Document:

Exhibit 10.13

 

OFFICE SUBLEASE

 

THIS SUBLEASE is made
and entered into as of the 23rd day of February, 2016 (the “Effective Date”), by and between
Restoration Hardware, Inc., a Delaware corporation (the “Sublandlord”) and Intercept Pharmaceuticals,
Inc., a Delaware corporation (the “Subtenant”).

 

WITNESSETH:

 

WHEREAS, Sublandlord
leases the land and the building located at 437 West 16th Street, New York, New York 10011 (the “Building”)
pursuant to that certain Net Lease (the “Master Lease”) dated April 12, 2013, between Henya Realty, LLC
and Salmir Realty, LLC (together, “Master Landlord”) [as successors-in-interest to 437 West 16th Street
LLC], and Sublandlord, a copy of which Lease is attached hereto as Exhibit A and is made a part hereof. All capitalized
terms not otherwise defined herein shall retain that meaning ascribed to them in the Lease; and

 

WHEREAS, Subtenant
desires to sublease from Sublandlord a portion of the Building consisting of the entire 4th Floor (5,382 rentable square feet)
and the entire 5th Floor (5,403 rental square feet) (together, the 4th Floor and the 5th Floor are referred to herein as the “Subleased
Premises”); and

 

WHEREAS, the parties
desire to enter into this Sublease defining their respective rights, duties, and liabilities relating to the Subleased Premises;

 

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

 

1.          Recitals.
The recitals above and exhibits attached hereto are all hereby incorporated into the body of this Sublease as if fully set forth
herein.

 

2.          Term.
Sublandlord, for and in consideration of the payment of the rent and the performance of the covenants hereinafter mentioned, does
hereby demise, lease and assign unto Subtenant the Subleased Premises, on the terms and conditions set forth herein, commencing
as of the date that exclusive broom-clean possession of the Subleased Premises is delivered to Subtenant in the Delivery Condition,
as such term is hereinafter defined (the “Sublease Commencement Date”) and ending at 11:59 p.m. on the
last day of the calendar month in which the fifth (5th) anniversary of the Sublease Rent Commencement Date (as defined below) occurs
(the “Sublease Expiration Date”). The time period between the Sublease Commencement Date and the Sublease
Expiration Date is hereinafter referred to as the “Sublease Term”). Notwithstanding anything to the contrary
contained herein, in no event shall the Sublease Term extend beyond the “Expiration of the Term” of the Master Lease.

 

3.          Subtenant
Termination Right. Provided that Subtenant is not then in default, Subtenant shall have the one-time right to terminate this
Sublease effective as of the third (3rd) anniversary of the Sublease Rent Commencement Date (as defined below). Such early termination
right shall only be exercised, if at all, by (i) providing Sublandlord advance irrevocable written notice of such exercise no later
than the second (2nd) anniversary of the Sublease Rent Commencement Date, and (ii) simultaneous with delivery of such notice (and
as a condition precedent to the effectiveness of such notice), paying to Sublandlord an amount equal to the sum of (A) all of the
unamortized transaction costs (including, without limitation: (w) brokerage commissions actually paid by Sublandlord (up to a customary
and commercially reasonable amount), (x) an amount equal to the Base Rent abated between the Commencement Date and the Rent Commencement
Date, (y) an amount equal to the TI Work Allowance, and (z) all reasonable out-of-pocket legal fees incurred by Sublandlord in
pursuing this Sublease) multiplied by 1.08%, plus (B) $167,167.50 (i.e., an amount equal to two months’ Base Rent). For purposes
of the foregoing calculation, “transactions costs” shall be amortized on a straight-line basis over the original Term
of the Sublease.

 

     

     

    

 

4.          Rent.

 

		a.	“Base Rent” for the Subleased
Premises is One Million Three Thousand Five Dollars ($1,003,005) per year. The Base Rent will be paid by Subtenant to Sublandlord
in equal monthly installments, in advance, with the “First Payment” due upon execution of this Sublease.
The First Payment shall be equal to $83,583.75 (and such payment shall be allocable to, and actually applied against, the fifth
(5th) full month of the Sublease Term), plus a prorated amount payable for the period of time from the Sublease Commencement Date
through the last day of the calendar month in which the Sublease Commencement Date occurs. The parties acknowledge that, unless
the Sublease Expiration Date occurs on the last day of a calendar month, the final month’s Base Rent payment shall likewise
be prorated.

 

			So long as Subtenant shall not then be in default under this Sublease after notice and the expiration
of any applicable cure periods, Base Rent shall be abated in full for the first four (4) full calendar months following the Sublease
Commencement Date. The first day of the fifth (5th) full calendar month following the Sublease Commencement Date is the “Sublease
Rent Commencement Date”. However, as noted above, Base Rent for the fifth (5th) full calendar month is included in
the First Payment, thus, Subtenant will resume regular Base Rent payments as of the sixth (6th) full calendar month following the
Sublease Commencement Date.

 

		b.	Subtenant acknowledges that the Subleased Premises is submetered for electricity, and Subtenant
agrees to pay Sublandlord for such amounts actually consumed by Subtenant within twenty (20) business days following Sublandlord’s
written request therefore, accompanied by a copy of the electric bill. Or, at Sublandlord’s election, provided Sublandlord
has arranged for the direct metering of electricity at Sublandlord’s sole cost and expense, Sublandlord may direct Subtenant
to pay the electric provider directly. For purposes of computing Subtenant’s submetered consumption of electricity, the cost
of electricity shall be computed utilizing the average kilowatt per hour rate charged to Sublandlord under the Lease.

 

		c.	All amounts due hereunder from Subtenant, including Base
Rent, shall be referred to herein as “Rent”. Subtenant shall pay Rent without any demand, setoff or
deduction of any kind, except as herein or in the incorporated provisions of the Master Lease to the extent applicable to this
Sublease. In the event any installment of Rent is not paid by the fifth (5th) day of each month, a late charge of three
(3%) percent of the delinquent installment shall be due and payable; provided, however, that the first such late charge in any
twelve (12) month period shall be forgiven so long as Subtenant pays the delinquent installment no later than the fifth (5th)
business day following Sublandlord’s notice of such delinquency). All payments of Rent shall be by good and sufficient check
or by other means (such as automatic debit or electronic transfer) acceptable to Sublandlord. Sublandlord’s acceptance of
less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due. No endorsement or statement
on a check or letter accompanying a check or payment shall be considered an accord and satisfaction, and either party may accept
such check or payment without such acceptance being considered a waiver of any rights such party may have under this Sublease
or applicable law. Subtenant’s covenant to pay Rent is independent of every other covenant in this Sublease.

 

5.          Operating
Expenses. Notwithstanding anything in the Master Lease to the contrary, commencing upon written request from Sublandlord, accompanied
by a copy of the invoice, any time from and after the January 2017 Base Rent payment, Subtenant shall pay to Sublandlord, within
thirty (30) days following written request therefore, 33.83% (representing Subtenant’s proportionate share) of increases
in Operating Expenses over a calendar 2016 base year. As used herein, “Operating Expenses” shall mean
those expenses set forth in Exhibit “B” attached hereto. Notwithstanding the foregoing, it is agreed that base
building HVAC shall be provided at no additional cost to Subtenant during normal Building hours; however, all distribution within
the Subleased Premises shall be the sole responsibility of Subtenant (and at its expense); provided, however, that Subtenant may
reuse any HVAC distribution system and components presently installed in the Subleased Premises. Further, Subtenant shall be solely
responsible for cleaning the Subleased Premises, including depositing any rubbish from the Subleased Premises in the designated
area within the Building; provided, however, that Sublandlord, at its sole cost and expense, will be responsible for rubbish removal
from the designated area within the Building. Subject to Section 8 herein, Subtenant shall keep neat and clean and maintain in
first class order, condition and repair, the Subleased Premises and every part thereof, including, without limitation, the exterior
and interior portions of all doors, windows, plate glass, all plumbing and sewage facilities within the Subleased Premises, fixtures
and interior walls, floors, ceilings, signs (including exterior signs where permitted), and all wiring, electrical systems, and
any distribution of the HVAC system.

 

     

     

    

  

6.          Real
Estate Taxes. Notwithstanding anything in the Master Lease to the contrary, commencing upon written request from Sublandlord
any time from and after the July 2017 Base Rent payment, Subtenant shall pay to Sublandlord, within thirty (30) days following
written request therefore, 33.83% representing Subtenant’s proportionate share of increases in Real Estate Taxes over the
average of the 2015 / 2016 and 2016 / 2017 fiscal base years. As used herein, “Real Estate Taxes” shall
mean real estate taxes and any other taxes, charges and assessments which are levied with respect to the Building or the land appurtenant
to the Building, or with respect to any improvements, fixtures and equipment or other property of Sublandlord, real or personal,
located in the Building and used in connection with the operation of the Building and said land, any payments to any ground lessor
in reimbursement of tax payments made by such lessor; and all reasonable fees, expenses and costs incurred by Landlord in investigating,
protesting, contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining
to any Real Estate Taxes to be paid by Sublandlord. Real Estate Taxes shall not include any corporate franchise, or estate, inheritance
or net income tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Building.

 

7.          Furniture
& Equipment. Subtenant may use any existing pantry appliances and security cameras within the Subleased Premises. Sublandlord
makes no representation or warranty as to the condition of such appliances or cameras and has no obligations to maintain, repair
or replace such items. Sublandlord will disconnect service to the cameras by the Commencement Date, and Subtenant, at its sole
cost and expense, shall pay for any costs related to the cameras should Subtenant choose to utilize them.

 

8.          Subordinate
to Master Lease. This Sublease is expressly made subject and subordinate to the terms and conditions of the Master Lease, and
Subtenant hereby represents and warrants that (a) it is not a debtor nor a debtor-in-possession in any voluntary or involuntary
bankruptcy proceeding, and (b) it is in compliance with, agrees to, and confirms the requirements, terms and conditions set forth
in Section 7.1(k) of the Master Lease as if the same were reprinted in full herein. With regard to the Subleased Premises, Sublandlord
shall have all the rights of “Landlord” under the Master Lease and Subtenant shall assume all the obligations of “Tenant”
under the Master Lease as if Sublandlord had been named “Landlord” and Subtenant had been named “Tenant”
thereunder, except as expressly modified herein. Subtenant shall have no obligation to (x) perform any structural repair or, subject
to the provisions of Section 5 herein, perform any maintenance or repair of the working systems of the Building, except and to
the extent the necessity of such repair or maintenance was caused by the negligence or willful misconduct of Subtenant, its employees,
agents, contractors, or invitees, and (y) cure any violation or illegal condition existing on the Sublease Commencement Date. Unless
otherwise expressly provided in this Sublease, all such terms and conditions of the Master Lease are hereby incorporated herein
by reference as though fully set forth herein at length, except (a) the Rent shall be as herein expressly provided and shall be
paid to Sublandlord (instead of the Landlord as provided in the Master Lease), and (b) the time limits contained in the Master
Lease for the giving of notices, making of demands or performing of any act, condition or covenant on the part of the “Tenant”
thereunder, or for the exercise of the “Tenant” thereunder of any right, remedy or option, are changed by shortening
the same in each instance by three business (3) days, so that in each instance Subtenant shall have three (3) business days’
less time to observe or perform hereunder than Sublandlord has as the “Tenant” under the Master Lease (provided, however,
that in no event shall any notice or cure period be reduced below three (3) days); and provided further that the following provisions
of the Master Lease shall be deleted or modified as follows for purposes of incorporation by reference in this Sublease: Sections
1.2, 1.3, 1.4, 1.5, 28.2, Articles 2, 5 and 30, Exhibit C and Exhibit G of the Master Lease shall be deemed deleted; Article 3
of the Master Lease shall be amended as provided in Section 6 of this Sublease; Article 9 of the Master Lease shall be amended
as provided in Sections 5 and 8 of this Sublease; Article 10 of the Master Lease shall be amended as provided in Sections 4(b)
and 5 of this Sublease; Article 12 of the Master Lease shall be amended as provided in Section 14 of this Sublease; Article 15
of the Master Lease shall be amended as provided in Sections 8 and 9 of this Sublease; Article 16 of the Master Lease shall be
amended so that the addresses for notices set forth therein shall be deemed to refer to the addresses for notices provided in this
Sublease; Article 19 of the Master Lease shall be deemed amended as provided in Section 13 of this Sublease; and Section 24.1 shall
be deemed amended as provided in Section 19 of this Sublease. Subtenant agrees to comply with and abide by all the terms, provisions,
covenants and conditions of the Master Lease, and any violation of the same by Subtenant shall constitute a default under this
Sublease. A default by Sublandlord under the Master Lease shall constitute a default under this Sublease to the extent such default
under the Master Lease materially adversely affects Subtenant’s use or occupancy of the Subleased Premises. The parties acknowledge
and agree that this Sublease is not a “Major Sublease” as defined in the Master Lease, and thus does not
require the consent of the Master Landlord. Nevertheless, the parties agree that Sublandlord may, at its option, provide a copy
of this Sublease to Master Landlord as a courtesy. Sublandlord shall notify the Master Landlord within five (5) business days after
Subtenant notifies Sublandlord of a breach of the Master Lease by the Master Landlord, to the extent such breach materially adversely
affects the Subleased Premises; and if the Master Landlord does not cure such breach within the cure periods provided under the
Master Lease (or if no cure periods are provided, within a reasonable period under the circumstances) Sublandlord shall use commercially
reasonable efforts to compel Master Landlord to comply with its obligations under the Master Lease (which efforts may include instituting
an action or court proceeding against the Master Landlord), provided that Subtenant indemnifies Sublandlord against all losses,
damages, costs and expenses paid or incurred by Sublandlord (including reasonable attorneys’ fees and charges through all
appeals) as a result of any such action or proceeding. Additionally, if and to the extent Sublandlord receives a rent abatement
or reduction from the Master Landlord under the Master Lease on account of a failure to provide any services or comply with any
obligations under the Master Lease which failure or noncompliance materially adversely affects Subtenant’s use or occupancy
of the Subleased Premises, Subtenant shall be entitled to 33.83% representing Subtenant’s share of such abatement or reduction
after deduction for Sublandlord's reasonable out-of-pocket costs, if any, in obtaining such rent abatement or reduction.

 

     

     

    

  

9.          Default.
Upon default by Subtenant in the payment of Rent or any other payment required to be made by it or in the performance of any of
its obligations hereunder, Sublandlord shall have the same rights and remedies against Subtenant as are afforded Master Landlord
against Sublandlord in the event of Sublandlord’s default under the terms of the Master Lease.

 

10.         Assignment
/ Subletting. Subtenant shall not sub-sublease or sub-assign all or any portion of the Subleased Premises without Sublandlord’s
written consent (not to be unreasonably withheld, conditioned or delayed), and, in all cases, any such sub-sublease or sub-assignment
must be in strict compliance with the terms and conditions of the Master Lease. To the extent permitted by the Master Lease, Sublandlord
and Subtenant shall split any such profits 50/50. As used in this section, “profits” means the base rental payments
received under any such sub-sublease or sub-assignment (if any) in excess of the Base Rent received hereunder after first deducting
(i) reasonable expenses incurred by the Subtenant (e.g., lease procurement costs, TI allowance, free rent, brokerage commissions,
advertising, etc., but all such expenses shall be limited to commercially reasonable amounts as would be incurred in subleasing
or assigning similar-situated space) and (ii) any profit paid to Master Landlord pursuant to the Master Lease.

 

Notwithstanding the foregoing
and subject to the terms of the Master Lease, Subtenant may assign, encumber or transfer its interest in this Sublease to its parent
company or a corporation or other entity under common control with Subtenant or a subsidiary or affiliate of it or its parent company,
or to a corporation or other entity in which it is merged, consolidated or acquired by, or to which all or substantially all of
its assets are sold. Additionally, a transfer of stock or other beneficial interests in Subtenant (i) among the existing shareholders
or beneficial interest holders, or (ii) the issuance of stock or other beneficial ownership interests in Subtenant for the purpose
of obtaining equity financing, or (iii) transfers of stock or other beneficial interests in Subtenant for estate planning purposes,
shall not require Sublandlord’s consent as long as it is for a good business purpose and not for the principal purpose of
transferring Subtenant’s interest in this Sublease.

 

11.         Delivery
Condition / Sublandlord’s Representations. To the best of Sublandlord’s actual knowledge and belief, the following
representations are (or will be, as applicable) true as they relate to the Subleased Premises:

 

a.           As
of the Sublease Commencement Date, the Subleased Premises will be vacant and in broom clean condition.

 

b.           As
of the Effective Date, the building systems (including, but not limited to, the existing fire protection infrastructure) serving
the Subleased Premises are in good operating condition. Further, the existing sprinkler loop on each floor of the Subleased Premises
will remain in place.

 

     

     

    

  

c.           As
of the Effective Date, Sublandlord has received no notice of violation of any applicable codes, laws and/or regulations, whether
pertaining to hazardous substances, fire and safety systems, or otherwise, which have not been cured or are not in the process
of being cured Copies of Sublandlord’s filed ACP-5 Certificates for the Subleased Premises shall be delivered to Subtenant
on or before the Effective Date.

 

d.           As
of the Effective Date, Sublandlord has not received actual notice of any outstanding construction liens and/or violations with
the Department of Buildings, Environmental Control Board, and/or the Fire Marshall, which have not been cured or are not in the
process of being cured.

 

e.           As
of the Effective Date, Sublandlord has a valid and subsisting leasehold estate under the Master Lease, the Master Lease is in full
force and effect, Sublandlord has not delivered or received written notice of default under the Master Lease which remains uncured.

 

Except as expressly provided
otherwise herein, Subtenant accepts the Subleased Premises in its current condition “as-is”, “where-is”,
and “with all faults”. In this Sublease, the term “Delivery Condition” shall mean that condition of the
Subleased Premises in respect of which all of the representations set forth in clauses a. – e. of this Paragraph 11 shall
be true in all material respects.

 

12.         Subtenant’s
Improvements. Subject to strict compliance by Subtenant with all terms and conditions of Article 6 of the Master Lease, Subtenant
may complete Subtenant’s Improvements using architects, engineers, contractors, and subcontractors selected by Subtenant
and approved by Sublandlord (which approval shall not be unreasonably withheld, conditioned or delayed). As used herein, “Subtenant’s
Improvements” means the interior fit-out of the Subleased Premises, the plans for which are subject to Sublandlord’s
prior approval (which approval shall not be unreasonably withheld, conditioned or delayed).

 

So long as Subtenant
shall not then be in default under this Sublease (including, by extension, the incorporated provisions of the Master Lease), after
notice and the expiration of any applicable cure periods, Sublandlord will contribute up to Three Hundred Twenty-Three Thousand
Five Hundred Fifty Dollars ($323,550) [i.e., $30.00 per rentable square foot] towards Subtenant’s actual, reasonable costs
for Subtenant’s Improvements (the “Subtenant Improvement Allowance”). No more than ten percent
(10%) of the foregoing Subtenant Improvement Allowance may be utilized for soft costs (including, without limitation, architect
fees, engineering fees, and permitting fees). Sublandlord will pay the Subtenant Improvement Allowance to Subtenant within thirty
(30) days following receipt of written request from Subtenant, which written request must include the following: (i) documents
evidencing Subtenant’s architect’s self-certification of Subtenant’s Improvements, or a letter of completion
from the City of New York Department of Buildings and all associated permit sign-offs for the Subtenant’s Improvements and
the Subleased Premises, (ii) written certification from Subtenant that it has completed the Subtenant’s Improvements in their
entirety and taken occupancy of the Subleased Premises (i.e., there shall be no “progress payments”), (iii) proof of
final cost (e.g., AIA G702 or similar) from its general contractor or construction consultant, (iv) unconditional lien waivers
from all contractors and subcontractors who rendered services or materials in connection with Subtenant’s Improvements, and
(v) written certification from Subtenant that it is full compliance with this Sublease.

 

So long as Subtenant
shall not then be in default under this Sublease (including, by extension, the incorporated provisions of the Master Lease), after
notice and the expiration of any applicable cure periods, Sublandlord agrees to make an additional contribution of up to Sixty-Four
Thousand Seven Hundred Ten Dollars ($64,710) [i.e., $6 per rentable square foot] towards the actual, reasonable costs of upgrading
the HVAC distribution within the Subleased Premises (the “Supplemental Subtenant Improvement Allowance”).
Such HVAC upgrades shall be considered part of Subtenant’s Improvements and the Supplemental Subtenant Improvement Allowance
shall be payable, if at all, pursuant to the same terms, conditions and requirements as the Subtenant Improvement Allowance set
forth in the immediately preceding paragraph.

 

In no event shall the
Subtenant Improvement Allowance or the Supplemental Subtenant Improvement Allowance paid exceed the actual costs incurred by Subtenant
in connection with such work.

 

     

     

    

  

13.         Use
& Indemnification. Subtenant shall use the Subleased Premises only for the Permitted Uses as provided in the Master Lease
(and Sublandlord represents to Subtenant that the Subleased Premises may be used for executive and general offices and uses ancillary
thereto). Subtenant shall be fully responsible and liable (Master Landlord and Sublandlord being indemnified) for the operation
of its business in the Subleased Premises in compliance with all applicable laws and regulations from and after the Sublease Commencement
Date. Subtenant shall indemnify, defend and hold Sublandlord and Master Landlord, and Sublandlord’s and Master Landlord’s
officers, agents, and employees (collectively, the “Master Landlord and Sublandlord Indemnitees”) harmless
from and against all liabilities, obligations, damages, judgments, penalties, claims, costs, charges and expenses, including, without
limitation, reasonable attorneys’ fees, which may be imposed upon, incurred by, or asserted against any of the Master Landlord
and Sublandlord Indemnities and arising, directly or indirectly, out of or in connection with (a) Subtenant’s breach of its
obligations under this Sublease (including, by extension, the Master Lease), (b) the negligence or willful acts of Subtenant, its
agents, contractors, and employees, and (c) any work or thing done in, on or about the Subleased Premises or any part thereof,
by Subtenant or its agents, contractors, and employees, including, without limitation, any Subtenant’s Improvements. In no
event shall Subtenant dispose, store, or otherwise utilize hazardous materials within the Subleased Premises except in full compliance
with the Master Lease and all applicable law.

 

Sublandlord shall indemnify,
defend and hold harmless Subtenant from and against any loss, cost, damage or expense (including reasonable attorneys’ fees),
or any claim therefor, arising out of (i) any negligence by Sublandlord; (ii) any accident, injury or damage whatsoever caused
to any person, or to the property of any person, occurring outside of Subleased Premises but within or about the Building, where
such accident, damage or injury results or is claimed to have resulted from an act or omission on the part of the Sublandlord and
not from the negligence or willful misconduct of Subtenant, or (iii) any failure by Sublandlord to observe or perform any of the
terms, covenants or conditions of (A) the applicable terms of the Master Lease (to the extent such failure materially adversely
affects Subtenant’s use or occupancy of the Subleased Premises) or (B) this Sublease to the extent required to be observed
or performed by Sublandlord, including any loss, cost, damage or expense any default under or termination of the Master Lease arising
by reason of any such failure.

 

It is the intent of the
parties that Subtenant have access to the Subleased Premises on a 24/7/365 basis, including use of the Building elevator(s) on
a 24/7/365 basis, at no cost or expense to Subtenant. The parties acknowledge that there is no freight elevator for the Building.

 

14.         Insurance.
Subtenant shall at all times during the term hereof keep in force at its own expense all insurance coverages required to be maintained
by Sublandlord under the Master Lease that are applicable to Subtenant’s use of the Subleased Premises; subject, however,
to certain adjustments in such insurance coverages as reflected on an insurance certificate provided by Tenant and approved by
Sublandlord and Master Landlord pursuant to a separate letter or email transmittal. Except as aforesaid, all such insurance shall
conform to the requirements for Sublandlord’s insurance policies under the Master Lease. As soon as reasonably practicable,
Subtenant shall deliver to Sublandlord an insurance certificate and required endorsements evidencing the insurance coverages required
under this Sublease.

 

15.         Security
Deposit / Letter of Credit Security. On execution of this Sublease, Subtenant shall deliver to Sublandlord an irrevocable letter
of credit (the “Letter of Credit”) in the amount of Two Hundred Fifty Thousand Seven Hundred Fifty-One and 25/100ths
Dollars ($250,751.25) issued in favor of Sublandlord in such amount, as security for the full and faithful performance of Subtenant’s
obligations under this Sublease. The Letter of Credit shall be an irrevocable, unconditional letter of credit with an initial term
of not less than one (1) year from the Commencement Date of this Lease. Without further act or instrument required by Sublandlord,
the Letter of Credit shall be automatically renewed for successive one (1) year periods throughout the remainder of the Term unless,
not less than forty-five (45) days prior to the then current expiration date of the Letter of Credit, the issuing bank notifies
Sublandlord of its intention not to renew the Letter of Credit. The Letter of Credit (or any renewal, extension or replacement
thereof) shall continue in full force and effect and shall be maintained in its full face amount for thirty (30) days beyond the
later of (x) expiration of the Term of this Sublease, and (y) the date Subtenant vacates and surrenders possession of the Subleased
Premises to Sublandlord. The Letter of Credit shall (i) be negotiable and freely transferable in connection with a sale or transfer
by Sublandlord as hereinafter described; (ii) be issued or confirmed by a banking institution reasonably acceptable to Sublandlord;
(iii) provide for payment of all or any portion of the face amount of the Letter of Credit to Sublandlord upon the receipt by the
issuing bank of a sight draft presented to the issuing bank by a representative of Sublandlord; and (iv) be otherwise in form and
substance reasonably satisfactory to Sublandlord. Sublandlord's receipt of notice from the issuing bank of its intention not to
renew the Letter of Credit or Subtenant's failure to deliver a renewal or replacement letter of credit shall entitle Sublandlord
to draw the full face amount of the Letter of Credit and retain such sum as security hereunder in lieu of the Letter of Credit.
Subtenant's failure to maintain the Letter of Credit shall constitute a default under this Sublease. If Subtenant defaults in its
obligations under this Sublease beyond any applicable notice and cure period, Sublandlord may draw upon the Letter of Credit to
the extent required for the payment of any sum as to which Subtenant is in default or for any sum which Sublandlord may have expended
or may be required to expend by reason of Subtenant’s default. In the event Sublandlord draws upon the Letter of Credit and
applies or retains any portion or all of the sum received upon such draw, Subtenant shall forthwith take such action as is necessary
to restore the face amount of the Letter of Credit so that at all times the amount of the Letter of Credit shall be equal to Two
Hundred Fifty Thousand Seven Hundred Fifty-One and 25/100ths Dollars ($250,751.25). Upon expiration of the Sublease Term or earlier
termination of this Sublease, and after Subtenant has delivered possession of the Subleased Premises in the condition required
by this Sublease and otherwise fully performed its covenants and obligations hereunder, Sublandlord shall promptly return the Letter
of Credit to Subtenant.

 

     

     

    

  

Notwithstanding the foregoing
provisions of this Sublease, Subtenant may deposit with Sublandlord the sum of $75,000.00 (the "Temporary Security Deposit
") upon Tenant's execution and submission of the Lease; provided, however, that Subtenant agrees that it shall, on or before
the forty-fifth (45th) day next following the date that this Sublease has been fully executed and delivered, deliver the Letter
of Credit, as hereinabove defined, in the form required under this Section 15 to Sublandlord, whereupon Sublandlord shall promptly
return the Temporary Security Deposit to Subtenant. Sublandlord shall deposit the Temporary Security Deposit in its general bank
account and will have no obligation to accrue or pay to Subtenant interest on such Temporary Security Deposit. The Temporary Security
Deposit is security for performance of Subtenant’s obligations under this Sublease. If Subtenant defaults with respect to
any provision of this Sublease, including but not limited to the provisions relating to the payment of Rent, and such default continues
after any applicable notice and cure period under this Sublease, Sublandlord, without prejudice to any other right or remedy it
may have, may use, apply or retain all or any part of the Temporary Security Deposit for the payment of any rent or additional
rent, or the cure of any such default. If Subtenant fails for any reason to deliver to Landlord the Letter of Credit by the forty-fifth
(45th) day next following the date that this Sublease has been fully executed and delivered, Subtenant's failure to deliver the
Letter of Credit by such date shall constitute an event of default under this Sublease, notwithstanding that no other default on
the part of Subtenant may then exist under this Sublease; and Sublandlord shall be entitled to exercise all rights and remedies
available to Sublandlord under this Sublease on account of such event of default.

 

16.         Brokers.
Each party represents that no real estate broker, salesman, or agent other than JLL (“Sublandlord’s Broker)
and Newmark Grubb Knight Frank (“Subtenant’s Broker”) were instrumental in procuring this Sublease.
Each party will indemnify the other against any claim or commission brought by a party other than the Sublandlord’s Broker
and the Subtenant’s Broker. If and only if this Sublease is fully executed, Sublandlord shall pay a commission to Sublandlord’s
Broker and/or Subtenant’s Broker pursuant to one or more separate agreements with the brokers.

 

17.         Notice.
It is expressly agreed that any notice required or desired to be sent shall be delivered to the following addresses and shall be
deemed given (i) three (3) business days after deposited in the US mail and sent by United States Certified and/or Registered Mail,
postage prepaid, return receipt requested, or (ii) on the day delivered if by hand, or (iii) when delivered if by overnight delivery
by a professional delivery service:

 

	If to Sublandlord:	If to Subtenant:
	 	 
	Restoration Hardware, Inc.	At the Subleased Premises
	Attn: Eugene Chang	 
	
        VP & Senior Counsel

        15 Koch Road | Corte Madera, CA 94925

        Direct: 415.945.5996 | echang@rh.com
	
        With a copy to:

         

        Mario J. Suarez, Esq.

        Thompson Hine LLP

        335 Madison Avenue (12th Floor)

        New York, New York 10017

 

Additionally, Subtenant
acknowledges that the address to which all payments of Rent due the Sublandlord should be sent is to the Sublandlord at the aforementioned
Sublandlord address.

 

     

     

    

 

18.         Attorneys’
Fees. If either party institutes a suit against the other for violation of or to enforce any covenant or condition of this
Sublease, or if either party intervenes in any suit in which the other is a party to enforce or protect its interest or rights,
the prevailing party shall be entitled to all of its actual out-of-pocket costs and expenses, including reasonable attorneys’
fees actually incurred.

 

19.         Return
of Sublease Premises. At the end of the Term, Subtenant shall remove its personal property, equipment and trade fixtures from
the Subleased Premises, and shall remove any Specialty Improvements installed by Subtenant and repair any damage caused by such
removal, all in accordance with the terms of the Master Lease. Sublandlord shall advise Subtenant at the time Sublandlord provides
its approval to Subtenant’s improvements as provided in Section 12 herein which Specialty Improvements, if any, shall be
removed upon expiration or earlier termination of the Sublease. In this Sublease, the term “Specialty Improvements”
shall mean any alterations or improvements that are not “typical” office improvements or which would not be conducive
for use by subsequent office occupants, and will also include any alterations that (i) perforate, penetrate or require reinforcement
of a floor slab (including, without limitation, interior stairwells or high-density filing or racking systems), (ii) consist of
the installation of a raised flooring system, (iii) consist of the installation of a vault or other similar device or system intended
to secure the Sublease Premises or a portion thereof in a manner that exceeds the level of security necessary for ordinary office
space, and (iv) involve material plumbing connections (such as, for example but not by way of limitation, kitchens, saunas, showers,
and executive bathrooms outside of the Building core and/or special fire safety systems).

 

20.         Early
Termination of the Master Lease. If the Master Lease should terminate prior to the Expiration of the Term, through no fault
of Sublandlord, Sublandlord shall have no liability to Subtenant. Where the Master Lease grants Sublandlord any discretionary right
to terminate the Master Lease as to all or any portion of the Master Lease Premises, whether due to casualty, condemnation, or
otherwise, Sublandlord shall be entitled to exercise or not exercise such right in its sole and absolute discretion, but only after
notice to Subtenant.

 

21.         Signage.
Subject to the consent of Sublandlord, which consent shall not be unreasonably withheld, and the consent of the landlord under
the Master Landlord, Subtenant, at Subtenant’s sole cost and expense, may maintain signs in the elevator lobbies of each
floor that the Subleased Premises is located on; and a sign in the Building lobby as approved in a separate sketch initialed by
Sublandlord; and a proportionate share of the listings in the Building’s directory.

 

22.         Exclusive
License to Use Roof Deck. Subject to applicable laws, governmental codes, regulations and requirements and ordinances (collectively,
“Law”) and the applicable provisions of the Master Lease, Subtenant and its employees and invitees shall
have an exclusive license to use the Building’s rooftop deck during the Term of this Sublease in accordance with the following
terms and conditions:

 

a. Subtenants use or
occupancy of the rooftop deck shall be in accordance with and subject to the applicable provisions of the Sublease and Master Lease,
as if the rooftop deck were a part of the Subleased Premises, except that (1) the rooftop deck shall not be included in the calculation
of Subtenant’s proportionate share of Operating Expenses and Real Estate Taxes and no additional Base Rent is due for Subtenant’s
use or occupancy of the rooftop deck, and (2) nothing contained herein shall be deemed to grant Subtenant (or any person claiming
by, through or under Subtenant), a leasehold interest in the rooftop deck. Subtenant’s license to the use of the rooftop
deck is limited to the existing rooftop deck, but not the underlying components comprising the roof or the parapets, copings and
railings enclosing the roof or the areas housing equipment located on the roof. Subtenant’s access to the rooftop deck is
not assignable or transferable except in connection with an assignment of this Sublease or a subletting of the Subleased Premises
in accordance with, or otherwise permitted pursuant to, the terms and conditions of Section 10 of this Sublease. Subtenant’s
use or occupancy of the rooftop desk shall be subject to inspection, maintenance, repair, alteration, additions, improvements and
other uses of Sublandlord or Master Landlord, and Subtenant shall not use or occupy, or suffer any use or occupancy of, the rooftop
deck in a manner that impairs, infringes or interferes with such rights of Sublandlord or Master Landlord or any equipment now
or hereafter housed on the rooftop. Subtenant acknowledges that the Building has an alarm system, and Subtenant shall (i) reasonably
cooperate with Sublandlord to coordinate the alarm system with Subtenant’s use or occupancy of the rooftop deck, and (ii)
be solely responsible for any costs associated with any alterations, modifications, changes or additions to the alarm system to
accommodate Subtenant’s use or occupancy of the rooftop deck.

 

     

     

    

 

b. Subtenant’s
use and occupancy of the rooftop deck shall be limited to Subtenant’s employees and invitees for only passive purposes like
eating or lounging, and in no event shall any general public access be allowed on the rooftop deck. Subtenant shall not (1) store
or keep any equipment, supplies, refuse or merchandise on the rooftop deck, except Subtenant may place outdoor furniture and plants
on the rooftop deck, (2) use the rooftop deck for lodging; (3) place anything on the parapets, ledges or railings on the perimeter
of the rooftop deck, (4) overload the rooftop deck, or (5) make any improvements, additions or installations to or on, or otherwise
penetrate, the rooftop deck.

 

c. Sublandlord (1)
makes no representation or warranty whatsoever with respect to the permitted use or occupancy of the rooftop deck or access thereto,
or the condition of the rooftop deck, or the legality of its use or occupancy, nor its fitness for a particular purpose, and (2)
shall have no obligation whatsoever to Subtenant to make any improvements, modifications or alterations or to perform any maintenance,
repair or other work with respect to the rooftop deck or access thereto and shall bear no cost with respect to the rooftop deck
or access thereto. In no event shall Subtenant have any manner of recourse against Sublandlord, nor any right to abate or set-off
against Base Rent or any other amounts owed under the Sublease, if Subtenant’s use or occupancy of the rooftop deck or access
thereto violates the Law or the Master Lease or is interrupted in connection with the maintenance, repair, restoration, or alteration
thereon or therein.

 

d. Subtenant acknowledges
and expressly agrees that any use and occupancy of the rooftop deck by Subtenant, its employees, invitees, agents, or anyone under
Subtenant’s direction or control (collectively “Subtenant Parties”) shall be at Subtenant’s
sole risk and expense. SUBTENANT FURTHER AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS SUBLANDLORD AND THE MASTER LANDLORD FROM
AND AGAINST ANY AND ALL LOSS, LIABILITY, DEMANDS, JUDGMENTS, AWARDS, EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES), GOVERNMENTAL
FINES, PENALTIES AND IMPOSITIONS, CLAIMS, PROCEEDINGS AND ACTIONS (COLLECTIVELY, “CLAIMS”) WHICH ARISE OR RESULT FROM
OR RELATE TO SUBTENANT PARTIES’ USE OR OCCUPANCY OF, OR ACCESS TO, OR ENTRY ONTO THE ROOFTOP DECK INCLUDING, WITHOUT LIMITATION,
DAMAGE TO PROPERTY OR HARM, INJURY (INCLUDING DEATH), OR ILLNESS TO PERSONS, OR VIOLATIONS OF LAW OR THE MASTER LEASE. THE INDEMNIFICATION
PROVISIONS OF THIS SECTION 21 ARE IN ADDITION TO THE INDEMNIFICATION PROVISIONS OF SECTION 13 IN THIS SUBLEASE. TO THE FULLEST
EXTENT ALLOWED BY LAW, SUBTENANT HEREBY IRREVOCABLY WAIVES AND UNCONDITIONALLY RELEASES AND FOREVER DISCHARGES SUBLANDLORD AND
MASTER LANDLORD AND THEIR RESPECTIVE AGENTS, PARTNERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AND PRINCIPALS CLAIMS ARISING OUT OF
SUBTENANT PARTIES’ ACCESS TO AND/OR USE OR OCCUPANCY OF THE ROOFTOP DECK. The provisions of this paragraph shall survive
the expiration or termination of this Sublease.

 

e. Subtenant will cause
its insurance (as required hereunder) to include Subtenant’s use and occupancy of the rooftop deck.

 

f. If (1) Subtenant’s
use or occupancy of the rooftop deck constitutes a default or breach under the Master Lease, or (2) a governmental violation is
issued (or threatened) against the Building relating to Subtenant’s use or occupancy, or manner of use or occupancy, of the
rooftop deck, Subtenant must either immediately cease and desist its use and occupancy of the rooftop deck or cure any such default,
breach or violation, as applicable, and provide Sublandlord with evidence of such curing and discharge.

 

23.         Miscellaneous.
This Sublease shall be construed and interpreted in accordance with the laws of the State of New York. All obligations under this
Sublease are performable in the county or other jurisdiction where the Subleased Premises is located, which shall be venue for
all legal actions. If any term or provision of this Sublease shall be invalid or unenforceable, then such term or provision shall
be automatically reformed to the extent necessary to render such term or provision enforceable, without the necessity of execution
of any amendment or new document. The remainder of this Sublease shall not be affected, and each remaining and reformed provision
of this Sublease shall be valid and enforced to the fullest extent permitted by law. The headings and titles to the Sections of
this Sublease are for convenience only and shall have no effect on the interpretation of any part of this Sublease. The words “include”,
“including” and similar words will not be construed restrictively to limit or exclude other items not listed. All of
the covenants and agreements herein contained shall be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, representatives, successors and permitted assigns. All understandings, discussions, and agreements previously
made between the parties, written or oral, are superseded by this Sublease, and neither party is relying upon any warranty, statement
or representation not contained in this Sublease. This Sublease may be modified only by a written agreement signed by Sublandlord
and Subtenant. Both parties covenant and agree to keep the financial terms of this Sublease confidential, disclosing them only
to their accountants, consultants, shareholders, and legal advisors as may be reasonably necessary.

 

[SIGNATURES APPEAR ON THE FOLLOWING
PAGE]

 

     

     

    

  

IN WITNESS WHEREOF,
Sublandlord and Subtenant have executed this Sublease as of the date first written above, intending to be bound hereby.

 

	SUBLANDLORD:	 
	 	 
	Restoration Hardware, Inc., a Delaware corporation	 
	 	 	 
	By:	/s/ Karen Boone	 
	Name:	Karen Boone	 
	Title:	CFO	 
	 	 	 
	SUBTENANT:	 
	 	 
	Intercept Pharmaceuticals, Inc., a Delaware corporation	 
	 	 	 
	By:	/s/ Mark Pruzanski	 
	Name:	Mark Pruzanski	 
	Title:	CEO	 

 

     

     

    

 

EXHIBIT A

 

Master Lease

 

INTENTIONALLY OMITTED

 

     

     

    

  

EXHIBIT B

 

Definition of Operating
Expenses

 

All costs of operation,
maintenance, repair, replacement and management of the Building (including the amount of any credits which Sublandlord may grant
to particular subtenants of the Building in lieu of providing any standard services or paying any standard costs described in this
definition for similar tenants), as determined in accordance with generally accepted accounting principles, including the following
costs by way of illustration, but not limitation: water and sewer charges; insurance charges of or relating to all insurance policies
and endorsements deemed by Sublandlord to be reasonably necessary or desirable and relating in any manner to the protection, preservation,
or operation of the Building or any part thereof; utility costs, including, but not limited to, the cost of heat, light, power,
steam, gas; waste disposal; the cost of janitorial services; the cost of security and alarm services (including any central station
signaling system); costs of cleaning, repairing, replacing and maintaining the common areas, including parking and landscaping,
window cleaning costs; labor costs; costs and expenses of managing the Building including management fees; air conditioning maintenance
costs; elevator maintenance fees and supplies; material costs; equipment costs including the cost of maintenance, repair and service
agreements and rental and leasing costs; purchase costs of equipment; current rental and leasing costs of items which would be
capital items if purchased; tool costs; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll
taxes; accounting and legal fees; any sales, use or service taxes incurred in connection therewith. In addition, Sublandlord shall
be entitled to recover, as additional rent (which, along with any other capital expenditures constituting Operating Expenses, Sublandlord
may either include in Operating Expenses or cause to be billed to Subtenant along with Operating Expenses and Real Estate Taxes
but as a separate item), Subtenant’s proportionate share of: (i) an allocable portion of the cost of capital improvement
items which are reasonably calculated to reduce operating expenses; (ii) the cost of fire sprinklers and suppression systems and
other life safety systems; and (iii) other capital expenses which are required under any governmental laws, regulations or ordinances
which were not applicable to the Building at the time it was constructed; but the costs described in this sentence shall be amortized
over the reasonable life of such expenditures in accordance with such reasonable life and amortization schedules as shall be determined
by Sublandlord in accordance with generally accepted accounting principles, with interest on the unamortized amount at one percent
(1%) in excess of the Wall Street Journal prime lending rate announced from time to time. Expenses shall not include depreciation
or amortization of the Building or equipment in the Building except as provided herein, loan principal payments, costs of alterations
of tenants’ premises, leasing commissions, interest expenses on long-term borrowings or advertising costs.Exhibit 10.2

 

INDEMNIFICATION AGREEMENT

 

This Agreement made and entered into this     day of              , (the “Agreement”), by and between Watts Water Technologies, Inc., a Delaware corporation (the “Company,” which term shall include, where appropriate, any Entity (as hereinafter defined) controlled directly or indirectly by the Company) and              (the “Indemnitee”):

 

WHEREAS, it is essential to the Company that it be able to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, increased corporate litigation has subjected directors and officers to litigation risks and expenses, and the limitations on the availability of directors and officers liability insurance have made it increasingly difficult for the Company to attract and retain such persons;

 

WHEREAS, the Company’s Certificate of Incorporation and By-laws (the “Certificate of Incorporation” and “By-laws,” respectively) require it to indemnify its directors and officers to the fullest extent permitted by law and permit it to make other indemnification arrangements and agreements;

 

WHEREAS, the Company desires to provide Indemnitee with specific contractual assurance of Indemnitee’s rights to full indemnification against litigation risks and expenses (regardless, among other things, of any amendment to or revocation of the Certificate of Incorporation or By-laws or any change in the ownership of the Company or the composition of its Board of Directors);

 

WHEREAS, the Company intends that this Agreement provide Indemnitee with greater protection than that which is provided by the Company’s Certificate of Incorporation and By-laws; and

 

WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing as a director or officer of the Company.

 

NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

1.                                      Definitions.

 

(a)                                 “Corporate Status” describes the status of a person who is serving or has served (i) as a director or officer of the Company, (ii) in any capacity with respect to any employee benefit plan of the Company, or (iii) as a director, partner, trustee, officer, employee, or agent of any other Entity at the request of the Company.  For purposes of subsection (iii) of this Section 1(a), if Indemnitee is serving or has served as a director, partner, trustee, officer, employee or agent of a

 

 

Subsidiary, Indemnitee shall be deemed to be serving at the request of the Company.

 

(b)                                 “Entity” shall mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization or other legal entity.

 

(c)                                  “Expenses” shall mean all fees, costs and expenses incurred by Indemnitee in connection with any Proceeding (as defined below), including, without limitation, attorneys’ fees, disbursements and retainers (including, without limitation, any such fees, disbursements and retainers incurred by Indemnitee pursuant to Sections 10 and 11(c) of this Agreement), fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services, and other disbursements and expenses.

 

(d)                                 “Indemnifiable Expenses,” “Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have the meanings ascribed to those terms in Section 3(a) below.

 

(e)                                  “Liabilities” shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

(f)                                   “Proceeding” shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including a proceeding initiated by Indemnitee pursuant to Section 10 of this Agreement to enforce Indemnitee’s rights hereunder.

 

(g)                                  “Subsidiary” shall mean any corporation, partnership, limited liability company, joint venture, trust or other Entity of which the Company owns (either directly or through or together with another Subsidiary of the Company) either (i) a general partner, managing member or other similar interest or (ii) (A) 50% or more of the voting power of the voting capital equity interests of such corporation, partnership, limited liability company, joint venture or other Entity, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other Entity.

 

 

2.                                      Services of Indemnitee.  In consideration of the Company’s covenants and commitments hereunder, Indemnitee agrees to serve or continue to serve as a director and/or officer of the Company.  However, this Agreement shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.

 

3.                                      Agreement to Indemnify.  The Company agrees to indemnify Indemnitee as follows:

 

(a)                                 Proceedings Other Than By or In the Right of the Company.  Subject to the exceptions contained in Section 4(a) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Company) by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company against all Expenses and Liabilities incurred or paid by Indemnitee in connection with such Proceeding (referred to herein as “Indemnifiable Expenses” and “Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable Amounts”).

 

(b)                                 Proceedings By or In the Right of the Company.  Subject to the exceptions contained in Section 4(b) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company against all Indemnifiable Expenses.

 

(c)                                  Conclusive Presumption Regarding Standard of Care.  In making any determination required to be made under Delaware law with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee submitted a request therefor in accordance with Section 5 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

 

4.                                      Exceptions to Indemnification.  Indemnitee shall be entitled to indemnification under Sections 3(a) and 3(b) above in all circumstances other than with respect to any specific claim, issue or matter involved in the Proceeding out of which Indemnitee’s claim for indemnification has arisen, as follows:

 

(a)                                 Proceedings Other Than By or In the Right of the Company.  If indemnification is requested under Section 3(a) and it has been finally adjudicated by a court of competent jurisdiction that, in connection with such specific claim, issue or matter, Indemnitee failed to act (i) in good faith and (ii) in a manner

 

 

Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful, Indemnitee shall not be entitled to payment of Indemnifiable Amounts hereunder.

 

(b)                                 Proceedings By or In the Right of the Company.  If indemnification is requested under Section 3(b) and

 

(i) it has been finally adjudicated by a court of competent jurisdiction that, in connection with such specific claim, issue or matter, Indemnitee failed to act (A) in good faith and (B) in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder; or

 

(ii) it has been finally adjudicated by a court of competent jurisdiction that Indemnitee is liable to the Company with respect to such specific claim, Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder with respect to such claim, issue or matter unless the Court of Chancery or another court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Indemnifiable Expenses which such court shall deem proper; or

 

(iii) it has been finally adjudicated by a court of competent jurisdiction that Indemnitee is liable to the Company for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, the rules and regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state or local statutory law, Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder.

 

(c)                                  Insurance Proceeds.  To the extent payment is actually made to the Indemnitee under a valid and collectible insurance policy in respect of Indemnifiable Amounts in connection with such specific claim, issue or matter, Indemnitee shall not be entitled to payment of Indemnifiable Amounts hereunder except in respect of any excess beyond the amount of payment under such insurance.

 

 

5.                                      Procedure for Payment of Indemnifiable Amounts.  Indemnitee shall submit to the Company a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment under Section 3 of this Agreement and the basis for the claim.  The Company shall pay such Indemnifiable Amounts to Indemnitee within sixty (60) calendar days of receipt of the request.  At the request of the Company, Indemnitee shall furnish such documentation and information as are reasonably available to Indemnitee and necessary to establish that Indemnitee is entitled to indemnification hereunder.

 

6.                                      Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, and without limiting any such provision, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Agreement, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, by reason of settlement, judgment, order or otherwise, shall be deemed to be a successful result as to such claim, issue or matter.

 

7.                                      Effect of Certain Resolutions.  Neither the settlement or termination of any Proceeding nor the failure of the Company to award indemnification or to determine that indemnification is payable shall create a presumption that Indemnitee is not entitled to indemnification hereunder.  In addition, the termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.

 

8.                                      Agreement to Advance Expenses; Undertaking.  The Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding, including a Proceeding by or in the right of the Company, in which Indemnitee is involved by reason of such Indemnitee’s Corporate Status within ten (10) calendar days after the receipt by the Company of a written statement from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  To the extent required by Delaware law, Indemnitee hereby undertakes to repay any and all of the amount of Indemnifiable Expenses paid to Indemnitee if it is finally determined by a court of competent jurisdiction that Indemnitee is not entitled under this Agreement to indemnification with respect to such Expenses.  This undertaking is an unlimited general obligation of Indemnitee.

 

9.                                      Procedure for Advance Payment of Expenses.  Indemnitee shall submit to the Company a written request specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement under Section 8 of this Agreement, together with documentation evidencing that Indemnitee has incurred such Indemnifiable Expenses.  Payment of Indemnifiable Expenses

 

 

under Section 8 shall be made no later than ten (10) calendar days after the Company’s receipt of such request.

 

10.                               Remedies of Indemnitee.

 

(a)                                 Right to Petition Court.  In the event that Indemnitee makes a request for payment of Indemnifiable Amounts under Sections 3 and 5 above or a request for an advancement of Indemnifiable Expenses under Sections 8 and 9 above and the Company fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement, Indemnitee may petition the Court of Chancery to enforce the Company’s obligations under this Agreement.

 

(b)                                 Burden of Proof.  In any judicial proceeding brought under Section 10(a) above, the Company shall have the burden of proving that Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder.

 

(c)                                  Expenses.  The Company agrees to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in connection with investigating, preparing for, litigating, defending or settling any action brought by Indemnitee under Section 10(a) above, or in connection with any claim or counterclaim brought by the Company in connection therewith, whether or not Indemnitee is successful in whole or in part in connection with any such action.

 

(d)                                 Failure to Act Not a Defense.  The failure of the Company (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this Agreement shall not be a defense in any action brought under Section 10(a) above, and shall not create a presumption that such payment or advancement is not permissible.

 

11.                               Defense of the Underlying Proceeding.

 

(a)                                 Notice by Indemnitee.  Indemnitee agrees to notify the Company promptly upon being served with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding which may result in the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to receive payments of Indemnifiable Amounts or advancements of Indemnifiable Expenses unless the Company’s ability to defend in such Proceeding is materially and adversely prejudiced thereby.

 

 

(b)                                 Defense by Company.  Subject to the provisions of the last sentence of this Section 11(b) and of Section 11(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to the payment of Indemnifiable Amounts hereunder; provided, however that the Company shall notify Indemnitee of any such decision to defend within ten (10) calendar days of receipt of notice of any such Proceeding under Section 11(a) above.  The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee.  This Section 11(b) shall not apply to a Proceeding brought by Indemnitee under Section 10(a) above or pursuant to Section 19 below.

 

(c)                                  Indemnitee’s Right to Counsel.  Notwithstanding the provisions of Section 11(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes that he or she may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with the position of other defendants in such Proceeding, (ii) a conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice at the expense of the Company.  In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any action, suit or proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection with any such matter.

 

12.                               Representations and Warranties of the Company.  The Company hereby represents and warrants to Indemnitee as follows:

 

(a)                                 Authority.  The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.

 

(b)                                 Enforceability.  This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally.

 

 

13.                               Insurance.  For a period of six (6) years following the date on which Indemnitee no longer serves as a director, officer or employee of the Company or any Subsidiary, and for such longer period, if any, for which Indemnitee may be subject to a Proceeding by reason of Indemnitee’s Corporate Status, the Company (i) shall maintain a policy or policies of insurance with one or more reputable insurance companies providing the Indemnitee with coverage in an amount not less than, and of a type and scope not materially less favorable to Indemnitee than, the directors’ and officers’ liability insurance coverage presently maintained by the Company, (ii) shall pay on a timely basis all premiums on such insurance and (iii) shall provide such notices and renewals in a complete and timely manner and take such other actions as may be required in order to keep such insurance in full force and effect.  In all policies of director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s officers and directors.

 

14.                               Contract Rights Not Exclusive.  The rights to payment of Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law, the Company’s Certificate of Incorporation or By-laws, or any other agreement, vote of stockholders or directors (or a committee of directors), or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other capacity as a result of Indemnitee’s serving as a director or officer of the Company.

 

15.                               Successors.  This Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee.  In the event that the Company or any of its successors or assigns (i) consolidates with or merges into any other person or entity and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person or entity, then, and in each such case, proper provision shall be made so that the successors and assigns of the Company assume the obligations of the Company under this Agreement.  This Agreement shall continue for the benefit of Indemnitee and such heirs, personal representatives, executors and administrators after Indemnitee has ceased to have Corporate Status.

 

16.                               Subrogation.  In the event of any payment of Indemnifiable Amounts under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the request of the Company, all reasonable action necessary to secure such rights, including the execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

17.                               Change in Law.  To the extent that a change in Delaware law (whether by statute or judicial decision) shall permit broader indemnification or advancement of expenses  than is

 

 

provided under the terms of the By-laws and this Agreement, Indemnitee shall be entitled to such broader indemnification and advancements, and this Agreement shall be deemed to be amended to such extent.

 

18.                               Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties.

 

19.                               Indemnitee as Plaintiff.  Except as provided in Section 10(c) of this Agreement and in the next sentence, Indemnitee shall not be entitled to payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding brought by Indemnitee against the Company, any Entity which it controls, any director or officer thereof, or any third party, unless the Board of Directors of the Company has consented to the initiation of such Proceeding.  This Section shall not apply to counterclaims or affirmative defenses asserted by Indemnitee in an action brought against Indemnitee.

 

20.                               Modifications and Waiver.  Except as provided in Section 17 above with respect to changes in Delaware law which broaden the right of Indemnitee to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

21.                               General Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

 

(i)                                     If to Indemnitee, to:

 

 

 

(ii)                                  If to the Company, to:

 

Watts Water Technologies, Inc.

815 Chestnut Street

North Andover, MA 01845

Facsimile: (978) 688-2976

Attention:

 

or to such other address as may have been furnished in the same manner by any party to the others.

 

22.                             Governing Law; Consent to Jurisdiction; Service of Process.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws.  Each of the Company and the Indemnitee hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware and the courts of the United States of America located in the State of Delaware (the “Delaware Courts”) for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the Delaware Courts and agrees not to plead or claim in any Delaware Court that such litigation brought therein has been brought in an inconvenient forum.  Each of the parties hereto agrees, (a) to the extent such party is not otherwise subject to service of process in the State of Delaware, to appoint and maintain an agent in the State of Delaware as such party’s agent for acceptance of legal process, and (b) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service.  Service made pursuant to (a) or (b) above shall have the same legal force and effect as if served upon such party personally within the State of Delaware.  For purposes of implementing the parties’ agreement to appoint and maintain an agent for service of process in the State of Delaware, each such party does hereby appoint The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, as such agent and each such party hereby agrees to complete all actions necessary for such appointment.

 

23.                             [Prior Agreement.  This Agreement supersedes and replaces in its entirety the Indemnification Agreement between the Indemnitee and the Company dated as of        ,    .]

 

 

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

 

	
 
    	
WATTS WATER   TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    

 

 

Schedule of Omitted Information

 

	
Name of Indemnitee
    	
 
    	
Date of Agreement
    	
 
    	
Date of Prior
   Agreement
   (Section 23)
    	
 
    	
Person Signing on
   behalf of the Company
    
	
John K. McGillicuddy
    	
 
    	
February 10, 2004
    	
 
    	
November 5, 2003
    	
 
    	
Patrick S. O’Keefe
   Chief Executive Officer
    
	
Timothy P. Horne
    	
 
    	
February 10, 2004
    	
 
    	
August 7, 2002
    	
 
    	
Patrick S. O’Keefe
   Chief Executive Officer
    
	
Kenneth R. Lepage
    	
 
    	
February 10, 2004
    	
 
    	
November 5, 2003
    	
 
    	
Patrick S. O’Keefe
   Chief Executive Officer
    
	
Robert L. Ayers
    	
 
    	
October 30, 2006
    	
 
    	
Not Applicable
    	
 
    	
Patrick S. O’Keefe
   Chief Executive Officer
    
	
Richard J. Cathcart
    	
 
    	
October 29, 2007
    	
 
    	
Not Applicable
    	
 
    	
Patrick S. O’Keefe
   Chief Executive Officer
    
	
Merilee Raines
    	
 
    	
February 7, 2011
    	
 
    	
Not Applicable
    	
 
    	
David J. Coghlan
   Chief Executive Officer
    
	
Bernard Baert
    	
 
    	
August 1, 2011
    	
 
    	
Not Applicable
    	
 
    	
David J. Coghlan
   Chief Executive Officer
    
	
W. Craig Kissel
    	
 
    	
October 30, 2011
    	
 
    	
Not Applicable
    	
 
    	
David J. Coghlan
   Chief Executive Officer
    
	
Joseph T. Noonan
    	
 
    	
May 15, 2013
    	
 
    	
Not Applicable
    	
 
    	
David J. Coghlan
   Chief Executive Officer
    
	
Kenneth S. Korotkin
    	
 
    	
September 23, 2013
    	
 
    	
Not Applicable
    	
 
    	
David J. Coghlan
   Chief Executive Officer
    
	
Robert J.   Pagano, Jr.
    	
 
    	
May 27, 2014
    	
 
    	
Not Applicable
    	
 
    	
Kenneth R. Lepage
   General Counsel
    
	
Munish Nanda
    	
 
    	
April 6, 2015
    	
 
    	
Not Applicable
    	
 
    	
Kenneth R. Lepage
   General Counsel
    
	
Todd A. Trapp
    	
 
    	
April 9, 2015
    	
 
    	
Not Applicable
    	
 
    	
Kenneth R. Lepage
   General Counsel
    
	
Christopher L. Conway
    	
 
    	
June 2, 2015
    	
 
    	
Not Applicable
    	
 
    	
Robert J.   Pagano, Jr.
   Chief Executive Officer
    
	
Debra J. Ogston
    	
 
    	
October 19, 2015
    	
 
    	
Not Applicable
    	
 
    	
Kenneth R. Lepage
   General Counsel
    
	
Joseph W. Reitmeier
    	
 
    	
February 10, 2016
    	
 
    	
Not Applicable
    	
 
    	
Robert J.   Pagano, Jr.
   Chief Executive Officer

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