Document:

nktr-ex101_86.htm

Exhibit 10.1

360 Third Street

OFFICE LEASE

This Office Lease (the "Lease"), dated as of the date set forth in Section 1 of the Summary of Basic Lease Information (the "Summary"), below, is made by and between KILROY REALTY FINANCE PARTNERSHIP, L.P., a Delaware limited partnership ("Landlord"), and NEKTAR THERAPEUTICS, a Delaware corporation ("Tenant"). 

SUMMARY OF BASIC LEASE INFORMATION

		
	
TERMS OF LEASE
	
DESCRIPTION

	
1.Date:
	
May 31, 2018.

	
2.Premises:

(Article 1)
	
 

	
2.1Building:
	
That certain seven (7) story office building (the "Building") located at 360 Third Street, San Francisco, California  94107, which Building contains approximately 436,358 rentable square feet of space. 

			
	
 
	
 
	
 

 

 

		
	
2.2Premises:
	
A total of approximately 135,936 rentable square feet of space, as further set forth in Exhibit A to this Lease, consisting of:

(i) approximately 1,726 rentable square feet of space located on the first (1st) floor of the Building and commonly known as Suite 104 ("Phase I Premises");

(ii) approximately 35,402 rentable square feet of space located on the seventh (7th) floor of the Building and commonly known as Suite 700 ("Phase II Premises");

(iii) approximately 26,624 rentable square feet of space located on the sixth (6th) floor of the Building and commonly known as Suite 600 ("Phase III Premises");

(iv) approximately 12,719 rentable square feet of space located on the sixth (6th) floor of the Building and commonly known as Suite 625 ("Phase IV Premises");

(v) approximately 13,459 rentable square feet of space located on the sixth (6th) floor of the Building and commonly known as Suite 650A ("Phase V Premises");

(vi) approximately 14,303 rentable square feet of space located on the sixth (6th) floor of the Building and commonly known as Suite 650B ("Phase VI Premises"); and

(vii) approximately 31,703 rentable square feet of space located on the seventh (7th) floor of the Building and commonly known as Suite 750 ("Phase VII Premises").

The Phase I Premises, Phase II Premises, Phase III Premises, Phase IV Premises, Phase V Premises, Phase VI Premises and Phase VII Premises are each referred to herein as a "Phase", and collectively as the "Premises".

	
2.3Project:
	
The Building is the principal component of an office project known as "360 Third Street," as further set forth in Section 1.1.2 of this Lease.

	
3.Lease Term

(Article 2):
	
 

	
3.1Length of Term:
	
Approximately eleven (11) years and eight (8) months from the "Phase I Lease Commencement Date", as defined below.

	
3.2Lease Commencement Date:
	
Tenant's lease of each Phase shall commence separately as set forth below, each date, as applicable, is a "Lease Commencement Date".

	
3.2.1Phase I Lease Commencement Date:
	
The date (the "Phase I Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase I Premises and (ii) four (4) months following the date the Phase I Premises are delivered to Tenant (the "Phase I Delivery Date"), which Phase I Delivery Date is estimated to be concurrent with the parties' full execution and delivery of this Lease).

	
3.2.2Phase II Lease Commencement Date:
	
The date (the "Phase II Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase II Premises and (ii) four (4) months following the date the Phase II Premises are delivered to Tenant (the "Phase II Delivery Date"), which Phase II Delivery Date is estimated to be January 1, 2019 (subject to Section 1.3 of the Lease).

	
3.2.3Phase III Lease Commencement Date:
	
The date (the "Phase III Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase III Premises and (ii) four (4) months following the date the Phase III Premises are delivered to Tenant (the "Phase III Delivery Date"), which Phase III Delivery Date is estimated to be August 1, 2019 (subject to Section 1.3 of the Lease).

	
3.2.4Phase IV Lease Commencement Date:
	
The date (the "Phase IV Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase IV Premises and (ii) four (4) months following the date the Phase IV Premises are delivered to Tenant (the "Phase IV Delivery Date"), which Phase IV Delivery Date is estimated to be August 1, 2019 (subject to Section 1.3 of the Lease)).

			
	
 
	
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3.2.5Phase V Lease Commencement Date:
	
The date (the "Phase V Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase V Premises and (ii) four (4) months following the date the Phase V Premises are delivered to Tenant (the "Phase V Delivery Date"), which Phase V Delivery Date is estimated to be April 1, 2019.

	
3.2.6Phase VI Lease Commencement Date:
	
The date (the "Phase VI Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase VI Premises and (ii) four (4) months following the date the Phase VI Premises are delivered to Tenant (the "Phase VI Delivery Date"), which Phase VI Delivery Date is estimated to be August 1, 2019 (subject to Section 1.3 of the Lease)).

	
3.2.7Phase VII Lease Commencement Date:
	
The date (the "Phase VII Lease Commencement Date") that is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase VII Premises and (ii) three (3) months following the date the Phase VII Premises are delivered to Tenant (the "Phase VII Delivery Date"), which Phase VII Delivery Date is estimated to be November 1, 2019).

The Phase I Delivery Date, Phase II Delivery Date, Phase III Delivery Date, Phase IV Delivery Date, Phase V Delivery Date, Phase VI Delivery Date and Phase VII Delivery Date are each referred to herein as a "Delivery Date".

	
3.3Lease Expiration Date:
	
January 31, 2030.

	
3.4Option Term:
	
One (1) five (5)-year option to renew, as more particularly set forth in Section 2.2 of this Lease.

	
4.Base Rent
(Article 3):
	
The  Base Rent schedule is set forth in Exhibit A-2 attached hereto.  It is based on the estimated Delivery Dates for each Phase of the Premises as set forth in Section 3.2 above in this Summary.  The Base Rent shall escalate as of the first (1st) day of the second "Lease Year" (as defined in Section 2.1 of this Lease) and as of the first (1st) day of each subsequent Lease Year during the Lease Term.  Following the determination of the actual Delivery Dates for each Phase of the Premises, and/or the dates Tenant first commences to conduct business in each Phase, the parties shall execute an amendment to this Lease reflecting the applicable Lease Commencement Date for each Phase and the Base Rent (as increased as of the applicable Lease Commencement Date) owed for each Phase.

			
	
 
	
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5.Base Year 

(Article 4): 
	
Calendar year 2020; provided, however, (i) electricity is separately submetered and directly paid by Tenant to Landlord in accordance with the terms and conditions of this Lease, and (ii) janitorial service shall be paid by Tenant 

directly to Tenant's janitorial provider in accordance with the terms and conditions of this Lease.

	
6.Tenant's Share

(Article 4):
	
Tenant's Share with respect to each Phase of the Premises shall be the following approximate percentages:

With respect to the Phase I Premises: 0.3955%

With respect to the Phase II Premises: 8.1131%

With respect to the Phase III Premises: 6.1014%

With respect to the Phase IV Premises: 2.9148%

With respect to the Phase V Premises: 3.0844%

With respect to the Phase VI Premises: 3.2778%

With respect to the Phase VII Premises: 7.2654%

	
7.Permitted Use

(Article 5):
	
Tenant shall use the Premises solely for general office, administrative and data center use and uses incidental thereto (the "Permitted Use"); provided, however, that notwithstanding anything to the contrary set forth hereinabove, and as more particularly set forth in the Lease, Tenant shall be responsible for operating and maintaining the Premises pursuant to, and in no event may Tenant's Permitted Use violate, (A) Landlord's "Rules and Regulations," as that term is set forth in Section 5.2 of this Lease, (B) all "Applicable Laws," as that term is set forth in Article 24 of this Lease, (C) all applicable zoning, building codes and the "CC&Rs," as that term is set forth in Section 5.3 of this Lease, and (D) first-class office standards in the market in which the Project is located.

	
8.Letter of Credit

(Article 21): 
	
$5,437,440.00, subject to the terms and conditions of Article 21 of this Lease.

	
9.Parking Passes

(Article 28):
	
Fourteen (14) valet parking passes.

	
10.Address of Tenant

(Section 29.18):
	
Nektar Therapeutics

455 Mission Bay Boulevard South, Suite 100

San Francisco, California  94158

Attention:  General Counsel
E-mail:  Mark Wilson: 
MWilson@necktar.com

with copies to:

	
 
	
Nektar Therapeutics

455 Mission Bay Boulevard South, Suite 100

San Francisco, California  94158
Attention:  CFO
E-mail:  Gilbert M. Labrucherie Jr.: 

  glabrucherie@nektar.com

and

			
	
 
	
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Nektar Therapeutics
455 Mission Bay Boulevard South, Suite 100
San Francisco, California  94158

Attention:  Vice President, Facilities Operations and Environmental, Health & Safety

Telephone Number:  (415) 482-5661
E-mail:  Robert Bacci: RBacci@nektar.com

	
11.Address of Landlord

(Section 29.18):
	
Kilroy Realty Finance Partnership, L.P.
c/o Kilroy Realty Corporation
12200 West Olympic Boulevard, Suite 200
Los Angeles, California  90064
Attention:  Legal Department

with copies to:

Kilroy Realty Corporation

12200 West Olympic Boulevard, Suite 200
Los Angeles, California  90064
Attention:  Mr. John Fucci

and

Kilroy Realty Corporation
100 First Street
Office of the Building, Suite 250
San Francisco, California 94107

Attention:  Rick Buziak, Senior Vice President

and

Kilroy Realty Corporation

100 First Street

Office of the Building, Suite 250

San Francisco, California 94105

Attention:  Executive Vice-President

and

Allen Matkins Leck Gamble Mallory & Natsis LLP

1901 Avenue of the Stars, Suite 1800

Los Angeles, California 90067

Attention:  Anton N. Natsis, Esq.

and, for sustainability-related notices only:

Kilroy Realty Corporation
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
Attention: Sara Neff,
Senior Vice President – Sustainability

			
	
 
	
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12.Brokers

(Section 29.24):

 

Representing Tenant:

Kidder Mathews
101 Mission Street, Suite 2100
San Francisco, California  94105

	
 

 

 

Representing Landlord:

CBRE, Inc.
101 California Street, 44th Floor
San Francisco, California  94111

	
13.Improvement Allowance

(Section 2 of Exhibit B):
	
$50.00 per rentable square foot of the Premises for a total of $6,796,800.00.

ARTICLE 1

			
	
 
	
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PREMISES, BUILDING, PROJECT, AND COMMON AREAS

1.1Premises, Building, Project and Common Areas.

1.1.1The Premises.  Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises, as set forth and defined in Section 2.2 of the Summary.  The outlines of each Phase of the Premises is set forth in Exhibit A attached hereto and the Premises and each respective Phase of the Premises has approximately the number of rentable square feet as set forth in Section 2.2 of the Summary.  The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions (the "TCCs") herein set forth, and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such TCCs by Tenant to be kept and performed and that this Lease is made upon the condition of such performance.  The parties hereto hereby acknowledge that the purpose of Exhibit A is to show the approximate location of each Phase of the Premises in the "Building," as that term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the "Common Areas," as that term is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or the "Project," as that term is defined in Section 1.1.2, below.  Except as specifically set forth in this Lease and in the Work Letter attached hereto as Exhibit B (the "Work Letter"), Tenant shall accept the Premises in its existing "as-is" condition and Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises.  Tenant also acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or the Project or with respect to the suitability of any of the foregoing for the conduct of Tenant's business, except as specifically set forth in this Lease and the Work Letter.

1.1.2The Building and the Project.  The Premises is a part of the building set forth in Section 2.1 of the Summary (the "Building").  The Building is the principal component of an office project known as "360 Third Street."  The term "Project," as used in this Lease, shall mean (i) the Building and the Common Areas, and (ii) the land (which is improved with landscaping, parking facilities and other improvements) upon which the Building and the Common Areas are located.

1.1.3Common Areas.  Tenant shall have the non-exclusive right to use in common with other tenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas, together with such other portions of the Project designated by Landlord, in its discretion, including certain areas designated for the exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the "Common Areas").  The Common Areas shall consist of the "Project Common Areas" and the "Building Common Areas" (as both of those terms are defined below).  The term "Project Common Areas," as used in this Lease, shall mean the portion of the Project designated as such by Landlord.  The term "Building Common Areas," as used in this Lease, shall mean the portions of the Common Areas located within the Building designated as such by Landlord.  The manner in which the Common Areas are maintained and operated shall be at Landlord's reasonable discretion, provided that Landlord shall maintain and operate the same in a manner consistent with the maintenance and operation of common areas in "Comparable Buildings," as defined in Section 4 of Exhibit H attached hereto and the use thereof shall be subject to such rules, regulations and restrictions as Landlord may make from time to time, provided that such rules, regulations and restrictions do not unreasonably interfere with the rights granted to Tenant under this Lease and the Permitted Use.  Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas; provided that no such changes shall be permitted which materially reduce Tenant's rights or access hereunder.  The Common Areas currently include the roof deck of the Building (the "Roof Deck"), which currently can be used on a non-exclusive basis by third parties (including Building tenants).  Notwithstanding the foregoing, Landlord reserves the right, in its sole discretion, to close, alter, add to, change the Roof Deck, and/or cease further use thereof by third parties (including Building tenants), at any time in the future.  Except when and where Tenant's right of access is specifically excluded in this Lease, Tenant shall have the right of access to the Premises, the Building, and the Project parking facility twenty-four (24) hours per day, seven (7) days per week during the "Lease Term," as that term is defined in Section 2.1, below.

			
	
 
	
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1.2Stipulation of Rentable Square Feet of Premises and Building.  For purposes of this Lease, "rentable square feet" of the Premises shall be deemed as set forth in Section 2.2 of the Summary, and the rentable square feet of the Building shall be deemed as set forth in Section 2.1 of the Summary.  For purposes of this Lease, such rentable square feet were calculated pursuant to BOMA 2017 for Office Buildings: Standard Methods of Measurement (ANSI/BOMA Z65.1-2017), and its accompanying guidelines.

1.3Delay in Delivery.  Landlord and Tenant hereby acknowledge and agree that, except for the Phase I Premises, the Premises is currently occupied by other tenants (the "Existing Tenants").  Landlord anticipates that each of the Existing Tenants will surrender, vacate and deliver full possession of their respective Phases on or before the respective estimated Delivery Dates for such Phases, but in the event the Existing Tenants fail to do so, except as set forth in this Section 1.3 below, Landlord shall have no liability whatsoever to Tenant relating to or arising from Landlord's inability or failure, for any reason, to deliver possession of any Phase to Tenant on any specific date, and such inability or failure shall not affect the validity of this Lease or the obligations of Tenant hereunder; provided, however, that following the scheduled expiration of any Existing Tenant's lease, if such Existing Tenant does not timely vacate its premises, Landlord shall use commercially reasonable efforts to pursue all available remedies at law and in equity, including filing an unlawful detainer action to regain possession of the subject Phase of the Premises.  The Base Rent abatement described in Sections 1.3.1 through 1.3.6 below are collectively, the "Late Delivery Credits".  Tenant's rights to the Late Delivery Credits, and Tenant's right to terminate Tenant's lease of the Phase III Premises, the Phase IV Premises and/or the Phase VI Premises as set forth in Section 1.3.7 below, shall be Tenant's sole and exclusive remedies at law or in equity for the failure of any particular Delivery Date to occur prior to or after any particular date.  Tenant shall immediately apply any accrued Late Delivery Credits against payments of Rent as they become due.  Landlord shall provide Tenant with notice of the then anticipated Delivery Date of the Phase II Premises no less than thirty (30) days' prior to such anticipated Delivery Date, and Landlord shall provide Tenant with notice of the then anticipated Delivery Dates for each of the other Phases of the Premises no less than sixty (60) days' prior to the respective anticipated Delivery Dates for each of such other Phases of the Premises.  The following chart is included for the convenience of the parties and shows the estimated Delivery Dates for each Phase of the Premises:

 

					
	
Phase
	
Suite
	
Rentable Square Footage

 
	
Estimated Delivery Date
	
Late Delivery Credit Date (Subject to Force Majeure)

	
Phase I Premises
	
Suite 104
	
1,726
	
Upon execution
	
N/A

	
Phase II Premises
	
Suite 700
	
35,402
	
January 1, 2019
	
March 1, 2019

	
Phase III Premises
	
Suite 600
	
26,624
	
August 1, 2019
	
September 1, 2019

	
Phase IV Premises
	
Suite 625
	
12,719
	
August 1, 2019
	
September 1, 2019

	
Phase V Premises
	
Suite 650A
	
13,459
	
April 1, 2019
	
May 1, 2019

	
Phase VI Premises
	
Suite 650B
	
14,303
	
August 1, 2019
	
September 1, 2019

	
Phase VII Premises
	
Suite 750
	
31,703
	
November 1, 2019
	
December 1, 2019

 

1.3.1Phase II Late Delivery Credit.  If the Phase II Delivery Date has not occurred by March 1, 2019 (the "Phase II Late Delivery Credit Date"), subject to extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase II Premises for each day following the Phase II Late Delivery Credit Date until the date that is the earlier to occur of (i) the actual Phase II Delivery Date, or (ii) the day immediately preceding the third (3rd) monthly anniversary of the Phase II Late Delivery Credit Date (as such date may have been extended by virtue of Force Majeure).  The parties acknowledge that the Phase II Premises is currently leased to a third party tenant (the "Existing Phase II Tenant") whose lease (the "Existing Phase II Lease") is scheduled to expire on May 31, 2021.  The Existing Phase II Tenant has the right under the Existing Phase II Lease to terminate such lease before its scheduled expiration date, which election is in the sole discretion of the Existing Phase II Tenant.  Landlord is currently negotiating with the Existing Phase II Tenant for an early termination of the Existing Phase II Lease.  Landlord shall promptly notify Tenant if Landlord enters into a written agreement with the Existing Phase II Tenant for an early termination of the Existing Phase II Lease 

			
	
 
	
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(the “Phase II Notice”), the terms of which agreement shall be in each party's sole discretion.  Such Phase II Notice shall state the latest scheduled expiration date that has been agreed to by Landlord and the Existing Phase II Tenant for the early termination of the Existing Phase II Lease.  Landlord shall deliver the Phase II Premises to Tenant promptly following the expiration or earlier termination of the Existing Phase II Lease, and the vacation and surrender of the Phase II Premises by the Existing Phase II Tenant.  If either: (A) the Phase II Notice is not delivered to Tenant on or before August 1, 2018, (B) the Phase II Notice is delivered to Tenant on or before August 1, 2018 but it states that the latest scheduled expiration date of the Existing Phase II Lease will occur after March 31, 2019, or (C) the Phase II Delivery Date has not occurred by June 30, 2019, then in any such case, Landlord shall work with Tenant in an attempt to locate temporary premises for Tenant consisting of at least 30,000 rentable square feet that is then available for lease to a third party as a temporary alternative to the Phase II Premises.  Such temporary premises may be located in the Building or in another building owned by Landlord or an entity affiliated with Kilroy Realty Corporation (the "KRC Affiliate") in the City of San Francisco, provided that the decision whether to lease any such temporary premises and the terms thereof shall be in Tenant's and the applicable building owner's respective sole discretion (provided that the parties hereto intend that any such temporary premises shall be leased by Tenant until the Phase II Lease Commencement Date occurs), and Landlord shall have no liability whatsoever to Tenant relating to or arising from Landlord's inability or failure, for any reason, to locate or lease temporary premises to Tenant (or for the inability or failure of any KRC Affiliate to locate or lease temporary premises to Tenant), and any such inability or failure to locate or lease temporary premises to Tenant shall not affect the validity of this Lease or the obligations of Tenant hereunder (including, without limitation, the obligation of Tenant to lease the Phase II Premises commencing as of the Phase II Lease Commencement Date).

1.3.2Phase III Late Delivery Credit.  If the Phase III Delivery Date has not occurred by September 1, 2019 (the "Phase III Late Delivery Credit Date"), subject to Section 1.3.7 below and extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase III Premises for each day following the Phase III Late Delivery Credit Date until the actual Phase III Delivery Date.

1.3.3Phase IV Late Delivery Credit.  If the Phase IV Delivery Date has not occurred by September 1, 2019 (the "Phase IV Late Delivery Credit Date"), subject to Section 1.3.7 below and extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase IV Premises for each day following the Phase IV Late Delivery Credit Date until the actual Phase IV Delivery Date.

1.3.4Phase V Late Delivery Credit.  If the Phase V Delivery Date has not occurred by May 1, 2019 (the "Phase V Late Delivery Credit Date"), subject to extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase V Premises for each day following the Phase V Late Delivery Credit Date until the actual Phase V Delivery Date.

1.3.5Phase VI Late Delivery Credit.  If the Phase VI Delivery Date has not occurred by September 1, 2019 (the "Phase VI Late Delivery Credit Date"), subject to Section 1.3.7 below and extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase VI Premises for each day following the Phase VI Late Delivery Credit Date until the actual Phase VI Delivery Date.

1.3.6Phase VII Late Delivery Credit.  If the Phase VII Delivery Date has not occurred by December 1, 2019 (the "Phase VII Late Delivery Credit Date"), subject to extension by virtue of Force Majeure, then Tenant shall be entitled to a day-for-day abatement of Base Rent attributable to the Phase VII Premises for each day following the Phase VII Late Delivery Credit Date until the actual Phase VII Delivery Date.  

1.3.7Existing Tenant in Sixth Floor Space.  The parties acknowledge that an Existing Tenant (the "Sixth Floor Existing Tenant") currently leases (the "Sixth Floor Lease") the Phase III Premises, the Phase IV Premises and the Phase VI Premises (collectively, the "Sixth Floor Space"), and that such Sixth Floor Existing Tenant may have the right under the existing terms of the Sixth Floor Lease to elect, in its sole discretion, to extend the term of the Sixth Floor Lease (the "Existing Sixth Floor Renewal Right") past the Delivery Dates and the Late Delivery Credit Dates for the Sixth Floor Space.  Landlord believes it is unlikely that the Sixth Floor Existing Tenant will have the right under the existing terms of the Sixth Floor Lease to exercise 

			
	
 
	
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the Existing Sixth Floor Renewal Right because the Sixth Floor Existing Tenant currently subleases portions of the Sixth Floor Space to third-party sublessees, and to Landlord's knowledge such subleases are not scheduled to expire until after the deadline under the Sixth Floor Lease for the Sixth Floor Existing Tenant to exercise the Existing Sixth Floor Renewal Right.  However, if the Sixth Floor Existing Tenant satisfies the occupancy requirement in the Sixth Floor Lease for its exercise of the Existing Sixth Floor Renewal Right, and elects to exercise such Existing Sixth Floor Renewal Right, on or prior to October 31, 2018, then the Delivery Dates for the Sixth Floor Space will not occur until after the expiration or earlier termination of the Sixth Floor Lease (as so extended).  Landlord shall provide Tenant with prompt written notice if the Sixth Floor Existing Tenant fails to timely exercise the Existing Sixth Floor Renewal Right.  If the Sixth Floor Existing Tenant validly exercises the Existing Sixth Floor Renewal Right, then (i) Landlord shall give Tenant written notice (the "Sixth Floor Renewal Notice") within five (5) days of Landlord's receipt of such election by the Sixth Floor Existing Tenant, and (ii) notwithstanding any contrary provision of this Lease, Tenant shall have no right to any Late Delivery Credits for the Phase III Premises, the Phase IV Premises, or the Phase VI Premises (i.e., Sections 1.3.2, 1.3.3, and 1.3.5 above shall be void and of no further force or effect).  Within thirty (30) days following Tenant's receipt of the Sixth Floor Renewal Notice, either party hereto shall have the right to terminate Tenant's lease of the Phase III Premises, the Phase IV Premises, and/or the Phase VI Premises by written notice to the non-terminating party, in which event (A) the terminated Phase(s) within the Sixth Floor Space will no longer be part of the Premises, (B) the Premises will be automatically reduced by the rentable square footage of such terminated Phase(s), and only the following amounts, percentages and figures appearing or referred to in this Lease shall be modified (i.e., proportionately reduced) based upon the rentable square footage of the terminated Phase(s):  (i) the amounts of "Base Rent" (as that term is defined in Section 3.1 below), (ii) "Tenant's Share" (as that term is defined in Section 4.2.7 below), (iii) the amount of the "L-C" (as that term is defined in Section 21.1 below), and (iv) the "Improvement Allowance" (as that term is defined in Section 2.1 of the Work Letter), and (C) the parties shall have no further obligations under this Lease with respect to such terminated Phase(s).  The parties shall promptly execute an amendment to this Lease to memorialize the foregoing changes to this Lease.

With respect to any Phases within the Sixth Floor Space that are or are not terminated pursuant to this Section 1.3.7, Landlord shall work with Tenant in an attempt to locate temporary premises for Tenant that are then available for lease to a third party as a temporary alternative to the non-terminated Phases within the Sixth Floor Space.  Such temporary premises may be located in the Building or in another building owned by Landlord or a KRC Affiliate in the City of San Francisco, provided that the decision whether to lease any such temporary premises and the terms thereof shall be in Tenant's and the applicable building owner's respective sole discretion (provided that the parties hereto intend that any such temporary premises shall be leased by Tenant until each of the applicable Lease Commencement Dates occur with respect to the non-terminated Phases within the Sixth Floor Space, and with respect to the terminated Phases within the Sixth Floor Space, such temporary premises shall be leased by Tenant for the lease term agreed to by Tenant and the applicable landlord in their respective sole discretion), and Landlord shall have no liability whatsoever to Tenant relating to or arising from Landlord's inability or failure, for any reason, to locate or lease temporary premises to Tenant (or for the inability or failure of any KRC Affiliate to locate or lease temporary premises to Tenant), and any such inability or failure to locate or lease temporary premises to Tenant shall not affect the validity of this Lease or the obligations of Tenant hereunder (including, without limitation, the obligation of Tenant to lease the non-terminated Phases within the Sixth Floor Space commencing as of the applicable Lease Commencement Dates with respect to such Phases).

The Phase I Late Delivery Credit Date, Phase II Late Delivery Credit Date, Phase III Late Delivery Credit Date, Phase IV Late Delivery Credit Date, Phase V Late Delivery Credit Date, Phase VI Late Delivery Credit Date and Phase VII Late Delivery Credit Date are each referred to herein as a "Late Delivery Credit Date".  Notwithstanding anything to the contrary set forth in this Section 1.3, Landlord shall not be able to extend any single Late Delivery Credit Date by more than ninety (90) days of "Force Majeure," as that term is defined in Section 29.16 below.

1.4Right of First Offer.  Landlord hereby grants to the Original Tenant and its "Permitted Transferee Assignee," as that term is defined in Section 14.8 below, a one-time right of first offer (the "Right of First Offer") with respect to each of the following suites on the fourth (4th) floor of the Building (each, a "First Offer Space"): (i) Suite 400, containing 20,597 rentable square feet, (ii) Suite 425, containing 15,466 rentable square feet, (iii) Suite 450, containing 20,488 rentable square feet, and (iv) Suite 475, containing 10,411 rentable square feet, on the terms and 

			
	
 
	
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conditions set forth in this Section 1.4.  The outline of each First Offer Space is more particularly shown on Exhibit A-1 attached hereto.  Notwithstanding the foregoing, and subject to the TCCs of Section 1.4.7 below, such Right of First Offer shall commence only following the expiration or earlier termination of the existing leases of each First Offer Space (the "Superior Leases") (including renewals of any such leases where such renewal is currently set forth in such lease regardless of whether such renewals are consummated pursuant to a lease amendment or a new lease or whether such renewals are executed strictly in accordance with their respective terms as such terms exist as of the date of this Lease).  Such Right of First Offer shall be subordinate to all existing expansion rights set forth in such Superior Leases, which rights relate to the First Offer Space, including, without limitation, any expansion, first offer, first refusal, first negotiation and other rights, regardless of whether such existing rights are executed strictly in accordance with their respective terms or pursuant to a lease amendment or a new lease (the "Superior Rights").  Notwithstanding any contrary provision in the lease of any Superior Right Holder, such rights of any Superior Right Holder shall continue to be Superior Rights in the event that such Superior Right Holder's lease is renewed or otherwise modified (to the extent such renewal is currently set forth in such lease, and regardless of whether such renewal is consummated pursuant to a lease amendment or a new lease or whether such renewal is executed strictly in accordance with its terms).  All such tenants of Superior Leases, are collectively referred to as the "Superior Right Holders".  Tenant's Right of First Offer shall be on the TCCs set forth in this Section 1.4.

1.4.1Procedure for Offer.  Subject to the TCCs of this Section 1.4, Landlord shall notify Tenant (the "First Offer Notice") from time to time when any First Offer Space or any portion thereof becomes available for lease to third parties, provided that any Superior Right Holder does not wish to lease such space.  Pursuant to such First Offer Notice, Landlord shall offer to lease to Tenant the then available First Offer Space.  The First Offer Notice shall describe:  (A) the space so offered to Tenant, (B) the approximate date on which the First Offer Space will be available for occupancy by Tenant and the proposed First Offer Commencement Date, and (C) the Base Rent and the other "Economic Terms" (as that term is defined herein below) upon which Landlord is willing to lease such First Offer Space to Tenant.  As used in this Section 1.4, "Economic Terms" shall refer to:  (i) the rental rate (including additional rent and considering any "base year" or "expense stop" applicable thereto); (ii) the amount of any improvement allowance or the value of any work to be performed by Landlord in connection with the lease of such First Offer Space (which amount is a deduction from the cost to Tenant or such other party); and (iii) the amount of free rent (which amount is a deduction from the cost to Tenant or such other party).

1.4.2Procedure for Acceptance.  If Tenant wishes to exercise Tenant's Right of First Offer with respect to the space described in the First Offer Notice, then within ten (10) business days of delivery of the First Offer Notice to Tenant, Tenant shall have the right to deliver notice to Landlord ("Tenant's First Offer Exercise Notice") of Tenant's election to exercise its right of first offer with respect to the entire space described in the First Offer Notice on the terms contained in such notice.  Concurrently with Tenant's exercise of its Right of First Offer, Tenant shall provide Tenant's most recent Audited Financial Statement (as that term is defined in Section 17.2 below) and any previous Audited Financial Statements (prepared by Tenant and not already in Landlord's possession or otherwise reviewed by Landlord) pertaining to the period starting with the Lease Commencement Date and continuing through the date of Landlord's delivery of the First Offer Notice, unless Tenant is otherwise not required to provide Audited Financial Statements pursuant to Section 17.2 below.  If Tenant does not deliver Tenant's First Offer Exercise Notice and all required accompanying documentation (if any) within the ten (10) business day period, then Landlord shall be free to enter into a lease ("Third Party Lease") for the space described in the First Offer Notice to anyone to whom Landlord desires on any terms Landlord desires; provided, however, if during the 180-day period following the initial delivery of the First Offer Notice to Tenant, the Economic Terms that Landlord is prepared to accept under a Third Party Lease are greater than five percent (5%) more favorable to the tenant than the Economic Terms offered by Landlord to Tenant (as determined using a "Net Equivalent Lease Rate", as defined in Exhibit H attached hereto), then Landlord shall first make an offer of such more favorable Economic Terms (as such Economic Terms are determined using a Net Equivalent Lease Rate and adjusted to account for the difference, if any, in the lease term offered to Tenant and the lease term offered to such third party) (the "New Offer Terms") to Tenant by written notice (the "Additional Notice") setting forth the New Offer Terms, and Tenant shall have seven (7) business days from Tenant's receipt of the Additional Notice to accept the New Offer Terms set forth in the Additional Notice (which procedure shall be repeated until Landlord enters into a lease or lease amendment with respect to such First Offer Space which does not require Landlord 

			
	
 
	
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to deliver another Additional Notice to Tenant pursuant to the terms of this paragraph or Tenant exercises such Right of First Offer, as applicable).  If Landlord does not lease the First Offer Space within the foregoing one hundred eighty (180) day period, then Landlord shall again be required to provide Tenant with a First Offer Notice prior entering into a Third Party Lease.

1.4.3Tenant's Financial Condition.  Following receipt of Tenant's First Offer Exercise Notice, Landlord shall determine the amount by which the L-C shall increase based on the financial condition of Tenant as evidenced in the provided Audited Financial Statements, or otherwise determined by Landlord pursuant to Section 17.2 below ("Tenant's Financial Condition").  Concurrently with Tenant's execution of the amendment contemplated in Section 1.4.6 below, Tenant shall increase and deliver to Landlord the L-C applicable to the First Offer Space, and Tenant's failure to timely deliver such increased L-C shall constitute an event of default under this Lease.

1.4.4First Offer Term; Parking for First Offer Space.  Tenant shall commence payment of Rent for the First Offer Space, and the term of the First Offer Space (the "First Offer Term") shall commence upon the date set forth in the First Offer Notice (the "First Offer Commencement Date") and shall terminate on the date set forth in the First Offer Notice.  In connection with the First Offer Space, Tenant shall be entitled to rent valet parking passes at the ratio of one (1) parking pass per each 10,000 rentable square feet of the First Offer Space, subject to the terms of Article 28 below, commencing on the First Offer Commencement Date.

1.4.5Construction in First Offer Space.  Tenant shall take the First Offer Space in its "as is" condition, subject to Landlord's obligation to perform any "Code Work" (as that term is defined in Section 1.2 of the Work Letter) for the First Offer Space, provided that Landlord shall not be obligated to perform any Code Work with respect to the restrooms on the fourth (4th) floor of the Building.  The last sentence of Section 1.1 of the Work Letter shall also apply to the First Offer Space.  Tenant's construction of improvements in the First Offer Space shall comply with the terms of Article 8 of this Lease.  Landlord shall deliver the First Offer Space with the "Building Systems" (as that term is defined in Article 7 below) serving the First Offer Space in good operating condition and repair and any failure of such Building Systems to be in such condition on delivery shall not be a default under this Lease, but shall be promptly remedied by Landlord at Landlord's sole cost and expense.  Any improvement allowance to which Tenant may be entitled shall be as set forth in the First Offer Notice.

1.4.6Amendment to Lease.  If Tenant timely exercises its Right of First Offer as set forth herein, then Landlord and Tenant shall, within thirty (30) days thereafter, execute an amendment to this Lease for such First Offer Space upon the TCCs as set forth in the First Offer Notice and this Section 1.4.  Notwithstanding the foregoing, the failure of Landlord and Tenant to execute and deliver such First Offer Space amendment shall not affect an otherwise valid exercise of Tenant's first offer rights or the parties' rights and responsibilities in respect thereof.

1.4.7Termination of Right of First Offer.  The Right of First Offer shall be personal to the Original Tenant and its Permitted Transferee Assignee, and may only be exercised by the Original Tenant and its Permitted Transferee Assignee (and not any other assignee, sublessee or transferee of Tenant's interest in this Lease) if Tenant is not then in default under this Lease beyond any applicable notice and cure periods.  The Right of First Offer granted herein shall terminate upon (i) Tenant's failure to timely exercise its Right of First Offer with respect to such particular First Offer Space, subject to Landlord's obligation to re-offer the First Offer Space to Tenant pursuant to Section 1.4.2 above, (ii) Tenant's monetary default under this Lease (beyond the applicable notice and cure periods) more than once during the Lease Term, (iii) the date of Tenant's Transfer (as defined in Section 14.1 below) of more than twenty-five percent (25%), in the aggregate, of the Premises other than to a Permitted Transferee Assignee, (iv) the date that Tenant (or its Permitted Transferee Assignee, as the case may be) vacates more than twenty-five percent (25%), in the aggregate, of the Premises for more than thirty (30) consecutive days, other than as a result of Alterations performed pursuant to Article 8 below or relating to a Casualty pursuant to Article 11 below, and (v) the date when less than fifteen (15) months remain in the Lease Term.  For purposes of this Section 1.4.7, “vacate” shall not include Tenant’s not occupying any portion of the Premises because Tenant is in the process of designing or constructing "Improvements" (as that term is defined in Section 2.1 of the Work Letter) in such portion of the Premises, even if Tenant had previously occupied such increment of the Premises.

			
	
 
	
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ARTICLE 2

LEASE TERM; OPTION TERM

2.1Initial Lease Term.  The TCCs and provisions of this Lease shall be effective as of the date of this Lease.  The term of this Lease (the "Lease Term") shall be as set forth in Section 3.1 of the Summary, shall commence on the Phase I Lease Commencement Date set forth in Section 3.2 of the Summary, with each subsequent Lease Commencement Date for its respective Phase of the Premises commencing on the applicable dates set forth in Section 3.2 of the Summary, and shall terminate on the date set forth in Section 3.3 of the Summary (the "Lease Expiration Date") unless this Lease is sooner terminated as hereinafter provided.  The term "Lease Commencement Date" when used in this Lease shall mean the Phase I Lease Commencement Date unless specified to the contrary.  For purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve (12) calendar month period during the Lease Term; provided, however, that the first Lease Year shall commence on the Phase I Lease Commencement Date and end on the last day of the twelfth (12th) full calendar month following the first Lease Commencement Date that occurs immediately following the Phase I Lease Commencement Date, provided that if the first Lease Commencement Date that occurs immediately following the Phase I Lease Commencement Date is the first day of a calendar month, then the first Lease Year shall instead end on the day immediately preceding the first anniversary of such first Lease Commencement Date that occurs immediately following the Phase I Lease Commencement Date, and the second and each succeeding Lease Year shall commence on the first day of the next calendar month; and further provided that the last Lease Year shall end on the Lease Expiration Date.  Promptly following Landlord's delivery of each Phase of the Premises to Tenant, Landlord shall deliver to Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within ten (10) business days of receipt thereof.

2.2Option Term(s).

2.2.1Option Right.  Landlord hereby grants the tenant originally named herein (the "Original Tenant") and its Permitted Transferee Assignee one (1) option to extend the Lease Term for the entire Premises by a period of five (5) years (the "Option Term").  Such option shall be exercisable only by "Notice" (as that term is defined in Section 29.18 of this Lease) delivered by Tenant to Landlord as provided below, provided that, as of the date of delivery of such Notice, (i) Tenant is not then in monetary default under this Lease, (ii) Tenant has not been in monetary default under this Lease (beyond the applicable notice and cure periods) more than once during the Lease Term, (iii) Tenant has not previously assigned the Lease (other than to its Permitted Transferee Assignee), and (iv) more than twenty-five percent (25%), in the aggregate, of the Premises has not been either (a) subleased or otherwise transferred by Tenant during the immediately preceding 12-month period to other than its Permitted Transferee (as that term is defined in Section 14.8 below), and/or (b) during the immediately preceding 12-month period, vacated for more than thirty (30) consecutive days by Tenant other than as a result of Alterations performed pursuant to Article 8 below or a Casualty pursuant to Article 11 below, then the Lease Term.  Upon the proper exercise of such option to extend, and provided that, at Landlord's election, as of the end of the Lease Term, (A) Tenant is not then in monetary default under this Lease, (B) Tenant has not been in monetary default under this Lease (beyond the applicable notice and cure periods) more than once during the Lease Term, (C) Tenant has not previously assigned the Lease (other than to its Permitted Transferee Assignee), and (D) more than twenty-five percent (25%), in the aggregate, of the Premises has not been either (a) subleased or otherwise transferred by Tenant during the immediately preceding 12-month period to other than its Permitted Transferee (as that term is defined in Section 14.8 below), and/or (b) during the immediately preceding 12-month period, vacated for more than thirty (30) consecutive days by Tenant (or its Permitted Transferee Assignee, as the case may be) other than as a result of Alterations performed pursuant to Article 8 below or a Casualty pursuant to Article 11 below, then the Lease Term, as it applies to the entire Premises, shall be extended for a period of five (5) years.  The rights contained in this Section 2.2 shall only be exercised by the Original Tenant or its Permitted Transferee Assignee (and not any other assignee, sublessee or transferee of the Original Tenant's interest in this Lease) if Original Tenant or its Permitted Transferee Assignee is in occupancy of at least 75% of the entire then-existing Premises.

			
	
 
	
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2.2.2Option Rent.  The Rent payable by Tenant during the Option Term (the "Option Rent") shall be equal to the "Market Rent," as that term is defined in, and determined pursuant to, Exhibit H attached hereto.

2.2.3Exercise of Option.  The option contained in this Section 2.2 shall be exercised by Tenant, if at all, only in the manner set forth in this Section 2.2.  Tenant shall deliver notice (the "Exercise Notice") to Landlord not more than eighteen (18) months nor less than fifteen (15) months prior to the expiration of the initial Lease Term, stating that Tenant is exercising its option.  Landlord shall deliver notice (the "Landlord Response Notice") to Tenant on or before the date which is thirty (30) days after Landlord's receipt of the Exercise Notice setting forth Landlord's calculation of the Market Rent (the "Landlord's Option Rent Calculation").  Within ten (10) business days of its receipt of the Landlord Response Notice, Tenant may, at its option, accept the Market Rent contained in the Landlord's Option Rent Calculation.  If Tenant does not affirmatively accept or Tenant rejects the Market Rent specified in the Landlord's Option Rent Calculation, the parties shall follow the procedure set forth in Section 2.2.4 below, and the Market Rent shall be determined in accordance with the terms of Section 2.2.4 below.

2.2.4Determination of Market Rent.  In the event Tenant timely and appropriately exercises its option to extend the Lease but rejects the Option Rent set forth in the Landlord's Option Rent Calculation pursuant to Section 2.2.3, above, then Landlord and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts.  The "Base Year," as that term is defined in Section 4.2.1, below, for the Option Term shall mean calendar year 2030.  If Landlord and Tenant fail to reach agreement upon the Option Rent applicable to the Option Term on or before the date that is one hundred twenty (120) days prior to the expiration of the initial Lease Term (the "Outside Agreement Date"), then the Option Rent shall be determined by arbitration pursuant to the terms of this Section 2.2.4.  Each party shall make a separate determination of the Market Rent, within ten (10) business days following the Outside Agreement Date.  If the higher of such estimates is not more than one hundred five percent (105%) of the lower, then the Market Rent shall be the average of the two.  If the higher of such estimates is more than one hundred five percent (105%) of the lower, then such determinations shall be submitted to arbitration in accordance with Section 2.2.4.1 through Section 2.2.4.4, below.

2.2.4.1Landlord and Tenant shall each appoint one arbitrator who shall by profession be a MAI appraiser, real estate broker, or real estate lawyer who shall have been active over the five (5) year period ending on the date of such appointment in the appraising and/or leasing of first class office properties in the vicinity of the Building.  The determination of the arbitrators shall be limited solely to the issue area of whether Landlord's or Tenant's submitted Option Rent is the closest to the actual Market Rent as determined by the arbitrators, taking into account the requirements of Section 2.2.2 of this Lease.  Each such arbitrator shall be appointed within fifteen (15) business days after the Outside Agreement Date.  Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions (including an arbitrator who has previously represented Landlord and/or Tenant, as applicable).  The arbitrators so selected by Landlord and Tenant shall be deemed "Advocate Arbitrators." 

2.2.4.2The two Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator ("Neutral Arbitrator") who shall be qualified under the same criteria set forth hereinabove for qualification of the two Advocate Arbitrators except that (i) neither the Landlord or Tenant or either parties' Advocate Arbitrator may, directly, or indirectly, consult with the Neutral Arbitrator prior or subsequent to his or her appearance, and (ii) the Neutral Arbitrator cannot be someone who has represented Landlord and/or Tenant during the five (5) year period prior to such appointment.  The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord's counsel and Tenant's counsel.

2.2.4.3Within ten (10) business days following the appointment of the Arbitrator, Landlord and Tenant shall enter into an arbitration agreement (the "Arbitration Agreement") which shall set forth the following:

2.2.4.3.1Each of Landlord's and Tenant's best and final and binding determination of the Option Rent exchanged by the parties pursuant to Section 2.2.4, above;

			
	
 
	
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2.2.4.3.2An agreement to be signed by the Neutral Arbitrator, the form of which agreement shall be attached as an exhibit to the Arbitration Agreement, whereby the Neutral Arbitrator shall agree to undertake the arbitration and render a decision in accordance with the terms of this Lease, as modified by the Arbitration Agreement, and shall require the Neutral Arbitrator to demonstrate to the reasonable satisfaction of the parties that the Neutral Arbitrator has no conflicts of interest with either Landlord or Tenant;

2.2.4.3.3Instructions to be followed by the Neutral Arbitrator when conducting such arbitration;

2.2.4.3.4That Landlord and Tenant shall each have the right to submit to the Neutral Arbitrator (with a copy to the other party), on or before the date that occurs fifteen (15) days following the appointment of the Neutral Arbitrator, an advocate statement (and any other information such party deems relevant) prepared by or on behalf of Landlord or Tenant, as the case may be, in support of Landlord's or Tenant's respective determination of Option Rent (the "Briefs"); 

2.2.4.3.5That within five (5) business days following the exchange of Briefs, Landlord and Tenant shall each have the right to provide the Neutral Arbitrator (with a copy to the other  party) with a written rebuttal to the other party's Brief (the "First Rebuttals"); provided, however, such First Rebuttals shall be limited to the facts and arguments raised in the other party's Brief and shall identify clearly which argument or fact of the other party's Brief is intended to be rebutted;

2.2.4.3.6That within five (5) business days following the parties' receipt of each other's First Rebuttal, Landlord and Tenant, as applicable, shall each have the right to provide the Neutral Arbitrator (with a copy to the other party) with a written rebuttal to the other party's First Rebuttal (the "Second Rebuttals"); provided, however, such Second Rebuttals shall be limited to the facts and arguments raised in the other party's First Rebuttal and shall identify clearly which argument or fact of the other party's First Rebuttal is intended to be rebutted;

2.2.4.3.7The date, time and location of the arbitration, which shall be mutually and reasonably agreed upon by Landlord and Tenant, taking into consideration the schedules of the Neutral Arbitrator, the Advocate Arbitrators, Landlord and Tenant, and each party's applicable consultants, which date shall in any event be within forty-five (45) days following the appointment of the Neutral Arbitrator;

2.2.4.3.8That no discovery shall take place in connection with the arbitration, other than to verify the factual information that is presented by Landlord or Tenant;

2.2.4.3.9That the Neutral Arbitrator shall not be allowed to undertake an independent investigation or consider any factual information other than presented by Landlord or Tenant, except that the Neutral Arbitrator shall be permitted to visit the Project and the buildings containing the Comparable Transactions;

2.2.4.3.10The specific persons that shall be allowed to attend the arbitration;

2.2.4.3.11Tenant shall have the right to present oral arguments to the Neutral Arbitrator at the arbitration for a period of time not to exceed three (3) hours ("Tenant's Initial Statement");

2.2.4.3.12Following Tenant's Initial Statement, Landlord shall have the right to present oral arguments to the Neutral Arbitrator at the arbitration for a period of time not to exceed three (3) hours ("Landlord's Initial Statement");

2.2.4.3.13Following Landlord's Initial Statement, Tenant shall have up to two (2) additional hours to present additional arguments and/or to rebut the arguments of Landlord ("Tenant's Rebuttal Statement");

2.2.4.3.14Following Tenant's Rebuttal Statement, Landlord shall have up to two (2) additional hours to present additional arguments and/or to rebut the arguments of Tenant;

			
	
 
	
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2.2.4.3.15That, not later than ten (10) days after the date of the arbitration, the Neutral Arbitrator shall render a decision (the "Ruling") indicating whether Landlord's or Tenant's submitted Option Rent is closer to the Market Rent;

2.2.4.3.16That following notification of the Ruling, Landlord's or Tenant's submitted Option Rent determination, whichever is selected by the Neutral Arbitrator as being closer to the Option Rent shall become the then applicable Option Rent; and  

2.2.4.3.17That the decision of the Neutral Arbitrator shall be binding on Landlord and Tenant.

2.2.4.3.18If a date by which an event described in Section 2.2.4.3, above, is to occur falls on a weekend or a holiday, the date shall be deemed to be the next business day.

2.2.4.4In the event that the Option Rent shall not have been determined pursuant to the terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Rent in effect at the end of the initial Lease Term.  Upon the determination of the Option Rent for the Option Term pursuant to this Section 2.2.4, the payments made by Tenant shall be reconciled with the actual amounts due, and the appropriate party shall make any corresponding payment or credit to the other party.

ARTICLE 3

BASE RENT

3.1In General.  Tenant shall pay, without prior notice or demand, to Landlord or Landlord's agent at the management office of the Project, or, at Landlord's option, at such other place as Landlord may from time to time designate in writing, by a check for currency or wire transfer which, at the time of payment, is legal tender for private or public debts in the United States of America, base rent ("Base Rent") based on the phased Lease Commencement Dates as set forth in Section 4 of the Summary, payable in equal monthly installments in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff or deduction whatsoever, subject to the applicable Base Rent abatements set forth in Section 3.2 below and any specific offset rights set forth in this Lease.  Tenant shall be permitted to pay all amounts due hereunder by electronic funds transfer, and Landlord shall cooperate with Tenant, if necessary to establish that manner of payment by Tenant.  In accordance with Section 4 of the Summary and Exhibit A-2 attached hereto, any increases in Base Rent shall occur on the first day of the second Lease Year and the first day of each subsequent Lease Year.  The parties acknowledge, however, that Tenant shall pay Base Rent for each "calendar month" of the Lease Term (or a prorated portion of a "calendar month", as applicable).  If any payment of Rent is for a period which is shorter than one month, the Rent for any such fractional month shall accrue on a daily basis during such fractional month and shall total an amount equal to the product of (i) a fraction, the numerator of which is the number of days in such fractional month and the denominator of which is the actual number of days occurring in such calendar month, and (ii) the then-applicable Monthly Installment of Base Rent.  All other payments or adjustments required to be made under the TCCs of this Lease that require proration on a time basis shall be prorated on the same basis.

3.2Base Rent Abatement.  Provided that Tenant is not then in default under this Lease (beyond any applicable notice and cure periods), and subject to the terms of this Section 3.2 and in addition to any Late Delivery Credits Tenant may be entitled to pursuant to Section 1.3 above:

3.2.1during the first three (3) months immediately following the Phase I Lease Commencement Date (the "Phase I Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase I Premises during such Phase I Base Rent Abatement Period (the "Phase I Base Rent Abatement");

3.2.2during the first seven (7) months immediately following the Phase II Lease Commencement Date (the "Phase II Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase II Premises during such Phase II Base Rent Abatement Period (the "Phase II Base Rent Abatement");

			
	
 
	
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3.2.3during the first two (2) months immediately following the Phase III Lease Commencement Date (the "Phase III Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase III Premises during such Phase III Base Rent Abatement Period (the "Phase III Base Rent Abatement");

3.2.4during the first two (2) months immediately following the Phase IV Lease Commencement Date (the "Phase IV Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase IV Premises during such Phase IV Base Rent Abatement Period (the "Phase IV Base Rent Abatement");

3.2.5during the first three (3) months immediately following the Phase V Lease Commencement Date (the "Phase V Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase V Premises during such Phase V Base Rent Abatement Period (the "Phase V Base Rent Abatement"); and

3.2.6during the first two (2) months immediately following the Phase VI Lease Commencement Date (the "Phase VI Base Rent Abatement Period"), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Phase VI Premises during such Phase VI Base Rent Abatement Period (the "Phase VI Base Rent Abatement").

The Phase I Base Rent Abatement Period, the Phase II Base Rent Abatement Period, the Phase III Base Rent Abatement Period, the Phase IV Base Rent Abatement Period, the Phase V Base Rent Abatement Period and the Phase VI Base Rent Abatement Period are collectively referred to herein as the "Base Rent Abatement Periods".  The Phase I Base Rent Abatement, the Phase II Base Rent Abatement, the Phase III Base Rent Abatement, the Phase IV Base Rent Abatement, the Phase V Base Rent Abatement and the Phase VI Base Rent Abatement are collectively referred to herein as the "Base Rent Abatement".  Tenant is not entitled to any Base Rent Abatement in connection with the Phase VII Premises.  The foregoing Base Rent Abatement rights set forth in this Section 3.2 shall be personal to the Original Tenant and its Permitted Transferee Assignee and shall only apply to the extent that the Original Tenant or its Permitted Transferee Assignee (and not any other assignee, sublessee or transferee of the Original Tenant's interest in this Lease) is the Tenant under this Lease during such Base Rent Abatement Periods.

3.3Effect of Default on Base Rent Abatement.  Tenant acknowledges and agrees that during such Base Rent Abatement Periods, such abatement of Base Rent for the respective Phases of the Premises shall have no effect on the calculation of any future increases in Base Rent or Direct Expenses payable by Tenant pursuant to the terms of this Lease, which increases shall be calculated without regard to such Base Rent Abatement.  Additionally, Tenant shall be obligated to pay all "Additional Rent" (as that term is defined in Section 4.1 of this Lease) during the Base Rent Abatement Periods.  Tenant acknowledges and agrees that the foregoing Base Rent Abatement has been granted to Tenant as additional consideration for entering into this Lease, and for agreeing to pay the Base Rent and perform the terms and conditions otherwise required under this Lease.  If Tenant shall be in default under this Lease and shall fail to cure such default within the notice and cure period, if any, permitted for cure pursuant to this Lease, or if this Lease is terminated for any reason other than Landlord's breach of this Lease, casualty, or condemnation, then the dollar amount of the unapplied portion of the Base Rent Abatement as of the date of such default or termination, as the case may be, shall be converted to a credit to be applied to the Base Rent applicable at the end of the Lease Term and Tenant shall immediately be obligated to begin paying Base Rent for the applicable Phase(s) of the Premises in full.  If Tenant has not been in default under this Lease past any applicable notice and cure period, if any, permitted for cure pursuant to this Lease, and if this Lease has not been terminated, then following the expiration of a subject Base Rent Abatement Period, the provisions of this Section 3.3 shall be of no further force or effect with respect to the subject Base Rent Abatement amount.  By way of example, if Tenant is in default under this Lease and fails to cure such default within the notice and cure period, if any, permitted for cure pursuant to this Lease, or if this Lease is terminated for any reason other than Landlord's breach of this Lease, casualty, or condemnation and such events occur following the lapse of the Base Rent Abatement Periods for Phases I, II and III, then the dollar amount of the unapplied portion of the Base Rent Abatement shall not include the Base Rent Abatement amounts with respect to Phases I, II and III, and only the Base Rent Abatement amounts for Phases IV, V and VI shall be converted to a credit to be applied to the Base Rent applicable at the end of the Lease Term, and Tenant shall immediately be obligated to begin paying Base Rent for Phases IV, V and VI of the Premises in full.

			
	
 
	
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ARTICLE 4

ADDITIONAL RENT

4.1In General.  In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct Expenses," as those terms are defined in Sections 4.2.7 and 4.2.2, respectively, of this Lease, which are in excess of the amount of Direct Expenses applicable to the Base Year; provided, however, that in no event shall any decrease in Direct Expenses for any "Expense Year" (as that term is defined in Section 4.2.3, below) below Direct Expenses for the Base Year entitle Tenant to any decrease in Base Rent or any credit against sums due under this Lease.  Such payments by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the TCCs of this Lease, are hereinafter collectively referred to as the "Additional Rent," and the Base Rent and the Additional Rent are herein collectively referred to as "Rent."  All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner as the Base Rent; provided, however, the parties hereby acknowledge that the first monthly installment of Tenant's Share of any "Estimated Excess," as that term is set forth in, and pursuant to the terms and conditions of, Section 4.4.2 of this Lease, shall first be due and payable in January 2021.  Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of the Lease Term.

4.2Definitions of Key Terms Relating to Additional Rent.  As used in this Article 4, the following terms shall have the meanings hereinafter set forth:

4.2.1"Base Year" shall mean the period set forth in Section 5 of the Summary.

4.2.2"Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."

4.2.3"Expense Year" shall mean each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in the event of any such change, Tenant's Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change but shall not result in any net material increased obligation with respect to Tenant's liability for Direct Expenses.

4.2.4"Operating Expenses" shall mean all expenses, costs and amounts of every kind and nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, renovation, restoration or operation of the Project, or any portion thereof, in accordance with sound real estate management and accounting practices, consistently applied.  Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the following:  (i) the cost of supplying all utilities (but excluding the cost of electricity consumed in the Premises and the premises of other tenants of the Building and any other buildings in the Project (as opposed to the Common Areas) since Tenant is separately paying for the cost of electricity services to the Premises pursuant to Section 6.1.2 of the Lease), the cost of operating, repairing, replacing, maintaining, renovating and restoring the utility, telephone, mechanical, sanitary, storm drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith, and to the extent such cost constitutes a capital expenditure, such cost shall be governed by item (xiii) below; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with a governmentally mandated transportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connection with the Project; (iv) the cost of landscaping, relamping, and all supplies, tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) costs incurred in connection with the parking areas servicing the Project, as well as costs incurred in connection with the provision of any shuttle service serving the Project for the purpose of facilitating access to public transportation; (vi) subject to the "Management Fee Cap," as that term is defined in Section 4.2.5.1.18 below, fees and other costs, including management fees, consulting fees, legal fees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance, replacement, renovation, repair and restoration of the Project; (vii) payments under any equipment rental agreements and the fair rental value of any management office space; (viii) wages, salaries and other compensation and benefits, 

			
	
 
	
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including taxes levied thereon, of all persons (other than persons generally considered to be higher in rank than the position of "Senior Asset Manager") engaged in the operation, maintenance and security of the Project; (ix) costs under any instrument pertaining to the sharing of costs by the Project; (x) operation, repair, maintenance, renovation, replacement and restoration of all systems and equipment and components thereof of the Project, and to the extent such cost constitutes a capital expenditure, such cost shall be governed by item (xiii) below; (xi) the cost of janitorial services (but excluding the cost of janitorial services in the Premises and the premises of other tenants of the Building and any other buildings in the Project (as opposed to the Common Areas) since Tenant is separately paying for the cost of janitorial services in the Premises pursuant to Section 6.1.5 of the Lease), alarm, security and other services, replacement, renovation, restoration and repair of wall and floor coverings, ceiling tiles and fixtures in common areas, maintenance, replacement, renovation, repair and restoration of curbs and walkways, repair to roofs and re-roofing, and to the extent such cost constitutes a capital expenditure, such cost shall be governed by item (xiii) below; (xii) amortization of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof (which amortization calculation shall include interest at the "Interest Rate," as that term is set forth in Article 25 of this Lease); (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended to effect economies in the operation or maintenance of the Project, or any portion thereof to the extent of reasonably anticipated cost savings, (B) that are required to comply with present or anticipated conservation programs, (C) which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition, (D) that are required under any governmental law or regulation by a federal, state or local governmental agency, except for capital repairs, replacements or other improvements to remedy a condition existing prior to the Lease Commencement Date which an applicable governmental authority, if it had knowledge of such condition prior to the Lease Commencement Date, would have then required to be remedied pursuant to then-current governmental laws or regulations in their form existing as of the Lease Commencement Date and pursuant to the then-current interpretation of such governmental laws or regulations by the applicable governmental authority as of the Lease Commencement Date, or (E) which are required in order for the Project, or any portion thereof, to obtain or maintain a certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design ("LEED"), or other applicable certification agency in connection with Landlord's sustainability practices for the Project (as such sustainability practices are to be determined by Landlord, in its sole and absolute discretion, from time to time; provided, however, that any capital expenditure shall be amortized with interest at the Interest Rate over its useful life as Landlord shall reasonably determine in accordance with sound real estate management and accounting practices, consistently applied, or with respect to those items included under item (A) above, their recovery/payback period as Landlord shall reasonably determine in accordance with sound real estate management and accounting practices, consistently applied; (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute "Tax Expenses" as that term is defined in Section 4.2.6, below; (xv) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Project and (xvi) costs of any additional services not provided to the  Project as of the Lease Commencement Date but which are thereafter provided by Landlord in connection with its prudent management of the Project.

4.2.5Exclusions from Operating Expenses.  Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include, and thus Tenant shall have no obligation to pay any of the following costs in excess of the caps stated hereinbelow:

4.2.5.1.1costs, including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of improvements made for new tenants initially occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any common areas of the Project or parking facilities);

4.2.5.1.2costs of capital repairs, capital alterations (including, without limitation, capital repairs and capital alterations in connection with damage caused by 

			
	
 
	
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earthquake or other casualty), and capital improvements and equipment, except as set forth in Section 4.2.4, items (xi), (xii), (xiii), and (xiv) above, 

4.2.5.1.3except as set forth in Section 4.2.4, items (xi), (xii), (xiii), and (xiv) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest;

4.2.5.1.4costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else (except to the extent of deductibles), and electric power costs for which any tenant directly contracts with the local public service company;

4.2.5.1.5any bad debt loss, rent loss, or reserves for bad debts or rent loss;

4.2.5.1.6costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project).  Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's general corporate overhead and general and administrative expenses;

4.2.5.1.7the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Senior Asset Manager;

4.2.5.1.8amount paid as ground rental for the Project by the Landlord;

4.2.5.1.9overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;

4.2.5.1.10any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge or parking attendants at the Project shall be includable as an Operating Expense;

4.2.5.1.11rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project ;

4.2.5.1.12all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;

4.2.5.1.13costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;

4.2.5.1.14any costs expressly excluded from Operating Expenses elsewhere in this Lease;

4.2.5.1.15rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or 

			
	
 
	
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fair market rental value of office space occupied by management personnel of the "Comparable Buildings," as that term is defined in Section 4 of Exhibit H to this Lease, with adjustment where appropriate for the size of the applicable project;

4.2.5.1.16costs to the extent arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services; 

4.2.5.1.17costs incurred to comply with laws relating to the removal of "Hazardous Materials" (as that term is defined in Section 29.33.1 below) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, state, local or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto, but only to the extent those laws were then being actively enforced by the applicable government authority; and costs incurred to remove, remedy, contain, or treat Hazardous Material, which Hazardous Material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, state, local or municipal governmental authority, if it had then had knowledge of the presence of such Hazardous Material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such Hazardous Material or other remedial or containment action with respect thereto, but only to the extent those laws were then being actively enforced by the applicable government authority;

4.2.5.1.18fees payable by Landlord for management of the Project in excess of three percent (3%) (the "Management Fee Cap") of Landlord's Gross Rental Revenues (as defined below), adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Project with all tenants paying rent, including base rent, pass-throughs, and parking fees (but excluding the cost of after-hours services or utilities not paid for directly by Tenant or any other tenant(s) for their respective premises in the Project for any calendar year or portion thereof, provided that utility costs payable by Tenant or other Project tenants for the Common Areas shall not be excluded) ("Gross Rental Revenues" shall mean the aggregate of (A) the annual base rentals for all tenants, and (B) other income from the use or occupancy of the Project; further, if Landlord agrees to permit any tenant to "buyout" its lease obligation in exchange for either a lump sum or some other accelerated payment to Landlord, for purposes of calculating Gross Rental Revenues, any such payment shall be amortized proportionately over the number of years which the terminated lease would otherwise have continued, with such amortization commencing on the date immediately following the date such lease was terminated);

4.2.5.1.19costs arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services; and

4.2.5.1.20amounts incurred as a result of damage caused by earthquakes or floods, to the extent (i) in excess of $1.25 per rentable square foot of the Project in any year, (ii) not includable in Operating Expenses as a permitted capital expenditure, and (iii) not required by Applicable Laws.  If Landlord elects to "expense" (as opposed to amortize) such amounts, then Landlord shall be permitted to pass through such amounts only in the year in which such amounts are expensed by Landlord.

Landlord shall, upon written request from Tenant, promptly notify Tenant of the insurance deductible amounts (as the same may be adjusted from time to time) with respect to the Project.  

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant.  If the Project is not fully occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been fully occupied; and the amount so 

			
	
 
	
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determined shall be deemed to have been the amount of Operating Expenses for such year.  Operating Expenses for the Base Year shall not include market-wide cost increases (including utility rate increases) due to extraordinary circumstances, including, but not limited to, Force Majeure, boycotts, strikes, conservation surcharges, embargoes or shortages, or amortized costs.  In no event shall each of the components of Direct Expenses for any Expense Year related to utility costs, Tax Expenses, Project services costs or Project insurance costs be less than each of the corresponding components of Direct Expenses related to such utility costs, Tax Expenses, Project services costs and Project insurance costs in the Base Year.  Landlord shall not (i) make a profit by charging items to Operating Expenses that are otherwise also charged separately to others and (ii) subject to Landlord's right to adjust the components of Operating Expenses described above in this paragraph, collect Operating Expenses from Tenant and all other tenants in the Building  in an amount in excess of what Landlord incurs for the items included in Operating Expenses.  If Landlord does not carry earthquake, terrorism or any other type of insurance for the Building during the Base Year but carries such type of insurance for the Building during any subsequent Expense Year, then, for purposes of determining the Operating Expense for such Expense Year, insurance expenses for the Base Year shall be deemed to be increased by the amount of the premium Landlord would have incurred for such type of insurance during the Base Year if Landlord had maintained such type of insurance for the same period of time during the Base Year as such insurance is maintained by Landlord during such Expense Year.

4.2.6Taxes.

4.2.6.1"Tax Expenses" shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof (including, without limitation, the land upon which the Building and the parking facility are located).

4.2.6.2Tax Expenses shall include, without limitation:  (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election ("Proposition 13") and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or the Project's contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises; and (v) all of the real estate taxes and assessments imposed upon or with respect to the Building and all of the real estate taxes and assessments imposed on the land and improvements comprising the Project.

4.2.6.3Any costs and expenses (including, without limitation, reasonable attorneys' fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such expenses are paid.  Except as set forth in Section 4.2.6.4, below, refunds of Tax Expenses shall be credited against Tax Expenses and 

			
	
 
	
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refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no event shall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by Tenant as an increase in Tax Expenses under this Article 4 for such Expense Year.  If Tax Expenses for any period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord within thirty (30) days of written demand accompanied by reasonably detailed documentation in connection therewith Tenant's Share of any such increased Tax Expenses included by Landlord as Building Tax Expenses pursuant to the TCCs of this Lease.  Notwithstanding anything to the contrary contained in this Section 4.2.6 (except as set forth in Section 4.2.6.1, above), there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord's general or net income (as opposed to rents, receipts or income attributable to operations at the Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease.  Notwithstanding anything to the contrary set forth in this Lease, only Landlord may institute proceedings to reduce Tax Expenses and the filing of any such proceeding by Tenant without Landlord's consent shall constitute an event of default by Tenant under this Lease.  Notwithstanding the foregoing, Landlord shall not be obligated to file any application or institute any proceeding seeking a reduction in Tax Expenses.

4.2.6.4Notwithstanding anything to the contrary set forth in this Lease, the amount of Tax Expenses for the Base Year and any Expense Year shall be calculated without taking into account any decreases in real estate taxes obtained in connection with Proposition 8, and, therefore, the Tax Expenses in the Base Year and/or an Expense Year may be greater than those actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due under this Lease; provided that (i) any costs and expenses incurred by Landlord in securing any Proposition 8 reduction shall not be included in Direct Expenses for purposes of this Lease, and (ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses, but rather shall be the sole property of Landlord.  Landlord and Tenant acknowledge that this Section 4.2.6.4 is not intended to in any way affect (A) the inclusion in Tax Expenses of the statutory two percent (2.0%) annual maximum allowable increase in Tax Expenses (as such statutory increase may be modified by subsequent legislation), or (B) the inclusion or exclusion of Tax Expenses pursuant to the terms of Proposition 13, which shall be governed pursuant to the terms of Sections 4.2.6.1 through 4.2.6.3.

4.2.7"Tenant's Share" shall mean the applicable percentages with respect to each Phase as set forth in Section 6 of the Summary.  

4.3Cost Pools.  Landlord shall have the right, from time to time, to equitably allocate some or all of the Direct Expenses for the Project among different portions or occupants of the Project (the "Cost Pools"), in Landlord's reasonable discretion.  Such Cost Pools may include, but shall not be limited to, the office space tenants of a building of the Project or of the Project, and the retail space tenants of a building of the Project or of the Project.  The Direct Expenses within each such Cost Pool shall be allocated and charged to the tenants within such Cost Pool in an equitable manner in accordance with sound real estate management and accounting practices, consistently applied.

4.4Calculation and Payment of Additional Rent.  If for any Expense Year ending or commencing within the Lease Term following the Base Year, the then-applicable Tenant's Share of Direct Expenses for such Expense Year exceeds Tenant's Share of Direct Expenses applicable to the Base Year, then Tenant shall pay to Landlord in the manner set forth in Section 4.4.1, below, and as Additional Rent, an amount equal to the then-applicable Tenant's Share of the excess (the "Excess").

4.4.1Statement of Actual Direct Expenses and Payment by Tenant.  Landlord shall give to Tenant following the end of each Expense Year, a statement (the "Statement") which shall state in general major categories the Direct Expenses incurred or accrued for the particular Expense Year, and which shall indicate the amount of the Excess.  Landlord shall use commercially reasonable efforts to deliver such Statement to Tenant on or before May 1 following the end of the Expense Year to which such Statement relates.  Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term, if an Excess is present, Tenant shall pay, within thirty (30) days after receipt of the Statement, the full amount of the Excess for such Expense Year, less the amounts, if any, paid during such Expense Year as "Estimated 

			
	
 
	
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Excess," as that term is defined in Section 4.4.2, below, and if Tenant paid more as Estimated Excess than the actual Excess, Tenant shall receive a credit in the amount of Tenant's overpayment against Rent next due under this Lease.  Subject to the last sentence of this Section 4.4.1, the failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or Tenant from enforcing its rights under this Article 4.  Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant's Share of Direct Expenses for the Expense Year in which this Lease terminates, if an Excess is present, Tenant shall, within thirty (30) days after receipt of the Statement, pay to Landlord such amount, and if Tenant paid more as Estimated Excess than the actual Excess, Landlord shall, within thirty (30) days, deliver a check or send such funds by wire transfer payable to Tenant in the amount of the overpayment.  The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term.  Notwithstanding the immediately preceding sentence, Tenant shall not be responsible for Tenant's Share of any Direct Expenses attributable to any Expense Year which are first billed to Tenant more than two (2) calendar years after the expiration of the applicable Expense Year, provided that in any event Tenant shall be responsible for Tenant's Share of Direct Expenses which (x) were levied by any governmental authority or by any public utility companies, and (y) Landlord had not previously received an invoice therefor and which are currently due and owing (i.e., costs invoiced for the first time regardless of the date when the work or service relating to this Lease was performed), at any time following the expiration of any Expense Year which are attributable to such Expense Year.  If there are costs subsequently billed to Tenant as set forth above, then Landlord shall provide Tenant with an amended Statement with respect to such subsequently billed costs, and Tenant's audit rights as set forth in Section 4.6 below shall apply (but only with respect to such particular subsequently billed costs) following Tenant's receipt of such amended Statement.

4.4.2Statement of Estimated Direct Expenses.  In addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the "Estimate Statement") which shall set forth in general major categories Landlord's reasonable estimate (the "Estimate") of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimated excess (the "Estimated Excess") as calculated by comparing the Direct Expenses for such Expense Year, which shall be based upon the Estimate, to the amount of Direct Expenses for the Base Year.  The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to collect any Additional Rent under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Excess theretofore delivered to the extent necessary.  Thereafter, Tenant shall pay, within thirty (30) days after receipt of the Estimate Statement, a fraction of the Estimated Excess for the then-current Expense Year (reduced by any amounts paid pursuant to the second to last sentence of this Section 4.4.2).  Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of such payment, and twelve (12) as its denominator.  Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time but not more than twice during any particular Expense Year), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in the previous Estimate Statement delivered by Landlord to Tenant.  Throughout the Lease Term Landlord shall maintain records with respect to Direct Expenses in accordance with sound real estate management and accounting practices, consistently applied. 

4.5Taxes and Other Charges for Which Tenant Is Directly Responsible.

4.5.1Tenant shall be liable for and shall pay before delinquency, taxes levied against Tenant's equipment, furniture, fixtures and any other personal property located in or about the Premises.  If any such taxes on Tenant's equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord's property or if the assessed value of Landlord's property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall within thirty (30) days of written demand accompanied by reasonably detailed documentation in connection therewith repay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.

4.5.2If the improvements in the Premises, whether installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for real property tax purposes at a valuation in excess of One Hundred Twenty-Five 

			
	
 
	
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and 00/100 Dollars ($125.00) per rentable square foot, then the Tax Expenses levied against Landlord or the property by reason of such assessed valuation with respect to the improvements in the Premises being in excess of One Hundred Twenty-Five and 00/100 Dollars ($125.00) per rentable square foot shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of Section 4.5.1, above.

4.5.3Notwithstanding any contrary provision herein, Tenant shall pay prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax on the rent or services herein or otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Project, including the Project parking facility; or (iii) taxes assessed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

4.6Landlord's Records.  Upon Tenant's written request given not more than one hundred twenty (120) days after Tenant's receipt of a Statement for a particular Expense Year, and provided that Tenant is not then in default under this Lease beyond the applicable notice and cure period provided in this Lease, specifically including, but not limited to, the timely payment of Additional Rent (whether or not a component thereof is the subject of the audit contemplated herein), Landlord shall furnish Tenant with such reasonable supporting documentation pertaining to the calculation of the Excess set forth in the Statement as Tenant may reasonably request.  Landlord shall provide said documentation pertaining to the relevant Excess to Tenant within sixty (60) days after Tenant's one-time written request therefor.  Within one hundred eighty (180) days after the later of (x) Tenant's receipt of a Statement for a particular Expense Year and (y) Tenant's receipt of the documentation pursuant to the immediately preceding sentence following Tenant's one-time request therefor (the "Audit Period"), if Tenant disputes the amount of the Excess set forth in the Statement, an independent certified public accountant (which accountant (A) is a member of a nationally or regionally recognized certified public accounting firm which has previous experience in auditing financial operating records of landlords of office buildings, (B) shall not already be providing primary accounting and/or lease administration services to Tenant and shall not have provided primary accounting and/or lease administration services to Tenant in the past three (3) years, (C) is not working on a contingency fee basis (i.e., Tenant must be billed based on the actual time and materials that are incurred by the certified public accounting firm in the performance of the audit), and (D) shall not currently be providing or within the past three (3) years have provided accounting and/or lease administration services to another tenant in the Building and/or the Project in connection with a review or audit by such other tenant of Landlord's expense records with respect to the Building and/or the Project).  If such accountant has a question about whether a particular tenant occupies the Building and/or the Project in connection with the limitation contained in the foregoing item (y)(D), then at Tenant's request Landlord shall reasonably cooperate, at no cost to Landlord, to confirm whether the particular tenant has leased space in the Building and/or the Project during the applicable time period.  Such accountant shall be designated and paid for by Tenant.  Such accountant may, after reasonable notice to Landlord and at reasonable times, audit Landlord's records with respect to the Excess set forth in the Statement at Landlord's corporate offices located in San Francisco, provided that (i) Tenant is not then in default under this Lease (beyond the applicable notice and cure periods provided under this Lease), (ii) Tenant has paid all amounts required to be paid under the applicable Estimate Statement and Statement, and (iii) a copy of the audit agreement between Tenant and its particular certified public accounting firm has been delivered to Landlord prior to the commencement of the audit; provided that Tenant may redact such provisions of the audit agreement which are not reasonably required for Landlord to confirm that the engagement of the certified public accountant is on a non-contingency fee basis.  In connection with such audit, Tenant and Tenant's certified public accounting firm must agree in advance to follow Landlord's reasonable rules and procedures regarding an audit of the aforementioned Landlord records, and shall execute a commercially reasonable confidentiality agreement regarding such audit.  Landlord currently does not have rules and procedures regarding tenant audits.  Any audit report prepared by Tenant's certified public accounting firm shall be delivered concurrently to Landlord and Tenant within the Audit Period.  Tenant's failure to audit the amount of the Excess set forth in any Statement within the Audit Period shall be deemed to be Tenant's approval of such Statement and Tenant, thereafter, waives the right or ability to audit the amounts set forth in such Statement.  If after such audit, Tenant still disputes such Excess, an audit to determine the proper amount shall be made, at Tenant's expense, by an independent certified public accountant (the "Accountant") selected by Landlord and subject to Tenant's reasonable approval; provided that if such audit by the Accountant proves that the Direct 

			
	
 
	
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Expenses in the subject Expense Year were overstated by more than six percent (6%), then the cost of the Accountant and the cost of such audit shall be paid for by Landlord. Tenant hereby acknowledges that Tenant's sole right to audit Landlord's records and to contest the amount of Direct Expenses payable by Tenant shall be as set forth in this Section 4.6, and Tenant hereby waives any and all other rights pursuant to Applicable Laws to audit such records and/or to contest the amount of Direct Expenses payable by Tenant.

If after receiving the results of its audit, Landlord still disputes the results of Tenant's audit or Tenant disputes the results of the Landlord's Accountant's audit, then Landlord and Tenant shall work in good faith to resolve such dispute within thirty (30) days following Landlord's delivery of the results of Landlord's audit to Tenant (the "Resolution Period").  Any dispute arising under this Section 4.6 which is not resolved during the Resolution Period shall be determined by arbitration in accordance with the Comprehensive Arbitration Rules and Procedures of Judicial Arbitration and Mediation Services ("JAMS"), as amended from time to time.  Notwithstanding any JAMS rules to the contrary, the arbitration shall be conducted by a single arbitrator, who shall by profession be a certified public accountant who shall have been active over the ten (10) year period ending on the date of such appointment with accounting and auditing experience with respect to first class institutionally owned office properties in the city of San Francisco.  The arbitrator shall not have the power, jurisdiction or authority to commit errors of law.  The arbitrator's decision will be final and binding, will not be subject to appeal, and may be entered as a final judgment in any court of competent jurisdiction; provided, however, that the decision may be vacated or corrected pursuant to California Code of Civil Procedure Sections 1286.2 or 1286.6, including on the grounds that the arbitrator exceeded his or her authority by committing an error of law.  All such arbitration proceedings shall be confidential, and neither the parties nor the arbitrator may disclose the content or results of any arbitration pursuant to this Section 4.6 without the written consent of all parties to the dispute, except as necessary to confirm, vacate or enforce the arbitrator's award.  The cost of any arbitration pursuant to this Section 4.6 shall be paid by Landlord and Tenant equally, except that the arbitrator may award costs, including without limitation, attorneys' and experts' fees, as determined by the arbitrator in the arbitrator's discretion.

ARTICLE 5

USE OF PREMISES

5.1Permitted Use.  Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld in Landlord's sole and absolute discretion.

5.2Prohibited Uses.  The uses prohibited under this Lease shall include, without limitation, use of the Premises or a portion thereof for (i) offices of any agency or bureau of the United States or any state or political subdivision thereof; (ii) offices or agencies of any foreign governmental or political subdivision thereof; (iii) offices of any health care professionals or service organization; (iv) schools or other training facilities which are not ancillary to corporate, executive or professional office use; (v) retail or restaurant uses; or (vi) communications firms such as radio and/or television stations.  Tenant shall not allow occupancy density for the Premises in violation of Applicable Laws, provided that Landlord makes no representation that the "HVAC," as that term is defined in Section 6.1 below, has the capacity to accommodate an occupancy density greater than six (6) persons per each one thousand (1,000) rentable square feet of the Premises, and in the event that the occupancy density of the Premises will be greater than six (6) persons per each one thousand (1,000) rentable square feet of the Premises (determined on a floor-by-floor basis), then the parties shall use commercially reasonable efforts to try to agree in advance on any necessary supplemental HVAC which may be required to accommodate such greater density (determined on a floor-by-floor basis), with any such supplemental HVAC to be installed by Tenant at Tenant's sole cost.  In addition, in the event that additional toilets or urinals are required by Applicable Laws for the restrooms located on any floor of the Premises to accommodate Tenant's occupancy density greater than six (6) persons per each one thousand (1,000) rentable square feet of the Premises then following delivery of written notice to Tenant of the necessity of same, such work shall be performed by Landlord at Tenant's sole cost, and any amounts payable by Tenant to Landlord hereunder shall be paid within thirty (30) days of billing when accompanied by reasonable supporting documentation with respect thereto.  Tenant further covenants and agrees that it shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to the rules and regulations promulgated by Landlord from 

			
	
 
	
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time to time ("Rules and Regulations"), the current set of which (as of the date of this Lease) is attached to this Lease as Exhibit D; or in violation of the laws of the United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project including, without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by Applicable Laws now or hereafter in effect; provided, however, Landlord shall not enforce, change or modify the Rules and Regulations in a discriminatory manner and Landlord agrees that the Rules and Regulations shall not be unreasonably modified or enforced in a manner which will unreasonably interfere with the normal and customary conduct of Tenant's business.  Tenant shall not do or permit anything to be done in or about the Premises which will in any way damage the reputation of the Project or obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to be used for any improper, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises.

5.3CC&Rs.  Tenant shall comply with all recorded covenants, conditions, and restrictions currently affecting the Project.  Additionally, Tenant acknowledges that the Project may be subject to any future covenants, conditions, and restrictions (the "CC&Rs") which Landlord, in Landlord's discretion, deems reasonably necessary or desirable.  So long as any such CC&Rs do not interfere with Tenant's rights under this Lease to more than a de minimus extent, Tenant agrees that this Lease shall be subject and subordinate to such CC&Rs.  Landlord shall have the right to require Tenant to execute and acknowledge, within fifteen (15) business days of a request by Landlord, a "Recognition of Covenants, Conditions, and Restriction," in a form substantially similar to that attached hereto as Exhibit F, agreeing to and acknowledging the CC&Rs.

ARTICLE 6

SERVICES AND UTILITIES

6.1Standard Tenant Services.  Landlord shall provide the following services on all days (unless otherwise stated below) during the Lease Term.

6.1.1Subject to reasonable changes implemented by Landlord and all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating, ventilation and air conditioning ("HVAC") when necessary for normal comfort for normal office use in the Premises (based on an occupancy density equal to the lesser of Tenant's actual occupancy density or an occupancy density of six (6) persons per each 1,000 rentable square feet of the Premises) from 7:00 A.M. to 6:00 P.M. Monday through Friday, and from 8:00 A.M. to 2:00 P.M. on Saturday (collectively, the "Building Hours"), except for the date of observation of New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and, at Landlord's discretion, other locally or nationally recognized holidays (collectively, the "Holidays").

6.1.2Landlord shall provide adequate electrical wiring and facilities and power for normal general office use as determined by Landlord.  Landlord represents that there are submeters already installed in each Phase on the sixth (6th) floor and the seventh (7th) floor of the Building to measure all of the electrical usage in the Premises.  Tenant shall pay for the costs (as reasonably determined by Landlord based on submeter readings of Tenant's electrical usage in the Premises) of such electrical power directly to Landlord.  Tenant shall pay the cost of electrical services within thirty (30) days after demand accompanied by reasonable supporting documentation with respect thereto and as Additional Rent under this Lease (and not as part of the Operating Expenses).  Landlord shall designate the public utility provider from time to time.

6.1.3As part of Operating Expenses, Landlord shall replace lamps, starters and ballasts for Building standard lighting fixtures within the Premises.  In addition, Tenant shall bear the cost of replacement of lamps, starters and ballasts for non-Building standard lighting fixtures within the Premises.

6.1.4Landlord shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes in the Building Common Areas.

			
	
 
	
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6.1.5Landlord shall not provide janitorial services for the Premises.  Tenant shall be solely responsible for performing all janitorial services and other cleaning of the Premises, all in compliance with Applicable Laws.  The janitorial and cleaning of the Premises shall be adequate to maintain the Premises in reasonable manner reasonably consistent with Comparable Buildings.  Without Landlord's prior consent, Tenant shall not use (and upon notice from Landlord shall cease using) janitorial service providers who would, in Landlord's reasonable and good faith judgment, disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas.

6.1.6Landlord shall provide nonexclusive, non-attended automatic passenger elevator service during the Building Hours, and shall have at least one elevator available at all other times.  Landlord shall provide nonexclusive freight elevator service subject to scheduling by Landlord.  Once Tenant occupies any entire floor of the Premises, then at Tenant's written request Landlord shall lock off such floor so that access to such floor shall thereafter require a key card.

Tenant shall cooperate fully with Landlord at all times and abide by all regulations and requirements that Landlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical and plumbing systems.

6.2Overstandard Tenant Use.  Tenant shall not, without Landlord's prior written consent, use heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than Building standard lights in the Premises, which may affect the temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease.  If such consent is given, Landlord shall have the right to require installation of supplementary air conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the cost thereof, including the cost of installation, operation and maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord within thirty (30) days of billing by Landlord.  If Tenant uses water, heat or air conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, within thirty (30) days of billing, the cost of such excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption; and Landlord may install devices to separately meter any increased use and in such event Tenant shall pay the increased cost directly to Landlord, including the cost of such additional metering devices.  Tenant's use of electricity shall never exceed the capacity of the feeders to the Project or the risers or wiring installation, and subject to the terms of Section 29.32, below, Tenant shall not install or use or permit the installation or use of any computer or electronic data processing equipment in the Premises, except for desktop computers and printers, without the prior written consent of Landlord.  If Tenant desires to use heat, ventilation or air conditioning outside of normal business hours as set forth in Section 6.1.1 of this Lease, Tenant shall give Landlord such prior notice, if any, as Landlord shall from time to time establish as appropriate, of Tenant's desired use in order to supply such utilities, and Landlord shall supply such utilities to Tenant at such hourly cost to Tenant (which shall be treated as Additional Rent) as Landlord shall from time to time establish.  As of the date of this Lease, such after-hours charges are $100 per hour to run the fans and $380 per hour for heating, with a four-hour minimum.

6.3Interruption of Use.  Subject to Section 6.4 below, Tenant agrees that Landlord shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident or Casualty whatsoever, by act or default of Tenant or other parties, or by any other cause beyond Landlord's reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant's use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease.  Furthermore, Landlord shall not be liable under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Tenant's business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Article 6.

			
	
 
	
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6.4Rent Abatement.  If Landlord fails to perform the obligations required of Landlord under the terms of this Lease and such failure causes all or a portion of the Premises to be unusable by, or inaccessible to, Tenant and such failure relates to (x) the nonfunctioning of the Building HVAC system in the Premises, the interruption of electricity to the Premises, the nonfunctioning of the elevator service to the Premises, or (y) a failure to provide access to all or a portion of the Premises (including as a result of any work performed by Landlord in or about the Premises or the Building unless in response to Tenant's request or as a result of Tenant's breach of this Lease), Tenant shall give Landlord notice to the Building management office and the other Landlord notice addresses set forth in Section 11 of the Summary (the "Initial Failure Notice"), specifying such failure to perform by Landlord (the "Abatement Event").  The address for the Building management office is currently 360 Third Street, Suite 105, San Francisco, California 94107, provided that Landlord may change such address and its other notice addresses from time to time by notice to Tenant.  If Landlord has not cured such Abatement Event within three (3) business days after the receipt of the Initial Failure Notice (the "Eligibility Period"), Tenant may deliver an additional notice to Landlord (the "Additional Failure Notice"), specifying such Abatement Event and Tenant's intention to abate the payment of Rent under this Lease.  If Landlord does not cure such Abatement Event within three (3) business days of receipt of the Additional Failure Notice, Tenant may, upon written notice to Landlord, immediately abate Rent payable under this Lease for that portion of the Premises rendered unusable or inaccessible and not used by Tenant, for the period beginning on the expiration of the Eligibility Period to the earlier of the date Landlord cures such Abatement Event or the date Tenant recommences the use of such portion of the Premises.  Such right to abate Rent shall be Tenant's sole and exclusive remedy at law or in equity for an Abatement Event.  Except as provided in this Section 6.4, nothing contained herein shall be interpreted to mean that Tenant is excused from paying Rent due hereunder.

6.5Supplemental HVAC.  Tenant, at its sole expense, may install a supplemental HVAC system in the Premises (the "Tenant HVAC System").  In the event that the Tenant HVAC System is not installed as part of the initial "Improvements" (as that term is defined in Section 2.1 of the Work Letter) pursuant to the Work Letter, then the Tenant HVAC System shall be installed, if at all, by Tenant as an "Alteration" (as that term is defined in Section 8.1 below) in accordance with the terms of Article 8, below.  To the extent space is then available on the roof of the Building for the Tenant HVAC System, which determination shall be made by Landlord in its sole and absolute discretion, Tenant may request installation of the Tenant HVAC System on the roof of the Building, subject to Article 8 and Section 23.6 of this Lease.  Tenant shall coordinate the installation and operation of the Tenant HVAC System with Landlord to ensure that the Tenant HVAC System is compatible with the systems and equipment of the Building, and to the extent that the Tenant HVAC System is not compatible with the systems and equipment of the Building, Tenant shall not be entitled to install or operate the same.  Tenant shall be solely responsible, at Tenant's sole cost and expense, for the monitoring, operation, replacement and repair of the Tenant HVAC System.  In connection with the Tenant HVAC System, (a) Tenant shall install, at Tenant's cost, a submeter to measure the electricity utilized by the Tenant HVAC System, as well as submeters to measure the use of any other utilities utilized by the Tenant HVAC System, and (b) Tenant shall be responsible for the payment of all costs relating to the use of electricity and other utilities, as well as the maintenance and repair of the Tenant HVAC System.  At Landlord's sole option, upon written notice to Tenant no less than one hundred twenty (120) days prior to the Lease Expiration Date, Tenant shall remove any Tenant HVAC System prior to the expiration or earlier termination of this Lease, and repair any damage to the Building caused by such removal and restore the portion of the Building and Premises affected by such removal to the condition existing prior to the installation of such Tenant HVAC System, or leave same in the Premises, in which event the same shall become a part of the realty and belong to Landlord and shall be surrendered with the Premises upon the expiration or earlier termination of this Lease.

ARTICLE 7

REPAIRS

Landlord shall maintain in good condition and operating order and keep in good repair and condition the structural portions of the Building, including the foundation, floor/ceiling slabs, roof structure (as opposed to roof membrane), curtain wall, exterior glass and mullions, columns, beams, shafts (including elevator shafts), stairs, stairwells, elevator cab, men's and women's washrooms, Building mechanical, electrical and telephone closets, and all common and public areas servicing the Building, including the parking areas, landscaping and exterior Project signage (collectively, "Building Structure") and the Base Building mechanical, electrical, life safety, 

			
	
 
	
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plumbing, sprinkler systems and HVAC systems which were not constructed by Tenant Parties (collectively, the "Building Systems"), the Building Common Areas and the Project Common Areas.  Notwithstanding anything in this Lease to the contrary, Tenant shall be required to repair the Building Structure and/or the Building Systems to the extent caused due to Tenant's use of the Premises for other than normal and customary business office operations, unless and to the extent such damage is covered by insurance carried or required to be carried by Landlord pursuant to Article 10 and to which the waiver of subrogation is applicable (such obligation to the extent applicable to Tenant as qualified and conditioned will hereinafter be defined as the "BS/BS Exception").  Tenant shall, at Tenant's own expense, keep the non-structural elements of the Premises, including all improvements, fixtures, equipment, interior window coverings, and furnishings therein, and the floor or floors of the Building on which the Premises is located, in good order, repair and condition at all times during the Lease Term, but such obligation shall not extend to the Building Structure and the Building Systems except pursuant to the BS/BS Exception.  In addition, Tenant shall, at Tenant's own expense, but under the supervision and subject to the prior approval of Landlord, and within any reasonable period of time specified by Landlord, promptly and adequately repair all damage to the Premises and replace or repair all damaged, broken, or worn fixtures and appurtenances, but such obligation shall not extend to the Building Structure and the Building Systems except pursuant to the BS/BS Exception, except for damage caused by ordinary wear and tear or beyond the reasonable control of Tenant;  provided however, if Tenant fails to make such repairs, Landlord may, after written notice to Tenant and Tenant's failure to repair within five (5) business days thereafter, but need not, make such repairs and replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established for the Building and/or the Project) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord's involvement with such repairs and replacements forthwith within thirty (30) days of being billed for same.  Landlord may, but shall not be required to, enter the Premises at all reasonable times subject to the entry requirements set forth in Section 27.1 below to make such repairs, alterations, improvements or additions to the Premises or to the Project or to any equipment located in the Project as Landlord shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree; provided, however, except for (i) emergencies, (ii) repairs, alterations, improvements or additions required by governmental or quasi-governmental authorities or court order or decree, or (iii) repairs which are the obligation of Tenant hereunder of which Tenant has failed to complete such repairs following receipt of written notice and the lapse of any applicable cure period, any such entry into the Premises by Landlord shall be performed in a manner so as not to materially interfere with Tenant's use of, or access to, the Premises; provided that, with respect to items (ii) and (iii) above, Landlord shall use commercially reasonable efforts to not materially interfere with Tenant's use of, or access to, the Premises.  Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1Landlord's Consent to Alterations.  Tenant may not make any improvements, alterations, additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the "Alterations") without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than fifteen (15) business days prior to the commencement thereof, and which consent shall not be unreasonably withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural portions or the systems or equipment of the Building or is visible from the exterior of the Building.  Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following ten (10) business days' notice to Landlord, but without Landlord's prior consent, to the extent that such Alterations do not (i) adversely affect the systems and equipment of the Building, exterior appearance of the Building, or structural aspects of the Building, (ii) adversely affect the value of the Premises or Building, (iii) require a building or construction permit, or (iv) cost more than One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00) for a particular job of work (the "Cosmetic Alterations").  The construction of the initial Improvements to the Premises shall be governed by the terms of the Work Letter and not the terms of this Article 8.  Landlord agrees to respond to any request by Tenant for approval of Alterations which approval is required hereunder 

			
	
 
	
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within ten (10) business days after delivery of Tenant's written request; Landlord's response shall be in writing and, if Landlord withholds its consent to any Alterations, Landlord shall specify in reasonable detail in Landlord's notice of disapproval, the basis for such disapproval, and the changes to Tenant's plans which would be required in order to obtain Landlord's approval.  If Landlord fails to notify Tenant of Landlord's approval or disapproval of any Alterations within such ten (10) business day period, Tenant shall have the right to provide Landlord with a second written request for approval (a "Second Request") that specifically identifies the applicable plans for the Alterations and contains the following statement in bold and capital letters: "THIS IS A SECOND REQUEST FOR APPROVAL PURSUANT TO THE PROVISIONS OF SECTION 8.1 OF THE LEASE.  IF LANDLORD FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE WORK DESCRIBED HEREIN."  If Landlord fails to respond to such Second Request within five (5) business days after receipt by Landlord, the plans in question shall be deemed approved by Landlord.

8.2Manner of Construction.  Other than with respect to Cosmetic Alterations, Landlord may impose, as a condition of its consent to any and all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable, including, but not limited to, the requirement that Tenant utilize for such purposes only contractors reasonably approved by Landlord, and any removal and/or restoration obligations required to be performed pursuant to the TCCs of Section 8.5 of this Lease.  If Landlord shall give its consent, the consent shall be deemed conditioned upon Tenant acquiring a permit to do the work from appropriate governmental agencies, the furnishing of a copy of such permit to Landlord prior to the commencement of the work, and the compliance by Tenant with all conditions of said permit in a prompt and expeditious manner.  If such Alterations will involve the use of or disturb Hazardous Materials existing in the Premises, Tenant shall notify Landlord prior to performing such Alterations and comply with Landlord's rules and regulations concerning such Hazardous Materials, subject to Landlord's obligations set forth in Section 29.35.5 below.  Tenant shall construct such Alterations and perform such repairs in a good and workmanlike manner, in conformance with any and all applicable federal, state, county, local or municipal laws, ordinances, rules and regulations and pursuant to a valid building permit, issued by the city in which the Building is located (or other applicable governmental authority), all in conformance with Landlord's construction rules and regulations; provided, however, that prior to commencing to construct any Alteration, Tenant shall meet with Landlord to discuss Landlord's design parameters and code compliance issues.  In the event Tenant performs any Alterations in the Premises which require or give rise to governmentally required changes to the "Base Building," as that term is defined below, then Landlord shall, at Tenant's expense, make such changes to the Base Building.  Since all or a portion of the Project is or may become in the future certified under the LEED rating system (or other applicable certification standard) (all in Landlord's sole and absolute discretion), Tenant expressly acknowledges and agrees that without limitation as to other grounds for Landlord withholding its consent to any proposed Alteration, Landlord shall have the right to withhold its consent to any proposed Alteration in the event that such Alteration is not compatible with such certification or recertification of the Project under such LEED rating system (or other applicable certification standard).  Upon Tenant's request, Landlord shall notify Tenant if Landlord is attempting to obtain or has obtained LEED certification.  The "Base Building" shall include the structural portions of the Building, and the public restrooms, elevators, exit stairwells and the systems and equipment located in the internal core of the Building on the floor or floors on which the Premises is located.  In performing the work of any such Alterations, Tenant shall have the work performed in such manner so as not to obstruct access to the Project or any portion thereof, by any other tenant of the Project, and so as not to obstruct the business of Landlord or other tenants in the  Project.  Tenant shall retain any union trades to the extent designated by Landlord.  Further, Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord's reasonable judgment, would disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas.  In addition to Tenant's obligations under Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of San Francisco in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and as a condition precedent to the enforceability and validity of Landlord's consent, Tenant shall deliver to the management office for the Project a reproducible copy of the "as built" and CAD drawings of the Alterations, to the extent applicable, as well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations.

			
	
 
	
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8.3Payment for Improvements.  With respect to payments to be made to Tenant's contractors for any Alterations, Tenant shall (i) comply with Landlord's requirements for final lien releases and waivers in connection with Tenant's payment for work to contractors, and (ii) sign Landlord's standard contractor's rules and regulations.  In addition, in connection with all Alterations other than Cosmetic Alterations, Tenant shall pay to Landlord a percentage of the cost of such work sufficient to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord's involvement with such work not to exceed one percent (1%) of the hard costs of such Alterations.

8.4Construction Insurance.  In the event that Tenant makes any Alterations, then prior to the commencement of such Alterations Tenant shall provide Landlord with evidence that Tenant carries "Builder's Risk" insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, with the amount of coverage consistent with the estimated cost of such Alterations, and such other industry standard insurance coverages for Comparable Buildings as Landlord may reasonably require, e.g., commercial general liability, automotive liability and workers' compensation.  In addition, the parties hereby agree that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof.  In addition, Landlord may, in its reasonable discretion, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations where the aggregate cost of such Alterations is reasonably estimated to exceed Seventy-Five and 00/100 Dollars ($75.00) per rentable square foot of the area of the Premises in which such Alterations shall occur, and naming Landlord as a co-obligee.

8.5Landlord's Property.  Landlord and Tenant hereby acknowledge and agree that (i) all Alterations, improvements, fixtures, equipment and/or appurtenances which may be installed or placed in or about the Premises (excluding Tenant's removable trade fixtures, furniture or non-affixed office equipment), from time to time, shall be at the sole cost of Tenant and shall be and become part of the Premises and the property of Landlord, and (ii) the Improvements to be constructed in the Premises pursuant to the TCCs of the Work Letter shall, upon completion of the same, be and become a part of the Premises and the property of Landlord.  Furthermore, Landlord may, by written notice to Tenant no less than one hundred twenty (120) days prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at Tenant's expense, to remove any Specialty Improvements (as that term is defined below), and to repair any damage to the Premises and the Building caused by such removal; provided, however, if, in connection with its notice to Landlord with respect to any such Alterations (or in connection with Tenant's request for Landlord's approval of the Final Working Drawings, as that term is defined in the Work Letter), (x) Tenant requests Landlord's decision with regard to the removal of any Specialty Improvements, and (y) Landlord thereafter agrees in writing to waive the removal requirement with regard to such Specialty Improvements, then Tenant shall not be required to so remove such Specialty Improvements.  If Tenant fails to complete such removal and/or to repair any damage caused by the removal of any Specialty Improvements, then at Landlord's option, either (A) Tenant shall be deemed to be holding over in the Premises and Rent shall continue to accrue in accordance with the terms of Article 16, below, until such work shall be completed, and/or (B) Landlord may do so and may charge the cost thereof to Tenant.  Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claim of lien in any manner relating to the installation, placement, removal or financing of any such Alterations, improvements, fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall survive the expiration or earlier termination of this Lease.  "Specialty Improvements" shall mean any of the following Alterations or Improvements:  (a) safes and vaults, (b) decorative water features, including, without limitation the "Aquarium" (as defined in Section 14 of Exhibit D attached hereto); (c) specialized flooring (including raised flooring); (d) conveyors and dumbwaiters; (e) any "Lines", as that term is defined in Section 29.32 below, and (f) any Alterations or Improvements which (i) perforate a floor slab in the Premises or a wall that encloses/encapsulates the Building Structure, (ii) involve material plumbing connections (such as kitchens and executive bathrooms outside of the Building core), (iii) require changes to the Base Building, (iv) are not typically found in general use office space, or (v) Tenant is expressly required to remove pursuant to the terms of this Lease.  Specialty Improvements shall not include any small break rooms which do not have cooking equipment installed therein.

			
	
 
	
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ARTICLE 9

COVENANT AGAINST LIENS

Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials furnished or obligations incurred by or on behalf of Tenant, and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without limitation, reasonable attorneys' fees and costs) arising out of same or in connection therewith.  Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any such work on the Premises (or such additional time as may be necessary under Applicable Laws) to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility.  Tenant shall remove any such lien or encumbrance by bond or otherwise within seven (7) business days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary to remove such lien or encumbrance, without being responsible for investigating the validity thereof.  The amount so paid shall be deemed Additional Rent under this Lease payable within thirty (30) days of written demand accompanies by reasonably detailed documentation in connection therewith, without limitation as to other remedies available to Landlord under this Lease.  Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord's title to the Building or Premises to any liens or encumbrances whether claimed by operation of law or express or implied contract.  Any claim to a lien or encumbrance upon the Building or Premises arising in connection with any such work or respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord's option shall attach only against Tenant's interest in the Premises and shall in all respects be subordinate to Landlord's title to the Project, Building and Premises.

ARTICLE 10

INDEMNIFICATION AND INSURANCE

10.1Indemnification and Waiver.  Except to the extent resulting from the gross negligence or willful misconduct of Landlord (or any "Landlord Parties," as that term is defined hereinbelow), Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises from any cause whatsoever and agrees that Landlord, its partners, subpartners and their respective officers, agents, servants, employees, and independent contractors (collectively, "Landlord Parties") shall not be liable for, and are hereby released from any responsibility for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant.  Except to the extent resulting from the gross negligence or willful misconduct of Landlord or any Landlord Parties, and subject to Section 10.5.2.4, Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from and against any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys' fees) incurred in connection with or arising from:  (a) any causes in, on or about the Premises; (b) the use or occupancy of the Premises by Tenant or any person claiming under Tenant; (c) any activity, work, or thing done, or permitted or suffered by Tenant in or about the Premises; (d) any acts, omission, or negligence of Tenant or any person claiming under Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant or any such person, in, on or about the Project (collectively, "Tenant Parties"); (e) any breach, violation, or non-performance by Tenant or any person claiming under Tenant or the employees, agents, contractors, invitees, or visitors of Tenant or any such person of any term, covenant, or provision of this Lease or any law, ordinance, or governmental requirement of any kind; (f) any injury or damage to the person, property, or business of Tenant, its employees, agents, contractors, invitees, visitors, or any other person entering upon the Premises under the express or implied invitation of Tenant; or (g) the placement of any personal property or other items within the Premises.  Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers', accountants' and attorneys' fees.  Further, Tenant's agreement to indemnify Landlord pursuant to this Section 10.1 is not intended and shall not relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to the provisions of this Lease, to the extent such policies cover the matters subject to Tenant's indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease.  The provisions of this Section 10.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination.  Notwithstanding the foregoing, the Tenant's indemnity set 

			
	
 
	
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forth above shall not include any lost profit, loss of business or other consequential damages except resulting from Tenant's holdover (other than a permitted holdover) pursuant to Article 16 below.

10.2Landlord Indemnity.  Landlord hereby indemnifies and agrees to defend, save and hold Tenant, its officers, directors, employees, managers, agents, sub-agents, constituent entities and lease signatories harmless from and against any and all Claims for injury or death to persons or damage to property occurring at the Project to the extent caused by or contributed to by the willful misconduct or gross negligence of Landlord or by any of Landlord's employees or agents.  Should Tenant be named as a defendant in any suit brought against Landlord in connection with or arising out of injury or death to persons or damage to property occurring at the Project to the extent caused by or contributed to by the willful misconduct or gross negligence of Landlord or by any of Landlord's employees or agents, Landlord shall pay to Tenant its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers', accountants' and attorneys' fees.  Further, Landlord's agreement to indemnify Tenant pursuant to this Section 10.2 is not intended and shall not relieve any insurance carrier of its obligations under policies required to be carried by Landlord pursuant to the provisions of this Lease, to the extent such policies cover the matters subject to Landlord's indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease.  The provisions of this Section 10.2 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination.

10.3Tenant's Compliance With Landlord's Fire and Casualty Insurance.  Tenant shall, at Tenant's expense, comply with Landlord's insurance company requirements pertaining to the use of the Premises.  If Tenant's conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body.

10.4Landlord's Fire, Casualty and Liability Insurance.  Landlord shall carry commercial general liability insurance with respect to the Building during the Lease Term, and shall further insure the Building during the Lease Term against loss or damage due to fire and other casualties covered within the classification of fire and extended coverage, vandalism coverage and malicious mischief, sprinkler leakage, water damage and special extended coverage.  Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time reasonably determine.  Additionally, at the option of Landlord, such insurance coverage may include the risks of earthquakes and/or flood damage and additional hazards, a rental loss endorsement and one or more loss payee endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Building or the ground or underlying lessors of the Building, or any portion thereof.  Notwithstanding the foregoing provisions of this Section 10.4, the coverage and amounts of insurance carried by Landlord in connection with the Building shall, at a minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of Comparable Buildings.  

10.5Tenant's Insurance.  Throughout the Lease Term, Tenant shall maintain the following coverages in the following amounts.  The required evidence of coverage must be delivered to Landlord on or before the date required under Section 10.6(I) sub-sections (x) and (y), or Section 10.6(II) below (as applicable).  Such policies shall be for a term of at least one (1) year, or the length of the remaining term of this Lease, whichever is less.

10.5.1Commercial General Liability Insurance, including Broad Form contractual liability covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof) based upon or arising out of Tenant's operations, occupancy or maintenance of the Premises and all areas appurtenant thereto.  Such insurance shall be written on an "occurrence" basis.  Landlord and any other party the Landlord so specifies that has a material financial interest in the Project, including Landlord's managing agent, ground lessor and/or lender, if any, shall be named as additional insureds as their interests may appear using Insurance Service Organization's form CG2011 or a comparable form approved by Landlord.  Tenant shall provide an endorsement or policy excerpt showing that Tenant's coverage is primary and any insurance carried by Landlord shall be excess and non-contributing.  The coverage shall also be extended to include damage caused by heat, smoke or fumes from a hostile fire.  The policy shall not contain any intra-insured exclusions as between insured persons or organizations.  This policy shall include 

			
	
 
	
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coverage for all liabilities assumed under this Lease as an insured contract for the performance of all of Tenant's indemnity obligations under this Lease.  The limits of said insurance shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder.  Limits of liability insurance shall not be less than the following; provided, however, such limits may be achieved through the use of an Umbrella/Excess Policy:

 

		
	
Bodily Injury

Property Damage Liability
	
$5,000,000 each occurrence

$5,000,000 each occurrence  

	
Personal Injury and Advertising Liability
	

$5,000,000 each occurrence

 

	
Tenant Legal Liability/Damage to Rented Premises Liability
	
$1,000,000

10.5.2Property Insurance covering (i) all office furniture, personal property, business and trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant's business personal property on the Premises installed by, for, or at the expense of Tenant, (ii) the Improvements, and any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the Base Building) (the "Original Improvements"), and (iii) all Alterations performed in the Premises.  Such insurance shall be written on a Special Form basis, for the full replacement cost value (subject to reasonable deductible amounts), without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for (a) all perils included in the CP 10 30 04 02 Coverage Special Form, (b) water damage from any cause whatsoever, including, but not limited to, sprinkler leakage, bursting, leaking or stoppage of any pipes, explosion, and backup or overflow from sewers or drains, and (c) terrorism (with respect to which Tenant shall be permitted to self-insure).

10.5.2.1Increase in Project's Property Insurance.  Tenant shall pay for any increase in the premiums for the property insurance of the Project if said increase is caused by Tenant's acts, omissions, use or occupancy of the Premises.

10.5.2.2Property Damage.  So long as this Lease is not terminated pursuant to Article 11 below (and subject to the last sentence of Section 11.2 below), Tenant shall use the proceeds from any such insurance for the replacement of personal property, trade fixtures, Improvements, Original Improvements and Alterations.

10.5.2.3No Representation of Adequate Coverage.  Landlord makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Tenant's property, business operations or obligations under this Lease.

10.5.2.4Property Insurance Subrogation.  Landlord and Tenant intend that their respective property loss risks shall be borne by insurance carriers to the extent above provided (and, in the case of Tenant, by an insurance carrier satisfying the requirements of Section 10.6(i) below), and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property loss to the extent that such coverage is agreed to be provided hereunder.  The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers.  Landlord and Tenant hereby represent and warrant that their respective "all risk" property insurance policies include a waiver of (i) subrogation by the insurers, and (ii) all rights based upon an assignment from its insured, against Landlord and/or any of the Landlord Parties or Tenant and/or any of the Tenant Parties (as the case may be) in connection with any property loss risk thereby insured against.  Tenant will cause all subtenants and licensees of the Premises claiming by, under, or through Tenant to execute and deliver to Landlord a waiver of claims similar to the waiver in this Section 10.5.2.4 and to obtain such waiver of subrogation rights endorsements.  If either party hereto fails to maintain the waivers set forth in items (i) and (ii) above, the party not maintaining the requisite waivers shall indemnify, defend, protect, and hold harmless the other party for, from and against any and all claims, losses, costs, damages, expenses and liabilities 

			
	
 
	
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(including, without limitation, court costs and reasonable attorneys' fees) arising out of, resulting from, or relating to, such failure. 

10.5.3Business Income Interruption for one year (1) plus Extra Expense insurance in such amounts as will reimburse Tenant for actual direct or indirect loss of earnings attributable to the risks outlined in Section 10.5.2 above.

10.5.4Worker's Compensation or other similar insurance pursuant to all applicable state and local statutes and regulations, and Employer's Liability with minimum limits of not less than $1,000,000 each accident/employee/disease.

10.5.5Commercial Automobile Liability Insurance covering all Owned (if any), Hired, or Non-owned vehicles with limits not less than $1,000,000 combined single limit for bodily injury and property damage.

10.6Form of Policies.  The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease.  Such insurance shall (i) be issued by an insurance company having an AM Best rating of not less than A:VII (or to the extent AM Best ratings are no longer available, then a similar rating from another comparable rating agency), or which is otherwise reasonably acceptable to Landlord and licensed to do business in the State of California, and (ii) comply with the requirements of Section 10.5 (including, Sections 10.5.1 through 10.5.5).  Tenant shall not do or permit to be done anything which invalidates the required insurance policies, and Tenant shall give thirty (30) days' prior written notice to Landlord and any mortgagee of Landlord, the identity of whom has been provided to Tenant in writing, before any cancellation of or change in coverage with respect to said insurance.  Tenant shall deliver certificates evidencing such policies and applicable endorsements which meet the requirements of this Article 10 to Landlord on or before (I) the earlier to occur of:  (x) the Phase I Lease Commencement Date, and (y) the date Tenant and/or its employees, contractors and/or agents first enter a Phase of the Premises for occupancy, construction of improvements, alterations, or any other move-in activities, and (II) five (5) business days after the renewal of such policies.  In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificates and applicable endorsements, Landlord may, at its option, after written notice to Tenant and Tenant's failure to obtain such insurance within five (5) business days thereafter, procure such policies solely with respect to Tenant's insurance obligations required under this Lease for the account of Tenant and the sole benefit of Landlord, and the cost thereof shall be paid to Landlord after delivery to Tenant of bills therefor.

10.7Additional Insurance Obligations.  Tenant shall carry and maintain during the entire Lease Term, at Tenant's sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10 and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant's operations therein, as may be reasonably requested by Landlord provided that any changes in Tenant's insurance requirements shall not be in excess of the insurance requirements at the Comparable Buildings, or as required by Landlord's lender.

10.8Third-Party Contractors.  Tenant shall cause all "Third Party Contractors" (as that term is defined below) to procure and maintain insurance coverage against such risks, in such amounts, and with such companies as Landlord may reasonably require, but in no event less than:  (i) Commercial General Liability insurance on an occurrence basis in amounts not less than $2,000,000 ($1,000,000 of which may be in excess umbrella coverage) naming Landlord as an additional insured for ongoing and completed operations; (ii) workers' compensation insurance in amounts required by statute and employer's liability coverage with limits of not less than $500,000 each accident for bodily injury by accident, $500,000 each employee for bodily injury by disease, and $500,000 policy limit for bodily injury by disease; (iii) Business Automobile Liability insurance on an occurrence basis in amounts not less than $1,000,000 naming Landlord as an additional insured; and (iv) Umbrella/Excess Liability with limits of not less than $5,000,000 per occurrence.  Coverage shall be written as follow form or alternately with a form that provides coverage that is at least as broad as the primary policies.  Each policy shall include a waiver of subrogation in favor of Landlord.  Tenant shall obtain and deliver to Landlord, Third Party Contractor's certificates of insurance and applicable endorsements at least five (5) business days prior to the commencement of work in or about the Premises by any vendor or any other third-party contractor (collectively, a "Third Party Contractor").  All such insurance shall (a) name Landlord as an additional insured under such party's liability policies as required by Section 10.5.1 

			
	
 
	
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above and this Section 10.8, (b) provide a waiver of subrogation in favor of Landlord under such Third Party Contractor's commercial general liability insurance, and (c) be primary and any insurance carried by Landlord shall be excess and non-contributing.  

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1Repair of Damage to Premises by Landlord.  If the Base Building or any Common Areas serving or providing access to the Premises shall be damaged by a fire or any other casualty (collectively, a "Casualty"), Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord's reasonable control, and subject to all other terms of this Article 11, restore the Base Building and such Common Areas.  Such restoration shall be to substantially the same condition of the Base Building and the Common Areas prior to the Casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage on the Building or Project or any other modifications to the Common Areas deemed desirable by Landlord, which are consistent with the character of the Project, provided that access to the Premises and any common restrooms serving the Premises shall not be materially impaired.  Tenant shall promptly notify Landlord upon the occurrence of any damage to the Premises resulting from a Casualty, and Tenant shall promptly inform its insurance carrier of any such damage.  Upon notice (the "Landlord Repair Notice") to Tenant from Landlord where Landlord has elected to make repairs including repairs to Improvements and the Original Improvements installed in the Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance required under Section 10.5 of this Lease.  The Landlord Repair Notice shall indicate the estimated length of such repairs.  In such event, Landlord shall repair any injury or damage to the Improvements and the Original Improvements installed in the Premises and shall return such Improvements and the Original Improvements to their original condition; provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the reasonable cost of such repairs (as determined by Landlord and Tenant acting in good faith) shall be paid by Tenant to Landlord prior to Landlord's commencement of repair of the damage.  If (x) Landlord does not deliver the Landlord Repair Notice within sixty (60) days following the date the Casualty becomes known to Landlord, (y) Landlord has elected not to repair any injury or damage to the Improvements and the Original Improvements installed in the Premises, and (z) Tenant has not elected to terminate this Lease in accordance with the provisions of this Article 11, then Tenant shall, at its sole cost and expense, repair any injury or damage to the Improvements and the Original Improvements installed in the Premises and shall return such Improvements and Original Improvements to their original condition and in such case Landlord shall not be entitled to, and Tenant shall have no obligation to assign to Landlord (or to any party designated by Landlord) the insurance proceeds payable to Tenant under Tenant's insurance required under Section 10.5 of this Lease.  If Tenant is making the repairs in accordance with the immediately preceding sentence, then prior to the commencement of construction, Tenant shall submit to Landlord, for Landlord's review and approval, all plans, specifications and working drawings relating thereto.  Conversely, if Landlord is making the repairs to the Improvements and Original Improvements installed in the Premises, then Landlord shall restore the applicable area to substantially the same design and layout as existed before the Casualty, subject to changes in Applicable Laws since the time of the original construction, and Landlord shall be responsible to prepare the necessary plans, specifications and working drawings relating thereto.  Landlord shall select the contractors to perform the improvement work regardless of whether Landlord or Tenant is performing such work, provided that in the event Tenant is performing the improvement work then Landlord shall use commercially reasonable efforts to consult with Tenant prior to Landlord's final selection of such contractors, but the final selection of such contractors shall be made by Landlord in its sole and absolute discretion.  Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof; provided however, that if such Casualty shall have damaged the Premises or Common Areas necessary to Tenant's occupancy, and the Premises is not occupied by Tenant as a result thereof, then during the time and to the extent the Premises is unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentable square feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable square feet of the Premises.  In the event that Landlord shall not deliver the Landlord Repair Notice, and the Lease is not terminated pursuant to this Article 11, Tenant's right to rent abatement pursuant to the 

			
	
 
	
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preceding sentence shall terminate as of the date which is reasonably determined by Landlord to be the date Tenant should have completed repairs to the Premises assuming Tenant used reasonable due diligence in connection therewith and assuming that Landlord has completed any repairs Landlord is required to make pursuant to this Article 11.

11.2Landlord's Option to Repair.  Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within sixty (60) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall be damaged by Casualty, whether or not the Premises is affected, and one or more of the following conditions is present: (i) in Landlord's reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of commencement of the repairs (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) the damage is not fully covered by Landlord's insurance policies (such calculation to include the amount of any deductibles under such insurance policies); and (iv) the damage occurs during the last twelve (12) months of the Lease Term; provided, however, that Landlord may only exercise its right to terminate this Lease pursuant to the provisions of this Section 11.2 if Landlord terminates all the leases of similarly affected tenants in the Project with comparable termination rights in those leases.  Moreover, if the Premises and/or access thereto are materially damaged by Casualty, and Landlord does not elect to terminate this Lease pursuant to Landlord's termination right as provided above, and either (A) the repairs cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty (180) days after being commenced or (B) the damage occurs during the last twelve (12) months of the Lease Term, Tenant may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant.  Moreover, if Landlord has elected to make such repairs and fails to complete repairs to the Premises within one hundred eighty (180) days of commencement of repairs, subject to Force Majeure (not to exceed ninety (90) days), then Tenant shall have the right to terminate the Lease upon written notice delivered to Landlord at any time after such one hundred eighty (180) day period and prior to Landlord's substantial completion of such repairs.  At any time, from time to time, after the date occurring sixty (60) days after the date of the damage, Tenant may request that Landlord inform Tenant of Landlord's reasonable opinion of the date of completion of the repairs and Landlord shall respond to such request within five (5) business days ("Landlord's Repair Estimate Notice").  Notwithstanding the provisions of this Section 11.2, Tenant shall have the right to terminate this Lease under this Section 11.2 only if each of the following conditions is satisfied: (a) the damage to the Project by Casualty was not caused by the gross negligence or intentional act of Tenant or its partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b) Tenant is not then in monetary default under this Lease (beyond applicable notice and cure periods); (c) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (d) as a result of the damage to the Project, Tenant does not occupy or use the Premises at all other than limited occupancy which is necessary to promptly wind down operations at the Premises.  In the event this Lease is terminated in accordance with the terms of this Section 11.2, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance required under items (ii) and (iii) of Section 10.3.2 of this Lease.  

11.3Waiver of Statutory Provisions.  The provisions of this Lease, including this Article 11, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or the Project, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project.

			
	
 
	
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ARTICLE 12

NONWAIVER

No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby.  The waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained.  The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent.  No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord's right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the full amount due.  No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant's right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.

ARTICLE 13

CONDEMNATION

If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority.  If more than twenty-five percent (25%) of the rentable square feet of the Premises is taken, or if access to the Premises is substantially impaired, in each case for a period in excess of one hundred eighty (180) days, Tenant shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority.  Tenant shall not because of such taking assert any claim against Landlord or the authority for any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant's personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is payable separately to Tenant.  All Rent shall be apportioned as of the date of such termination.  If any part of the Premises shall be taken, and this Lease shall  not be so terminated, the Rent shall be proportionately abated.  Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure.  Notwithstanding anything to the contrary contained in this Article 13, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises.  Landlord shall be entitled to receive the entire award made in connection with any such temporary taking.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1Transfers.  Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any 

			
	
 
	
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interest hereunder by operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to collectively as "Transfers" and any person or entity to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee").  If Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the "Transfer Notice") shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the "Subject Space"), (iii) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the "Transfer Premium", as that term is defined in Section 14.3 below, in connection with such Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, including all existing operative documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, provided that Landlord shall have the right to require Tenant to utilize Landlord's standard Transfer documents in connection with the documentation of such Transfer, (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee's business and proposed use of the Subject Space and (v) an executed estoppel certificate from Tenant in the form attached hereto as Exhibit E.  Landlord shall respond to Tenant's Transfer Notice within fifteen (15) business days following delivery by Tenant of the Transfer Notice and all of the items described in the immediately preceding sentence.  Any Transfer made without Landlord's prior written consent shall, at Landlord's option, be null, void and of no effect, and shall, at Landlord's option, constitute a default by Tenant under this Lease.  Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord's review and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys', accountants', architects', engineers' and consultants' fees) incurred by Landlord, within thirty (30) days after written request by Landlord not to exceed Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) in each instance for Transfers in the ordinary course of business.  If Landlord fails to timely deliver to Tenant notice of Landlord's consent, or the withholding of consent, to a proposed Transfer within such 15-business day period, then Tenant may send a second (2nd) notice to Landlord, which notice must contain all of the items contained in the Transfer Notice and the following inscription, in bold faced lettering: "SECOND NOTICE DELIVERED PURSUANT TO SECTION 14.1 OF LEASE -- FAILURE TO TIMELY RESPOND WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN DEEMED APPROVAL OF ASSIGNMENT OR SUBLEASE."  If Landlord fails to deliver notice of Landlord's consent, or the withholding of Landlord's consent, to the proposed Transfer within five (5) business days following receipt of such second notice, Landlord shall be deemed to have approved the Transfer in question.  If Landlord at any time timely delivers notice to Tenant of Landlord's withholding of consent to a proposed Transfer, Landlord shall specify in reasonable detail in such notice the basis for such withholding of consent.

14.2Landlord's Consent.  Landlord shall not unreasonably withhold its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice.  Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any Applicable Laws for Landlord to withhold consent to any proposed Transfer where one or more of the following apply:

14.2.1The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project;

14.2.2The Transferee intends to use the Subject Space for purposes which are not permitted under this Lease;

14.2.3The Transferee is either a governmental agency or instrumentality thereof;

14.2.4The Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested;

			
	
 
	
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14.2.5The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease;

14.2.6The terms of the proposed Transfer will allow the Transferee to exercise a right of renewal, right of expansion, right of first offer, or other similar right held by Tenant (or will allow the Transferee to occupy space leased by Tenant pursuant to any such right); or

14.2.7Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, (i) occupies space in the Project at the time of the request for consent, or (ii) is negotiating with Landlord to lease space in the Project at such time; or

14.2.8The Transferee does not intend to occupy the entire Premises and conduct its business therefrom for a substantial portion of the term of the Transfer.

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's consent, but not later than the expiration of said six (6)-month period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, or (ii) which would cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in Tenant's original Transfer Notice, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord's right of recapture, if any, under Section 14.4 of this Lease).  Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent under this Section 14.2 or otherwise has breached or acted unreasonably under this Article 14, their sole remedies shall be a declaratory judgment and an injunction for the relief sought without any monetary damages, and Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any successor statute, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all Applicable Laws, on behalf of the proposed Transferee.  Tenant shall indemnify, defend and hold harmless Landlord from any and all liability, losses, claims, damages, costs, expenses, causes of action and proceedings involving any third party or parties (including without limitation Tenant's proposed subtenant or assignee) who claim they were damaged by Landlord's wrongful withholding or conditioning of Landlord's consent.

14.3Transfer Premium.  If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined in this Section 14.3, received by Tenant from such Transferee.  "Transfer Premium" shall mean all rent, additional rent or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer on a per rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for (i) any changes, alterations and improvements to the Premises in connection with the Transfer, (ii) any free base rent or other economic concessions reasonably provided to the Transferee, and (iii) any brokerage commissions and reasonable attorneys' fees in connection with the Transfer.  "Transfer Premium" shall also include, but not be limited to, key money, bonus money or other cash consideration paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer.  The provisions of this Section 14.3 shall not apply to a Permitted Transfer.

14.4Landlord's Option as to Contemplated Transfer Space.  Notwithstanding anything to the contrary contained in this Article 14, in the event Tenant contemplates a Transfer of all or substantially all of the Premises (taking into account any prior subleases which then remain in effect) for all or substantially all of the remaining Lease Term (or in the event of any other Transfer or Transfers entered into by Tenant as a subterfuge in order to avoid the terms of this Section 14.4), Tenant shall give Landlord notice (the "Intention to Transfer Notice") of such contemplated Transfer (whether or not the contemplated Transferee or the terms of such 

			
	
 
	
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contemplated Transfer have been determined).  The Intention to Transfer Notice shall specify the portion of and amount of rentable square feet of the Premises which Tenant intends to Transfer (the "Contemplated Transfer Space"), the contemplated date of commencement of the contemplated Transfer (the "Contemplated Effective Date"), and the contemplated length of the term of such contemplated Transfer, and shall specify that such Intention to Transfer Notice is delivered to Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to recapture the Contemplated Transfer Space for the term set forth in the Intention to Transfer Notice.  Thereafter, Landlord shall have the option, by giving written notice to Tenant within thirty (30) days after receipt of any Intention to Transfer Notice, to recapture the Contemplated Transfer Space.  Such recapture of the Contemplated Transfer Space by Landlord shall cancel and terminate this Lease with respect to the Contemplated Transfer Space as of the date stated in the Intention to Transfer Notice as the effective date of the proposed Transfer, and Tenant shall be relieved of its obligation under this Lease with respect to such Contemplated Transfer Space.  In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same.  If Landlord declines, or fails to elect in a timely manner to recapture  the Contemplated Transfer Space under this Section 14.4, then, provided Landlord has consented (or deemed to have consented) to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Contemplated Transfer Space to the proposed Transferee, subject to provisions of the last paragraph of Section 14.2 of this Lease.  The provisions of this Section 14.4 shall not apply to a Permitted Transfer.

14.5Effect of Transfer.  If Landlord consents to a Transfer, (i) the TCCs of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon Landlord's request a complete statement, certified by an independent certified public accountant, or Tenant's chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease from any liability under this Lease, including, without limitation, in connection with the Subject Space.  Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant solely relating to any Transfer, and shall have the right to make copies thereof, and upon request from Tenant, Landlord agrees to sign a commercially reasonable confidentiality agreement in connection with such audit.  If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than six percent (6%), Tenant shall pay Landlord's costs of such audit.

14.6Additional Transfers.  For purposes of this Lease, the term "Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of more than fifty percent (50%) or more of the partners, or transfer of more than fifty percent (50%) or more of partnership interests, within a twelve (12)-month period, or the dissolution of the partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly held and not traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or other reorganization of Tenant or (B) the sale or other transfer of an aggregate of more than fifty percent (50%) or more of the voting shares of Tenant (other than to immediate family members by reason of gift or death), within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or pledge of an aggregate of more than fifty percent (50%) or more of the value of the unencumbered assets of Tenant within a twelve (12)-month period.

14.7Occurrence of Default.  Any Transfer hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to:  (i) treat such Transfer as cancelled and repossess the Subject Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such Transfer.  If Tenant shall be in default under this Lease, Landlord is hereby irrevocably authorized to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease) until such default is cured.  Such Transferee shall rely on any representation by 

			
	
 
	
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Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant.  Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed or observed under this Lease.  No collection or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing.  In no event shall Landlord's enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord's right to enforce any term of this Lease against Tenant or any other person.

14.8Deemed Consent Transfers.  Notwithstanding anything to the contrary contained in this Lease, (A) an assignment or subletting of all or a portion of the Premises to an affiliate of the Original Tenant, i.e., Nektar Therapeutics (an entity which, as defined below, is Controlled by, Controls, or is under common Control with, Nektar Therapeutics (the "Affiliate Permitted Transferee")), (B) an assignment of the Lease to an entity which acquires all or substantially all of the stock or assets of Tenant, or (C) an assignment of the Lease to an entity which is the resulting entity of a merger or consolidation of Tenant during the Lease Term, shall not be deemed a Transfer requiring Landlord's consent under this Article 14 (any such assignee or sublessee described in clauses (A) through (C) of this Section 14.8 hereinafter referred to as a "Permitted Transferee" and any such assignment or sublease, a "Permitted Transfer"), provided that (i) Tenant notifies Landlord at least twenty (20) days prior to the effective date of any such assignment or sublease (provided, however, that if Tenant is prohibited by Law from providing such information to Landlord prior to the occurrence of such Permitted Transfer, Tenant shall provide such notice to Landlord promptly following the occurrence of same) and promptly supplies Landlord with any documents or information reasonably requested by Landlord regarding such Transfer or Permitted Transferee as set forth above, (ii) such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease and is for a good business purpose, (iii) such Permitted Transferee shall be of a character and reputation consistent with the quality of the Building, (iv) other than in connection with an assignment or subletting to an Affiliate Permitted Transferee pursuant to clause (A) above, such Permitted Transferee shall have a tangible net worth (not including goodwill as an asset) computed in accordance with generally accepted accounting principles ("Net Worth") at least equal to Sixty Million and 00/100 Dollars ($60,000,000.00), (v) no assignment or sublease relating to this Lease, whether with or without Landlord's consent, shall relieve Tenant from any liability under this Lease, and (vi) the liability of such Permitted Transferee under either an assignment or sublease shall be joint and several with Tenant.  

In connection with an assignment or subletting to an Affiliate Permitted Transferee under clause (A) above, such assignment or subletting shall only be deemed a "Permitted Transfer" during the period in which (i) such Affiliate Permitted Transferee remains wholly owned by, Controls, or is under common Control with Nektar Therapeutics, (ii) there has been no acquisition of all or substantially all of Nektar Therapeutics' stock or assets by a third party, and (iii) Nektar Therapeutics has not been subject to a merger or consolidation pursuant to which Nektar Therapeutics is not the surviving entity.  At such time as any of the conditions set forth in items (i) through (iii) of the immediately preceding sentence is no longer satisfied (the "Triggering Event"), then such Triggering Event (which shall automatically be deemed to be an assignment of this Lease, notwithstanding any contrary provision of this Article 14), shall be subject to Sections 14.1 through 14.7 above, and the provisions of this Section 14.8 if such Triggering Event might qualify as a Permitted Transfer pursuant to clauses (B) or (C) above.  If Tenant fails to notify Landlord of such Triggering Event at least twenty (20) days prior to the effective date thereof (provided, however, that if Tenant is prohibited by Law from providing such information to Landlord prior to the occurrence of such Triggering Event then Tenant shall provide such notice to Landlord promptly following the occurrence of same), or if Tenant fails to obtain Landlord's consent to the assignment of this Lease resulting from such Triggering Event to the extent such consent is required, i.e., where such Triggering Event does not qualify as a Permitted Transfer pursuant to clauses (B) or (C) above, then, at Landlord's election, such assignment shall constitute a default pursuant to Section 19.1.5 below.  An assignee of Tenant's entire interest in this Lease who qualifies as a Permitted Transferee or Affiliate Permitted Transferee may also be referred to herein as a "Permitted Transferee Assignee."  "Control," as used in this Section 14.8, shall mean the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of more than fifty percent (50%) of the voting interest in, any person or entity.  

			
	
 
	
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14.9Stock Transfers.  For the purpose of this Lease, if Tenant is a publicly traded company, then any sale or transfer of Tenant's capital stock, redemption or issuance of any additional stock of any class or the trading of any of Tenant's stock  shall not be deemed an assignment, subletting or any other transfer of this Lease or the Premises.  Moreover, none of the following shall be deemed an assignment, subletting or any other transfer of this Lease or the Premises: (i) a sale of corporate shares of capital stock in Tenant in connection with an initial public offering of Tenant's stock on a nationally-recognized stock exchange, or (ii) the issuance of any stock preferences or other equity interests of Tenant in connection with raising additional financing or capital.

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND 
REMOVAL OF TRADE FIXTURES

15.1Surrender of Premises.  No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord.  The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated.  The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises or terminate any or all such sublessees or subtenancies.

15.2Removal of Tenant Property by Tenant.  Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, except for (x) reasonable wear and tear, (y) damage by any Casualty that is not Tenant's obligation to repair hereunder, or (z) repairs which are specifically made the responsibility of Landlord hereunder.  Upon such expiration or termination, in addition to Tenant's obligations under Section 29.32, below, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, business and trade fixtures, free-standing cabinet work, server and telephone equipment, movable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal.

ARTICLE 16

HOLDING OVER

If Tenant holds over after the expiration of the Lease Term with at least six (6) months' prior written notice to and/or the express written consent of Landlord, such tenancy shall be from month-to-month only (terminable by either party upon thirty (30) days' notice), and shall not constitute a renewal hereof or an extension for any further term, and in such case Base Rent shall be payable at a monthly rate of one hundred fifty percent (150%) of the Base Rent applicable during the last rental period of the Lease Term under this Lease.  Such month-to-month tenancy shall be subject to every other applicable term, covenant and agreement contained herein, and such tenancy shall automatically terminate after three (3) months, at which time such tenancy shall become a tenancy at sufferance, and in such case daily damages in any action to recover possession of the Premises shall be calculated at a daily rate equal to two hundred percent (200%) of the Base Rent applicable during the last rental period of the Lease Term under this Lease (calculated on a per diem basis).  If Tenant holds over after the expiration of the Lease Term without at least six (6) months' prior written notice to and/or the express written consent of Landlord, such tenancy shall be a tenancy at sufferance, and shall not constitute a renewal hereof or an extension for any further term, and in such case daily damages in any action to recover possession of the Premises shall be calculated at a daily rate equal to two hundred percent (200%) of the Base Rent applicable during the last rental period of the Lease Term under this Lease (calculated on a per diem 

			
	
 
	
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basis).  Nothing contained in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, subject to an express written agreement between the parties with respect to any such holding over by Tenant, and Landlord expressly reserves the right to require Tenant to vacate and deliver possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease.  The provisions of this Article 16 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law.  If Tenant holds over without at least six (6) months' prior written notice to Landlord and/or Landlord's express written consent, and tenders payment of rent for any period beyond the expiration of the Lease Term by way of check (whether directly to Landlord, its agents, or to a lock box) or wire transfer, Tenant acknowledges and agrees that the cashing of such check or acceptance of such wire shall be considered inadvertent and not be construed as creating a month-to-month tenancy, provided Landlord refunds such payment to Tenant promptly upon learning that such check has been cashed or wire transfer received.  Tenant acknowledges that any holding over without Landlord's express written consent may compromise or otherwise affect Landlord's ability to enter into new leases with prospective tenants regarding the Premises.  Therefore, if Tenant fails to vacate and deliver the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom so long as Landlord has provided written notice to Tenant with regard to any succeeding tenancy, Tenant shall protect, defend, indemnify and hold Landlord harmless from and against all claims made by any succeeding tenant founded upon such failure to vacate and deliver, and any losses suffered by Landlord, including lost profits, resulting from such failure to vacate and deliver.  Tenant agrees that any proceedings necessary to recover possession of the Premises, whether before or after expiration of the Lease Term, shall be considered an action to enforce the terms of this Lease for purposes of the awarding of any reasonable attorneys' fees in connection therewith.

ARTICLE 17

ESTOPPEL CERTIFICATES; AUDITED FINANCIAL STATEMENTS

17.1Estoppel Certificates.  Within ten (10) business days following a request in writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be substantially in the form of Exhibit E, attached hereto (or such other form as may be required by any prospective mortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord's mortgagee or prospective mortgagee.  Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of the Project.  Tenant shall execute and deliver whatever other instruments may be reasonably required for such purposes.  At any time during the Lease Term, if Tenant is not a publicly held corporation, Landlord may require Tenant to provide Landlord with a current financial statement and financial statements of the two (2) years prior to the current financial statement year.  Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant.  Failure of Tenant to timely execute, acknowledge and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct, without exception.

17.2Audited Financial Statements.  No more than once per calendar year (other than in connection with (i) any event wherein Tenant has exercised any rights hereunder to expand within the Project, (ii) a Transfer pursuant to Article 14 above, or (iii) an event of default then occurring under this Lease), Landlord may require Tenant to provide Landlord with a current financial statement (the "Audited Financial Statement") and Audited Financial Statements of the two (2) years prior to the current financial statement year.  Such Audited Financial Statements shall be prepared in accordance with generally accepted accounting principles and shall be audited by an independent certified public accountant from a nationally recognized certified public accounting firm, and shall include a consolidated balance sheet, consolidated income statement, and consolidated statement of cashflow.  Notwithstanding the foregoing, in the event that (i) stock in the entity which constitutes Tenant under this Lease (as opposed to an entity that controls Tenant or is otherwise an affiliate of Tenant) is publicly traded on NASDAQ or a national stock exchange, and (ii) Tenant has its own, separate and distinct 10K and 10Q filing requirements (as opposed joint or cumulative filings with an entity that controls Tenant or with entities which are otherwise affiliates of Tenant), then Tenant's obligation to provide Landlord with a copy of its most recent Audited Financial Statement shall be deemed satisfied.  

			
	
 
	
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ARTICLE 18

SUBORDINATION

This Lease shall be subject and subordinate to all present and future ground or underlying leases of the Building or Project and to the lien of any mortgage, trust deed or other encumbrances hereafter in force against the Building or Project or any part thereof, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds (each, a "Mortgage"), unless the holders of such mortgages, trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto.  Notwithstanding the foregoing, the subordination of this Lease to future Mortgages shall be subject to Tenant's receipt of a non-disturbance agreement in a form reasonably acceptable to Tenant which provides in substance that so long as Tenant is not in default under the Lease past applicable notice and cure periods, its use and occupancy of the Premises shall not be disturbed notwithstanding any default of Landlord under such Mortgage.  Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease, provided such lienholder or purchaser or ground lessor shall agree to accept this Lease and not disturb Tenant's occupancy, so long as Tenant timely pays the rent and observes and performs the TCCs of this Lease to be observed and performed by Tenant.  Landlord's interest herein may be assigned as security at any time to any lienholder.  Tenant shall, within ten (10) business days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground leases or underlying leases.  Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.  Landlord represents and warrants that, as of the date of this Lease, there is no mortgage, trust deed or ground lease encumbering the Premises or the Project.

ARTICLE 19

DEFAULTS; REMEDIES

19.1Events of Default.  The occurrence of any of the following shall constitute a default of this Lease by Tenant:

19.1.1Any failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due unless such failure is cured within five (5) business days after notice; or

19.1.2Except where a specific time period is otherwise set forth for Tenant's performance in this Lease, in which event the failure to perform by Tenant within such time period shall be a default by Tenant under this Section 19.1.2, any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure such default, but in no event exceeding a period of time in excess of ninety (90) days after written notice thereof from Landlord to Tenant; or

19.1.3To the extent permitted by law, (i) Tenant or any guarantor of this Lease being placed into receivership or conservatorship, or becoming subject to similar proceedings under Federal or State law, or (ii) a general assignment by Tenant or any guarantor of this Lease for the benefit of creditors, or (iii) the taking of any corporate action in furtherance of bankruptcy or dissolution whether or not there exists any proceeding under an insolvency or bankruptcy law, or (iv) the filing by or against Tenant or any guarantor of any proceeding under an insolvency or bankruptcy law, unless in the case of such a proceeding filed against Tenant or any guarantor the 

			
	
 
	
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same is dismissed within sixty (60) days, or (v) the appointment of a trustee or receiver to take possession of all or substantially all of the assets of Tenant or any guarantor, unless possession is restored to Tenant or such guarantor within thirty (30) days, or (vi) any execution or other judicially authorized seizure of all or substantially all of Tenant's assets located upon the Premises or of Tenant's interest in this Lease, unless such seizure is discharged within thirty (30) days; or

19.1.4Abandonment (as defined by Applicable Laws) of the Premises by Tenant; or

19.1.5The failure by Tenant to observe or perform according to the provisions of Articles 5, 14, 17 or 18 of this Lease where such failure continues for more than three (3) business days after notice from Landlord.

The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law.

19.2Remedies Upon Default.  Upon the occurrence of any event of default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.

19.2.1Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim for damages therefor; and Landlord may recover from Tenant the following:

19.2.1.1.1The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus

19.2.1.1.2The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

19.2.1.1.3The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

19.2.1.1.4Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and

19.2.1.1.5At Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Laws.

The term "rent" as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others.  As used in Sections 19.2.1(a) and (b), above, the "worth at the time of award" shall be computed by allowing interest at the Interest Rate.  As used in Section 19.2.1(c), above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).  

19.2.2Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).  Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

			
	
 
	
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19.2.3Landlord shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other provision of this Lease), without prior demand or notice except as required by applicable law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof.

19.3Subleases of Tenant.  Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in such subleases, licenses, concessions or arrangements.  In the event of Landlord's election to succeed to Tenant's interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

19.4Intentionally Omitted.

19.5Efforts to Relet.  No re-entry or repossession, repairs, maintenance, changes, alterations and additions, reletting, appointment of a receiver to protect Landlord's interests hereunder, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant's right to possession, or to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant's obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant.  Tenant hereby irrevocably waives any right otherwise available under any law to redeem or reinstate this Lease.

19.6Landlord Default.  Notwithstanding anything to the contrary set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord's failure to perform; provided, however, if the nature of Landlord's obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter diligently pursues the same to completion.  Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity.  Any award from a court or arbitrator in favor of Tenant requiring payment by Landlord which is not paid by Landlord within the time period directed by such award, may be offset by Tenant from Rent next due and payable under this Lease; provided, however, Tenant may not deduct the amount of the award against more than fifty percent (50%) of Base Rent next due and owing (until such time as the entire amount of such judgment is deducted) to the extent following a foreclosure or a deed-in-lieu of foreclosure.

ARTICLE 20

COVENANT OF QUIET ENJOYMENT

Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved and on keeping, observing and performing all the other TCCs, provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to the TCCs, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord.  The foregoing covenant is in lieu of any other covenant express or implied.

ARTICLE 21

LETTER OF CREDIT

21.1Delivery of Letter of Credit.  Tenant shall deliver to Landlord, within ten (10) days of Tenant's and Landlord's execution of this Lease, an unconditional, clean, irrevocable letter of credit (the "L‐C") in the amount set forth in Section 9 of the Summary (the "L‐C Amount"), which L‐C shall be issued by a money-center, solvent and nationally recognized bank (a bank 

			
	
 
	
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which accepts deposits, maintains accounts, has a local San Francisco office which will negotiate a letter of credit, and whose deposits are insured by the FDIC) reasonably acceptable to Landlord (such approved, issuing bank being referred to herein as the "Bank"), which Bank must have a short term Fitch Rating which is not less than "F1", and a long term Fitch Rating which is not less than "A"(or in the event such Fitch Ratings are no longer available, a comparable rating from Standard and Poor's Professional Rating Service or Moody's Professional Rating Service) (collectively, the "Bank's Credit Rating Threshold"), and which L‐C shall be in the form of Exhibit G, attached hereto.  Tenant shall pay all expenses, points and/or fees incurred by Tenant in obtaining the L‐C.  The L‐C shall (i) be "callable" at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through renewal or extension, for the period commencing on the date of this Lease and continuing until the date (the "L‐C Expiration Date") that is no less than one hundred five (105) days after the expiration of the Lease Term as the same may be extended, and Tenant shall deliver a new L‐C or certificate of renewal or extension to Landlord at least sixty (60) days prior to the expiration of the L‐C then held by Landlord, without any action whatsoever on the part of Landlord, (iii) be fully assignable by Landlord, its successors and assigns, (iv) permit partial draws and multiple presentations and drawings, and (v) be otherwise subject to the International Standby Practices-ISP 98, International Chamber of Commerce Publication #590.  Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the L‐C if any of the following shall have occurred or be applicable:  (A) such amount is due to Landlord under the terms and conditions of this Lease, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, "Bankruptcy Code"), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Lease has been rejected, or is deemed rejected, under Section 365 of the U.S. Bankruptcy Code, following the filing of a voluntary petition by Tenant under the Bankruptcy Code, or the filing of an involuntary petition against Tenant under the Bankruptcy Code, or (E) the Bank has notified Landlord that the L‐C will not be renewed or extended through the L‐C Expiration Date, or (F) Tenant is placed into receivership or conservatorship, or becomes subject to similar proceedings under Federal or State law, or (G) Tenant executes an assignment for the benefit of creditors, or (H) if (1) any of the Bank's Fitch Ratings (or other comparable ratings to the extent the Fitch Ratings are no longer available) have been reduced below the Bank's Credit Rating Threshold, or (2) there is otherwise a material adverse change in the financial condition of the Bank, and Tenant has failed to provide Landlord with a replacement letter of credit, conforming in all respects to the requirements of this Article 21 (including, but not limited to, the requirements placed on the issuing Bank more particularly set forth in this Section 21.1 above), in the amount of the applicable L‐C Amount, within ten (10) days following Landlord's written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary) (each of the foregoing being an "L‐C Draw Event").  The L‐C shall be honored by the Bank regardless of whether Tenant disputes Landlord's right to draw upon the L‐C, and regardless of any discrepancies between the L-C and this Lease.  In addition, in the event the Bank is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation or any successor or similar entity, then, effective as of the date such receivership or conservatorship occurs, said L‐C shall be deemed to fail to meet the requirements of this Article 21, and, within ten (10) days following Landlord's notice to Tenant of such receivership or conservatorship (the "L‐C FDIC Replacement Notice"), Tenant shall replace such L‐C with a substitute letter of credit from a different issuer (which issuer shall meet or exceed the Bank's Credit Rating Threshold and shall otherwise be acceptable to Landlord in its reasonable discretion) and that complies in all respects with the requirements of this Article 21.  If Tenant fails to replace such L‐C with such conforming, substitute letter of credit pursuant to the terms and conditions of this Section 21.1, then, notwithstanding anything in this Lease to the contrary, Landlord shall have the right to declare Tenant in default of this Lease for which there shall be no notice or grace or cure periods being applicable thereto (other than the aforesaid ten (10) day period).  Tenant shall be responsible for the payment of any and all costs incurred with the review of any replacement L‐C (including without limitation Landlord's reasonable attorneys' fees), which replacement is required pursuant to this Section 21.1 or is otherwise requested by Tenant.  In the event of an assignment by Tenant of its interest in the Lease (and irrespective of whether Landlord's consent is required for such assignment), the acceptance of any replacement or substitute letter of credit by Landlord from the assignee shall be subject to Landlord's prior written approval, in Landlord's sole and absolute discretion, and the reasonable attorneys' fees incurred by Landlord in connection with such determination shall be payable by Tenant to Landlord within thirty (30) days of billing.

21.2Application of L‐C.  Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the L‐C 

			
	
 
	
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upon the occurrence of any L‐C Draw Event.  In the event of any L‐C Draw Event, Landlord may, but without obligation to do so, and without notice to Tenant (except in connection with an L-C Draw Event under Section 21.1(H) above), draw upon the L‐C, in part or in whole, to cure any such L-C Draw Event and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant's breach or default of the Lease or other L-C Draw Event and/or to compensate Landlord for any and all damages arising out of, or incurred in connection with, the termination of this Lease, including, without limitation, those specifically identified in Section 1951.2 of the California Civil Code.  The use, application or retention of the L‐C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L‐C, and such L‐C shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled.  Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L‐C, either prior to or following a "draw" by Landlord of any portion of the L‐C, regardless of whether any dispute exists between Tenant and Landlord as to Landlord's right to draw upon the L‐C.  No condition or term of this Lease shall be deemed to render the L‐C conditional to justify the issuer of the L‐C in failing to honor a drawing upon such L‐C in a timely manner.  Tenant agrees and acknowledges that (i) the L‐C constitutes a separate and independent contract between Landlord and the Bank, (ii) Tenant is not a third party beneficiary of such contract, (iii) Tenant has no property interest whatsoever in the L‐C or the proceeds thereof, and (iv) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, Tenant is placed into receivership or conservatorship, and/or there is an event of a receivership, conservatorship or a bankruptcy filing by, or on behalf of, Tenant, neither Tenant, any trustee, nor Tenant's bankruptcy estate shall have any right to restrict or limit Landlord's claim and/or rights to the L‐C and/or the proceeds thereof by application of Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise.

21.3Maintenance of L-C.  If, as a result of any drawing by Landlord of all or any portion of the L-C, the amount of the L-C shall be less than the L-C Amount, Tenant shall, within five (5) business days thereafter, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency, and any such additional letter(s) of credit shall comply with all of the provisions of this Article 21, and if Tenant fails to comply with the foregoing, the same shall be subject to the terms of Section 21.3.3 below.  Tenant further covenants and warrants that it will neither assign nor encumber the L-C or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.  Without limiting the generality of the foregoing, if the L-C expires earlier than the L‐C Expiration Date, Landlord will accept a renewal thereof (such renewal letter of credit to be in effect and delivered to Landlord, as applicable, not later than sixty (60) days prior to the expiration of the L-C), which shall be irrevocable and automatically renewable as above provided through the L‐C Expiration Date upon the same terms as the expiring L‐C or such other terms as may be acceptable to Landlord in its sole discretion.  If Tenant exercises its option to extend the Lease Term pursuant to Section 2.3 of this Lease then, not later than one hundred five (105) days prior to the commencement of the Option Term, Tenant shall deliver to Landlord a new L C or certificate of renewal or extension evidencing the L-C Expiration Date as one hundred five (105) days after the expiration of the Option Term.  However, if the L‐C is not timely renewed, or if Tenant fails to maintain the L‐C in the amount and in accordance with the terms set forth in this Article 21, Landlord shall have the right to present the L‐C to the Bank in accordance with the terms of this Article 21, and the proceeds of the L-C may be applied by Landlord against any Rent payable by Tenant under this Lease that is not paid when due and/or to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease.  In the event Landlord elects to exercise its foregoing rights, (I) any unused proceeds shall constitute the property of Landlord (and not Tenant's property or, in the event of a receivership, conservatorship, or a bankruptcy filing by, or on behalf of, Tenant, property of such receivership, conservatorship or Tenant's bankruptcy estate) and need not be segregated from Landlord's other assets, and (II) Landlord agrees to pay to Tenant within thirty (30) days after the L‐C Expiration Date the amount of any proceeds of the L-C received by Landlord and not applied against any Rent payable by Tenant under this Lease that was not paid when due or used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will suffer) as a result of any breach or default by Tenant under this Lease; provided, however, that if prior to the L‐C Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant's creditors, under the Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the unused L-C proceeds until either all preference issues relating to payments under this Lease 

			
	
 
	
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have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed.

21.4Transfer and Encumbrance.  The L-C shall also provide that Landlord may, at any time and without notice to Tenant and without first obtaining Tenant's consent thereto, transfer (one or more times) all or any portion of its interest in and to the L-C to another party, person or entity, as a part of the assignment by Landlord of its rights and interests in and to this Lease or in connection with any financing for the Project obtained by Landlord.  In the event of a transfer of Landlord's interest in under this Lease, Landlord shall transfer the L-C, in whole, to the transferee and thereupon Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole of said L-C to a new landlord.  In connection with any such transfer of the L-C by Landlord, Tenant shall, at Tenant's sole cost and expense, execute and submit to the Bank such applications, documents and instruments as may be necessary to effectuate such transfer and, Tenant shall be responsible for paying the Bank's transfer and processing fees in connection therewith; provided that, Landlord shall have the right (in its sole discretion), but not the obligation, to pay such fees on behalf of Tenant, in which case Tenant shall reimburse Landlord within thirty (30) days after Tenant's receipt of an invoice from Landlord therefor.  

21.5L-C Not a Security Deposit.  Landlord and Tenant (1) acknowledge and agree that in no event or circumstance shall the L‐C or any renewal thereof or substitute therefor or any proceeds thereof be deemed to be or treated as a "security deposit" under any law applicable to security deposits in the commercial context, including, but not limited to, Section 1950.7 of the California Civil Code, as such Section now exists or as it may be hereafter amended or succeeded (the "Security Deposit Laws"), (2) acknowledge and agree that the L‐C (including any renewal thereof or substitute therefor or any proceeds thereof) is not intended to serve as a security deposit, and the Security Deposit Laws shall have no applicability or relevancy thereto, and (3) waive any and all rights, duties and obligations that any such party may now, or in the future will, have relating to or arising from the Security Deposit Laws.  Tenant hereby irrevocably waives and relinquishes the provisions of Section 1950.7 of the California Civil Code and any successor statute, and all other provisions of law, now or hereafter in effect, which (x) establish the time frame by which a landlord must refund a security deposit under a lease, and/or (y) provide that a landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by a tenant or to clean the premises, it being agreed that Landlord may, in addition, claim those sums specified in this Article 21 and/or those sums reasonably necessary to (a) compensate Landlord for any loss or damage caused by Tenant's breach of this Lease, including any damages Landlord suffers following termination of this Lease, and/or (b) compensate Landlord for any and all damages arising out of, or incurred in connection with, the termination of this Lease, including, without limitation, those specifically identified in Section 1951.2 of the California Civil Code.

21.6Non-Interference By Tenant.  Tenant agrees not to interfere in any way with any payment to Landlord of the proceeds of the L-C, either prior to or following a "draw" by Landlord of all or any portion of the L-C, regardless of whether any dispute exists between Tenant and Landlord as to Landlord's right to draw down all or any portion of the L-C.  No condition or term of this Lease shall be deemed to render the L‐C conditional and thereby afford the Bank a justification for failing to honor a drawing upon such L-C in a timely manner.  Tenant shall not request or instruct the Bank of any L‐C to refrain from paying sight draft(s) drawn under such L‐C.

21.7Waiver of Certain Relief.  Tenant unconditionally and irrevocably waives (and as an independent covenant hereunder, covenants not to assert) any right to claim or obtain any of the following relief in connection with the L‐C:

21.7.1A temporary restraining order, temporary injunction, permanent injunction, or other order that would prevent, restrain or restrict the presentment of sight drafts drawn under any L‐C or the Bank's honoring or payment of sight draft(s); or

21.7.2Any attachment, garnishment, or levy in any manner upon either the proceeds of any L‐C or the obligations of the Bank (either before or after the presentment to the Bank of sight drafts drawn under such L‐C) based on any theory whatever.

21.8Remedy for Improper Drafts.  Tenant's sole remedy in connection with the improper presentment or payment of sight drafts drawn under any L‐C shall be the right to obtain 

			
	
 
	
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from Landlord a refund of the amount of any sight draft(s) that were improperly presented or the proceeds of which were misapplied, together with interest at the Interest Rate and reasonable actual out-of-pocket attorneys' fees, provided that within ten (10) business days following Tenant's receipt of such refund, Tenant shall increase the amount of such L‐C to the amount (if any) then required under the applicable provisions of this Lease.  Tenant acknowledges that the presentment of sight drafts drawn under any L‐C, or the Bank's payment of sight drafts drawn under such L‐C, could not under any circumstances cause Tenant injury that could not be remedied by an award of money damages, and that the recovery of money damages would be an adequate remedy therefor.  In the event Tenant shall be entitled to a refund as aforesaid and Landlord shall fail to make such payment within ten (10) business days after demand, Tenant shall have the right to deduct the total amount thereof together with interest thereon at the Interest Rate from the next installment(s) of Base Rent.

ARTICLE 22

EMERGENCY GENERATOR

Subject to the TCCs hereof and Applicable Laws, Tenant shall have the right, at Tenant sole cost and expense but without any additional payment to Landlord, to install and operate an emergency generator (the "Generator") in the approximate area shown on Exhibit I (the "Generator Area"), in order to provide emergency electricity service to the Premises.  Landlord shall deliver, and Tenant shall accept, the Generator Area in its "as-is", "where-is" condition.  In no event shall Tenant permit the Generator to interfere with normal and customary use or operation of the Project by Landlord or other tenants and/or occupants (including, without limitation, by means of noise or odor).  Tenant shall be responsible for all maintenance and repairs in accordance with manufacturer specifications and compliance with Applicable Law obligations related to the Generator and acknowledges and agrees that Landlord shall have no responsibility in connection therewith and that Landlord shall not be liable for any damage that may occur with respect to the Generator.  The Generator shall be used by Tenant only during (i) testing and regular maintenance, and (ii) the period of any electrical power outage in the Building.  Tenant shall be entitled to operate the Generator, and such connections to the Building, for testing and regular maintenance only upon notice to Landlord and at times reasonably approved by Landlord.  Tenant shall comply with all reasonable requirements imposed by Landlord so that the Building Systems or other components of the Project are not adversely affected by the operation of the Generator and/or based upon other reasonable factors as determined by Landlord.  Tenant shall indemnify, defend, protect, and hold harmless Landlord, its partners, subpartners and their respective officers, agents, servants, employees, and independent contractors from any and all loss, cost, damage, expense and liability (including, without limitation, court costs and reasonable attorneys' fees) incurred in connection with or arising from any cause related to or connected with the use, operation or repair of the Generator, and/or any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person, in connection with the Generator or any breach of the TCCs of this Article 22, provided that the TCCs of the foregoing indemnity shall not apply to the gross negligence or willful misconduct of Landlord.  In the event that Tenant shall fail to comply with the requirements set forth herein, without limitation of Landlord's other remedies, (i) Landlord shall have the right to terminate Tenant's rights with respect to the Generator, and/or (ii) Landlord shall have the right, at Tenant's sole cost and expense, to cure such breach, in which event Tenant shall be obligated to pay to Landlord, within ten (10) days following demand by Landlord, the amount expended by Landlord.

ARTICLE 23

SIGNS; ROOF RIGHTS

23.1Full Floors.  Subject to Landlord's prior written approval, in its sole discretion, and provided all signs are in keeping with the quality, design and style of the Building and Project, Tenant, if the Premises comprise an entire floor of the Building, at its sole cost and expense, may install identification signage anywhere in the Premises including in the elevator lobby of the Premises, provided that such signs must not be visible from the exterior of the Building.

23.2Multi-Tenant Floors.  If other tenants occupy space on the floor on which any Phase of the Premises is located, Tenant's identifying signage (including, without limitation, elevator lobby identification signage on floors 6 and 7 of the Premises, as applicable) shall be 

			
	
 
	
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provided by Landlord, at Tenant's cost, and such signage shall be comparable to that used by Landlord for other similar floors in the Building and shall comply with Landlord's Building standard signage program.

23.3Building Directory.  A building directory is located in the lobby of the Building.  Tenant shall have the right, at Tenant's sole cost and expense, to designate one (1) name strip on such directory, and any subsequent changes to Tenant's name strip shall be at Tenant's sole cost and expense following Tenant's receipt of Landlord's consent thereto (which consent may be withheld in Landlord's sole and absolute discretion).

23.4Tenant's Signage.  In addition to the signage rights expressly set forth above in this Article 23, Tenant, at Tenant's sole cost and expense, shall be entitled to install one (1) exterior building sign (the location and size of which shall be determined by Landlord in its reasonable discretion and shall be subject to approval by the City) identifying Tenant's name (the "Tenant's Signage") in connection with Tenant's lease of the Premises.  Tenant may not install Tenant's Signage until after the occurrence of the first Lease Commencement Date that occurs immediately following the Phase I Lease Commencement Date.

23.4.1Specifications and Permits.  The Tenant's Signage shall set forth Tenant's name as determined by Tenant in its sole discretion, but subject to Landlord's reasonable approval, and in no event shall the Tenant's Signage include an "Objectionable Name," as that term is defined in Section 23.5.2, below.  The graphics, materials, color, design, lettering, lighting, size, illumination, specifications and exact locations of the Tenant's Signage shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and shall be consistent and compatible with the quality and nature of the Project and Landlord's Building standard signage specifications.  In addition, the Tenant's Signage shall be subject to Tenant's receipt of all necessary governmental or quasi-governmental approvals and permits (collectively, "Governmental Approvals") and shall be subject to all Applicable Laws and the CC&Rs (as the same may be modified).  Tenant hereby acknowledges that Landlord has made no representation or warranty to Tenant with respect to the probability of obtaining all necessary Governmental Approvals for the Tenant's Signage.  In the event Tenant does not receive the necessary Governmental Approvals for the Tenant's Signage, Tenant's and Landlord's rights and obligations under the remaining TCCs of this Lease shall be unaffected.

23.4.2Objectionable Name.  To the extent that Tenant desires to change the name set forth on the Tenant's Signage, such name shall not have a name which relates to an entity which is of a character or reputation, or is associated with a political faction or orientation, which is inconsistent with the quality of the Project, or which would otherwise reasonably offend a landlord of the Comparable Buildings (an "Objectionable Name").  The parties hereby agree that the name "Nektar" or any reasonable derivation thereof, shall not be deemed an Objectionable Name.

23.4.3Termination of Right to Tenant's Signage.  The rights contained in this Section 23.4 shall be personal to the Original Tenant and its Permitted Transferee Assignee, and may only be exercised and maintained by the Original Tenant (and not any other assignee, sublessee or transferee of the Original Tenant's interest in the Lease other than a Permitted Transferee Assignee).  Tenant's rights to Tenant's Signage pursuant to this Section 23.4 shall terminate upon the earliest to occur of any of the following: (i) Tenant's failure to install Tenant's Signage within twelve (12) months of the Phase VII Lease Commencement Date, (ii) Tenant's Transfer of more than twenty-five percent (25%), in the aggregate, of the Premises, or (iii) Tenant's (or its Permitted Transferee Assignee's, as the case may be) vacation of more than thirty (30) consecutive days by Tenant other than as a result of Alterations performed pursuant to Article 8 below or a Casualty pursuant to Article 11 below.  In the event Tenant fails to comply with any of the requirements set forth hereinabove, the signage rights provided in this Section 23.5 shall automatically terminate.

23.4.4Cost and Maintenance; Change and Replacement.  The actual costs of the Tenant's Signage and the installation, design, construction and any and all other costs associated with the Tenant's Signage, including, without limitation, utility charges and hook-up fees, permits, and maintenance and repairs, shall be the sole responsibility of Tenant.  Should the Tenant's Signage require repairs and/or maintenance, as determined in Landlord's reasonable judgment, Landlord shall have the right to provide notice thereof to Tenant and Tenant (except as set forth below) shall cause such repairs and/or maintenance to be performed within thirty (30) days after receipt of such notice from Landlord, at Tenant's sole cost and expense; provided, 

			
	
 
	
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however, if such repairs and/or maintenance are reasonably expected to require longer than thirty (30) days to perform, Tenant shall commence such repairs and/or maintenance within such thirty (30) day period and shall diligently prosecute such repairs and maintenance to completion.  Should Tenant fail to perform such repairs and/or maintenance within the periods described in the immediately preceding sentence, Landlord shall, upon the delivery of an additional five (5) business days' prior written notice, have the right to cause such work to be performed and to charge Tenant as Additional Rent for the actual cost of such work.  Subject to Tenant's agreement to comply with the terms of this Section 23.4, Tenant shall be permitted to change and/or replace the Tenant's Signage periodically in Tenant's reasonable discretion.  Upon the expiration or earlier termination of this Lease or upon any earlier termination of Tenant's rights to the Tenant's Signage as set forth herein, Tenant shall, at Tenant's sole cost and expense, cause the Tenant's Signage to be removed and shall cause the areas in which such Tenant's Signage was located to be restored to the condition existing immediately prior to the placement of such Tenant's Signage except for (x) reasonable wear and tear, (y) damage by Casualty that is not Tenant's obligation to repair hereunder, or (z) repairs which are specifically made the responsibility of Landlord hereunder.  If Tenant fails to timely remove the Tenant's Signage or to restore the areas in which such the Tenant's Signage was located, as provided in the immediately preceding sentence, then Landlord may perform such work, and all actual costs incurred by Landlord in so performing shall be reimbursed by Tenant to Landlord within thirty (30) days after Tenant's receipt of an invoice therefor.  The terms and conditions of this Section 23.4.4 shall survive the expiration or earlier termination of the Lease.

23.5Prohibited Signage and Other Items.  Any signs, notices, logos, pictures, names or advertisements which are installed and that have not been separately approved by Landlord may be removed without notice by Landlord at the sole expense of Tenant.  Tenant may not install any signs on the exterior or roof of the Project or the Common Areas.  Any signs, window coverings, or blinds (even if the same are located behind the Landlord-approved window coverings for the Building), or other items visible from the exterior of the Premises or Building, shall be subject to the prior approval of Landlord, in its sole discretion.

23.6Communications and HVAC Rooftop Equipment.  Throughout the Lease Term, as the same may be extended, subject to Landlord's reasonable approval and the terms of this Section 23.6, Tenant shall have the non-exclusive right to install, repair, maintain (including access thereto) and replace on the roof of the Buildings, a satellite dish and any and all related equipment (collectively, the "Communications Equipment") as well as a Tenant HVAC System in accordance with Section 6.5 above, for use in connection with Tenant's business within the Premises, in a location reasonably designated by Landlord and subject to the execution by Landlord and Tenant of a separate commercially reasonable license agreement outlining the terms and conditions of Tenant's use of such rooftop space; provided, however, (i) any installation shall be performed pursuant to this Section 23.6, and it shall be deemed reasonable for Landlord to withhold its approval to the extent any such installation would interfere with the Landlord's or any other tenant's use, operation, repair and/or maintenance of then-existing equipment and systems installed on the roof or use of the roof deck or would violate Code, or the CC&Rs, and (ii) Landlord shall not charge a monthly fee for Tenant's use of rooftop space pursuant to this Section 23.6 but Tenant shall be responsible to pay for its usage of  utilities in connection with the Communications Equipment.  The exact location, physical appearance and all specifications of the Communications Equipment (including, without limitation, mounting and structural support specifications) shall be subject to Landlord's reasonable approval, and Landlord may require Tenant to install screening around such Communications Equipment, at Tenant's sole cost and expense, as reasonably designated by Landlord.  Without having to pay any additional rental or license fees therefor, but subject to Landlord's reasonable rules and regulations, Tenant may also use a Building's risers, conduits and towers for purposes of installing cabling from the Communications Equipment to the Premises in the interior of such Building.  Tenant may not license, assign or sublet the right to use any of such Communications Equipment or podium roof space, other than to Transferees permitted under Article 14, without Landlord's prior written consent, which consent may be withheld in Landlord's sole and absolute discretion.  Notwithstanding any provision set forth in the Lease, Tenant shall be responsible, at Tenant's sole cost and expense, for (i) obtaining, as applicable, and maintaining all permits or other governmental approvals required in connection with the Communications Equipment, (ii) repairing and maintaining and causing the Communications Equipment to comply with all Applicable Laws, and (iii) the removal of the Communications Equipment and all associated wiring promptly following the expiration or earlier termination of this Lease (and the repair of all affected areas to the condition existing prior to the installation 

			
	
 
	
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thereof).   In no event shall Tenant permit the Communications Equipment to interfere with any communications or other equipment at or servicing the Building or Project that exist as of the date of Tenant's installation (or reasonable substitutes or replacements therefor) or with any Building Systems.  Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all loss, cost, damage, expense and liability (including, without limitation, court costs and reasonable attorneys' fees) incurred in connection with or arising from any cause related to Tenant's installation, use, repair or maintenance or any other matter relating to or in connection with the Communications Equipment.  

ARTICLE 24

COMPLIANCE WITH LAW

24.1Landlord's Compliance with Law Obligations.  Landlord shall comply with all Applicable Laws relating to the Base Building, provided that compliance with such Applicable Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord's failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would unreasonably and materially affect the safety of Tenant's employees or create a significant health hazard for Tenant's employees.  Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under this Article 24 to the extent not prohibited by the terms of Section 4.2.4 above.  Landlord and Tenant hereby acknowledge that neither the Premises nor the Building have undergone inspection by a Certified Access Specialist (CASp).  As required by Section 1938(e) of the California Civil Code, Landlord hereby states as follows:  "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law.  Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant.  The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises."  In furtherance of the foregoing, Landlord and Tenant hereby agree as follows:  (a) any CASp inspection requested by Tenant shall be conducted, at Tenant's sole cost and expense, by a CASp designated by Landlord, subject to Landlord's reasonable rules and requirements; (b) Tenant, at its sole cost and expense, shall be responsible for making any improvements or repairs within the Premises to correct violations of construction-related accessibility standards; and (c) if anything done by or for Tenant in its use or occupancy of the Premises shall require any improvements or repairs to the Building or Project (outside the Premises) to correct violations of construction-related accessibility standards, then Tenant shall reimburse Landlord within thirty (30) days of written demand accompanied by reasonably detailed documentation in connection therewith, as Additional Rent, for the cost to Landlord of performing such improvements or repairs.

24.2Tenant's Compliance with Law Obligations.  Tenant shall not do anything or suffer anything to be done in or about the Premises or the Project which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated, including, without limitation, any such governmental regulations related to disabled access (collectively, "Applicable Laws").  At its sole cost and expense except for the Code Work to be performed by Landlord pursuant to the Work Letter, Tenant shall promptly comply with all Applicable Laws (including the making of any alterations to the Premises required by Applicable Laws) which relate to (i) Tenant's use of the Premises, (ii) the Alterations or the Improvements in the Premises, or (iii) the Base Building, but, as to the Base Building, only to the extent such obligations are triggered by Tenant's Alterations, the Improvements, or use of the Premises for non-general office use.  Should any standard or regulation now or hereafter be imposed on Landlord or Tenant by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations.  The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant.  

			
	
 
	
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ARTICLE 25

LATE CHARGES

If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee when due, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the overdue amount plus any reasonable attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent and/or other charges when due hereunder; provided, however, with regard to the first such failure in any twelve (12) month period, Landlord will waive such late charge to the extent Tenant cures such failure within five (5) business days following Tenant's receipt of written notice from Landlord that the same was not received when due.  The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord's other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner.  In addition to the late charge described above, any Rent or other amounts owing hereunder which are not paid within ten (10) days after the date they are due shall bear interest from the date when due until paid at the "Interest Rate."  For purposes of this Lease, the "Interest Rate" shall be an annual rate equal to the lesser of (i) the annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release Publication H.15(519), published weekly (or such other comparable index as Landlord and Tenant shall reasonably agree upon if such rate ceases to be published), plus two (2) percentage points, and (ii) the highest rate permitted by applicable law.

ARTICLE 26

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

26.1Landlord's Cure.  All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwise expressly provided herein.  If Tenant shall fail to perform any obligation under this Lease, and such failure shall continue in excess of the time allowed under Section 19.1.2, above, unless a specific time period is otherwise stated in this Lease, Landlord may, but shall not be obligated to, make any such payment or perform any such act on Tenant's part without waiving its rights based upon any default of Tenant and without releasing Tenant from any obligations hereunder.

26.2Tenant's Reimbursement.  Except as may be specifically provided to the contrary in this Lease, Tenant shall pay to Landlord, within thirty (30) days of delivery by Landlord to Tenant of statements therefor:  (i) sums equal to expenditures reasonably made and obligations incurred by Landlord in connection with the remedying by Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses referred to in Article 10 of this Lease; and (iii) sums equal to all expenditures made and obligations incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or pursuant to law, including, without limitation, all legal fees and other amounts so expended.  Tenant's obligations under this Section 26.2 shall survive the expiration or sooner termination of the Lease Term.

ARTICLE 27

ENTRY BY LANDLORD

27.1Landlord's Entry.  Subject to Section 27.2 below, Landlord reserves the right at all reasonable times (during Building Hours with respect to items (i) and (ii) below) and upon at least one (1) business days' prior written notice to Tenant (except in the case of an emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to prospective purchasers, or to current or prospective mortgagees, ground or underlying lessors or insurers, or during the last nine (9) months of the Lease Term, to prospective tenants; (iii) post notices of nonresponsibility; or (iv) alter, improve or repair the Premises or the Building, or for structural alterations, repairs or improvements to the Building or the Building's systems and equipment.  Notwithstanding anything to the contrary contained in this Article 27, if Landlord's entry is for routine or ministerial purposes and Landlord is otherwise required by this Article 27 to give Tenant written notice prior to its entry into the Premises, then Landlord may provide notice by electronic mail to Tenant's most recent facilities manager with whom Landlord has previously corresponded instead of the notices required under Section 29.18 below and such notice shall indicate any portion of the Secured Areas 

			
	
 
	
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which Landlord requires access to.  Landlord may enter the Premises at any time to (A) perform services required of Landlord; (B) take possession due to any breach of this Lease in the manner provided herein; and (C) perform any covenants of Tenant which Tenant fails to perform.  Landlord may make any such entries without the abatement of Rent, except as otherwise provided in this Lease, and may take such reasonable steps as required to accomplish the stated purposes; provided, however, except for (x) emergencies, (y) repairs, alterations, improvements or additions required by governmental or quasi-governmental authorities or court order or decree, or (z) repairs which are the obligation of Tenant hereunder, any such entry shall be performed in a manner so as not to unreasonably interfere with Tenant's use of the Premises and shall be performed after normal business hours if reasonably practical.  With respect to items (y) and (z) above, Landlord shall use commercially reasonable efforts to not materially interfere with Tenant's use of, or access to, the Premises.  Tenant hereby waives any claims for damages or for any injuries or inconvenience to or interference with Tenant's business, lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby.  For each of the above purposes, Landlord shall at all times have a key with which to unlock all the doors in the Premises, excluding Tenant's vaults, safes and special security areas designated in advance by Tenant.  In an emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and to the Premises.  Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises, provided, however, in connection with exercising its rights hereunder, Landlord shall use commercially reasonable efforts to minimize interference with the operation of Tenant's business in the Premises.  No provision of this Lease shall be construed as obligating Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed to be performed by Landlord herein.

27.2Tenant's Security Requirements.  Landlord acknowledges and understands that (i) certain operations of Tenant within the Premises may involve the use of valuable property and/or confidential information, and (ii) in connection therewith, Tenant may reasonably designate certain reasonable areas of the Premises as "Secured Areas" should Tenant require such areas for the purpose of securing certain valuable property or confidential information.  In recognition of such needs by Tenant:  (A) Landlord shall provide Tenant an opportunity to have a Tenant representative accompany Landlord and Landlord's invitees (who shall be bound by the confidentiality provisions of this Lease) pursuant to Section 27.1 hereof during any entry into the Premises by Landlord (except in the case of an emergency), provided that if such representative is not available to accompany Landlord and Landlord's invitees during any entry into the Premises, Landlord and Landlord's invitees shall nevertheless have the right to enter the Premises (including the Secured Areas) subject to and in accordance with this Article 27; (B) Landlord shall not enter such Secured Areas except in the event of an emergency or in connection with alterations to the premises of another tenant of the Building or to make any repairs to the Building subject to Landlord's compliance with provisions of this Lease; and (C) Landlord shall only maintain or repair such Secured Areas to the extent (1) such repair or maintenance is required in order to maintain and repair the Building's Structure and/or Building's Systems, (2) as required by Applicable Laws, or (3) in response to specific requests by Tenant and in accordance with a schedule reasonably designated by Tenant (subject to Landlord's reasonable approval), and in connection with Landlord's entry into the Secured Areas for the limited purposes described in items (1) - (3), such entry shall be subject to Landlord's compliance with the other provisions of this Lease applicable thereto.  Any entry into the Premises (including the Secured Areas) by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises (including the Secured Areas), or an actual or constructive eviction of Tenant from any portion of the Premises (including the Secured Areas), provided, however, in connection with exercising its rights hereunder, Landlord shall use commercially reasonable efforts to minimize interference with the operation of Tenant's business in the Premises (including the Secured Areas).

ARTICLE 28

TENANT PARKING

Tenant shall have the right, but not the obligation, to rent from Landlord, on a monthly basis throughout the Lease Term, commencing on the Phase I Lease Commencement Date, the amount of valet parking passes set forth in Section 9 of the Summary.  In the event, however, that at any time on and after the date that is sixty (60) days following the first Lease Commencement 

			
	
 
	
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Date that occurs immediately following the Phase I Lease Commencement Date, Tenant does not rent the full amount of valet parking passes set forth in Section 9 of the Summary, then with respect to the valet parking pass(es) that Tenant no longer rents, Tenant shall no longer have the right to rent such valet parking pass(es), but Tenant may, subject to availability as reasonably determined by Landlord, rent one (1) or more valet parking passes on a month-to-month basis; provided, however, in no event shall the total number of valet parking passes rented by Tenant at any time exceed the number of valet parking passes set forth in Section 9 of the Summary.  Tenant shall pay to Landlord (or its designee) for the parking passes on a monthly basis at the prevailing rate charged from time to time at the location of such parking passes.  In addition to any fees that may be charged to Tenant in connection with its parking of automobiles in the Project parking facilities, Tenant shall be responsible for the full amount of any taxes imposed by any governmental authority in connection with the renting of such parking passes by Tenant or the use of the parking facility by Tenant.  Tenant's continued right to use the parking passes is conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the parking facility where the parking passes are located, including any sticker or other identification system established by Landlord, Tenant's cooperation in seeing that Tenant's employees and visitors also comply with such rules and regulations and Tenant not being in default under this Lease.  Landlord specifically reserves the right to change the size, configuration, design, layout and all other aspects of the Project parking facility at any time and Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease, from time to time, close-off or restrict access to the Project parking facility for purposes of permitting or facilitating any such construction, alteration or improvements.  Landlord may, at any time, institute valet assisted parking, tandem parking stalls, "stack" parking, or other parking program within the Project parking facility, the cost of which shall be included in Operating Expenses.  Landlord may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed hereby to the Landlord.  The parking passes rented by Tenant pursuant to this Article 28 are provided to Tenant solely for use by Tenant's own personnel and such passes may not be transferred, assigned, subleased or otherwise alienated by Tenant without Landlord's prior approval other than to a Permitted Transferee.

ARTICLE 29

MISCELLANEOUS PROVISIONS

29.1Terms; Captions.  The words "Landlord" and "Tenant" as used herein shall include the plural as well as the singular.  The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may require, shall in all cases be assumed as though in each case fully expressed.  The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections.

29.2Binding Effect.  Subject to all other provisions of this Lease, each of the covenants, conditions and provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective heirs, personal representatives, successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

29.3No Air Rights.  No rights to any view or to light or air over any property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease.  If at any time any windows of the Premises is temporarily darkened or the light or view therefrom is obstructed by reason of any repairs, improvements, maintenance or cleaning in or about the  Project, the same shall be without liability to Landlord and without any reduction or diminution of Tenant's obligations under this Lease.

29.4Modification of Lease.  Should any current or prospective mortgagee or ground lessor for the Building or Project require a modification of this Lease, which modification will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever documents are reasonably required therefor and to deliver the same to Landlord within ten (10) business days following a request therefor.  At the request of Landlord or any mortgagee or ground lessor, Tenant agrees to execute a short form of Lease and deliver the same to Landlord within ten (10) business days following 

			
	
 
	
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the request therefor; provided, however, that Landlord agrees to reimburse Tenant for Tenant's reasonable attorneys' fees actually incurred in the review and negotiation of any such documentation.

29.5Transfer of Landlord's Interest.  Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all liability under this Lease and Tenant agrees to look solely to such transferee for the performance of Landlord's obligations hereunder after the date of transfer and such transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord, and Tenant shall attorn to such transferee.  Tenant further acknowledges that Landlord may assign its interest in this Lease to a mortgage lender as additional security and agrees that such an assignment shall not release Landlord from its obligations hereunder and that Tenant shall continue to look to Landlord for the performance of its obligations hereunder.

29.6Prohibition Against Recording or Publication.  Neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded or otherwise published by Tenant or by anyone acting through, under or on behalf of Tenant; provided, however, nothing herein shall prevent Tenant from filing all or any portion of this Lease with the SEC if required by Applicable Laws to do so, as reasonably determined by Tenant.

29.7Landlord's Title.  Landlord's title is and always shall be paramount to the title of Tenant.  Nothing herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord.

29.8Relationship of Parties.  Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant.

29.9Application of Payments.  Landlord shall have the right to apply payments received from Tenant pursuant to this Lease, regardless of Tenant's designation of such payments, to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion, may elect.

29.10Time of Essence.  Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.

29.11Partial Invalidity.  If any term, provision or condition contained in this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted by law.

29.12No Warranty.  In executing and delivering this Lease, Tenant has not relied on any representations, including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the exhibits attached hereto.  Tenant agrees that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the physical condition of the Building, the Project, the land upon which the Building or the Project are located, or the Premises, or the expenses of operation of the Premises, the Building or the Project, or any other matter or thing affecting or related to the Premises, except as herein expressly set forth in the provisions of this Lease.

29.13Landlord Exculpation.  The liability of Landlord or the Landlord Parties to Tenant for any default by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration or any other matter relating to the Project or the Premises shall be limited solely and exclusively to an amount which is equal to the lesser of (a) the interest of Landlord in the Building or (b) the equity interest Landlord would have in the Building if the Building were encumbered by third-party debt in an amount equal to eighty percent (80%) of the value of the Building (as such value is determined by Landlord), provided that in no event shall such liability extend to any sales or insurance proceeds received by Landlord 

			
	
 
	
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or the Landlord Parties in connection with the Project, Building or Premises.  Neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.  The limitations of liability contained in this Section 29.13 shall inure to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns.  Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord's obligations under this Lease.  Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any circumstances for injury or damage to, or interference with, Tenant's business, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring.

29.14Entire Agreement.  It is understood and acknowledged that there are no oral agreements between the parties hereto affecting this Lease and this Lease constitutes the parties' entire agreement with respect to the leasing of the Premises and supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto (including, without limitation, any confidentiality agreement, letter of intent, request for proposal, or similar agreement previously entered into between Landlord and Tenant in anticipation of this Lease)or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease.  None of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties hereto.

29.15Right to Lease.  Landlord reserves the absolute right to effect such other tenancies in the Project as Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building or Project.  Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any space in the Building or Project.

29.16Force Majeure.  Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, any Casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant or Landlord pursuant to this Lease and except as to Tenant's obligations under Articles 5 and 24 of this Lease (collectively, a "Force Majeure"), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party's performance caused by a Force Majeure.  Any party claiming Force Majeure shall promptly notify the other party of such claim in writing, along with a statement regarding the anticipated length of such Force Majeure delay.

29.17Waiver of Redemption by Tenant.  Tenant hereby waives, for Tenant and for all those claiming under Tenant, any and all rights now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant's right of occupancy of the Premises after any termination of this Lease.

29.18Notices.  All notices, demands, statements or communications (collectively, "Notices") given or required to be given by either party to the other hereunder shall be in writing, shall be (A)  delivered by a nationally recognized overnight courier, or (B) delivered personally.  Any such Notice shall be delivered (i) to Tenant at the appropriate address set forth in Section 10 of the Summary, or to such other place as Tenant may from time to time designate in a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section 11 of the Summary, or to such other firm or to such other place as Landlord may from time to time designate in a Notice to Tenant.  Any Notice will be deemed given on the date of receipted delivery, of refusal to accept delivery, or when delivery is first attempted but cannot be made due to a change of address for which no Notice was given.  If Tenant is notified of the identity and address of Landlord's mortgagee or ground or underlying lessor, Tenant shall give to such mortgagee or ground or underlying lessor written notice of any default by Landlord under the terms of this Lease by registered or certified mail, and such mortgagee or ground or underlying lessor shall be given a reasonable opportunity 

			
	
 
	
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to cure such default prior to Tenant's exercising any remedy available to Tenant.  The party delivering Notice shall use commercially reasonable efforts to provide a courtesy copy of each such Notice to the receiving party via electronic mail.  

29.19Joint and Several.  If there is more than one Tenant, the obligations imposed upon Tenant under this Lease shall be joint and several.

29.20Authority.  If Tenant is a corporation, trust or partnership, Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in California and that Tenant has full right and authority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so.  In such event, Tenant shall, within ten (10) days after execution of this Lease, deliver to Landlord satisfactory evidence of such authority and, if a corporation, within ten (10) business days of demand by Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in Tenant's state of incorporation and (ii) qualification to do business in California.

29.21Attorneys' Fees.  In the event that either Landlord or Tenant should bring suit for the possession of the Premises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease or for any other relief against the other, then all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment.

29.22Governing Law; WAIVER OF TRIAL BY JURY.  This Lease shall be construed and enforced in accordance with the laws of the State of California.  IN ANY ACTION OR PROCEEDING ARISING FROM THE SUBJECT MATTER OF THIS LEASE, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY.  IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

29.23Submission of Lease.  Submission of this instrument for examination or signature by Tenant does not constitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

29.24Brokers.  Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 12 of the Summary (the "Brokers"), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Lease.  Landlord shall pay the Brokers pursuant to the terms of separate written commission agreements.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys' fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party.

29.25Independent Covenants.  This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled to make any repairs or perform 

			
	
 
	
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any acts hereunder at Landlord's expense or to any setoff of the Rent or other amounts owing hereunder against Landlord.

29.26Project or Building Name and Signage.  Landlord shall have the right at any time to change the name of the Project or Building and to install, affix and maintain any and all signs on the exterior and on the interior of the Project or Building as Landlord may, in Landlord's sole discretion, desire.  Tenant shall not use the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or for any purpose other than as the address of the business to be conducted by Tenant in the Premises, without the prior written consent of Landlord.

29.27Counterparts.  This Lease may be executed in counterparts with the same effect as if both parties hereto had executed the same document.  Both counterparts shall be construed together and shall constitute a single lease.

29.28Confidentiality.  Notwithstanding anything to the contrary in this Lease, if Tenant reasonably determines on advice from its legal counsel that it is required to disclose all or part of this Lease to a governmental authority in order to comply with any applicable governmental regulations, then Tenant shall be permitted to do so without being in violation of this Lease.  Tenant acknowledges that the content of this Lease and any related documents are confidential information.  Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant's financial, legal, and space planning consultants, prospective purchasers, prospective lenders, investors, or any independent auditors, third party's designated to review Direct Expenses, its directors, officers, employees, attorneys, or proposed Transferees, provided that such prospective parties agree to abide by the terms of this confidentiality provision.  Landlord acknowledges that the content of this Lease and any related documents are confidential information (including information provided to Landlord pursuant to Section 17.2 above or with respect to any financial statements required to be delivered to Landlord elsewhere in this Lease).  Moreover, Tenant has advised Landlord that Tenant may be obligated to regularly provide financial information concerning the Tenant and/or its affiliates to the shareholders of its affiliates, to the Federal Securities and Exchange Commission and other regulatory agencies, and to auditors and underwriters, which information may include summaries of financial information regarding this Lease, but only to the extent such disclosures are deemed to be "material" within the meaning of applicable securities laws or otherwise requested or required for compliance purposes.  In addition, the parties' respective confidentiality obligations set forth in this Section 29.28 shall not apply to any information or document which:  (a)  was lawfully in Landlord's or Tenant's possession prior to the time of disclosure by or on behalf of the other party; (b) is or becomes generally available to the public through no fault, omission, or other act of Landlord or Tenant, as the case may be; (c) is or was obtained from a third party, provided that such third party is not known by the disclosing party to be subject to a confidentiality agreement with the non-disclosing party; (d) was or is independently developed, discovered, or arrived at by or for Landlord or Tenant, as the case may be, without reference to, aid from or reliance upon the confidential information, or (e) is disclosed by Landlord or Tenant, as the case may be, in connection with the enforcement of the terms of this Lease.  Subject to the immediately preceding sentence and the immediately following sentence, Landlord shall keep the content of this Lease and any related documents strictly confidential and shall not disclose such confidential information to any person or entity other than Landlord's financial, legal and space planning consultants, or its directors, officers, employees, attorneys, accountants, prospective lenders, prospective purchasers, and current and potential partners, provided such prospective lenders, purchasers and partners agree to abide by the terms of this confidentiality provision.  Moreover, Landlord has advised Tenant that Landlord is obligated to regularly provide financial information concerning Landlord and/or its affiliates (including Kilroy Realty Corporation, a public company whose shares of stock are listed on the New York Stock Exchange) to the shareholders of its affiliates, to the Federal Securities and Exchange Commission and other regulatory agencies, and to auditors and underwriters, which information may include summaries of financial information concerning leases, rents, costs and results of operations of its real estate business, including any rents or results of operations affected by this Lease, but only to the extent such disclosures are deemed to be "material" within the meaning of applicable securities laws or otherwise requested or required for compliance purposes.  This Section 29.28 shall survive the expiration or earlier termination of this Lease for one (1) year.  

29.29Transportation Management.  Tenant shall fully comply with all present or future programs intended to manage parking, transportation or traffic in and around the Building, and in 

			
	
 
	
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connection therewith, Tenant shall take responsible action for the transportation planning and management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities.

29.30Building Renovations.  It is specifically understood and agreed that Landlord has made no representation or warranty to Tenant and has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate the Premises, Building, or any part thereof and that no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant except as specifically set forth herein or in the Work Letter.  However, Tenant hereby acknowledges that Landlord is currently renovating or may during the Lease Term renovate, improve, alter, or modify (collectively, the "Renovations") the Project, the Building and/or the Premises including without limitation the parking structure, common areas, systems and equipment, roof, and structural portions of the same, which Renovations may include, without limitation, (i) installing sprinklers in the Building common areas and tenant spaces, (ii) modifying the common areas and tenant spaces to comply with Applicable Laws and regulations, including regulations relating to the physically disabled, seismic conditions, and building safety and security, and (iii) installing new floor covering, lighting, and wall coverings in the Building common areas, and in connection with any Renovations, Landlord may, among other things, erect scaffolding or other necessary structures in the Building, limit or eliminate access to portions of the Project, including portions of the common areas, or perform work in the Building, which work may create noise, dust or leave debris in the Building.  Subject to Section 6.4, Tenant hereby agrees that such Renovations and Landlord's actions in connection with such Renovations shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent.  Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the Renovations, nor except as set forth in Section 6.4 above to the extent applicable to any Renovations, shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant's personal property or improvements resulting from the Renovations or Landlord's actions in connection with such Renovations, or for any inconvenience or annoyance occasioned by such Renovations or Landlord's actions.  Notwithstanding the foregoing, in exercising its rights pursuant to this Section 29.30, Landlord shall use commercially reasonable efforts to minimize interference with Tenant use of, occupancy of and access to the Premises including, without limitation, performing such work after normal business hours with respect to work taking place in the Premises.  With respect to any renovations which take place outside of the Premises, Landlord shall use commercially reasonable efforts to minimize the impact of any Renovations on Tenant's access to, use of and occupancy of the Premises, including, without limitation, taking all commercially reasonable steps to minimize noise and dust intrusion into the Premises resulting from any Renovations.

29.31No Violation.  Tenant hereby warrants and represents that neither its execution of nor performance under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold Landlord harmless against any claims, demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees and costs, arising from Tenant's breach of this warranty and representation.

29.32Communications and Computer Lines.  Tenant may install, maintain, replace, remove or use any communications or computer wires and cables (collectively, the "Lines") at the Project in or serving the Premises, provided that (i) Tenant shall obtain Landlord's prior written consent, use Landlord's designated contractor for provision of cabling and riser management services (or, if Landlord does not have a designated contractor, then an experienced and qualified contractor reasonably approved in writing by Landlord), and comply with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an acceptable number of spare Lines and space for additional Lines shall be maintained for existing and future occupants of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables) shall be (x) appropriately insulated to prevent excessive electromagnetic fields or radiation, (y) surrounded by a protective conduit reasonably acceptable to Landlord, and (z) identified in accordance with the "Identification Requirements," as that term is set forth hereinbelow, (iv) any new or existing Lines servicing the Premises shall comply with all applicable governmental laws and regulations, (v) as a condition to permitting the installation of new Lines, Tenant shall remove existing Lines located in or serving the Premises and repair any damage in connection with such removal, and (vi) Tenant shall pay all costs in connection therewith.  All Lines shall be clearly marked with 

			
	
 
	
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adhesive plastic labels (or plastic tags attached to such Lines with wire) to show Tenant's name, suite number, telephone number and the name of the person to contact in the case of an emergency (A) every four feet (4') outside the Premises (specifically including, but not limited to, the electrical room risers and other Common Areas), and (B) at the Lines' termination point(s) (collectively, the "Identification Requirements").  Upon the expiration of the Lease Term, or immediately following any earlier termination of this Lease, Tenant shall, at Tenant's sole cost and expense, remove all Lines installed by Tenant, and repair any damage caused by such removal.  In the event that Tenant fails to complete such removal and/or fails to repair any damage caused by the removal of any Lines, Landlord may do so and may charge the cost thereof to Tenant.  Landlord reserves the right to require that Tenant remove any Lines located in or serving the Premises which are installed in violation of these provisions, or which at any time (1) are in violation of any Applicable Laws, (2) are inconsistent with then-existing industry standards (such as the standards promulgated by the National Fire Protection Association (e.g., such organization's "2002 National Electrical Code")), or (3) otherwise represent a dangerous or potentially dangerous condition.

29.33Hazardous Substances.  

29.33.1Definitions.  For purposes of this Lease, the following definitions shall apply: "Hazardous Material(s)" shall mean any solid, liquid or gaseous substance or material that is described or characterized as a toxic or hazardous substance, waste, material, pollutant, contaminant or infectious waste, or any matter that in certain specified quantities would be injurious to the public health or welfare, or words of similar import, in any of the "Environmental Laws," as that term is defined below, or any other words which are intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity or reproductive toxicity and includes, without limitation, asbestos, petroleum (including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas, nuclear or radioactive matter, medical waste, soot, vapors, fumes, acids, alkalis, chemicals, microbial matters (such as molds, fungi or other bacterial matters), biological agents and chemicals which may cause adverse health effects, including but not limited to, cancers and /or toxicity.  "Environmental Laws" shall mean any and all federal, state, local or quasi-governmental laws (whether under common law, statute or otherwise), ordinances, decrees, codes, rulings, awards, rules, regulations or guidance or policy documents now or hereafter enacted or promulgated and as amended from time to time, in any way relating to (i) the protection of the environment, the health and safety of persons (including employees), property or the public welfare from actual or potential release, discharge, escape or emission (whether past or present) of any Hazardous Materials or (ii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any Hazardous Materials.

29.33.2Compliance with Environmental Laws.  Landlord covenants that during the Lease Term, Landlord shall comply with all Environmental Laws in accordance with, and as required by, the TCCs of Article 24 of this Lease.  Tenant represents and warrants that, except as herein set forth, it will not use, store or dispose of any Hazardous Materials in or on the Premises.  However, notwithstanding the preceding sentence, Landlord agrees that Tenant may use, store and properly dispose of commonly available household cleaners and chemicals to maintain the Premises and Tenant's routine office operations (such as printer toner and copier toner and normal janitorial cleaning supplies) (hereinafter the "Permitted Chemicals").  Landlord and Tenant acknowledge that any or all of the Permitted Chemicals described in this paragraph may constitute Hazardous Materials.  However, Tenant may use, store and dispose of same, provided that in doing so, Tenant fully complies with all Environmental Laws.  

29.33.3Tenant Hazardous Materials.  Tenant will (i) obtain and maintain in full force and effect all Environmental Permits (as defined below) that may be required from time to time under any Environmental Laws applicable to Tenant or the Premises, and (ii) with respect to the Premises, be and remain in compliance with all terms and conditions of all such Environmental Permits and with all other Environmental Laws.  "Environmental Permits" means, collectively, any and all permits, consents, licenses, approvals and registrations of any nature at any time required pursuant to, or in order to comply with any Environmental Law.  On or before the Lease Commencement Date and on each annual anniversary of the Lease Commencement Date thereafter, as well as at any other time following Tenant's receipt of a reasonable request from Landlord, Tenant agrees to deliver to Landlord a list of all Hazardous Materials anticipated to be used by Tenant in the Premises and the quantities thereof if other than Permitted Chemicals.  At any time following Tenant's receipt of a request from Landlord, Tenant shall promptly complete 

			
	
 
	
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an "environmental questionnaire" using the form then-provided by Landlord.  Upon the expiration or earlier termination of this Lease, Tenant agrees to promptly remove from the Premises, the Building and the Project, at its sole cost and expense, any and all Hazardous Materials, including any equipment or systems containing Hazardous Materials, which are installed, brought upon, stored, used, generated or released upon, in, under or about the Premises, the Building, and/or the Project or any portion thereof by Tenant and/or any Tenant Parties (such obligation to survive the expiration or sooner termination of this Lease).  Nothing in this Lease shall impose any liability on Tenant for any Hazardous Materials in existence in any Phase of the Premises, the Building or the Project prior to the applicable Delivery Date or brought onto the Premises, Building or Project after the Lease Commencement Date by any third parties not under Tenant's control.

29.33.4Intentionally Omitted.

29.33.5Indemnifications.  Landlord agrees to indemnify, defend, protect and hold harmless the Tenant Parties from and against any liability, obligation, damage or costs, including without limitation, attorneys' fees and costs, resulting directly or indirectly from any use, presence, removal or disposal of any Hazardous Materials to the extent such liability, obligation, damage or costs:  (A) was related to Hazardous Materials present in the Premises prior to the Delivery Date of the subject Phase of the Premises, or (B) was a result of actions caused or knowingly permitted by Landlord or a Landlord Party.   Tenant agrees to indemnify, defend, protect and hold harmless the Landlord Parties from and against any liability, obligation, damage or costs, including without limitation, attorneys' fees and costs, resulting directly or indirectly from any use, presence, removal or disposal of any Hazardous Materials or breach of any provision of this section, to the extent such liability, obligation, damage or costs was a result of actions caused or permitted by Tenant or a Tenant Party.  Notwithstanding anything to the contrary set forth in the Lease, the Tenant's indemnity in this Section shall not include any Hazardous Materials that were located at the subject Phase of the Premises prior to the subject Delivery Date, nor any Hazardous Materials placed on the Premises or the Project by Landlord, its employees, agents, or contractors or any third party not under Tenant's control.  In the event that:  (x) Hazardous Materials are discovered in the Premises in violation of applicable Environmental Laws, and (y) such presence existed prior to the subject Delivery Date, Landlord shall, at Landlord's sole cost and expense, promptly remediate such Hazardous Materials in compliance with applicable Environmental Laws.  If following delivery of any Phase of the Premises to Tenant, (A) Tenant discovers the presence of Hazardous Materials in the subject Phase of the Premises, and (B) such Hazardous Materials must be remediated by Landlord before Tenant can proceed with the Tenant's initial Improvements in such Phase, then Tenant shall be entitled to one day of free Base Rent with respect to the subject Phase of the Premises for each day of delay caused by Landlord's remediation of such Hazardous Materials in accordance with all applicable Environmental Laws.

29.34Development of the Project.

29.34.1Subdivision.  Landlord reserves the right to further subdivide all or a portion of the Project.  Tenant agrees to execute and deliver, within ten (10) business days of written demand by Landlord and in the form requested by Landlord, any additional documents needed to conform this Lease to the circumstances resulting from such subdivision.

29.34.2The Other Improvements.  If portions of the Project or property adjacent to the Project (collectively, the "Other Improvements") are owned by an entity other than Landlord, Landlord, at its option, may enter into an agreement with the owner or owners of any or all of the Other Improvements to provide (i) for reciprocal rights of access and/or use of the Project and the Other Improvements, (ii) for the common management, operation, maintenance, improvement and/or repair of all or any portion of the Project and the Other Improvements, (iii) for the allocation of a portion of the Direct Expenses to the Other Improvements and the operating expenses and taxes for the Other Improvements to the Project, and (iv) for the use or improvement of the Other Improvements and/or the Project in connection with the improvement, construction, and/or excavation of the Other Improvements and/or the Project.  Nothing contained herein shall be deemed or construed to limit or otherwise affect Landlord's right to convey all or any portion of the Project or any other of Landlord's rights described in this Lease.

29.34.3Construction of Project and Other Improvements.  Tenant acknowledges that portions of the Project and/or the Other Improvements may be under construction following Tenant's occupancy of the Premises, and that such construction may result in levels of noise, dust, obstruction of access, etc.  which are in excess of that present in a fully 

			
	
 
	
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constructed project.  Subject to Section 6.4 above, Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise in connection with such construction.

29.35Office and Communications Services.

29.35.1The Provider.  Landlord has advised Tenant that certain office and communications services (which may include, without limitation, cable or satellite television service) may be offered to tenants of the Building by a concessionaire (which may or may not have exclusive rights to offer such services in the Building) under contract to Landlord ("Provider").  Tenant shall be permitted to contract with Provider for the provision of any or all of such services on such terms and conditions as Tenant and Provider may agree.

29.35.2Other Terms.  Tenant acknowledges and agrees that:  (i) Landlord has made no warranty or representation to Tenant with respect to the availability of any such services, or the quality, reliability or suitability thereof; (ii) the Provider is not acting as the agent or representative of Landlord in the provision of such services, and Landlord shall have no liability or responsibility for any failure or inadequacy of such services, or any equipment or facilities used in the furnishing thereof, or any act or omission of Provider, or its agents, employees, representatives, officers or contractors; (iii) Landlord shall have no responsibility or liability for the installation, alteration, repair, maintenance, furnishing, operation, adjustment or removal of any such services, equipment or facilities; and (iv) any contract or other agreement between Tenant and Provider shall be independent of this Lease, the obligations of Tenant hereunder, and the rights of Landlord hereunder, and, without limiting the foregoing, no default or failure of Provider with respect to any such services, equipment or facilities, or under any contract or agreement relating thereto, shall have any effect on this Lease or give to Tenant any offset or defense to the full and timely performance of its obligations hereunder, or entitle Tenant to any abatement of rent or additional rent or any other payment required to be made by Tenant hereunder, or constitute any accrual or constructive eviction of Tenant, or otherwise give rise to any other claim of any nature against Landlord.

29.36Water Sensors.  Tenant shall, at Tenant's sole cost and expense, be responsible for promptly installing web-enabled wireless water leak sensor devices designed to alert the Tenant on a twenty-four (24) hour seven (7) day per week basis if a water leak is occurring in the Premises (which water sensor device(s) located in the Premises shall be referred to herein as "Water Sensors").  The Water Sensors shall be installed in any areas in the Premises where water is utilized (such as sinks, pipes, faucets, water heaters, coffee machines, ice machines, water dispensers and water fountains), and in locations that may be designated from time to time by Landlord (the "Sensor Areas").  In connection with any Alterations affecting or relating to any Sensor Areas, Landlord may require Water Sensors to be installed or updated in Landlord's sole and absolute discretion.  With respect to the installation of any such Water Sensors, Tenant shall obtain Landlord's prior written consent, use an experienced and qualified contractor reasonably designated by Landlord, and comply with all of the other provisions of Article 8 of this Lease.  Tenant shall, at Tenant's sole cost and expense, pursuant to Article 7 of this Lease keep any Water Sensors located in the Premises (whether installed by Tenant or someone else) in good working order, repair and condition at all times during the Lease Term and comply with all of the other provisions of Article 7 of this Lease.  Notwithstanding any provision to the contrary contained herein, Landlord has neither an obligation to monitor, repair or otherwise maintain the Water Sensors, nor an obligation to respond to any alerts it may receive from the Water Sensors or which may be generated from the Water Sensors.  Upon the expiration of the Lease Term, or immediately following any earlier termination of this Lease, Landlord reserves the right to require Tenant, at Tenant's sole cost and expense, to remove all Water Sensors installed by Tenant, and repair any damage caused by such removal; provided, however, if the Landlord does not require the Tenant to remove the Water Sensors as contemplated by the foregoing, then Tenant shall leave the Water Sensors in place together with all necessary user information such that the same may be used by a future occupant of the Premises (e.g., the Water Sensors shall be unblocked and ready for use by a third-party).  If Tenant is required to remove the Water Sensors pursuant to the foregoing and Tenant fails to complete such removal and/or fails to repair any damage caused by the removal of any Water Sensors, Landlord may do so and may charge the reasonable cost thereof to Tenant.

29.37No Discrimination.  Tenant covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through Tenant, and this Lease is made and accepted upon and subject to the following conditions:  that there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, 

			
	
 
	
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creed, sex, religion, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through Tenant, establish or permit such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the Premises.

29.38LEED Certification.  Landlord may, in Landlord's sole and absolute discretion, elect to apply to obtain or maintain a LEED certification for the Project (or portion thereof), or other applicable certification in connection with Landlord's sustainability practices for the Project (as such sustainability practices are to be determined by Landlord, in its sole and absolute discretion, from time to time).  In the event that Landlord elects to pursue such an aforementioned certification, Tenant shall, at Tenant's sole cost and expense, promptly cooperate with the Landlord's efforts in connection therewith and provide Landlord with any documentation it may need in order to obtain or maintain the aforementioned certification (which cooperation may include, but shall not be limited to, Tenant complying with certain standards pertaining to the purchase of materials used in connection with any Alterations or improvements undertaken by the Tenant in the Project, the sharing of documentation pertaining to any Alterations or improvements undertaken by Tenant in the Project with Landlord, and the sharing of Tenant's billing information pertaining to trash removal and recycling related to Tenant's operations in the Project).  Landlord shall provide reasonably detailed information regarding the specific actions Tenant is required to take in order to meet such LEED certification.

29.39Utility Billing Information.  In the event that the Tenant is permitted to contract directly for the provision of electricity, gas and/or water services to the Premises with the third-party provider thereof (all in Landlord's sole and absolute discretion), Tenant shall promptly, but in no event more than ten (10) business days following its receipt of each and every invoice for such items from the applicable provider, provide Landlord with a copy of each such invoice. Tenant acknowledges that pursuant to California Public Resources Code Section 25402.10 and the regulations adopted pursuant thereto (collectively the "Energy Disclosure Requirements"), Landlord may be required to disclose information concerning Tenant's energy usage at the Building to certain third parties, including, without limitation, prospective purchasers, lenders and tenants of the Building (the "Tenant Energy Use Disclosure").  Tenant hereby (A) consents to all such Tenant Energy Use Disclosures, and (B) acknowledges that Landlord shall not be required to notify Tenant of any Tenant Energy Use Disclosure.  Further, Tenant hereby releases Landlord from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Tenant Energy Use Disclosure.  The terms of this Section 29.39 shall survive the expiration or earlier termination of this Lease.

29.40Green Cleaning/Recycling.  To the extent a "green cleaning program" and/or a recycling program is implemented by Landlord in the Building and/or Project (each in Landlord's sole and absolute discretion), Tenant shall, at Tenant's sole cost and expense, comply with the provisions of each of the foregoing programs (e.g., Tenant shall separate waste appropriately so that it can be efficiently processed by Landlord's particular recycling contractors).  Landlord shall provide reasonably detailed information to Tenant regarding the elements Tenant is required to comply with in connection with such green cleaning program and/or recycling program.  To the extent Tenant negligently or intentionally fails to comply with any of Landlord's recycling programs contemplated by the foregoing, Tenant shall be required to pay any contamination charges related to such non-compliance. 

29.41Shuttle Service.  Subject to the provisions of this Section 29.41, so long as Landlord, in Landlord's sole and absolute discretion, permits a shuttle service (the "Shuttle Service") to operate at the Project, Tenant's employees ("Shuttle Service Riders") shall be entitled to use the Shuttle Service operated at the Project.  The use of the Shuttle Service shall be subject to the reasonable rules and regulations (including rules regarding hours of use) established from time to time by Landlord, in its sole and absolute discretion, and/or the operator of the Shuttle Service and Landlord shall provide a copy of such rules and regulations to Tenant.  Landlord and Tenant acknowledge that the use of the Shuttle Service by the Shuttle Service Riders shall be at their own risk and that the terms and provisions of Section 10.1 of this Lease shall apply to Tenant and the Shuttle Service Rider's use of the Shuttle Service.  The costs of operating, maintaining and repairing the Shuttle Service shall be included as part of Operating Expenses.  Tenant acknowledges that the provisions of this Section 29.41 shall not be deemed to be a representation by Landlord that Landlord shall continuously maintain the Shuttle Service (or any other shuttle service) throughout the Lease Term, and Landlord shall have the right, at Landlord's sole 

			
	
 
	
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discretion, to expand, contract, eliminate or otherwise modify all Shuttle Services provided by it.  Landlord or the operator of the Shuttle Service shall have a right to charge a fee to the users of the Shuttle Service.  No expansion, contraction, elimination or modification of any or all Shuttle Services, and no termination of Tenant's or the Shuttle Service Rider's rights to the Shuttle Service shall entitle Tenant to an abatement or reduction in Rent, constitute a constructive eviction, or result in an event of default by Landlord under this Lease.

29.42Bicycle Parking; Showers; Day-Use Lockers.  Landlord will provide a covered bicycle parking area (with the ability for owners to secure their bicycles) at the Building in a location determined by Landlord in its sole discretion.  Access to such bicycle parking area shall be restricted to Landlord, Tenant, and other tenants and occupants of the Building.  Tenant's use of such bicycle parking area shall be for the parking of bicycles only, and shall be in common with the other tenants and occupants of the Building on a first-come, first-served basis.  No over-night parking or storage of bicycles shall be permitted.  The bicycle parking provided to Tenant pursuant to this Section 29.42 is provided to Tenant solely for use by Tenant's own personnel and such use may not be transferred, assigned, subleased or otherwise alienated by Tenant without Landlord's prior approval, which will not be withheld in connection with any sublease or assignment.  Such rights in connection with a sublease or assignment carried out in accordance with the provisions of this Lease.  The cost of the operation, maintenance and repair of such bicycle parking area shall be included in the Operating Expenses to the extent consistent the terms set forth in Article 4, above.  Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of such bicycle parking area.  Tenant further assumes the risk that any safety and security devices, services and programs which Landlord elects, in its sole discretion, to provide may not be effective, or may malfunction or be circumvented by an unauthorized third party, and Tenant shall, in addition to its other insurance obligations under this Lease, obtain its own insurance coverage to the extent Tenant desires protection against losses related to such occurrences.  Subject to availability and the Building's Rules and Regulations, Tenant's employees may use the showers and day-use lockers located near the Building lobby.

29.43Open-Ceiling Plan.  In the event that the Premises has an "open ceiling plan", then Landlord and third parties leasing or otherwise using/managing or servicing space on the floor immediately above the Premises shall have the right to install, maintain, repair and replace mechanical, electrical and plumbing fixtures, devices, piping, ductwork and all other improvements through the floor above the Premises (which may penetrate through the ceiling of the Premises and be visible within the Premises during the course of construction and upon completion thereof) (as applicable, the "Penetrating Work"), as Landlord may determine in Landlord's sole and absolute discretion and with no approval rights being afforded to Tenant with respect thereto.  Moreover, there shall be no obligation by Landlord or any such third party to enclose or otherwise screen any of such Penetrating Work from view within the Premises, whether during the course of construction or upon completion thereof.  Since Tenant may be occupying the Premises at the time the Penetrating Work is being performed, Landlord agrees that it shall (and shall cause third parties to) use commercially reasonable efforts to perform the Penetrating Work in a manner so as to attempt to minimize interference with Tenant's use of the Premises; provided, however, such Penetrating Work shall be performed after normal business hours.  Tenant hereby acknowledges that, notwithstanding Tenant's occupancy of the Premises during the performance of any such Penetrating Work, Tenant hereby agrees that the performance of such Penetrating Work shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of rent except as set forth in Section 6.4 above.  Neither Landlord nor any of the Landlord Parties or any third parties performing the Penetrating Work shall be responsible for any direct or indirect injury to or interference with Tenant's business arising from the performance of such Penetrating Work, nor shall Tenant be entitled to any compensation or damages from Landlord or any of the Landlord Parties or any third parties performing the Penetrating Work for loss of the use of the whole or any part of the Premises or of Tenant's personal property or improvements resulting from the performance of the Penetrating Work, or for any inconvenience or annoyance occasioned by the Penetrating Work.  In addition, Tenant hereby agrees to use commercially reasonable efforts to promptly and diligently cooperate with Landlord and any of the third parties performing the Penetrating Work in order to facilitate the applicable party's performance of the particular Penetrating Work in an efficient and timely manner.

29.44Prohibited Persons; Foreign Corrupt Practices Act and Anti-Money Laundering.  Neither Tenant nor any of its affiliates, nor any of their respective members, partners or other equity holders holding a ten percent (10%) or more equitable ownership interest in Tenant, and none of their respective officers, directors or managers is, nor prior to or during the Lease 

			
	
 
	
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Term, will they become a person or entity with whom U.S. persons or entities are restricted from doing business under (a) the Patriot Act (as defined below), (b) any other requirements contained in the rules and regulations of the Office of Foreign Assets Control, Department of the Treasury ("OFAC") (including any "blocked" person or entity listed in the Annex to Executive Order Nos. 12947, 13099 and 13224 and any modifications thereto or thereof or any other person or entity named on OFAC's Specially Designated Blocked Persons List) or (c) any other U.S. statute, Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) or other governmental action (collectively, "Prohibited Persons").  Prior to and during the Lease Term, Tenant, and to Tenant's knowledge, its employees and any person acting on its behalf have at all times fully complied with, and are currently in full compliance with, the Foreign Corrupt Practices Act of 1977 and any other applicable anti-bribery or anti-corruption laws.  Tenant is not entering into this Lease, directly or indirectly, in violation of any laws relating to drug trafficking, money laundering or predicate crimes to money laundering. As used herein, "Patriot Act" shall mean the USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001) and all other statutes, orders, rules and regulations of the U.S. government and its various executive departments, agencies and offices interpreting and implementing the Patriot Act.

29.45Signatures.  The parties hereto consent and agree that this Lease may be signed and/or transmitted by facsimile, e-mail of a .pdf document or using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the party so signing as a paper copy bearing such party's handwritten signature. The parties further consent and agree that (1) to the extent a party signs this Lease using electronic signature technology, by clicking "SIGN", such party is signing this Lease electronically, and (2) the electronic signatures appearing on this Lease shall be treated, for purposes of validity, enforceability and admissibility, the same as handwritten signatures.

[Signatures follow on next page]

			
	
 
	
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

		
	
 
	
"LANDLORD":

KILROY REALTY FINANCE PARTNERSHIP, L.P.,
a Delaware limited partnership

 

By:KILROY REALTY FINANCE, INC.,

a Delaware corporation,

Its:  General Partner

By: /s/ Jeffrey Hawken
Name: Jeffrey Hawken
Its: COO

By: /s/ Rick Buziak
Name: Rick Buziak
Its: SVP Asset Management

"TENANT":

NEKTAR THERAPEUTICS,

a Delaware corporation

By:/s/ Gil Labrucherie
Name:Gil Labrucherie
Its:Chief Financial Officer

 

*NOTE:

Tenant shall deliver to Landlord evidence in a form reasonably acceptable to Landlord that the signatory is authorized to execute this Lease.  

 

 

			
	
 
	
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EXHIBIT A

360 Third Street

OUTLINE OF PREMISES

			
	
 
	

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EXHIBIT A-1

360 Third Street

OUTLINE OF EACH FIRST OFFER SPACE

 

 

 

 

			
	
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360 THIRD STREET

Nektar Therapeutics

 

 

EXHIBIT A-2

360 THIRD STREET 

BASE RENT SCHEDULE

 

								
	
Phase
	
Suite / Rentable Square Feet ("RSF")
	
Aggregate RSF from time to time
	
Estimated Delivery Date*
	
Estimated Lease Commencement Dates and Estimated Lease Year Dates☐
	
Base Rent Abatement Period for each applicable Phase ☐☐
	
Annual Rental Rate per RSF**
	
Monthly Base Rent (based on Amount of RSF then taken down)▪

	
Phase I Premises
	
Suite 104

1,726
	
1,726
	
Upon execution
	
June 1, 2018
	
3 months
June 1, 2018 – August 31, 2018
($34,520.01)
	
$80.00
	
$11,506.67

	
Phase II Premises
	
Suite 700

35,402
	
37,128
	
January 1, 2019
	
May 1, 20191
	
7 months
May 1, 2019 – November 30, 2019
($1,652,093.33)
	
$80.00
	
$247,520.00

	
Phase III Premises
	
Suite 600

26,624
	
63,752
	
August 1, 2019
	
December 1, 2019
	
2 months
December 1, 2019 – January 31, 2020
($354,986.67)
	
$80.00
	
$425,013.33

	
Phase IV Premises
	
Suite 625

12,719
	
76,471
	
August 1, 2019
	
December 1, 2019
	
2 months
December 1, 2019 – January 31, 2020
($169,586.67)
	
$80.00
	
$509,806.67

	
Phase V Premises
	
Suite 650A

13,459
	
89,930
	
April 1, 2019
	
August 1, 2019
	
3 months
August 1, 2019 – October 31, 2019
($269,180.00)
	
$80.00
	
$599,533.33

	
Phase VI Premises
	
Suite 650B

14,303
	
104,233
	
August 1, 2019
	
December 1, 2019
	
2 months
December 1, 2019 – January 31, 2020
($190,706.67)
	
$80.00
	
$694,886.67

	
Phase VII Premises
	
Suite 750

31,703
	
135,936
	
November 1, 2019
	
February 1, 2020
	
None
($0.00)
	
$80.00
	
$906,240.00

	
End of 1st Lease Year
	
All Phases
	
135,936
	
N/A
	
April 30, 2020***
	
None
($0.00)
	
$80.00
	
$906,240.00

	
1st Day of 2nd Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2020***
	
None
($0.00)
	
$82.40
	
$933,427.20

	
1st Day of 3rd Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2021***
	
None
($0.00)
	
$84.87
	
$961,430.02

	
1st Day of 4th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2022***
	
None
($0.00)
	
$87.42
	
$990,272.92

	
1st Day of 5th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2023***
	
None
($0.00)
	
$90.04
	
$1,019,981.10

	
1st Day of 6th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2024***
	
None
($0.00)
	
$92.74
	
$1,050,580.54

	
1st Day of 7th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2025***
	
None
($0.00)
	
$95.52
	
$1,082,097.95

	
1st Day of 8th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2026***
	
None
($0.00)
	
$98.39
	
$1,114,560.89

	
1st Day of 9th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2027***
	
None
($0.00)
	
$101.34
	
$1,147,997.72

	
1st Day of 10th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2028***
	
None
($0.00)
	
$104.38
	
$1,182,437.65

	
1st Day of 11th Lease Year
	
All Phases
	
135,936
	
N/A
	
May 1, 2029***
	
None
($0.00)
	
$107.51
	
$1,217,910.78

 

			
	
 
	

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1
	
If the Phase II Delivery Date occurs on January 1, 2019, then the Phase II Lease Commencement Date will be the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Phase II Premises, and (ii) May 1, 2019 (i.e., the date which is 4 months after the Phase II Delivery Date).

 

	
▪
	
The initial Monthly Base Rent amount was calculated by multiplying the initial Annual Rental Rate per RSF amount by the number of rentable square feet of space in the applicable Phase of the Premises, and dividing the product thereof by twelve (12).  In all subsequent Base Rent payment periods during the Lease Term commencing on the first (1st) day of the second (2nd) Lease Year (and continuing on the first (1st) day of each subsequent Lease Year), the calculation of each Monthly Base Rent amount reflects an annual increase of three percent (3%) in the corresponding Annual Rental Rate per RSF amount.

 

	
*
	
Subject to adjustment depending on the actual Delivery Date for the subject Phase of the Premises.

	
☐
	
The estimated Lease Commencement Date for each Phase and the estimated Lease Year dates are estimated based on provisions contained in Section 3.2 of the Summary and Section 2.1 of the Lease.

	
☐☐
	
Subject to the terms set forth in Section 3.2 of the Lease, the Base Rent attributable to the periods of certain Phases specified in such Section 3.2 shall be abated.  The dates in this column are only estimated dates.

	
**
	
The amounts identified in the column entitled "Annual Rental Rate per RSF" are rounded amounts and are provided for informational purposes only.

	
***
	
Subject to adjustment depending on the actual first Lease Commencement Date that occurs immediately following the Phase I Lease Commencement Date.

 

			
	
 
	

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EXHIBIT B

360 Third Street

WORK LETTER

 

This Work Letter shall set forth the terms and conditions relating to the construction of the Premises.  This Work Letter is essentially organized chronologically and addresses the issues of the construction of the Premises, in sequence, as such issues will arise during the actual construction of the Premises; provided, however, that the parties hereto acknowledge that the Premises will be delivered in phases and thus there will be multiple iterations of construction of the "Improvements" (as that term is defined in Section 2.1 below) as each Phase of the Premises is delivered to Tenant.  The construction of the Improvements may occur on a Phase by Phase basis or Tenant may elect to perform the Improvements in one (1) or more Phases at the same time, in Tenant's sole discretion.  Tenant currently anticipates performing Alterations in the Phase I Premises pursuant to Article 8 [entitled Alterations] of this Lease, and Tenant does not anticipate requesting reimbursement from the "Improvement Allowance" (as that term is defined in Section 2.1 below) with respect to such Phase I Premises Alterations.  All references in this Work Letter to Articles or Sections of "this Lease" shall mean the relevant portions of Articles 1 through 29 of the Office Lease to which this Work Letter is attached as Exhibit B and of which this Work Letter forms a part, and all references in this Work Letter to Sections of "this Work Letter" shall mean the relevant portion of Sections 1 through 5 of this Work Letter.

SECTION 1

DELIVERY OF THE PREMISES

	
1.1
	
Delivery of Premises.  Tenant acknowledges that Tenant has thoroughly examined the Phase I Premises but that Tenant has been unable to examine the other Phases of the Premises.  In accordance with the schedule of estimated Delivery Dates set forth in the Lease, Landlord shall deliver each Phase of the Premises and Tenant shall accept each Phase of the Premises from Landlord in its presently existing, "as-is" condition as of the applicable Delivery Date subject to: (i) the immediately following sentence, (ii) Section 1.3 of the Lease; (iii) Section 1.2 below, and (iv) any repair and cleanup items identified by the parties pursuant to Section 1.3 below.  Notwithstanding the foregoing, Landlord represents and warrants to Tenant that, as of the date that Landlord tenders possession of each Phase to Tenant, the Base Building and Building Systems serving such Phase shall be in good working order; provided, however, that (i) Landlord shall not be responsible for any damage to the Base Building caused by Tenant or Tenant's agents, and (ii) any breach by Landlord of the foregoing representation and warranty shall be subject to cure by Landlord and shall not entitle Tenant to terminate this Lease in connection with the same so long as Landlord is diligently pursuing the completion of such cure.

	
1.2
	
Compliance.  Notwithstanding the foregoing, in connection with Tenant's construction of the Improvements and to the extent that such Improvements are normal and customary general office improvements, Landlord shall be responsible, at Landlord's sole cost and expense, to the extent such compliance is required in order to allow Tenant to obtain a certificate of occupancy, or its legal equivalent, for each Phase of the Premises for general office use, (i) to cause the restrooms located on the 6th and 7th floors to be in good working order and in compliance with all Applicable Laws, including Title 24 accessibility standards and applicable handicap access codes of the City of San Francisco (collectively, "Legal Compliance Requirements"), as enacted and enforced as of the Delivery Date of the final Phase delivered to Tenant on such floor, (ii) to cause the "path of travel" to each Phase of the Premises (i.e., the most direct route through the Building Common Areas and Project Common Areas starting from the entrance of each Phase of the Premises and ending at the entrance to each Phase of the Premises) to satisfy the Legal Compliance Requirements, as enacted and enforced as of the applicable Phase Lease Commencement Date, and (iii) to perform all work necessary to the Base Building and the Common Areas to satisfy the Legal Compliance Requirements, as enacted and enforced as of the applicable Phase Lease Commencement Date (collectively, the "Code Work").

	
1.3
	
Walk-Throughs.  Promptly following the Delivery Date for each Phase of the Premises, Landlord and Tenant shall conduct a walk-through of such Phase of the Premises and identify any necessary repairs which need to be completed in order that the subject Phase be 

			
	
 
	

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delivered to Tenant in broom clean condition, free of material damage and free of any prior tenant's personal property, furniture or equipment.  Neither Landlord nor Tenant shall unreasonably withhold his or her agreement on repair and cleanup items.  Landlord shall use reasonable efforts to complete all repair and cleanup items within thirty (30) days after agreement thereon.  Once the final Phase of a single floor is delivered, such walk-through shall include a walk-through of the restrooms on such floor.

SECTION 2

IMPROVEMENTS

	
2.1
	
Improvement Allowance.  Tenant shall be entitled to a one-time improvement allowance (the "Improvement Allowance") in the amount of Six Million Seven Hundred Sixty-Seven Thousand Five Hundred and 00/100 Dollars ($6,767,500) (i.e., Fifty and 00/100 Dollars ($50.00) per rentable square foot of the Premises) for the costs relating to the initial design and construction of the improvements, which are permanently affixed to the Premises (the "Improvements").  In addition to the Improvement Allowance, Tenant shall be entitled to an amount up to $0.15 per rentable square foot of the entire Premises towards the cost of one (1) preliminary space plan for the entire Premises (the "Space Planning Allowance").  Landlord shall not be obligated to pay a total amount for the design and construction of the Improvements which exceeds the Improvement Allowance and the Space Planning Allowance, as applicable.  Notwithstanding the foregoing or any contrary provision of this Lease, all Improvements shall be deemed Landlord's property under the terms of this Lease.  Any unused portion of the Improvement Allowance remaining as of the date twelve (12) months after the last Delivery Date, shall remain with Landlord and Tenant shall have no further right thereto.

	
2.2
	
Disbursement of the Improvement Allowance.

2.2.1Improvement Allowance Items.  Except as otherwise set forth in this Work Letter, the Improvement Allowance shall be disbursed by Landlord (each of which disbursements shall be made pursuant to Landlord's disbursement process, including, without limitation, Landlord's receipt of invoices for all costs and fees described herein) only for the following items and costs (collectively the "Improvement Allowance Items"):

2.2.1.1  Payment of the fees of the "Architect" and the "Engineers," as those terms are defined in Section 3.1 of this Work Letter, payment of plan check, permit and license fees relating to construction of the Improvements, which fees and costs under this Section 2.2.1.1 shall, notwithstanding anything to the contrary contained in this Work Letter, not exceed an aggregate amount equal to Seven and 50/100 Dollars ($7.50) per rentable square foot of the Premises;

2.2.1.2  Intentionally Omitted; 

2.2.1.3  The cost of construction of the Improvements, including, without limitation, testing and inspection costs, freight elevator usage, hoisting and trash removal costs, and contractors' fees and general conditions;

2.2.1.4  The cost of any changes in the Base Building when such changes are required by the "Construction Drawings," as that term is defined in Section 3.1 of this Work Letter, such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith, but excluding any costs that are Landlord's obligation pursuant to the terms of Section 1 of this Work Letter;

2.2.1.5  The cost of any changes to the Construction Drawings or Improvements required by all applicable building codes (the "Code"), but excluding any costs that are Landlord's obligation pursuant to the terms of Section 1 of this Work Letter;

2.2.1.6  The cost of the "Coordination Fee," as that term is defined in Section 4.2.2.1 of this Work Letter;

2.2.1.7  Sales and use taxes; and

2.2.1.8  All other costs to be expended by Landlord in connection with the construction of the Improvements.

			
	
 
	

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2.2.2Disbursement of Improvement Allowance.  During the construction of the Improvements, Landlord shall make monthly disbursements of the Improvement Allowance for Improvement Allowance Items and shall authorize the release of monies as follows.

2.2.2.1  Monthly Disbursements.  On or before the twentieth (20th) day of each calendar month, during the construction of the Improvements (or such other date as Landlord may designate), Tenant shall deliver to Landlord:  (i) a request for reimbursement to Tenant of Landlord's pari passu share (calculated in accordance with Section 4.2.1 below) of Tenant's prior payment of the "Contractor," as that term is defined in Section 4.1.1 of this Work Letter, in a form to be provided by Landlord, showing the schedule, by trade, of percentage of completion of the Improvements in the Premises, detailing the portion of the work completed and the portion not completed; (ii) paid invoices from all of "Tenant's Agents," as that term is defined in Section 4.1.2 of this Work Letter, for labor rendered and materials delivered to the Premises; (iii) executed mechanic's lien releases from all of Tenant's Agents which shall comply with the appropriate provisions, as reasonably determined by Landlord, of California Civil Code Sections 8132, 8134, 8136 and 8138; and (iv) all other information reasonably requested by Landlord.  Tenant's request for payment shall be deemed Tenant's acceptance and approval of the work furnished and/or the materials supplied as set forth in Tenant's payment request.  Thereafter, Landlord shall deliver a check to Tenant on a pari passu basis (as described in Sections 4.2.1 and 4.2.2 below) made payable to Tenant, in payment of the lesser of:  (A) the amounts so requested by Tenant, as set forth in this Section 2.2.2.1, above, less a ten percent (10%) retention for each respective "Contract," as that term is defined in Section 4.2.2 below (each such retention to be known as a "Final Retention"), and (B) the balance of any remaining available portion of the Improvement Allowance (not including the Final Retention(s)), provided that Landlord does not dispute any request for payment based on non-compliance of any work with the "Approved Working Drawings," as that term is defined in Section 3.4 below, or due to any substandard work, or for any other reason.  Landlord's payment of such amounts shall not be deemed Landlord's approval or acceptance of the work furnished or materials supplied as set forth in Tenant's payment request.

2.2.2.2  Final Retention(s).  Subject to the provisions of this Work Letter, a check payable to Tenant for the Final Retention for any Contract shall be delivered by Landlord to Tenant within thirty (30) days following the completion of construction of the Improvements pursuant to such Contract, provided that (i) Tenant delivers to Landlord (a) paid invoices for all Improvements and related costs for which the Improvement Allowance is to be disbursed for such Contract (to the extent such invoices have not previously been delivered to Landlord pursuant to Section 2.2.2.1 above), (b) signed permits for all Improvements completed within the subject Phase of the Premises, and (c) properly executed unconditional mechanics lien releases in compliance with both California Civil Code Section 8134 and either Section 8136 or Section 8138 from Tenant's contractor, subcontractors and material suppliers and any other party which has lien rights in connection with the construction of the Improvements for the subject Contract, (ii) Landlord has reasonably determined that no substandard work exists which adversely affects the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, the structure or exterior appearance of the Building, or any other tenant's use of such other tenant's leased premises in the Building, (iii) Architect delivers to Landlord a "Certificate of Substantial Completion", in a form reasonably acceptable to Landlord, certifying that the construction of the Improvements in the subject Phase(s) of the Premises has been substantially completed, (iv) Tenant delivers to Landlord a "close-out package" in both paper and electronic forms (including, as-built drawings, and final record CADD files for the associated plans, warranties and guarantees from all contractors, subcontractors and material suppliers, and an independent air balance report) with respect to the Phase(s) covered by the subject Contract; and (v) a certificate of occupancy, a temporary certificate of occupancy or its equivalent is issued to Tenant for the subject Phase(s) of the Premises.

2.2.2.3  Other Terms.  Landlord shall only be obligated to make disbursements from the Improvement Allowance to the extent costs are incurred by Tenant for Improvement Allowance Items.  All Improvement Allowance Items for which the Improvement Allowance has been made available shall be deemed Landlord's property under the terms of this Lease.

	
2.3
	
Building Standards.  Landlord has established or may establish specifications for certain Building standard components to be used in the construction of the Improvements in the Premises, and Landlord shall notify Tenant of such Building standard specifications in writing no less than thirty (30) days following the full execution of this Lease by Landlord and Tenant.  The 

			
	
 
	

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quality of Improvements shall be equal to or of greater quality than the quality of such Building standards.  Landlord may make changes to said specifications for Building standards from time to time; provided, however, that once the "Final Working Drawings," as that term is defined in Section 3.3 below, are approved for the Improvements in any Phase, then Landlord may not require Tenant to comply with subsequently modified Building standards with respect to the Improvements.  Removal requirements regarding the Improvements are addressed in Article 8 of this Lease.

	
2.4
	
Water Sensors.  In connection with the construction of the Improvements pursuant to the terms of this Work Letter, Tenant shall, at Tenant's sole cost and expense (which may be deducted from the Improvement Allowance in accordance with the provisions of Section 2.2 of this Work Letter), install Water Sensors (as more particularly contemplated by the terms of Section 29.36 of this Lease).  The Water Sensors so installed by Tenant shall be subject to the terms and conditions set forth in Section 29.36 of this Lease.

	
2.5
	
Removal Requirements.  Tenant's removal requirements with respect to the Improvements are set forth in Section 8.5 of this Lease, including Tenant's right to request that Landlord waive certain removal requirements pursuant to the terms thereof.

SECTION 3

CONSTRUCTION DRAWINGS

	
3.1
	
Selection of Architect/Construction Drawings.  Tenant shall retain the architect/space planner designated by Landlord (the "Architect") to prepare the "Construction Drawings," as that term is defined in this Section 3.1.  Landlord hereby pre-approves Flad Architects as the Architect.  Tenant shall retain the engineering consultants designated by Landlord, consisting of Pioneer Fire, Trane Controls and Pyro Comm (the "Engineers"), to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises, which work is not part of the Base Building.  Landlord hereby approves Interface Engineering as an Engineer for the Improvements.  The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the "Construction Drawings."  All Construction Drawings shall comply with the drawing format and specifications determined by Landlord, and shall be subject to Landlord's approval.  Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Base Building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith.  Landlord's review of the Construction Drawings as set forth in this Section 3, shall be for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to review the same, for quality, design, Code compliance or other like matters.  Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord's space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant's waiver and indemnity set forth in this Lease shall specifically apply to the Construction Drawings.

	
3.2
	
Final Space Plan.  Tenant shall supply Landlord with four (4) hard copies signed by Tenant of its final space plan, along with other renderings or illustrations reasonably required by Landlord, to allow Landlord to understand Tenant's design intent, for the subject Phase of the Premises before any architectural working drawings or engineering drawings have been commenced, and concurrently with Tenant's delivery of such hard copies, Tenant shall send to Landlord via electronic mail one (1) .pdf electronic copy of such final space plan.  The final space plan (the "Final Space Plan") shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein.  Landlord may request clarification or more specific drawings for special use items not included in the Final Space Plan.  Landlord shall advise Tenant within five (5) business days after Landlord's receipt of the Final Space Plan for the subject Phase of the Premises if the same is unsatisfactory or incomplete in any respect.  If Tenant is so advised, Tenant shall promptly cause the Final Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require.  If Landlord fails to notify Tenant of Landlord's approval or disapproval of any such Final Space Plan within such five (5) business day period, Tenant shall have the right to provide Landlord with a second written request for approval (a "Second Request") that specifically identifies the Final Space Plan and 

			
	
 
	

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contains the following statement in bold and capital letters: "THIS IS A SECOND REQUEST FOR APPROVAL PURSUANT TO THE PROVISIONS OF SECTION 3.2 OF THE WORK LETTER ATTACHED TO THE LEASE.  IF LANDLORD FAILS TO RESPOND WITHIN THREE (3) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE FINAL SPACE PLAN."  If Landlord fails to respond to such Second Request within three (3) business days after receipt by Landlord, the Final Space Plan in question shall be deemed approved by Landlord.

	
3.3
	
Final Working Drawings.  After the Final Space Plan has been approved by Landlord, Tenant shall supply the Engineers with a complete listing of standard and non-standard equipment and specifications, including, without limitation, B.T.U. calculations, electrical requirements and special electrical receptacle requirements for the subject Phase of the Premises, to enable the Engineers and the Architect to complete the "Final Working Drawings" (as that term is defined below) in the manner as set forth below.  Upon the approval of the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers to complete the architectural and engineering drawings for the subject Phase of the Premises, and Architect shall compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the "Final Working Drawings") and shall submit the same to Landlord for Landlord's approval.  Tenant shall supply Landlord with four (4) hard copies signed by Tenant of the Final Working Drawings, and concurrently with Tenant's delivery of such hard copies, Tenant shall send to Landlord via electronic mail one (1) .pdf electronic copy of such Final Working Drawings.  Landlord shall advise Tenant within ten (10) business days after Landlord's receipt of the Final Working Drawings for the subject Phase of the Premises if the same is unsatisfactory or incomplete in any respect.  If Tenant is so advised, Tenant shall immediately revise the Final Working Drawings in accordance with such review and any disapproval of Landlord in connection therewith.  If Landlord fails to notify Tenant of Landlord's approval or disapproval of any such Final Working Drawings within such ten (10) business day period, Tenant shall have the right to provide Landlord with a second written request for approval (a "Working Drawing Second Request") that specifically identifies the Final Working Drawings and contains the following statement in bold and capital letters: "THIS IS A SECOND REQUEST FOR APPROVAL PURSUANT TO THE PROVISIONS OF SECTION 3.3 OF THE WORK LETTER ATTACHED TO THE LEASE.  IF LANDLORD FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE FINAL WORKING DRAWINGS."  If Landlord fails to respond to such Working Drawing Second Request within five (5) business days after receipt by Landlord, the Final Working Drawings in question shall be deemed approved by Landlord.  Subject to Landlord's obligation to perform the Code Work, if the Final Working Drawings or any amendment thereof or supplement thereto shall require alterations in the Base Building (as contrasted with the Improvements), and if Landlord in its sole and exclusive discretion agrees to any such alterations, and notifies Tenant of the need and cost for such alterations, then Tenant may elect to either:  (i) value engineer the Final Working Drawings so as to reduce or eliminate such cost, or (ii) pay the cost of such required changes in advance upon receipt of notice thereof, and in either case Tenant shall pay all direct architectural and/or engineering fees in connection with such Base Building changes, plus five percent (5%) of such direct costs for Landlord's servicing and overhead.

	
3.4
	
Approved Working Drawings.  The Final Working Drawings shall be approved by Landlord (the "Approved Working Drawings") prior to the commencement of construction of the subject Phase of the Premises by Tenant.  After approval by Landlord of the Final Working Drawings, Tenant may submit the same to the appropriate municipal authorities for all applicable building permits.  Tenant hereby agrees that neither Landlord nor Landlord's consultants shall be responsible for obtaining any building permit or certificate of occupancy for the subject Phase of the Premises and that obtaining the same shall be Tenant's responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy.  Subject to Section 3.6 below, no changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord, which consent may not be unreasonably withheld, conditioned, or delayed.

	
3.5
	
Electronic Approvals.  Notwithstanding any provision to the contrary contained in the Lease or this Work Letter, Landlord may, in Landlord's sole and absolute discretion, transmit or otherwise deliver any of the approvals required under this Work Letter via electronic mail to 

			
	
 
	

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Tenant's representative identified in Section 5.1 of this Work Letter, or by any of the other means identified in Section 29.18 of this Lease.

	
3.6
	
Change Orders.  In the event Tenant desires to make any material changes to the Approved Working Drawings, Tenant shall deliver written notice (the "Drawing Change Notice") of the same to Landlord, setting forth in detail the proposed changes (the "Tenant Change") Tenant desires to make to the Approved Working Drawings.  Within three (3) business days following receipt of a Drawing Change Notice, Landlord shall deliver written notice to Tenant of either (i) Landlord's approval of the proposed Tenant Change, or (ii) its disapproval of the proposed Tenant Change (not to be unreasonably withheld, conditioned or delayed, in accordance with Landlord's rights under Section 3.4 of this Work Letter) specifying in reasonably sufficient detail the reasons for Landlord's disapproval.  If Landlord fails to notify Tenant of Landlord's approval or disapproval of any such Tenant Change within such three (3) business day period, Tenant shall have the right to provide Landlord with a second written request for approval (a "Tenant Change Second Request") that specifically identifies the Tenant Change and contains the following statement in bold and capital letters: "THIS IS A SECOND REQUEST FOR APPROVAL PURSUANT TO THE PROVISIONS OF SECTION 3.6 OF THE WORK LETTER ATTACHED TO THE LEASE.  IF LANDLORD FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL BE DEEMED TO HAVE APPROVED THE TENANT CHANGE."  If Landlord fails to respond to such Tenant Change Second Request within five (5) business days after receipt by Landlord, the Tenant change in question shall be deemed approved by Landlord.  Tenant shall pay all additional costs and fees, if any, attributable to such Tenant Change, subject to Section 4.2.1 below.

SECTION 4

CONSTRUCTION OF THE IMPROVEMENTS

	
4.1
	
Tenant's Selection of Contractors.

4.1.1The Contractor.  A general contractor shall be retained by Tenant to construct the Improvements.  Such general contractor ("Contractor") shall be selected by Tenant from a list of general contractors supplied by Landlord, and Tenant shall deliver to Landlord notice of its selection of the Contractor upon such selection.  Notwithstanding the foregoing, Landlord hereby approves the following contractors: XL Construction, Swinerton Builders, SC Builders and GCI Construction.  

4.1.2Tenant's Agents.  All subcontractors, laborers, materialmen, and suppliers used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be known collectively as "Tenant's Agents") must be approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed.  If Landlord does not approve any of Tenant's proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit other proposed subcontractors, laborers, materialmen or suppliers for Landlord's written approval.  All of Tenant's Agents retained directly by Tenant shall all be union labor in compliance with the then existing master labor agreements.

	
4.2
	
Construction of Improvements by Tenant's Agents.

4.2.1Estimated Budget.  Prior to the commencement of the construction of any Improvements, Tenant shall prepare a preliminary space plan for the Improvements to be constructed in all Phases of the Premises (other than in the Phases I Premises, which shall be governed by Article 8 of the Lease), provided that Tenant shall be required to obtain Landlord's approval of the Final Space Plan and Final Working Drawings pursuant to Sections 3.2 and 3.3 above regardless of Tenant's preparation of a preliminary space plan for the Improvements.  Tenant shall obtain a quote from the Contractor to construct the Improvements based on such preliminary space plan.  Tenant shall provide Landlord with a copy of the Contractor's quote.  Tenant shall also provide Landlord with a detailed preliminary budget of costs to be incurred or which have been incurred, as set forth more particularly in Sections 2.2.1.1 through 2.2.1.8 above, in connection with the design and construction of the Improvements to be performed by or at the direction of Tenant or the Contractor (the "Estimated Budget").  The Estimated Budget shall be subject to Landlord's reasonable approval.  Prior to the commencement of construction of the Improvements, the parties shall determine the difference between the amount of the Estimated Budget and the amount of the Improvement Allowance.  Tenant shall be the party to pay the Contractor and other 

			
	
 
	

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parties upon the Contractor's or such other parties' submittal of their requests for payment and the other documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of this Work Letter, and Tenant shall be reimbursed by Landlord from the Improvement Allowance for Landlord's pari passu share of such payments in accordance with this Section 4.2.1 and Section 2.2.2 above.  In the event that the total costs shown on the Estimated Budget are equal to or less than the amount of the Improvement Allowance (taking into account any amounts expended from the Improvement Allowance in connection with the preparation of the Construction Drawings, and the cost of all other Improvement Allowance Items incurred prior to the commencement of construction of the Improvements), then Landlord's pari passu share of each amount requested by the Contractor or otherwise to be disbursed under this Work Letter based on the Estimated Budget shall be 100%, subject to the disbursement process set forth in Section 2.2.2 above.  In the event that the total costs shown on the Estimated Budget are greater than the amount of the Improvement Allowance (taking into account any amounts expended from the Improvement Allowance in connection with the preparation of the Construction Drawings, and the cost of all other Improvement Allowance Items incurred prior to the commencement of construction of the Improvements) (the "Over-Allowance Amount"), then Tenant's pari passu share of each disbursement shall be equal to the ratio of the Over-Allowance Amount to the amount of the Estimated Budget (after deducting from the Estimated Budget any amounts expended in connection with the preparation of the Construction Drawings, and the cost of all other Improvement Allowance Items incurred prior to the commencement of construction of the Improvements), and Landlord's pari passu share shall be equal to the difference between 100% and Tenant's pari passu share.  In the event that, after the Estimated Budget has been delivered by Tenant to Landlord, the costs relating to the design and construction of the Improvements shall change, any additional costs necessary to such design and construction in excess of the Estimated Budget shall be paid by Tenant out of its own funds, provided that Tenant shall continue to provide Landlord with the documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of this Work Letter, above, for Landlord's approval with respect to such additional costs.

4.2.2Construction Contract; Cost Budget.  Tenant shall engage the Contractor under a Stipulated Sum Agreement (or Guaranteed Maximum Price Contract) accompanied by Landlord's general terms and conditions ("General Conditions"), which General Conditions shall be in the form attached as Schedule 1 hereto (collectively, the "Contract").  The Contract shall include the provision set forth in Schedule 2 attached hereto.  At such time as Tenant enters into a Contract, Tenant shall provide Landlord with a final budget with respect to the Improvements covered by such Contract.  Prior to the commencement of the construction of the Improvements within the applicable Phase(s), and after Tenant has accepted all bids for the Improvements within such Phase(s), Tenant shall provide Landlord with a detailed breakdown, by trade, of the final costs to be incurred or which have been incurred, as set forth more particularly in Sections 2.2.1.1 through 2.2.1.8, above, in connection with the design and construction of the Improvements within each Phase to be performed by or at the direction of Tenant or the Contractor, which costs form a basis for the amount of the Contract with respect to such Phase(s) (the "Final Costs").  If the Final Costs for the subject Phase(s) are estimated to be more than such amounts shown on the Estimated Budget, then the pari passu ratio described in Section 4.2.1 above shall be equitably modified by Landlord and Tenant, provided that (i) in no event shall Landlord be obligated to pay an aggregate amount in excess of the Improvement Allowance and the Space Planning Allowance for the design and construction of all of the Improvements for all of the Phases combined, and (ii) Landlord's obligations to pay Landlord's pari passu share with respect to the subject Phase(s) shall be subject to Landlord's right to retain the Final Retention(s) pursuant to Section 2.2.2 above.

4.2.2Tenant's Agents.

4.2.2.1  Landlord's General Conditions for Tenant's Agents and Improvement Work.  Tenant's and Tenant's Agent's construction of the Improvements shall comply with the following:  (i) the Improvements shall be constructed in strict accordance with the Approved Working Drawings; (ii) Tenant's Agents shall submit schedules of all work relating to the Improvements to Contractor and Contractor shall, within five (5) business days of receipt thereof, inform Tenant's Agents of any changes which are necessary thereto, and Tenant's Agents shall adhere to such corrected schedule; and (iii) Tenant shall abide by all rules made by Landlord's Building manager with respect to the use of freight, loading dock and service elevators, storage of materials, coordination of work with the contractors of other tenants, and any other matter in connection with this Work Letter, including, without limitation, the construction of the Improvements.  Tenant shall pay a logistical coordination fee (the "Coordination Fee") to Landlord in an amount equal to the product of (i) one percent (1%), and (ii) the total hard costs of 

			
	
 
	

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constructing the Improvements, which Coordination Fee shall be for services relating to the coordination of the construction of the Improvements.

4.2.2.2  Indemnity.  Tenant's indemnity of Landlord as set forth in this Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant's non-payment of any amount arising out of the Improvements and/or Tenant's disapproval of all or any portion of any request for payment.  Such indemnity by Tenant, as set forth in this Lease, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to Landlord's performance of any ministerial acts reasonably necessary (i) to permit Tenant to complete the Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of occupancy for the subject Phase of the Premises.

4.2.2.3  Requirements of Tenant's Agents.  Each of Tenant's Agents shall guarantee to Tenant and for the benefit of Landlord that the portion of the Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof.  Each of Tenant's Agents shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after the completion of the work performed by such contractor or subcontractors.  The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection with such removal or replacement of all or any part of the Improvements, and/or the Building and/or common areas that may be damaged or disturbed thereby.  All such warranties or guarantees as to materials or workmanship of or with respect to the Improvements shall be contained in the Contract or subcontract and shall be written such that such guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either.  Tenant covenants to give to Landlord any assignment or other assurances which may be necessary to effect such right of direct enforcement.

4.2.2.4  Insurance Requirements.

4.2.2.4.1  General Coverages.  All of Tenant's Agents shall carry worker's compensation insurance covering all of their respective employees, and shall also carry commercial general liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant's contractors pursuant to Section 10.8 of this Lease.

4.2.2.4.2  Special Coverages.  Tenant shall carry "Builder's All Risk" insurance in an amount approved by Landlord covering the construction of the Improvements, and such other insurance as Landlord may reasonably require, it being understood and agreed that the Improvements shall be insured by Tenant pursuant to this Lease immediately upon completion thereof.  Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord including, but not limited to, the requirement that all of Tenant's Agents shall carry excess liability and Products and Completed Operation Coverage insurance, each in amounts not less than $5,000,000 per incident, $5,000,000 in aggregate, and in form and with companies as are required to be carried by Tenant as set forth in this Lease.

4.2.2.4.3  General Terms.  Certificates for all insurance carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before the commencement of construction of the Improvements and before the Contractor's equipment is moved onto the site.  Tenant will give Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance.  In the event that the Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant's sole cost and expense.  Tenant's Agents shall maintain all of the foregoing insurance coverage in force until the Improvements are fully completed and accepted by Landlord, except for any Products and Completed Operation Coverage insurance required by Landlord, which is to be maintained for ten (10) years following completion of the work and acceptance by Landlord and Tenant.  All policies carried under this Section 4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, as well as Contractor and Tenant's Agents.  All insurance, except Workers' Compensation, maintained by Tenant's Agents shall preclude subrogation claims by the insurer against anyone insured thereunder.  Such insurance 

			
	
 
	

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shall provide that it is primary insurance as respects the owner and that any other insurance maintained by owner is excess and noncontributing with the insurance required hereunder.  The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under Section 4.2.2.2 of this Work Letter.

4.2.3Governmental Compliance.  The Improvements shall comply in all respects with the following:  (i) the Code and other state, federal, city or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person; (ii) applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code; and (iii) building material manufacturer's specifications.

4.2.4Inspection by Landlord.  Except with respect to any Phase of the Premises which is then occupied by Tenant in which case Landlord's entry requirements shall be governed by Section 27 of the Lease, Landlord shall have the right to inspect the Improvements at all times, provided however, that Landlord's failure to inspect the Improvements shall in no event constitute a waiver of any of Landlord's rights hereunder nor shall Landlord's inspection of the Improvements constitute Landlord's approval of the same.  If Landlord identifies any defects in the Improvements, or deviations in the construction of the Improvements from the Approved Working Drawings (including any approved Tenant Change), then Landlord shall so notify Tenant.  Landlord and Tenant shall meet and determine whether in fact such defect or deviation exists, each acting in good faith.  If Tenant agrees or it is otherwise determined by a third party contractor or consultant agreed upon by Landlord and Tenant to make such determination (the "Third Party Consultant") that such defect or deviation exists, then the same shall be rectified by Tenant at no expense to Landlord (subject to disbursement from the Improvement Allowance), provided however, that in the event Landlord determines that a defect or deviation exists or disapproves of any matter in connection with any portion of the Improvements and such defect, deviation or matter might adversely affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning or life-safety systems of the Building, the structure or exterior appearance of the Building or any other tenant's use of such other tenant's leased premises, Landlord may, take such action as Landlord deems necessary, at Tenant's expense and without incurring any liability on Landlord's part absent any negligence on Landlord's part, to correct any such defect, deviation and/or matter, including, without limitation, causing the cessation of performance of the construction of the Improvements until such time as the defect, deviation and/or matter is corrected to Landlord's reasonable satisfaction.  If the Third Party Consultant confirms that a defect or deviation exists, then Tenant shall be the party responsible for the cost of such Third Party Consultant, and if the Third Party Consultant does not find that a defect or deviation exists, then Landlord shall bear the cost of such Third Party Consultant.

4.2.5Meetings.  Within thirty (30) days following the execution of this Lease, Tenant shall hold weekly meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of Construction Drawings and the construction of the Improvements, which meetings may be held telephonically, and Landlord and/or its agents shall receive prior notice of, and shall have the right to attend, all such meetings, and, upon Landlord's request, certain of Tenant's Agents shall attend such meetings.  In addition, minutes shall be taken at all such meetings, a copy of which minutes shall be promptly delivered to Landlord.  Notwithstanding the foregoing, following commencement of construction of the Improvements, such meetings shall be held at the Building and include the review of Contractor's current request for payment.

	
4.3
	
Notice of Completion; Copy of Record Set of Plans.  Within fifteen (15) business days after completion of construction of the Improvements, Tenant shall cause a Notice of Completion to be recorded in the office of the Recorder of the county in which the Building is located in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do so, Landlord may execute and file the same as Tenant's agent for such purpose, at Tenant's sole cost and expense.  At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all changes made to the Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the "record-set" of as-built drawings are true and correct, which certification shall survive the expiration or termination of this Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set of drawings within ninety (90) days following issuance of a certificate of occupancy for the subject Phase of the Premises, and (ii) Tenant shall 

			
	
 
	

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deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the subject Phase of the Premises.

SECTION 5

MISCELLANEOUS

	
5.1
	
Tenant's Representative.  Tenant has designated Robert Bacci as its sole representative with respect to the matters set forth in this Work Letter (whose e-mail address for the purposes of this Work Letter is RBacci@nektar.com and phone number is (415) 482-5661, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter.

	
5.2
	
Landlord's Representative.  Landlord has designated Scott Halfwassen and Kevin Ryan (whose e-mail addresses are shalfwassen@kilroyrealty.com and kryan@kilroyrealty.com, respectively, and phone numbers are (415) 778-5676 and (415) 778-7749, respectively, for purposes of this Work Letter), who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Work Letter.

	
5.3
	
Time of the Essence in This Work Letter.  Unless otherwise indicated, all references herein to a "number of days" shall mean and refer to calendar days.  If any item requiring approval is timely disapproved by Landlord, the procedure for preparation of the document and approval thereof shall be repeated until the document is approved by Landlord.

	
5.4
	
Tenant's Lease Default.  Notwithstanding any provision to the contrary contained in the Lease or this Work Letter, if any default by Tenant under the Lease or this Work Letter (including, without limitation, any failure by Tenant to fund any portion of the Over-Allowance Amount) occurs at any time on or before the substantial completion of the Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Improvement Allowance and/or Landlord may, without any liability whatsoever, cause the cessation of construction of the Improvements (in which case, Tenant shall be responsible for any delay in the substantial completion of the Improvements and any costs occasioned thereby), and (ii) all other obligations of Landlord under the terms of the Lease and this Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease.

 

			
	
 
	

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SCHEDULE 1 TO EXHIBIT B

360 Third Street

GENERAL CONDITIONS

			
	
 
	

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LANDLORD'S GENERAL Terms and CONDITIONS

INDEMNIFICATION

	
 
	
•
	
To the fullest extent permitted by law, Contractor shall defend all claims through legal counsel acceptable to KRC Entity and any of the other Indemnitees requiring defense, and indemnify and hold KRC Entity, Kilroy Realty, L.P., Kilroy Realty Corporation, Kilroy Realty Finance Partnership, L.P., , and any lender for the Project, and their respective parents, subsidiaries, shareholders, parents, members and affiliates at every tier, and all of the respective officers, directors, employees, partners, members, and shareholders of all of the foregoing, and all of the respective heirs, executors, successors and assigns of all of the foregoing (collectively referred to as "Indemnitees") harmless from and against each and all of the following: (1) any claim, demand, liability, loss, damage, cost, expense, including reasonable attorneys’ fees, awards, fines, or judgments (collectively "Liabilities") arising out of, or relating in any way, directly or indirectly, to the Work, death or bodily or personal injury to persons, injury or damage to tangible property, including the loss of use therefrom, construction defects, or other loss, damage or expense; (2) any and all Liabilities sustained by the Indemnitees, including reasonable attorneys’ fees, on account of or through the misuse of the land which is the Project location, the improvements thereon, or any part of either by a Contractor Party, or by any other person whomsoever thereon, at the invitation, express or implied, of a Contractor Party, or by permission of a Contractor Party arising out of or indirectly or directly due to or resulting from the performance of the Work by a Contractor Party; (3) any Liabilities, including reasonable attorneys’ fees, by reason of the misuse by a Contractor Party or any of its agents, servants, employees, invitees, licensees or permittees of the Project or any part thereof, or the improvements situated thereon; and (4) any negligence or willful misconduct or breach of the Agreement by any Contractor Party.
	
 

 

	
 
	
•
	
This indemnity shall survive the expiration or termination of the Agreement and shall remain in effect until such time as an action on account of any matter covered by such indemnity is barred by applicable statute of limitations. Contractor’s indemnification obligation under these Landlord General Terms and Conditions ("General Conditions") shall apply regardless of the passive negligence of Indemnitees, except to the extent that such indemnity is void or otherwise unenforceable under applicable law in effect on or validly retroactive to the date of the Agreement, and except where such Liabilities are the result of the active negligence, in whole or in part, or willful misconduct of Indemnitees or independent contractors who are directly responsible to Indemnitees other than a Contractor Party. 
	
 

 

	
 
	
•
	
This indemnity shall not be construed to negate, abridge or otherwise reduce any other right or obligation of indemnity which would otherwise exist in favor of the Indemnitees under the Agreement, at law or in equity, as to any part or person described in these Landlord General Conditions or otherwise. Nothing herein shall be deemed to abridge the rights, if any, of Owner or any of the other Indemnitees to seek contribution where appropriate. For the purposes of these Landlord General Terms and Conditions, Owner shall be deemed to mean KRC Entity.
	
 

 

			
	
 
	

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•
	
As used herein, the term "Contractor Party" means Contractor, Contractor's Subcontractors of every tier, consultants and/or material suppliers and their respective employees, agents and/or representatives.
	
 

 

	
 
	
•
	
In connection with any and all Claims against the Indemnitees and by any employee of the Contractor, any Subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, the indemnification obligation under these Landlord General Conditions shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Contractor or any Subcontractor under worker's or workmen's compensation acts, disability benefit acts or other employee benefit acts except to the extent of any Indemnitees active negligence and/or willful conduct, in whole or in part.
	
 

 

	
 
	
•
	
Indemnified Liabilities under these Landlord General Conditions shall include, without limitation: (1) injury or damage consequent to misuse by Contractor, its Subcontractor, agents, and all other kinds of items of equipment, whether or not the same be owned, furnished or loaned by Owner.
	
 

 

	
 
	
•
	
The Contractor’s indemnity obligations under these Landlord General Conditions shall, but not by way of limitation, specifically include all claims and judgments which may be made against the Indemnitees under any “safe place to work” or similar-type statute, similar laws of a state or other governmental body having jurisdiction, and against claims and judgments arising from violation of public ordinances and requirements of governing authorities due to the Contractor’s or Subcontractor’s method of execution of the Work.  The Contractor's indemnity obligations shall also specifically include, without limitation, all fines, penalties, damages, liability, costs, expenses (including, without limitation, reasonable attorneys' fees), and punitive damages (if any) arising out of, or in connection with, any:  (i) violation or failure to comply with any law, statute, ordinance, rule regulation, code, or requirement of a public authority that bears upon the performance of the Work by the Contractor, a Subcontractor, or any person or entity for whom either is responsible, (ii) means, methods, procedures techniques, or sequences of execution or performance of the Work by the Contractor, a Subcontractor, or any person or entity for whom either is responsible, and (iii) failure to secure and pay for permits, fees, approvals, licenses, and inspections as required under the Contract Documents, or any violation of any permit or other approval of a public authority applicable to do the Work, by the Contractor, a Subcontractor, or any person or entity for whom either is responsible. 
	
 

 

	
 
	
•
	
Except as otherwise expressly set forth herein, the indemnification obligations of the Contractor under the Agreement shall be limited only to the extent required by the laws of the State in which the Project is located and as set forth herein.
	
 

 

CONTRACTOR’S LIABILITY INSURANCE

 

	
 
	
•
	
The Contractor shall, for the protection and benefit of the "Indemnitees" (as that term is defined above) and Contractor, and as part of the Contractor’s efforts to satisfy the obligations set forth in these Landlord General Conditions, procure, pay for, and maintain in full force and effect, at all times during the performance of the Work, or for such duration as required by applicable laws, policies of insurance issued by a carrier with an A.M. Best’s Rating of not lower than A- VII, , which afford, at a minimum, the coverages set forth hereinbelow.  All such insurance shall be written on an occurrence basis (with the exception of Contractor's Professional 
	
 

			
	
 
	

-3-
	
 

 

 

	
 
		
Liability Insurance policy, if any).  The Contractor shall deliver to the Owner, within ten (10) days of the date of the Agreement and prior to bringing any equipment or personnel onto the site of the Work or the Project site, Certificates of Insurance in form and substance satisfactory to the Owner evidencing the required coverages with limits not less than those required hereunder.  The coverage afforded under any insurance policy obtained under or pursuant to these Landlord General Conditions shall be primary to any valid and collectible insurance carried separately by any of the Indemnitees. All policies and Certificates of Insurance shall expressly provide that no less than thirty (30) days’ prior written notice shall be given the Owner in the event of cancellation and non-renewal of the coverage contained in such policy or evidenced by such certified copy or Certificate of Insurance.
	
 

 

	
 
	
o
	
Workers' Compensation including Occupational Disease insurance meeting the statutory requirements of the state in which the Work is performed and Employers' Liability Insurance in an amount of at least $1,000,000.00 bodily injury each accident, $1,000,000.00 bodily injury by disease policy limit, and $1,000,000.00 bodily injury by disease each employee.  Policy must waive subrogation against Owner.  If Workers' Compensation Insurance is not required by the state or no other employees are involved other than the Contractor and Workers' Compensation Insurance is not applicable, evidence of personal medical insurance must be provided as well as a letter from the Contractor's Insurance Agent or Broker stating such exemption.
	
 

 

	
 
	
o
	
Commercial General Liability Insurance providing minimal limits of $1,000,000.00 per occurrence for bodily injury and property damage, $2,000,000.00 for Products/Completed Operations aggregate limit; $1,000,000.00 for Advertising and Personal Injury; $2,000,000.00 in the general aggregate limit.  Policy must be on per occurrence form.  The policy must designate additional insureds listed below and provide Premises/Operations, Contractual, Independent Consultants, Broad Form Property Damage, Personal Injury, Blanket Contractual covering indemnities within Contract Documents and Products and Completed Operations coverages.  XCU Exclusions must be deleted when applicable to operations performed by Contractor.
	
 

 

	
 
	
▪
	
Contractor shall agree to maintain Products and Completed Operations coverage until the expiration of all applicable statutes of limitation, but in no event less than ten (10) years from the date the Project is completed.  Contractor shall continue to provide Certificates of Insurance to Owner during such period.  In addition, Contractor shall obtain an endorsement to its Commercial General Liability policy to cover the Contractor's obligations above.
	
 

 

	
 
	
▪
	
In addition to the foregoing, Contractor shall provide a Certificate of Insurance evidencing Umbrella Liability coverage in a commercially reasonable amount. for Bodily Injury and Property Damage combined.
	
 

 

	
 
	
o
	
Commercial Automobile Liability on occurrence basis covering all Owned, Non-Owned, and Hired Vehicles in a minimum amount of $1,000,000.00, combined single limit, bodily injury and property damage.
	
 

 

			
	
 
	

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o
	
In addition to other insurance required by statute or under provisions of the Contract, to the extent Contractor is to provide any design-build work in connection with the Project, Contractor shall provide Professional Liability Insurance, issued by an insurance carrier approved in advance by the Owner and licensed to provide such coverage in the State where the Project is located, to compensate the Owner for all negligent acts, errors, and omissions by the Contractor, its firm or company, its agents, its employees, and its consultants (as applicable) arising out of the Contract.  Such Professional Liability Insurance policy shall provide coverage amounts not less than $1,000,000.00 per incident, and $1,000,000.00 annual aggregate.  
	
 

 

	
 
	
o
	
Certificates of above insurance must not be canceled, not renewed or materially changed before thirty (30) days written notice by mail to the Owner, and certificates of insurance shall so state said notice will be furnished.  Renewals shall be forwarded to Owner  as soon as possible after the  expiration thereof.
	
 

 

	
 
	
o
	
It is understood and agreed that the insurance coverages and limits required above shall not limit the extent of the Contractor’s, or any Subcontractor’s, responsibilities and liabilities with respect to the Project.
	
 

 

	
 
	
o
	
All insurance provided or required to be provided by Contractor and all Subcontractors shall be issued by insurance companies rated at least  A- VII in the current edition of Bests’ Insurance Guide.  The maintenance in full current force and effect of such coverage shall be a condition precedent to the payment obligations to pay under the construction contract.  If evidence of the required insurance coverage is not produced promptly on demand, Owner shall have the right, after notification to the insured to procure the required insurance on behalf of Contractor and to charge Contractor for the costs to procure such insurance, but Owner shall not be under any liability to do so.  The coverage amounts listed above shall be the minimum insurance coverage amounts required for each applicable insurance policy.
	
 

 

	
 
	
o
	
Contractor waives all rights against Owner for damages to Contractor's personal property caused by fire or other perils covered under an All Risk Physical Damage Insurance Policy, and similar waivers shall be obtained from all consultants performing any of the services required hereunder.
	
 

 

	
 
	
o
	
KRC Entity, and the Indemnitees for the Project (collectively, the "Owner Parties") shall be named additional insureds (pursuant to ISO Form 20 10 11 85 or its equivalent and ISO Form CG 20 32 07 04) under Contractor's Commercial General Liability and Automobile Liability policies mentioned above, but only to the extent of liabilities falling within Contractor’s indemnity obligations, pursuant to the terms of this agreement. Prior to the commencement of any Work hereunder (and thereafter as coverage expires and is renewed or new coverage obtained), Contractor shall provide Owner with a certificate or endorsement naming the Owner Parties as additional insureds with respect to such insurance policies.  Owner, in addition to being a named additional insured, shall also be provided written confirmation through endorsement on the Certificate of Insurance or policy language that contractual liability has not been excluded from the Commercial General Liability insurance policy described in these Landlord’s General Conditions.  
	
 

 

			
	
 
	

-5-
	
 

 

 

	
 
	
o
	
The Contractor shall notify the Owner in writing of any reduction in collectible limits and the Contractor shall promptly procure, at no expense to the Owner, such additional coverage as is necessary to restore the valid and collectible limits of such insurance to that required under these Landlord General Conditions.  Written notice to Owner shall be made by the Contractor as soon as possible of the Contractor becoming aware of an event of loss.  If the event of loss is a theft, a police report shall be required for a claim.  Other losses shall be fully documented, including photos and full cost accounting.  If the Contractor’s documentation is incomplete and the claim is subsequently denied, the cost of repair or replacement shall not be included in the Contract Sum and shall be an expense of the Contractor.
	
 

 

	
 
	
o
	
In addition to the above, the Contractor shall assure that the above-referenced insurance includes the following types of coverage:
	
 

 

	
 
	
▪
	
Claims under workers’ compensation, disability benefit and other similar employee benefit acts that are applicable to the Work to be performed;
	
 

 

	
 
	
▪
	
Claims for damages because of bodily injury, occupational sickness or disease, or death of the Contractor’s employees;
	
 

 

	
 
	
▪
	
Claims for damages because of bodily injury, sickness or disease, or death of any person other than the Contractor’s employees;
	
 

 

	
 
	
▪
	
Claims for damages insured by personal injury liability coverage;
	
 

 

	
 
	
▪
	
Claims for damages, other than to the Work itself, because of injury to or destruction of tangible property, including loss of use resulting therefrom;
	
 

 

	
 
	
▪
	
Claims for damages because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle;
	
 

 

	
 
	
▪
	
Claims for bodily injury or property damage arising out of completed operations, which coverage shall be maintained for no less than ten (10) years following final payment; 
	
 

 

	
 
	
▪
	
Claims involving contractual liability insurance applicable to the Contractor’s obligations under the Contract Documents, including,  those indemnity obligations set forth in these Landlord General Conditions; and
	
 

 

	
 
	
▪
	
Claims on account of design errors and/or omissions provided by Subcontractors and consultants, if any.
	
 

 

	
 
	
•
	
Contractor’s insurance policies shall include a severability of interest or cross-liability endorsement and provide that an act or omission of one of the named or additional insureds shall not reduce or avoid coverage to another named or additional insured and shall afford coverage for all claims based upon insurable acts, omissions, injuries or damages from which the claims occurred or arose (or the onset of which occurred or arose) in whole or in part during the policy period.  Contractor’s insurance policies shall also contain endorsements:  (i) deleting any 
	
 

			
	
 
	

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employee exclusion on personal injury coverage, (ii) including employees as additional insureds and (iii) providing host liquor liability coverage.
	
 

 

	
 
	
•
	
The Contractor shall cause the commercial liability coverage required by these Landlord’s General Conditions to include (1) the Owner as an additional insured for claims caused in whole or in part by the Contractor’s negligent acts or omissions during the Contractor’s operations; and (2) the Owner as an additional insured for claims made under the Contractor’s completed operations coverage.  Such policy will be endorsed that the Contractor’s policy will be primary and the Owner’s policy will be non-contributory.
	
 

 

	
 
	
•
	
If the Contractor fails to purchase and maintain, or require to be purchased and maintained, any insurance required under these Landlord General Conditions, the Owner may, but shall not be obligated to, upon five (5) days’ written notice to the Contractor, purchase such insurance on behalf of the Contractor and shall be entitled to be reimbursed by the Contractor upon demand.
	
 

 

When any required insurance, due to the attainment of a normal expiration date or renewal date shall expire, the Contractor shall supply the Owner with Certificates of Insurance and amendatory riders or endorsements that clearly evidence the continuation of all coverage in the same manner, limits of protection, and scope of coverage as was provided by the previous policy.  If any renewal or replacement policy, for whatever reason obtained or required, is written by a carrier other than that with whom the coverage was previously placed, or the subsequent policy differs in any way from the previous policy, the Contractor shall furnish the Owner with a Certificate of Insurance and applicable additional insured endorsements for any such policy.  

	
 
	
•
	

	
 

 

	
 
	
•
	
The Contractor shall cause each Subcontractor to (1) procure appropriate to the scope of service provided, and (2) name the Indemnitees as additional insureds under the Subcontractor’s comprehensive/commercial general liability policy and umbrella/excess policy.  The additional insured endorsement included on the Subcontractor’s comprehensive/commercial general liability policy and umbrella/excess policy shall state that coverage is afforded the additional insureds with respect to claims arising out of operations performed by or on behalf of the Contractor.  If the additional insureds have other insurance which is applicable to the loss, such other insurance shall be on an excess or contingent basis.  The amount of the insurer’s liability under this insurance policy shall not be reduced by the existence of such other insurance.
	
 

 

 

	
 
	
•
	
In any and all claims against the Owner or any of the Owner’s agents or employees by any employee of the Contractor, its consultants, subcontractors and anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, the indemnification obligation under Landlord General Conditions shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Contractor or its Subcontractors under workers’ or workmen’s compensation acts, disability benefit acts or other employee benefit acts except to the extent of any Indemnitees active negligence and/or willful conduct, in whole or in part.
	
 

 

	
 
	
•
	
The obligations described in Landlord General Conditions shall survive the termination of the Contract.
	
 

 

			
	
 
	

-7-
	
 

 

 

	
 
	
•
	
If any insurance required by these Landlord General Conditions is not available on an “occurrence” basis and such policy is written on a “claims made” basis, such policy shall be subject to the Owner’s prior written approval and must be written so that the effective (or retroactive or prior acts) date of the policy is prior to the date of commencement of any of the Contractor’s Work or services hereunder.  Any such “claims made” basis insurance shall be maintained for the benefit of the Owner, with evidence thereof provided at each renewal of such insurance until the expiration of any applicable statute of limitations, but in any event for a period of not less than ten (10) years following completion by the Contractor of all of its Work and services under the Contract and the Owner’s approval and acceptance of the Work.
	
 

 

 

	
 
	
•
	
The acceptance of delivery by the Owner of any certificate of insurance evidencing the required insurance coverages and limits does not constitute approval or agreement by the Owner that the insurance requirements have been met or that the insurance policies shown in the certificates of insurance are in compliance with the requirements of the Agreement.
	
 

 

	
 
	
•
	
Upon renewal of any such insurance that expires before the termination of the Contractor’s obligation to carry such insurance pursuant to the Contract, the Owner shall be provided with renewal certificates or binders  within 10 business days after such expiration.
	
 

 

	
 
	
•
	
The Contractor shall immediately report to the Owner and applicable insurance carrier, and promptly thereafter confirm in writing, the occurrence of any injury, loss or damage incurred by the Contractor or its Subcontractors, or the Contractor’s receipt of notice or knowledge of any claim by a third party or any occurrence that might give rise to such a claim
	
 

 

	
 
	
•
	
If Owner has Builders Risk Coverage and Contractor wishes to make any claim for recovery under said policy, Contractor shall give timely notification to the Owner of the event giving rise to the claim, cooperate with the Owner, and do all things required of it as an insured under such policy, so as to permit the policy to be complied with and a claim to be made thereunder.  The Contractor further agrees that to the extent required under such policy (except property policies), the Contractor shall permit and authorize full subrogation in favor of the insurers of any rights, as against any other person, firm or corporation (other than the Owner, the Owner’s Representative, if any, Lenders and their respective members, managers, partners, officers, agents and employees).
	
 

 

	
 
	
•
	
It shall be the responsibility of the Contractor not to violate nor knowingly permit to be violated any condition of the policies required under the Contract, and it shall be the Contractor’s duty and responsibility to impose upon each consultant and Subcontractor employed by the Contractor to perform any of the Work described in the Agreement the same responsibilities and obligations imposed upon the Contractor under these Landlord General Conditions.
	
 

 

	
 
	
•
	
All insurance coverage procured by the Contractor shall be provided by insurance companies having policy holder ratings no lower than  “A-“ VII in the Best's Insurance Guide, latest edition in effect as of the date of the Contract, and subsequently in effect at the time of renewal of any policies required by the Contract Documents.  
	
 

 

			
	
 
	

-8-
	
 

 

 

	
 
	
•
	
If the Owner or the Contractor is damaged by the failure of the other party to purchase or maintain insurance required under these Landlord General Conditions, then the party who failed to purchase or maintain the insurance shall bear all reasonable costs (including attorneys’ fees and court and settlement expenses) properly attributable thereto.
	
 

GENERAL REQUIREMENTS

	
 
	
•
	
The Contractor acknowledges that the Owner must comply with (i) the requirements of the state in which the Project is located and local jurisdictions, and (ii) any and all of Owner's rules, regulations and requirements (including, without limitation, those set forth in the Lease and attached to the Agreement) relating to the Project and/or any construction work performed in the Building.
	
 

 

	
 
	
•
	
The Contractor shall only employ labor on the Project or in connection with the Work capable of working harmoniously with all trades, crafts and any other individuals associated with the Project.  The Contractor shall also use its best efforts to minimize the likelihood of any strike, work stoppage or other labor disturbance.  The Contractor shall comply with all requirements of OSHA and shall defend, indemnify and hold the Owner and Indemnitees harmless from any losses or damages it may incur as a result of the Contractor’s failure to comply with OSHA requirements.  
	
 

 

	
 
	
•
	
The Contractor shall confine operations at the site to areas permitted by law, ordinances, permits and the Contract and shall not unreasonably encumber the Project site with materials or equipment.  Only materials and equipment which are to be used directly in the Work shall be brought to and stored on the Project Site by the Contractor.  After equipment is no longer required for the Work, it shall be promptly removed from the Project Site.  Protection of construction materials and equipment stored at the Project Site from weather, theft, damage and all other adversity is solely the responsibility of the Contractor.
	
 

 

	
 
	
•
	
The Contractor and any entity for whom the Contractor is responsible shall not erect any sign on the Project Site without the prior written consent of the Owner.
	
 

 

	
 
	
•
	
The Contractor shall ensure that the Work, at all times, is performed in a manner that affords reasonable access, both vehicular and pedestrian, to the Project Site and all adjacent areas.  The Work shall be performed, to the fullest extent reasonably possible, in such a manner that public and other areas adjacent to the Project Site shall be free from all debris, building materials and equipment likely to cause hazardous conditions.  Without limitation of any other provision of the Contract Documents, the Contractor shall use its best efforts to minimize any interference with the occupancy or beneficial use of the Project in the event of partial occupancy.  In addition, Contractor expressly recognizes and acknowledges that the Building is part of a first-class commercial project and that any activities involving entry to the Building, or the project or center in which the Building is be located, by Contractor or a Contractor Party must be scheduled in advance with the Owner and to the fullest extent possible, outside of normal operating hours for the Building or when Contractor’s and/or the Contractor Party's work shall be the least disruptive to the Building’s operations and that of the Building's tenants, occupants, visitors, customers and invitees.
	
 

 

	
 
	
•
	
The Contractor shall keep the premises and surrounding area free from accumulation of waste materials or rubbish caused by operations under the Contract.  During the construction and at the completion of the Work, the 
	
 

			
	
 
	

-9-
	
 

 

 

	
 
		
Contractor shall remove from and about the Project waste materials, rubbish, the Contractor’s tools, construction equipment, machinery and surplus materials, in a manner consistent with all provisions, including, but not limited to, the Legal Requirements, and shall leave all floor services in a broom-clean condition and clean all other surfaces.
	
 

 

	
 
	
•
	
Owner and any party designated by Owner shall have access to the Project at all times for the purpose of inspecting the Work provided such parties comply with the Contractor's reasonable safety procedures. 
	
 

SAFETY OF PERSON AND PROPERTY

	
 
	
•
	
The Contractor shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss to:
	
 

 

	
 
	
o
	
employees on the Work and other persons who may be affected thereby (including, without limitation, all tenants, occupants, visitors, customers and/or invitees of the Building);
	
 

 

	
 
	
o
	
the Work and materials and equipment to be incorporated therein, whether in storage on or off the Project site, under care, custody or control of the Contractor or the Subcontractors, including, without limitation, the Sub-subcontractors; and
	
 

 

	
 
	
o
	
other property at the Project site or adjacent thereto (including, without limitation, the property of other tenants, occupants, visitors, customers and/or invitees of the Building).
	
 

 

	
 
	
•
	
The Contractor shall give notices and comply with applicable laws, ordinances, rules, regulations and lawful orders of public authorities bearing on safety of persons or property or their protection from damage, injury or loss.
	
 

 

	
 
	
•
	
The Contractor shall erect and maintain, as required by existing conditions and performance of the Contract, reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying owners and users of adjacent sites and utilities.  The Contractor shall also be responsible, at the Contractor’s sole cost and expense, for all measures necessary to protect any property adjacent to the Project and improvements therein.  Any damage to such property or improvements shall be promptly repaired by the Contractor.
	
 

 

	
 
	
•
	
The Contractor shall designate a responsible member of the Contractor’s organization at the Project site whose duty shall be the prevention of accidents.  This person shall be the Contractor’s superintendent unless otherwise designated by the Contractor in writing to the Owner and Architect.
	
 

 

	
 
	
•
	
The Contractor shall not load or permit any part of the construction or Project site to be loaded so as to endanger its safety.
	
 

 

	
 
	
•
	
When all or a portion of the Work is suspended for any reason, the Contractor shall securely fasten down all coverings and protect the Work, as necessary, from injury by any cause.
	
 

 

	
 
	
•
	
In addition to reporting to OSHA and all governmental and insurance agencies, the Contractor shall promptly report in writing to the Owner and Architect all accidents 
	
 

			
	
 
	

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arising out of or in connection with the Work which cause death, personal injury, or property damage, giving full details.  In addition, if death, serious personal injuries, or serious property damages are caused, the accident shall be reported immediately by telephone or messenger to the Owner.
	
 

 

	
 
	
•
	
The Contractor will comply with and enforce all requirements of OSHA and other governing regulatory agencies which pertain to the safety and protection of persons on the Project site.  The Contractor shall comply with and enforce all of the Owner’s regulations pertaining to the use of the Project Site or the safety and protection of persons and property and all instructions of the Owner including but not limited to instructions relating to signs, advertisements, fires, smoking and hazardous materials.
	
 

LICENSING 

	
 
	
•
	
CONTRACTORS ARE REQUIRED BY LAW TO BE LICENSED AND REGULATED BY THE CONTRACTORS’ STATE LICENSE BOARD WHICH HAS JURISDICTION TO INVESTIGATE COMPLAINTS AGAINST CONTRACTORS IF A COMPLAINT REGARDING A PATENT ACT OR OMISSION IS FILED WITHIN FOUR YEARS OF THE DATE OF THE ALLEGED VIOLATION.  A COMPLAINT REGARDING A LATENT ACT OR OMISSION PERTAINING TO STRUCTURAL DEFECTS MUST BE FILED WITHIN TEN YEARS OF THE DATE OF THE ALLEGED VIOLATION.  ANY QUESTIONS CONCERNING A CONTRACTOR MAY BE REFERRED TO THE REGISTRAR, CONTRACTORS’ STATE LICENSE BOARD, P.O. BOX 26000, SACRAMENTO, CALIFORNIA 95826.  The Contractor hereby warrants and represents that it is a duly licensed contractor under the laws of the State of California and that its contractor’s license number is INSERT CONTRACTOR’S LICENSE NUMBER.
	
 

 

	
 
	
•
	
The Contractor shall make the site of the Work available at reasonable times for inspection by the Owner or the Owner’s representatives;
	
 

 

 

 

			
	
 
	

-11-
	
 

 

 

SCHEDULE 2 TO EXHIBIT B

360 Third Street

PROVISION TO BE INSERTED IN ALL CONTRACTS BETWEEN TENANT AND CONTRACTORS FOR THE CONSTRUCTION OF IMPROVEMENTS

 

[DRAFTING NOTE:  Make sure the exhibit letter in the body of the paragraph matches the exhibit assigned to Landlord's General Conditions in the Contract, and the section number matches where you are inserting this language into the Contract.]

 

"[Section]__ Except where expressly provided to the contrary in the Lease, in the event of any conflict between any of the Contract documents, the terms and provisions of the Landlord's General Conditions (attached hereto as Exhibit __) shall control over this Contact, and the terms and provisions of this Contract shall control over those of the other exhibits (excluding Landlord's General Conditions) attached hereto."

 

			
	
 
	

-1-
	
 

 

 

EXHIBIT C

360 Third Street

NOTICE OF LEASE TERM DATES

 

To:_______________________

_______________________

_______________________

_______________________

	
 
	
Re:
	
Office Lease dated May ___, 2018 (the "Lease"), by and between KILROY REALTY FINANCE PARTNERSHIP, L.P., a Delaware limited partnership ("Landlord"), and NEKTAR THERAPEUTICS, a Delaware corporation ("Tenant"), for approximately _____________ rentable square feet of space commonly known as Suite ______ which is Phase [__] of the Premises located on the ______ (___) floor of that certain office building located at 360 Third Street, San Francisco, California (the "Building").

Dear ________________:

Notwithstanding any provision to the contrary contained in the Lease, this letter is to confirm and agree upon the following: 

	
 
	
1.
	
Tenant has accepted Phase [__] of the above-referenced Premises as being delivered in accordance with the Lease.  

	
 
	
2.
	
The Phase [__] Lease Commencement Date shall commence on or has commenced on ______________.

	
 
	
3.
	
The Lease Term is scheduled to expire on January 31, 2030. 

	
 
	
4.
	
Base Rent with respect to Phase [__] commenced to accrue on __________________, 201[8] in the amount of ________________ per month.

	
 
	
5.
	
Base Rent with respect to Phase [__] abates from ______, 201[8] and ending on ______, 201[8] in the amount of $_____ per month.

	
 
	
6.
	
If the Phase [__] Lease Commencement Date is other than the first day of the month, the first billing will contain a pro rata adjustment.  Each billing thereafter shall be for the full amount of the monthly installment as provided for in the Lease.

	
 
	
7.
	
Your rent checks should be made payable to __________________ at ___________________.

	
 
	
8.
	
The rentable square feet of Phase [__] of the Premises is ________________. 

	
 
	
9.
	
Tenant's Share of Direct Expenses with respect to the Phase [__] of the Premises is ________% of the Project.

	
 
	
10.
	
Capitalized terms used herein that are defined in the Lease shall have the same meaning when used herein.  Tenant confirms that the Lease has not been modified or altered except as set forth herein, and the Lease is in full force and effect.  Landlord and Tenant acknowledge and agree that to each party's actual knowledge, neither party is in default or violation of any covenant, provision, obligation, agreement or condition in the Lease.

If the provisions of this letter correctly set forth our understanding, please so acknowledge by signing at the place provided below on the enclosed copy of this letter and returning the same to Landlord.

The parties hereto consent and agree that this letter may be signed and/or transmitted by facsimile, e-mail of a .pdf document or using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed electronic record shall be valid 

			
	
 
	

-1-
	
 

 

 

and as effective to bind the party so signing as a paper copy bearing such party's handwritten signature. The parties further consent and agree that (1) to the extent a party signs this letter using electronic signature technology, by clicking "SIGN", such party is signing this letter electronically, and (2) the electronic signatures appearing on this letter shall be treated, for purposes of validity, enforceability and admissibility, the same as handwritten signatures.

		
	
 
	
"Landlord":

,

a 

 

By:  

Name:

Its:  

By:  

Name:

Its:  

 

	
Agreed to and Accepted

as of ____________, 20__.

"Tenant":

,

a 

By: 

Name:

Its: 

By: 

Name:

Its: 
	
 

 

 

			
	
 
	

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EXHIBIT D

360 Third Street

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and Regulations.  Landlord shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the  Project.  In the event of any conflict between the Rules and Regulations and the other provisions of this Lease, the latter shall control.

	
1.
	
Tenant shall not alter any lock or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord's prior written consent.  Tenant shall bear the cost of any lock changes or repairs required by Tenant.  Two keys will be furnished by Landlord for the Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord.  Upon the termination of this Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet rooms, either furnished to, or otherwise procured by, Tenant and in the event of the loss of keys so furnished, Tenant shall pay to Landlord the cost of replacing same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such changes.

	
2.
	
All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises.

	
3.
	
Landlord reserves the right to close and keep locked all entrance and exit doors of the Building during such hours as are customary for comparable buildings in the San Francisco, California area.  Tenant, its employees and agents must be sure that the doors to the Building are securely closed and locked when leaving the Premises if it is after the normal hours of business for the Building.  Any tenant, its employees, agents or any other persons entering or leaving the Building at any time when it is so locked, or any time when it is considered to be after normal business hours for the Building, may be required to sign the Building register.  Access to the Building may be refused unless the person seeking access has proper identification or has a previously arranged pass for access to the Building.  Landlord will furnish passes to persons for whom Tenant requests same in writing.  Tenant shall be responsible for all persons for whom Tenant requests passes and shall be liable to Landlord for all acts of such persons.  The Landlord and his agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person.  In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right to prevent access to the Building or the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property.

	
4.
	
No furniture, freight or equipment of any kind shall be brought into the Building without prior notice to Landlord.  All moving activity into or out of the Building shall be scheduled with Landlord and done only at such time and in such manner as Landlord designates.  Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy property brought into the Building and also the times and manner of moving the same in and out of the Building.  Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight.   Landlord will not be responsible for loss of or damage to any such safe or property in any case.  Any damage to any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other property shall be the sole responsibility and expense of Tenant.

	
5.
	
No furniture, packages, supplies, equipment or merchandise will be received in the Building or carried up or down in the elevators, except between such hours, in such specific elevator and by such personnel as shall be designated by Landlord.

	
6.
	
The requirements of Tenant will be attended to only upon application at the management office for the Project or at such office location designated by Landlord.  Employees of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord.

			
	
 
	

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7.
	
No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by Tenant on any part of the Premises or the Building without the prior written consent of the Landlord.  Tenant shall not disturb, solicit, peddle, or canvass any occupant of the Project and shall cooperate with Landlord and its agents of Landlord to prevent same.

	
8.
	
The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein.  The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose servants, employees, agents, visitors or licensees shall have caused same.

	
9.
	
Tenant shall not overload the floor of the Premises, nor mark, drive nails or screws, or drill into the partitions, woodwork or drywall or in any way deface the Premises or any part thereof without Landlord's prior written consent.  Tenant shall not purchase spring water, ice, towel, linen, maintenance or other like services from any person or persons not approved by Landlord.

	
10.
	
Except for vending machines intended for the sole use of Tenant's employees and invitees, no vending machine or machines other than fractional horsepower office machines shall be installed, maintained or operated upon the Premises without the written consent of Landlord.

	
11.
	
Tenant shall not use or keep in or on the Premises, the Building, or the Project any kerosene, gasoline, explosive material, corrosive material, material capable of emitting toxic fumes, or other inflammable or combustible fluid chemical, substitute or material.  Tenant shall provide material safety data sheets for any hazardous material or substance used or kept on the Premises.

	
12.
	
Tenant shall not without the prior written consent of Landlord use any method of heating or air conditioning other than that supplied by Landlord.

	
13.
	
Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors, or vibrations, or interfere with other tenants or those having business therein, whether by the use of any musical instrument, radio, phonograph, or in any other way.  Tenant shall not throw anything out of doors, windows or skylights or down passageways.

	
14.
	
Except for the aquarium (the "Aquarium") to be installed as part of Tenant's initial Improvements, Tenant shall not bring into or keep within the Project, the Building or the Premises any firearms, animals, birds, aquariums, or, except in areas designated by Landlord, bicycles or other vehicles.

	
15.
	
No cooking shall be done or permitted on the Premises, nor shall the Premises be used for the storage of merchandise, for lodging or for any improper, objectionable or immoral purposes.  Notwithstanding the foregoing, Underwriters' laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors, provided that such use is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules and regulations.

	
16.
	
The Premises shall not be used for manufacturing or for the storage of merchandise except as such storage may be incidental to the use of the Premises provided for in the Summary.  Tenant shall not occupy or permit any portion of the Premises to be occupied as an office for a messenger-type operation or dispatch office, public stenographer or typist, or for the manufacture or sale of liquor, narcotics, or tobacco in any form, or as a medical office, or as a barber or manicure shop, or as an employment bureau without the express prior written consent of Landlord.  Tenant shall not engage or pay any employees on the Premises except those actually working for such tenant on the Premises nor advertise for laborers giving an address at the Premises.

	
17.
	
Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations.

	
18.
	
Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules or any Common Areas for the 

			
	
 
	

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purpose of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises.  

	
19.
	
Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Building's heating and air conditioning system, and shall refrain from attempting to adjust any controls.  Tenant shall participate in recycling programs undertaken by Landlord.

	
20.
	
Tenant shall store all its trash and garbage within the interior of the Premises.  No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in San Francisco, California without violation of any law or ordinance governing such disposal.  All trash, garbage and refuse disposal shall be made only through entry-ways and elevators provided for such purposes at such times as Landlord shall designate.  If the Premises is or becomes infested with vermin as a result of the use or any misuse or neglect of the Premises by Tenant, its agents, servants, employees, contractors, visitors or licensees, Tenant shall forthwith, at Tenant's expense, cause the Premises to be exterminated from time to time to the satisfaction of Landlord and shall employ such licensed exterminators as shall be approved in writing in advance by Landlord.

	
21.
	
Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

	
22.
	
Any persons employed by Tenant to do janitorial work shall be subject to the prior written approval of Landlord, and while in the Building and outside of the Premises, shall be subject to and under the control and direction of the Building manager (but not as an agent or servant of such manager or of Landlord), and Tenant shall be responsible for all acts of such persons.

	
23.
	
No awnings or other projection shall be attached to the outside walls of the Building without the prior written consent of Landlord, and no curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises other than Landlord standard drapes.  All electrical ceiling fixtures hung in the Premises or spaces along the perimeter of the Building must be fluorescent and/or of a quality, type, design and a warm white bulb color approved in advance in writing by Landlord.  Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without the prior written consent of Landlord.  Tenant shall be responsible for any damage to the window film on the exterior windows of the Premises and shall promptly repair any such damage at Tenant's sole cost and expense.  Tenant shall keep its window coverings closed during any period of the day when the sun is shining directly on the windows of the Premises.  Prior to leaving the Premises for the day, Tenant shall draw or lower window coverings and extinguish all lights.  Tenant shall abide by Landlord's regulations concerning the opening and closing of window coverings which are attached to the windows in the Premises, if any, which have a view of any interior portion of the Building or Building Common Areas.

	
24.
	
The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be placed on the windowsills.

	
25.
	
Tenant must comply with requests by the Landlord concerning the informing of their employees of items of importance to the Landlord.

	
26.
	
Tenant must comply with applicable "NO-SMOKING" ordinances and all related, similar or successor ordinances, rules, regulations or codes.  If Tenant is required under the ordinance to adopt a written smoking policy, a copy of said policy shall be on file in the office of the Building.  In addition, no smoking of any substance shall be permitted within the Project except in specifically designated outdoor areas.  Within such designated outdoor areas, all remnants of consumed cigarettes and related paraphernalia shall be deposited in ash trays and/or waste receptacles.  No cigarettes shall be extinguished and/or left on the ground or any other surface of the Project.  Cigarettes shall be extinguished only in ashtrays.  Furthermore, in no event shall Tenant, its employees or agents smoke tobacco products or other substances (x) within any interior areas of the Project, or (y) within two hundred feet (200') of the main entrance of the Building or 

			
	
 
	

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the main entrance of any of the adjacent buildings, or (z) within seventy-five feet (75') of any other entryways into the Building.

	
27.
	
Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, the Building or the Project.  Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees, contractors, invitees and guests, and the property thereof, from acts of third parties, including keeping doors locked and other means of entry to the Premises closed, whether or not Landlord, at its option, elects to provide security protection for the Project or any portion thereof.  Tenant further assumes the risk that any safety and security devices, services and programs which Landlord elects, in its sole discretion, to provide may not be effective, or may malfunction or be circumvented by an unauthorized third party, and Tenant shall, in addition to its other insurance obligations under this Lease, obtain its own insurance coverage to the extent Tenant desires protection against losses related to such occurrences.  Tenant shall cooperate in any reasonable safety or security program developed by Landlord or required by law.  In the event that Landlord elects not to provide access control measures for the benefit of the Premises, the Building or the Project, then Tenant may elect at Tenant's sole cost to provide such services within the Premises for Tenant's sole benefit.

	
28.
	
All office equipment of any electrical or mechanical nature shall be placed by Tenant in the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise and annoyance.

	
29.
	
Tenant shall not use in any space or in the public halls of the Building, any hand trucks except those equipped with rubber tires and rubber side guards.

	
30.
	
No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale shall be conducted in the Premises without the prior written consent of Landlord.

	
31.
	
No tenant shall use or permit the use of any portion of the Premises for living quarters, sleeping apartments or lodging rooms.

	
32.
	
Tenant shall not purchase spring water, towels, janitorial or maintenance or other similar services from any company or persons not approved by Landlord.  Landlord shall approve a sufficient number of sources of such services to provide Tenant with a reasonable selection, but only in such instances and to such extent as Landlord in its judgment shall consider consistent with the security and proper operation of the Building.

	
33.
	
Tenant shall install and maintain, at Tenant's sole cost and expense, an adequate, visibly marked and properly operational fire extinguisher next to any duplicating or photocopying machines or similar heat producing equipment, which may or may not contain combustible material, in the Premises.

Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord's judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, Building, the Common Areas and the Project, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein.  Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the  Project.  Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises.

 

			
	
 
	

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EXHIBIT E

360 Third Street

FORM OF TENANT'S ESTOPPEL CERTIFICATE

The undersigned as Tenant under that certain Office Lease (the "Lease") made and entered into as of ___________, 2018 by and between _______________ as Landlord, and the undersigned as Tenant, for Premises on the ______________ floors of the office building located at 360 Third Street, San Francisco, California ____________, certifies as follows:

	
1.
	
Attached hereto as Exhibit A is a true and correct copy of the Lease and all amendments and modifications thereto.  The documents contained in Exhibit A represent the entire agreement between the parties as to the Premises.

	
2.
	
The undersigned currently occupies the Premises described in the Lease, the Lease Term commenced on __________, and the Lease Term expires on ___________, and the undersigned has no option to terminate or cancel the Lease or to purchase all or any part of the Premises, the Building and/or the Project.

	
3.
	
Base Rent with respect to Phase [__] of the Premises became payable on ____________.

	
4.
	
The Lease is in full force and effect and has not been modified, supplemented or amended in any way except as provided in Exhibit A.

	
5.
	
Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows:

 

 

 

	
6.
	
Tenant shall not modify the documents contained in Exhibit A without the prior written consent of Landlord's mortgagee.

	
7.
	
All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through ___________.  The current monthly installment of Base Rent is $_____________________.

	
8.
	
All conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease have been satisfied and Landlord is not in default thereunder.  In addition, the undersigned has not delivered any notice to Landlord regarding a default by Landlord thereunder.

	
9.
	
No rental has been paid more than thirty (30) days in advance and no security has been deposited with Landlord except as provided in the Lease.

	
10.
	
As of the date hereof, there are no existing defenses or offsets, or, to the undersigned's knowledge, claims or any basis for a claim, that the undersigned has against Landlord.

	
11.
	
If Tenant is a corporation or partnership, each individual executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in California and that Tenant has full right and authority to execute and deliver this Estoppel Certificate and that each person signing on behalf of Tenant is authorized to do so.

	
12.
	
There are no actions pending against the undersigned under the bankruptcy or similar laws of the United States or any state.

			
	
 
	

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13.
	
Other than in compliance with all applicable laws and incidental to the ordinary course of the use of the Premises, the undersigned has not used or stored any hazardous materials or substances in the Premises.

	
14.
	
To the undersigned's knowledge, all improvement work to be performed by Landlord under the Lease has been completed in accordance with the Lease and has been accepted by the undersigned and all reimbursements and allowances due to the undersigned under the Lease in connection with any improvement work have been paid in full.

The undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to a prospective mortgagee or prospective purchaser, and acknowledges that said prospective mortgagee or prospective purchaser will be relying upon the statements contained herein in making the loan or acquiring the property of which the Premises is a part and that receipt by it of this certificate is a condition of making such loan or acquiring such property.

Executed at ______________ on the ____ day of ___________, 20_  .

		
	
 
	
"Tenant":

,

a 

By:  

Its:  

By:  

Its:  

 

			
	
 
	

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EXHIBIT F

360 THIRD STREET

FORM OF RECOGNITION OF COVENANTS, CONDITIONS, AND RESTRICTIONS

RECORDING REQUESTED BY

AND WHEN RECORDED RETURN TO:

ALLEN MATKINS LECK GAMBLE

MALLORY & NATSIS LLP

1901 Avenue of the Stars, 18th Floor

Los Angeles, California  90067

Attention:  Anton N. Natsis, Esq.

 

RECOGNITION OF COVENANTS,

CONDITIONS, AND RESTRICTIONS

This Recognition of Covenants, Conditions, and Restrictions (this "Agreement") is entered into as of the __ day of ________, 20___, by and between __________________ ("Landlord"), and  ________________ ("Tenant"), with reference to the following facts:

	
A.
	
Landlord and Tenant entered into that certain Office Lease dated _____, 20__ (the "Lease").  Pursuant to the Lease, Landlord leased to Tenant and Tenant leased from Landlord space (the "Premises") located in an office building on certain real property described in Exhibit A attached hereto and incorporated herein by this reference (the "Property").

	
B.
	
The Premises is located in an office building located on real property which is part of an area owned by Landlord containing approximately ___ (__) acres of real property located in the City of ____________, California (the "Project"), as more particularly described in Exhibit B attached hereto and incorporated herein by this reference.

	
C.
	
Landlord, as declarant, has previously recorded, or proposes to record concurrently with the recordation of this Agreement, a Declaration of Covenants, Conditions, and Restrictions (the "Declaration"), dated ________________, 20___, in connection with the Project.

	
D.
	
Tenant is agreeing to recognize and be bound by the terms of the Declaration, and the parties hereto desire to set forth their agreements concerning the same.

NOW, THEREFORE, in consideration of (a) the foregoing recitals and the mutual agreements hereinafter set forth, and (b) for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows,

1.Tenant's Recognition of Declaration.  Notwithstanding that the Lease has been executed prior to the recordation of the Declaration, Tenant agrees to recognize and by bound by all of the terms and conditions of the Declaration.

2.Miscellaneous.

2.1This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, estates, personal representatives, successors, and assigns.

2.2This Agreement is made in, and shall be governed, enforced and construed under the laws of, the State of California.

2.3This Agreement constitutes the entire understanding and agreements of the parties with respect to the subject matter hereof, and shall supersede and replace all prior understandings and agreements, whether verbal or in writing.  The parties confirm and acknowledge that there are no other promises, covenants, understandings, agreements, representations, or warranties with respect to the subject matter of this Agreement except as expressly set forth herein.

			
	
 
	

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2.4This Agreement is not to be modified, terminated, or amended in any respect, except pursuant to any instrument in writing duly executed by both of the parties hereto.

2.5In the event that either party hereto shall bring any legal action or other proceeding with respect to the breach, interpretation, or enforcement of this Agreement, or with respect to any dispute relating to any transaction covered by this Agreement, the losing party in such action or proceeding shall reimburse the prevailing party therein for all reasonable costs of litigation, including reasonable attorneys' fees, in such amount as may be determined by the court or other tribunal having jurisdiction, including matters on appeal.

2.6All captions and heading herein are for convenience and ease of reference only, and shall not be used or referred to in any way in connection with the interpretation or enforcement of this Agreement.

2.7If any provision of this Agreement, as applied to any party or to any circumstance, shall be adjudged by a court of competent jurisdictions to be void or unenforceable for any reason, the same shall not affect any other provision of this Agreement, the application of such provision under circumstances different from those adjudged by the court, or the validity or enforceability of this Agreement as a whole.

2.8Time is of the essence of this Agreement.

2.9The Parties agree to execute any further documents, and take any further actions, as may be reasonable and appropriate in order to carry out the purpose and intent of this Agreement.

2.10As used herein, the masculine, feminine or neuter gender, and the singular and plural numbers, shall each be deemed to include the others whenever and whatever the context so indicates.

			
	
 
	

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SIGNATURE PAGE OF RECOGNITION OF
COVENANTS, CONDITIONS AND RESTRICTIONS

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

"Landlord":

_________________________,

a ________________________

	
 
	
By:
	

	
 
	
Its:
	

 

"Tenant":

	
 
	

	
,

	
 
	
a 
	

	
 
	
By:
	

	
 
	
Its:
	

	
 
	
By:
	

	
 
	
   
	
Its:

 

			
	
 
	

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EXHIBIT G

360 Third Street

FORM OF LETTER OF CREDIT

(Letterhead of a money center bank

acceptable to the Landlord)

 

		
	
FAX NO. [(___) ___-____]
SWIFT:  [Insert No., if any]
	
[Insert Bank Name And Address]

	
 
	
DATE OF ISSUE: 

	
BENEFICIARY:
Kilroy Realty Finance Partnership, L.P.
c/o Kilroy Realty Corporation
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
Attention: Legal Department

Fax:  (310) 481-6530
	
APPLICANT:
[Insert Applicant Name And Address]

	
 
	
LETTER OF CREDIT NO. 

	
EXPIRATION DATE:
 AT OUR COUNTERS
	
AMOUNT AVAILABLE:
USD[Insert Dollar Amount]
(U.S. DOLLARS [Insert Dollar Amount])

LADIES AND GENTLEMEN:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. ___________ IN YOUR FAVOR FOR THE ACCOUNT OF [Insert Tenant's Name], A [Insert Entity Type], UP TO THE AGGREGATE AMOUNT OF USD[Insert Dollar Amount] ([Insert Dollar Amount] U.S. DOLLARS) EFFECTIVE IMMEDIATELY AND EXPIRING ON ___(Expiration Date)___ AVAILABLE BY PAYMENT UPON PRESENTATION OF YOUR DRAFT AT SIGHT DRAWN ON [Insert Bank Name] WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENT(S):

	
1.
	
THE ORIGINAL OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT AND AMENDMENT(S), IF ANY.

	
2.
	
BENEFICIARY'S SIGNED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF BENEFICIARY ("LANDLORD") STATING THE FOLLOWING:

"THE UNDERSIGNED HEREBY CERTIFIES THAT THE LANDLORD, EITHER (A) UNDER THE LEASE (DEFINED BELOW), OR (B) AS A RESULT OF THE TERMINATION OF SUCH LEASE,  HAS THE RIGHT TO DRAW DOWN THE AMOUNT OF USD  IN ACCORDANCE WITH THE TERMS OF THAT CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS THE SAME MAY HAVE BEEN AMENDED (COLLECTIVELY, THE "LEASE"), OR SUCH AMOUNT CONSTITUTES DAMAGES OWING BY THE TENANT TO BENEFICIARY RESULTING FROM THE BREACH OF SUCH LEASE BY THE TENANT THEREUNDER, OR THE TERMINATION OF SUCH LEASE, AND SUCH AMOUNT REMAINS UNPAID AT THE TIME OF THIS DRAWING." 

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT WE HAVE RECEIVED A WRITTEN NOTICE OF [Insert Bank Name]'S ELECTION NOT TO EXTEND ITS STANDBY LETTER OF CREDIT NO. ___________ AND HAVE NOT 

			
	
 
	

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RECEIVED A REPLACEMENT LETTER OF CREDIT WITHIN AT LEAST SIXTY (60) DAYS PRIOR TO THE PRESENT EXPIRATION DATE."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE FULL AMOUNT OF LETTER OF CREDIT NO. ___________ AS THE RESULT OF THE FILING OF A VOLUNTARY PETITION UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE BY THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS THE SAME MAY HAVE BEEN AMENDED (COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN DISMISSED AT THE TIME OF THIS DRAWING."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE FULL AMOUNT OF LETTER OF CREDIT NO. ___________ AS THE RESULT OF AN INVOLUNTARY PETITION HAVING BEEN FILED UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE AGAINST THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS THE SAME MAY HAVE BEEN AMENDED (COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN DISMISSED AT THE TIME OF THIS DRAWING."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE FULL AMOUNT OF LETTER OF CREDIT NO. ________________ AS THE RESULT OF THE REJECTION, OR DEEMED REJECTION, OF THAT CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS THE SAME MAY HAVE BEEN AMENDED, UNDER SECTION 365 OF THE U.S. BANKRUPTCY CODE."

SPECIAL CONDITIONS:

PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS MAY BE MADE UNDER THIS STANDBY LETTER OF CREDIT, PROVIDED, HOWEVER, THAT EACH SUCH DEMAND THAT IS PAID BY US SHALL REDUCE THE AMOUNT AVAILABLE UNDER THIS STANDBY LETTER OF CREDIT.

ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR OTHERWISE, MUST BE COMPLETED AT THE TIME OF DRAWING.

ALL SIGNATURES MUST BE MANUALLY EXECUTED IN ORIGINALS.

ALL BANKING CHARGES ARE FOR THE APPLICANT'S ACCOUNT.

THIS LETTER OF CREDIT EXPIRES AT OUR ABOVE OFFICE ON MAY 16, 2030.  IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR A PERIOD OF ONE YEAR  FROM THE PRESENT OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION DATE WE SEND YOU NOTICE BY NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR ANY SUCH ADDITIONAL PERIOD.  SAID NOTICE WILL BE SENT TO THE ADDRESS INDICATED ABOVE, UNLESS SUCH ADDRESS IS CHANGED BY TRANSFER OF THIS LETTER OF CREDIT TO A TRANSFEREE (AS THAT TERM IS DEFINED BELOW) OR YOU NOTIFY US OF A CHANGE OF ADDRESS IN WRITING BY RECEIPTED MAIL OR COURIER.  ANY NOTICE TO US WILL BE DEEMED EFFECTIVE ONLY UPON ACTUAL RECEIPT BY US AT OUR DESIGNATED OFFICE.  IN NO EVENT, AND WITHOUT FURTHER NOTICE FROM OURSELVES, SHALL THE EXPIRATION DATE BE EXTENDED BEYOND A FINAL EXPIRATION DATE OF MAY 16, 2030 (105 days from the Lease Expiration Date, January 31, 2030).  ANY REFERENCE TO A FINAL EXPIRATION DATE DOES NOT IMPLY THAT WE 

			
	
 
	

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ARE OBLIGATED TO EXTEND THE EXPIRATION DATE BEYOND THE INITIAL OR ANY EXTENDED DATE THEREOF. 

THIS LETTER OF CREDIT MAY BE TRANSFERRED SUCCESSIVELY BUT IN EACH INSTANCE ONLY IN THE FULL AMOUNT AVAILABLE TO BE DRAWN UNDER THE LETTER OF CREDIT AT THE TIME OF SUCH TRANSFER IN FAVOR OF A NOMINATED TRANSFEREE ("TRANSFEREE"), ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE IS IN COMPLIANCE WITH ALL APPLICABLE U.S. LAWS AND REGULATIONS.  AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGINAL AMENDMENT(S) IF ANY, MUST BE SURRENDERED TO US TOGETHER WITH OUR TRANSFER FORM (IN THE FORM ATTACHED AS SCHEDULE 1) AND PAYMENT OF OUR CUSTOMARY TRANSFER FEES, WHICH FEES SHALL BE PAYABLE BY APPLICANT (PROVIDED THAT BENEFICIARY MAY, BUT SHALL NOT BE OBLIGATED TO, PAY SUCH FEES TO US ON BEHALF OF APPLICANT, AND SEEK REIMBURSEMENT THEREOF FROM APPLICANT).  IN CASE OF ANY TRANSFER UNDER THIS LETTER OF CREDIT, THE DRAFT AND ANY REQUIRED STATEMENT MUST BE EXECUTED BY THE TRANSFEREE AND WHERE THE BENEFICIARY'S NAME APPEARS WITHIN THIS STANDBY LETTER OF CREDIT, THE TRANSFEREE'S NAME IS AUTOMATICALLY SUBSTITUTED THEREFOR.

WE ARE SUBJECT TO VARIOUS LAWS, REGULATIONS AND EXECUTIVE AND JUDICIAL ORDERS (INCLUDING ECONOMIC SANCTIONS, EMBARGOES, ANTI-BOYCOTT, ANTI-MONEY LAUNDERING, ANTI-TERRORISM, AND ANTI-DRUG TRAFFICKING LAWS AND REGULATIONS) OF THE U.S. AND OTHER COUNTRIES THAT ARE ENFORCEABLE UNDER APPLICABLE LAW.  WE WILL NOT BE LIABLE FOR OUR REFUSAL OR DELAY TO TRANSFER THIS LETTER OF CREDIT THAT IS REQUIRED BY SUCH LAWS, REGULATIONS, OR ORDERS..

ALL DRAFTS REQUIRED UNDER THIS STANDBY LETTER OF CREDIT MUST BE MARKED: ''DRAWN UNDER [Insert Bank Name] STANDBY LETTER OF CREDIT NO. ___________."

We hereby agree with you that if drafts are presented to [Insert Bank Name] under this Letter of Credit on a business day, and provided that such drafts presented conform to the terms and conditions of this Letter of Credit, payment shall be initiated by us in immediately available funds NOT LATER THAN OUR CLOSE OF BUSINESS ON THE Second SUCCEEDING BUSINESS DAY.  As used in this Letter of Credit, "business day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the state of California are authorized or required by law to close.  If the expiration date for this Letter of Credit shall ever fall on a day which is not a business day then such expiration date shall automatically be extended to the date which is the next business day.

DRAWINGS MAY BE PRESENTED TO US AT OUR ABOVE OFFICE BY HAND DELIVERY OR DELIVERED TO US BY U.S. POSTAL SERVICE MAIL, REGISTERED MAIL OR CERTIFIED MAIL OR BY EXPRESS COURIER OR OVERNIGHT COURIER. DRAWINGS MAY ALSO BE PRESENTED TO US BY FACSIMILE TRANSMISSION TO FACSIMILE NUMBER 844-879-5593 (EACH SUCH DRAWING, A "FAX DRAWING"); PROVIDED, HOWEVER, THAT A FAX DRAWING WILL NOT BE EFFECTIVELY PRESENTED UNTIL YOU CONFIRM BY TELEPHONE OUR RECEIPT OF SUCH FAX DRAWING BY CALLING US AT TELEPHONE NUMBER 1-800-798-2815 (OPTION 1).  IF YOU PRESENT A FAX DRAWING UNDER THIS LETTER OF CREDIT YOU DO NOT NEED TO PRESENT THE ORIGINAL OF ANY DRAWING DOCUMENTS, AND IF WE RECEIVE ANY SUCH ORIGINAL DRAWING DOCUMENTS THEY WILL NOT BE EXAMINED BY US.  IN THE EVENT OF A FULL OR FINAL DRAWING THE ORIGINAL LETTER OF CREDIT MUST BE RETURNED TO US BY OVERNIGHT COURIER.

WE HEREBY ENGAGE WITH YOU THAT ALL DOCUMENT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS STANDBY LETTER OF CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR PAYMENT AT OUR OFFICE LOCATED AT [Insert Bank Name], [Insert Bank Address], ATTN: [Insert Appropriate 

			
	
 
	

-3-
	
 

 

 

Recipient], ON OR BEFORE THE EXPIRATION DATE OF THIS CREDIT, ___((Expiration Date)___.

WE AGREE IN THE EVENT THAT THE ORIGINAL OF THIS LETTER OF CREDIT IS LOST, STOLEN, MUTILATED OR DESTROYED, THAT UPON YOUR REQUEST, WE WILL PROVIDE A REPLACEMENT TO THE ORIGINAL OF THIS LETTER OF CREDIT IN THE FORM OF AN AUTHENTICATED COPY OF THE ORIGINAL LETTER OF CREDIT PROVIDED THAT YOUR REQUEST IS ACCOMPANIED BY YOUR INDEMNIFICATION TO US (IN THE FORM ATTACHED AS SCHEDULE 2) PURPORTEDLY SIGNED BY YOUR AUTHORIZED REPRESENTATIVE) AND OUR CUSTOMARY FEE.  WE FURTHER AGREE THAT FOR PURPOSES OF THIS LETTER OF CREDIT, SUCH AN AUTHENTICATED COPY OF THIS LETTER OF CREDIT SHALL BE CONSIDERED THE ORIGINAL OF THIS LETTER OF CREDIT.

EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE "INTERNATIONAL STANDBY PRACTICES" (ISP 98) INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO. 590). 

 

Very truly yours,

(Name of Issuing Bank)

By:  ______

[ATTACH THE TRANSFER FORM AS SCHEDULE 1 AND THE INDEMNITY FORM AS SCHEDULE 2]

 

			
	
 
	

-4-
	
 

 

 

EXHIBIT H

360 Third Street

MARKET RENT DETERMINATION FACTORS

When determining Market Rent, the following rules and instructions shall be followed.

	
1.
	
RELEVANT FACTORS.  The "Market Rent," as used in this Lease, shall be derived from an analysis (as such derivation and analysis are set forth in this Exhibit H) of the "Net Equivalent Lease Rate," of the "Comparable Transactions" (as those terms are defined below).  The Market Rent, as used in this Lease, shall be equal to the annual rent per rentable square foot, at which tenants, are, pursuant to transactions consummated within twelve (12) months prior to the commencement of the Option Term, provided that timing adjustments shall be made to reflect any changes in the Market Rent following the date of any particular Comparable Transaction up to the date of the commencement of the applicable Option Term, leasing non-sublease, non-encumbered space comparable in location and quality to the Premises containing a square footage comparable to that of the Premises for a term of five (5) years, in an arm's-length transaction, which comparable space is located in "Comparable Buildings" (transactions satisfying the foregoing criteria shall be known as the "Comparable Transactions").  The terms of the Comparable Transactions shall be calculated as a "Net Equivalent Lease Rate" pursuant to the terms of this Exhibit H, and shall take into consideration only the following terms and concessions:  (i) the rental rate and escalations for the Comparable Transactions, (ii) the amount of parking rent per parking permit paid in the Comparable Transactions, if any, (iii) operating expense and tax protection granted in such Comparable Transactions such as a base year or expense stop (although for each such Comparable Transaction the base rent shall be adjusted to a triple net base rent using reasonable estimates of operating expenses and taxes as determined by Landlord for each such Comparable Transaction); (iv) rental abatement concessions, if any, being granted such tenants in connection with such comparable space, (v) any "Renewal Allowance," as defined herein below, to be provided by Landlord in connection with the Option Term as compared to the improvements or allowances provided or to be provided in the Comparable Transactions, taking into account the contributory value of the existing improvements in the Premises, such value to be based upon the age, design, quality of finishes, and layout of the existing improvements, and (vi) all other monetary concessions (including the value of any signage), if any, being granted such tenants in connection with such Comparable Transactions.  Notwithstanding any contrary provision hereof, in determining the Market Rent, no consideration shall be given to (A) any period of rental abatement, if any, granted to tenants in Comparable Transactions in connection with the design, permitting and construction of improvements, or (B) any commission paid or not paid in connection with such Comparable Transaction.  The Market Rent shall include adjustment of the stated size of the Premises based upon the standards of measurement utilized in the Comparable Transactions; provided, however, the size of the Premises shall, notwithstanding the foregoing, be at least equal to the greater of:  (i) the square footages set forth in this Lease, and (ii) the square footage of the Premises determined pursuant to the standards of space measurement used in the Comparable Transactions.  In addition, the Market Rent determination shall take into account the stipulated Base Year for the Option Term as set forth in Section 2.2.4 of the Lease

	
2.
	
TENANT SECURITY.  The Market Rent shall additionally include a determination as to whether, and if so to what extent, (i) Tenant must provide Landlord with financial security, such as a cash security deposit, a letter of credit (or enhanced letter of credit) or guaranty, for Tenant's Rent obligations during the Option Term, and/or (ii) Tenant shall be permitted to reduce the L-C Amount, or no L-C shall be required during the Option Term. In connection with item (ii) in the immediately preceding sentence, if no letter of credit shall be required for the Option Term and if the L-C has not been fully drawn down, then Landlord shall return the L-C to the Bank with a written cancellation request within ten (10) business days after the later of (a) the commencement date of the Option Term, and (b) the date of Tenant's full payment to Landlord of the Base Rent owing for the first full calendar month of the Option Term occurring after the expiration of any free Rent period and any cash security deposit payable by Tenant for the Option Term, and Tenant's delivery to Landlord of the required guaranty, fully signed by the required guarantor.  Notwithstanding the foregoing, in the event that the Option Rent is not determined prior to the commencement of the Option Term, then Landlord shall instead return the L-C to the Bank promptly following the determination of the Option Rent and Tenant's satisfaction of the conditions set forth in item (b) of the immediately preceding sentence.  The determination of Tenant's obligation to provide Landlord with financial security for the Option 

			
	
 
	

-1-
	
 

 

 

		
Term shall be made by reviewing the extent of financial security then generally being imposed in Comparable Transactions from tenants of comparable financial condition and credit history to the then existing financial condition and credit history of Tenant (with appropriate adjustments to account for differences in the then-existing financial condition of Tenant and such other tenants, and giving reasonable consideration to Tenant's prior performance history during the Lease Term).

	
3.
	
RENEWAL IMPROVEMENT ALLOWANCE.  Notwithstanding anything to the contrary set forth in this Exhibit H, once the Market Rent for the Option Term is determined as a Net Equivalent Lease Rate, if, in connection with such determination, it is deemed that Tenant is entitled to an improvement or comparable allowance for the improvement of the Premises, (the total dollar value of such allowance shall be referred to herein as the "Renewal Allowance"), Landlord shall pay the Renewal Allowance to Tenant pursuant to a commercially reasonable disbursement procedure determined by Landlord and the terms of Article 8 of this Lease, and, as set forth in Section 5, below, of this Exhibit H, the rental rate component of the Market Rent shall be increased to be a rental rate which takes into consideration that Tenant will receive payment of such Renewal Allowance and, accordingly, such payment with interest shall be factored into the base rent component of the Market Rent.  

	
4.
	
COMPARABLE BUILDINGS.  For purposes of this Lease, the term "Comparable Buildings" shall mean first-class multi-tenant occupancy office buildings which are comparable to the Building in terms of age (based upon the date of completion of construction or major renovation), quality of construction, level of services and amenities (including, but not limited to, the type (e.g., surface, covered, subterranean) and amount of parking), size and appearance, and are located in the "Comparable Area," which is the "Central Business District of the City of San Francisco."  The "Central Business District of the City of San Francisco" shall be the area containing Comparable Buildings which have reasonably comparable freeway access to the Project and which are within an area by King Street to the south, Market Street to the north, Fourth Street to the west, and The Embarcadero to the east.

	
5.
	
METHODOLOGY FOR REVIEWING AND COMPARING THE COMPARABLE TRANSACTIONS.  For purposes of this Section 5, the term "Comparable Transactions" shall include any proposed transactions with third parties for the First Offer Space (pursuant to Section 1.4 above).  In order to analyze the Comparable Transactions based on the factors to be considered in calculating Market Rent, and given that the Comparable Transactions may vary in terms of length of term, rental rate, concessions, etc., the following steps shall be taken into consideration to "adjust" the objective data from each of the Comparable Transactions.  By taking this approach, a "Net Equivalent Lease Rate" for each of the Comparable Transactions shall be determined using the following steps to adjust the Comparable Transactions, which will allow for an "apples to apples" comparison of the Comparable Transactions.

	
5.1.
	
The contractual rent payments for each of the Comparable Transactions should be arrayed monthly or annually over the lease term.  All Comparable Transactions should be adjusted to simulate a net rent structure, wherein the tenant is responsible for the payment of all property operating expenses in a manner consistent with this Lease.  This results in the estimate of Net Equivalent Rent received by each landlord for each Comparable Transaction being expressed as a periodic net rent payment.

	
5.2
	
Any free rent or similar inducements received over time should be deducted in the time period in which they occur, resulting in the net cash flow arrayed over the lease term.

	
5.3
	
The resultant net cash flow from the lease should then be discounted (using an 8% annual discount rate) to the lease commencement date, resulting in a net present value estimate.

	
5.4
	
From the net present value, up front inducements (improvements allowances and other concessions) should be deducted.  These items should be deducted directly, on a "dollar for dollar" basis, without discounting since they are typically incurred at lease commencement, while rent (which is discounted) is a future receipt.

	
5.5
	
The net present value should then be amortized back over the lease term as a level monthly or annual net rent payment using the same annual discount rate of 8.0% used in the present value analysis.  This calculation will result in a hypothetical level or even payment 

			
	
 
	

-2-
	
 

 

 

		
over the option period, termed the "Net Equivalent Lease Rate" (or constant equivalent in general financial terms).

6.USE OF NET EQUIVALENT LEASE RATES FOR COMPARABLE TRANSACTIONS.  The Net Equivalent Lease Rates for the Comparable Transactions shall then be used to reconcile, in a manner usual and customary for a real estate appraisal process, to a conclusion of Market Rent which shall be stated as a "NNN" lease rate applicable to each year of the Option Term or First Offer Term, as applicable.  To the extent the length of the Comparable Term offered to a third party for the First Offer Space is different than the length of the First Offer Term, then for purposes of determining if the Economic Terms of any First Offer Space offered to such third party are less than ninety-five percent (95%) as favorable to Landlord as the terms offered to Tenant, the Net Equivalent Lease Rate for the Comparable Term shall be compared to the Net Equivalent Lease Rate for the First Offer Term without taking into consideration the differing term lengths, if any.  For example, if the Net Equivalent Lease Rate for a ten (10) year Comparable Term is $2.50 per month and the Net Equivalent Lease Rate for a seven (7) year First Offer Term is equal to $2.60 per month, then the Economic Terms will be deemed to be within five percent (5%) (since $0.10 is 3.85% of $2.60), regardless of the difference in length of term.  

 

 

			
	
 
	

-3-
	
 

 

 

EXHIBIT I

360 THIRD STREET

LOCATION OF GENERATOR AREA

 

 

 

			
	
 
	

-1-
	
 

 

 

OFFICE LEASE

KILROY REALTY

360 THIRD STREET

 

 

 

 

KILROY REALTY FINANCE PARTNERSHIP, L.P.,
a Delaware limited partnership,

as Landlord, 

and

NEKTAR THERAPEUTICS,

a Delaware corporation,

as Tenant.

 

			
	
 
	
 
	
 

 

TABLE OF CONTENTS

Page

	
ARTICLE 1
	
PREMISES, BUILDING, PROJECT, AND COMMON AREAS7
	
 

	
ARTICLE 2
	
LEASE TERM; OPTION TERM13
	
 

	
ARTICLE 3
	
BASE RENT16
	
 

	
ARTICLE 4
	
ADDITIONAL RENT18
	
 

	
ARTICLE 5
	
USE OF PREMISES26
	
 

	
ARTICLE 6
	
SERVICES AND UTILITIES27
	
 

	
ARTICLE 7
	
REPAIRS29
	
 

	
ARTICLE 8
	
ADDITIONS AND ALTERATIONS30
	
 

	
ARTICLE 9
	
COVENANT AGAINST LIENS33
	
 

	
ARTICLE 10
	
INDEMNIFICATION AND INSURANCE33
	
 

	
ARTICLE 11
	
DAMAGE AND DESTRUCTION37
	
 

	
ARTICLE 12
	
NONWAIVER39
	
 

	
ARTICLE 13
	
CONDEMNATION39
	
 

	
ARTICLE 14
	
ASSIGNMENT AND SUBLETTING39
	
 

	
ARTICLE 15
	
SURRENDER OF PREMISES; OWNERSHIP AND  REMOVAL OF TRADE FIXTURES44
	
 

	
ARTICLE 16
	
HOLDING OVER44
	
 

	
ARTICLE 17
	
ESTOPPEL CERTIFICATES; AUDITED FINANCIAL STATEMENTS45
	
 

	
ARTICLE 18
	
SUBORDINATION46
	
 

	
ARTICLE 19
	
DEFAULTS; REMEDIES46
	
 

	
ARTICLE 20
	
COVENANT OF QUIET ENJOYMENT48
	
 

	
ARTICLE 21
	
LETTER OF CREDIT48
	
 

	
ARTICLE 22
	
EMERGENCY GENERATOR52
	
 

	
ARTICLE 23
	
SIGNS; ROOF RIGHTS52
	
 

	
ARTICLE 24
	
COMPLIANCE WITH LAW55
	
 

	
ARTICLE 25
	
LATE CHARGES56
	
 

	
ARTICLE 26
	
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT56
	
 

	
ARTICLE 27
	
ENTRY BY LANDLORD56
	
 

	
ARTICLE 28
	
TENANT PARKING57
	
 

	
ARTICLE 29
	
MISCELLANEOUS PROVISIONS58
	
 

 

			
	
 
	
(i)
	
 

 

 

EXHIBITS

	
EXHIBIT "A" –
	
OUTLINE OF PREMISES

	
EXHIBIT "A-1" –
	
OUTLINE OF EACH FIRST OFFER SPACE

	
EXHIBIT "A-2" –
	
BASE RENT SCHEDULE

	
EXHIBIT "B" –
	
WORK LETTER

	
EXHIBIT "C" –
	
NOTICE OF LEASE TERMS DATES

	
EXHIBIT "D" –
	
RULES AND REGULATIONS

	
EXHIBIT "E" –
	
FORM OF TENANT'S ESTOPPEL CERTIFICATE

	
EXHIBIT "F" –
	
FORM OF RECOGNITION OF COVENANTS, CONDITIONS AND
RESTRICTIONS

	
EXHIBIT "G" –
	
FORM OF LETTER OF CREDIT

	
EXHIBIT "H" –
	
MARKET RENT DETERMINATION FACTORS

	
EXHIBIT "I" –
	
LOCATION OF GENERATOR AREA

 

 

			
	
 
	
(ii)
	
 

 

INDEX

Page(s)

360 Third Street7

Abatement Event29

Accountant25

Additional Failure Notice29

Additional Notice11

Additional Rent18

Advocate Arbitrators.14

all risk35

Alterations30

Applicable Laws55

Approved Working Drawings5

Arbitration Agreement14

ArchitectExhibit B

as built31

Audit Period25

Audited Financial Statement45

Bank49

Bank Prime Loan56

Bankruptcy Code49

Bank's Credit Rating Threshold49

Base Building31

Base Building,31

Base Rent16

Base Rent Abatement17

Base Rent Abatement Periods17

Base Year18

Briefs15

Brokers61

BS/BS Exception30

Builder's Risk32

Building1, 7

Building Common Areas7

Building Hours27

Building Structure29

Building Systems30

Casualty37

CC&Rs27

CodeExhibit B

Code WorkExhibit B

Common Areas7

Communications Equipment54

Comparable AreaExhibit H

Comparable BuildingsExhibit H

Comparable TransactionsExhibit H

Construction DrawingsExhibit B

Contemplated Effective Date42

Contemplated Transfer Space42

ContractExhibit B

ContractorExhibit B

Control43

Coordination FeeExhibit B

Cosmetic Alterations30

Cost Pools23

Delivery Date3

Direct Expenses18

Drawing Change NoticeExhibit B

Economic Terms11

Eligibility Period29

Energy Disclosure Requirements67

			
	
 
	
(iii)
	
 

 

Page(s)

EngineersExhibit B

Environmental Laws64

Environmental Permits64

Estimate24

Estimate Statement24

Estimated Excess24

Excess23

Exercise Notice14

Existing Tenants8

Expense Year18

Final CostsExhibit B

Final RetentionExhibit B

Final Space PlanExhibit B

Final Working Drawings5

First Offer Commencement Date12

First Offer Notice11

First Offer Space10

First Offer Term12

First Rebuttals15

Force Majeure60

General Conditions7

Generator52

Generator Area52

Governmental Approvals53

Gross Rental Revenues21

Hazardous Material(s)64

Holidays27

HVAC27

Identification Requirements64

Improvement AllowanceExhibit B

Improvement Allowance ItemsExhibit B

ImprovementsExhibit B

Initial Notice29

Intention to Transfer Notice41

Interest Rate56

JAMS26

Landlord1

Landlord Parties33

Landlord Repair Notice37

Landlord Response Notice14

Landlord's Initial Statement15

Landlord's Option Rent Calculation14

Landlord's Repair Estimate Notice38

Late Delivery Credit Date10

Late Delivery Credits8

L‐C48

L‐C Amount48

L‐C Draw Event50

L‐C Expiration Date49

L‐C FDIC Replacement Notice50

Lease1

Lease Commencement Date2

Lease Expiration Date13

Lease Term13

Lease Year13

LEED19

Legal Compliance RequirementsExhibit B

Lines63

Management Fee Cap21

Market RentExhibit H

Mortgage46

			
	
 
	
(iv)
	
 

 

Page(s)

Net Equivalent Lease RateExhibit H

Net Worth43

Neutral Arbitrator14

New Offer Terms11

Notices60

Objectionable Name53

occurrence34

OFAC69

Operating Expenses18

Option Rent14

Option Term13

Original Improvements35

Original Tenant13

Other Improvements65

Outside Agreement Date14

Over-Allowance AmountExhibit B

Patriot Act69

Penetrating Work68

Permitted Chemicals64

Permitted Transfer43

Permitted Transferee43

Permitted Transferee Assignee.43

Permitted Use4

Phase2

Phase I Base Rent Abatement16

Phase I Base Rent Abatement Period16

Phase I Delivery Date2

Phase I Lease Commencement Date2

Phase I Premises1

Phase II Base Rent Abatement16

Phase II Base Rent Abatement Period16

Phase II Delivery Date2

Phase II Late Delivery Credit Date9

Phase II Lease Commencement Date2

Phase II Premises1

Phase III Base Rent Abatement17

Phase III Base Rent Abatement Period17

Phase III Delivery Date3

Phase III Late Delivery Credit Date9

Phase III Lease Commencement Date3

Phase III Premises1

Phase IV Base Rent Abatement17

Phase IV Base Rent Abatement Period17

Phase IV Delivery Date3

Phase IV Late Delivery Credit Date9

Phase IV Lease Commencement Date2

Phase IV Premises1

Phase V Base Rent Abatement17

Phase V Base Rent Abatement Period17

Phase V Delivery Date3

Phase V Late Delivery Credit Date9

Phase V Lease Commencement Date3

Phase V Premises1

Phase VI Base Rent Abatement17

Phase VI Base Rent Abatement Period17

Phase VI Delivery Date3

Phase VI Late Delivery Credit Date9

Phase VI Lease Commencement Date3

Phase VI Premises1

Phase VII Delivery Date3

Phase VII Late Delivery Credit Date9

			
	
 
	
(v)
	
 

 

Page(s)

Phase VII Lease Commencement Date3

Phase VII Premises1

Premises2

Prohibited Persons69

Project7

Project Common Areas7

Proposition 1322

Provider66

Renewal AllowanceExhibit H

Renovations63

rent47

Rent.18

Resolution Period26

Right of First Offer10

Roof Deck7

RSF1

Rules and Regulations27

Ruling16

Second Rebuttals15

Second Request31, Exhibit B

Secured Areas57

Security Deposit Laws51

Sensor Areas66

Shuttle Service67

Shuttle Service Riders67

Space Planning AllowanceExhibit B

Specialty Improvements32

Statement23

Subject Space40

Summary1

Superior Leases11

Superior Right Holders11

Superior Rights11

Tax Expenses22

TCCs7

Tenant1

Tenant ChangeExhibit B

Tenant Change Second RequestExhibit B

Tenant Energy Use Disclosure67

Tenant HVAC System29

Tenant Parties33

Tenant's AgentsExhibit B

Tenant's Financial Condition12

Tenant's First Offer Exercise Notice11

Tenant's Initial Statement15

Tenant's Rebuttal Statement15

Tenant's Share23

Tenant's Signage53

Third Party ConsultantExhibit B

Third Party Contractor36

Third Party Lease11

Transfer42

Transfer Notice40

Transfer Premium41

Transferee40

Transfers40

Water Sensors66

Work Letter7

Working Drawing Second RequestExhibit B

 

			
	
 
	
(vi)iots_Ex10_1

		
			Exhibit 10.1
		

		
			 
		

		
			 
		

		
			CREDIT AGREEMENT
		

		
			dated as of
		

		
			May 8, 2018,
		

		
			among
		

		
			ADESTO TECHNOLOGIES CORPORATION,
		

		
			 as Borrower,
		

		
			THE LENDERS PARTY HERETO,
		

		
			CORTLAND CAPITAL MARKET SERVICES LLC,
		

		
			 as Administrative Agent,
		

		
			and
		

		
			OBSIDIAN AGENCY SERVICES, INC.,
		

		
			as Collateral Agent
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

 

		

		
			 
		

		
			Table of Contents
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Page

				
	
					
						ARTICLE I DEFINITIONS

					
1
				
	
					
						 

					
					
						 

				
	
					
						SECTION 1.01.

					
					
						Defined Terms

					
1
				
	
					
						SECTION 1.02.

					
					
						Terms Generally

					
25
				
	
					
						SECTION 1.03.

					
					
						Irish Terms.: 

					
25
				
	
					
						SECTION 1.04.

					
					
						Independence of Covenants. 

					
26
				
	
					
						SECTION 1.05.

					
					
						Construction

					
26
				
	
					
						SECTION 1.06.

					
					
						Pro Forma Compliance

					
26
				
	
					
						SECTION 1.07.

					
					
						Currency

					
26
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE II THE CREDITS

					
27
				
	
					
						 

					
					
						 

				
	
					
						SECTION 2.01.

					
					
						Commitments

					
27
				
	
					
						SECTION 2.02.

					
					
						Loans; Notice of Borrowing

					
27
				
	
					
						SECTION 2.03.

					
					
						Disbursement of Funds

					
27
				
	
					
						SECTION 2.04.

					
					
						Evidence of Debt; Repayment of Loans

					
27
				
	
					
						SECTION 2.05.

					
					
						Fees

					
28
				
	
					
						SECTION 2.06.

					
					
						Interest on Loans

					
29
				
	
					
						SECTION 2.07.

					
					
						Default Interest

					
29
				
	
					
						SECTION 2.08.

					
					
						Termination of Commitments

					
30
				
	
					
						SECTION 2.09.

					
					
						Repayment of Loans

					
30
				
	
					
						SECTION 2.10.

					
					
						Mandatory Prepayments

					
31
				
	
					
						SECTION 2.11.

					
					
						Reserve Requirements; Change in Circumstances

					
33
				
	
					
						SECTION 2.12.

					
					
						Indemnity

					
34
				
	
					
						SECTION 2.13.

					
					
						Pro Rata Treatment

					
34
				
	
					
						SECTION 2.14.

					
					
						Ratable Sharing

					
34
				
	
					
						SECTION 2.15.

					
					
						Payments

					
35
				
	
					
						SECTION 2.16.

					
					
						Taxes

					
35
				
	
					
						SECTION 2.17.

					
					
						Assignment of Loans Under Certain Circumstances; Duty to Mitigate

					
38
				
	
					
						SECTION 2.18.

					
					
						[Reserved]. 

					
39
				
	
					
						SECTION 2.19.

					
					
						Original Issue Discount

					
39
				
	
					
						SECTION 2.20.

					
					
						Investment Unit

					
39
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE III REPRESENTATIONS AND WARRANTIES

					
40
				
	
					
						 

					
					
						 

				
	
					
						SECTION 3.01.

					
					
						Organization; Powers

					
40
				
	
					
						SECTION 3.02.

					
					
						Authorization

					
40
				
	
					
						SECTION 3.03.

					
					
						Enforceability

					
40
				
	
					
						SECTION 3.04.

					
					
						Governmental Approvals

					
40
				
	
					
						SECTION 3.05.

					
					
						Financial Statements

					
41
				
	
					
						SECTION 3.06.

					
					
						Title to Properties; Possession Under Leases

					
41
				
	
					
						SECTION 3.07.

					
					
						Subsidiaries

					
42
				
	
					
						SECTION 3.08.

					
					
						Litigation; Compliance with Laws

					
43
				
	
					
						SECTION 3.09.

					
					
						Contractual Obligations

					
43
				
	
					
						SECTION 3.10.

					
					
						Federal Reserve Regulations

					
43
				
	
					
						SECTION 3.11.

					
					
						Government Regulation

					
44
				

		
			 
		

		
			
		

		
			

		 

		

			i

		

 

		

		
			 
		

		
			Table of Contents
		

		
			(continued)
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						SECTION 3.12.

					
					
						Use of Proceeds

					
44
				
	
					
						SECTION 3.13.

					
					
						Tax Returns; Passive Foreign Investment Company

					
44
				
	
					
						SECTION 3.14.

					
					
						No Material Misstatements

					
44
				
	
					
						SECTION 3.15.

					
					
						Employee Benefit Plans

					
45
				
	
					
						SECTION 3.16.

					
					
						Environmental Matters

					
45
				
	
					
						SECTION 3.17.

					
					
						Insurance

					
45
				
	
					
						SECTION 3.18.

					
					
						Security Documents

					
45
				
	
					
						SECTION 3.19.

					
					
						Location of Real Property and Leased Premises

					
46
				
	
					
						SECTION 3.20.

					
					
						Labor Matters

					
46
				
	
					
						SECTION 3.21.

					
					
						Solvency

					
46
				
	
					
						SECTION 3.22.

					
					
						Transaction Documents

					
47
				
	
					
						SECTION 3.23.

					
					
						Sanctioned Persons

					
47
				
	
					
						SECTION 3.24.

					
					
						Financial Advisors

					
47
				
	
					
						SECTION 3.25.

					
					
						Foreign Assets Control Regulations, Etc

					
47
				
	
					
						SECTION 3.26.

					
					
						Representations and Warranties

					
48
				
	
					
						SECTION 3.27.

					
					
						Deposit Accounts; Securities Accounts

					
48
				
	
					
						SECTION 3.28.

					
					
						Loans to Officers and Directors

					
48
				
	
					
						SECTION 3.29.

					
					
						Customers

					
48
				
	
					
						SECTION 3.30.

					
					
						Accounts and Notes Receivable; Accounts and Notes Payable

					
48
				
	
					
						SECTION 3.31.

					
					
						Internal Controls

					
48
				
	
					
						SECTION 3.32.

					
					
						Intellectual Property; Copyright Matters

					
48
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE IV CONDITIONS OF LENDING

					
49
				
	
					
						 

					
					
						 

				
	
					
						SECTION 4.01.

					
					
						Conditions Precedent to Closing

					
49
				
	
					
						SECTION 4.02.

					
					
						Post Closing Obligations

					
54
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE V AFFIRMATIVE COVENANTS

					
56
				
	
					
						 

					
					
						 

				
	
					
						SECTION 5.01.

					
					
						Existence; Compliance with Laws; Businesses and Properties

					
56
				
	
					
						SECTION 5.02.

					
					
						Insurance

					
56
				
	
					
						SECTION 5.03.

					
					
						Obligations and Taxes

					
57
				
	
					
						SECTION 5.04.

					
					
						Financial Statements, Reports, etc

					
57
				
	
					
						SECTION 5.05.

					
					
						Litigation and Other Notices

					
60
				
	
					
						SECTION 5.06.

					
					
						Information Regarding Collateral

					
60
				
	
					
						SECTION 5.07.

					
					
						Maintaining Records; Access to Properties and Inspections

					
61
				
	
					
						SECTION 5.08.

					
					
						Use of Proceeds

					
61
				
	
					
						SECTION 5.09.

					
					
						Employee Benefits

					
61
				
	
					
						SECTION 5.10.

					
					
						Compliance with Environmental Laws

					
61
				
	
					
						SECTION 5.11.

					
					
						Preparation of Environmental Reports

					
61
				
	
					
						SECTION 5.12.

					
					
						Further Assurances

					
62
				
	
					
						SECTION 5.13.

					
					
						Change of Control Provisions

					
63
				
	
					
						SECTION 5.14.

					
					
						Intellectual Property

					
63
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VI NEGATIVE COVENANTS

					
63
				

		
			 
		

		
			
		

		
			

		 

		

			ii

		

 

		

		
			 
		

		
			Table of Contents
		

		
			(continued)
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						SECTION 6.01.

					
					
						Indebtedness

					
64
				
	
					
						SECTION 6.02.

					
					
						Liens

					
65
				
	
					
						SECTION 6.03.

					
					
						Sale and Lease‐Back Transactions

					
68
				
	
					
						SECTION 6.04.

					
					
						Investments

					
68
				
	
					
						SECTION 6.05.

					
					
						Consolidations, Dispositions of Assets and Acquisitions

					
70
				
	
					
						SECTION 6.06.

					
					
						Restricted Payments; Restrictive Agreements

					
72
				
	
					
						SECTION 6.07.

					
					
						Transactions with Affiliates

					
73
				
	
					
						SECTION 6.08.

					
					
						Borrower and Subsidiaries

					
73
				
	
					
						SECTION 6.09.

					
					
						Other Indebtedness and Agreements, etc

					
73
				
	
					
						SECTION 6.10.

					
					
						[Reserved] 

					
73
				
	
					
						SECTION 6.11.

					
					
						[Reserved] 

					
73
				
	
					
						SECTION 6.12.

					
					
						Maximum Consolidated Leverage Ratios

					
74
				
	
					
						SECTION 6.13.

					
					
						Minimum Liquidity

					
74
				
	
					
						SECTION 6.14.

					
					
						Fiscal Year

					
74
				
	
					
						SECTION 6.15.

					
					
						Certain Equity Securities

					
74
				
	
					
						SECTION 6.16.

					
					
						Amendments or Waivers of Documents Relating to Organizational Documents, Equity Interests and Acquisition Agreement

					
74
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VII EVENTS OF DEFAULT

					
75
				
	
					
						 

					
					
						 

				
	
					
						SECTION 7.01.

					
					
						Events of Default

					
75
				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

					
78
				
	
					
						 

					
					
						 

				
	
					
						ARTICLE IX MISCELLANEOUS

					
81
				
	
					
						 

					
					
						 

				
	
					
						SECTION 9.01.

					
					
						Notices

					
81
				
	
					
						SECTION 9.02.

					
					
						Survival of Agreement

					
82
				
	
					
						SECTION 9.03.

					
					
						Binding Effect

					
82
				
	
					
						SECTION 9.04.

					
					
						Successors and Assigns

					
82
				
	
					
						SECTION 9.05.

					
					
						Expenses; Indemnity

					
85
				
	
					
						SECTION 9.06.

					
					
						Right of Setoff

					
86
				
	
					
						SECTION 9.07.

					
					
						Applicable Law

					
87
				
	
					
						SECTION 9.08.

					
					
						Waivers; Amendment

					
87
				
	
					
						SECTION 9.09.

					
					
						Interest Rate Limitation

					
87
				
	
					
						SECTION 9.10.

					
					
						Entire Agreement

					
88
				
	
					
						SECTION 9.11.

					
					
						Waiver of Jury Trial

					
88
				
	
					
						SECTION 9.12.

					
					
						Judgment Currency

					
88
				
	
					
						SECTION 9.13.

					
					
						Severability

					
89
				
	
					
						SECTION 9.14.

					
					
						Counterparts

					
89
				
	
					
						SECTION 9.15.

					
					
						Headings

					
89
				
	
					
						SECTION 9.16.

					
					
						Jurisdiction; Consent to Service of Process

					
89
				
	
					
						SECTION 9.17.

					
					
						Confidentiality

					
89
				
	
					
						SECTION 9.18.

					
					
						USA PATRIOT Act Notice

					
90
				

		
			 
		

		
			
		

		
			

		 

		

			iii

		

 

		

		
			 
		

			
					
						SCHEDULES

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Schedule 1.01(a)

					
					
						‐

					
					
						Subsidiary Guarantors

				
	
					
						Schedule 1.01(b)

					
					
						‐

					
					
						Existing Debt to Be Repaid

				
	
					
						Schedule 2.01

					
					
						‐

					
					
						Lenders and Commitments

				
	
					
						Schedule 3.07(a)

					
					
						‐

					
					
						Capitalization of Borrower and its Subsidiaries

				
	
					
						Schedule 3.07(b)

					
					
						‐

					
					
						Capital Stock of Borrower, Options, Warrants, etc.

				
	
					
						Schedule 3.16

					
					
						‐

					
					
						Environmental Matters

				
	
					
						Schedule 3.17

					
					
						‐

					
					
						Insurance

				
	
					
						Schedule 3.18(a)

					
					
						‐

					
					
						UCC Filing Offices

				
	
					
						Schedule 3.19(a)

					
					
						‐

					
					
						Owned Real Property

				
	
					
						Schedule 3.19(b)

					
					
						‐

					
					
						Leased Real Property

				
	
					
						Schedule 3.24

					
					
						‐

					
					
						Financial Advisors

				
	
					
						Schedule 3.29

					
					
						 

					
					
						Major Customers

				
	
					
						Schedule 3.27

					
					
						‐

					
					
						Deposit Accounts and Securities Accounts

				
	
					
						Schedule 3.30(b)

					
					
						‐

					
					
						Accounts Payable and Notes Payable

				
	
					
						Schedule 6.01

					
					
						‐

					
					
						Existing Indebtedness

				
	
					
						Schedule 6.02

					
					
						‐

					
					
						Existing Liens

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						EXHIBITS

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Exhibit A

					
					
						‐

					
					
						Form of Notice of Borrowing

				
	
					
						Exhibit B

					
					
						‐

					
					
						Form of Solvency Certificate

				
	
					
						Exhibit C

					
					
						‐

					
					
						Form of Note

				
	
					
						Exhibit D

					
					
						‐

					
					
						Form of Administrative Questionnaire

				
	
					
						Exhibit E

					
					
						‐

					
					
						Form of Assignment and Acceptance

				
	
					
						Exhibit F

					
					
						‐

					
					
						Form of Guarantee and Collateral Agreement

				
	
					
						Exhibit H

					
					
						‐

					
					
						Form of Warrant

				
	
					
						Exhibit I

					
					
						‐

					
					
						Form of Warrant Agreement

				

		
			 
		

		
			 
		

		
			

		 

		

			iv

		

 

		

		
			 
		

		
			CREDIT AGREEMENT
		

		
			This CREDIT AGREEMENT is dated as of May 8, 2018 and entered into by and among Adesto Technologies Corporation, a Delaware corporation (the “Borrower”), the Lenders (as defined in Article I), Cortland Capital Market Services LLC (“Cortland”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns, the “Administrative Agent”) and, Obsidian Agency Services, Inc. (“Obsidian”), as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns, the “Collateral Agent”).
		

		
			PRELIMINARY STATEMENT
		

		
			The Borrower desires that the Lenders extend certain credit facilities to the Borrower (i) to finance the Acquisition, (ii) to effectuate the Existing Debt Refinancing, (iii) to pay fees, costs and expenses (including, without limitation, attorney’s fees) incurred in connection with the Transactions (“Transaction Expenses”) and (iv) to finance working capital and other general corporate purposes of the Borrower and its Subsidiaries.
		

		
			The Lenders have agreed to extend term loans to the Borrower for such purposes.
		

		
			The Borrower desires to secure all of the Obligations hereunder and under the other Loan Documents by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority Lien on substantially all of its real, personal and mixed property, including a pledge of the capital stock of each of its Subsidiaries, as and to the extent provided herein and in the other Loan Documents.
		

		
			Certain of the Borrower’s Subsidiaries have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority Lien on substantially all of their respective real, personal and mixed property, including a pledge of the Equity Interests of each of their respective Subsidiaries, as and to the extent provided herein and in the other Loan Documents.
		

		
			The Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as follows:
		

		
			ARTICLE I
		

		
			 
		

		
			Definitions
		

		
			SECTION 1.01.     Defined Terms.
		

		
			As used in this Agreement, the following terms shall have the meanings specified below:
		

		
			“Acquired Entity” shall have the meaning assigned to such term in Section 6.04(xiii).
		

		
			“Acquisition” shall mean the purchase of certain Equity Interests of the Target by the Borrower and the consummation of the other transactions contemplated by the Transaction Documents, in each case, in accordance with the Transaction Documents.
		

		
			“Acquisition Agreement” shall mean that certain Share Purchase Agreement dated as of May 8, 2018 among Borrower and the sellers party thereto, as amended, restated, supplemented or otherwise modified in accordance with the terms thereof and hereof.
		

		
			
		

		
			

		 

 

		

		
			 
		

		
			“Acquisition Earnout”  shall means, with respect to the Acquisition or any Permitted Acquisition, all obligations of the Borrower or any Subsidiary thereof to make earn out or other contingency payments (including milestone payments, purchase price adjustments or any similar contingent payment obligation calculated by reference to the performance of business or assets acquired pursuant to such Acquisition or Permitted Acquisition) pursuant to the documentation relating to such Acquisition or Permitted Acquisition.  For purposes of determining the aggregate consideration paid for such an Acquisition, the amount of any earn out obligations shall be deemed to be the maximum amount of the earn out and other contingency payments in respect thereof as specified in the documents relating to such Acquisition or Permitted Acquisition.
		

		
			“Administrative Agent” shall have the meaning assigned to such term in the Preamble.
		

		
			“Administrative Agent Fees” shall have the meaning assigned to such term in Section 2.05(a).
		

		
			“Administrative Questionnaire” shall mean an Administrative Questionnaire in the form of Exhibit D, or such other form as may be supplied from time to time by the Administrative Agent.
		

		
			“Affiliate” shall mean, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided,  however, that, for purposes of Section 6.07, the term “Affiliate” shall also include any Person that directly or indirectly owns 10% or more of any class of Equity Interests of the Person specified or that is an officer or director of the Person specified.
		

		
			“Agents” shall have the meaning assigned to such term in Article VIII.
		

		
			“Agreement” shall mean this Credit Agreement.
		

		
			“Alternate Base Rate” means, for any day, a fluctuating rate of interest per annum equal to the highest of:
		

		
			(i)          the Prime Rate in effect on such day;
		

		
			(ii)         the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1.0% per annum; and
		

		
			(iii)       the Libor Rate plus 1%.
		

		
			Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Libor Rate shall be effective from and including the effective day of such change in the Prime Rate, the Federal Funds Effective Rate or the Libor Rate, respectively.
		

		
			The Alternate Base Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer of any Agent or any Lender.  Interest calculated pursuant to clause (i) above will be determined based on a year of 365 days or 366 days, as applicable and actual days elapsed.  Interest calculated pursuant to clauses (ii) and (iii) above will be determined based on a year of 360 days and actual days elapsed.
		

		
			“Alternate Base Rate Loans” shall mean any Loan that bears interest at a rate determined by reference to the Alternate Base Rate.
		

		
			“Applicable Prepayment Premium” has the meaning assigned to such term in Section 2.05(c).
		

		
			
		

		
			

		 

		

			2

		

 

		

		
			 
		

		
			“Appointee” shall have the meaning assigned to such term in Section 5.16.
		

		
			“Asset Sale” shall mean the Disposition by the Borrower or any Subsidiary to any Person other than the Borrower or any Subsidiary Guarantor of (i) any of the Equity Interests of any of the Borrower’s Subsidiaries, (ii) substantially all of the assets of any division or line of business of the Borrower or any of its Subsidiaries, or (iii) any other assets (whether tangible or intangible) of the Borrower or any of its Subsidiaries, including the granting of licenses in respect of Intellectual Property with a term of five (5) years or more (other than (a) inventory sold in the ordinary course of business, (b) Dispositions of accounts in the ordinary course of business for purposes of collection, (c) non-exclusive licenses to firmware in connection with the sale of products in the ordinary course and licenses granted to persons providing manufacturing, packaging or testing services in the ordinary course of business in connection with such services, and (d) any other assets to the extent that (x) the aggregate value of such assets Disposed of in any single transaction or related series of transactions is equal to $250,000 or less and (y) the aggregate value of assets disposed in reliance on the foregoing clause (x) does not exceed $500,000 in any fiscal year); provided that (1) a Casualty Event, the issuance of Equity Interests of any Loan Party or Subsidiary of a Loan Party shall not constitute an Asset Sale, (2) the events set forth in clauses (iv), (vi), (vii), (viii), (ix), (xi), (xii), (xiii), (xiv) and (xv) of Section 6.05 shall not constitute an “Asset Sale” and shall not be included in “Net Asset Sale Proceeds” and (3) licenses granted by Adesto Technologies Corporation and its Subsidiaries (but excluding S3 Semiconductors and its Subsidiaries and such other Subsidiaries acquired pursuant to a Permitted Acquisition following the Closing Date as may be reasonably agreed to by the Collateral Agent (such agreement not to be unreasonably withheld)) in respect of Intellectual Property with a term of five (5) years or more shall not constitute “Asset Sales” and shall not be included in “Net Asset Sale Proceeds” to the extent the aggregate value or revenue generated in respect thereof does not exceed $5,000,000 after the Closing Date and (4) licenses granted by S3 Semiconductors and its Subsidiaries (and such other Subsidiaries acquired pursuant to a Permitted Acquisition following the Closing Date as may be reasonably agreed to by the Collateral Agent (such agreement not to be unreasonably withheld) in respect of Intellectual Property with a term of five (5) years or more shall not constitute “Asset Sales” and shall not be included in “Net Asset Sale Proceeds”.
		

		
			“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent and the Collateral Agent, in the form of Exhibit E or such other form as shall be approved by the Administrative Agent and the Collateral Agent.
		

		
			“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.
		

		
			“Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America.
		

		
			“Borrower” shall have the meaning assigned to such term in the Preamble.
		

		
			“Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New York, New York or Los Angeles, California are authorized or required by law to close, and shall include any Business Day on which dealings in U.S. Dollars between banks may be carried on in London, England and New York, New York.
		

		
			“Capital Expenditures” shall mean, for any period, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or should be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP, (b) Capital Lease Obligations or Synthetic Lease Obligations incurred by the Borrower and its consolidated Subsidiaries during such period, and (c) to the extent not covered by
		

		
			
		

		
			

		 

		

			3

		

 

		

		
			 
		

		
			clauses (a) and (b) of this definition, the aggregate of all expenditures by the Borrower and its Subsidiaries during that period (x) to purchase or develop computer software or systems (whether or not such expenditures are capitalized on the consolidated balance sheet of the Borrower and its Subsidiaries in conformity with GAAP) or (y) to acquire (by purchase or otherwise) the business, property or fixed assets of any Person, or the stock or other evidence of beneficial ownership of any Person that, as a result of such acquisition, becomes a Subsidiary of the Borrower; provided that Capital Expenditures shall not include (i) the Acquisition or any Permitted Acquisition, or (ii) any such expenditure made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with insurance proceeds, condemnation awards or damage recovery proceeds relating to any such damage, loss, destruction or condemnation.
		

		
			“Capital Lease Obligations” of any Person shall mean the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
		

		
			“Casualty Event” shall mean any event or occurrence described in clauses (i)(a) and/or (i)(b) of the definition of “Net Insurance/Condemnation Proceeds”.
		

		
			“Change in Control” shall mean the occurrence of any of the following:
		

		
			(a)         the direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Borrower and the Subsidiaries, taken as a whole, to any Person;
		

		
			(b)         after the Closing Date, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Closing Date) shall have acquired beneficial ownership, directly or indirectly, of Equity Interests of the Borrower (or other Equity Interests convertible into such Equity Interests) representing 35% or more of the combined voting power of all Equity Interests of the Borrower entitled to vote in the election of members of the Governing Body of the Borrower, other than Equity Interests having such power only by reason of the happening of a contingency; or
		

		
			(c)         the failure at any time of the Borrower, directly or indirectly, beneficially own and Control 100% on a fully diluted basis of the issued and outstanding Equity Interests of Target and each of the Borrower’s other Subsidiaries, in each case, free and clear of any Liens, rights, options, warrants or similar agreements or understandings, other than Liens in favor of the Collateral Agent created pursuant to the Security Documents.
		

		
			As used herein, the term “beneficially own” or “beneficial ownership” shall have the meaning set forth in the Exchange Act and the rules and regulations promulgated thereunder
		

		
			“Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.11, by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives issued thereunder or in connection therewith and (y) all requests, rules, guidelines
		

		
			
		

		
			

		 

		

			4

		

 

		

		
			 
		

		
			or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the day enacted, adopted, issued or implemented.
		

		
			“Charges” shall have the meaning assigned to such term in Section 9.09.
		

		
			“Closing Date” shall mean the date on which the Loans are made.
		

		
			“Closing Date Joinders” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.
		

		
			“Closing Date Projections” shall have the meaning assigned to such term in Section 4.01(e).
		

		
			“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
		

		
			“Collateral” shall mean all the real, personal, and mixed property in which Liens are purported to be granted pursuant to the Security Documents, including all “Collateral” (as defined therein) and Mortgaged Properties.
		

		
			“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, distributor, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Loan Party’s books and records, equipment, or Inventory, in each case, in form and substance reasonably satisfactory to the Collateral Agent.
		

		
			“Collateral Agent” shall have the meaning assigned to such term in the Preamble.
		

		
			“Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Loans hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Commitment, as applicable.  The initial aggregate amount of the Lenders’ Commitments is $35,000,000.
		

		
			“Commitment Percentage” of any Lender at any time shall mean a fraction (expressed as a percentage) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the total Commitments of all Lenders at such time.
		

		
			 “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period plus
		

		
			(a)         without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) Transaction Expenses, (v) unusual, extraordinary and non‐recurring charges or losses for such period,  including with respect to the Acquisition or any Permitted Acquisition,  provided that the amount of any such cash charges or cash losses shall not exceed $250,000 in the aggregate for such period, (vi) non‐cash charges for such period representing any impairment charge or asset write‐off related to intangible assets in accordance with FASB Statement 142 (to the extent that such charges do not represent a write‐down of a right to receive future payment or other consideration, and excluding non‐cash items that represent an accrual of or reserve for potential cash expenditures in any future period or amortization of a prepaid cash item that was paid in a prior period), (vii) reasonable fees and costs arising from any amendments, waivers, consents and
		

		
			
		

		
			

		 

		

			5

		

 

		

		
			 
		

		
			other agreements entered into in connection with this Agreement and the other Loan Documents after the Closing Date, (viii) discretionary non‐cash bonus and other non‐cash compensation expenses in the form of common Equity Interests for such period, (ix) fees, costs and expenses paid during such period in connection with Investments permitted by the Loan Documents, including in connection with any Permitted Acquisition (to the extent consummated),  (x) fees, costs and expenses paid during such period in connection with Investments permitted by the Loan Documents, including in connection with any proposed Permitted Acquisition that is not consummated in an aggregate amount not to exceed $500,000 for such period, (xi) all non cash losses, including non cash adjustments resulting from the application of purchase accounting,  (xii) expenses with respect to liability or casualty events or business interruption to the extent covered and reimbursed or advanced during or prior to the relevant period by insurance, excluding the amount of any such insurance payments that are included in the calculation of Consolidated Net Income, (xiii) restructuring or integration costs or charges in an aggregate amount, when taken together with the add-back described in clause (xiv), not to exceed $500,000 for such period, (xv) net cost savings, expense reductions and cost-related synergies expected from synergies associated with the Acquisition or any Permitted Acquisition that are reasonably identifiable and factually supportable and projected by the Borrower in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) within twelve (12) months after consummation of the Acquisition or such Permitted Acquisition, calculated on a pro forma basis in an aggregate amount, when taken together with the add-back described in clause (xiii), not to exceed $500,000 for such period, (xvi) any non-cash loss attributed to mark to market movement in the valuation of hedging obligations (to the extent the cash impact resulting from such loss shall not have been realized), and (xvii) non-cash foreign exchange translation losses, minus
		

		
			(b)         without duplication and to the extent included in determining such Consolidated Net Income, (i) consolidated interest income for such period, (ii) all cash payments made during such period on account of reserves, restructuring charges and other non‐cash charges added to Consolidated Net Income pursuant to clauses (a)(v) or (a)(vi) above in a previous period, (iii) income tax credits (to the extent not netted from income tax expenses), (iv) any extraordinary or non‐recurring gains for such period, (v) any non-cash gain attributed to mark to market movement in the valuation of hedging obligations (to the extent the cash impact resulting from such gain shall not have been realized), (vi) any non-cash foreign exchange translation gains, and (vii) all non cash income or gains, including non cash adjustments resulting from the application of purchase accounting, all determined on a consolidated basis in accordance with GAAP.
		

		
			For the purposes of calculating Consolidated Revenue or Consolidated EBITDA, as applicable, for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated Revenue Leverage Ratio or Consolidated EBITDA Leverage Ratio, (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated Revenue or Consolidated EBITDA, as applicable, for such Reference Period shall be reduced by an amount equal to the Consolidated Revenue (if positive) or the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated Revenue (if negative) or the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, in each case determined as if such Material Disposition occurred on the first day of such Reference Period, and to the extent the proceeds of such Material Disposition are used to repay any Indebtedness, such repayment shall be deemed to have occurred on the first day of such Reference Period and interest expenses shall be appropriately reduced to give effect thereto for such Reference Period and (ii) if at any time during such Reference Period the Borrower or any Subsidiary shall have made consummated a Permitted Acquisition, the Consolidated Revenue or Consolidated EBITDA, as applicable, for such Reference Period shall be increased by an
		

		
			
		

		
			

		 

		

			6

		

 

		

		
			 
		

		
			amount equal to the Consolidated Revenue (if positive) or the Consolidated EBITDA (if positive) attributable to such Permitted Acquisition for such Reference Period or decreased by an amount equal to the Consolidated Revenue (if negative) or the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, in each case determined as if such Permitted Acquisition on the first day of such Reference Period.  As used in this definition, “Material Disposition” shall mean any Disposition of property or series of related Dispositions of property that yield gross proceeds to the Borrower or any of its Subsidiaries in excess of $500,000.
		

		
			“Consolidated EBITDA Leverage Ratio” shall mean, on any date, the ratio of Total Debt outstanding on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such date.
		

		
			“Consolidated Interest Expense” shall mean, for any period, the sum of (a) the interest expense (including imputed interest expense in respect of Capital Lease Obligations and Synthetic Lease Obligations) of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus (b) any interest accrued during such period in respect of Indebtedness of the Borrower or any of its Subsidiaries that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP.  For purposes of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by the Borrower or any of its Subsidiaries with respect to interest rate Hedging Agreements.
		

		
			“Consolidated Net Income” shall mean, for any period, the net income or loss of the Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by the Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Borrower or any Subsidiary (other than the acquisition by the Borrower of the Target), (c) the income of any Person attributable to minority interests in such Person solely to the extent of the amount of dividends or other distributions actually paid to such minority interests, (d) any after‐tax gains or losses attributable to Asset Sales, or returned surplus assets of any pension plan, and (e) the net income or loss for such period shall not include the cumulative effect of a change in accounting principles during such period.
		

		
			“Consolidated Revenue” shall mean, for any period, the total revenue of the Borrower and its Subsidiaries on a consolidated basis determined in a manner consistent with GAAP, for such period (subject to the last paragraph of the definition of “Consolidated EBITDA”); provided that, notwithstanding anything to the contrary contained herein, for each of the fiscal quarters ending on the date set forth below, total revenue for such fiscal quarter shall be deemed to be the amount set forth below opposite such fiscal quarter:
		

		
			 
		

			
					
						Fiscal Quarter

					
					
						    

					
					
						Total Revenue

					
					
						 

				
	
					
						June 30, 2017

					
					
						 

					
					
						$

					
					
						16,263,000 

					
					
						 

				
	
					
						September 30, 2017

					
					
						 

					
					
						$

					
					
						18,586,000 

					
					
						 

				
	
					
						December 31, 2017

					
					
						 

					
					
						$

					
					
						19,749,000 

					
					
						 

				
	
					
						March 31, 2018

					
					
						 

					
					
						$

					
					
						17,813,000 

					
					
						 

				

		
			 
		

		
			“Consolidated Revenue Leverage Ratio” shall mean, on any date, the ratio of Total Debt outstanding on such date to Consolidated Revenue for the period of four consecutive fiscal quarters ended on such date.
		

		
			
		

		
			

		 

		

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			“Contingent Obligation”, as applied to any Person, shall mean any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any acceptance, letter of credit or surety bond or similar instrument issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings, or (iii) under Hedging Agreements.  Contingent Obligations shall include (a) the direct or indirect Guarantee, endorsement (otherwise than for collection or deposit in the ordinary course of business), co‐making, discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take or‐pay or similar payments if required regardless of non‐performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence and Contingent Obligations shall exclude (A) endorsements for collection or deposit in the ordinary course of business, (B) customary indemnity obligations in effect on the Closing Date or entered into in connection with any Investment or acquisition or disposition of Equity Interests permitted under this Agreement or the other Loan Documents, (C) product warranties or other similar contingent obligations given or incurred in the ordinary course of business and (D) ordinary course performance guarantees.  The amount of any liability in respect of a Hedging Agreement shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Hedging Agreement had terminated at the end of such fiscal quarter.  In making such determination, if any agreement relating to such Hedging Agreement provides for the netting of amounts payable by and to such Person thereunder or if such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined, in each case to the extent that such agreement is legally enforceable in Insolvency Proceedings against the applicable counterparty thereof.  The amount of any other Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.
		

		
			“Contractual Obligation” shall mean, as applied to any Person, any provision of any Equity Interest issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or subject.
		

		
			“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
		

		
			“Control Agreement” shall mean an agreement, satisfactory in form and substance to the Collateral Agent and executed by the financial institution or securities intermediary at which a Deposit Account or a Securities Account, as the case may be, is maintained, pursuant to which such financial institution or securities intermediary confirms and acknowledges the Collateral Agent’s security interest in such account, and agrees that the financial institution or securities intermediary, as the case may be, will comply with instructions or entitlement orders, as applicable, originated by the Collateral Agent as to disposition of funds in such account, without further consent by the Borrower or any Subsidiary; provided, that the Collateral
		

		
			
		

		
			

		 

		

			8

		

 

		

		
			 
		

		
			Agent shall only deliver instructions or entitlement orders when an Event of Default has occurred and is continuing.
		

		
			“Copyright Act” shall mean Title 17 of the United States Code, including the Copyright Act of 1976, and all rules and regulations issued or promulgated thereunder, all as amended and in effect from time to time.
		

		
			“Declined Proceeds” shall have the meaning assigned to such term in Section 2.10(h).
		

		
			“Default” shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.
		

		
			“Deposit Account” shall mean a demand, time, savings, passbook or similar account maintained with a Person engaged in the business of banking, including savings bank, savings and loan association, credit union or trust of the Borrower or as otherwise defined in the UCC.
		

		
			“Disposition” shall mean with respect to any property, any sale, lease, sublease, sale and leaseback, assignment, conveyance, transfer, license or other disposition thereof.  The terms “Dispose” and “Disposed of” shall have correlative meanings.
		

		
			“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the date that is one year and one day following the Maturity Date; or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time on or prior to the date that is one year and one day following the Maturity Date.
		

		
			“Dollars” or “$” shall mean lawful money of the United States of America.
		

		
			“Domestic Subsidiary” shall mean any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia.
		

		
			“ECF Prepayment Date” shall have the meaning specified in Section 2.10(a).
		

		
			“Eligible Assignee” shall mean (i) any Lender, any Affiliate of any Lender and any Related Fund of any Lender; and (ii) (a) a commercial bank organized under the laws of the United States or any state thereof; (b) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (c) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided that (1) such bank is acting through a branch or agency located in the United States or (2) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (d) any other entity that is an “accredited investor” (as defined in Regulation D under the Securities Act) that extends credit or buys loans as one of its businesses including insurance companies, mutual funds and lease financing companies; provided that none of the Borrower or any Affiliate of the Borrower shall be an Eligible Assignee.
		

		
			
		

		
			

		 

		

			9

		

 

		

		
			 
		

		
			“Employee Benefit Plan” shall mean, at any time, an employee benefit plan, as defined in Section 3(3) of ERISA, which the Borrower or any ERISA Affiliate maintains, contributes to or has an obligation to contribute.
		

		
			“Environmental Laws” shall mean all current and future Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders), and agreements in each case, relating to protection of the environment, natural resources, human health and safety or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.
		

		
			“Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non‐compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
		

		
			“Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.
		

		
			“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.
		

		
			“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with the Borrower, is, or was within the last six preceding plan years, treated as a single employer under Section 414(b) or (c) of the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the Code, is, or was within the last six preceding plan years, treated as a single employer under Section 414 of the Code.
		

		
			“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30‐day notice period is waived), (b) any failure by any Plan to satisfy the minimum funding standards (within the meaning of Section 412 or 430 of the Code) or Section 302 of ERISA, in each case whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (e) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan or the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, (f) the imposition of a lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate , (g) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA, (h) the occurrence of a “prohibited transaction” with respect to which the Borrower or any of the Subsidiaries is a “disqualified person” (within the meaning of
		

		
			
		

		
			

		 

		

			10

		

 

		

		
			 
		

		
			Section 4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise incur a material liability, (i) the incurrence by the Borrower or any of its ERISA Affiliates of any liability pursuant to Section 4063 or 4064 of ERISA, (j) the imposition of liability on the Borrower or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA or (k) a Plan is in “at risk” status within the meaning of Section 430(i) of the Code, or (l) a Multiemployer Plan is in “endangered status” or “critical status” within the meaning of Section 432(b) of the Code.
		

		
			 “Events of Default” shall have the meaning assigned to such term in Article VII.
		

		
			“Excess Cash Flow” shall mean, without duplication, with respect to any fiscal year (or portion thereof) of the Borrower and its Subsidiaries, Consolidated Net Income plus (a) depreciation, amortization, Consolidated Interest Expense and all other non‐cash charges to the extent deducted in determining Consolidated Net Income, minus (b) Capital Expenditures during such period (excluding the financed portion thereof), minus (c) Consolidated Interest Expense paid or accrued (excluding any original issue discount, interest paid in kind or amortized debt discount, to the extent included in determining Consolidated Interest Expense) and scheduled principal payments paid or payable in respect of Indebtedness and voluntary principal payments paid or payable in respect of Loans, minus, (d) the amount of cash Investments permitted under Section 6.04(xiii) or (xx), plus or minus (as the case may be) (e) extraordinary gains or losses which are cash items not included in the calculation of Consolidated Net Income, plus (f) taxes deducted in determining Consolidated Net Income to the extent not paid for in cash, minus (g) any increase in the working capital of the Borrower and its Subsidiaries during such period (measured as the excess of such working capital at the end of such period over such working capital at the beginning of such period), plus (h) any decrease in the working capital of the Borrower and its Subsidiaries during such period (measured as the excess of such working capital at the beginning of such period over such working capital at the end thereof).
		

		
			“Excess Cash Flow Percentage” shall mean 50%; provided that, with respect to any fiscal year of the Borrower, the Excess Cash Flow Percentage shall be reduced to 25% if (a) no Default or Event of Default has occurred and is continuing and (b) (i)  for Excess Cash Flow prepayments for or prior to the fiscal year ending December 31, 2019, the Consolidated Revenue Leverage Ratio as of the last day of such fiscal year is not greater than 0.40 to 1.00 and (ii) for Excess Cash Flow prepayments for any fiscal year thereafter, the Consolidated EBITDA Leverage Ratio as of the last day of such fiscal year is not greater than 1.25 to 1.00.
		

		
			“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
		

		
			“Excluded Subsidiary” shall mean, at any date of determination, each Subsidiary of the Borrower that has been designated by the Borrower in writing to the Administrative Agent and the Collateral Agent as an “Excluded Subsidiary” for purposes of this Agreement; provided that, (a) no Subsidiary that is a Domestic Subsidiary or that is organized under the laws of Ireland may be an Excluded Subsidiary, (b) no Subsidiary that owns or holds any interests in Material Intellectual Property may be an Excluded Subsidiary, (c) for purposes of this Agreement, at no time shall (i) the total assets of any Excluded Subsidiary as of the last day of any four fiscal quarter period exceed 2.5% of the Consolidated Total Assets of the Borrower and its Subsidiaries at such date, (ii) the total assets of all Excluded Subsidiaries as of the last day of any four fiscal quarter period exceed 5.0% of the Consolidated Total Assets of the Borrower and its Subsidiaries at such date, (iii) the revenues of any Excluded Subsidiary as of the last day of any four fiscal quarter period exceed 2.5% of the Consolidated Revenue of the Borrower and its Subsidiaries at such date and (iv) the revenues of all Excluded Subsidiaries as of the last day of any four fiscal quarter period exceed 5.0% of the Consolidated Revenue of the Borrower and its Subsidiaries at such date, (d) the Borrower shall not designate any new Excluded Subsidiary if such designation would not comply with the provisions set forth
		

		
			
		

		
			

		 

		

			11

		

 

		

		
			 
		

		
			in clauses (a) through (c) above, and (e) if any of clauses (a) through (c) shall not be satisfied at any time, then all such Subsidiaries shall be deemed to be non‐Excluded Subsidiaries unless and until the Borrower shall redesignate one or more Excluded Subsidiaries as non‐Excluded Subsidiaries, in each case in a written notice to the Administrative Agent and Collateral Agent, and, as a result thereof, clauses (a) through (c) shall be satisfied. For purposes of determining whether any Subsidiary is an Excluded Subsidiary, the amount of total assets and revenue of any Subsidiary shall exclude charges or other payments attributable to or arising from cost-sharing agreements, transfer pricing agreements and any similar intercompany transactions. Notwithstanding the foregoing Adesto Technologies France shall constitute an Excluded Subsidiary so long as, but for its co-ownership of Patent Number 8847192, such entity would otherwise constitute an Excluded Subsidiary.
		

		
			“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) income or franchise Taxes or branch profits Taxes, in each case (i) imposed on (or measured by) its net income by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that are Other Connection Taxes, (b)  in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.17), U.S. federal withholding Taxes imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.16(d), except in each case to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Tax pursuant to Section 2.16 and (c) U.S. federal withholding Taxes imposed under FATCA.
		

		
			“Existing Debt Refinancing” shall mean the repayment in full of the debt set forth on Schedule 1.01(b) and the termination of commitments thereunder and the release of all guarantees and security in respect thereof.
		

		
			“Extraordinary Receipts” shall mean the receipt by the Borrower or any of its Subsidiaries of (i) any judgments, litigation settlements or indemnity payments to the extent not received as reimbursement or compensation for cash losses or payments made by the Borrower or any of its Subsidiaries, in each case in an amount that is equal to 100% of such payments and (ii) any proceeds from indemnifications provided by any Seller (as defined in the Acquisition Agreement) under the Acquisition Agreement to the extent not received as reimbursement or compensation for cash losses or payments made by the Borrower or any of its Subsidiaries.
		

		
			“Facilities” shall mean any and all real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by the Borrower or any of its Subsidiaries or any of their respective predecessors or Affiliates.
		

		
			“Fair Labor Standards Act” shall mean the Fair Labor Standards Act of 1938, as amended from time to time.
		

		
			“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any applicable agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreements with respect to the implementation of such Sections of the Code, and any fiscal or regulatory legislation, rules or official administrative practices to the extent adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
		

		
			
		

		
			

		 

		

			12

		

 

		

		
			 
		

		
			“Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
		

		
			“Federal Power Act” shall mean the Federal Power Act of 1935, as amended from time to time.
		

		
			“Fee Letter” shall mean any letter agreement entered into between the Borrower and the Administrative Agent pertaining to the Administrative Agent Fees.
		

		
			“Financial Officer” of any Person shall mean the chief financial officer, principal accounting officer, treasurer, controller, or in each case, anyone acting in such capacity or any similar capacity of such Person.
		

		
			“Fiscal Quarter” means any of the quarterly accounting periods of Borrower and its Subsidiaries ending on March 31, June 30, September 30 and December 31 of each year.
		

		
			“Foreign Law Security Documents” shall mean collectively, any local law debenture, charge or other security or collateral agreement relating to the assets of any Foreign Subsidiary that is a Loan Party (including the Irish Security Documents and each Pledge Agreement) to the extent necessary or useful to grant or perfect the Collateral Agent’s security interest therein under applicable laws.
		

		
			“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
		

		
			“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.
		

		
			“GAAP” shall mean United States generally accepted accounting principles applied on a consistent basis.
		

		
			“Governing Body” shall mean the board of directors or other body having the power to direct or cause the direction of the management and policies of a Person that is a corporation, partnership, trust or limited liability company.
		

		
			“Governmental Authority”  shall mean any Federal, state, local or foreign court or governmental agency, government department, authority, instrumentality, regulatory body, board or commission, or in the case of Ireland, any government minister, tribunal or public or statutory person being of a public nature.
		

		
			“Granting Lender” shall have the meaning assigned to such term in Section 9.04(j).
		

		
			“Guarantee” of or by any Person shall mean any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment of such Indebtedness or other obligation or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the
		

		
			
		

		
			

		 

		

			13

		

 

		

		
			 
		

		
			primary obligor to pay such Indebtedness or other obligation; provided,  however, that the term “Guarantee” shall not include endorsements of negotiable instruments for collection or deposit in the ordinary course of business.
		

		
			“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral Agreement, in the form of Exhibit F, among the Borrower, the Subsidiaries party thereto and the Collateral Agent for the benefit of the Secured Parties.
		

		
			“Guarantors” shall mean the Subsidiary Guarantors.
		

		
			“Hazardous Materials” shall mean (a) any petroleum products or byproducts and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone‐depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.
		

		
			“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.
		

		
			“ICC Termination Act” shall mean the ICC Termination Act of 1995, as amended from time to time.
		

		
			“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) [reserved], (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, including any earn‐out obligations, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business and not more than 180 days past due), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed (limited to the lesser of (x) fair market value of the property as reasonably determined by such Person and (y) the amount of Indebtedness secured by such Lien), (g) all Contingent Obligations of such Person in respect of Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease Obligations of such Person, (i) all obligations of such Person as an account party in respect of letters of credit and (j) all obligations of such Person in respect of bankers’ acceptances, (k) Disqualified Stock, and (l) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, including any Hedging Agreement, in each case, whether entered into for hedging or speculative purposes or otherwise.  The amount of any Indebtedness of any Person in respect of a Hedging Agreement shall be the amount determined in respect thereof as of the end of the then most recently ended fiscal quarter of such Person, based on the assumption that such Hedging Agreement had terminated at the end of such fiscal quarter.  In making such determination, if any agreement relating to such Hedging Agreement provides for the netting of amounts payable by and to such Person thereunder or if any such agreement provides for the simultaneous payment of amounts by and to such Person, then in each such case, the amount of such obligation shall be the net amount so determined, in each case to the extent that such agreement is legally enforceable in Insolvency Proceedings against the applicable counterparty thereof.  The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer.
		

		
			
		

		
			

		 

		

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			“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
		

		
			“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).
		

		
			“Information” shall have the meaning assigned to such term in Section 9.17.
		

		
			“Insolvency Proceeding” shall mean (i) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, examinership, dissolution, winding‐up or relief of debtors, or (ii) any general assignment for the benefit of creditors, formal or informal moratorium, composition, marshaling of assets for creditors or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each case, undertaken under United States federal or state or non‐United States legal requirements, including the Bankruptcy Code.
		

		
			“Installment” shall have the meaning assigned to such term in Section 2.09.
		

		
			“Intellectual Property” shall mean all present and future:  (a) all inventions and discoveries (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations‐in‐part, revisions, extensions and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, trade names and corporate names, together with all translations, adaptations, derivations and combinations thereof and including all goodwill associated therewith, (c) all copyrightable works, all copyrights and all applications, registrations and renewals in connection therewith, (d) all broadcast rights, (e) all mask works and all applications, registrations and renewals in connection therewith, (f) all know‐how, trade secrets and confidential business information, whether patentable or unpatentable and whether or not reduced to practice (including ideas, research and development, know‐how, formulas, compositions and manufacturing and production process and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals), (g) all computer software (including data and related documentation), (h) all other proprietary rights, (i) all copies and tangible embodiments thereof (in whatever form or medium) and (j) all licenses and agreements in connection therewith.
		

		
			“Interest Payment Date” shall mean the last Business Day of each Fiscal Quarter of the Borrower, commencing with the last Business Day of June 2018.
		

		
			“Interstate Commerce Act” shall mean the Interstate Commerce Act of 1887, as amended from time to time.
		

		
			“Inventory” means inventory (as that term is defined in the UCC).
		

		
			“Investment” shall mean (i) any direct or indirect purchase or other acquisition by the Borrower or any of its Subsidiaries of, or of a beneficial interest in, any stocks, bonds, notes, debentures or other obligations or securities of any other Person; (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by the Borrower or any Subsidiary of the Borrower from any Person, of any Equity Interests of such Person; (iii) any direct or indirect loan, advance or capital contributions by the Borrower or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business and (iv) all investments consisting of any exchange traded or over the counter derivative transaction, including any Hedging Agreement, whether entered into for hedging or speculative
		

		
			
		

		
			

		 

		

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			purposes or otherwise.  The amount of any Investment of the type described in clauses (i), (ii) and (iii) shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write ups, write downs or write offs with respect to such Investment and after giving effect to any return of capital, repayment or dividends or distributions in respect thereof received in cash with respect to such Investment.
		

		
			“Investment Company Act of 1940” shall mean the Investment Company Act of 1940, as amended from time to time.
		

		
			“Irish Companies Act” means the Companies Act 2014 of Ireland.
		

		
			“Irish Debenture” means the Irish law governed mortgage debenture between S3 Semiconductors and the Collateral Agent for the benefit of the Secured Parties.
		

		
			“Irish Security Documents” means the Irish Debenture and the Irish Share Charge.
		

		
			“Irish Share Charge” means the Irish law governed charge over the shares in S3 Semiconductors between the Borrower and the Collateral Agent for the benefit of the Secured Parties.
		

		
			“IRS” means United States Internal Revenue Service.
		

		
			“Lenders” shall mean (a) the Persons listed on Schedule 2.01 (other than any such Person that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any Person that has become a party hereto pursuant to an Assignment and Acceptance.
		

		
			“Libor Rate” shall mean, for any date of determination, the three‐month London Interbank Offered Rate (rounded upward to the nearest 1/16 of one percent) that appears on Bloomberg as of approximately 11:00 a.m. (Local Time) two Business Days prior to the applicable Interest Payment Date (or initially, the Closing Date); provided, that if such index ceases to exist or is no longer published or announced, then the term “Libor Rate” shall mean the three‐month London Interbank Offered Rate (rounded upward to the nearest 1/16 of one percent) as published in such other publication reasonably selected by the Administrative Agent on such date of determination, and if this latter index ceases to exist or is no longer published or announced, then the term “Libor Rate” shall mean such replacement rate as reasonably determined by Administrative Agent and Collateral Agent.  The Libor Rate shall be determined on any date of determination by the Administrative Agent or, if no Administrative Agent then exists, by the Required Lenders.  The Libor Rate shall be determined two Business Days prior to the Closing Date and, thereafter, two Business Days prior to the applicable Interest Payment Date.  The Libor Rate shall in no event be less than 1.00% per annum.
		

		
			“LIBOR Unavailability Notice” shall have the meaning assigned to such term in Section 2.11(e).
		

		
			“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge, assignment by way of security or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset or (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
		

		
			“Liquidity” shall mean the aggregate amount of Unrestricted Cash and Permitted Investments of the Loan Parties.
		

		
			
		

		
			

		 

		

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			“Loans” shall have the meaning assigned to such term in Section 2.01.
		

		
			“Loan Documents” shall mean this Agreement, the Security Documents, the Notes, the Related Documents, the Fee Letter and any other document or agreement executed in connection herewith or therewith.
		

		
			“Loan Parties” shall mean the Borrower and the Guarantors.
		

		
			“Local Time” shall mean New York City time.
		

		
			“Make‐Whole Amount” shall mean, with respect to any Loan and on the applicable date of prepayment, repayment or acceleration of the Loans, an amount equal to the sum of (i) the present value of the aggregate amount of interest that would have otherwise been payable from the date of prepayment, repayment or acceleration through the first anniversary of the Closing Date on the amount prepaid using a discount rate equal to the Treasury Rate plus 0.50% per annum plus (ii) 2.00% of the principal amount prepaid, repaid or accelerated.
		

		
			“Management Fee Recipient” shall have the meaning assigned to such term in the definition of “Management Fees”.
		

		
			“Management Fees” shall mean any fees or other amounts (whether structured as a fee, an underwriting discount or otherwise) payable, directly or indirectly, to or for the benefit of the Borrower, any direct or indirect holder of Equity Interests of the Borrower or any Affiliate of any such holder of Equity Interests (each of the foregoing, a “Management Fee Recipient”) or in respect of management, consulting, financial advisory, financing, underwriting or placement services or other investment banking activities provided by or on behalf of any Management Fee Recipient to or for the benefit, directly or indirectly, of any of the Borrower or the Borrower’s Affiliates, whether payable, earned or otherwise provided for pursuant to a management agreement (howsoever denominated) or otherwise.
		

		
			“Margin Stock” shall have the meaning assigned to such term in Regulation U.
		

		
			“Material Adverse Effect” shall mean (a) a materially adverse effect on and/or material adverse developments with respect to (i) the value of the Collateral (taken as a whole), (ii) the business, assets, liabilities, operations, financial condition, operating results or properties of the Borrower and its Subsidiaries, taken as a whole, or (iii) a significant portion of the industry or business segment in which the Borrower or its Subsidiaries operate or rely upon if such effect or development is reasonably likely to have a material adverse effect on the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Borrower or any other Loan Party to perform any of its obligations under any Loan Document to which it is or will be a party or (c) a material impairment of the rights and remedies of or benefits available to either Agent or the Lenders under any Loan Document.
		

		
			“Material Disposition” shall have the meaning assigned to such term in “Consolidated EBITDA”.
		

		
			“Material Indebtedness” shall mean Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower or any Subsidiary in an aggregate principal amount exceeding $500,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements to the extent that such agreements are legally enforceable in Insolvency Proceedings against the applicable counterparty or counterparties thereof) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.
		

		
			
		

		
			

		 

		

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			“Material Intellectual Property” shall mean any Intellectual Property that (i) is material or necessary for the business of any Loan Party or any of its Subsidiaries, (ii) is reasonably determined to generate revenue in excess of $250,000 or (iii) is incorporated into or is material to the production of products or performance or services that is reasonably determined to generate revenue in excess of $250,000. Notwithstanding the foregoing, (x) “Material Intellectual Property” shall not include any third-party Intellectual Property that is non-exclusively licensed by any Loan Party or any of its Subsidiaries in the ordinary course of business as commercially available software or firmware, or with license payments that do not exceed $50,000 per year and (y) with respect to any Subsidiary, if such Subsidiary holds Intellectual Property that does not constitute Material Intellectual Property pursuant to clauses (ii) or (iii) of the foregoing sentence, but collectively, all such Intellectual Property held by such Subsidiary is reasonably determined to generate revenue in excess of $750,000 in the aggregate or is incorporated into or is material to the production of products or performance or services that is reasonably determined to generate revenue in excess of $750,000 in the aggregate, such Subsidiary shall be deemed to own Material Intellectual Property.
		

		
			“Material Real Property” shall mean any real property located in the United States of America with a fair market value in excess of $250,000.
		

		
			“Maturity Date” shall mean May 8, 2022.
		

		
			“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.
		

		
			“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.
		

		
			“Mortgaged Properties” shall mean parcel of Material Real Property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 4.01 or Section 5.12.
		

		
			“Mortgages” shall mean the mortgages, deeds of trust, assignments of leases and rents, modifications and other security documents delivered with respect to Mortgaged Properties pursuant to Section 5.12, each in form and substance reasonably satisfactory to the Collateral Agent.
		

		
			“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
		

		
			“Net Asset Sale Proceeds” shall mean the cash proceeds received by the Borrower or any of its Subsidiaries in respect of an Asset Sale (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (a) actual and reasonable expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Borrower’s good faith estimate of income taxes, in each case paid or payable in connection with such sale), (b) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Asset Sale Proceeds) and (c) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money that is secured by the asset sold in such Asset Sale and that is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset and other than Indebtedness hereunder.
		

		
			“Net Insurance/Condemnation Proceeds” shall mean any net cash payments or net cash proceeds received by the Collateral Agent or by the Borrower or any of its Subsidiaries (i) under any casualty insurance policy in respect of a covered loss thereunder or (ii) as a result of the taking of any assets of the Borrower or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
		

		
			
		

		
			

		 

		

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			or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, in each case net of any actual and reasonable documented fees, costs or expenses, including reasonable legal fees and expenses, and taxes incurred by the Borrower or any of its Subsidiaries in connection with the adjustment or settlement of any claims of the Borrower or such Subsidiary in respect thereof.
		

		
			“Net Securities Proceeds” shall mean the cash proceeds (net of reasonable underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses) from  the incurrence of Indebtedness by the Borrower or any of its Subsidiaries.
		

		
			“Note” shall have the meaning assigned to such term in Section 2.04(d).
		

		
			“Notice of Borrowing” shall have the meaning assigned to such term in Section 2.02(c).
		

		
			“Obligations” shall mean all obligations of every nature of each Loan Party from time to time owed to Administrative Agent, Collateral Agent, the Lenders or any of them under the Loan Documents, whether for principal, interest (including, without limitation, any interest accruing after the commencement of any bankruptcy case or insolvency proceeding involving a Loan Party, whether or not such interest is an allowed claim in such case or proceeding), fees, premium, Make‐Whole Amount, expenses, indemnification or otherwise.
		

		
			“OFAC” shall have the meaning assigned to such term in Section 3.23.
		

		
			“OID” shall have the meaning assigned to such term in Section 2.19.
		

		
			“Organizational Documents” shall mean with respect to any Person, its charter, constitution, certificate or articles of incorporation, bylaws, articles of organization, operating agreement, members agreement, partnership agreement, voting trust, or similar agreement or instrument governing the formation or operation of such Person.
		

		
			“Other Connection Taxes” shall mean all Taxes imposed as a result of a present or former connection between such Person and the jurisdiction imposing such Tax (other than connections arising from such Person having executed, delivered, become a party to, performed it obligations under, received or perfected a security interest under, received payments under or engage in any other transaction pursuant to any Loan Document, or sold or assigned an interest in any Loan or Loan Document.
		

		
			“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.
		

		
			“Participant Register” shall have the meaning assigned to such term in Section 9.04(h).
		

		
			“Payment Conditions” shall mean the satisfaction of each of the following conditions immediately before and after giving effect to any distribution or payment in respect of a Permitted Acquisition in accordance with Section 6.04(xiii) or any Acquisition Earnout in accordance with Section 6.09(B):
		

		
			(a)         No Event of Default has occurred and is continuing or would result therefrom;
		

		
			(b)         Borrower and its Subsidiaries shall be in compliance with the covenant set forth in Section 6.12, calculated as of the most recently completed period of four consecutive fiscal quarters or
		

		
			
		

		
			

		 

		

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			fiscal month, as applicable, ending prior to such distribution or payment for which the financial statements required by Section 5.04(a) or Section 5.04(b) have been delivered; and
		

		
			(c)         Liquidity shall be no less than $7,500,000.
		

		
			“Payment Office” shall mean the office of the Administrative Agent located at 225 West Washington Street, 9th Floor, Chicago, Illinois 60606 and such deposit account (or such other office) as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.
		

		
			“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.
		

		
			“Perfection Certificate” shall mean the Perfection Certificate substantially in the form of Exhibit B to the Guarantee and Collateral Agreement.
		

		
			“Permitted Acquisition” shall have the meaning assigned to such term in Section 6.04(xiii).
		

		
			“Permitted Investments” shall mean:
		

		
			(a)         direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
		

		
			(b)         investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
		

		
			(c)         investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;
		

		
			(d)         fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria of clause (c) above;
		

		
			(e)         investments in “money market funds” within the meaning of Rule 2a‐7 of the Investment Company Act of 1940, at least 95% of whose assets are invested in investments of the type described in clauses (a) through (d) above; and
		

		
			(f)         other short‐term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing.
		

		
			“Permitted Liens” means the Liens permitted pursuant to Section 6.02.
		

		
			“Person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.
		

		
			“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code, and in respect of which the Borrower or
		

		
			
		

		
			

		 

		

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			any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
		

		
			“Pledge Agreements” shall mean, collectively, any local law pledge agreement relating to the Equity Interests or evidence of Indebtedness of any Foreign Subsidiary owned directly by a Loan Party to the extent necessary or useful to perfect the Collateral Agent’s security interest therein under applicable laws.
		

		
			“Prime Rate” means, for any day, the rate of interest in effect for such day that is identified and normally published by The Wall Street Journal as the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then the highest of such rates), with any change in Prime Rate to become effective as of the date the rate of interest which is so identified as the “Prime Rate” is different from that published on the preceding Business Day.  If The Wall Street Journal no longer reports the Prime Rate, or if the Prime Rate no longer exists, or the Collateral Agent and Administrative Agent determine in good faith that the rate so reported no longer accurately reflects an accurate determination of the prevailing Prime Rate, then the Collateral Agent and Administrative Agent may jointly select a reasonably comparable index or source to use as the basis for the Prime Rate.
		

		
			“Qualified Capital Stock” of any Person shall mean any Equity Interest of such Person that is not Disqualified Stock.
		

		
			“Recipient” shall mean (a) the Administrative Agent, (b) the Collateral Agent and (c) any Lender, as applicable.
		

		
			“Reference Period” shall have the meaning assigned to such term in “Consolidated EBITDA”.
		

		
			“Register” shall have the meaning assigned to such term in Section 9.04(d).
		

		
			“Regulation T” shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
		

		
			“Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
		

		
			“Regulation X” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.
		

		
			“Related Documents” shall mean, collectively, the Warrants and the Warrant Agreement.
		

		
			“Related Fund” shall mean, with respect to any Lender that is a fund or commingled investment vehicle that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
		

		
			“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person’s Affiliates; provided that an agent of a sub‐agent shall not be a Related Party, unless (i) such agent is appointed as a sub‐agent by an Agent in accordance with Article VIII, or (ii) such agent is appointed or retained by, or at the direction of, the Required Lenders.
		

		
			
		

		
			

		 

		

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			“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.
		

		
			“Required Lenders” shall mean, at any time, Lenders having Loans and Commitments representing more than 50% of the sum of all Loans and Commitments at such time.
		

		
			“Responsible Officer” of any Person shall mean any executive officer or Financial Officer of such Person and any other officer or similar official thereof responsible for the administration of the obligations of such Person in respect of this Agreement.
		

		
			“Restricted Indebtedness” shall mean Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted under Section 6.09.
		

		
			“Restricted Payment” shall mean (i) any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any Subsidiary, and (iii) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in‐substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness (except to the extent permitted by the applicable subordination agreement).
		

		
			“S3 Semiconductors” means S3 ASIC Semiconductors Limited, a company incorporated in Ireland, having registered number 618969.
		

		
			“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.
		

		
			“SEC” shall mean the Securities and Exchange Commission or any other similar or successor agency of the Federal government administering the Securities Act.
		

		
			“Secured Parties” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.
		

		
			“Securities Account” is defined in the UCC.
		

		
			“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect from time to time.
		

		
			“Security Documents” shall mean the Guarantee and Collateral Agreement, each Foreign Law Security Document, Control Agreements, the Mortgages (if any) and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.12.
		

		
			“Sellers” shall mean the Key Sellers and Other Sellers, each as defined in the Acquisition Agreement.
		

		
			“SPC” shall have the meaning assigned to such term in Section 9.04(j).
		

		
			
		

		
			

		 

		

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			“Subordinated Indebtedness” shall mean any Indebtedness of the Borrower or its Subsidiaries incurred from time to time and subordinated in right of payment to the Obligations in manner reasonably acceptable to the Collateral Agent.
		

		
			“Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Borrower after giving effect to the Acquisition.
		

		
			“Subsidiary Guarantor” shall mean, on the Closing Date, each Subsidiary listed on Schedule 1.01(a), and thereafter each other Subsidiary that is or becomes a party to the Guarantee and Collateral Agreement or otherwise provides a Guarantee in respect of the Obligations.
		

		
			“Synthetic Lease” shall mean, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is accounted for as an operating lease under GAAP, but which, upon the application of any insolvency or bankruptcy laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment) and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.
		

		
			“Synthetic Lease Obligations” shall mean, as to any Person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such Person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.
		

		
			“Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or any Subsidiary is or may become obligated to make (a) any payment in connection with a purchase by any third party from a Person other than the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment (other than on account of a permitted purchase by it of any Equity Interest or Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that no phantom stock or similar plan providing for payments only to current or former directors, officers or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.
		

		
			“Target” shall mean S3 Semiconductors.
		

		
			“Tax Returns” shall mean (i) all returns, declarations, reports, schedules or information return or statement of, or with respect to, Taxes required to be filed with any Governmental Authority or depository and (ii) Form TD F 90‐22.1.
		

		
			“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
		

		
			“Terrorism Order” shall have the meaning assigned to such term in Section 3.25.
		

		
			
		

		
			

		 

		

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			“Total Debt” shall mean, at any time, the total Indebtedness of the Borrower and its Subsidiaries at such time.
		

		
			“Transaction Documents” shall mean the Acquisition Agreement and all material exhibits and schedules thereto and all agreements expressly contemplated thereby and the Loan Documents, in each case as amended from time to time in accordance with the terms hereof and thereof.
		

		
			“Transaction Expenses” shall have the meaning assigned to such term in the recitals hereto.
		

		
			“Transactions” shall mean, collectively, the transactions to occur pursuant to the Transaction Documents, including (a) the execution and delivery of the Loan Documents and the making of the borrowings hereunder; (b) the issuance of Warrants, (c) the Existing Debt Refinancing; (d) the Acquisition; and (e) the payment of related fees, costs and expenses (including, without limitation, attorney’s fees).
		

		
			“Treasury Rate” shall mean a rate per annum (computed on the basis of actual days elapsed over a year of 360 days) equal to the rate determined by the Administrative Agent on the date 3 Business Days prior to the date of repayment, to be the yield expressed as a rate listed in The Wall Street Journal for United States Treasury securities having a term ending closest to, but prior to, the first day of Year 2 of the Credit Facilities.
		

		
			“UCC” shall mean the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the issue of perfection of security interests.
		

		
			“Unrestricted Cash and Permitted Investments” of any Person, shall mean cash or Permitted Investments of such Person, (a) that is not, and is not required to be, designated as “restricted” on the financial statements of such Person, (b) that is not contractually required, and has not been contractually committed by such Person, to be used for a specific purpose, (c) that is not subject to (i) any provision of law, statute, rule or regulation, (ii) any provision of the Organizational Documents of such Person, (iii) any order of any Governmental Authority or (iv) any contractual restriction (including the terms of any Equity Interests), in each case of (i) through (iv), preventing such cash or Permitted Investments, as applicable, from being applied to the payment of the Obligations, (d) in which no Person other than the Collateral Agent has a Lien, (e) that is denominated in Dollars and (f) that is held in a Deposit Account or Securities Account, as applicable, in which the Collateral Agent has a valid and enforceable security interest, perfected by “control” (within the meaning of the applicable Uniform Commercial Code); provided that (i) for the 45‐day period following the Closing Date (or such longer period as the Collateral Agent may agree in its reasonable discretion), such Unrestricted Cash and Permitted Investments shall not be required to be subject to “control” in favor of the Collateral Agent and (ii) Unrestricted Cash and Permitted Investments shall not include any cash deposited in any accounts of the Loan Parties for purposes of reinvestment in accordance with Section 2.10.
		

		
			“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107‐56 (signed into law October 26, 2001)).
		

		
			“U.S. Person” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
		

		
			“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term in Section 2.16(f)(ii)(B)(iii).
		

		
			
		

		
			

		 

		

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			“Warrant Agreement” shall mean that certain Warrant Purchase Agreement to purchase Equity Interests of Borrower, dated the date hereof, executed by Borrower in order to issue the Warrants in the form of Exhibit I.
		

		
			“Warrants” shall mean the warrants, in the form of Exhibit H, issued by Borrower in favor of each Lender.
		

		
			“Wholly Owned Subsidiary” of any Person shall mean a Subsidiary of such Person of which securities (except (i) for directors’ qualifying shares or (ii) in the case of a Foreign Subsidiary, nominal shares required by law to be owned by a resident of the relevant jurisdiction) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, Controlled or held by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.
		

		
			“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
		

		
			“Withholding Agent” means any Loan Party and the Administrative Agent.
		

		
			SECTION 1.02.     Terms Generally.  The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”; and the words “asset” and “property” shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require.  Except as otherwise expressly provided herein, (a) any reference in this Agreement to any Loan Document or any other documents shall mean such document as amended, restated, supplemented or otherwise modified from time to time to the extent not prohibited or restricted hereunder and (b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided,  however, that (x) any obligations of a Person under a lease (whether existing now or entered into in the future) that is not (or would not be) a Capital Lease Obligation under GAAP as in effect on the Closing Date shall not be treated as a Capital Lease Obligation solely as a result of the adoption of changes in GAAP and (y) in the event of any change in GAAP occurring after the date of this Agreement that would have any effect on the operation of any covenant in Article VI or any related definition, the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective and the Borrower shall provide to the Administrative Agent, the Collateral Agent and the Lenders the reconciliation statements provided for in Section 5.04, until such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders or the Borrower and the Required Lenders agree that compliance with such covenant should be determined on the basis of GAAP as so changed.
		

		
			SECTION 1.03.     Irish Terms. In this Agreement, where it relates to a Subsidiary registered in Ireland, a reference to:
		

		
			(a)         “inability to pay its debts” will be deemed to mean inability to pay its debts within the meaning of Section 570 of the Irish Companies Act; and
		

		
			
		

		
			

		 

		

			25

		

 

		

		
			 
		

		
			(b)         the term “examiner” shall have the meaning given to it in Section 508 of the Irish Companies Act and the term “examinership” shall be construed in accordance with the Irish Companies Act.
		

		
			SECTION 1.04.     Independence of Covenants.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted as an exception to, or would otherwise be within the limitations of, another covenants shall not avoid the occurrence of an Event of Default or Default of such action is taken or condition exists.
		

		
			SECTION 1.05.     Construction.  Each of the parties hereto acknowledges that (i) it has been represented by counsel in the negotiation and documentation of the terms of this Agreement, (ii) it has had full and fair opportunity to review and revise the terms of this Agreement, (iii) this Agreement has been drafted jointly by all of the parties hereto, and (iv) no Lender has any fiduciary relationship with or duty to the Borrower or any of its Subsidiaries arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Lenders, on the one hand, and the Borrower and its Subsidiaries, on the other hand, in connection herewith or therewith is solely that of debtor and creditor in respect of the Indebtedness represented hereby.  Accordingly, each of the parties hereto acknowledges and agrees that the terms of this Agreement shall not be construed against or in favor of another party.
		

		
			SECTION 1.06.     Pro Forma Compliance.  All determinations of compliance or pro forma compliance with the covenants set forth in Section 6.12(a) for periods prior to June 30, 2018, shall be deemed to be references to the covenant levels applicable to the period ending as of June 30, 2018.
		

		
			SECTION 1.07.     Currency.
		

		
			(a)         The Collateral Agent may set up standards and procedures to determine or redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Loan Party or Secured Party.  Any such determination or redetermination by the Collateral Agent shall be conclusive and binding for all purposes, absent manifest error.  No determination or redetermination by any Loan Party or any Secured Party and no other currency conversion shall change or release any obligation of any Loan Party or of any Secured Party (other than Agents and their respective Related Parties) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted.  The Collateral Agent may round up or down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may determine reasonable de minimis payment thresholds.
		

		
			(b)         For purposes of determining compliance with Sections 6.01,  6.02 and 6.04 with respect to any amount of Indebtedness or Investment in a currency other than Dollars, no Default shall be deemed to have occurred solely as a result of changes in rates of currency exchange occurring after the time such Indebtedness or Investment is incurred (so long as such Indebtedness or Investment, at the time incurred, made or acquired, was permitted hereunder).
		

		
			(c)         For purposes of determining the Consolidated EBITDA Leverage Ratio and the Consolidated Revenue Leverage Ratio, the amount of Indebtedness shall reflect the currency translation effects, determined in accordance with GAAP, of Hedge Agreements permitted hereunder for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar equivalent of such Indebtedness.
		

		
			
		

		
			

		 

		

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			ARTICLE II
		

		
			 
		

		
			The Credits
		

		
			SECTION 2.01.     Commitments.  Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, to make a term loan (the “Loans”) to the Borrower on the Closing Date in a principal amount equal to its Commitment.  The Borrower may make only one borrowing of Loans.  Amounts paid or prepaid in respect of Loans may not be reborrowed.
		

		
			SECTION 2.02.     Loans; Notice of Borrowing.
		

		
			(a)         The failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender).
		

		
			(b)         Each Lender shall make the Loan to be made by it hereunder on the Closing Date by wire transfer of immediately available funds to the Administrative Agent’s account as it may designate to each Lender not later than 1:00 p.m., Local Time.
		

		
			(c)         The Borrower shall give the Administrative Agent three Business Days’ prior notice of the Loan to be incurred hereunder no later than 12:00 p.m.  Local Time.  Such notice (a “Notice of Borrowing”) shall be irrevocable and shall be in writing, in the form of Exhibit A, appropriately completed to specify the aggregate principal amount of the Loans to be incurred, and such other requirements as set forth in the Notice of Borrowing.
		

		
			SECTION 2.03.     Disbursement of Funds.  Following the receipt of all requested Loan funds, the Administrative Agent will make available to the Borrower at the Borrower’s account set forth in the Notice of Borrowing the aggregate of the amounts so made available by the Lenders.  Unless the Administrative Agent shall have been notified, in writing, by any Lender prior to the date of borrowing that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of any borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of borrowing and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent.  The Administrative Agent also shall be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Effective Rate for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter and (ii) if recovered from the Borrower, the rate of interest applicable to the respective borrowing, as determined pursuant to Section 2.06.  Nothing in this Section 2.03 shall be deemed to relieve any Lender from its obligation to make Loans hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder.
		

		
			SECTION 2.04.     Evidence of Debt; Repayment of Loans.
		

		
			
		

		
			

		 

		

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			(a)         The Borrower hereby unconditionally promises to pay to each Lender the principal amount of the Loan of such Lender as provided in Section 2.09.
		

		
			(b)         Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from the Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.
		

		
			(c)         The entries made in the accounts maintained pursuant to paragraph (b) above shall be prima facie evidence absent manifest error of the existence and amounts of the obligations therein recorded; provided,  however, that the failure of any Lender to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.
		

		
			(d)         The Borrower’s obligation to pay the principal of, and interest on, the Loan made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 9.04(d) and shall, if requested by such Lender, also be evidenced by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit C, with blanks appropriately completed in conformity herewith (each a “Note” and, collectively, the “Notes”).  To the extent of any conflict between the Register and the entries made in the accounts maintained pursuant to paragraph (b) above, the entries made in the Register shall control.
		

		
			(e)         Notwithstanding anything to the contrary contained above in this Section 2.04 or elsewhere in this Agreement, Notes shall only be delivered to Lenders that at any time specifically request the delivery of such Notes.  No failure of any Lender to request or obtain a Note evidencing its Loan to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) incurred by the Borrower that would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the Loan Documents.  Any Lender that does not have a Note evidencing its outstanding Loan shall in no event be required to make the notations otherwise described in preceding clause (b).  At any time when any Lender requests the delivery of a Note to evidence its Loan, the Borrower shall promptly execute and deliver to the respective Lender the requested Note in the appropriate amount or amounts to evidence such Loan.
		

		
			SECTION 2.05.     Fees.
		

		
			(a)         The Borrower agrees to pay to the Administrative Agent, for its own account, such fees set forth in the Fee Letter at the times and in the amounts specified therein (the “Administrative Agent Fees”).  If the Administrative Agent shall at any time be replaced by a new administrative agent, the Borrower will enter into a new Fee Letter with such replacement Administrative Agent.
		

		
			(b)         On the Closing Date, the Borrower shall pay to the Administrative Agent for distribution to each Lender a closing fee equal to such Lender’s pro rata share of an amount equal to 2.00% of the aggregate initial principal amount of the Loans.  Such closing fee shall be fully earned on the Closing Date.
		

		
			(c)         Upon (i) the repayment or prepayment (whether voluntary, mandatory or otherwise) of the Loans in full or termination of this Agreement, in each case, prior to the Maturity Date (other than pursuant to a refinancing of the Loans pursuant to credit extensions made or arranged by the Persons who are Lenders as of the Closing Date or their Affiliates or mandatory prepayments under Sections 2.10 (a),  (c) and (f)) or (ii) the acceleration of the Obligations for any reason, the Borrower shall pay, on the date of such repayment, prepayment or termination or the Obligations are so accelerated, to each Lender an early termination fee equal to such Lender’s pro rata share (1) the Make‐Whole Amount or (2) the prepayment
		

		
			
		

		
			

		 

		

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			premium (expressed as percentages of principal amount) in each case set forth below (collectively, the “Applicable Prepayment Premium”) determined for the prepayment date with respect to 100% of the principal amount so repaid, prepaid or accelerated, as applicable:
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						If Prepaid:

					
					
						    

					
					
						Make‐Whole
Amount/Percentage

					
					
						 

				
	
					
						From and after the Closing Date but on or prior to the first anniversary of the Closing Date

					
					
						 

					
					
						Make‐Whole Amount

					
					
						 

				
	
					
						After the first anniversary of the Closing Date but on or prior to the second anniversary of the Closing Date

					
					
						 

					
					
						2.00%

					
					
						 

				
	
					
						After the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date

					
					
						 

					
					
						1.00%

					
					
						 

				

		
			 
		

		
			(d)         All fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent or the Lenders, as applicable.  Once paid, none of the fees shall be refundable under any circumstances or subject to any right of setoff, counterclaim or any similar right (each of which is hereby waived by the Borrower).
		

		
			SECTION 2.06.     Interest on Loans.
		

		
			(a)         Subject to the provisions of Section 2.07, the Loans shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the sum of the Libor Rate plus 8.75% per annum (or, to the extent the Administrative Agent shall have delivered a LIBOR Unavailability Notice to the Borrower and the Lenders pursuant to Section 2.11(e), the Alternate Base Rate plus 7.75% per annum).
		

		
			(b)         Interest on each Loan shall be payable on the Interest Payment Dates except as otherwise provided in this Agreement.
		

		
			SECTION 2.07. Default Interest.  Upon the occurrence and during the continuation of any Event of Default, the outstanding principal amount of all Loans and, to the extent permitted by applicable law, any interest payments thereon not paid when due and any fees and other amounts then due and payable hereunder (including to the extent permitted by applicable law, accrued and unpaid interest), shall thereafter, automatically in the case of an Event of Default under Section 7.01(a), (g) or (h), and at the written election of the Administrative Agent (acting at the written direction of the Required Lenders) otherwise (it being understood that such election may apply retroactively to the date such Event of Default occurred), bear interest (including post‐petition interest in any proceeding under the Bankruptcy Code or
		

		
			
		

		
			

		 

		

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			other applicable bankruptcy laws) payable upon demand at the rate otherwise applicable to the Loans pursuant to Section 2.06 plus 2.0% per annum.  Payment or acceptance of the increased rates of interest provided for in this Section 2.07 is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent, the Collateral Agent or any Lender.
		

		
			SECTION 2.08.     Termination of Commitments.  All Commitments shall automatically terminate upon the making of the Loans on the Closing Date.
		

		
			SECTION 2.09.     Repayment of Loans.
		

		
			(a)         The principal amount of the Loans shall be repaid at par in consecutive quarterly installments (each, an “Installment”) on the last day of each calendar quarter (or if such day is not a Business Day, on the preceding Business Day) commencing December 31, 2018 in an amount, per Installment, equal to 1.25% (or, in the case of the initial Installment to be made on December 31, 2018, 0.833%) of the initial aggregate principal amount of the Loans.  Notwithstanding the foregoing, such Installments shall be reduced in connection with any voluntary or mandatory prepayments of the Loans in accordance with Section 2.09(b) and Section 2.10, as applicable.
		

		
			(b)         The Borrower shall have the right at any time and from time to time to prepay the outstanding Loans in whole or in part at 100% of the principal amount so prepaid, plus the Applicable Prepayment Premium determined for the prepayment date with respect to such principal amount, plus accrued and unpaid interest thereon, if any, to the applicable prepayment date; provided,  however, that each partial prepayment shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000, in each case, unless the remaining amount of the outstanding Loans is less than such amount.  Each amount required to be applied pursuant to this Section 2.09(b) shall be applied to prepay the outstanding principal amount of Loans in inverse order of maturity against the remaining Installments of principal due in respect of the Loans pursuant to Section 2.09(a) (inclusive of the payment to be made on the Maturity Date).
		

		
			(c)         The Borrower will give at least 5 Business Days’ prior written notice of each prepayment under clause (b) of this Section 2.09 to the Administrative Agent and the Lenders.  Each such notice shall specify the prepayment date, the aggregate principal amount of the Loans to be prepaid on such date, the principal amount of each Loan owned by such Lender to be prepaid (determined in accordance with Section 2.13), the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Financial Officer of the Borrower as to the estimated Applicable Prepayment Premium, if any, due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Such notice shall be irrevocable and shall commit the Borrower to prepay the Loans by the amount stated therein on the date stated therein; provided that such notice may be contingent on the satisfaction of certain conditions set forth therein, and such notice shall be deemed revoked if the conditions set forth therein are not satisfied within the time periods set forth in such notice for the satisfaction thereof (or are waived in writing by the Borrower).  All prepayments under clause (b) of this Section 2.09 shall be subject to Section 2.05(b) and Section 2.12, but, for the avoidance of doubt, no Applicable Prepayment Premium shall be paid or due on any interest.  All prepayments under clause (b) of this Section 2.09 shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of prepayment.  Each prepayment pursuant to Section 2.09(b) shall be applied pro rata among the Loans.
		

		
			(d)         To the extent not previously paid, all Loans shall be due and payable on the Maturity Date (or, if such day is not a Business Day, on the next preceding Business Day) together with accrued and unpaid interest on the principal amount to be paid to but excluding the date of payment.
		

		
			
		

		
			

		 

		

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			SECTION 2.10.     Mandatory Prepayments.
		

		
			(a)         Excess Cash Flow.  Commencing with respect to the portion of the fiscal year commencing on the Closing Date and ending on December 31, 2018, and with respect to each fiscal year thereafter during the term of this Agreement, on or prior to the date that is five (5) days after the earlier of (A) the date on which the annual audited financial statements for such fiscal year are delivered pursuant to Section 5.04(a) or (B) the date on which such annual audited financial statements were required to be delivered pursuant to Section 5.04(a) (the “ECF Prepayment Date”), the Borrower shall be required to make a mandatory prepayment of the Obligations in an amount equal to the Excess Cash Flow Percentage of the Excess Cash Flow for such fiscal year.  Each such prepayment shall be accompanied by a certificate signed by the Borrower’s chief financial officer certifying the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance satisfactory to the Collateral Agent.  Any payment due hereunder shall be applied pursuant to Section 2.10(j) and for the avoidance of doubt, shall not be subject to any Applicable Prepayment Premium.
		

		
			(b)         Net Asset Sale Proceeds.  Not later than the tenth Business Day following the receipt of Net Asset Sale Proceeds by the Borrower or any of its Subsidiaries, the Borrower shall either (1) apply an amount equal to 100% of the Net Asset Sale Proceeds received with respect thereto to prepay outstanding Loans in accordance with Section 2.10(g) and Section 2.10(h) or (2) so long as no Default or Event of Default shall have occurred and be continuing, deliver to the Administrative Agent a certificate of a Responsible Officer setting forth (x) that portion of such Net Asset Sale Proceeds that the Borrower or such Subsidiary intends to reinvest or enter into a binding commitment to reinvest such Net Cash Proceeds in long term productive assets of the general type used or that are useful in the business of the Borrower and its Subsidiaries within 270 days (or in the case of a binding commitment to reinvest entered into with 270 days, within 360 days) of such date of receipt and (y) the proposed use of such portion of the Net Asset Sale Proceeds and such other information with respect to such reinvestment as the Administrative Agent or the Collateral Agent may reasonably request, and the Borrower shall, or shall cause one or more of its Subsidiaries to, promptly and diligently apply such portion to such reinvestment purposes; provided,  however, that, pending such reinvestment, such portion of the Net Asset Sale Proceeds shall be deposited into a Deposit Account subject to a control agreement with the Collateral Agent;  provided further that Net Asset Sale Proceeds from the granting of licenses of Intellectual Property with a term of five years or more shall be applied to prepay the Loans and may not be reinvested.  In addition, the Borrower shall, no later than 270 days (or in the case of a binding commitment to reinvest entered into with 270 days, within 360 days) after receipt of such Net Asset Sale Proceeds that have not been applied to prepay the Loans or so reinvested as provided above, make an additional prepayment of the Loans in the full amount of such Net Asset Sale Proceeds that have not been so reinvested. Notwithstanding the foregoing, the aggregate Net Asset Sale Proceeds from the Closing Date through the date of determination that have not been applied to repay the Loans exceeds $1,000,000, the Borrower shall use 50% of such Net Asset Sale Proceeds in excess of $1,000,000 to repay the Loans (or 100% of such Net Asset Sale Proceeds in excess of $1,000,000 to the extent not reinvested as provided in this Section 2.10(b)).
		

		
			(c)         Net Insurance/Condemnation Proceeds.  No later than the fifth Business Day following the date of receipt by the Collateral Agent or by the Borrower or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds in excess of $500,000 for all Casualty Events in any fiscal year of Borrower, the Borrower shall prepay outstanding Loans in an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided, so long as no Event of Default shall have occurred and be continuing, the Borrower shall have the option, directly or through one or more of its Subsidiaries to invest such Net Insurance/Condemnation Proceeds within 270 days  (or in the case of a binding commitment to reinvest entered into within 270 days, within  360 days) of receipt thereof or enter into a binding commitment to reinvest such Net Cash Proceeds (i) in long term productive assets of the general type used or that are useful in the business of the Borrower and its Subsidiaries or (ii) to repair, restore or replace the assets
		

		
			
		

		
			

		 

		

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			subject to the applicable Casualty Event; provided,  however, that, pending such reinvestment, such portion of the Net Insurance/Condemnation Proceeds shall be deposited into a Deposit Account subject to a control agreement with the Collateral Agent; provided further that an amount equal to any such Net Insurance/Condemnation Proceeds that have not been reinvested within 270 days  (or in the case of a binding commitment to reinvest entered into within 270 days, within 360 days) of receipt thereof shall be applied by the Borrower to prepay the Loans in accordance with Section 2.10(g) and Section 2.10(h).
		

		
			(d)         [Reserved].
		

		
			(e)         Issuance of Indebtedness.  On the date of receipt of any Net Securities Proceeds from the issuance of any Indebtedness or Equity Interests of the Borrower or any of its Subsidiaries after the Closing Date, other than Indebtedness permitted under Section 6.01, the Borrower shall prepay the Loans in accordance with Section 2.10(g) and Section 2.10(h) in an aggregate amount equal to such Net Securities Proceeds, as applicable.
		

		
			(f)         Extraordinary Receipts.  In the event that the Borrower or any of its Subsidiaries shall receive any Extraordinary Receipt, the Borrower shall, substantially simultaneously with (and in any event not later than the tenth Business Day next following) the receipt of such Extraordinary Receipt, apply an amount equal to 100% of such Extraordinary Receipt to prepay outstanding Loans in accordance with Section 2.10(g) and Section 2.10(h).
		

		
			(g)         In connection with any prepayment required under paragraphs (b) through (f) of this Section 2.10, the Borrower shall deliver to the Administrative Agent (i) at the time of each prepayment, a certificate signed by a Responsible Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such prepayment and (ii) at least three Business Days prior to such prepayment, written notice of such prepayment.  Each notice of prepayment shall specify the prepayment date, the subsection under which this prepayment is being made, the principal amount of each Loan (or portion thereof) to be prepaid, the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Financial Officer of the Borrower as to the estimated Applicable Prepayment Premium due in connection with such prepayment, setting forth the details of such computation.  All prepayments of Loans under this Section 2.10 shall be subject to Section 2.05(b),  Section 2.10(h),  Section 2.10(i),  Section 2.10(j) and Section 2.12 and shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.
		

		
			(h)         Notwithstanding anything to the contrary herein, any Lender may elect, by written notice to the Administrative Agent no later than 5:00 p.m. two Business Days prior to any prepayment of Loans required to be made by the Borrower pursuant to paragraph (a), (b), (c) or (f) of this Section 2.10, to decline all (but not a portion) of its pro rata share of such prepayment (such declined amounts, the “Declined Proceeds”).  To the extent any Lender does not so decline by the time period set forth above, it shall be deemed to have accepted such prepayment.  Any Declined Proceeds shall be offered on a pro rata basis to the Lenders not so declining such prepayment, and such Lenders shall have the right to accept any Declined Proceeds by providing written notice to the Administrative Agent of such acceptance no later than 5:00 p.m. one Business Day prior to the prepayment.  Any such Lender that does not so accept within the foregoing time period, shall be deemed to have rejected the additional Declined Proceeds.  To the extent such non‐declining Lenders elect to decline their pro rata shares of such Declined Proceeds, such Declined Proceeds may be retained by the Borrower.
		

		
			(i)          With respect to any prepayment of Loans required to be made by the Borrower pursuant to paragraph (b), (e) or (f) of this Section 2.10, the Borrower shall pay, to the extent applicable, the Applicable Prepayment Premium determined for the prepayment date with respect to such principal amount paid, if any, and in accordance with Section 2.10(j).
		

		
			
		

		
			

		 

		

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			(j)          Each amount required to be applied pursuant to this Section 2.10 (other than (k) below) shall be applied to prepay the outstanding principal amount of Loans, plus accrued and unpaid interest thereon, in inverse order of maturity against the remaining Installments of principal due in respect of the Loans pursuant to Section 2.09(a) (inclusive of the payment to be made on the Maturity Date).
		

		
			(k)         Notwithstanding anything to the contrary or in any other Loan Document, if the Acquisition is not consummated in accordance with Section 4.02(x), the Borrower shall prepay the Loans and all other Obligations, plus accrued and unpaid interest thereon, in full on May 10, 2018.
		

		
			SECTION 2.11.     Reserve Requirements; Change in Circumstances.
		

		
			(a)         Notwithstanding any other provision of this Agreement, if any Change in Law shall:
		

		
			(i)          impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Lender or shall impose on such Lender any other condition affecting this Agreement or Loans made by such Lender; or
		

		
			(ii)         subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
		

		
			and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, upon demand, such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.
		

		
			(b)         If any Lender shall have determined that any Change in Law regarding capital adequacy or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender pursuant hereto to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
		

		
			(c)         A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section 2.11 shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.
		

		
			(d)         Failure or delay on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital pursuant to this Section 2.11 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be under any obligation to compensate any Lender under paragraph (a) or (b) of this Section 2.11 with respect to increased costs incurred or reductions suffered more than six months prior to the date that such Lender notifies the Borrower in writing of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change
		

		
			
		

		
			

		 

		

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			in Law giving rise to such increased costs or reductions is retroactive, then the six‐month period referred to above shall be extended to include the period of retroactive effect thereof).  The protection of this Section 2.11(d) shall be available to each Lender and regardless of any possible contention of the invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.
		

		
			(e)         Notwithstanding anything to the contrary, in the event that the Administrative Agent shall have determined that dollar deposits in the principal amounts of the Loan are not generally available in the London interbank market, or that the rates at which such dollar deposits are being offered will not adequately and fairly reflect the cost to the majority of Lenders of making or maintaining loans at the three‐month London Interbank Offered Rate, or that reasonable means do not exist for ascertaining the Libor Rate, the Administrative Agent shall, as soon as practicable thereafter, give written or email notice of such determination to the Borrower and the Lenders (a “LIBOR Unavailability Notice”).  In the event of any such determination, until the Administrative Agent shall have advised the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, interest on the Loan shall accrue by reference to the Alternate Base Rate.  Each determination by the Administrative Agent under this Section 2.11(e) shall be conclusive absent manifest error.
		

		
			SECTION 2.12.     Indemnity.  Subject to the limitations set forth in Section 9.05, the Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of any default by Borrower or any other Loan Party in the making of any payment or prepayment required to be made hereunder.  A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.12 shall be delivered to the Borrower and shall be conclusive absent manifest error.
		

		
			SECTION 2.13.     Pro Rata Treatment.  Except as otherwise provided in this Agreement the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Obligations owed to the Lenders hereunder, the Administrative Agent shall distribute such payment to the Lenders entitled thereto (other than any Lender that has consented in writing to waive its pro rata share of any such payment) pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received.
		

		
			SECTION 2.14.     Ratable Sharing.  Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against the Borrower or any other Loan Party, or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means (but excluding any sale or participation of its Loans to a Person other than the Borrower or an Affiliate thereof, which shall be included), obtain payment (voluntary or involuntary) in respect of any principal of or interest on any Loan as a result of which the unpaid principal portion of its Loans shall be proportionately less than the unpaid principal portion of the Loans of any other Lender, it shall (a) notify the Administrative Agent of such fact and (b) be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans of such other Lender, so that the aggregate unpaid principal amount of the Loans and participations in Loans held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its Loans prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all Loans outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; provided,  however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.14 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest.  The Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in a Loan deemed to have been so purchased may
		

		
			
		

		
			

		 

		

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			exercise any and all rights of banker’s lien, setoff or counterclaim or other event with respect to any and all moneys owing by the Borrower to such Lender by reason thereof as fully as if such Lender had made a Loan directly to the Borrower in the amount of such participation.
		

		
			SECTION 2.15.     Payments.
		

		
			(a)         The Borrower shall make each payment (including principal of or interest on any Loan or any fees or other amounts) hereunder and under any other Loan Document not later than 1:00 PM, Local Time, on the date when due in immediately available Dollars, without setoff, defense or counterclaim.  Any payment received by Administrative Agent after that time on such due date may (in the Administrative Agent’s sole discretion) be deemed to have been paid by Borrower on the next Business Day/ Each such payment shall be made to the Administrative Agent for distribution to the Lenders or other appropriate Person.  Each such payment that is payable to a Lender shall be paid directly to such Lender at the office identified on Schedule 2.01 for such Lender or as otherwise directed by such Lender in writing from time to time, and each such payment that is payable to the Administrative Agent or the Collateral Agent shall be paid directly to the Administrative Agent or Collateral Agent, as applicable, at their respective offices identified on Schedule 2.01 or as otherwise directed by the Administrative Agent or Collateral Agent, as applicable, in writing from time to time.
		

		
			(b)         Except as otherwise expressly provided herein, whenever any payment (including principal of or interest on any Loan or any fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, if applicable.
		

		
			SECTION 2.16.     Taxes.
		

		
			(a)         Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
		

		
			(b)         The Borrower shall, or shall cause each of the Loan Parties and their respective Subsidiaries to, timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
		

		
			(c)         The Loan Parties shall jointly and severally indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
		

		
			
		

		
			

		 

		

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			(d)         Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Administrative Agent has not already been indemnified by any of the Loan Parties for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(h) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).
		

		
			(e)         As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.16, the Borrower shall, or shall cause such Loan Party to, deliver to the Administrative Agent or the applicable Lender, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent or the applicable Lender, as the case may be.
		

		
			(f)         (i)          Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by applicable law, or reasonably requested by the applicable Withholding Agent such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.16(ii)(A) and (ii)(B)(i)‐(iv) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
		

		
			(ii)         Without limiting the generality of the foregoing, any Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent), whichever of the following is applicable:
		

		
			(A)        any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W‐9 certifying that such Lender is not subject to U.S. federal backup withholding tax;
		

		
			(B)        any Foreign Lender shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this
		

		
			
		

		
			

		 

		

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			Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent) whichever of the following is applicable:
		

		
			(i)          in the case of a Foreign Lender claiming the benefits of an income Tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W‐8BEN or W‐8BEN‐E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such Tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W‐8BEN or W‐8BEN‐E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such Tax treaty;
		

		
			(ii)         executed copies of IRS Form W‐8ECI;
		

		
			(iii)       in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that (A) such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (B) the interest payments in question are not effectively connected with a U.S. trade or business conducted by such Foreign Lender (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W‐8BEN or W‐8BEN‐E;
		

		
			(iv)        to the extent a Foreign Lender is not the beneficial owner (for example, where the Foreign Lender is a partnership or participating Lender granting a typical participation), executed originals of IRS Form W‐8IMY, accompanied by a Form W‐8ECI, W‐8BEN, W‐8BEN‐E, U.S. Tax Compliance Certificate, Form W‐9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership (and not a participating Lender) and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner; or
		

		
			(v)         executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.
		

		
			(iii)       If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations
		

		
			
		

		
			

		 

		

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			under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment under FATCA, if any.  Solely for purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
		

		
			Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
		

		
			(g)         If the Administrative Agent, Collateral Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.16 (including by the payment of additional amounts pursuant to this Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out‐of‐pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after‐Tax position than the indemnified party would have been in if Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid.
		

		
			(h)         Nothing contained in this Section 2.16 shall require any Lender (or any transferee or assignee) or either Agent to make available any of its Tax Returns or any other information that it deems to be confidential or proprietary.
		

		
			SECTION 2.17.     Assignment of Loans Under Certain Circumstances; Duty to Mitigate.
		

		
			(a)         In the event (i) any Lender delivers a certificate requesting compensation pursuant to Section 2.11, (ii) the Borrower is required to pay any Indemnified Taxes or any additional amount to any Lender or any Governmental Authority on account of any Lender pursuant to Section 2.16 or (iii) any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by the Borrower that requires the consent of a greater percentage of the Lenders than the Required Lenders and such amendment, waiver or other modification is consented to by the Required Lenders, and, in the case of clause (i) or (ii), such Lender has declined or is unable to designate a different lending office in accordance with Section 2.17(b), the Borrower, at its sole expense and effort (including with respect to the processing and recordation fee referred to in Section 9.04(b)), upon notice to such Lender, the Collateral Agent or the Administrative Agent, may require such Lender to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.11 or Section 2.16) and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such assigned obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (x) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority having jurisdiction, (y) the Borrower shall have received the prior written consent of the Collateral Agent, which consent shall not unreasonably be withheld or delayed, and (z) the Borrower or such assignee shall have paid to the affected Lender in immediately available funds an amount equal to the sum of the principal of and interest accrued to the date of such payment on the outstanding Loans of such
		

		
			
		

		
			

		 

		

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			Lender, plus all fees and other amounts accrued for the account of such Lender hereunder with respect thereto (including any amounts under Section 2.11 and Section 2.12); provided further that, if prior to any such transfer and assignment the circumstances or event that resulted in such Lender’s claim for compensation under Section 2.11 or the amounts paid pursuant to Section 2.16, as the case may be, cease to cause such Lender to suffer increased costs or reductions in amounts received or receivable or reduction in return on capital or cease to result in amounts being payable under Section 2.16, as the case may be (including as a result of any action taken by such Lender pursuant to paragraph (b) of this Section 2.17), or if such Lender shall waive its right to claim further compensation under Section 2.11 in respect of such circumstances or event or shall waive its right to further payments under Section 2.16 in respect of such circumstances or event or shall consent to the proposed amendment, waiver, consent or other modification, as the case may be, then such Lender shall not thereafter be required to make any such transfer and assignment hereunder.  Each Lender hereby grants to the Administrative Agent and the Collateral Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section 2.17.
		

		
			(b)         If (i) any Lender shall request compensation under Section 2.11 or (ii) the Borrower is required to pay any Indemnified Taxes or any additional amount to any Lender or any Governmental Authority on account of any Lender pursuant to Section 2.16, then such Lender shall (at the request of the Borrower) use reasonable efforts (which shall not require such Lender to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action inconsistent with its internal policies or legal or regulatory restrictions or suffer any disadvantage or burden deemed by it to be significant) to assign (at the request of the Borrower) its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would reduce its claims for compensation under Section 2.11 or would reduce amounts payable pursuant to Section 2.16, as the case may be, in the future.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such filing or assignment, delegation and transfer.
		

		
			SECTION 2.18.     [Reserved].
		

		
			SECTION 2.19.     Original Issue Discount.  The Borrower and each of the Lenders agree, and the Borrower shall cause the other Loan Parties to agree, (i) that the Loans are debt for U.S. federal income tax purposes, (ii) that the Loans are issued with original issue discount (“OID”) solely on account of the value allocated to the Warrants under Section 2.20 and the closing fee paid in accordance with Section 2.05, (iii) that the Loans are not governed by the rules set out in Treasury Regulations Section 1.1275‐4 and (iv) not to file any Tax Return, report or declaration inconsistent with the foregoing.  The inclusion of this Section 2.19 is not an admission by any Lender that it is subject to United States taxation.
		

		
			SECTION 2.20. Investment Unit.  In connection with the Loans, each of the Lenders is receiving a Warrant on the Closing Date.  The Loans and Warrants are considered to be the issuance of an “investment unit” under Section 1273(c)(2) of the Code, and the parties agree that the aggregate fair market value of the Warrants shall be, for purposes of the investment unit allocation rules under Section 1273(c)(2) of the Code, an amount to be reasonably agreed to by Collateral Agent and Borrower.  The Borrower and each of the Lenders agree, and the Borrower shall cause the other Loan Parties to agree, to report in a manner that is consistent with this allocation for all tax purposes.
		

		
			
		

		
			

		 

		

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			ARTICLE III
		

		
			 
		

		
			Representations and Warranties
		

		
			In order to induce the Lenders to enter into this Agreement and to make the Loans, the Borrower represents and warrants to the Administrative Agent, the Collateral Agent and each of the Lenders that the following statements are true and correct (it being understood and agreed that the representations and warranties made on the Closing Date are deemed to be made concurrently with the consummation of the Transactions):
		

		
			SECTION 3.01.     Organization; Powers.  Each of the Loan Parties and their respective Subsidiaries (a) is duly organized or incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or incorporation, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, and (d) has the power and authority to execute, deliver and perform its obligations under each of the Loan Documents to which it is or will be a party and, in the case of the Borrower, to borrow hereunder.
		

		
			SECTION 3.02.     Authorization.  The Transactions (a) have been duly authorized by all requisite corporate (or other organizational) and, if required, stockholder action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, (B) any provision of the Organizational Documents or by‐laws of the Borrower or any Subsidiary, (C) any order of any Governmental Authority or (D) any provision of any Contractual Obligation of the Borrower or any Subsidiary except, in the case of (A), (C) or (D), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any such Contractual Obligation except, as would otherwise reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (iii) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by the Borrower or any Subsidiary (other than any Lien created hereunder or under the Security Documents), or (iv) require any approval of holders of Equity Interests of the Borrower or any of its Subsidiaries or any approval or consent of any Person under any material Contractual Obligation of the Borrower or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Closing Date.
		

		
			SECTION 3.03.     Enforceability.  This Agreement has been duly executed and delivered by the Borrower and subject to the completion of any summary approval procedure under the Irish Companies Act, constitutes, and each other Loan Document when executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
		

		
			SECTION 3.04.     Governmental Approvals.  No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the Transactions, except for (a) the filing of UCC financing statements and filings with the United States Patent and Trademark Office and the United States Copyright Office, (b) recordation of the Mortgages, (c) registration of the Collateral over Intellectual Property granted under the Irish Debenture at the trade marks registry and patent office in Ireland, (d) registration of the Irish Debenture at the Companies Registration
		

		
			
		

		
			

		 

		

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			Office within 21 days after its execution, (e) filing of the statutory declaration sworn or to be sworn by all or a majority of the directors of S3 Semiconductors pursuant to Section 239 or Section 82 of the Companies Act 2014, (f) registration of the Irish Debenture at the Irish Land Registry and (g) such as have been made or obtained and are in full force and effect.
		

		
			SECTION 3.05.     Financial Statements.
		

		
			(a)         The Borrower has heretofore furnished to the Lenders (i) GAAP audited consolidated or combined, as applicable, balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries for the 2017 fiscal year, audited by and accompanied by the opinion of BPM LLP, independent public accountants and (ii) GAAP unaudited consolidated or combined, as applicable, balance sheets and related statements of income, stockholders’ equity and cash flows of the Borrower and its Subsidiaries (other than the Target and its Subsidiaries) for the fiscal quarter ending March 31, 2018, certified by the chief financial officer of the Borrower.  Such financial statements present fairly, in all material respects, the financial condition and results of operations and cash flows of the Borrower and its Subsidiaries as of such dates and for such periods.  Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the dates thereof required to be disclosed pursuant to GAAP.  Such financial statements were prepared in accordance with GAAP applied on a consistent basis, subject, in the case of unaudited financial statements, to normal year‐end audit adjustments and the absence of footnotes.
		

		
			(b)         The Borrower has heretofore furnished to the Lenders unaudited pro forma consolidated balance sheets and related pro forma consolidated statements of income and cash flows of the Borrower as of and for the twelve‐month period ending on the last day of the most recently completed four‐fiscal quarter period ended at least 45 days prior to the Closing Date, in each case prepared after giving effect to the Transactions as if they had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements).  Such pro forma financial statements have been prepared in good faith by the Borrower, based on assumptions believed by the Borrower on the date hereof and on the Closing Date to be reasonable, are based on the best information available to the Borrower as of the date of delivery thereof, accurately reflect all adjustments required to be made to give effect to the Transactions and present fairly, in all material respects, on a pro forma basis the estimated consolidated financial position of the Borrower as of such date and for such period, assuming that the Transactions had actually occurred at such date or at the beginning of such period, as the case may be, and such financial statements are based on actual results of the Borrower and its Subsidiaries, without giving effect to projected synergies or cost savings.  All such adjustments shall be set forth in a reasonably detailed certificate of a Responsible Officer of the Borrower).
		

		
			(c)         Except as fully disclosed in the balance sheets delivered pursuant to Section 3.05(a), there were as of the Closing Date no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, are required to be disclosed pursuant to GAAP.
		

		
			(d)         Since December 31, 2017, no event has occurred or other circumstances arisen that has had, or could reasonably be expected to have, a Material Adverse Effect.
		

		
			SECTION 3.06.     Title to Properties; Possession Under Leases.
		

		
			(a)         Each of the Loan Parties and their respective Subsidiaries has good and marketable title to, or valid leasehold interests in, substantially all its properties and assets (including all Mortgage Property), except for minor defects in title that do not interfere in any material respect with its ability to conduct its
		

		
			
		

		
			

		 

		

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			business as currently conducted or to utilize such properties and assets for their intended purposes.  All such properties and assets are free and clear of Liens, other than Liens expressly permitted by Section 6.02.
		

		
			(b)         Each of the Loan Parties and their respective Subsidiaries has complied in all material respects with all obligations under all leases (with respect to properties that are material to the business of the Loan Parties and their respective Subsidiaries taken as a whole) to which it is a party and all such leases are in full force and effect.  Each of the Loan Parties enjoys peaceful and undisturbed possession under all such leases, except for Liens expressly permitted by Section 6.02.
		

		
			(c)         As of the Closing Date, none of the Loan Parties has received any notice of, nor has any knowledge of, any pending or contemplated condemnation proceeding affecting the Mortgaged Properties or any sale or disposition thereof in lieu of condemnation.
		

		
			(d)         As of the Closing Date, none of the Loan Parties is obligated under any right of first refusal, option or other contractual right to Dispose of any Mortgaged Property or any interest therein.
		

		
			(e)         There are no pending or, to the knowledge of the Loan Parties, threatened applications, proceedings or litigation, nor any presented claims adversely affecting the Intellectual Property held by any Loan Party or any of its Subsidiaries, and, to the knowledge of the Loan Parties, no Person is infringing, misusing, violating or breaching such Intellectual Property.  Each Loan Party and its Subsidiaries owns or has a valid license to all material Intellectual Property necessary to operate their business as currently conducted.  Neither any Loan Party nor any of its Subsidiaries has received written notice of any claim of infringement, misuse, violation or breach by such Loan Party or any of its Subsidiaries of any Intellectual Property owned or controlled by another Person.  Neither any Loan Party nor any of its Subsidiaries are, to the knowledge of the Loan Parties, infringing, misusing, violating or breaching any Intellectual Property owned or controlled by any other Person.
		

		
			SECTION 3.07.     Subsidiaries.
		

		
			(a)         Schedule 3.07(a) sets forth as of the Closing Date a list of all Subsidiaries of the Borrower and the percentage ownership interest of the Borrower and its Subsidiaries.  The shares of capital stock or other ownership interests so indicated on Schedule 3.07(a) are fully paid and non‐assessable and are owned by the Borrower or such Subsidiary, directly or indirectly, free and clear of all Liens (other than Liens created under the Security Documents and Liens permitted by Section 6.02).
		

		
			(b)         Schedule 3.07(b), as of the Closing Date, sets forth the authorized capital stock of the Borrower and the amount of capital stock issued and outstanding.  Except as set forth in Schedule 3.07(b), the Borrower does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreement of any character calling for the purchase or issuance of any Equity Interests of the Borrower or any securities representing the right to purchase or otherwise receive any Equity Interests of the Borrower.
		

		
			(c)         Except as set forth on Schedule 3.07(a), each Subsidiary of the Borrower is a Wholly Owned Subsidiary, and all of the issued and outstanding Equity Interests of such Subsidiary are legally and beneficially owned and Controlled directly by the Borrower, free and clear of any Liens, rights, options, warrants or similar agreements or understandings, other than Liens in favor of the Collateral Agent created pursuant to the Security Documents and Liens permitted by Section 6.02.
		

		
			(d)         All the outstanding shares of Equity Interests of the Borrower are duly authorized, validly issued, fully paid, nonassessable and have been issued in compliance with applicable law.  The Warrants and Warrant Shares (as defined in the Warrant Agreement), upon issuance and payment therefor in
		

		
			
		

		
			

		 

		

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			accordance with the terms of the Warrant Agreement, will be duly authorized, validly issued, fully paid and nonassessable.  The Warrant Shares (as defined in the Warrant Agreement) have been duly and validly reserved for issuance on the exercise of the Warrants.  None of the shares of the Equity Interests of the Borrower are held in the Borrower’s treasury.  The Borrower has duly reserved a sufficient number of shares of Warrant Shares (as defined in the Warrant Agreement) for issuance upon exercise of the Warrants and other outstanding warrants at the initial exercise rate thereof.  No Equity Interest of the Borrower is entitled to cumulative voting rights, preemptive rights, anti‐dilution rights or so‐called registration rights under the Securities Act, except as otherwise provided in the Warrants.
		

		
			SECTION 3.08.     Litigation; Compliance with Laws.
		

		
			(a)         There are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or threatened in writing against or affecting any of the Loan Parties or their respective Subsidiaries or any business, property or rights of any such Person that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
		

		
			(b)         None of the Loan Parties or their respective Subsidiaries or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including any zoning, building, Environmental Law, ordinance, code or approval or any building permits) or any restrictions of record or agreements affecting the Mortgaged Property, or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.
		

		
			(c)         Certificates of occupancy and permits are in effect for each Mortgaged Property as currently constructed, and true and complete copies of such certificates of occupancy have been delivered to the Collateral Agent as mortgagee with respect to each Mortgaged Property.
		

		
			(d)         None of the Loan Parties or their respective Subsidiaries is, in any material respect, in conflict or default with respect to or in violation of any applicable laws, regulations, orders or judgments.  Each Loan Party and each of its Subsidiaries have timely filed with the appropriate authorities all Tax Returns and other filings required to be filed by them with respect to Taxes for any period ending on or before the Closing Date, and all Taxes that are due prior to the Closing Date have been duly paid.
		

		
			SECTION 3.09.     Contractual Obligations. Except as set forth on Schedule 3.09, as of the Closing Date:
		

		
			(a)         none of the Loan Parties or their respective Subsidiaries is a party to any Contractual Obligation or subject to any organizational restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect;
		

		
			(b)         none of the Loan Parties or their respective Subsidiaries is in any respect in default under or in violation of the performance of any of its obligations under any Contractual Obligation, and, to the knowledge of the Loan Parties, no other party thereto is in default under or in violation of the performance of any of its obligations under any such Contractual Obligation, in each case, that has resulted or could reasonably be expected to result in a Material Adverse Effect; and
		

		
			(c)         none of the Loan Parties or their respective Subsidiaries is a party or subject to any Contractual Obligation pursuant to which any Loan Party is required to pay any Management Fees.
		

		
			SECTION 3.10.     Federal Reserve Regulations.
		

		
			
		

		
			

		 

		

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			(a)         None of the Loan Parties or their respective Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.
		

		
			(b)         No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation T, Regulation U or Regulation X.
		

		
			SECTION 3.11.     Government Regulation.  None of the Loan Parties is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.  None of the Loan Parties is subject to regulation under the Federal Power Act, the Interstate Commerce Act, the ICC Termination Act, as amended, or under any other federal or state statute or regulation that may limit its ability to incur Indebtedness or Contingent Obligations or which may otherwise render all or any portion of the Obligations unenforceable.
		

		
			SECTION 3.12.     Use of Proceeds.  The Borrower will use the proceeds of the Loans only for the purposes specified in Section 5.08.
		

		
			SECTION 3.13.     Tax Returns; Passive Foreign Investment Company.
		

		
			(a)         Each of the Loan Parties and their respective Subsidiaries has filed or caused to be filed all Federal, state, material local and foreign Tax Returns required to have been filed by it and has paid or caused to be paid all Taxes due and payable by it, except Taxes that are being contested in good faith by appropriate proceedings and for which the applicable Loan Party or Subsidiary of a Loan Party shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested Tax and the imposition or enforcement of any Lien.
		

		
			(b)         Neither the Borrower nor any of its Subsidiaries ever has been, is, or, upon the consummation of the transactions contemplated hereby, by any other Transaction Document or any related agreements, will be a “passive foreign investment company” within the meaning of Section 1297 of the Code.
		

		
			SECTION 3.14.     No Material Misstatements.
		

		
			(a)         Except with respect to the Closing Date Projections, the information that the Loan Parties have provided, directly or indirectly, in writing, taken as a whole, to the Collateral Agent or any Lender (including, without limitation, all information contained in the Loan Documents but excluding the Closing Date Projections) is true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided.
		

		
			(b)         The Closing Date Projections have been diligently prepared on a basis consistent with the financial statements delivered to the Lenders and the Collateral Agent pursuant to Section 3.05, and are based on good faith estimates and assumptions believed by management of the Borrower to be reasonable as of the date of the Closing Date Projections and as of the Closing Date, and there are no statements or conclusions in any of the Closing Date Projections that are based upon or include information known to any Loan Party or any of its Subsidiaries to be misleading in any material respect or which fail on the Closing Date to take into account material information regarding the matters reported therein.  On the Closing Date, the Borrower believes that the Closing Date Projections are reasonable, it being recognized
		

		
			
		

		
			

		 

		

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			by the Lenders and the Collateral Agent, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Closing Date Projections may differ from the projected results and such differences may be material.
		

		
			SECTION 3.15.     Employee Benefit Plans.  Except as would not reasonably be expected to result in a Material Adverse Effect, each Employee Benefit Plan of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect.  Each Borrower and ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Plan.  There are no pending or threatened in writing claims, sanctions, actions or lawsuits, asserted or instituted against any Employee Benefit Plan or any Person as fiduciary or sponsor of any such Employee Benefit Plan.  There are no pending or threatened in writing claims, sanctions, actions or lawsuits, asserted or instituted against any Employee Benefit Plan or any Person as fiduciary or sponsor of any such Employee Benefit Plan.  “Pension Funding Rules” shall mean the rules of the Code and ERISA regarding minimum required contributions to Plans set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA
		

		
			SECTION 3.16.     Environmental Matters.  Except as set forth in Schedule 3.16, none of the Loan Parties or their respective Subsidiaries (i) has failed to comply in any material respect with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any written claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
		

		
			SECTION 3.17.     Insurance.  Schedule 3.17 sets forth a true, complete and correct description of all insurance maintained by the Loan Parties and their respective Subsidiaries as of the Closing Date.  As of such date, such insurance is in full force and effect and all premiums have been duly paid.  The Loan Parties have insurance in such amounts and covering such risks and liabilities as are customary for companies of a similar size engaged in similar businesses in similar locations.
		

		
			SECTION 3.18.     Security Documents.
		

		
			(a)         The Guarantee and Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and the proceeds thereof except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles and except with respect to additional actions and documents that need to be entered into that are required under foreign law to create a legal, valid and enforceable security interest and (i) when the Pledged Collateral (as defined in the Guarantee and Collateral Agreement) is delivered to the Collateral Agent, the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the Loan Parties in such Pledged Collateral, in each case prior and superior in right to any other Person, and (ii) when financing statements in appropriate form are filed in the offices specified on Schedule 3.18(a),  the actions described above with respect to Pledged Collateral, and upon taking any other perfection action as may be required under the UCC or any other applicable law, including any action required under foreign law to create or perfect such security interest, the Lien created under the Guarantee and Collateral Agreement will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (other than federally registered copyrights) in which a security interest may be perfected pursuant
		

		
			
		

		
			

		 

		

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			to Article 9 of the UCC, in each case prior and superior in right to any other Person, other than with respect to Liens expressly permitted by Section 6.02.
		

		
			(b)         Upon the recordation of the Guarantee and Collateral Agreement (or a short‐form security agreement in form and substance reasonably satisfactory to the Borrower and the Collateral Agent) with the United States Copyright Office, the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in the federally registered copyrights in which a security interest may be perfected by filing in the United States and its territories and possessions, in each case prior and superior in right to any other Person other than Liens permitted by Section 6.02 (it being understood that subsequent recordings in the United States Copyright Office may be necessary to perfect a Lien on registered copyrights acquired by the Loan Parties after the date hereof).
		

		
			(c)         The security conferred by each Irish Security Document constitutes a first priority security interest of the type described, over the assets referred to, in that Irish Security Document and those assets are not subject to any prior or pari passu Lien.
		

		
			SECTION 3.19.     Location of Real Property and Leased Premises.
		

		
			(a)         Schedule 3.19(a) lists completely and correctly as of the Closing Date all real property owned by the Borrower and the Subsidiaries and the addresses thereof.  As of the Closing Date, the Borrower and the Subsidiaries own in fee all the real property set forth on Schedule 3.19(a).
		

		
			(b)         Schedule 3.19(b) lists completely and correctly as of the Closing Date all real property leased by the Borrower and the Subsidiaries and the addresses thereof.  As of the Closing Date, the Borrower and the Subsidiaries have valid leasehold interests  in all the real property set forth on Schedule 3.19(b).
		

		
			SECTION 3.20.     Labor Matters.  As of the Closing Date, there are no strikes, lockouts or slowdowns against any of the Loan Parties or their respective Subsidiaries pending or, to the knowledge of the Borrower, threatened.  The hours worked by and payments made to employees of the Loan Parties have not been in material violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters.  All payments due from any of the Loan Parties, or for which any claim may be made against any of the Loan Parties or their respective Subsidiaries, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Loan Parties or their respective Subsidiaries.  The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any of the Loan Parties or their respective Subsidiaries is bound.
		

		
			SECTION 3.21.     Solvency.  Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of the Loans and after giving effect to the application of the proceeds of the Loans, (a) the fair value of the assets of the Loan Parties and their respective Subsidiaries on a consolidated basis, at a fair valuation, will exceed their debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of the Loan Parties and their respective Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) the Loan Parties and their respective Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Loan Parties and their respective Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted following the Closing Date.  Such foregoing determination has been made by the chief executive
		

		
			
		

		
			

		 

		

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			officer,  chief financial officer or other Financial Officer, if any, of the Borrower, is based on such officer’s actual knowledge and such officer has not conveyed any information to the contrary to any other Person at any time on or prior to the date that this representation and warranty is being made or deemed made.
		

		
			SECTION 3.22.     Transaction Documents.  The Borrower has delivered to the Administrative Agent a complete and correct copy of the Acquisition Agreement (including all schedules, exhibits, amendments, supplements and modifications thereto).  No Loan Party or, to the knowledge of the Borrower, any other Person party thereto (including the Target) is in default in the performance or compliance with any material provisions thereof.  The Acquisition Agreement complies in all material respects with all applicable laws.  All representations and warranties set forth in the Acquisition Agreement were true and correct in all respects at the time as of which such representations and warranties were made (or deemed made).  Notwithstanding anything in the Acquisition Agreement to the contrary, the representations and warranties of the Borrower set forth in this Section 3.22 with respect the Acquisition Agreement shall, solely for purposes of this Agreement, survive the Closing Date and the consummation of the Acquisition for the benefit of Lenders.
		

		
			SECTION 3.23.     Sanctioned Persons.  None of the Loan Parties, their respective Subsidiaries nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of any of the Loan Parties or their respective Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); the Borrower will not directly or indirectly use the proceeds of the Loans or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
		

		
			SECTION 3.24.     Financial Advisors.  Except as set forth in Schedule 3.24, no agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee from any Loan Party or any Subsidiary of any Loan Party with respect to this Agreement or any of the other Loan Documents or any of the transactions contemplated hereby, and the Borrower hereby indemnifies the Lenders, the Collateral Agent and the Administrative Agent against, and agrees that it will hold the Lenders, the Collateral Agent and the Administrative Agent harmless from, any claim, demand or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses (including reasonable and documented fees, expenses and disbursements of counsel) arising in connection with any such claim, demand or liability.
		

		
			SECTION 3.25.     Foreign Assets Control Regulations, Etc.
		

		
			(a)         Neither the borrowing of the Loans by the Borrower hereunder nor its use of the proceeds thereof will violate (i) the United States Trading with the Enemy Act, as amended, (ii) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto, (iii) Executive Order No. 13,224, 66 Fed Reg 49,079 (2001), issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) (the “Terrorism Order”) or (iv) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107‐56 (October 26, 2001).  No part of the proceeds from the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
		

		
			
		

		
			

		 

		

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			(b)         No Loan Party or any of its Subsidiaries (i) is or will become a “blocked person” as described in Section 1.01 of the Terrorism Order or (ii) engages or will engage in any dealings or transactions, or is otherwise associated, with any such blocked person.
		

		
			(c)         Each of the Loan Parties and their Respective Subsidiaries and Affiliates are in compliance, in all material respects, with the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107‐56 (October 26, 2001).
		

		
			SECTION 3.26.     Representations and Warranties.  The representations and warranties of each Subsidiary Guarantor contained in the Loan Documents to which it is a party are true and correct as of the date made or deemed made.
		

		
			SECTION 3.27.     Deposit Accounts; Securities Accounts.  Set forth on Schedule 3.27 is a listing of all of the Loan Parties’ Deposit Accounts and Securities Accounts as of the Closing Date, including, with respect to each bank or securities intermediary (a) the name and address of such Person, (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person, and (c) the relevant Loan Party or Loan Parties.
		

		
			SECTION 3.28.     Loans to Officers and Directors.  Except as set forth on Schedule 3.28, there are no outstanding loans made by the Borrower or any of its Subsidiaries to any of their officers, directors or shareholders (directly or indirectly) or any of such Persons’ Affiliates.
		

		
			SECTION 3.29.     Customers.  Schedule 3.29 lists the names and addresses of the ten (10) largest customers of the Borrower and its Subsidiaries (based on revenues) during the twelve‐month period ended March 31, 2018 (“Major Customers”).
		

		
			SECTION 3.30.     Accounts and Notes Receivable; Accounts and Notes Payable.
		

		
			(a)         All the accounts receivable and notes receivable owing to the Borrower or any of its Subsidiaries as of the Closing Date constitute valid and enforceable claims arising from bona fide transactions in the ordinary course of business, consistent with past practice.
		

		
			(b)         All accounts payable and notes payable by the Borrower or any of its Subsidiaries to third parties as of the Closing Date arise from bona fide transactions in the ordinary course of business, consistent with past practice and, except as set forth on Schedule 3.30(b), there is no such account payable or note payable delinquent in its payment, except those contested in good faith.
		

		
			SECTION 3.31.     Internal Controls.  The Borrower and its Subsidiaries maintain a system of internal control over financial reporting.  Such internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
		

		
			SECTION 3.32.     Intellectual Property; Copyright Matters.
		

		
			(a)         Each of the Borrower and its Subsidiaries owns or possesses, or could obtain ownership or possession of, on terms not adverse to it, all patents, trademarks, service marks, trade names, copyrights, licenses and rights with respect thereto necessary for the present conduct of its business, without any known conflict with the rights of others, except where such conflicts and restrictions could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
		

		
			
		

		
			

		 

		

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			(b)         All Intellectual Property that is material to the business of the Borrower and its Subsidiaries is owned by, or is validly licensed to, the Borrower or, after the consummation of the Acquisition and the effectiveness of the Closing Date Joinders, S3 Semiconductors.
		

		
			(c)         Each Loan Party (i) has duly and timely filed all reports and other filings which are required to be filed under the Copyright Act, the non‐filing of which could reasonably be expected to have a Material Adverse Effect, and (ii) is in compliance in all material respects with the Copyright Act.  All information provided by or on behalf of any Loan Party in any material filing with the Copyright Office was, at the time of filing, true, complete and correct in all material respects when made, and the Copyright Office has been notified of any substantial or significant changes in such information as may be required by the Copyright Act.
		

		
			ARTICLE IV
		

		
			 
		

		
			Conditions of Lending
		

		
			SECTION 4.01.     Conditions Precedent to Closing.
		

		
			The obligations of the Lenders to make Loans hereunder are subject to the satisfaction of the following conditions on the Closing Date:
		

		
			(a)         Loan Party Documents.  The Administrative Agent and the Collateral Agent shall have received the following from or with respect to each Loan Party:
		

		
			(i)          Except to the extent such Loan Party is organized in a jurisdiction where the applicable Governmental Authority does not provide such certificates, a copy of the certificate or articles of incorporation or other such Organizational Document, including all amendments thereto, certified as of a recent date by either the Secretary of State of the state of its organization or such Governmental Authority, and a certificate certifying that such Loan Party has paid all franchise Taxes due and payable on or prior to the date of such certificate and such Loan Party is duly organized and in good standing under the laws of such jurisdiction;
		

		
			(ii)         A certificate of the Secretary of each Loan Party (other than S3 Semiconductors) dated the Closing Date and certifying (A) that attached thereto are true and complete copies of the Organizational Documents of such Loan Party as in effect on the Closing Date and at all times since a date on or prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Governing Body of such Loan Party authorizing the execution, delivery and performance of the Loan Documents and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the Organizational Document of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing any Loan Documents or any other document delivered in connection herewith on behalf of such Loan Party;
		

		
			(iii)       A certificate of a Director of S3 Semiconductors dated the Closing Date in a form and content satisfactory to the Collateral Agent certifying (A) that attached thereto are true and complete copies of the Organizational Documents of S3 Semiconductors as in effect on the Closing Date and at all times since a date on or prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of S3 Semiconductors authorizing,  among other things, the execution, delivery
		

		
			
		

		
			

		 

		

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			and performance of the Loan Documents to which S3 Semiconductors is a party and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the Organizational Document of S3 Semiconductors have not been amended since the date of the last amendment referred to in  the Director certificate, (D) as to the incumbency and specimen signature of each officer executing any Loan Documents or any other document delivered in connection herewith on behalf of S3 Semiconductors, (E) the names and addresses of Directors and Secretary of S3 Semiconductors and the registered office, corporate tax number and shareholder details of S3 Semiconductors, and (F) that attached thereto is a true copy of the Power of Attorney referred to therein;
		

		
			(iv)        a copy of the shareholders special resolution adopting a new Constitution of S3 Semiconductors in a form acceptable to the Collateral Agent;
		

		
			(v)         evidence to be provided to the Collateral Agent, in a form and content satisfactory to it that S3 Semiconductors  has done all that is necessary to follow the authorization procedures set out in Section 82 of the Companies Act 2014. Such evidence shall include:
		

		
			(A) copies of any requisite shareholder/s resolutions; and
		

		
			(B) statutory declarations;
		

		
			(vi)        a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above;
		

		
			(vii)       executed copies of the Loan Documents to which such Person is a party; and
		

		
			(viii)     executed copies of the Related Documents; and
		

		
			(ix)        such other documents as the Lenders, the Collateral Agent or the Administrative Agent may reasonably request.
		

		
			(b)         Fees.  The Administrative Agent, the Collateral Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all reasonable and documented out of pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document.
		

		
			(c)         Corporate and Capital Structure.  The capitalization (including the number of shares outstanding) and structure of the Borrower and its Subsidiaries and the equity ownership of the Borrower’s Subsidiaries shall be as set forth in Schedule 3.07.
		

		
			(d)         Financial Statements; Pro Forma Financial Statements.  The Lenders shall have received (i) the financial statements, pro forma financial statements, and audit opinion referred to in Section 3.05 and (ii) pro forma financial statements, giving effect to the Transactions, which pro forma financial statements shall be in form and substance reasonably satisfactory to the Collateral Agent.
		

		
			(e)         Closing Date Projections.  The Lenders and the Collateral Agent shall have received the forecasted financial statements of the Borrower and its Subsidiaries, consisting of balance sheets, income statements and cash flow statements for the Borrower and its Subsidiaries giving effect to the consummation of the transactions contemplated by this Agreement and the other Transaction Documents (the “Closing Date Projections”), in form and substance satisfactory to the Lenders and the Collateral Agent, together
		

		
			
		

		
			

		 

		

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			with an officers’ certificate from the Borrower’s chief executive officer and chief financial officer regarding the Closing Date Projections containing the certifications set forth in Section 3.14(b).
		

		
			(f)         Solvency Assurances.  The Administrative Agent and the Collateral Agent shall have received a solvency certificate from the chief financial officer of the Borrower, substantially in the form of Exhibit B hereto.
		

		
			(g)         Opinions of Counsel.  The Administrative Agent shall have received, on behalf of itself, the Collateral Agent, the Lenders, a favorable written opinion of (i) Fenwick & West LLP, counsel for the Loan Parties, (ii) Arthur Cox, counsel for the Loan Parties and (iii) Mason Hayes & Curran, counsel for the Collateral Agent, in each case, (A) dated the Closing Date, (B) addressed to the Administrative Agent, the Collateral Agent and the Lenders, and (C) covering such other matters relating to the Loan Documents and the Transactions as the Administrative Agent shall reasonably request, and the Borrower hereby requests such counsel to deliver such opinions.
		

		
			(h)         Evidence of Insurance.  The Administrative Agent and the Collateral Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.02 and the applicable provisions of the Security Documents, each of which shall name the Collateral Agent as additional insured or loss payee, as applicable, in form and substance satisfactory to the Collateral Agent.
		

		
			(i)          Necessary Governmental Authorizations and Consents; Expiration of Waiting Periods, etc.  All requisite Governmental Authorities and other material third parties shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required, all applicable appeal periods shall have expired and there shall not be any pending or threatened litigation, governmental, administrative or judicial action, actual or threatened, that could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the Transactions.
		

		
			(j)          Security Interests.
		

		
			(i)          The Security Documents shall have been duly executed by each Loan Party that is to be a party thereto and shall be in full force and effect on the Closing Date.  The Collateral Agent on behalf of the Secured Parties shall have a security interest in the Collateral of the type and priority described herein and in each Security Document.
		

		
			(ii)         The Collateral Agent shall have received a Perfection Certificate with respect to the Loan Parties dated the Closing Date and duly executed by a Responsible Officer of the Borrower, and shall have received the results of a search of the UCC filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such Persons as reasonably required by the Collateral Agent, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence reasonably satisfactory to the Collateral Agent that the Liens indicated in any such financing statement (or similar document) would be permitted under Section 6.02 or have been or will be contemporaneously released or terminated.  Such search results shall include copyright, patent and trademark searches, and copyright, patent and trademark filings or recordations, necessary or advisable in the Collateral Agent’s reasonable determination to perfect the Collateral Agent’s security interest in the Collateral as of the Closing Date to the extent such perfection can be obtained by (a) the filing of a financing statement (or similar document), (b) any copyright filing or recordation with the United States Copyright Office and (c) or any patent or trademark filing or recordation with the United States Patent and Trademark Office.
		

		
			
		

		
			

		 

		

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			(iii)       The Collateral Agent shall have received all certificates, agreements or instruments representing or evidencing the Pledged Collateral (as defined in the Guarantee and Collateral Agreement), accompanied by instruments of transfer and stock powers undated and endorsed in blank.
		

		
			(iv)        The Collateral Agent shall have received duly executed notices of assignment required pursuant to the Irish Security Documents.
		

		
			(v)         The Collateral Agent shall have received the following share ancillaries in respect of shares charged under the Irish Share Charge:
		

		
			(A)        original share certificates;
		

		
			(B)        share transfer form;
		

		
			(C)        dividend mandate;
		

		
			(D)        shareholder’s letter of authority;
		

		
			(E)        letter of irrevocable proxy;
		

		
			(F)         director’s and secretary letter of resignation; and
		

		
			(G)        authority to date director’s and secretary’s letter of resignation
		

		
			(vi)        The Collateral Agent shall have received certified copies of all agreements and loan agreements secured by the Irish Share Charge, to include without limitation a certified copy of the Share Purchase Agreement.
		

		
			(vii)       Delivery to the Collateral Agent of explanations to up to date searches (including judgments search) in respect of S3 Semiconductors at the Companies Registration Office and the High Court’s Central Office along with evidence that any security affecting S3 Semiconductors or any of its assets.
		

		
			(k)         Closing Date Certifications. The Administrative Agent and the Collateral Agent shall have received a certificate, dated the Closing Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in Section 4.01(a), Section 4.01(b), Section 4.01(c), Section 4.01(d), Section 4.01(e), Section 4.01(i), Section 4.01(o), Section 4.01(q), Section 4.01(s), Section 4.01(t).
		

		
			(l)          Existing Debt.  The Borrower shall have (i) consummated the Existing Debt Refinancing; (ii) delivered to the Administrative Agent and the Collateral Agent a “pay‐off” letter in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent with respect to all debt being refinanced in the Existing Debt Refinancing, (iii) delivered to the Administrative Agent and the Collateral Agent all documents or instruments necessary to release all Liens securing the debt being repaid in the Existing Debt Refinancing, and (iv) made arrangements reasonably satisfactory to the Administrative Agent and Collateral Agent with respect to the cancellation or cash collateralization of any letters of credit outstanding under any debt being repaid in the Existing Debt Refinancing or the issuance of letters of credit to support the obligations of the Borrower and its Subsidiaries with respect thereto.
		

		
			(m)        Other Legal Matters.
		

		
			
		

		
			

		 

		

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			(i)          All corporate and other proceedings in connection with the transactions contemplated by this Agreement and the other Loan Documents and all other agreements, documents and instruments incident to such transactions shall be reasonably satisfactory to the Lenders and the Collateral Agent, and the Lenders, the Collateral Agent and the Administrative Agent shall have received all such counterpart originals or certified or other copies of such documents as the Lenders, the Collateral Agent or Administrative Agent may reasonably request.
		

		
			(ii)         The Administrative Agent, the Collateral Agent and the Lenders shall have received all documentation and other information required by regulatory authorities under applicable “know your customer” and anti‐money laundering rules and regulations, including the USA Patriot Act, with respect to the Loan Parties and the Lenders.
		

		
			(iii)       All legal matters incident to this Agreement, the extensions of credit hereunder and the other Loan Documents shall be satisfactory to the Lenders, the Collateral Agent and to the Administrative Agent.
		

		
			(n)         Funds Flow Memorandum.  The Administrative Agent and the Collateral Agent shall have received a funds flow memorandum duly executed by a Responsible Officer of the Borrower, in form and substance reasonably satisfactory to the Collateral Agent.
		

		
			(o)         Material Adverse Effect.  Since December 31, 2017, no Material Adverse Effect shall have occurred.
		

		
			(p)         [Reserved].
		

		
			(q)         No Litigation.  There shall not exist any action, suit, investigation, litigation, proceeding, hearing or other legal or regulatory developments, pending or threatened in writing in any court or before any arbitrator or Governmental Authority that, in the reasonable opinion of the Collateral Agent, singly or in the aggregate, could reasonably be expected to materially impair any of the transactions contemplated by the Loan Documents, or that could reasonably be expected to have a Material Adverse Effect.
		

		
			(r)         Due Diligence.  The Collateral Agent shall have completed a due diligence investigation of the Loan Parties in scope, and with results, reasonably satisfactory to the Collateral Agent, including without limitation, as to general affairs, environmental concerns, management, corporate structure, capital structure, other debt instruments, material contracts, governing documents, prospects, financial position, stockholders’ equity and results of operations, and the tax, accounting, legal, regulatory, environmental and other issues relevant to the Loan Parties, and shall have been given access during normal business hours and with reasonable advance written notice to the external independent auditors, management, records, books of account, contracts and properties of the Loan Parties and shall have received such financial, business and other information regarding the Loan Parties as it shall have requested.
		

		
			(s)         No Default; Representations and Warranties.  At the time of the borrowing hereunder on the Closing Date and also after giving effect thereto (i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein and in the other Loan Documents shall be true and correct in all material respects as of the date of such borrowing (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date); provided that, if a representation and warranty is qualified as to materiality, for purposes of this clause (u), the applicable materiality qualifier set forth above shall be disregarded with respect to such representation and warranty.
		

		
			
		

		
			

		 

		

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			(t)          No Injunction.  No injunction or other restraining order shall have been issued and no hearing to cause an injunction or other restraining order to be issued shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the Transactions or the making of Loans hereunder.
		

		
			(u)         Notice of Borrowing.  Prior to the making of the Loan, the Administrative Agent and the Collateral Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.02(c).
		

		
			The acceptance of the benefits of each borrowing hereunder shall constitute a representation and warranty by the Borrower to the Administrative Agent, the Collateral Agent and each of the Lenders that all the conditions specified in this Section 4.01 and applicable to such borrowing are satisfied as of that time.  All of the Notes, certificates, legal opinions and other documents and papers referred to in this Section 4.01, unless otherwise specified, shall be delivered to the Administrative Agent and the Collateral Agent for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form and substance reasonably satisfactory to the Collateral Agent.
		

		
			SECTION 4.02.     Post Closing Obligations.  As an accommodation to the Borrower, the Administrative Agent, the Collateral Agent and the Lenders have agreed to execute this Agreement and to make Loans on the Closing Date notwithstanding the failure by the Borrower to satisfy the conditions set forth below on or before the Closing Date.  In consideration of such accommodation, the Lenders agree that, in addition to all other terms, conditions and provisions set forth in this Agreement and the other Loan Documents, including those conditions set forth in Section 4.01, the Borrower shall, and cause each other Loan Party to, satisfy each of the conditions subsequent set forth below on or before the date applicable thereto or such later date as agreed to by the Collateral Agent in its sole discretion (it being understood that (i) the failure by the Borrower to perform or cause to be performed any such condition subsequent on or before the date applicable thereto shall constitute an immediate Event of Default and (ii) to the extent that the existence of any such condition subsequent would otherwise cause any representation, warranty or covenant in this Agreement or any other Loan Document to be breached, the Required Lenders hereby waive such breach for the period from the Closing Date until the date on which such condition subsequent is required to be fulfilled pursuant to this Section 4.02):
		

		
			(i)          Deliver to the Administrative Agent and the Collateral Agent lender’s loss payable and additional insured endorsements in respect of the insurance policies required by Section 5.02 in form and substance reasonably satisfactory to the Collateral Agent no later than 30 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(ii)         Deliver to the Administrative Agent and the Collateral Agent Control Agreements with financial institutions, securities intermediaries and other Persons in order to perfect Liens by “control” (within the meaning of the applicable Uniform Commercial Code) in respect of Deposit Accounts and Securities Accounts (other than the Excluded Accounts (as defined in the Guarantee and Collateral Agreement)) in each case, located in the United States of America, in form and substance reasonably satisfactory to the Collateral Agent no later than 45 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(iii)       Use commercially reasonable efforts to deliver to the Administrative Agent and the Collateral Agent (and to the extent requested by the Collateral Agent) in respect of (A) each leased property, mortgagee of owned property, distributor, bailee or consignee with respect to any location in the United States of America where Inventory or Equipment with a value in excess of $250,000 is stored or located and (B) the chief executive office or sole place of business of each Loan Party located in the United States of America, a Collateral Access Agreement no later than 60 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole
		

		
			
		

		
			

		 

		

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			discretion); provided that the Borrower’s failure to deliver such Collateral Access Agreement notwithstanding the Borrower’s commercial reasonable efforts to obtain the same will not constitute an Event of Default;
		

		
			(iv)        Deliver to the Administrative Agent and the Collateral Agent an amendment to the Operating Agreement of Artemis Acquisition LLC, in form and substance reasonably satisfactory to the Collateral Agent no later than 30 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(v)         Deliver to the Administrative Agent and the Collateral Agent a filed UCC-3 termination statement with respect to filing number 09-7194843530 naming Adesto Technologies Corporation as debtor and Dell Financial Services L.L.C. as secured party, no later than 30 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(vi)        Deliver to the Administrative Agent and the Collateral Agent executed release documents with respect to the security interests in Intellectual Property owned by Borrower and certain of its Subsidiaries as recorded in the United States Patent and Trademark Office in favor of Opus Bank, in form and substance reasonably satisfactory to the Collateral Agent no later than 60 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(vii)       Deliver to the Administrative Agent and the Collateral Agent executed release documents with respect to the security interests in Intellectual Property owned by Borrower and certain of its Subsidiaries as recorded in the United States Patent and Trademark Office in favor of JPMorgan Chase Bank, N.A., in form and substance reasonably satisfactory to the Collateral Agent no later than 60 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion);
		

		
			(viii)     Deliver to the Administrative Agent and Collateral Agent no later than 20 days after the Closing Date, a certified copy of the updated register of members for S3 Semiconductors;
		

		
			(ix)        Deliver to the Administrative Agent and Collateral Agent no later than (i) 15 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion), the original share certificates in respect of all shares held by the S3 Semiconductors in S3 Semiconductor Solutions USA Inc., (ii) 30 days after the Closing Date (or such later date as the Collateral Agent may agree to in its sole discretion), the original share certificate in respect of all shares held by the Borrower in Semitech Semiconductor Pty Ltd and (iii) no later than 20 days after the Closing Date, the original share certificates in respect of all shares held by the Borrower in S3 Semiconductors; and
		

		
			(x)         By 5:00 p.m. Los Angeles time on May 9, 2018:
		

		
			(A)        the conditions set forth in Section 5 of the Acquisition Agreement shall be satisfied, and the representations and warranties made in Section 6 of the Acquisition Agreement shall be true and correct in all material respects; (ii) the Acquisition Agreement shall be in full force and effect (without any amendments, waivers or alterations thereof unless consented to by the Collateral Agent); and (iii) the Administrative Agent and the Collateral Agent shall have received copies of each Transaction Document and all other agreements relating to the Acquisition Agreement, certified by an officer of the Borrower to be true, correct and complete, certified by an officer thereof as being true, correct and
		

		
			
		

		
			

		 

		

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			complete, that such resolutions have not been modified, rescinded or amended and are in full force and effect.
		

		
			(B)        The Acquisition and the other Transactions shall have been consummated in accordance with applicable law and on the terms described in the Acquisition Agreement and all other material related documentation, in each case in the form provided to the Administrative Agent and the Collateral Agent.
		

		
			(C)        No stockholder rights plan or “poison pill” shall have been triggered or otherwise become exercisable in connection with the Transactions.
		

		
			ARTICLE V
		

		
			 
		

		
			Affirmative Covenants
		

		
			The Borrower covenants and agrees with each Lender, the Collateral Agent and the Administrative Agent that so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document shall have been paid in full, the Borrower will, and will cause each of the Subsidiaries to:
		

		
			SECTION 5.01.     Existence; Compliance with Laws; Businesses and Properties.
		

		
			(a)         Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.05.
		

		
			(b)         Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except as could not reasonably be expected to result in a Material Adverse Effect; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times, except as could not reasonably be expected to result in a Material Adverse Effect.
		

		
			SECTION 5.02.     Insurance.
		

		
			(a)         Keep its insurable properties adequately insured at all times by financially sound and reputable insurers; maintain such other insurance, to such extent and against such risks, including fire and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar locations and maintain such other insurance as may be required by law.
		

		
			(b)         Subject to Section 4.02, cause all such policies (if any) covering any Collateral to be endorsed or otherwise amended to include a customary lender’s loss payable endorsement, in form and substance reasonably satisfactory to the Collateral Agent, which endorsement shall provide that, from and after the Closing Date, if the insurance carrier shall have received written notice from the Administrative Agent or the Collateral Agent of the occurrence of an Event of Default, the insurance carrier shall pay all proceeds otherwise payable to the Borrower or the Loan Parties under such policies directly to the Collateral
		

		
			
		

		
			

		 

		

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			Agent; cause all such policies to provide that none of the Borrower, the Administrative Agent, the Collateral Agent nor any other party shall be a coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without any deduction for depreciation, and such other provisions as the Collateral Agent may reasonably require from time to time to protect their interests; upon written request by the Collateral Agent, deliver original or certified copies of all such policies to the Collateral Agent; cause each such policy to provide that it shall not be canceled, modified or not renewed (i) by reason of nonpayment of premium upon not less than 10 days’ prior written notice thereof by the insurer to the Administrative Agent and the Collateral Agent (giving the Administrative Agent and the Collateral Agent the right to cure defaults in the payment of premiums) or (ii) for any other reason upon not less than 30 days’ prior written notice thereof by the insurer to the Administrative Agent and the Collateral Agent; upon written request by the Collateral Agent, deliver to the Administrative Agent and the Collateral Agent, prior to the cancellation, modification or nonrenewal of any such policy of insurance, a copy of a renewal or replacement policy (or other evidence of renewal of a policy previously delivered to the Administrative Agent and the Collateral Agent) together with evidence satisfactory to the Collateral Agent of payment of the premium therefor.
		

		
			(c)         If at any time the area in which the applicable properties subject to any Mortgage are located is designated (i) a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance in such total amount as the Collateral Agent or the Required Lenders may from time to time require, and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time, or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount as the Collateral Agent or the Required Lenders may from time to time require.
		

		
			(d)         Notify the Administrative Agent and the Collateral Agent promptly whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 5.02 is taken out by any Loan Party; and promptly deliver to the Administrative Agent and the Collateral Agent a duplicate original copy of such policy or policies.
		

		
			SECTION 5.03.     Obligations and Taxes.  Pay its Material Indebtedness promptly and in accordance with their terms and pay and discharge promptly when due all Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided,  however, that such payment and discharge shall not be required with respect to any such Tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Borrower shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture of such property.
		

		
			SECTION 5.04.     Financial Statements, Reports, etc.  In the case of the Borrower, furnish to the Administrative Agent, the Collateral Agent and each Lender:
		

		
			(a)         within 90 days after the end of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2018), the consolidated and consolidating balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Borrower and its consolidated Subsidiaries as of the close of such fiscal year and the results of its operations and the operations of such Subsidiaries during such year, together with comparative figures for the immediately preceding fiscal year of the Borrower, all audited by Burr Pilger & Mayer or other independent public accountants of recognized national standing reasonably acceptable to the Collateral Agent and accompanied by an opinion of such accountants (which opinion shall be without a “going concern” or like qualification or exception (other than any “going concern” or other qualification or exception arising from or related to
		

		
			
		

		
			

		 

		

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			the maturity of the Loans made hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the delivery of annual reports on Form 10‐K of the Borrower and its consolidated Subsidiaries shall satisfy the requirements of this Section 5.04(a) to the extent such annual reports include the information specified herein);
		

		
			(b)         within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ending June 30, 2018), the consolidated and consolidating balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal quarter and the results of its operations and the operations of such Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal year of the Borrower, together with comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of the Financial Officers of the Borrower, as the case may be, as fairly presenting in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year‐end audit adjustments (it being understood that the delivery of quarterly reports on Form 10‐Q of the Borrower and its consolidated Subsidiaries shall satisfy the requirements of this Section 5.04(b) to the extent such quarterly reports include the information specified herein);
		

		
			(c)         within 30 days after the end of each fiscal month of the Borrower (commencing with the fiscal month ending April 2018), the consolidated and consolidating balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of the Borrower and its consolidated Subsidiaries as of the close of such fiscal month and the results of its operations and the operations of such Subsidiaries during such fiscal month and the then‐elapsed portion of the fiscal year, together with the comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of the Financial Officers of the Borrower, as the case may be, as fairly presenting in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year‐end audit adjustments and the absence of footnotes;
		

		
			(d)         concurrently with any delivery of financial statements under paragraph (a), (b) or (c) above, a certificate of the accounting firm (in the case of paragraph (a)) or Financial Officer of the Borrower (in the case of paragraphs (b) and (c)) opining on or certifying such statements (which opinion or certificate, when furnished by an accounting firm, may be limited to accounting matters and disclaim responsibility for legal interpretations) (i) certifying that no Event of Default or Default has occurred or, if such an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (ii) (except with respect to financial statements delivered pursuant to paragraph (c) above) setting forth computations in reasonable detail, together with supporting calculations, in each case satisfactory to the Collateral Agent demonstrating compliance with the covenants contained in Section 6.12 and Section 6.13;
		

		
			(e)         concurrently with any delivery of financial statements under paragraph (a) above, an officer’s certificate of a Responsible Officer of the Borrower, certifying that, except as expressly set forth therein, the representations and warranties in Article III are true, correct and complete in all material respects on and as of the date of the certificate to the same extent as though made on and as of that date (or, to the extent such representations and warranties specifically relate to an earlier date, certifying that such representations and warranties were true, correct and complete in all material respects on and as of such earlier date); provided that, if a representation and warranty is qualified as to materiality, for purposes of
		

		
			
		

		
			

		 

		

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			such certification, the applicable materiality qualifier set forth above shall be disregarded with respect to such representation and warranty, provided further that for the avoidance of doubt, any disclosure made in connection with such certificate will not constitute a breach of the representations and warranties in Article III or an Event of Default.
		

		
			(f)         promptly following delivery thereof, copies of any financial statements or other material reports delivered by the Borrower or any of its Subsidiaries to any Governmental Authority (including any regulatory body);
		

		
			(g)         concurrently with any delivery of financial statements under paragraph (a) or (b) above, an officer’s certificate of a Responsible Officer of the Borrower, identifying (i) any Subsidiary formed or acquired by any Loan Party, (ii) any certificated securities (to the extent required to be pledged under the Security Documents), uncertificated securities, other Equity Interests or Indebtedness not held in a Securities Account acquired by any Loan Party, (iii) any change in name or jurisdiction of organization of any Loan Party as permitted by the Loan Documents, (iv) any new location of any Inventory of, or Equipment owned or leased by, any Loan Party (v) any Securities Account, Deposit Account or commodity account opened by any Loan Party, in each case, since the last certificate delivered pursuant to this Section 5.04(g) (or since the Closing Date, in the case of the first such list delivered after the Closing Date) and (vi) any registered Intellectual Property, related rights thereto and inbound licenses involving required payments in excess of $500,000 over the life of the license acquired since the last certificate delivered pursuant to this Section 5.04(f) (or since the Closing Date, in the case of the first such list delivered after the Closing Date), together with an updated Schedule 3.29 (if necessary);
		

		
			(h)         on the 15th calendar day of any fiscal month of the Borrower (each such calendar day, a “Measurement Date”), a certificate of a Responsible Officer of the Borrower setting forth computations in reasonable detail, together with supporting calculations, in each case satisfactory to the Collateral Agent demonstrating compliance with the covenants contained in Section 6.13 as of such Measurement Date;
		

		
			(i)          [reserved];
		

		
			(j)          within 45 days after the beginning of each fiscal year of the Borrower, a detailed consolidated budget for Borrower and its consolidated Subsidiaries for such fiscal year presented on a month by month basis (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for each month in such fiscal year, and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;
		

		
			(k)         promptly after the same become publicly available, copies of all periodic and other material reports, proxy statements and other materials filed by the Borrower or any Subsidiary with any Governmental Authority or securities exchange, or distributed to its shareholders, as the case may be;
		

		
			(l)          promptly after the receipt thereof by the Borrower or any of its Subsidiaries, a copy of any “management letter” received by any such Person from its certified public accountants and the management’s response thereto;
		

		
			(m)        promptly after the request by any Lender, Administrative Agent or Collateral Agent, all documentation and other information that such Person reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti‐money laundering rules and regulations, including the USA PATRIOT Act; and
		

		
			
		

		
			

		 

		

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			(n)         promptly, from time to time, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent, Collateral Agent or any Lender may reasonably request.
		

		
			If, as a result of any change in accounting principles and policies from those used in the preparation of the audited financial statements referred to in Section 5.04(a), the consolidated financial statements of the Borrower and its Subsidiaries delivered pursuant to clause (b) or clause (c) of this Section 5.04 will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such clauses had no such change in accounting principles and policies been made, then, at the reasonable request of the Collateral Agent, (i) together with the first delivery of financial statements pursuant to clause (b) or clause (c) of this Section 5.04 following such change, consolidated financial statements of the Borrower and its Subsidiaries for the current fiscal year of the Borrower to the effective date of such change prepared on a pro forma basis as if such change had been in effect during such period and (ii) together with each delivery of financial statements pursuant to clause (b) or clause (c) of this Section 5.04 following such change, a written statement of a Financial Officer of the Borrower setting forth the differences (including any differences that would affect any calculations relating to the financial covenants in Section 6.12 and Section 6.13) which would have resulted if such financial statements had been prepared without giving effect to such change.
		

		
			SECTION 5.05.     Litigation and Other Notices.  Furnish to the Administrative Agent, the Collateral Agent and each Lender prompt written notice of the following:
		

		
			(a)         the occurrence of any Event of Default or Default, specifying the nature and extent thereof, the date of occurrence thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;
		

		
			(b)         the filing or commencement of, or any threat or notice of intention of any Person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;
		

		
			(c)         the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $250,000;
		

		
			(d)         any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect; and
		

		
			(e)         any default or event of default (in each case, after taking into account applicable cure or grace periods) under (A) any Contractual Obligation (other than the Loan Documents or documents governing Material Indebtedness) of the Borrower or any of its Subsidiaries that would reasonably be expected to have a Material Adverse Effect or (B) any documents governing Material Indebtedness.
		

		
			SECTION 5.06.     Information Regarding Collateral.  Furnish to the Collateral Agent prompt written notice of any change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Party’s identity or corporate structure or (iv) in any Loan Party’s Federal Taxpayer Identification Number.  The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral, with the priority required hereunder and under the Security Documents.  The Borrower also agrees promptly to notify the Collateral Agent if
		

		
			
		

		
			

		 

		

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			any material portion of the Collateral is damaged or destroyed or if the value of the Collateral is impaired in an amount in excess of $250,000.
		

		
			SECTION 5.07.     Maintaining Records; Access to Properties and Inspections.  Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities.  The Borrower shall, and shall cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent, the Collateral Agent or any Lender to visit and inspect the financial records and the properties of such Person at reasonable times and as often as reasonably requested and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent, the Collateral Agent or any Lender to discuss the affairs, finances and condition of such Person with the officers thereof and independent accountants therefor (such visit and inspection shall be at the sole cost and expense of the Borrower on a quarterly basis so long as no Event of Default has occurred and is continuing or on a more frequent basis if an Event of Default has occurred and is continuing).
		

		
			SECTION 5.08.     Use of Proceeds.  Use the proceeds of Loans solely (i) to finance the Acquisition, (ii) to effectuate the Existing Debt Refinancing, (iii) to pay fees, costs and expenses (including, without limitation, attorney’s fees) incurred in connection with the Transactions and (iv) to finance working capital and other general corporate purposes of the Borrower and its Subsidiaries.
		

		
			SECTION 5.09.     Employee Benefits.
		

		
			(a)         With respect to each Employee Benefit Plan, comply in all material respects with the applicable provisions of ERISA and the Code and furnish to the Administrative Agent and the Collateral Agent as soon as possible after, and in any event within 10 days after any Responsible Officer of the Borrower or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that, alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrower or any ERISA Affiliate in an aggregate amount exceeding $250,000, a statement of a Responsible Officer of the Borrower setting forth details as to such ERISA Event and the action, if any, that the Borrower proposes to take with respect thereto.
		

		
			(b)         Upon request by the Administrative Agent or the Collateral Agent, furnish copies of (i) annual report (Form 5500 Series) filed by any Loan Party or any Subsidiary thereof or any of its ERISA Affiliates with respect to each Employee Benefit Plan; (ii) the most recent actuarial valuation report for each Plan, to the extent such exists; (iii) all notices received by any Loan Party or any of its ERISA Affiliates from a Multiemployer Plan sponsor or any governmental agency concerning an ERISA Event; and (iv) such other information, documents or governmental reports or filings relating to any Employee Benefit Plan as the Collateral Agent shall reasonably request.
		

		
			SECTION 5.10.     Compliance with Environmental Laws.  Comply, and cause all lessees and other Persons occupying its properties to comply, in all material respects with all Environmental Laws applicable to its operations and properties; obtain and renew all material environmental permits necessary for its operations and properties; and conduct any remedial action in accordance with Environmental Laws; provided,  however, that neither the Borrower nor any Subsidiary shall be required to undertake any remedial action required by Environmental Laws to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.
		

		
			SECTION 5.11.     Preparation of Environmental Reports.  If a Default caused by reason of a breach of Section 3.16 or Section 5.10 shall have occurred and be continuing for more than 20 days without the Borrower or any Subsidiary commencing activities reasonably likely to cure such Default, at
		

		
			
		

		
			

		 

		

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			the written request of the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Loan Parties, an environmental site assessment report regarding the matters that are the subject of such Default prepared by an environmental consulting firm reasonably acceptable to the Collateral Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or remedial action in connection with such Default.
		

		
			SECTION 5.12.     Further Assurances.
		

		
			(a)         Execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing UCC and other financing statements, mortgages and deeds of trust and arranging for the Collateral Agent’s Lien on the certificate of title of each motor vehicle owned by a Loan Party (other than any motor vehicle with respect to which, pursuant to the provisions of the Guarantee and Collateral Agreement, the Loan Parties are not required to evidence the Collateral Agent’s Lien on the certificate of title for such vehicle)) that may be required under applicable law, or that the Required Lenders, the Administrative Agent or the Collateral Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created by the Security Documents.  In addition, from time to time, the Borrower will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected security interests with respect to such of its assets and properties and the assets and property of its Subsidiaries (other than Excluded Subsidiaries) as may be required by the Loan Documents (it being understood that it is the intent of the parties that the Obligations shall be secured by substantially all the assets of the Loan Parties (including real and other properties acquired subsequent to the Closing Date)).  Such security interests and Liens will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance satisfactory to the Collateral Agent, and the Borrower shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions, title insurance policies and lien searches) as the Collateral Agent shall reasonably request to evidence compliance with this Section 5.12.  The Borrower agrees to provide such evidence as the Collateral Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien.  In furtherance of the foregoing, the Borrower will give prompt notice to the Administrative Agent and the Collateral Agent of the acquisition by it or any of the Subsidiaries of any Material Real Property (or any interest in Material Real Property (other than a leasehold interest)).
		

		
			(b)         Upon the consummation of any Permitted Acquisition of any Person by any of the Loan Parties, or upon the formation by any of the Loan Parties of any such Subsidiary (other than an Excluded Subsidiary) or if any Excluded Subsidiary ceases to be an “Excluded Subsidiary”, the Borrower shall cause the Person so acquired or formed or ceasing to be “Excluded Subsidiary” to be designated as a Subsidiary Guarantor of the Obligations.  Within 10 Business Days of the acquisition or formation of any Domestic Subsidiary (and within 30 days of the acquisition or formation of any Foreign Subsidiary), such Person shall become a Loan Party by executing the Guarantee and Collateral Agreement and each applicable Security Document in favor of the Collateral Agent.  In addition, within 10 Business Days of the acquisition or formation of any Domestic Subsidiary (and within 30 days of the acquisition or formation of any Foreign Subsidiary),  (i) such Person shall execute and deliver such Security Documents, agreements and documents as the Administrative Agent, the Collateral Agent or the Required Lenders may reasonably request to grant a first priority perfected Lien in respect of substantially all of its real and personal property in favor of the Collateral Agent and the Lenders, and (ii) the Loan Parties owning Equity Interests in such Person shall pledge all such Equity Interests in such Person.
		

		
			(c)         Notwithstanding anything to the contrary in paragraph (a) or (b) of this Section 5.12, no Foreign Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957(a) of the Code shall be required to (a) (i) grant a security interest in its assets to secure the Obligations, (ii) to
		

		
			
		

		
			

		 

		

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			guarantee the Obligations and (b) no Equity Interests of any Foreign Subsidiary (other than a first‐tier Foreign Subsidiary of the Borrower or a Domestic Subsidiary) shall be required to be pledged, in each of clauses (a) and (b) to the extent the foregoing would result in material adverse tax consequences to the Borrower (as determined by the Collateral Agent and the Borrower in good faith).
		

		
			(d)         In the event that any Person becomes a Foreign Subsidiary of a Loan Party after the date hereof, the Borrower will promptly notify the Lenders and the Collateral Agent of that fact and cause such Foreign Subsidiary, such Loan Party or both to execute and deliver to the Lenders and the Collateral Agent such documents and instruments and take such further actions as may be necessary, or in the reasonable opinion of the Collateral Agent, desirable to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a valid and perfected first priority Lien on 100% of the Equity Interests in such Foreign Subsidiary, including execution and delivery of a Pledge Agreement; provided that no more than 66% of the voting Equity Interests of a first‐tier Foreign Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957(a) of the Code shall be required to be pledged if such pledge would result in material adverse tax consequences to a Loan Party under Section 956 of the Code (as determined by the Collateral Agent and the Borrower in good faith).
		

		
			(e)         Furnish to the Collateral Agent and Administrative Agent prompt written notice, and in any event within 10 days, of (i) the acquisition by any Loan Party of any Intellectual Property (or rights related thereto) or (ii) any Loan Party entering into, acquiring or otherwise becoming a party or any license(s) of Intellectual Property (individually or in a series of related transactions) as to which any Loan Party is the licensee that, in the case of each of clause (i) or clause (ii), (A) provide for payment of annual consideration by the Loan Parties, in the aggregate, of greater than $100,000 or (B) are otherwise material to the business, assets, liabilities, operations, condition (financial or otherwise), operating results, properties or prospects of the Loan Parties, taken as a whole.
		

		
			SECTION 5.13.     Change of Control Provisions.  Use commercially reasonable efforts to exclude from any inbound license and any agreement the termination, expiration or suspension of which could reasonably be expected to result in a Material Adverse Effect entered into by or binding upon the Borrower or any of its Subsidiaries after the Closing Date, any “change of control” provision, howsoever denominated, or any other provision the inclusion of which in such agreement would automatically, or at the option of any party thereto, result in (i) the termination of or right to terminate such agreement, (ii) the suspension of or right to suspend any obligations of any parties thereto, or (iii) any change in the rights, duties or obligations of any party thereto, in the case of each of clause (i), clause (ii) or clause (iii), whether immediately or upon the passage of time or otherwise.
		

		
			SECTION 5.14.     Intellectual Property.  Except as otherwise mutually and reasonably agreed by the Collateral Agent and the Borrower or pursuant to Dispositions consummated in accordance with Section 6.05, the Loan Parties will own or have a valid license to all Intellectual Property used in or necessary to operate, or material to, the business of the Borrower and its Subsidiaries.
		

		
			ARTICLE VI
		

		
			 
		

		
			Negative Covenants
		

		
			The Borrower covenants and agrees with each Lender, the Collateral Agent and the Administrative Agent that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document have been paid in full, the Borrower will not, nor will it cause or permit any of its Subsidiaries to:
		

		
			
		

		
			

		 

		

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			SECTION 6.01.     Indebtedness.  Incur, create, assume or permit to exist any Indebtedness, except:
		

		
			(i)          Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions, renewals or replacements of such Indebtedness; provided that (i) the principal amount of such Indebtedness is not increased, (ii) neither the final maturity nor the weighted average life to maturity of such Indebtedness is decreased, (iii) such Indebtedness, if subordinated to the Obligations, remains so subordinated on terms no less favorable to the Lenders, and (iv) the original obligors in respect of such Indebtedness remain the only obligors thereon;
		

		
			(ii)         Indebtedness created hereunder and under the other Loan Documents;
		

		
			(iii)       intercompany Indebtedness of the Borrower and the Subsidiaries to the extent permitted by Section 6.04(iii);
		

		
			(iv)        Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(iv), when combined with the aggregate principal amount of all Capital Lease Obligations and Synthetic Lease Obligations incurred pursuant to Section 6.01(v) shall not exceed $3,500,000 at any time outstanding;
		

		
			(v)         Capital Lease Obligations and Synthetic Lease Obligations in an aggregate principal amount, when combined with the aggregate principal amount of all Indebtedness incurred pursuant to Section 6.01(iv), not in excess of $3,500,000 at any time outstanding;
		

		
			(vi)        Indebtedness under performance bonds or with respect to workers’ compensation claims, payment, bid, performance or surety bonds, completion guarantees, or similar instruments, in each case incurred in the ordinary course of business and Indebtedness in respect of appeal bonds and similar instruments;
		

		
			(vii)       [reserved];
		

		
			(viii)     Indebtedness under any Hedging Agreement permitted under Section 6.04(vi);  provided that if such Hedging Agreement relates to interest rates, (i) such Hedging Agreement relates to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (ii) the notional principal amount of such Hedging Agreement at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Agreement relate;
		

		
			(ix)        guaranties by and other Contingent Obligations of the Borrower of Indebtedness of a Subsidiary Guarantor or guaranties by a Subsidiary Guarantor of Indebtedness of the Borrower or another Subsidiary Guarantor with respect, in each case, to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 (other than clause (i) of this Section 6.01); provided, that if the Indebtedness that is being guarantied is unsecured and/or subordinated to the Obligations, the guaranty shall also be unsecured and/or subordinated to the Obligations, in each case on terms no less favorable to the Lenders than the subordination terms of the Indebtedness so guaranteed;
		

		
			(x)         (A) Indebtedness of any Person that becomes a Subsidiary Guarantor after the date hereof, which Indebtedness is existing at the time such Person becomes a Subsidiary of the
		

		
			
		

		
			

		 

		

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			Borrower (other than Indebtedness incurred in contemplation of or in connection with such Person becoming a Subsidiary) and (B) Indebtedness secured by assets purchased by a Loan Party in a Permitted Acquisition that is assumed by such Loan Party (other than Indebtedness incurred in contemplation of or in connection with such purchase) in an aggregate amount under this clause (x) not in excess of $250,000 at any time outstanding;
		

		
			(xi)        Indebtedness incurred in the ordinary course of business in connection with cash pooling arrangements, cash management and other similar arrangements consisting of netting arrangements and overdraft protections incurred in the ordinary course of business and not in excess of $500,000 in the aggregate at any time outstanding;
		

		
			(xii)       Indebtedness representing any Taxes, assessments or governmental charges to the extent such Taxes are being contested in good faith and adequate reserves have been provided therefor in conformity with GAAP;
		

		
			(xiii)     letters of credit in an aggregate face amount not exceeding $500,000 to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations or Synthetic Lease Obligations), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature;
		

		
			(xiv)      Subordinated Indebtedness in an aggregate principal amount not exceeding $500,000;
		

		
			(xv)       unsecured Indebtedness consisting of any Acquisition Earnout to the extent incurred pursuant to the Acquisition or a Permitted Acquisition;
		

		
			(xvi)      Indebtedness incurred in the ordinary course of business with respect to customer deposits and other unsecured current liabilities not the result of borrowing;
		

		
			(xvii)     Indebtedness consisting of guarantees resulting from real property leases entered into by the Borrower or its Subsidiaries;
		

		
			(xviii)   endorsements of instruments or other payment items for deposit or the financing of insurance premiums;
		

		
			(xix)      Indebtedness arising as a result of judgments, orders, awards or degrees against the Borrower or its Subsidiaries, in each case not constituting an Event of Default; and
		

		
			(xx)       other unsecured Indebtedness of the Borrower or its Subsidiaries in an aggregate principal amount not exceeding $250,000 at any time outstanding.
		

		
			SECTION 6.02.     Liens.  Create, incur, assume or permit to exist any Lien on any property or assets (including Equity Interests or other securities of any Person, including the Borrower or any Subsidiary) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:
		

		
			(i)          Liens on property or assets of the Borrower and the Subsidiaries existing on the date hereof and set forth in Schedule 6.02;  provided that such Liens shall secure only those obligations that they secure on the date hereof and extensions, renewals and replacements thereof permitted hereunder;
		

		
			
		

		
			

		 

		

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			(ii)         any Lien created under the Security Documents;
		

		
			(iii)       any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or assets of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary, as the case may be; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, (ii) such Lien does not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien secures only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be;
		

		
			(iv)        Liens for Taxes not yet due or that are being contested in compliance with Section 5.03;
		

		
			(v)         Landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business and securing obligations that are not overdue for a period of more than 45 days or that are being contested in compliance with Section 5.03;
		

		
			(vi)        pledges and deposits made in the ordinary course of business in compliance with workmen’s compensation, unemployment insurance and other social security laws or regulations;
		

		
			(vii)       deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases (other than Capital Lease Obligations or Synthetic Lease Obligations), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
		

		
			(viii)     zoning restrictions, easements, rights‐of‐way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;
		

		
			(ix)        purchase money security interests in real property, improvements thereto or equipment hereafter acquired and the proceeds thereof (or, in the case of improvements, constructed) by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by Section 6.01(iv), (ii) such security interests are incurred, and the Indebtedness secured thereby is created, within 90 days after such acquisition (or construction), (iii) the Indebtedness secured thereby does not exceed 100% of the lesser of the cost or the fair market value of such real property, improvements or equipment at the time of such acquisition (or construction and related expenses) and (iv) such security interests do not apply to any other property or assets of the Borrower or any Subsidiary;
		

		
			(x)         Liens on property or assets of a Person (other than any Equity Interests in any Person) existing at the time the assets of such Person are acquired or such Person is merged into or consolidated with the Borrower or any Subsidiary or becomes a Subsidiary of the Borrower or any Subsidiary; provided that any such Lien (i) was not created in contemplation of or in connection with such asset purchase, merger, consolidation or investment and (ii) does not extend to any assets other than those acquired in such asset purchase and those assets of the Person merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;
		

		
			
		

		
			

		 

		

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			(xi)        bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to (i) cash and Permitted Investments on deposit in one or more accounts maintained by any Loan Party, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements, and (ii) financial assets on deposit in one or more securities accounts maintained by any Loan Party, in each case granted in the ordinary course of business in favor of the securities intermediaries with which such accounts are maintained, securing amounts owing to such securities intermediaries with respect to services rendered in connection with such securities accounts;
		

		
			(xii)       non‐exclusive licenses and sublicenses in the ordinary course of business;
		

		
			(xiii)     Liens to secure payment of workers’ compensation, employment insurance, old‐age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);
		

		
			(xiv)      precautionary filings of financing statements under the Uniform Commercial Code of any applicable jurisdictions in respect of operating leases or consignments entered into by the Borrower or the Subsidiaries in the ordinary course of business;
		

		
			(xv)       Liens arising out of judgments or awards not constituting an Event of Default in respect of which the Borrower or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review in respect of which there shall be secured a subsisting stay of execution pending such appeal or proceedings;
		

		
			(xvi)      Liens on insurance policies and the proceeds thereof securing insurance premium financing and pledges and deposits in the ordinary course of business securing liability for reimbursement or indemnification obligations of insurance carriers providing insurance to Borrower and its Subsidiaries;
		

		
			(xvii)     Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by Borrower or any Subsidiary in the ordinary course of business;
		

		
			(xviii)   Liens on cash collateral (not in excess of 105% of the face amount of such letters of credit) securing obligations under letters of credit permitted under Section 6.01(xiii);
		

		
			(xix)      Good faith earnest money deposits made in connection with a Permitted Acquisition or any other Investment or letter of intent or purchase agreement permitted hereunder;
		

		
			(xx)       Liens (A) incurred in the ordinary course of business in connection with the purchase or shipping of goods or assets (or the related assets and proceeds thereof), which Liens are in favor of the seller or shipper of such goods or assets and only attach to such goods or assets, and (B) in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; and
		

		
			(xxi)      other Liens securing Indebtedness not to exceed $100,000 in the aggregate at any time outstanding.
		

		
			
		

		
			

		 

		

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			Notwithstanding anything to the contrary hereunder or under any other Loan Document, no Liens (other than Liens permitted under clauses (ii) and (iv)) shall be permitted on Equity Interests issued by any of the Borrower’s Subsidiaries which constitute Collateral.
		

		
			SECTION 6.03.     Sale and Lease‐Back Transactions.  Enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
		

		
			SECTION 6.04.     Investments.  Purchase, hold, make or acquire any Investments, any other Person, except:
		

		
			(i)          (i) Investments by the Borrower and its Subsidiaries existing on the date hereof in the Equity Interests of their respective Subsidiaries and (ii) additional Investments by the Borrower and the Subsidiaries in the Equity Interests of the Borrower and the Subsidiaries; provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement or a Pledge Agreement (subject to the limitations applicable to voting Equity Interests of a Foreign Subsidiary referred to therein) and (B) the aggregate amount of Investments made by Loan Parties after the date hereof in Subsidiaries that are not (or do not become at the time of the acquisition) Loan Parties (determined without regard to any write downs or write‐offs of such Investments), when combined with loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties pursuant to Section 6.04(iii), shall not exceed $500,000 at any time outstanding;
		

		
			(ii)         Permitted Investments;
		

		
			(iii)       loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to the Guarantee and Collateral Agreement or a Pledge Agreement and (ii) the aggregate amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (determined without regard to any write‐downs or write‐offs of such loans and advances), when combined with the Investments made pursuant to Section 6.04(i) shall not exceed $500,000 at any time outstanding;
		

		
			(iv)        Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;
		

		
			(v)         the Borrower and its Subsidiaries may make loans and advances in the ordinary course of business to their respective employees for travel ,entertainment, relocation and analogous ordinary business purposes so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write‐downs or write‐offs of such loans and advances) shall not exceed $100,000;
		

		
			(vi)        the Borrower and its Subsidiaries may enter into Hedging Agreements in the ordinary course of business that are not speculative in nature;
		

		
			
		

		
			

		 

		

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			(vii)       Investments resulting from the reinvestment of Net Cash Proceeds of Disposition or Net Insurance/Condemnation Proceeds arising from any Casualty Event as permitted under Section 2.10 of this Agreement;
		

		
			(viii)     Guarantees permitted by Section 6.01;
		

		
			(ix)        Investments consisting of intercompany debt permitted hereunder;
		

		
			(x)         prepaid expenses or lease, utility and other similar deposits, in each case made in the ordinary course of business;
		

		
			(xi)        Investments consisting of any deferred portion (including promissory notes and non cash consideration) of the sales price received by the Borrower or any Subsidiary in connection with any Disposition permitted hereunder;
		

		
			(xii)       the Acquisition;
		

		
			(xiii)     Borrower or any of its Subsidiaries may acquire all or substantially all the assets of a Person or line of business of such Person, or not less than 100% of the Equity Interests (other than directors’ qualifying shares) of a Person (referred to herein as the “Acquired Entity”); provided that (i) such acquisition was not preceded by an unsolicited tender offer for such Equity Interests by, or proxy contest initiated by, the Borrower or any Subsidiary or Affiliate thereof; (ii) the Acquired Entity shall be in a similar or reasonably related line of business as that of the Borrower and the Subsidiaries as conducted during the current and most recent calendar year; and (iii) at the time of such transaction (A) both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; (B) the Borrower would be in compliance with the covenants set forth in Sections 6.12 and 6.13, in each case, as of the most recently completed period of four consecutive fiscal quarters or fiscal month, as applicable, ending prior to such transaction for which the financial statements required by Section 5.04(a) or Section 5.04(b) have been delivered, after giving pro forma effect to such transaction, and to any other event occurring after such period as to which pro forma recalculation is appropriate (including any other transaction described in this Section 6.04(xiii) occurring after such period) as if such transaction had occurred as of the first day of such period; (C) the Borrower shall have delivered to Collateral Agent a certificate of a Financial Officer, certifying as to the conditions described in this Section 6.04(xiii) and containing reasonably detailed calculations in support thereof, in form and substance satisfactory to the Collateral Agent; and (D) the purchase price in respect of such acquisition (including, without duplication, the maximum amount payable with respect to any Acquisition Earnout) shall be in the form of or funded solely with the proceeds of an issuance of the Borrower’s common Equity Interests and/or funded with cash on hand of the Acquired Entity and/or, so long as the Payment Conditions are satisfied, cash on hand of the Borrower or any of its Subsidiaries (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(xiii) being referred to herein as a “Permitted Acquisition”);
		

		
			(xiv)      advances of payroll payments to employees of the Borrower and any of its Subsidiaries in the ordinary course of business;
		

		
			(xv)       extensions of credit in the nature of accounts receivable or notes receivable arising from (i) the sales of goods or services in the ordinary course of business, (ii) the satisfaction or partial satisfaction thereof to the extent reasonably necessary in order to prevent or limit loss and any prepayment and other credits to suppliers made in the ordinary course of business or (iii) the satisfaction, partial satisfaction or enforcement of Indebtedness or claims due or owing to Borrower
		

		
			
		

		
			

		 

		

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			or any of its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims in the ordinary course of business;
		

		
			(xvi)      Investments consisting of security deposits made in the ordinary course of business;
		

		
			(xvii)     advances (including to trade creditors) made in connection with the purchases of goods or services in the ordinary course of business;
		

		
			(xviii)   Investments made as a result of consideration received in connection with a Disposition permitted under Section 6.05;
		

		
			(xix)      Investments consisting of good faith deposits made in accordance with Section 6.02(xix); and
		

		
			(xx)       in addition to Investments permitted by paragraphs (i) through (xix) above, additional Investments by the Borrower and the Subsidiaries so long as the aggregate amount invested pursuant to this paragraph (xx) (determined without regard to any write‐downs or write‐offs of such Investments) does not exceed $250,000 (or such greater amount as may be agreed to by Collateral Agent in its sole discretion) in the aggregate.
		

		
			SECTION 6.05.     Consolidations, Dispositions of Assets and Acquisitions.  Enter into any transaction of merger or consolidation, or liquidate, wind‐up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of, in one transaction or a series of transactions, all or any part of its business, property or assets (including its notes or receivables and Equity Interests of a Subsidiary, whether newly issued or outstanding), whether now owned or hereafter acquired, except:
		

		
			(i)          any Subsidiary of the Borrower may be merged with or into the Borrower or any Wholly Owned Subsidiary of the Borrower that is a Guarantor, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be Disposed of, in one transaction or a series of transactions, to the Borrower or any Wholly Owned Subsidiary of the Borrower that is a Guarantor; provided that, in the case of such a merger, the Borrower or such Wholly Owned Subsidiary Guarantor shall be the continuing or surviving Person;
		

		
			(ii)         any Subsidiary of the Borrower that is not a Guarantor may be merged with or into any Subsidiary of the Borrower that is not a Guarantor, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise Disposed of, in one transaction or a series of transactions, to any Subsidiary of the Borrower that is not a Guarantor;
		

		
			(iii)       the Borrower and its Subsidiaries may Dispose of assets in transactions that do not constitute Asset Sales; provided that, in the case of (A) any Disposition made pursuant to clauses (c)(x) and (y) of the definition of Asset Sale, (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof, and (b) at least 75% of such consideration consists of cash and (B) any licenses granted in respect of Intellectual Property with a term of five years, (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof, and (b) 100% of such consideration consists of cash;
		

		
			(iv)        the Borrower and its Subsidiaries may Dispose of obsolete, worn out or surplus property in the ordinary course of business;
		

		
			
		

		
			

		 

		

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			(v)         the Borrower and its Subsidiaries may make Asset Sales of assets having a fair market value not in excess of $500,000 between the Closing Date and the Maturity Date; provided that, in the case of any Disposition made pursuant to (A) clauses (c)(x) and (y) of the definition of Asset Sale, (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof; (b) no less than 75% of the consideration received shall be cash and (B) any licenses granted in respect of Intellectual Property with a term of five years, (a) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof, and (b) 100% of such consideration consists of cash; (c) no Default or Event of Default shall have occurred or be continuing after giving effect thereto; and (d) the proceeds of such Asset Sales shall be applied as required by Section 2.10(b);
		

		
			(vi)        in order to resolve disputes that occur in the ordinary course of business, the Borrower and its Subsidiaries may sell, transfer, discount, forgive, cancel or otherwise compromise for less than the face value thereof, notes or accounts receivable;
		

		
			(vii)       (a) leases and subleases of real or personal property in the ordinary course of business and (b)  non‐exclusive licenses and sublicenses of Intellectual Property or other property in the ordinary course of business;
		

		
			(viii)     the lapse or abandonment in the ordinary course of business of any Intellectual Property that is, in the reasonable business judgment of the Borrower, immaterial, no longer useful in the Loan Parties’ business, or no longer economically practicable to maintain;
		

		
			(ix)        the Borrower or a Subsidiary may Dispose of Equity Interests of any of its Subsidiaries solely to qualify directors of the Governing Body of the Subsidiary if required by applicable law;
		

		
			(x)         any Person may be merged with or into the Borrower or any Subsidiary if the acquisition of the Equity Interests of such Person by the Borrower or such Subsidiary would have been permitted pursuant to Section 6.04(xiii);  provided that (a) in the case of the Borrower, the Borrower shall be the continuing or surviving Person, (b) if a Subsidiary is not the surviving or continuing Person, the surviving Person becomes a Subsidiary and complies with the provisions of Section 5.12 and (c) no Default or Event of Default shall have occurred or be continuing after giving effect thereto;
		

		
			(xi)        so long as no Default or Event of Default has occurred and is continuing, the Borrower and its Subsidiaries may Dispose of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such property are promptly applied to the purchase price of such replacement property; provided that to the extent such property that was Disposed of was Collateral, such replacement property shall constitute Collateral;
		

		
			(xii)       use cash and Disposition of Permitted Investments in the ordinary course of business;
		

		
			(xiii)     Dispositions resulting from Casualty Events;
		

		
			(xiv)      the unwinding or terminating of Hedging Agreements;
		

		
			
		

		
			

		 

		

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			(xv)       Investments permitted pursuant to Section 6.04, transactions permitted pursuant to Section 6.03, Liens in compliance with Section 6.02 and Restricted Payments permitted pursuant to Section 6.06.
		

		
			To the extent the Required Lenders or all the Lenders, as applicable, waive the provisions of this Section 6.05 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 6.05, such Collateral (unless sold to a Loan Party or an Affiliate or a Loan Party) shall be sold automatically free and clear of the Liens created by the Security Documents and the Agents shall, at the reasonable cost and expense of the Borrower, take all actions they reasonably deem appropriate in order to effect the foregoing. Notwithstanding anything to the contrary hereunder or under any other Loan Document, after the consummation of the Acquisition and the effectiveness of the Closing Date Joinders, neither S3 Semiconductors nor any of its Subsidiaries shall Dispose of (including by sublicense) or grant to any Person (other than Borrower and its Subsidiaries) any right, title, or interest in respect of Intellectual Property for which it has acquired, licensed or otherwise obtained any interest from Adesto Technologies Corporation or any of its Subsidiaries (other than S3 Semiconductors or any of its Subsidiaries),  except (a) non-exclusive licenses to firmware in connection with the sale of products in the ordinary course and licenses granted to persons providing manufacturing, packaging or testing services in the ordinary course of business in connection with such services and (b) licenses to persons of Intellectual Property with a term of less than five (5) years.
		

		
			SECTION 6.06.     Restricted Payments; Restrictive Agreements.
		

		
			(a)         Declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so; provided,  however,
		

		
			(i)          any Subsidiary of Borrower may declare and pay dividends or make other distributions ratably to its equity holders;
		

		
			(ii)         Borrower may declare and pay dividends with respect to the Borrower’s Equity Interests payable solely in shares of its Qualified Capital Stock (or the equivalent thereof);
		

		
			(iii)       the Borrower may purchase, redemption, retirement, or other acquisition of shares of its Equity Interests with the proceeds received from a substantially concurrent issue of new shares of its Qualified Capital Stock;
		

		
			(iv)        the Borrower may effect repurchases of Qualified Capital Stock deemed to occur upon the exercise of stock options or warrants if such repurchased Qualified Capital Stock represents a portion of the exercise price of such options or warrants; and
		

		
			(v)         the Borrower may effect repurchases of Qualified Capital Stock deemed to occur upon withholding of a portion of the Qualified Capital Stock granted or awarded to a current or former director, officer, employee or consultant to pay for the taxes payable by such Person upon such grant or award (or upon vesting thereof).
		

		
			(b)         Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (A) the foregoing shall not apply to restrictions and conditions imposed by
		

		
			
		

		
			

		 

		

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			law or by any Loan Document (other than a Related Document), (B) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary (or its assets) pending such sale, provided such restrictions and conditions apply only to the Subsidiary (or such assets) that is (or are) to be sold and such sale is permitted hereunder, (C) clause (i) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (D) clause (i) of the foregoing shall not apply to customary provisions in leases, subleases, licenses, sublicenses and other contracts restricting the assignment thereof, (E) the foregoing shall not apply with respect to (i) any agreement (including with respect to Indebtedness) in effect at the time any Person becomes a Subsidiary of the Borrower; provided, that such agreement was not entered into in contemplation of such Person becoming a Subsidiary of the Borrower, (ii) restrictions under agreements evidencing or governing or otherwise relating to Indebtedness of any Subsidiaries that are not Loan Parties permitted under Section 6.01; provided that such Indebtedness is only with respect to the assets of any Subsidiaries that are not Loan Parties, (iii) customary provisions in joint venture agreements, limited liability company operating agreements, partnership agreements, stockholders agreements, other Organizational Documents and other similar agreements, (iv) customary anti-assignment provisions in licenses and other contracts restricting the sublicensing or assignment thereof, (v) pursuant to Contractual Obligations that (y) exist on the Closing Date and (z) to the extent Contractual Obligations permitted by this clause (v) are set forth in an agreement evidencing Indebtedness or any agreement evidencing any permitted refinancing thereof so long as such permitted refinancing does not expand the scope of such Contractual Obligation, and (vi) restrictions in connection with cash or other deposits permitted under Section 6.02.
		

		
			SECTION 6.07.     Transactions with Affiliates.  Except for transactions between or among Loan Parties, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions (including services rendered, whether or not in the ordinary course of business) with, any of its Affiliates, except that the Borrower or any Subsidiary may engage in any of the foregoing transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s‐length basis from unrelated third parties, except for (i) indemnification agreements for the benefit of officers and directors, (ii) reimbursement of expenses, and (iii) compensatory arrangements that are approved by an committee of independent directors of the Board of Directors of the Borrower or are available to employees generally.
		

		
			SECTION 6.08.     Borrower and Subsidiaries.  With respect to the Borrower and each of its Subsidiaries, engage at any time in any business or business activity other than the business conducted by it on the date hereof and business activities reasonably incidental or related thereto.
		

		
			SECTION 6.09.     Other Indebtedness and Agreements, etc.  (i) Make any distribution or payment, whether in cash, property, securities or a combination thereof (other than (A) regularly scheduled payments of principal and interest as and when due (to the extent not prohibited by applicable subordination provisions), other than in respect of any Acquisition Earnout and (B) subject to the satisfaction of the Payment Conditions, distributions or payments in respect of any Acquisition Earnout in accordance with the documentation relating to such Acquisition) in respect of, or pay, or commit to pay, or directly or indirectly (including pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise acquire for consideration, or set apart any sum for any of the foregoing purposes, any Indebtedness or Disqualified Stock, (ii) pay in cash any amount in respect of any Indebtedness or preferred Equity Interests that may at the obligor’s option be paid in kind or in other securities or (iii) pay any Management Fees.
		

		
			SECTION 6.10.     [Reserved]
		

		
			SECTION 6.11.     [Reserved]
		

		
			
		

		
			

		 

		

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			SECTION 6.12.     Maximum Consolidated Leverage Ratios.
		

		
			(a)         Permit the Consolidated Revenue Leverage Ratio as of the last day of a period set forth below to be greater than the ratio set forth opposite such period below:
		

		
			 
		

			
					
						Four Fiscal Quarters Ending

					
					
						    

					
					
						Ratio

					
					
						 

				
	
					
						June 30, 2018

					
					
						 

					
					
						0.53 to 1.00

					
					
						 

				
	
					
						September 30, 2018

					
					
						 

					
					
						0.49 to 1.00

					
					
						 

				
	
					
						December 31. 2018

					
					
						 

					
					
						0.46 to 1.00

					
					
						 

				
	
					
						March 31, 2019

					
					
						 

					
					
						0.42 to 1.00

					
					
						 

				
	
					
						June 30, 2019

					
					
						 

					
					
						0.38 to 1.00

					
					
						 

				
	
					
						September 30, 2019

					
					
						 

					
					
						0.35 to 1.00

					
					
						 

				
	
					
						December 31, 2019

					
					
						 

					
					
						0.32 to 1.00

					
					
						 

				

		
			 
		

		
			(b)         Permit the Consolidated EBITDA Leverage Ratio as of the last day of a period set forth below to be greater than the ratio set forth opposite such period below:
		

		
			 
		

			
					
						Four Fiscal Quarters Ending

					
					
						    

					
					
						Ratio

					
					
						 

				
	
					
						March 31, 2020

					
					
						 

					
					
						1.50 to 1.00

					
					
						 

				
	
					
						June 30, 2020

					
					
						 

					
					
						1.50 to 1.00

					
					
						 

				
	
					
						September 30, 2020 and each fiscal quarter ending thereafter

					
					
						 

					
					
						1.25 to 1.00

					
					
						 

				

		
			 
		

		
			SECTION 6.13.     Minimum Liquidity.  Permit average Liquidity to be less than $5,000,000 during the last five consecutive calendar days of any fiscal month and the five consecutive calendar days thereafter (calculated as one ten‐day period).
		

		
			SECTION 6.14.     Fiscal Year.  Permit any of the Borrower or any Subsidiary to change its fiscal year end to a date other than December 31.
		

		
			SECTION 6.15.     Certain Equity Securities.  Issue any Equity Interest that is not Qualified Capital Stock; and for the avoidance of any doubt, each Lender consents to the Issuance of Qualified Capital Stock.
		

		
			SECTION 6.16.     Amendments or Waivers of Documents Relating to Organizational Documents, Equity Interests and Acquisition Agreement.
		

		
			(a)         Amendments of Organizational Documents.  Make any amendment, waiver, restatement, supplement or other modification to such Person’s Organizational Documents in any manner adverse to the Lenders, the Collateral Agent or the Administrative Agent without in each case obtaining the prior written
		

		
			
		

		
			

		 

		

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			consent of the Required Lenders to such amendment, waiver, restatement, supplement or other modification.
		

		
			(b)         Amendments of Equity Interests.  Make any amendment, waiver, restatement, supplement or other modification to the terms of any Equity Interests of the Borrower or any of its Subsidiaries, (i) if the effect thereof would be to bring forward (to an earlier date) the dates on which any put right or other right of the holder thereof to require any mandatory prepayment can be exercised, (ii) if the effect thereof would cause such Equity Interests to constitute Disqualified Stock, or (iii) in any manner adverse to the Lenders, the Collateral Agent or the Administrative Agent.
		

		
			(c)         Amendments of Acquisition Agreement.  Neither the Borrower nor any of its Subsidiaries will agree to any amendment, waiver, restatement, supplement or other modification to, or grant any consent with respect to or waive any of its rights under, the Acquisition Agreement or any of the other Transaction Documents after the Closing Date in any manner adverse to the Lenders, the Collateral Agent or the Administrative Agent without in each case obtaining the prior written consent of the Required Lenders to such amendment, waiver, restatement, supplement, modification or consent.
		

		
			ARTICLE VII
		

		
			 
		

		
			Events of Default
		

		
			SECTION 7.01.     Events of Default.  In case of the happening of any of the following events (“Events of Default”):
		

		
			(a)         default shall be made in the payment of any principal of, or Applicable Prepayment Premium on, any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;
		

		
			(b)         default shall be made in the payment of any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of 5 Business Days;
		

		
			(c)         any representation or warranty made or deemed made to any Agent or Lender in or in connection with or pursuant to any Loan Document or the Loans made hereunder, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Loan Document, shall be false or misleading in any material respect when so made, deemed made or furnished (except to the extent already qualified by materiality, in which case it shall not be false or misleading in any respect);
		

		
			(d)         default shall be made in the due observance or performance by the Borrower or any Subsidiary of any covenant, condition or agreement contained in Section 4.02,  Section 5.01(a),  Section 5.04,  Section 5.05,  Section 5.08,  Section 5.12,  Section 5.13 or Section 5.14 or in Article VI;
		

		
			(e)         default shall be made in the due observance or performance by the Borrower or any Subsidiary of any covenant, condition or agreement contained in any Loan Document (other than those specified elsewhere in this Article VII) and such default shall continue unremedied for a period of 30 days after the earlier of (i) notice thereof from the Administrative Agent, the Collateral Agent or any Lender to the Borrower and (ii) knowledge thereof by the Borrower;
		

		
			
		

		
			

		 

		

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			(f)         (i) the Borrower or any Subsidiary shall fail to pay any principal or interest, regardless of amount, due in respect of any Material Indebtedness, when and as the same shall become due and payable beyond any applicable notice or cure period; or (ii) any Subsidiary incorporated in Ireland is unable or admits inability to pay its debts as they fall due; or (iii) any other event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (iii) shall not apply to secured Indebtedness that becomes due solely as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
		

		
			(g)         an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or any Subsidiary (other than any Excluded Subsidiary), or of a substantial part of the property or assets of the Borrower or any Subsidiary (other than any Excluded Subsidiary), under the Bankruptcy Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary (other than any Excluded Subsidiary) or for a substantial part of the property or assets of the Borrower or any Subsidiary (other than any Excluded Subsidiary) or (iii) the winding‐up or liquidation of the Borrower or any Subsidiary (other than any Excluded Subsidiary); and, in each case of the foregoing clauses (i) through (iii), such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;
		

		
			(h)         the Borrower or any Subsidiary (other than any Excluded Subsidiary) shall (i) voluntarily commence any proceeding or file any petition seeking relief under the Bankruptcy Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership, examinership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (g) above, (iii) apply for or consent to the appointment of a receiver, examiner, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary (other than any Excluded Subsidiary) or for a substantial part of the property or assets of the Borrower or any Subsidiary (other than any Excluded Subsidiary), (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;
		

		
			(i)          one or more judgments shall be rendered against the Borrower, any Subsidiary (other than any Excluded Subsidiary) or any combination thereof and the same shall remain undischarged for a period of 45 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Borrower or any Subsidiary (other than any Excluded Subsidiary) to enforce any such judgment and such judgment either (i) is for the payment of money in an aggregate amount in excess of $500,000 (excluding amounts covered by insurance to the extent the relevant independent third party insurer has not denied coverage therefor) or (ii) is for injunctive relief and could reasonably be expected to result in a Material Adverse Effect;
		

		
			(j)          (i) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of the Borrower and its ERISA Affiliates in an aggregate amount exceeding $500,000; or (ii) any event that results in the imposition of a Lien on any asset of Loan Party or ERISA Affiliate with respect to any Plan;
		

		
			(k)         any Guarantee under the Guarantee and Collateral Agreement for any reason shall cease to be in full force and effect (other than in accordance with its terms), or any Guarantor shall deny in writing
		

		
			
		

		
			

		 

		

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			that it has any further liability under the Guarantee and Collateral Agreement (other than as a result of the discharge of such Guarantor in accordance with the terms of the Loan Documents);
		

		
			(l)          any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority security interest (subject to any Lien permitted by Section 6.02)  in the securities, assets or properties purported to be covered thereby, other than as a result of any failure by Collateral Agent to take any action within its control;
		

		
			(m)        any Subordinated Indebtedness of the Borrower or any Subsidiary constituting Material Indebtedness shall cease (or any Loan Party or an Affiliate of any Loan Party shall so assert), for any reason, to be validly subordinated to the Obligations as provided in the agreements evidencing such Subordinated Indebtedness;
		

		
			(n)         there shall have occurred a Change in Control; or
		

		
			(o)         the Acquisition shall not have been consummated by 5:00 p.m. Los Angeles time on May 9, 2018.
		

		
			then, and in every such event (other than an event with respect to any of the Loan Parties described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Collateral Agent may, and at the request of the Required Lenders shall, by notice to the Borrower and the Administrative Agent, take either or both of the following actions, at the same or different times:  (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable (and accrued interest thereon), together with the Applicable Prepayment Premium for the prepayment date with respect to such principal amount paid and accrued interest thereon, and any unpaid accrued fees and all other liabilities of the Loan Parties accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event with respect to any of the Loan Parties described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding (and accrued interest thereon), together with the Applicable Prepayment Premium for the prepayment date with respect to such principal amount paid and accrued interest thereon and any unpaid accrued fees and all other liabilities of the Loan Parties accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding, and the Collateral Agent shall have the right to enforce all of the Liens created pursuant to the Security Documents and exercise on behalf of itself and the other Secured Parties all rights and remedies available to it and the other Secured Parties under the Loan Documents or applicable law, including the right to appoint a receiver.
		

		
			If the Obligations are accelerated for any reason, including because of default, Disposition or encumbrance (including that by operation of law or otherwise), the Applicable Prepayment Premium will also be due and payable as though said indebtedness was voluntarily prepaid and shall constitute part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s lost profits as a result thereof.  Any Applicable Prepayment Premium payable above shall be presumed to be the liquidated damages sustained by each Lender as the result of the early termination and the Borrower agrees that it is reasonable under the circumstances currently existing.  The Applicable Prepayment Premium shall also be payable in the event the Obligations (and/or this Agreement or the Notes evidencing the Obligations) are
		

		
			
		

		
			

		 

		

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			satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means.  THE BORROWER EXPRESSLY WAIVES THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING APPLICABLE PREPAYMENT PREMIUM.  The Borrower expressly agrees that:  (A) the Applicable Prepayment Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Prepayment Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the Applicable Prepayment Premium; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph.  The Borrower expressly acknowledges that its agreement to pay the Applicable Prepayment Premium to Lenders as herein described is a material inducement to Lenders to make the Loans.
		

		
			ARTICLE VIII
		

		
			 
		

		
			The Administrative Agent and the Collateral Agent
		

		
			Each of the Lenders hereby irrevocably appoints the Administrative Agent and the Collateral Agent (for purposes of this Article VIII, the Administrative Agent and the Collateral Agent are referred to collectively as the “Agents”) its agent and authorizes the Agents to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.  Without limiting the generality of the foregoing, the Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the Collateral and the rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Documents.
		

		
			The Person serving as the Administrative Agent and/or the Collateral Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such Person and its affiliates may provide debt financing, equity capital or other services (including financial advisory services) to any of the Loan Parties (or any Person engaged in similar business as that engaged in by any of the Loan Parties) as if such Person was not performing the duties specified herein, and may accept fees and other consideration from any of the Loan Parties for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.
		

		
			Neither Agent shall have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) neither Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) neither Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that such Agent is instructed in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08), and (c) except as expressly set forth in the Loan Documents, neither Agent shall have any duty to disclose, nor shall it be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Person serving as the Administrative Agent and/or Collateral Agent or any of its Affiliates in any capacity.  Neither Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08) or in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.  Neither Agent nor any Lender shall be deemed to have knowledge of any Default unless and until written notice thereof (conspicuously identified as “notice of default”) is given to such Agent or such Lender by
		

		
			
		

		
			

		 

		

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			the Borrower or a Lender, and neither Agent nor any Lender shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent or such Lender.
		

		
			Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  Each Agent may also rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
		

		
			Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub‐agents appointed by it.  Each Agent and any such sub‐agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub‐agent and to the Related Parties of each Agent and any such sub‐agent, and shall apply to their respective activities in connection with the syndication of the Loans as well as activities as Agent.
		

		
			Either Agent may resign at any time by notifying the Lenders and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.  If within 30 days after written notice is given of the resigning Agent’s resignation under this Article VIII no successor Agent shall have been appointed and shall have accepted such appointment, then on such 30th day (a) the retiring Agent’s resignation shall become effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent (with the consent of the Borrower (to the extent required above)).  Upon the acceptance of its appointment as Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder.  The Borrower shall pay the reasonable fees of a successor Agent for performing its duties and obligations hereunder.  After an Agent’s resignation hereunder, the provisions of this Article VIII and Section 9.05 shall continue in effect for the benefit of such retiring Agent, its sub‐agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while acting as Agent.
		

		
			Each Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder.
		

		
			
		

		
			

		 

		

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			Each Lender hereby further authorizes the Collateral Agent, on behalf of and for the benefit of Lenders, to enter into each Security Document as secured party and to be the agent for and representative of the Lenders thereunder, and each Lender agrees to be bound by the terms of each Security Document; provided that the Collateral Agent shall not (i) enter into or consent to any material amendment, modification, termination or waiver of any provision contained in any Security Document or (ii) release any Collateral (except as otherwise expressly permitted or required pursuant to the terms of this Agreement or the applicable Security Document), in the case of each of clauses (i) and (ii) without the prior consent of Required Lenders (or, if required pursuant to Section 9.08, all Lenders); provided further,  however, that, without further written consent or authorization from the Lenders, the Collateral Agent may execute any documents or instruments necessary to (a) release any Lien encumbering any item of Collateral that is the subject of a sale or other Disposition of assets permitted by this Agreement or to which Required Lenders have otherwise consented, (b) release any Subsidiary Guarantor from the Guarantee and Collateral Agreement if all of the Equity Interests of such Subsidiary Guarantor are sold or otherwise Disposed of to any Person (other than an Affiliate of a Loan Party) pursuant to a sale or other Disposition permitted hereunder or to which Required Lenders have otherwise consented or (c) subordinate the Liens of the Collateral Agent, on behalf of the Secured Parties, to any Liens permitted by Section 6.02.  Anything contained in any of the Loan Documents to the contrary notwithstanding, the Borrower, the Collateral Agent and each Lender hereby agree that (1) no Lender shall have any right individually to realize upon any of the Collateral under or otherwise enforce any Security Document, it being understood and agreed that all powers, rights and remedies under the Security Documents may be exercised solely by the Collateral Agent for the benefit of the Secured Parties in accordance with the terms thereof, and (2) in the event of a foreclosure by either on any of the Collateral pursuant to a public or private sale, either Agent or any Lender may be the purchaser of any or all of such Collateral at any such sale and the Collateral Agent, as agent for and representative of Lenders (but not any Lender or Lenders in its or their respective individual capacities unless Required Lenders shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale.  Notwithstanding anything to the contrary herein, the Collateral Agent shall be permitted to take any action it is authorized to take under any Loan Document.
		

		
			In case of the pendency of any case or proceeding under the Bankruptcy Code or any other judicial proceeding relative to any Loan Party, the Administrative Agent or Collateral Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent or Collateral Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
		

		
			(i)          to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Agents and their respective agents and counsel and all other amounts due the Lenders, the Collateral Agent and the Administrative Agent under Section 2.05,  Section 2.12,  Section 2.16, and Section 9.05) allowed in such judicial proceeding; and
		

		
			(ii)         to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the Collateral Agent to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Collateral Agent, to pay to the Administrative Agent any amount due for the
		

		
			
		

		
			

		 

		

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			reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 2.05 and Section 9.05.
		

		
			ARTICLE IX
		

		
			 
		

		
			Miscellaneous
		

		
			SECTION 9.01.     Notices.  Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:
		

		
			(i)          if to the Borrower, to it at:  Adesto Technologies Corporation, 3600 Peterson Way, Santa Clara, California 95054, Attention:  Chief Financial Officer (Email:  ron.shelton@adestotech.com), with a copy (which shall not constitute notice) to Fenwick & West LLP, 801 California Street, Mountain View, California 94041, Attention: Mark Leahy and David Michaels (Fax No. (650) 938-5200 and Email: mleahy@fenwick.com and dmichaels@fenwick.com);
		

		
			(ii)         if to the Administrative Agent, to Cortland Capital Market Services LLC at 225 West Washington Street, 9th Floor, Chicago, Illinois 60606, Attention:  Eugene Kim and Legal Department (Fax No. (312) 376‐0751 and Email:  eugene.kim @cortlandglobal.com and legal@cortlandglobal.com), with a copy (which shall not constitute notice) to (A) Holland & Knight LLP, 131 S. Dearborn Street, 30th Floor, Chicago, Illinois 60603, Attention:  Joshua M. Spencer (Fax No. (312) 578‐6666 and Email:  joshua.spencer@hklaw.com and (B) Obsidian Agency Services, Inc., c/o Tennenbaum Capital Partners, LLC, 2951 28th Street, Suite 1000, Santa Monica, California 90405, Attention:  Asher Finci (Fax No. (310) 889‐4950 and Email:  asher.finci@tennenbaumcapital.com);
		

		
			(iii)       if to the Collateral Agent, to Obsidian Agency Services, Inc., c/o Tennenbaum Capital Partners, LLC, 2951 28th Street, Suite 1000, Santa Monica, California 90405, Attention:  Asher Finci (Fax No. (310) 889‐4950 and Email:  asher.finci@tennenbaumcapital.com), with a copy (which shall not constitute notice) to Katten Muchin Rosenman LLP, 515 South Flower Street, Suite 1000, Los Angeles, California 90071, Attention:  Glen K. Lim (Fax No. (213) 443‐9001 and Email:  glen.lim@kattenlaw.com); and
		

		
			(iv)        if to a Lender, to it at its address (or fax number) set forth in the Administrative Questionnaire submitted by such Lender to the Administrative Agent or in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto
		

		
			All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by fax or on the date 5 Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01.  As agreed to among the Borrower, the Administrative Agent, the Collateral Agent and the applicable Lenders from time to time, notices and other communications may also be delivered by e‐mail to the e‐mail address of a representative of the applicable Person provided from time to time by such Person.
		

		
			
		

		
			

		 

		

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			SECTION 9.02.     Survival of Agreement.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the making by the Lenders of the Loans, regardless of any investigation made by the Lenders or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any Fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Commitments have not been terminated.  The provisions of Section 2.11,  Section 2.12,  Section 2.16 and Section 9.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent or any Lender.
		

		
			SECTION 9.03.     Binding Effect.  This Agreement shall become effective when it shall have been executed by the Borrower, the Collateral Agent and the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.
		

		
			SECTION 9.04.     Successors and Assigns.
		

		
			(a)         Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower, the Administrative Agent, the Collateral Agent or the Lenders that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.
		

		
			(b)         Each Lender may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), with the prior written consent of the Borrower, the Collateral Agent and the Administrative Agent (not to be unreasonably withheld or delayed); provided,  however, that (i) the consent of the Borrower shall not be required to any such assignment made (A) to another Lender or an Affiliate of a Lender or (B) after the occurrence and during the continuance of any Event of Default, (ii) the Borrower shall be deemed to have consented to any such assignment (and shall not be a party to or required to sign any Assignment and Acceptance related thereto) unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; (iii) the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be in an integral multiple of, and not less than, $1,000,000 (or, if less, the entire remaining amount of such Lender’s Commitment or Loans), (iv) the parties to each such assignment shall manually execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (provided that only one such fee shall be payable in the case of concurrent assignments to Persons that, after giving effect to such assignments, will be Related Funds), and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms and other required know‐your‐customer documentation.  Upon acceptance and recording pursuant to paragraph (e) of this Section 9.04, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s
		

		
			
		

		
			

		 

		

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			rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 2.11,  Section 2.12,  Section 2.16 and Section 9.05).
		

		
			(c)         By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows:  (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and the outstanding balance of its Loans, without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance; (ii) except as set forth in (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Loan Document, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary or the performance or observance by the Borrower or any Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements referred to in Section 3.05 or delivered pursuant to Section 5.04 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, the Collateral Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (vi) such assignee appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent and the Collateral Agent, respectively, by the terms hereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
		

		
			(d)         The Administrative Agent shall maintain at its principal executive offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  Absent manifest error, the Borrower, the Administrative Agent, the Collateral Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, the Collateral Agent and any Lender, at any reasonable time and from time to time upon reasonable prior written notice.
		

		
			(e)         Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above, if applicable, and the written consent of the Administrative Agent, the Collateral Agent and, if required, the Borrower to such assignment and any applicable tax forms and other required know‐your‐customer documentation, the Administrative Agent shall (i) accept such Assignment and Acceptance and (ii) notify the Borrower of such acceptance.  The Administrative Agent shall promptly record the information contained therein in the Register.  No assignment shall be effective unless it has been recorded in the Register as provided in this paragraph (e).  This Section 9.04(e) shall be construed so that any Commitment, Loan or other Obligation under the Loan Documents is in registered form under Section 5f.103‐1(c) of the United States Treasury Regulations.
		

		
			
		

		
			

		 

		

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			(f)         Each Lender may without the consent of the Borrower, the Collateral Agent or the Administrative Agent sell participations to one or more banks or other Persons in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided,  however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other Persons shall be entitled to the benefit of the cost protection provisions contained in Section 2.11 and Section 2.16 to the same extent as if they were Lenders (but, with respect to any particular participant, to no greater extent than the Lender that sold the participation to such participant, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the participant acquired the applicable participation) and (iv) the Borrower, the Collateral Agent, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers decreasing any fees payable to such participating bank or Person hereunder or the amount of principal of or the rate at which interest is payable on the Loans in which such participating bank or Person has an interest, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans in which such participating bank or Person has an interest, increasing or extending the Commitments in which such participating bank or Person has an interest or releasing any Guarantor (other than in connection with the sale of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral).
		

		
			(g)         Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103‐1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
		

		
			(h)         Any Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.04, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure of information designated by the Borrower as confidential, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 9.17.
		

		
			(i)          Any Lender may at any time assign all or any portion of its rights under this Agreement to secure extensions of credit to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.
		

		
			
		

		
			

		 

		

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			(j)          Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof.  In addition, notwithstanding anything to the contrary contained in this Section 9.04, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in the Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and the Collateral Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non‐public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.  A Granting Lender that transfers all or any portion of its Loan to an SPC shall maintain a register that complies with the requirements set forth in Section 9.04(g).
		

		
			(k)         The Borrower shall not assign or delegate any of its rights or duties hereunder without the prior written consent of the Administrative Agent, the Collateral Agent and each Lender, and any attempted assignment without such consent shall be null and void.
		

		
			SECTION 9.05.     Expenses; Indemnity.
		

		
			(a)         The Borrower agrees to pay all reasonable and documented out‐of‐pocket costs and expenses, including reasonable and documented attorneys’ fees (limited to one transaction counsel, one local counsel in each relevant jurisdiction and any regulatory or other specialized counsel for the Administrative Agent and one transaction counsel, one local counsel in each relevant jurisdiction and any regulatory or other specialized counsel for the Collateral Agent and the Lenders, taken as a whole)  and reasonable and documented fees, costs and expenses of accountants, advisors and consultants, incurred by the Administrative Agent, the Collateral Agent and its counsel in connection with the syndication of the Loans and the negotiation, preparation and administration of this Agreement and the other Loan Documents (including travel costs) or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby or thereby contemplated shall be consummated) or relating to efforts to evaluate or assess any Loan Party, its business or financial condition or protect, evaluate, assess or Dispose of any of the Collateral; and all out‐of‐pocket costs and expenses, including reasonable and documented attorneys’ fees, fees, costs and expenses of accountants, advisors and consultants and costs of settlement, incurred by the Administrative Agent, the Collateral Agent or any of the Lenders in enforcing any Obligations of or in collecting any payments due from any Loan Party hereunder or under the other Loan Documents (including in connection with the sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Loan Documents) or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a “work‐out” or pursuant to any insolvency or bankruptcy proceedings.
		

		
			
		

		
			

		 

		

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			(b)         The Borrower agrees to indemnify the Administrative Agent and each Related Party (“Agent Indemnitees”), the Collateral Agent, each Lender and each Related Party of any of the foregoing Persons (“Lender Indemnitees”; together with the Agent Indemnitees, each such Person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable and documented out-of-pocket counsel fees for one transaction counsel, one local counsel in each relevant jurisdiction and any regulatory or other specialized counsel for the Agent Indemnitees and one transaction counsel, one local counsel in each relevant jurisdiction and any regulatory or other specialized counsel for the Lender Indemnitees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the Transactions and the other transactions contemplated thereby, (ii) the use of the proceeds of the Loans, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto or the plaintiff or defendant thereunder (and regardless of whether such matter is initiated by a third party, a Lender or by the Borrower, any other Loan Party or any of their respective Affiliates), or (iv) any actual or alleged presence or Release of Hazardous Materials on any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted primarily from the gross negligence or willful misconduct of such Indemnitee.
		

		
			(c)         To the extent that the Borrower fails to pay any amount required to be paid by them to the Administrative Agent or the Collateral Agent under paragraph (a) or (b) of this Section 9.05(c), each Lender severally agrees to pay to the Administrative Agent or the Collateral Agent, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent in its capacity as such.  For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the outstanding Loans and unused Commitments at the time.
		

		
			(d)         To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.
		

		
			(e)         The provisions of this Section 9.05 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent or any Lender.  All amounts due under this Section 9.05 shall be payable on written demand therefor.
		

		
			SECTION 9.06.     Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, except to the extent prohibited by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing
		

		
			
		

		
			

		 

		

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			under this Agreement and other Loan Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such other Loan Document and although such obligations may be unmatured.  The rights of each Lender under this Section 9.06 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
		

		
			SECTION 9.07.     Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
		

		
			SECTION 9.08.     Waivers; Amendment.
		

		
			(a)         No failure or delay of the Administrative Agent, the Collateral Agent or any Lender in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Collateral Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances.
		

		
			(b)         Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders, with a copy of each promptly provided to the Administrative Agent; provided,  however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of or any scheduled principal payment date or date for the payment of any interest on any Loan, or waive or excuse any such payment or any part thereof, or decrease the rate of interest on any Loan, without the prior written consent of each Lender directly adversely affected thereby (other than any waiver of any increase in the interest rate applicable to the Loans as a result of the occurrence of an Event of Default), (ii) increase or extend the Commitment or decrease or extend the date for payment of any fees of any Lender without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements of Section 2.13, the provisions of Section 9.04(k) or the provisions of this Section 9.08(b) or release any Guarantor (other than in connection with the sale or other disposition of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral, without the prior written consent of each Lender, (iv) modify the protections afforded to an SPC pursuant to the provisions of Section 9.04(j) without the written consent of such SPC, or (v) reduce the percentage contained in the definition of the term “Required Lenders” without the prior written consent of each Lender (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Commitments on the date hereof); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document without the prior written consent of the Administrative Agent or the Collateral Agent, as applicable.
		

		
			SECTION 9.09.     Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken,
		

		
			
		

		
			

		 

		

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			received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 9.09 shall be cumulated and the interest and Charges payable to such Lender in respect of other periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.
		

		
			SECTION 9.10.     Entire Agreement.  This Agreement and the other Loan Documents constitute the entire contract between the parties relative to the subject matter hereof.  Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents.  Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any Person (other than the parties hereto and thereto, their respective successors and assigns permitted hereunder and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.
		

		
			SECTION 9.11.     Waiver of Jury Trial.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
		

		
			SECTION 9.12.     Judgment Currency.  If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Collateral Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given.  The obligation of the Loan Parties in respect of any such sum due from it to the Administrative Agent, the Collateral Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than U.S. dollars (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent, the Collateral Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent, the Collateral Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent, the Collateral Agent or any Lender from any Loan Party in the Agreement Currency, the Loan Parties, jointly and severally, agree, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent, the Collateral Agent or such Lender, as the case may be, against such loss.  If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent, the Collateral Agent or any Lender in such currency, the Administrative Agent, the Collateral Agent or such Lender, as the case may be, agrees to return the amount of any excess to the Borrower (or to any other Person who may be entitled thereto under applicable law).
		

		
			
		

		
			

		 

		

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			SECTION 9.13.     Severability.  In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good‐faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
		

		
			SECTION 9.14.     Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 9.03.  Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic means shall be as effective as delivery of a manually signed counterpart of this Agreement.
		

		
			SECTION 9.15.     Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
		

		
			SECTION 9.16.     Jurisdiction; Consent to Service of Process.
		

		
			(a)         The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Administrative Agent, the Collateral Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against the Borrower or its properties in the courts of any jurisdiction.
		

		
			(b)         The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any court located in the City of New York, Borough of Manhattan, or of the United States of America sitting in the Southern District of New York.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
		

		
			(c)         Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
		

		
			SECTION 9.17.     Confidentiality.  Each of the Administrative Agent, the Collateral Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ officers, directors, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep
		

		
			
		

		
			

		 

		

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			such Information confidential), (b) to the extent requested by any regulatory authority or quasi‐regulatory authority (such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) in connection with the exercise of any remedies hereunder or under the other Loan Documents or any suit, action or proceeding relating to the enforcement of its rights hereunder or thereunder, (e) subject to an agreement containing provisions substantially the same as those of this Section 9.17, to (i) any actual or prospective assignee of or participant in any of its rights or obligations under this Agreement and the other Loan Documents or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any Subsidiary or any of their respective obligations, (f) with the consent of the Borrower or (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 9.17.  For the purposes of this Section 9.17, “Information” shall mean all information received from the Borrower or any Subsidiary and related to the Borrower or any Subsidiary or their business, other than any such information that was available to the Administrative Agent, the Collateral Agent or any Lender on a nonconfidential basis prior to its disclosure by the Borrower or any Subsidiary; provided that, in the case of Information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this 7 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord its own confidential information.
		

		
			SECTION 9.18.     USA PATRIOT Act Notice.  Each Lender, the Collateral Agent and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower and the Subsidiary Guarantors that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower and the Subsidiary Guarantors, which information includes the name and address of the Borrower and the Subsidiary Guarantors and other information that will allow such Lender, the Collateral Agent or the Administrative Agent, as applicable, to identify the Borrower and the Subsidiary Guarantors in accordance with the USA PATRIOT Act.
		

		
			[Signature pages follow]
		

		
			 
		

		
			 
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
		

		
			 
		

			
					
						 

					
					
						ADESTO TECHNOLOGIES CORPORATION, as Borrower

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Ron Shelton

				
	
					
						 

					
					
						Name:

					
					
						Ron Shelton

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			
		

		
			

		 

		

			S-1

		

 

		

		
			 
		

			
					
						 

					
					
						CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Jonathan Kirschmeier

				
	
					
						 

					
					
						Name:

					
					
						Jonathan Kirschmeier

				
	
					
						 

					
					
						Title:

					
					
						Associate Counsel

				

		
			 
		

		
			
		

		
			

		 

		

			S-2

		

 

		

		
			 
		

			
					
						 

					
					
						OBSIDIAN AGENCY SERVICES, INC., as Collateral Agent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						Name:

					
					
						Howard Levkowitz

				
	
					
						 

					
					
						Title:

					
					
						Managing Partner

				

		
			 
		

		
			
		

		
			

		 

		

			S-3

		

 

		

		
			 
		

			
					
						 

					
					
						LENDERS:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						SPECIAL VALUE CONTINUATION PARTNERS, LP

				
	
					
						 

					
					
						TCP DIRECT LENDING FUND VIII-A, LLC

				
	
					
						 

					
					
						TCP DIRECT LENDING FUND VIII-N, LLC

				
	
					
						 

					
					
						TCP DIRECT LENDING FUND VIII-S, LLC

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						TENNENBAUM CAPITAL PARTNERS, LLC

				
	
					
						 

					
					
						Its:

					
					
						Investment Manager

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Name: Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Title:Managing Partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TCP DLF VIII ICAV,

				
	
					
						 

					
					
						an umbrella type Irish collective asset management vehicle acting solely for and on behalf of its sub-fund

				
	
					
						 

					
					
						TCP Direct Lending Fund VIII-U (Ireland)

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						TENNENBAUM CAPITAL PARTNERS, LLC

				
	
					
						 

					
					
						Its:

					
					
						Investment Manager

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Name: Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Title:Managing Partner

				

		
			 
		

		
			
		

		
			

		 

		

			S-4

		

 

		

		
			 
		

			
					
						 

					
					
						TCP DLF VIII ICAV,

				
	
					
						 

					
					
						an umbrella type Irish collective asset management vehicle acting solely for and on behalf of its sub-fund

				
	
					
						 

					
					
						TCP Direct Lending Fund VIII-L (Ireland)

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						SVOF/MM, LLC

				
	
					
						 

					
					
						Its:

					
					
						Sub-Advisor acting as attorney-in-fact

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Name: Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Title:Managing Partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TCP DIRECT LENDING FUND VIII-T, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						SVOF/MM, LLC

				
	
					
						 

					
					
						Its:

					
					
						Sub-Advisor

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Name: Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Title:Managing Partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TCP DLF VIII 2018 CLO, LLC

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						Series I of SVOF/MM, LLC

				
	
					
						 

					
					
						Its:

					
					
						Collateral Manager

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Name: Howard Levkowitz

				
	
					
						 

					
					
						 

					
					
						Title:Managing Partner

				

		
			 
		

		 

		

			S-5

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