	
  Second Lease
  Year

  	
   

  	
  $

  	
  18.54

  	
   

  	
  $

  	
  1,156,284.18

  	
   

  	
  $

  	
  96,357.02

  	
   

  
	
  Third Lease Year

  	
   

  	
  $

  	
  19.10

  	
   

  	
  $

  	
  1,191,209.70

  	
   

  	
  $

  	
  99,267.48

  	
   

  
	
  Fourth Lease
  Year

  	
   

  	
  $

  	
  19.67

  	
   

  	
  $

  	
  1,226,758.89

  	
   

  	
  $

  	
  102,229.91

  	
   

  
	
  Fifth Lease Year

  	
   

  	
  $

  	
  20.26

  	
   

  	
  $

  	
  1,263,555.42

  	
   

  	
  $

  	
  105,296.29

  	
   

  
	
  Sixth Lease Year

  	
   

  	
  $

  	
  20.87

  	
   

  	
  $

  	
  1,301,599.29

  	
   

  	
  $

  	
  108,466.61

  	
   

  
	
  Seventh Lease
  Year

  	
   

  	
  $

  	
  21.49

  	
   

  	
  $

  	
  1,340,266.83

  	
   

  	
  $

  	
  111,688.90

  	
   

  
	
  Eighth Lease
  Year**

  	
   

  	
  $

  	
  22.14

  	
   

  	
  $

  	
  1,380,805.38

  	
   

  	
  $

  	
  115,067.12

  	
   

  

 

*Note: 
Sublandlord and Subtenant acknowledge and agree that for the first Lease
Year of the term of this Sublease, the Minimum Rent shall be determined based
on 42,000 rentable square feet of the Premises (notwithstanding that Subtenant
shall be in occupancy of the entire Premises); provided, however, during such
period of time, Subtenant shall be responsible to pay any and all additional
rent due and owing under this Sublease based on the full rentable area of the
Premises.

 

**Note: 
Sublandlord and Subtenant acknowledge and agree that as the expiration
of the term of the Prime Lease is August 31, 2012, the eighth Lease Year may
not consist of a full twelve (12) month period and accordingly the Annual
Minimum Rent category for such eighth Lease Year as set forth in schedule above
is for explanatory purposes only.

 

Annual Minimum Rent shall be due and payable in twelve
equal installments.  Each such
installment shall be due and payable in advance on the first day of each
calendar month of the term hereof.  If
the term of this Sublease commences on a day other than the first day of a
month or ends on a day other than the last day of a month, Minimum Rent for
such month shall be prorated; prorated Minimum Rent for any such partial first
month of the term hereof shall be paid on the date on which the term
commences.  Notwithstanding anything in
this Sublease to the contrary, Subtenant shall pay to Sublandlord the first
monthly installment of Minimum Rent due under this Sublease (in the amount of
$63,000.00) upon the execution and delivery of this Sublease by Subtenant to
Sublandlord.

 

3

 

(b)                                 All
Minimum Rent and additional rent shall be paid without setoff or deduction
whatsoever and shall be paid to Sublandlord at the following address:  Real Estate Administration, Gateway, Inc.,
610 Gateway Drive Y91, North Sioux City, South Dakota 97049 or at such other
place as Sublandlord may designate by notice to Subtenant.

 

(c)                                  Notwithstanding
anything to the contrary contained in this Sublease, Sublandlord and Subtenant
acknowledge and agree that so long as Subtenant is not in default under this
Sublease past any cure period provided herein, Subtenant shall be entitled to
an abatement of the Minimum Rent due and owing under this Sublease for the
second, third and fourth months of the first Lease Year of the term of this
Sublease.  In no event shall the
foregoing abatement limit or restrict Subtenant’s obligation to pay the full
amount of any and all additional rent due under this Sublease.

 

4.                                       Additional Rent; Payments; Interest.

 

(a)                                  Except
for “Base Rent” (as such term is defined in the Prime Lease and for the payment
of which Subtenant shall have no obligation under this Sublease), Subtenant
shall also pay to Sublandlord all other amounts payable by Sublandlord under the
Prime Lease which are attributable to the Premises or attributable to
Subtenant, its agents, employees, customers or invitees, including without
limitation, the Operating Cost Share Rent, the Tax Share Rent, and Additional
Rent (as such terms are defined in the Prime Lease).  By way of example and not by way of
limitation, charges by Landlord for furnishing air conditioning or heating to
the Premises at times in addition to those certain times specified in the Prime
Lease, costs incurred by Landlord in repairing damage to the Building caused by
an employee of Subtenant, increased insurance premiums due as a result of
Subtenant’s use of the Premises, and amounts expended or incurred by Landlord
on account of any default by Subtenant which gives rise to a default under the
Prime Lease would be amounts payable by Subtenant pursuant to this Subsection
4(a).

 

(b)                                 Each
amount due to pursuant to Subsection 4(a) above and each other amount payable
by Subtenant hereunder, unless a date for payment of such amount is provided
for elsewhere in this Sublease, shall be due and payable on the fifth day
following the date on which Landlord or Sublandlord has given notice to
Subtenant of the amount thereof.

 

(c)                                  All
amounts other than Minimum Rent payable to Sublandlord under this Sublease
shall be deemed to be additional rent due under this Sublease.  All past due installments of Minimum Rent and
additional rent which are not paid on or before the third (3rd) business day
after such amount is due shall bear interest from the date due until paid at
the rate per annum equal to five percent (5%) in excess of the Prime Rate (as
hereinafter defined) in effect from time to time, which rate shall change from
time to time as of the effective date of each change in the Prime Rate, unless
a lesser rate shall then be

 

4

 

the
maximum rate permissible by law with respect thereto, in which event said
lesser rate shall be charged.  For the
purposes of this Sublease, the term “Prime Rate” shall mean the rate of
interest announced from time to time by Chase Manhattan Bank or its successors
as its prime or corporate base rate.

 

(d)                                 Subtenant
shall pay Landlord on the due dates for services requested by Subtenant which
are billed by Landlord directly to Subtenant rather than Sublandlord.

 

(e)                                  In
addition to the Minimum Rent payable pursuant to Section 3 above, from and
after the Commencement Date, for each calendar year of the term, Subtenant, as
additional rent, shall pay Subtenant’s Percentage Share (which Sublandlord and
Subtenant acknowledge and agree is equal to 100%) of Operating Cost Share Rent,
Tax Share Rent and all Additional Rent payable by Sublandlord under the Prime
Lease for the then current calendar year. 
Sublandlord shall give subtenant written notice of Sublandlord’s
estimate of the amount of additional rent per month payable pursuant to this
Subsection for each calendar year following Sublandlord’s receipt of Landlord’s
estimate of such amounts payable under the Prime Lease.  Thereafter, the additional rent payable
pursuant to this Subsection shall be determined and adjusted in accordance with
the provisions below.

 

(f)                                    The
determination and adjustment of additional rent contemplated under Subsection
4(e) above shall be made in accordance with the following procedures:

 

(1)                                  Upon
receipt of a statement from Landlord specifying the estimated Operating Cost
Share Rent, Tex Share Rent and all Additional Rent to be charged to Sublandlord
under the Prime Lease with respect to each calendar year, or as soon after
receipt of such statement as practicable, Sublandlord shall give Subtenant
written notice of its estimate of additional rent payable under Subsection 4(e)
for the ensuing calendar year, which estimate shall be prepared based on the estimate
received from Landlord (as Landlord’s estimate may change from time to time),
together with a copy of the statement received from Landlord.  Sublandlord’s estimate of additional rent to
be paid by Subtenant pursuant to this Sublease shall not exceed Subtenant’s
Percentage Share of Landlord’s estimate delivered to Sublandlord pursuant to
the Prime Lease (as Landlord’s estimate may change from time to time).  On or before the first day of each month
during each calendar year, Subtenant shall pay to Sublandlord as additional
rent one-twelfth (1/12th) of such estimated amount together with the Minimum
Rent.

 

(2)                                  In
the event Sublandlord’s notice set forth in Subsection 4(f)(1)
is not given in December of the calendar year preceding the calendar year for
which Sublandlord’s notice is applicable, as the case may be, then until the
calendar month after such notice is delivered by Sublandlord, Subtenant shall
continue to pay to Sublandlord monthly, during the ensuing calendar year,
estimated payments equal to the amounts payable hereunder during the calendar
year just ended.  Upon receipt of any
such post-December notice Subtenant shall (i) commence as of the immediately

 

5

 

following calendar
month, and continue for the remainder of the calendar year, to pay to
Sublandlord monthly such new estimated payments and (ii) if the monthly
installment of the new estimate of such additional rent is greater than the
monthly installment of the estimate for the previous calendar year, pay to
Sublandlord within thirty (30) days of the receipt of such notice an amount
equal to the difference of such monthly installment multiplied by the number of
full and partial calendar months of such year preceding the delivery of such notice.

 

(3)                                  Within
thirty (30) days after the receipt by Sublandlord of a final statement of such
costs from Landlord with respect to each calendar year, Sublandlord shall
deliver to Subtenant a statement of the adjustment to be made pursuant to
Section 4(f) hereof for the calendar year just ended, together with a copy of
the statement received by Sublandlord from Landlord.  If on the basis of such statement Subtenant
owes an amount that is less than the estimated payments for the calendar year
just ended previously paid by Subtenant, Sublandlord shall credit such excess
to the next payments of rent coming due or, if the term of this Sublease is
about to expire, so long as Subtenant is not in default under this Sublease,
promptly refund such excess to Subtenant. 
If on the basis of such statement Subtenant owes an amount that is more
than the estimated payments for the calendar year just ended previously made by
Subtenant, Subtenant shall pay the deficiency to Sublandlord within thirty (30)
days after delivery of the statement from Sublandlord to Subtenant.

 

(4)                                  For
partial calendar years during the term of this Sublease, the amount of
additional rent payable pursuant to Subsection 4(f) that is applicable to that
partial calendar year shall be prorated based on the ratio of the number of
days of such partial calendar year falling during the term of this Sublease to
365.  The expiration or earlier
termination of this Sublease shall not affect the obligations of Sublandlord and
Subtenant pursuant to this Section 4, and such obligations shall survive and
remain to be performed after any expiration or earlier termination of this
Sublease.

 

5.                                       Condition of Premises and Construction of Improvements.  Subtenant hereby acknowledges and agrees that
it is to demise the Premises in an “as-is” condition and Subtenant’s taking
possession of the Premises shall be conclusive evidence as against Subtenant
that the Premises were in good order and satisfactory condition when Subtenant
took possession.  No promise of
Sublandlord to alter, remodel or improve the Premises, and no representation
respecting the condition of the Premises have been made by Sublandlord to
Subtenant except to the extent expressly set forth in this Sublease.  Upon the expiration of the term hereof, or
upon any earlier termination of the term hereof or of Subtenant’s right to
possession, Subtenant shall surrender the Premises in the condition required in
the Prime Lease and the Consent Agreement (and in case of any conflict between
the Prime Lease and the Consent Agreement on the subject, the Consent Agreement
shall control).

 

6

 

6.                                       The Prime Lease.

 

(a)                                  This
Sublease and all rights of Subtenant hereunder and with respect to the Premises
are subject to the terms, conditions and provisions of the Prime Lease.  Subtenant hereby assumes and agrees to
perform faithfully and be bound by, with respect to the Premises, all of
Sublandlord’s obligations, covenants, agreements and liabilities under the
Prime Lease and all terms, conditions, provisions and restrictions contained in
the Prime Lease except:

 

(i)                                     for
the payment of “Base Rent” (as such term is defined in the Prime Lease);

 

(ii)                                  that Subtenant shall not have any obligations to construct
or install tenant improvements except as may be provided herein, and

 

(iii)                               that
the following provisions of the Prime Lease do not apply to this Sublease:  any provisions in the Prime Lease allowing or
purporting to allow Sublandlord any rent concessions or abatements or
construction or refurbishment allowances, any provisions allowing Sublandlord
to extend or renew the term of the Prime Lease (provided if this Sublease is
then in force and Subtenant remains in possession of the Premises, any election
or right of Sublandlord to renew or extend shall not abrogate or affect
Subtenant’s right to extend with Landlord as set forth in the Consent
Agreement), any provisions of the Prime Lease granting any option to purchase
or lease the Building or any other space in the Project, any right to audit any
costs passed through under the Prime Lease (including, without limitation, the
provisions of Section 2.D.(4) of the Prime Lease), any right to receive an
abatement of rent in connection with an interruption of utilities (including,
without limitation, the provisions of Section 4.F. of the Prime Lease) other
than as may be expressly set forth in this Sublease, any right to terminate the
Lease as a result of a casualty or fire (including, without limitation, any
provision set forth in Section 9.A. of the Prime Lease) other than as may be
expressly set forth in this Sublease, any right to any allowance granted under
the Prime Lease as set forth in Section 5.G. of the Prime Lease, any rights
deriving from a default under the Prime Lease by the Landlord thereunder
(including, without limitation, the provisions of Section 26.J. of the Prime
Lease), any extension option as set forth in Section 30 of the Prime Lease, any
right of first offer set forth in Section 36 of the Prime Lease, or any rights
with respect to the Tanabe Building as set forth in Section 37 of the Prime
Lease.

 

(b)                                 Without
limitation of the foregoing:

 

(i)                                     Subtenant
shall not make any changes, alterations or additions in or to the Premises
except as otherwise expressly provided herein or in the Consent Agreement;
provided, however, the foregoing shall not limit or restrict the right of
Subtenant to obtain the consent of Sublandlord to any such changes, alterations
or additions (such obligations shall be satisfied if the Consent Agreement contains
the

 

7

 

consent
of Sublandlord to such changes, alterations or additions).  In connection therewith, Sublandlord and
Subtenant acknowledge and agree that Subtenant desires to make certain
alterations, additions and/or improvements to the Premises following its
occupancy thereof.  In connection with
such work (hereinafter referred to as the “Subtenant Work”), such work shall be
performed at the sole cost and expense of Subtenant, shall be performed by a
licensed contractor which is reasonably acceptable to Sublandlord and Landlord,
pursuant to plans and specifications which have been approved by both
Sublandlord and Landlord (which approval will not be unreasonably withheld or
delayed) and shall otherwise strictly conform to all the terms and provisions
of the Prime Lease.  Subtenant shall
obtain the approval of both the Landlord and Sublandlord with respect to any
and all aspects of the Subtenant Work prior to commencing same.  Sublandlord agrees to respond to any request
for approval of any Subtenant Work within a reasonable period of time.

 

(ii)                                  If
Subtenant desires to take any other action and the Prime Lease and/or the
Consent Agreement would require that Sublandlord obtain the consent of Landlord
before undertaking any action of the same kind, Subtenant shall not undertake
the same without the prior written consent of Sublandlord.  Sublandlord may condition its consent on the
consent of Landlord being obtained and may require Subtenant to contact Landlord
directly for such consent;

 

(iii)                               All
rights given to Landlord and its agents and representatives by the Prime Lease
and/or the Consent Agreement to enter the Premises shall inure to the benefit
of Sublandlord and their respective agents and representatives with respect to
the Premises;

 

(iv)                              Sublandlord
shall also have all other rights, and all privileges, options, reservations and
remedies, granted or allowed to, or held by, Landlord under the Prime Lease
and/or the Consent Agreement or granted to Landlord in the Consent Agreement;

 

(v)                                 Subtenant
shall maintain insurance of the kinds and in the amounts required to be
maintained by Sublandlord under the Prime Lease as well as set forth in the
Consent Agreement.  All policies of
liability insurance shall name as additional insureds the Landlord and
Sublandlord and their respective officers, directors or partners, as the case
may be, and the respective agents and employees of each of them; and

 

(vi)                              Subtenant
shall not do anything or suffer or permit anything to be done which could
result in a default under the Prime Lease or permit the Prime Lease to be
canceled or terminated.

 

8

 

(c)                                  Notwithstanding
anything contained herein or in the Prime Lease which may appear to be to the
contrary, Sublandlord and Subtenant hereby agree as follows:

 

(i)                                     Subtenant
shall not assign, mortgage, pledge, hypothecate or otherwise transfer or permit
the transfer of this Sublease or any interest of Subtenant in this Sublease, by
operation of law or otherwise, or permit the use of the Premises or any part
thereof by any persons other than Subtenant and Subtenant’s employees, or
sublet the Premises or any part thereof. 
Notwithstanding the foregoing, Subtenant shall have the right to assign
this Sublease or sub-sublet all or any portion of the Premises to an entity
into which Subtenant has merged or consolidated or to an entity to which
substantially all of Subtenant’s assets are conveyed (collectively a “Corporate
Transaction”) without the consent of Sublandlord so long as such assignee or
sub-subtenant has a net worth reasonably acceptable to Sublandlord and provided
that Subtenant delivers not less than thirty (30) days prior written notice to
Sublandlord and Landlord, which notice shall include information satisfactory
to Sublandlord and Landlord in order to determine the net worth both of the
original Subtenant named herein and of the successor subtenant immediately
prior to such assignment of sub-sublet. 
Subtenant shall otherwise have the right to assign this Sublease or
sublet all or any portion of the Premises in accordance with the terms and
provisions of the Prime Lease and Sublandlord shall have all of the same rights
as the Landlord in connection therewith. 
Further, any rights granted to Subtenant herein to assign this Sublease
or sub-sublet all or any portion of the Premises without the Sublandlord’s
consent shall be subject to the rights and obligations of the Landlord under
the Prime Lease to consent thereto.  In
connection with any assignment of this Sublease or sub-sublet of all or any
portion of the Premises as permitted Subtenant hereinabove, Subtenant shall
remit to Sublandlord fifty percent (50%) of any and all Excess Rent (as defined
in the Prime Lease) received by Subtenant in connection with such transfer.

 

(ii)                                  Neither
rental nor other payments hereunder shall abate by reason of any damage to or
destruction of the Premises, or the Building or any part thereof, unless, and
then only to the extent that, rental and such other payments actually abate
under the Prime Lease with respect to the Premises on account of such event and
Sublandlord and Subtenant acknowledge and agree that in the event monthly Rent
(as defined in the Prime Lease) is abated pursuant to the provisions of Section
4.F. of the Prime Lease, then Subtenant shall be entitled to a consequent
abatement of rent due under this Sublease to the extent that such monthly Rent
(as defined in the Prime Lease) actually abates under the Prime Lease;

 

(iii)                               Sublandlord
and Subtenant acknowledge and agree that in the event the Prime Lease permits
the Tenant thereunder to terminate the Prime Lease in the event of any casualty
to the Premises, then except as set forth hereinbelow, in no event shall
Sublandlord, as the Tenant under the Prime Lease be restricted in so
terminating the

 

9

 

Prime Lease,
provided, however, so long as (a) Subtenant is not then in default under this
Sublease after written notice and past any cure period provided under this
Sublease, and (b) Subtenant then has a tangible net worth in excess of Twenty
Million Dollars ($20,000,000.00) as evidenced by financial statements
reasonably satisfactory to Sublandlord, in no event shall Sublandlord, as the Tenant
under the Prime Lease, elect to so terminate the Prime Lease without obtaining
the consent or approval from Subtenant as to such termination.  Notwithstanding the foregoing, in no event
shall the right of Sublandlord to elect to so terminate the Prime Lease be
limited or restricted in the event Sublandlord would have the right to
terminate the Prime Lease as set forth in paragraph 9.A thereof in the
circumstance where the time to restore any such casualty would exceed two (2)
months and the restoration work would begin during the last twelve (12) months
of the Term of the Prime Lease if (a) Sublandlord provides prior notice of such
election to Subtenant and (b) such termination right is conditioned upon
Subtenant having a written agreement with Landlord to continue in possession
and occupy the Premises without interruption through exercise of Subtenant’s
option to extend set forth in the Consent Agreement;

 

(iv)                              Subtenant
shall not have any right to exercise or have Sublandlord exercise any option
under the Prime Lease, including, without limitation, any option to extend the
term of the Prime Lease or lease additional space (provided, Sublandlord and
Subtenant acknowledge and agree that the foregoing shall not limit or restrict
any such options and rights that may be granted to Subtenant directly from
Landlord in the Consent Agreement so long as Sublandlord incurs no liability or
obligation in connection therewith); and

 

(v)                                 In
the event of any conflict between the terms, conditions and provisions of the
Prime Lease and of this Sublease, the terms, conditions and provisions of this
Sublease shall, in all instances, govern and control.  In the event of any conflict between the
terms, conditions and provisions of this Sublease and the Consent Agreement, as
between Sublandlord and Subtenant, the terms, conditions and provisions of this
Sublease shall, in all instances, govern and control; provided, however,
Sublandlord and Subtenant acknowledge and agree that as between Landlord and
Subtenant, the terms, conditions and provisions of the Consent Agreement shall,
in all instances, govern and control.

 

(d)                                 It
is expressly understood and agreed that Sublandlord does not assume and shall
not have any of the obligations or liabilities of Landlord under the Prime
Lease and that Sublandlord is not making the representations, warranties or
indemnifications, if any, made by Landlord in the Prime Lease.  With respect to work, services, repairs and
restoration or the performance of other obligations required of Landlord under
the Prime Lease, Sublandlord’s sole obligation with respect thereto shall be to
request the same, upon written request from Subtenant, and to use reasonable
efforts, at Subtenant’s sole cost and expense, to obtain the same from
Landlord.

 

10

 

Sublandlord shall
not be liable in damages, nor shall rent abate hereunder, for or on account of
any failure by Landlord to perform the obligations and duties imposed on it
under the Prime Lease.  Sublandlord and
Subtenant acknowledge and agree that any repair, maintenance and/or replacement
obligations with respect to the Premises which are the responsibility of the
Sublandlord, as tenant under the Prime Lease, shall be performed by Subtenant
at Subtenant’s sole cost and expense.  In
the event that a condition exists in the Premises that Landlord is obligated to
repair under the terms of the Prime Lease, Subtenant shall so advise
Sublandlord, and Sublandlord, in turn, shall promptly advise Landlord
thereof.  At Subtenant’s request, in the
event that Landlord fails to fulfill any repair or maintenance obligation under
the terms of the Prime Lease with respect to the Premises, Sublandlord shall
use its reasonable efforts to have Landlord fulfill such repair and maintenance
obligations, all of which reasonable efforts shall at be Subtenant’s sole cost
and expense.

 

(e)                                  Except
for the Consent Agreement nothing contained in this Sublease shall construed to
create privity of estate or contract between Subtenant and Landlord, except the
agreements of Subtenant in Sections 10 and 11 hereof in favor of Landlord, and
then only to the extent of the same.

 

7.                                       Default by Subtenant.

 

(a)                                  Upon
the happening of any of the following:

 

(i)                                     Subtenant
fails to pay any Minimum Rent within five (5) days after the date it is due;

 

(ii)                                  Subtenant
fails to pay any other amount due from Subtenant hereunder and such failure
continues for five (5) days after notice thereof from Sublandlord to Subtenant;

 

(iii)                               Subtenant
fails to perform or observe any other covenant or agreement set forth in this
Sublease and such failure continues for fifteen (15) days except that if such
default is not capable of being cured within such fifteen (15) day period, then
so long as Subtenant continues to diligently attempt to cure such default, the
fifteen (15) day period shall be extended to sixty (60) days or such lesser
period as is reasonably necessary to complete the cure of such default after
notice thereof from Sublandlord to Subtenant; or

 

(iv)                              any
other event occurs which involves Subtenant or the Premises and which would
constitute a default under the Prime Lease if it involved Sublandlord or the
Premises and such default continues for fifteen (15) days after notice thereof
from Sublandlord to Subtenant except that if such default is not capable of
being cured within such fifteen (15) day period, then so long as Subtenant
continues to diligently attempt to cure such default, the fifteen (15) day
period shall be extended to

 

11

 

sixty (60) days or
such lesser period as is reasonably necessary to complete the cure of such
default; Subtenant shall be deemed to be in default hereunder, and Sublandlord
may exercise, without limitation of any other rights and remedies available to
it hereunder or at law or in equity, any and all rights and remedies of
Landlord set forth in the Prime Lease in the event of a default by Sublandlord
thereunder.

 

(b)                                 In
the event Subtenant fails or refuses to make any payment or perform any
covenant or agreement to be performed hereunder by Subtenant, Sublandlord may
make such payment or undertake to perform such covenant or agreement (but shall
not have any obligation to Subtenant to do so). 
In such event, amounts so paid and amounts expended in undertaking such
performance, together with all costs, expenses and attorneys’ fees incurred by
Sublandlord in connection therewith, shall be additional rent hereunder.

 

8.                                       Nonwaiver.  Failure of either party to declare any
default or delay in taking any action in connection therewith shall not waive
such default.  No receipt of moneys by
Sublandlord from Subtenant after the termination in any way of the term or of
Subtenant’s right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the term or affect any notice given to
Subtenant or any suit commenced or judgment entered prior to receipt of such
moneys.

 

9.                                       Cumulative Rights and Remedies.  All rights and remedies of Sublandlord under
this Sublease shall be cumulative and none shall exclude any other rights or
remedies allowed by law.

 

10.                                 Waiver of Claims and Indemnity.

 

(a)                                  Subtenant
hereby releases and waives any and all claims against Landlord and Sublandlord
and each of their respective officers, directors, partners, agents and
employees for injury or damage to person, property or business sustained in or
about the Building or the Premises by Subtenant other than by reason of the
active negligence or willful misconduct and except in any case which would
render this release and waiver void under law.

 

(b)                                 Subtenant
agrees to indemnify, defend and hold harmless Landlord and Sublandlord and each
of their respective officers, directors, partners, agents and employees, from
and against any and all claims, demands, costs and expenses of every kind and
nature, including attorneys’ fees and litigation expenses, arising from
Subtenant’s use and occupancy of the Premises, Subtenant’s construction of any
leasehold improvements in the Premises, any release, discharge, storage, production,
use or disposal of Hazardous Substances in the Premises caused or permitted by
Subtenant or its agents, contractors, employees, licensees or invitees or in
any way relating to any Hazardous Substances brought onto the Premises by
Subtenant or its agents, contractors, employees, licensees or invitees, the
installation, maintenance, repair and/or removal of

 

12

 

any and all
signage installed by Subtenant, including, without limitation, the Building Signage,
or from any breach or default on the part of Subtenant in the performance of
any agreement or covenant of Subtenant to be performed under this Sublease or
the Consent Agreement or pursuant to the terms of this Sublease or the Consent
Agreement, or from any act or neglect of Subtenant or its agents, officers,
employees, guests, servants, invitees or customers in or about the
Premises.  In addition, the foregoing
indemnification of Sublandlord and the other noted parties herein shall include
any and all liability assessed, imposed or charged against Subtenant for any
violation of the provisions of the Prime Lease and/or Consent Agreement with
respect to their respective provisions relating to Hazardous Substances, which
violation was not caused by Sublandlord or its agents, contractors or
employees.  In case any such proceeding
is brought against any of said indemnified parties, Subtenant covenants, if
requested by Sublandlord, to defend such proceeding at its sole cost and
expense by legal counsel reasonably satisfactory to Sublandlord.

 

(c)                                  Sublandlord
agrees to indemnify, defend and hold harmless Subtenant and its officers,
directors, partners, agents and employees, from and against any and all claims,
demands, cost and expenses of every kind and nature, including attorneys’ fees
and litigation expenses, arising from (i) any breach or default by Sublandlord
under the Prime Lease (which breach or default was not attributable to
Subtenant or its agents, contractors, employees, licensees or invitees under this
Sublease and/or the Consent Agreement), and (ii) the active negligence or
willful misconduct of Sublandlord or its agents, officers or employees or from
any breach or default on the part of Sublandlord in the performance of any
agreement or covenant of Sublandlord to be performed under this Sublease.  In case any such proceeding is brought
against any of said indemnified parties, Sublandlord covenants, if requested by
Subtenant, to defend such proceeding at its sole cost and expense by legal
counsel reasonably satisfactory to Subtenant.

 

11.                                 Waiver of Subrogation.  Anything in this Sublease to the contrary
notwithstanding, Sublandlord and Subtenant each hereby waive any and all rights
of recovery, claims, actions or causes of action against the other and the
officers, directors, partners, agents and employees of each of them, and
Subtenant hereby waives any and all rights of recovery, claims, actions or
causes of action against Landlord and its agents and employees for any loss or
damage that may occur to the Premises, or any improvements thereto, or any
personal property of any person therein or in the Building, by reason of fire,
the elements or any other cause insured against under valid and collectible
fire and extended coverage insurance policies, regardless of cause or origin,
including negligence, except in any case which would render this waiver void
under law.

 

12.                                 Brokerage Commissions.  Each party hereby represents and warrants to
the other that other than Julien J. Studley, Inc. and The Staubach Company,
whose commissions shall be payable by Sublandlord) it has had no dealings with
any real estate

 

13

 

broker
or agent in connection with this Sublease, and that it knows of no real estate
broker or agent who is or might be entitled to a commission in connection with
this Sublease.  Each party agrees to
protect, defend, indemnify and hold the other harmless from and against any and
all claims inconsistent with the foregoing representations and warranties for
any brokerage, finder’s or similar fee or commission in connection with this
Sublease, if such claims are based on or relate to any act of the indemnifying
party which is contrary to the foregoing representation and warranties.

 

13.                                 Successors and Assigns.  This Sublease shall be binding upon and inure
to the benefit of the successors and assigns of Sublandlord and shall be
binding upon and inure to the benefit of the successors of Subtenant and, to
the extent any such assignment may be approved, Subtenant’s assigns.  The provisions of Subsection 6(e) and
Sections 10 and 11 hereof shall inure to the benefit of the successors and
assigns of Landlord.

 

14.                                 Entire Agreement.  This Sublease contains all the terms,
covenants, conditions and agreements between Sublandlord and Subtenant relating
in any manner to the rental, use and occupancy of the Premises.  No prior agreement or understanding
pertaining to the same shall be valid or of any force or effect.  The terms, covenants and conditions of this
Sublease cannot be altered, changed, modified or added to except by a written
instrument signed by Sublandlord and Subtenant.

 

15.                                 Notices.

 

(a)                                  In
the event any notice from the Landlord or otherwise relating to the Prime Lease
is delivered to the Premises or is otherwise received by Subtenant, Subtenant
shall, as soon thereafter as possible, but in any event within one (1) business
day, deliver such notice to Sublandlord if such notice is written or advise
Sublandlord thereof by telephone if such notice is oral.

 

(b)                                 In
the event any default notice from the Landlord is received by Sublandlord,
Sublandlord shall, as soon thereafter as possible, but in any event within one
(1) business day, deliver such notice to Subtenant if such notice is written or
advise Subtenant thereof by telephone if such notice is oral.

 

(c)                                  Notices
and demands required or permitted to be given by either party to the other with
respect hereto or to the Premises shall be in writing and shall not be
effective for any purpose unless the same shall be served either by personal
delivery with a receipt requested, by overnight air courier service or by
United States certified or registered mail, return receipt requested, postage
prepaid; provided, however, that all notices of default shall be served either
by personal delivery with a receipt requested or by overnight air courier
service, addressed after the Rent Commencement Date to Subtenant at the
Premises and otherwise as follows:

 

14

 

	
  if to Sublandlord:

  	
  GATEWAY, INC.

  
	
   

  	
  Real Estate Administration

  
	
   

  	
  610 Gateway Drive Y91

  
	
   

  	
  North Sioux City, South Dakota 97049

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  GATEWAY, INC.

  
	
   

  	
  7565 Irvine Center Drive

  
	
   

  	
  Irvine, California 92618

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  
	
  if to Subtenant:

  	
  NUVASIVE, INC.

  
	
   

  	
  10065 Old Grove Road

  
	
   

  	
  San Diego, CA 92131

  
	
   

  	
  Attn: Carrie Rael

  

 

Notices and demands shall be deemed to have been given
two (2) days after mailing, if mailed, or, if made by personal delivery or by
overnight air courier service, then upon such delivery.  Either party may change its address for
receipt of notices by giving notice to the other party.

 

16.                                 Authority.  Subtenant represents and warrants to
Sublandlord that this Sublease has been duly authorized, executed and delivered
by and on behalf of Subtenant and constitutes the valid, enforceable and
binding agreement of Subtenant and of each party constituting Subtenant, each
of whom shall be jointly and severally liable hereunder in accordance with the
terms hereof.  Sublandlord represents and
warrants to Subtenant that the Sublease has been duly authorized, executed and
delivered by and behalf of Sublandlord and constitutes the valid, enforceable
and binding agreement of Sublandlord.

 

17.                                 Limitation on Liability.  Subject to the provisions of Section 10(c)
hereof, Sublandlord shall not be liable for personal injury or property damage
to Subtenant, its officers, agents, employees, invitees, guests, licensees or
any other person in the Premises, regardless of how such injury or damage may
be caused; provided, however, as to any claims for personal injury, the
foregoing shall not limit the liability of Sublandlord with respect to any
personal injury caused by the intentionally or grossly negligent acts of
Sublandlord or its agents, contractors or employees.  Any property of Subtenant kept or stored in
the Premises shall be kept or stored at the sole risk of Subtenant.  Subtenant shall hold Sublandlord harmless
from any claims arising out of any personal injury or property damage occurring
in the Premises, including subrogation claims by Subtenant’s insurance
carrier(s).

 

18.                                 Consents; Approvals; and Definitions.  In any instance when Sublandlord’s consent or
approval is required under this Sublease, Sublandlord’s refusal

 

15

 

to consent to or
approve any matter or thing shall be deemed reasonable if, among other matters,
such consent or approval is required under the provisions of the Prime Lease
incorporated herein by reference but has not been obtained from Landlord.  Except as otherwise provided herein,
Sublandlord shall not unreasonably withhold or delay its consent to or approval
of a matter if such consent or approval is required under the provisions of the
Prime Lease and Landlord has consented to or approved of such matter.

 

19.                                 Consent of Landlord.  The obligations of Sublandlord and Subtenant
under this Sublease are conditioned and contingent upon the Landlord consenting
to this Sublease by executing and delivering a counterpart of the Consent of
Landlord attached hereto as Exhibit ‘E” to this Sublease (the “Consent
Agreement”).  In the event Landlord’s
consent is not obtained within thirty (30) days after the date hereof as
evidenced by its execution and delivery of this Sublease and the Consent
Agreement, this Sublease shall automatically terminate and become null and void
and neither Sublandlord nor Subtenant shall have any further obligations or
liability hereunder or to each other with respect to the Premises.  In connection with obtaining Landlord’s consent,
Sublandlord and Subtenant acknowledge and agree that Subtenant shall pay any
and all legal fees and costs associated with obtaining such consent to this
Sublease; provided, however, up to a maximum cost to Sublandlord of $1,500.00,
Sublandlord shall bear one-half (1/2) of such cost payable to Landlord in
connection with obtaining its consent to this Sublease.

 

20.                                 Examination.  Submission of this instrument for examination
or signature by Subtenant does not constitute a reservation of or option for
the Premises or in any manner bind Sublandlord, and no lease, sublease or
obligation on Sublandlord shall arise until this instrument is signed and
delivered by Sublandlord and Subtenant and the consent of Landlord is obtained
as described in Section 19 above; provided, however, that the execution and
delivery by Subtenant of this Sublease to Sublandlord shall constitute an
irrevocable offer by Subtenant to sublease the Premises on the terms and
conditions herein contained, which offer may not be revoked for five (5)
business days after such delivery.

 

21.                                 Security Deposit.  Subtenant at least one (1) business day prior
to the commencement of the Early Occupancy Period and as a condition to
delivery of possession of the Premises by Sublandlord, shall deposit with
Sublandlord cash or a letter of credit (the “Letter of Credit”) equal to six
(6) month’s Minimum Rent (which Sublandlord and Subtenant agree is equal to
$561,303.00).  Such letter of credit
shall be in a form satisfactory to Sublandlord (in its sole and absolute
discretion) and issued upon a bank with a minimum long term capital rating of “AA”,
with a branch in San Diego, California for purposes of Sublandlord’s ability to
draw thereon and shall otherwise be satisfactory to Sublandlord (in its sole
and absolute discretion).  Further, such
letter of credit shall be irrevocable, “evergreen”, “clean” and in the full
amount required naming Sublandlord as beneficiary, and providing for partial
and multiple draws and shall

 

16

 

otherwise
be satisfactory to Sublandlord as set forth hereinabove.  Such letter of credit shall be held by
Sublandlord as security for the faithful performance by Subtenant of all terms,
covenants and conditions of this Sublease. 
Subtenant agrees that Sublandlord may apply (or draw upon, as the case
may be) the security deposit to remedy any failure by Subtenant to repair or
maintain the Premises or to perform any other terms, covenants and conditions
contained herein or make any payment owing hereunder, all following the
expiration of applicable notice and cure periods.  If Subtenant has kept and performed all
terms, covenants and conditions of this Sublease during the term, Sublandlord
will, within thirty (30) days after the expiration hereof, promptly return the
security deposit to Subtenant or the last permitted assignee of Subtenant’s
interest hereunder.  Should Sublandlord
use (or draw upon, as the case may be) any portion of the security deposit to
cure any default by Subtenant hereunder, Subtenant shall forthwith replenish
the security deposit to the original amount. 
Sublandlord shall not be required to keep the security deposit separate
from its general funds, and Subtenant shall not be entitled to interest on any
such deposit.  Subtenant hereby
acknowledges and agrees that Sublandlord may draw upon such letter of credit at
such time as Sublandlord is permitted to do so under this paragraph 21 or if
Subtenant fails to provide Sublandlord with a replacement letter of credit no
later than thirty (30) days prior to the expiration date of any then held
letter of credit in Sublandlord’s possession. 
In the event Sublandlord draws down such letter of credit, then
Sublandlord shall hold such cash security deposit in accordance with the terms
and provisions of this paragraph 21 and Subtenant shall have the right to
replace the letter of credit and receive a return of the cash from Sublandlord
by providing a letter of credit consistent with the requirements as set forth
in this Paragraph 21.  Notwithstanding
anything herein to the contrary, the amount of the letter of credit held as a
Security Deposit shall be reduced annually, commencing upon the commencement of
the second Lease Year, on a straight line basis (subject to Subtenant’s right
to Accelerated Reduction (as hereinafter defined) as set forth below) based
upon the Term of this Sublease (the “Automatic Reduction”) upon the following
terms and conditions:  (i) Subtenant is
not then in monetary default under this Sublease nor in non-monetary default
under this Sublease (as to such non-monetary default, in order for such
condition to prohibit such reduction in the letter of credit such non-monetary
default must be beyond applicable notice and cure periods), (ii) in no event
shall such Security Deposit be less than $187,101.00 (“Minimum Amount”), (iii)
Subtenant provides written notice to Sublandlord of Subtenant’s reduction of
such Security Deposit and a replacement letter of credit in the then
appropriate amount which meets the requirements for such a letter of credit as
set forth in this paragraph 21, and (iv) Subtenant shall be entitled to one
such reduction each year effective as of the anniversary of the Commencement
Date.  At such time as Subtenant has met
the conditions set forth above, Sublandlord shall return the then held letter
of credit to Subtenant.  In addition to
the Automatic Reduction of the Security Deposit as provided above, Sublandlord
agrees that provided Subtenant has met the conditions to the Automatic
Reduction as set forth in subparagraphs (i) through (iii) above, Subtenant
shall also be entitled to additionally reduce the amount of the letter of
credit to the Minimum Amount at such time as Subtenant provides written notice
and

 

17

 

evidence to
Sublandlord (which is reasonably satisfactory to Sublandlord) that the net
worth of Subtenant is equal to or greater than Twenty Million Dollars
($20,000,000.00) and that Subtenant has maintained such net worth for a minimum
period of not less than twelve (12) consecutive months immediately prior to
such Accelerated Reduction (the “Accelerated Reduction”).  At such time as Subtenant has met the
conditions for the Accelerated Reduction and provided Sublandlord with the
replacement letter of credit in the Minimum Amount, Sublandlord shall return
the then held letter of credit to Subtenant.

 

22.                                 Furniture and Fixtures.  Subtenant hereby covenants and agrees that it
shall have the right to use all of the furniture and fixtures located in the Premises
and scheduled on the schedule attached to the Sublease as Exhibit “C”
throughout the term of the Sublease at no cost or expense to Subtenant.  Upon the expiration of the term of this
Sublease, Subtenant shall purchase the FFE from Sublandlord for a cost of $1.00
pursuant to a form of bill of sale attached to this Sublease as Exhibit “D”.  Sublandlord and Subtenant acknowledge and
agree that Sublandlord is providing such FFE to Subtenant for its use in an
as-is basis without representation or warranty of any kind whatsoever,
including the disclaimer of any warranties of merchantability, fitness for a
particular purpose or any other thing or nature whatsoever except (i)
Sublandlord has merchantable title to such items and (ii) such items are
conveyed free and clear of any liens or security interests of Landlord or any
other party.

 

23.                                 Parking.  During the term of this Sublease, so long as
Subtenant is not in default under this Sublease, Subtenant and its employees
shall be entitled to use Subtenant’s Percentage Share of the parking rights
granted to Sublandlord as tenant, under the Prime Lease, including, without
limitation, the terms and provisions of Section 4.G. of the Prime Lease.  Subtenant acknowledges and agrees that its
right to use such parking area shall be upon the terms and conditions set forth
in the Prime Lease, including, without limitation, any and all rules and
regulations promulgated by Landlord with respect thereto.  Sublandlord also agrees, provided Subtenant
has obtained the consent of Landlord thereto and Sublandlord as to the plans
and specifications for same as well as all aspects of the installation of same,
Subtenant shall have the right at its sole cost and expense to install a
security booth and/or gate control with respect to parking area pursuant to the
provisions of Section 4G of the Prime Lease.

 

24.                                 Roof Rights.  Sublandlord and Subtenant acknowledge and
agree that Subtenant may desire, at its sole cost and expense, to install a
satellite dish on the roof of the Building. 
So long as Subtenant is not in default under this Sublease past any cure
period provided herein, Sublandlord hereby consents to the installation of same
upon the following terms and conditions: 
(i) Subtenant shall obtain the approval of Landlord and Sublandlord with
respect to all aspects of the installation of such satellite dish, including,
without limitation, the plans and specifications therefor, the manner of
installation of same and the location of same; and (ii) the right granted to
Subtenant hereunder shall be

 

18

 

subject
to all of the terms and conditions of the Prime Lease.  In addition to such satellite dish,
Sublandlord acknowledges and agrees that Subtenant may desire to install a
central mechanical plant on the roof of the Premises and so long as the
Subtenant obtains the consent of Landlord and Sublandlord as to the plans and
specifications for same as well as all aspects of the installation of same and
obtains all necessary approvals under the Prime Lease, Subtenant shall be
permitted to utilize the roof of the Premises to install such a central
mechanical plant.

 

25.                                 Signage.  Sublandlord and Subtenant hereby acknowledge
and agree that so long as Subtenant is not in default under this Sublease past
any cure period provided herein, Subtenant shall be granted the right provided
to Sublandlord, as tenant under the Prime Lease, to install the Building Sign
as set forth in Section 31 of the Prime Lease, subject to the following terms
and conditions:

 

(i)                                     in
no event shall Subtenant be permitted to install such Building Sign unless and
until Subtenant obtains any and all necessary approvals in connection
therewith, including, without limitation, the approval of Landlord, Sublandlord
and any necessary governmental entity or agency having jurisdiction over the
Premises;

 

(ii)                                  Subtenant
shall comply with all of the terms and provisions of the Lease and this
Sublease in connection with the installation of same.

 

26.                                 Counterpart; Execution.  This Sublease may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall constitute
but one and the same instrument. 
Signature pages may be detached from the counterparts and attached to a
single copy of this Sublease to physically form one document.  This Sublease may also be delivered by
telefacsimile and any signature of a party on a telefacsimile copy shall be binding.  Any party delivering an executed counterpart
of this Sublease by telefacsimile shall also deliver by overnight service to
the other party or parties an original counterpart of this Sublease, provided
the failure to deliver an original counterpart shall not affect the validity,
enforceability and binding effect of this Sublease.

 

19

 

IN WITNESS WHEREOF, Sublandlord and Subtenant have
executed this Sublease as of the date aforesaid.

 

	
   

  	
   

  	
  SUBLANDLORD

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  GATEWAY, INC.

  	
   

  	 

	
   

  	
   

  	
  a Delaware corporation

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   Sr. Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  SUBTENANT

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  NUVASIVE, INC.

  	
   

  	 

	
   

  	
   

  	
  a Delaware corporation

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   /s/ Kevin
  O’Boyle

  	
   

  	 

	
   

  	
   

  	
  Its:

  	
   CFO

  	
   

  	 

 

[SIGNATURE PAGE TO
SUBLEASE

BETWEEN GATEWAY,
INC. & NUVASIVE, INC.]

 

 

EXHIBIT A

 

PRIME LEASE

 

A-1

 

EXHIBIT B

 

INTENTIONALLY OMITTED

 

B-1

 

EXHIBIT E

 

CONSENT AGREEMENT

 

E-1

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