Document:

Document

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) is the type of information that the registrant treats as private or confidential.  Double asterisks denote omissions.

									
	
	
	Amended and Restated License Agreement
St Vincent's Hospital Sydney Limited
ABN 77 054 038 872
and
AVEO Pharmaceuticals, Inc.

	Anti MIC-1 antibody for treatment of
cachexia, etc.	
	Amended and Restated as of August 13, 2015

									
			
	

CONTENTS
CLAUSE    PAGE
						
	1.    INTERPRETATION
	1

	1.1    Definitions
	1

	1.2    Rules for interpreting this Agreement
	11

	1.3    Business Days
	11

	1.4    The rule about "contra proferentem"
	11

	2.    LICENSE GRANTS
	12

	2.1    Grant of Therapeutic License
	12

	2.2    Grant of Diagnostic License
	12

	2.3    Grant of license under St Vincent's Research Tool IP
	12

	2.4    Nature of licenses
	12

	2.5    Affiliates and Sub-licensing
	12

	2.6    Grant back of rights to St Vincent's
	13

	3.    DEVELOPMENT AND exploitation OF LICENSED PRODUCTS
	14

	3.1    Technology Transfer
	14

	3.2    General diligence
	14

	3.3    Milestones
	14

	3.4    No Exploitation outside the Therapeutic Field and Diagnostic Field
	15

	3.5    Alternative products for cachexia, etc.
	15

	3.6    Compliance with Laws
	15

	3.7    Certain restricted activities
	15

	3.8    Quarterly development reports
	15

	3.9    Adverse events
	16

	4.    IMPROVEMENTS
	17

									
			
	

						
	4.1    AVEO Improvements
	17

	4.2    St Vincent's Improvements
	17

	5.    LICENSE FEES AND ROYALTIES
	18

	5.1    Up-front license fees
	18

	5.2    Milestone Fees
	18

	5.3    Royalties on Licensed Therapeutic Products
	18

	5.4    Royalties and Diagnostic License Commercialisation Income
	19

	5.5    Duration of royalty obligations
	20

	5.6    Royalty reduction for MIC-1 competition
	20

	5.7    Payment of royalties and Diagnostic License Commercialisation Income
	21

	5.8    Sub-licensing milestone fee
	21

	5.9    How payments shall be made
	21

	5.10    Deductions and withholdings
	21

	5.11    Interest on overdue amounts
	22

	5.12    Currency conversion
	22

	6.    REPORTS, RECORDS AND ACCOUNTING
	22

	6.1    Books and records
	22

	6.2    Quarterly statements – following First Commercial Sale
	23

	6.3    Certification
	23

	6.4    Adjustments
	24

	7.    PROSECUTION AND MAINTENANCE OF PATENT RIGHTS
	24

	7.1    Prosecution and maintenance of Licensed Patent Rights
	24

	7.2    Obligations to AVEO
	24

	7.3    Assistance by AVEO
	25

	7.4    Reimbursement by AVEO
	25

									
			
	

						
	7.5    Prosecution and maintenance of Patent Rights for Improvements
	25

	7.6    Term extensions in Single Patent Countries
	25

	7.7    Common interest
	26

	8.    INTELLECTUAL PROPERTY RIGHTS AND INFRINGEMENT CLAIMS
	26

	8.1    Acknowledgments
	26

	8.2    Notification
	26

	8.3    Infringement Claims by AVEO
	26

	8.4    Joinder and participation of St Vincent's
	27

	8.5    Infringement Claims by St Vincent's
	27

	8.6    Joinder and participation of AVEO
	28

	8.7    Damages and settlement amounts
	28

	8.8    Common interest
	28

	9.    CONFIDENTIAL INFORMATION
	29

	9.1    Confidentiality
	29

	9.2    Security
	29

	9.3    Permitted disclosures
	29

	9.4    Publicly available
	30

	9.5    Agreed press releases and announcements
	30

	10.    PUBLICATIONS
	31

	10.1    Acknowledgements
	31

	10.2    Notification of Proposed Publications
	31

	10.3    Review of Proposed Publications
	31

	10.4    Consequences
	31

	11.    REPRESENTATIONS AND WARRANTIES
	32

									
			
	

						
	11.1    Representations and warranties by each party
	32

	11.2    Representations and warranties by St Vincent's
	33

	11.3    Knowledge of St Vincent's
	33

	11.4    Investigations and Licensed Patent Rights
	34

	11.5    Representation and warranty by AVEO
	34

	11.6    Exclusion of conditions and warranties
	34

	11.7    Reliance on representations and warranties
	34

	12.    LIABILITY AND INDEMNITY
	35

	12.1    Limitation of liability
	35

	12.2    Indirect and consequential loss
	35

	12.3    Indemnity by AVEO
	35

	13.    INSURANCE
	36

	13.1    AVEO's insurance policies
	36

	13.2    Name of St Vincent's
	36

	13.3    Certificates of currency
	36

	13.4    Expiry
	36

	14.    FORCE MAJEURE
	36

	14.1    Notice and suspension of obligations
	36

	14.2    Effort to overcome
	37

	14.3    Termination
	37

	15.    TERM AND TERMINATION
	37

	15.1    Term
	37

	15.2    Termination by either party
	37

	15.3    Insolvency of St Vincent's
	38

	15.4    Termination by St Vincent's
	38

									
			
	

						
	15.5    Termination by AVEO
	38

	15.6    Lapse, withdrawal etc. of certain Patent Rights
	38

	15.7    Consequences of termination – default or election by AVEO
	39

	15.8    Sub-licensees in good standing
	39

	15.9    Regulatory approvals
	40

	15.10    Return or destruction of Confidential Information
	40

	15.11    Alternatives to termination
	41

	15.12    Restrictions on partial termination
	41

	15.13    Survival and accrued rights
	41

	16.    DISPUTE RESOLUTION
	42

	16.1    Disputes
	42

	16.2    Notice of Dispute
	42

	16.3    Negotiation
	42

	16.4    Resolution of Dispute
	42

	16.5    Arbitration
	42

	17.    NOTICES
	43

	17.1    Notices
	43

	17.2    Addresses for notices
	43

	18.    AMENDMENT AND ASSIGNMENT
	44

	18.1    Amendment
	44

	18.2    Assignment
	44

	19.    GENERAL
	44

	19.1    Governing law
	44

	19.2    Liability for expenses
	44

	19.3    Relationship of the parties
	44

									
			
	

						
	19.4    Giving effect to this Agreement
	44

	19.5    Variation of rights
	45

	19.6    Operation of this Agreement
	45

	19.7    Counterparts
	45

						
	Schedule 1
	47

	Licensed Patent Rights
	47

	Schedule 2
	54

	Milestones and Milestone Fees
	54

	Schedule 3
	56

	St Vincent's Research Tools
	56

	SCHEDULE 4
	58

	Key Patent Rights
	58

	SCHEDULE 5
	59

	Patenting Costs for Division of European Patent Application No. 05729508.1
	59

	SCHEDULE 6
	60

	Sub-license Provisions
	60

	SCHEDULE 7
	62

	Press Release
	62

	ANNEXURE 1
	63

	Form of Quarterly Development Report
	63

									
			
	

THIS AMENDED AND RESTATED LICENSE AGREEMENT, is made on August 13, 2015 (the “Amendment Effective Date”), 
BETWEEN:
(1)St Vincent's Hospital Sydney Limited ABN 77 054 038 872 whose registered office is at 390 Victoria Street, Darlinghurst NSW 2010 Australia ("St Vincent's"); and
(2)AVEO Pharmaceuticals, Inc., a company incorporated under the laws of the State of Delaware, USA, whose registered office is at One Broadway, 14th Floor, Cambridge MA 02142 USA ("AVEO"). 
This Agreement amends and restates the License Agreement, dated July 2, 2012 (the “Effective Date”), by and between St. Vincent’s and AVEO.
RECITALS:
(A)St Vincent’s is a hospital established and operated by the Sisters of Charity and conducts itself in accordance with the Code of Ethical Standards for Catholic Health and Aged Care Services in Australia.  
(B)St Vincent's is the owner of the Licensed Patent Rights.  
(C)AVEO wishes to obtain an exclusive license under the Licensed Patent Rights and certain other Intellectual Property Rights of St Vincent's to Exploit Licensed Therapeutic Products in the Therapeutic Field in the Territory.  
(D)AVEO also wishes to obtain a non-exclusive license under the Licensed Patent Rights and other Intellectual Property Rights of St Vincent's to Exploit Licensed Diagnostic Products in the Diagnostic Field in the Territory.  
(E)St Vincent's agrees to grant and AVEO agrees to accept such licenses on the terms and conditions of this Agreement.  
THE PARTIES AGREE AS FOLLOWS:
1.INTERPRETATION
1.1Definitions
The following definitions apply in this Agreement.
"Accountant" has the meaning given in clause 6.3(a).  
"Accounting Standards" means internationally recognized accounting standards (e.g., US Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) as generally and consistently applied by AVEO, its Sublicensees, or their Affiliates, as applicable.
"Affiliate", in relation to a Person, means a Person which Controls, is Controlled by or is under common Control with that Person.  
"Agreement" means this agreement, including its Schedules and its Annexure.  
"Amendment Effective Date" has the same meaning as the term "Effective Date" in the Amendment Deed between St Vincent's and AVEO dated on or about the date of this Agreement.
									
		1
	

"Authorisation" means:
(a)an authorisation, consent, declaration, exemption, notarisation or waiver, however it is described; and
(b)in relation to anything that could be prohibited or restricted by Law if a Government Agency acts in any way within a specified period, the expiry of that period without that action being taken,
including any renewal or amendment.  
"AVEO Improvements" means:
(a)all Improvements made, created, invented or conceived of solely by AVEO, its Affiliates, or their employees or agents after the Effective Date; and
(b)all Improvements made, created, invented, or conceived of by Third Parties after the Effective Date:
(i)the IPRs in which are assigned to or otherwise owned by AVEO or its Affiliates; or 
(ii)which AVEO or an Affiliate has or acquires a license to Exploit in the Therapeutic Field or the Diagnostic Field.  
"Business Day" means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Sydney, Australia and Boston, Massachusetts, USA.  
"Claim", in relation to a Person, means any claim (including a written demand), cause of action, proceeding or suit made against the Person.  
"Clinical Trial", in relation to a product, means any experiment, study or test in which the product is administered or dispensed to, or used involving, one or more human subjects.  
"Combination Product" means (a) a product that includes, in addition to a Licensed Therapeutic Product, one or more separate pharmaceutically active products which are not, or are not part of, the Licensed Therapeutic Product (and for the purposes of this definition, a pharmaceutically active product does not include something which acts as a stabilizing agent, excipient, adjuvant, delivery vehicle or the like) or (b) a product that includes, in addition to a Licensed Diagnostic Product, one or more separate diagnostic products which are not, or are not part of, the Licensed Diagnostic Product.  
"Confidential Information" means:
(a)in relation to St Vincent's, the Licensed Know How, all St Vincent's Research Tools, all St Vincent's Improvements, all documents, records and reports relating to the Licensed IP, St Vincent's Research Tools or Licensed Products provided by St Vincent's to AVEO under this Agreement and all other information disclosed by St Vincent's to AVEO under or in connection with this Agreement, and the existence and terms of this Agreement, but does not include information which AVEO can establish by written records: 
(i)was publicly available when it was given to AVEO;
(ii)becomes, after being given to AVEO, publicly available, except through disclosure contrary to this Agreement; 
									
		2
	

(iii)was in the lawful knowledge and possession of AVEO before it was disclosed to AVEO; 
(iv)was lawfully received by AVEO from another Person having the unrestricted legal right to disclose that information without requiring the maintenance of confidentiality; or
(v)was independently developed by AVEO without use of or reference to any Confidential Information of St Vincent’s; and
(b)in relation to AVEO, all AVEO Improvements, all documents, records and reports relating to Licensed Products provided by AVEO to St Vincent’s under this Agreement and all other information disclosed by AVEO to St Vincent's under or in connection with this Agreement, and the existence and terms of this Agreement, but does not include information referred to in paragraph (a) (other than the existence and terms of this Agreement), or any information which St Vincent's can establish by written records: 
(i)was publicly available when it was given to St Vincent's;
(ii)becomes, after being given to St Vincent's, publicly available, except through disclosure contrary to this Agreement; 
(iii)was in the lawful knowledge and possession of St Vincent's before it was disclosed to St Vincent's; 
(iv)was lawfully received by St Vincent's from another Person having the unrestricted legal right to disclose that Information without requiring the maintenance of confidentiality; or
(v)was independently developed by St Vincent’s without use of or reference to any Confidential Information of AVEO.  
"Control", in relation to a Person, means the ownership of more than half the issued shares of the Person (not counting any share which carries no right to participate beyond a specified amount in the distribution of either profit or capital), ownership of more than half the voting rights attaching to shares in the Person, or the legal power to otherwise direct or cause the direction of the general management and policies of the Person.  
"Covered by" means: 
(a)with respect to a claim of an issued patent and a particular product, process or use, that the claim would if valid (and for this purpose, validity is assumed), be infringed by the making, use, supply, sale, hire or other disposal, offer for sale, hire or other disposal or importation of such product, process or use (or product of such process) but for: 
(i)a license granted in this Agreement; or 
(ii)any legal exemption to infringement provided for clinical or preclinical use of pharmaceutical products; and 
(b)with respect to a claim of a pending patent application and a particular product, process or use, that the claim, if included in an issued patent rather than in a pending patent application, would if valid (and for this purpose, validity is assumed), be infringed by the making, use, supply, sale, hire or other disposal, offer for sale, hire or other disposal or importation of the product, process or use (or product of such process) but for: 
(i)a license granted in this Agreement; or 
									
		3
	

(ii)any legal exemption to infringement provided for clinical or preclinical use of pharmaceutical products.  
"Diagnostic Field" means:
(a)diagnosis of diseases or conditions characterised by elevated levels of MIC-1, including cachexia, for use in conjunction with a Licensed Therapeutic Product; 
(b)stratification of patients in Clinical Trials of Licensed Therapeutic Products based on MIC-1 levels; or
(c)determination of appropriate treatment with Licensed Therapeutic Products based on MIC-1 levels.  
"Diagnostic License" means the rights and licenses granted in clause 2.2.  
"Diagnostic License Commercialisation Income" means that portion of gross income received by or on behalf of AVEO or its Affiliates from any Person fairly in consideration of the Sub-licensing of the Diagnostic License, but does not include income comprising Net Sales of Licensed Diagnostic Products by or on behalf of AVEO or its Affiliates.  
"Diligent Efforts", in relation to an obligation or task of a party, means the level of effort required to carry out that obligation or task in a sustained manner consistent with the efforts a reasonable Person in the same position as the party normally devotes to its products at a similar stage of development, based on conditions then prevailing.  Diligent Efforts requires that the party: 
(a)promptly assign responsibility for the relevant obligation or task to specific employees who are held accountable for progress, and monitor such progress on an on-going basis; 
(b)set and consistently seek to achieve specific and meaningful objectives for carrying out the obligation or task; and 
(c)consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives.  
"Disclosing Party", in relation to any information, means the party who disclosed that information to the other party.  
"Dispute" has the meaning given in clause 16.1.  
"Dispute Notice" has the meaning given in clause 16.2.  
"Disruption" means the existence of any of the following that delays or prevents a party from performing an obligation: an act of war (whether declared or not) or terrorism, the mobilisation of armed forces, civil commotion or riot, natural disaster, industrial action or labour disturbance, currency restriction, embargo, action or inaction by a Government Agency (other than a Government Agency which is charged with, or whose role involves, the administration of any Laws relating to the Authorisation or conduct of Clinical Trials, or the evaluation, assessment or Authorisation of, or reimbursement for, therapeutic or diagnostic products, including the United States Food and Drug Administration and counterparts thereof in other countries), a failure of a supplier, public utility or common carrier or computer disruption due to the effects of a virus or other malicious code introduced other than through the acts or omissions of such party, for so long as such condition continues.  
"Effective Date" has the meaning set forth in the preamble to this Agreement.  
"EU5" means France, Germany, Spain, Italy and the United Kingdom.  
									
		4
	

"Exploit" means:
(a)in relation to a product, to research, develop, make, have made, use, import, supply, sell, hire or otherwise dispose of, or offer to make, supply, sell, hire or otherwise dispose of the product; 
(b)in relation to a method, process or use, to practice or have practiced or use the method or process or use, or do any act referred to in paragraph (a) with any product of the method or process; and
(c)to induce another Person to do any action encompassed within paragraph (a) or (b).  
"First Commercial Sale", with respect to a Licensed Product in a country, means the first commercial use or sale by AVEO, its Affiliates or any Sub-licensee of the Licensed Product in such country to a Third Party (or manufacture for that purpose), following receipt of marketing approval to sell such Licensed Product in such country, but does not include any transfer or sale at cost or without charge for Clinical Trials, compassionate use, named patient programs, sales under a treatment IND, or any non-registrational studies.  
"Force Majeure Event" means the existence of any condition beyond the reasonable control of a party that delays or prevents such party from performing an obligation, including, as applicable, any Disruption.  
"Government Agency" means any federal, state or local government, government department or other governmental, semi–governmental or judicial body, including a statutory corporation.  
"Improvement", in relation to a Licensed Product or Licensed Process, means an improvement, development, enhancement or modification or new use (including for a new indication) of the Licensed Product or Licensed Process, or of methods for making or using them, which, or the Exploitation of which, is Covered by the Licensed Patent Rights.  
"Infringement Claim" means a Claim against any Person for infringement or misappropriation of any Licensed IP in the Therapeutic Field.  
"Insolvency Event" means, in respect of a party: 
(a)a bankruptcy administrator or other external administrator being appointed to the party;
(b)(i)    the party resolving to appoint a receiver, receiver and manager or analogous Person to the party or the party's property; or 
(i)a receiver, receiver and manager, provisional liquidator, trustee for creditors or in bankruptcy or analogous Person is appointed to the party or the party's property; 
(c)the holder of a security interest or any agent on its behalf appointing a receiver, receiver and manager or analogous Person, or taking possession of the party's property;
(d)the party failing to comply or being taken to have failed to comply with a statutory demand;
(e)an order being made, or the party passing a resolution, for its winding up or placing of that party into liquidation or bankruptcy;
									
		5
	

(f)the party ceasing to carry on all or a material part of its business, being unable to pay its debts when they are due, or being or becoming otherwise insolvent; 
(g)the party entering into an assignment for the benefit of any of its creditors; or  
(h)any analogous event under the Laws of any applicable jurisdiction,
1unless this takes place as part of business in the ordinary course, a solvent reconstruction, amalgamation, merger or consolidation, or in the case of any proceeding described above, unless such proceeding is stayed or dismissed within sixty (60) days after it is brought.  
"Intellectual Property Rights" (or "IPR") means intellectual property rights, whether conferred by statute, common law, or equity, in relation to inventions or Know How, including copyright, trade secrets (including rights under general law to require that Know How be kept confidential and to control its use), and Patent Rights (including the right to apply for registration of any such rights), but does not include trademark rights.  
"Know How" means technical and other information which is not publicly available, including inventions, discoveries, concepts, data, formulae, sequences, sequence data, ideas, specifications, procedures for experiments and tests, results of experimentation and testing, results of research and development (including pre-clinical and clinical research and development) and information in laboratory records, case reports, data analyses and summaries.  
"Law" means any law (including subordinate or delegated legislation or statutory instruments of any kind) and any judgment, order, regulation, rule, ordinance, or official directive of any Government Agency or regulatory body, including the SEC and any stock exchange.  
"Licensed IP" means: 
(a)the Licensed Patent Rights; and
(b)the Licensed Know How and the IPR of St Vincent's in the Licensed Know How.  
"Licensed Know How" means all Know How owned or controlled solely by St Vincent's at the Effective Date which relates to the use and reduction to practice of the inventions claimed in the Licensed Patent Rights in the Therapeutic Field or the Diagnostic Field and was developed in the laboratory of Samuel N. Breit by Samuel N. Breit or by employees of St Vincent's under his supervision and direction before 1 March 2011.  
"Licensed Diagnostic Product" means a diagnostic product, kit, apparatus or substance, which, or the manufacture, importation, supply, sale, hire or other disposal or use of which, is or was at any time during the Term Covered by a Valid Claim of the Licensed Patent Rights anywhere in the Territory.  
"Licensed Patent Rights" means all Patent Rights in patent application numbers:
[**], 
together with any patent applications anywhere in the Territory claiming priority therefrom or sharing priority therewith and all divisions, continuations, and continuations-in-part or the like thereof, any and all granted or issued patents arising from any of such applications, any and all granted or issued reissues, re-examinations, renewals, extensions, restorations, and supplemental protection certificates (including any form of patent term extensions), including all Patent Rights in the patents and patent applications set out in Schedule 1.  
									
		6
	

"Licensed Process" means any process, method or use which, or the use of which, is or was at any time during the Term Covered by a Valid Claim of the Licensed Patent Rights anywhere in the Territory.  
"Licensed Therapeutic Product" means a therapeutic product, kit, apparatus or substance which, or the manufacture, importation, supply, sale, hire or other disposal, or use of which, is or was at any time during the Term Covered by a Valid Claim of the Licensed Patent Rights anywhere in the Territory.  
"Licensed Products" means Licensed Therapeutic Products and Licensed Diagnostic Products.  
"Loss" means costs and expenses incurred as a result of or associated with a Claim (including court costs, reasonable legal expenses, reasonable attorney fees and amounts paid in settlement), and damages, compensation, fines, penalties, charges and recoveries awarded or imposed by a Government Agency (including a court) with respect thereto.  
"Major Market" means any of the United States, Japan, and each of the EU5.  
"MIC-1" means the protein designated pCL13, and variants, fragments and derivatives of pCL13, as described in International Patent Application PCT/AU1996/000386 or the protein and allelic variants encoded by the gene designated GDF15 (growth differentiation factor 15), including the protein designated NCBI Reference Sequence (RefSeq) No. NP_004855.2 and variants, fragments and derivatives of such proteins.  
"Milestone Fee" means each fee set out in Schedule 2.  
"Milestone" means each milestone set out in Schedule 2.  
"Net Sales", in relation to a Licensed Product, means the net sales of the Licensed Product recorded by AVEO, its Affiliates, or any Sub-licensee of AVEO or its Affiliates (each of the foregoing, the "Seller") to a Third Party as determined in accordance with the Seller's Accounting Standards as consistently applied, less a deduction of [**]% for direct expenses related to the sales of the Licensed Product, distribution and warehousing expenses and uncollectible amounts on previously sold Licensed Products.  The deductions booked on an accrual basis by the Seller or its Affiliates under its Accounting Standards to calculate the recorded net sales of Licensed Products from gross sales of Licensed Products may include the following: 
(a)normal trade and cash discounts; 
(b)amounts repaid or credited by reasons of defects, rejections, recalls or returns;
(c)rebates and chargebacks to customers and Third Parties (including Medicare, Medicaid, Managed Healthcare and similar types of rebates);
(d)any amounts recorded in gross revenue associated with goods provided to customers for free; 
(e)amounts provided or credited to customers through coupons and other discount programs; 
(f)delayed ship order credits, discounts or payments related to the impact of price increases between purchase and shipping dates or retroactive price reductions;  
(g)fee for service payments to customers for any non-separable services (including compensation for maintaining agreed inventory levels of Licensed Products and providing information); and
									
		7
	

(h)other reductions or specifically identifiable amounts deducted for reasons similar to those listed above in accordance with the Seller's Accounting Standards (as consistently applied).
With respect to the calculation of Net Sales:
(a)Net Sales only include the value charged or invoiced on the first arm’s length sale to a Third Party and sales between or among the Seller and its Affiliates will be disregarded for purposes of calculating Net Sales;
(b)if a Licensed Product is delivered to the Third Party before being invoiced (or is not invoiced), Net Sales will be calculated at the time all the revenue recognition criteria under the Seller's Accounting Standards (as consistently applied) are met; and
(c)for Net Sales of a Combination Product, the Net Sales of the Licensed Product contained in the Combination Product will be determined as follows:
(i)If such Licensed Product is a Licensed Therapeutic Product, by multiplying the Net Sales of such Combination Product by the fraction of A/(A+B), where A is the weighted (by sales volume) average sale price in that country of the Licensed Therapeutic Product in the same calendar year when sold separately and B is the weighted average sale price in that country in the same calendar year of the other pharmaceutically active product(s) sold separately.  Regarding prices comprised in the weighted average price when sold separately referred to above, if these are available for different dosages from the dosages of Licensed Therapeutic Product and other active ingredient components that are included in the Combination Product, then AVEO will be entitled to make a proportional adjustment to such prices in calculating the royalty-bearing Net Sales of the Combination Product.  If neither the Licensed Therapeutic Product nor the other pharmaceutically active product(s) of the Combination Product are sold separately, then the parties shall negotiate in good faith the relative value of the other pharmaceutically active product(s) contained in the Combination Product that is to be deducted from the Net Sales of the Combination Product in determining the Net Sales of the Licensed Therapeutic Product contained in the Combination Product.  In this regard, each party’s agreement to the relative value must not be unreasonably withheld or delayed, and unless and until the parties reach agreement on the relative value of such other pharmaceutically active product(s), such value will be assumed to be 50% of the selling price of the Combination Product.  
(ii)If such Licensed Product is a Licensed Diagnostic Product, by multiplying the Net Sales of such Combination Product by the fraction of A/(A+B), where A is the weighted (by sales volume) average sale price in that country of the Licensed Diagnostic Product in the same calendar year when sold separately and B is the weighted average sale price in that country in the same calendar year of the other diagnostic product(s) sold separately.  If neither the Licensed Diagnostic Product nor the other diagnostic product(s) of the Combination Product are sold separately, then the parties shall negotiate in good faith the value of the other diagnostic product(s) contained in the Combination Product that is to be deducted from the Net Sales of the Combination Product in determining the Net Sales of the Licensed Diagnostic Product contained in the Combination Product, and unless and until the parties reach agreement on the value of such other diagnostic product(s), such value will be assumed to be 40% of the selling price of the Combination Product. 
(iii)If the parties do not reach agreement on the value of the other pharmaceutically active product(s) or other diagnostic product(s) contained 
									
		8
	

in a Combination Product in accordance with subsection (i) or (ii), as applicable, within 30 days after the First Commercial Sale of the Combination Product in the relevant country, then a Dispute Notice shall be deemed to have been given under clause 16.2, and upon resolution of the Dispute, the parties shall make any payments necessary in order to retrospectively adjust the value within 45 days.  
"Non-Licensed Product" has the meaning given in clause 3.5(a)(i).  
"Patent Rights" means rights with respect to existing and future patents (including any divisions, continuations, continuations in part, renewals, reissues, extensions, supplementary protection certificates, utility models and foreign equivalents of any such patents) and rights with respect to existing and future patent applications and patentable inventions, including the right to apply for registration of any such rights.  
"Person" means any natural person, corporation, partnership, limited liability company or other legal entity having the capacity to contract.  
"Phase I Clinical Trial" means a Clinical Trial, a purpose of which is a preliminary determination of the safety, metabolism, pharmacological effects, pharmacokinetics, mechanism of action, structure-activity relationships or side effects of a pharmaceutical product in healthy individuals or patients, as further described in 21 CFR § 312.21(a) or foreign counterpart thereto, or a similar Clinical Trial in a country other than the United States.  
"Phase II Clinical Trial" means a Clinical Trial, a purpose of which is to evaluate the efficacy of a pharmaceutical product in patients with the disease or condition under study and to determine the common short-term side effects and risks associated with the pharmaceutical product, as further described in 21 CFR § 312.21(b) or foreign counterpart thereto, or a similar Clinical Trial in a country other than the United States.  
"Phase III Clinical Trial" means a Clinical Trial, a purpose of which is to obtain, after preliminary evidence suggesting effectiveness of a pharmaceutical product has been obtained, additional information about the safety and efficacy of a pharmaceutical product that is needed to evaluate the overall benefit-risk relationship of the pharmaceutical product and to provide an adequate basis for seeking regulatory approval to market such product for patients with the disease or condition under study, as further described in 21 CFR § 312.21(c) or foreign counterpart thereto, or a similar Clinical Trial in a country other than the United States.  
"Quarter" means, in respect of any calendar year, the four quarters of that year, commencing on 1 January, 1 April, 1 July and 1 October of that year.  
"Reduced Royalty Product" means a Licensed Product that is: (a) manufactured in a country where its manufacture is not Covered by a Valid Claim in the Licensed Patent Rights and (b) supplied, sold, hired or otherwise disposed of in a country where neither its sale, supply, hire or disposal, nor its use is Covered by a Valid Claim in the Licensed Patent Rights.  
"Research Tool License" means the rights and licenses granted in clause 2.3.  
"SEC" means the United States Securities and Exchange Commission.  
"St Vincent’s Research Tools" means the MIC-1 antagonists, reagents and antibodies listed in Schedule 3.  
									
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"St Vincent's Improvements" means: 
(a)all Improvements in the Therapeutic Field or the Diagnostic Field made, created, invented or conceived of solely by St Vincent's, its Affiliates, or their employees or agents after the Effective Date; and
(b)all Improvements in the Therapeutic Field or the Diagnostic Field made, created, invented, or conceived of by Third Parties after the Effective Date:
(i)the Patent Rights in which are assigned to or otherwise owned by St Vincent's or its Affiliates; or 
(ii)which St Vincent's or an Affiliate has or acquires a license to Exploit in the Therapeutic Field or the Diagnostic Field.  
"St Vincent's Research Tool IP" means the IPR of St Vincent's in and in relation to the St Vincent’s Research Tools.  
"Sub-license" in relation to any rights or license ("licensed rights"), means: (a) grant  to a Third Party any right or license under the licensed rights to Exploit a product, process or use; (b) grant to or confer on a Third Party any option, right of first refusal or right of first negotiation to acquire any right or licence referred to in (a); or (c) enter into any agreement with a Third Party under which any right or option referred to in (a) or (b) is or may be granted.  
"Sub-licensee" means: (a) Novartis International Pharmaceutical Ltd and its Affiliates: or (b) any other Person to whom AVEO has sub-licensed the Therapeutic License, Diagnostic License or Research Tool License, and Affiliates and sub-licensees of the foregoing. 
"Tax" means a tax, levy, duty, charge, deduction or withholding, however it is described, that is imposed by Law or by a Government Agency, together with any related interest, penalty, fine or other charge, other than one that is imposed on net income in any jurisdiction.  
"Term" means the term of this Agreement as determined under clause 15.1.  
"Territory" means the world.  
"Therapeutic Field" means all human therapeutic, preventative and palliative applications which benefit from inhibition or decreased expression or activity of MIC-1, including from administration of a MIC-1 antagonist or MIC-1 receptor antagonist.  
"Therapeutic License" means the rights and licenses granted in clause 2.1.  
"Third Party" means any Person other than the parties to this Agreement and their Affiliates.  
"Valid Claim" means:
(a)any claim in a pending patent application included within the Licensed Patent Rights that is being actively prosecuted; or 
(b)any claim in a granted or issued patent included within Licensed Patent Rights, 
which, in either case, has not been withdrawn, cancelled or disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision.  If AVEO notifies St Vincent’s in writing of its desire that a claim of a pending application in a particular country in the Territory be withdrawn or abandoned, and the claim remains pending as at the later of: (i) [**] years after the Effective Date; or (ii) 
									
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10 years after the first substantive office action in relation to the claim, then the pending claim shall cease to be a Valid Claim for the purposes of this definition (but for avoidance of doubt, if and when granted or issued, the claim shall again be a Valid Claim).  
1.2Rules for interpreting this Agreement
Headings are for convenience only, and do not affect interpretation.  The following rules also apply in interpreting this Agreement, except where the context makes it clear that a rule is not intended to apply.  
(a)A reference to: 
(i)legislation (including subordinate legislation or any regulation) is to that legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;
(ii)a document or agreement, or a provision of a document or agreement, is to that document, agreement or provision as amended, supplemented, replaced or novated; 
(iii)a party to this Agreement or to any other document or agreement includes a permitted assign of that party;
(iv)a clause or Schedule is to a clause or Schedule of this Agreement; and
(v)anything (including a right, obligation or concept) includes each part of it.
(b)A singular word includes the plural, and vice versa.  
(c)A word which suggests one gender include the other genders.  
(d)If a word is defined, another part of speech has a corresponding meaning.  
(e)If an example is given of anything (including a right, obligation or concept), such as by saying it includes something else, the example does not limit the scope of that thing.  
(f)A reference to "information" is to information of any kind in any form or medium, whether formal or informal, written or unwritten, for example, computer software or programs, concepts, data, drawings, ideas, knowledge, procedures, source codes or object codes, technology or trade secrets.  
(g)The word "agreement" includes an undertaking or other binding arrangement or understanding, whether or not in writing.  
(h)A reference to "USD" or "$" is to the lawful currency of the United States of America. 
(i)The word "or" is used in the inclusive sense (i.e., "and/or"). 
1.3Business Days
If the day on or by which a party must do something under this Agreement is not a Business Day the party must do it on or by the next Business Day.  
1.4The rule about "contra proferentem"
This Agreement is not to be interpreted against the interests of a party merely because that party proposed this Agreement or some provision of it or because that party relies on a provision of this Agreement to protect itself.  
									
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2.LICENSE GRANTS
2.1Grant of Therapeutic License
By this Agreement St Vincent's grants to AVEO an exclusive, royalty bearing license under the Licensed IP to:
(a)Exploit Licensed Therapeutic Products in the Therapeutic Field;
(b)practise and have practised Licensed Processes in the Therapeutic Field; and
(c)use, reproduce, apply, develop, modify and enhance the Licensed Know How in the Therapeutic Field for the purpose of exercising the rights granted in clauses 2.1(a) and 2.1(b),
(i)in the Territory, subject to and in accordance with the terms and conditions of this Agreement.  
2.2Grant of Diagnostic License
By this Agreement St Vincent's grants to AVEO a non-exclusive, royalty bearing license under the Licensed IP to: 
(a)Exploit Licensed Diagnostic Products in the Diagnostic Field;
(b)practise and have practised Licensed Processes in the Diagnostic Field; and 
(c)use, reproduce, apply, develop, modify and enhance the Licensed Know How in the Diagnostic Field for the purpose of exercising the rights granted in clauses 2.2(a) and 2.2(b), 
(ii)in the Territory, subject to and in accordance with the terms and conditions of this Agreement.  
2.3Grant of license under St Vincent's Research Tool IP
By this Agreement St Vincent's grants to AVEO a non-exclusive license under the St Vincent's Research Tool IP to research and develop Licensed Therapeutic Products in the Therapeutic Field and Licensed Diagnostic Products in the Diagnostic Field in the Territory, subject to and in accordance with the terms and conditions of this Agreement.  
2.4Nature of licenses
(a)The licenses granted in clauses 2.1, 2.2 and 2.3 are each separate and distinct licenses in each country of the Territory.  
(b)If all Licensed Patent Rights in any country in the Territory expire, lapse or are revoked during the Term, or no Licensed Patent Rights exist in the country, then subject to clause 15.1, each of the licenses granted in clauses 2.1, 2.2 and 2.3 applies and continues in full force and effect in that country for the Term as a license under the IPR in the Licensed Know How only.  
2.5Affiliates and Sub-licensing
(a)AVEO may grant to any Affiliate a sub-license under any of the rights and licenses granted to it in clauses 2.1, 2.2 and 2.3, subject to and in accordance with the terms and conditions of this Agreement.  For clarity, no such grant to an Affiliate shall be considered a “Sub-license” hereunder.  
									
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(b)Subject to clauses 2.5(c), 2.5(d) and 2.5(e), AVEO may grant Sub-licenses under the Therapeutic License, Diagnostic License and Research Tool License in its discretion and without the further consent of St Vincent's.  
(c)Before granting any Sub-license under the Therapeutic License, Diagnostic License or Research Tool License, AVEO shall:
(i)ensure that the terms of the Sub-license agreement are consistent with the terms of this Agreement;
(ii)ensure that the Sub-license agreement contains a recital that St Vincent’s is a hospital established and operated by the Sisters of Charity and conducts itself in accordance with the Code of Ethical Standards for Catholic Health and Aged Care Services in Australia;
(iii)ensure that the Sub-license agreement contains obligations on the Sub-licensee with respect to confidentiality and security of all Confidential Information of St Vincent's on terms which are no less onerous than the obligations of AVEO under this Agreement; and
(iv)ensure that either: (A) the Sub-license agreement is expressed to terminate immediately upon termination of this Agreement; or (B) the Sub-license agreement includes provisions to substantially the same effect as those in Schedule 6.  
(d)AVEO shall provide to St Vincent's a copy of each executed Sub-license agreement within [**] days after its execution.  St Vincent's acknowledges that such Sub-licenses may be or may contain Confidential Information of AVEO.  
(e)AVEO remains responsible to St Vincent’s for performance of AVEO’s obligations under this Agreement and nothing in any Sub-license, nor in this clause 2.5 nor clause 15.8(a), relieves AVEO of its obligations under this Agreement.  
2.6Grant back of rights to St Vincent's 
(a)By this Agreement AVEO grants back to St Vincent's a non-exclusive, royalty-free, perpetual, irrevocable right and license under the Licensed IP to:
(i)make, have made and use Licensed Therapeutic Products; 
(ii)practice and have practised Licensed Processes; and
(iii)use, reproduce, apply, develop, modify and enhance the Licensed Know How in the Territory for the purpose of exercising the rights granted back in clauses 2.6(a)(i) and 2.6(a)(ii), 
in the Therapeutic Field in the Territory solely for research purposes.  
(b)Subject to clause 2.6(c), St Vincent's may not grant Sub-licenses under the rights granted back to it in clause 2.6(a) without the consent of AVEO.  
(c)St Vincent's may grant Sub-licenses under the rights granted back to it in clause 2.6(a) to non-commercial (not-for-profit) research collaborators in its discretion and without the further consent of AVEO.  For avoidance of doubt, research funded by for-profit entities shall not be considered non-commercial research.  
									
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3.DEVELOPMENT AND EXPLOITATION OF LICENSED PRODUCTS
3.1Technology Transfer
(a)Within [**] days after the Effective Date, St Vincent's shall deliver to AVEO a package of information comprising the Licensed Know How which is in existence as at the Effective Date.  
(b)Within [**] days after the Effective Date, AVEO shall notify St Vincent's in writing of the items and quantities of St Vincent's Research Tools which AVEO wishes to have delivered to AVEO.  Thereafter, from time to time during the Term AVEO may notify St Vincent's in writing of further or additional items and quantities of St Vincent's Research Tools which AVEO wishes to have delivered to AVEO.  
(c)Within [**] days after receipt by St Vincent's of each request referred to in clause 3.1(b), St Vincent's shall provide to AVEO an estimate of the reasonable costs and time for production and delivery of the requested items, for AVEO's written approval.  
(d)Upon receiving AVEO's written approval, St Vincent's shall arrange the production and delivery to AVEO of a package of the agreed items and quantities of St Vincent's Research Tools within the agreed time frame or as soon as reasonably practicable thereafter.  
(e)AVEO shall reimburse St Vincent's within [**] days after delivery to AVEO of the package of St Vincent's Research Tools, the reasonable costs of production and delivery.  
3.2General diligence 
(a)AVEO acknowledges that development and commercial Exploitation of Licensed Therapeutic Products under this Agreement is of the utmost importance to St Vincent's.  
(b)Subject to clause 3.2(c), AVEO shall use Diligent Efforts (whether by itself or through an Affiliate or Sub-licensee): 
(i)to conduct research and clinical development, and to commercially launch at least one Licensed Therapeutic Product; and
(ii)to market, promote, distribute, import, export, offer to sell and sell at least one Licensed Therapeutic Product in each of the Major Markets. 
(c)Clause 3.2(b) shall cease to apply if, and shall not apply only for so long as, there is no Valid Claim in the Licensed Patent Rights anywhere in the Territory that Covers the manufacture, importation, sale, hire or other disposal, supply, practise or use of any therapeutic product, kit, apparatus, substance or method.  
3.3Milestones
(a)Subject to clauses 3.3(b), 3.9(a)(i), 3.9(a)(ii), 3.9(a)(iii) and 5.2(c), AVEO (whether by itself or through an Affiliate or Sub-licensee) shall meet each Milestone for a first Licensed Therapeutic Product on or before the date set out in Schedule 2 for that Milestone.  
(b)Clause 3.3(a) shall cease to apply if, and shall not apply only for so long as,there is no Valid Claim in the Licensed Patent Rights anywhere in the Territory that Covers the manufacture, importation, sale, hire or other disposal, supply, practise or use of any therapeutic product, kit, apparatus, substance or method.  
									
		14
	

3.4No Exploitation outside the Therapeutic Field and Diagnostic Field
AVEO shall not, and AVEO shall ensure that its Affiliates and Sub-licensees do not:
(a)Exploit Licensed Therapeutic Products outside the Therapeutic Field or market, advertise or promote Licensed Therapeutic Products for use outside the Therapeutic Field;
(b)Exploit Licensed Diagnostic Products outside the Diagnostic Field or market, advertise or promote Licensed Diagnostic Products for use outside the Diagnostic Field;
(c)Exploit Licensed Processes outside the Therapeutic Field and Diagnostic Field; or
(d)Exploit St Vincent's Research Tools outside the Therapeutic Field and Diagnostic Field.  
3.5Alternative products for cachexia, etc.
(a)In light of its obligations to St Vincent's in this Agreement, including the obligations in clauses 3.2 and 3.3, AVEO shall not, and AVEO shall ensure that its Affiliates and Sub-licensees do not:
(i)develop or commercialise any product, other than a Licensed Therapeutic Product, for the treatment, prevention or prophylaxis of cachexia, decreased appetite or body weight, which binds to MIC-1 or the MIC-1 receptor and is a MIC-1 antagonist (any such product, a "Non-Licensed Product"); or 
(ii)license or induce any other Person to develop or commercialise a Non-Licensed Product, 
without the prior written consent of St Vincent's.  
(b)Clause 3.5(a) shall cease to apply if, and shall not apply only for so long as,there is no Valid Claim in the Licensed Patent Rights anywhere in the Territory that Covers the manufacture, importation, sale, hire or other disposal, supply, practise or use of any therapeutic product, kit, apparatus, substance or method.  
3.6Compliance with Laws
(a)AVEO shall ensure that all research and development, manufacture, storage and handling of Licensed Products takes place in accordance with applicable Laws, the requirements of any Government Agency and applicable Good Clinical Practise.  
(b)AVEO shall ensure that all Licensed Products Exploited comply with any applicable Laws and requirements of any Government Agency in the countries in the Territory in which they are Exploited, and any applicable codes of Good Manufacturing Practise.  
3.7Certain restricted activities 
AVEO shall not, and shall ensure that its Affiliates and Sub-licensees do not, Exploit any Licensed Product or Licensed Process for either the deliberate creation of human life by artificial means or the deliberate destruction of human life at any stage of development.  
3.8Quarterly development reports
(a)AVEO shall prepare a report for each Quarter giving details of all material research and development activities for Licensed Products, including: 
									
		15
	

(i)the planning and progress of all pre-clinical development (including the progress toward selection of any lead compound for a Licensed Product);
(ii)the design, purpose, progress and results of all Clinical Trials of Licensed Products and any applications for Authorisations for the conduct of Clinical Trials of Licensed Products; 
(iii)the achievement of any Milestones and steps towards achievement of Milestones; and
(iv)the filing of all applications for Authorisations for export or marketing of Licensed Products anywhere in the Territory, and the grant of any such Authorisations,
in the relevant Quarter, in the format shown in Annexure 1 or as otherwise agreed by St Vincent's in writing.  
(b)AVEO shall submit each report referred to in clause 3.8(a) to St Vincent's within [**] days after the end of the Quarter to which it relates.  
3.9Adverse events
(a)AVEO shall notify St Vincent's promptly in writing if:
(i)AVEO becomes aware of a Government Agency refusing any Authorisation required to further develop or Exploit a Licensed Product in any country, or orders or requires the termination of any Clinical Trial of a Licensed Product;
(ii)AVEO becomes aware of a Government Agency ordering or requiring any warning or withdrawal of a Licensed Product from the market in any country for any health or safety reason; 
(iii)AVEO becomes aware of a Government Agency granting a Third Party an exclusive legal right, such as an orphan drug designation in a country that precludes the Government Agency from issuing a marketing approval for a Licensed Product for at least [**] years; or
(iv)by good faith judgment AVEO or any Sub-licensee decides:
(A)to withdraw any Licensed Product from the market for health or safety reasons; or
(B)that an event or condition has occurred with respect to a technical issue, including feasibility, CMC, efficacy, safety or toxicology with respect to a Licensed Product that cannot be overcome.  
(b)For avoidance of doubt, clause 3.9(a)(iv) does not require AVEO to report to St Vincent's any adverse events occurring during the course of a Clinical Trial before the Clinical Trial has concluded or is otherwise terminated.  
(c)St Vincent’s shall notify AVEO promptly in writing, subject to any confidentiality obligation it may owe to any Third Party, if through its own research in the Therapeutic Field or Diagnostic Field St Vincent’s becomes aware of any significant health or safety concern with respect to any Licensed Product.  
									
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4.IMPROVEMENTS
4.1AVEO Improvements
St Vincent's acknowledges that as between the parties, AVEO will be the sole legal and beneficial owner of all IPR in all AVEO Improvements.  
4.2St Vincent's Improvements
(a)AVEO acknowledges that as between the parties, St Vincent's will be the sole legal and beneficial owner of all IPR in all St Vincent's Improvements.  
(b)Subject to clause 4.2(e), St Vincent's shall not grant to any Person any license under any IPR in St Vincent's Improvements to commercially Exploit the St Vincent's Improvement in the Therapeutic Field, or otherwise deal commercially with such IPR in the Therapeutic Field, without first notifying AVEO in writing, giving details of the relevant St Vincent's Improvement and the relevant IPR (a "St Vincent's Improvement Notice").  
(c)If AVEO notifies St Vincent's in writing within [**] days of a St Vincent's Improvement Notice that AVEO wishes to obtain an exclusive license under the relevant IPR to Exploit the relevant St Vincent's Improvement in the Therapeutic Field, then the parties shall negotiate in good faith, for up to 6 months from the date of the St Vincent's Improvement Notice (the "Negotiation Period") the terms on which St Vincent's may grant such a license to AVEO.  
(d)If, having received a St Vincent's Improvement Notice:
(i)AVEO does not notify St Vincent's in writing within [**] days after receipt of the St Vincent's Improvement Notice that AVEO wishes to obtain an exclusive license under the relevant IPR to Exploit the St Vincent's Improvement in the Therapeutic Field;
(ii)AVEO notifies St Vincent's in writing at any time to the effect that AVEO does not wish to obtain an exclusive license under the relevant IPR to Exploit the St Vincent's Improvement in the Therapeutic Field; or
(iii)AVEO notifies St Vincent's in writing within [**] days after receipt of the St Vincent's Improvement Notice that AVEO wishes to obtain an exclusive license under the relevant IPR to Exploit the St Vincent's Improvement in the Therapeutic Field, but the parties have not entered into a binding license agreement in which such license is granted before the end of the Negotiation Period, 
then: 
(iv)subject to clause 4.2(d)(v), St Vincent's may grant to any Third Party any license under the relevant IPR to Exploit the St Vincent's Improvement in the Therapeutic Field, or otherwise deal with such IPR, in its absolute discretion; but
(v)St Vincent's shall not, before the [**] of either the event referred to in paragraph (i), the notice referred to in paragraph (ii) or the expiration of the Negotiation Period, as applicable, grant to any Person a license under the relevant IPR to Exploit the St Vincent's Improvement in the Therapeutic Field on terms more favourable to the Person than those offered to AVEO.  
									
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(e)Nothing in this clause 4.2 prevents St Vincent's from:
(i)making, having made, practising, having practised or using any St Vincent's Improvement solely for research purposes;
(ii)using, reproducing, applying, developing, modifying or enhancing any St Vincent's Improvement solely for research purposes; or 
(iii)licensing or otherwise permitting non-commercial (not-for-profit) research collaborators to perform the activities in paragraphs (i) and (ii) solely for research purposes, in its discretion and without the further consent of AVEO.  For avoidance of doubt, research funded by for-profit entities shall not be considered non-commercial research.  
5.LICENSE FEES AND ROYALTIES
5.1Up-front license fees
In consideration of the licenses granted in clauses 2.1, 2.2 and 2.3, AVEO shall pay to St Vincent's a license fee of USD700,000 in two instalments, being:
(a)USD400,000, to be paid within 10 Business Days after the Effective Date; and
(b)USD300,000, to be paid on or before the first anniversary of the Effective Date unless this Agreement is earlier terminated in accordance with clause 15.5(a).  
5.2Milestone Fees
(a)In further consideration of the licenses granted in clauses 2.1, 2.2 and 2.3, if a Milestone is reached, then AVEO shall pay to St Vincent's the corresponding Milestone Fee, in accordance with this clause 5.2.  
(b)AVEO shall provide to St Vincent's a notice in writing of the occurrence of a Milestone within [**] days after AVEO has knowledge of its occurrence, together with payment to St Vincent's of the relevant Milestone Fee.  
(c)In the event that any Milestone is not achieved in the timeframe set out for that Milestone in Schedule 2, then: 
(i)AVEO may pay to St Vincent's the Milestone Fee corresponding to the relevant Milestone within [**] days after the expiry of the relevant timeframe; and
(ii)if AVEO pays the Milestone Fee corresponding to the relevant Milestone in accordance with clause 5.2(c)(i), then St Vincent's shall have no right to terminate this Agreement based on AVEO's failure to meet that Milestone.  
(d)If AVEO grants a Sub-license under the Diagnostic License to a Third Party to Exploit Licensed Diagnostic Products in the United States, Europe or Japan before the occurrence of the Milestone for the relevant country set out in Part B of Schedule 2, then AVEO shall have no obligation to pay the corresponding Milestone Fee for the relevant country, it being understood and agreed that AVEO’s payment of Diagnostic License Commercialisation Income shall be in lieu of such Milestone Fees for such country.  
5.3Royalties on Licensed Therapeutic Products
(a)In further consideration of the Therapeutic License, AVEO shall pay to St Vincent's royalties on Net Sales of Licensed Therapeutic Products in accordance with this clause 5.3, subject to clauses 5.5 and 5.6.  
									
		18
	

(b)While the total Net Sales of Licensed Therapeutic Products in the Territory during the then current calendar year are less than USD[**], AVEO shall pay to St Vincent's:
(i)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are Reduced Royalty Products.  
(c)While the total Net Sales of Licensed Therapeutic Products in the Territory during the then current calendar year are greater than USD[**] but less than USD[**], AVEO shall pay to St Vincent's:
(i)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are Reduced Royalty Products.  
(d)While the total Net Sales of Licensed Therapeutic Products in the Territory during the then current calendar year are greater than USD[**] but less than USD[**], AVEO shall pay to St Vincent's:
(i)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are Reduced Royalty Products.  
(e)On and from the date on which total Net Sales of Licensed Therapeutic Products in the Territory during the then current calendar year exceed USD[**], AVEO shall pay to St Vincent's:
(i)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales of all Licensed Therapeutic Products which are Reduced Royalty Products.  
For example, if Net Sales of Licensed Therapeutic Products during a calendar year are USD[**], none of which were Net Sales of Reduced Royalty Products, then the total royalty payable under this clause 5.3 for such calendar year, subject to clauses 5.5 and 5.6, would be calculated as follows: [**].  
5.4Royalties and Diagnostic License Commercialisation Income
(a)In further consideration of the Diagnostic License, AVEO shall pay to St Vincent's: 
(i)royalties on Net Sales of Licensed Diagnostic Products by or on behalf of AVEO or its Affiliates in accordance with clauses 5.4(c) and 5.4(d); and
(ii)[**]% of all Diagnostic License Commercialisation Income.  
(b)For clarity, AVEO shall not be required to pay royalty payments to St Vincent’s under clause 5.4(a)(i) on Net Sales of Licensed Diagnostic Products by any Sub-licensee under the Diagnostic License, it being understood and agreed that AVEO’s payment of Diagnostic License Commercialisation Income shall be in lieu of such royalties.  
									
		19
	

(c)While the total Net Sales of Licensed Diagnostic Products in the Territory during the then current calendar year is less than USD[**], AVEO shall pay to St Vincent's: 
(i)a royalty of [**]% of Net Sales by or on behalf of AVEO or its Affiliates of all Licensed Diagnostic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales by or on behalf of AVEO or its Affiliates of all Licensed Diagnostic Products which are Reduced Royalty Products.  
(d)On and after the date on which total Net Sales of Licensed Diagnostic Products in the Territory during the then current calendar year exceed USD[**], AVEO shall pay to St Vincent's:
(i)a royalty of [**]% of Net Sales by or on behalf of AVEO or its Affiliates of all Licensed Diagnostic Products which are not Reduced Royalty Products; and
(ii)a royalty of [**]% of Net Sales by or on behalf of AVEO or its Affiliates of all Licensed Diagnostic Products which are Reduced Royalty Products.  
For example, if Net Sales of Licensed Diagnostic Products during a calendar year are USD[**], none of which were Net Sales of Reduced Royalty Products, then the total royalty payable under this clause 5.4 for such calendar year, subject to clause 5.6, would be calculated as follows: [**].  
5.5Duration of royalty obligations
(a)AVEO’s obligation to pay royalties under clauses 5.3 and 5.4 shall, on a country-by-country and Licensed Product-by-Licensed Product basis, run until the later of: 
(i)the date of expiry, lapse, withdrawal or revocation of the last Valid Claim in the Licensed Patent Rights which Covers the Exploitation of the Licensed Product in such country; or 
(ii)10 years from First Commercial Sale of such Licensed Product in such country.  
(b)If the last Valid Claim in the Licensed Patent Rights which would Cover a Licensed Product in a particular country expires, lapses, is withdrawn or revoked before the date which is 10 years from First Commercial Sale of the Licensed Product in such country, then it shall become a Reduced Royalty Product and, subject to clause 5.5(a), the royalties payable on Net Sales of such Licensed Product are reduced in accordance with the applicable subclause (ii) in clause 5.3 or 5.4 (as applicable).  
(c)Upon expiry of all AVEO's obligations under this clause 5 to pay license fees, Milestone Fees, royalties and Diagnostic License Commercialisation Income, AVEO shall have fully paid up, perpetual, irrevocable licenses for all remaining Licensed Know How in existence post expiry of the Licensed Patent Rights.  
5.6Royalty reduction for MIC-1 competition
If:
(a)a product which contains or includes a MIC-1 antagonist other than a Licensed Therapeutic Product (a "MIC-1 Competitor") is granted a general marketing Authorisation by a Government Agency in the Therapeutic Field in a country in the Territory in which the Licensed Therapeutic Product's Exploitation is not Covered by a Valid Claim in the Licensed Patent Rights, and the MIC-1 Competitor is commercially launched and sold by any Person other than AVEO, its Affiliates or Sub-licensees in that country for use in the Therapeutic Field; and
									
		20
	

(b)AVEO can demonstrate by reference to IMS supported or similar independent data that either: 
(i)the total value of sales by AVEO, its Affiliates or Sub-licensees of Licensed Therapeutic Products in such country have decreased by more than [**]% following the launch of such MIC-1 Competitor; or 
(ii)the sales of such MIC-1 Competitor in such country has achieved a [**]% market share, either by volume or value, whichever is first to occur,
then as from the first month where either of the criteria in paragraph (b)(i) or (ii) has occurred, the royalty payable by AVEO on Net Sales of that Licensed Therapeutic Product in that county under clause 5.3 shall be reduced by [**]% for as long as the sales of the MIC-1 Competitor continue to have either of the effects referred to in paragraphs (b)(i) and (ii).  
5.7Payment of royalties and Diagnostic License Commercialisation Income
(a)AVEO shall pay to St Vincent's all royalties payable under clauses 5.3 and 5.4 Quarterly in arrears, in accordance with paragraph (b).
(b)Within [**] days after the end of each Quarter following the First Commercial Sale, AVEO shall provide to St Vincent's a sales and royalty report referred to in clause 6.2.  St Vincent's will submit an invoice to AVEO with respect to the royalty amount due to St Vincent's.  AVEO shall pay such royalty amount within 30 days after receipt of the invoice.  
(c)AVEO shall notify St Vincent's in writing of the receipt of any Diagnostic License Commercialisation Income within [**] days after its receipt, together with payment to St Vincent's of the amount calculated under clause 5.4(a)(ii).  
5.8Sub-licensing milestone fee
AVEO shall pay to St Vincent's a one-time Sub-license milestone fee of USD1,500,000 within twenty-one (21) days after the Amendment Effective Date.
5.9How payments shall be made
All payments to be made under or in connection with this Agreement shall be made in USD by delivering an unendorsed bank cheque to the other party at the place, or by direct transfer of funds to the credit of an account nominated by the other party at least [**] days in advance, and (to the extent permitted by Law) free and clear of, and without deduction or withholding for or on account of any Taxes, except as provided in clause 5.10.  
5.10Deductions and withholdings
If at any time an applicable Law obliges AVEO to make a deduction or withholding in respect of any Tax from any payment by AVEO to St Vincent's under this Agreement, AVEO shall:
(a)notify St Vincent's of the obligation promptly after AVEO becomes aware of it;
(b)ensure that the deduction or withholding does not exceed the minimum amount required by Law; and
(c)pay to the relevant Government Agency on time the full amount of the deduction or withholding and promptly deliver to St Vincent's a copy of any receipt, certificate or other proof of payment.  
									
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5.11Interest on overdue amounts
(a)AVEO shall pay interest on each amount that is not paid when due, from (and including) the day on which it falls due to (but excluding) the day on which it is paid in full, at the rate calculated in accordance with paragraph (b).  This interest shall be paid on demand.  
(b)Interest on an unpaid amount accrues each day at a rate equal to [**].  
(c)This clause 5.11 does not affect a party's obligation to pay each amount under this Agreement when it is due.  
5.12Currency conversion
(a)For the purposes of clause 5.9, when conversion of payments from any currency other than USD is required to be undertaken by AVEO or its Sub-licensees, then subject to paragraph (b), the USD equivalent shall be calculated using the then-current standard exchange rate methodology as applied by AVEO or its Sub-licensee (as the case may be) in its external reporting in accordance with its Accounting Standards.  
(b)If there is no standard exchange rate methodology applied by AVEO or its Sub-licensee (as the case may be) in its external reporting in accordance with its Accounting Standards, then any amount in a currency other than USD shall be converted to USD using the exchange rate between those two currencies most recently quoted in the Wall Street Journal in New York: 
(i)as to Net Sales, as of the last Business Day of the Quarter in which the Net Sales were made; and
(ii)as to Diagnostic License Commercialisation Income, on the Business Day on which the payment was received by or on behalf of AVEO or its Affiliate, as applicable.  
6.REPORTS, RECORDS AND ACCOUNTING
6.1Books and records
AVEO shall, and shall ensure its Affiliates and Sub-licensees, make, keep and maintain separate and complete records and books of account relating to:
(a)research and development of Licensed Products (including the achievement of all Milestones), for [**] years after the end of the calendar year to which they relate;
(b)marketing, advertising and promotion of Licensed Products, for [**] years after the end of the calendar year to which they relate; 
(c)commercial Exploitation of Licensed Products, including the sales of Licensed Products sold, supplied or otherwise disposed of by AVEO, its Affiliates and Sub-licensees of AVEO and its Affiliates, and the deductions made in the calculation of Net Sales, for [**] years after the end of the calendar year to which they relate; and
(d)any assignment or Sub-licensing of AVEO's rights under this Agreement, including amounts received by or on behalf of AVEO or its Affiliates from any Person in consideration of, as a result of, or in connection with, any assignment, Sub-licensing or other dealing with the Diagnostic License, for [**] years after the end of the calendar year to which they relate,
									
		22
	

in accordance with generally accepted accounting principles consistently applied (such as IFRS or US GAAP), which shall contain clear particulars sufficient to enable the calculation of all amounts payable to St Vincent's under clause 5.  
6.2Quarterly statements – following First Commercial Sale
After the date of the First Commercial Sale of a Licensed Product in any country in the Territory, AVEO shall prepare statements for each Quarter showing:
(a)all Net Sales of each Licensed Product sold, supplied or otherwise disposed of on a country-by-country basis during the reporting period by AVEO, its Affiliates and Sub-licensees (and, to the extent such information is or becomes available to AVEO, the gross sales of each Licensed Product sold, supplied or otherwise disposed of on a country-by-country basis during the reporting period by AVEO, its Affiliates and Sub-licensees, and the deductions made in the calculation of Net Sales), except that:
(i)in the case of Licensed Diagnostic Products sold, supplied or otherwise disposed of by Sub-licensees, AVEO shall provide such statements or information in relation to such Licensed Diagnostic Products as is available to AVEO or its Affiliates; and
(ii)such statements need not include Licensed Products with respect to which no royalties are payable due to the application of clause 5.5(a); 
(b)details of all Diagnostic License Commercialisation Income received by or on behalf of AVEO and its Affiliates in the period to which the statement relates; and
(c)the royalties payable, in USD, which will have accrued under this Agreement with respect to such Net Sales,
and shall submit those statements to St Vincent's within [**] days after the end of each Quarter to which they relate.  
6.3Certification
(a)St Vincent's may give notice to AVEO at any time (but no more than [**]) that it wishes to have any statement submitted by AVEO under clause 6.2 or the amount of any payment(s) made by AVEO audited and certified by one of PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, KPMG, or an alternative independent accountant reasonably acceptable to AVEO, in either case which is not St Vincent's own regular accountant or auditor (the "Accountant") at St Vincent’s cost.  
(b)Before inspecting any accounts and records, the Accountant shall provide a written undertaking to AVEO to maintain AVEO’s Confidential Information as confidential on terms substantially the same as those in clause 9.  
(c)St Vincent's shall provide to AVEO a copy of its instructions to the Accountant within 7 days of having provided those instructions to the Accountant.  AVEO may provide to the Accountant within [**] days thereafter any additional information it wishes to give the Accountant (with a copy to St Vincent's).  
(d)In order that a statement or payment may be certified under paragraph (a), AVEO shall, and shall ensure its Affiliates, within [**] days after receipt of a notice by St Vincent's under clause 6.3(a):
(i)grant the Accountant access to all relevant records and books of account during normal business hours to permit the Accountant to inspect them; and
									
		23
	

(ii)permit the Accountant to make such copies of the records and books of account as he or she reasonably requires for the purpose of inspection and certification; and
(iii)give the Accountant such assistance as he or she reasonably requires, including by providing access to facilities, hardware, software and documents, to enable the Accountant to verify and independently calculate any amount payable or allegedly payable to St Vincent's under this Agreement.  
(e)As soon as is reasonably practicable upon completion of the inspection, St Vincent's shall cause the Accountant to certify the results of the inspection or verification and provide a copy of the certification to both parties (a "Certification").  
6.4Adjustments
(a)In the absence of manifest error a Certification is final and binding on the parties.  
(b)If a Certification reveals that St Vincent's has not been paid any amount payable to it under this Agreement, then within [**] days after receiving the Certification, AVEO shall pay to St Vincent's the amount of any underpayment, and clause 5.11 applies.  
(c)If a Certification reveals that St Vincent's was underpaid by: (i) [**]% or more of an amount payable to St Vincent's under this Agreement or of the aggregate royalty payable to St Vincent's on Net Sales in any Quarter; or (ii) [**]% of the aggregate royalty payable to St Vincent's on Net Sales in any calendar year, then within [**] days after receiving the Certification, AVEO shall also reimburse St Vincent's all reasonable costs and expenses of the inspection and certification.  
(d)If a Certification reveals that St Vincent's was paid more than the amount payable under this Agreement, then within [**] days after receiving the Certification, St Vincent's shall refund AVEO the amount of the overpayment, less all reasonable costs and expenses of the inspection and certification in the course of which the overpayment was discovered.  
7.PROSECUTION AND MAINTENANCE OF PATENT RIGHTS
7.1Prosecution and maintenance of Licensed Patent Rights
Subject to this clause 7, St Vincent's is and shall remain solely responsible for patent management, filing, prosecution and maintenance in the Territory of all Licensed Patent Rights.  
7.2Obligations to AVEO 
St Vincent's shall:
(a)use diligent efforts to conduct patent management, filing, prosecution and maintenance of the Licensed Patent Rights to the extent permitted by applicable Law;
(b)keep AVEO reasonably informed of all material developments in the filing, prosecution and maintenance of the Licensed Patent Rights; and
(c)have reasonable regard to any comments or suggestions by AVEO in relation to filing and prosecution strategies for the Licensed Patent Rights so far as they relate to the Therapeutic Field or the Diagnostic Field.  
									
		24
	

7.3Assistance by AVEO
AVEO shall, and shall ensure that its Affiliates and Sub-licensees, promptly provide to St Vincent's all information and documents (including any statements, oaths or statutory declarations) which St Vincent's may reasonably request in order for St Vincent's to make any application for extension of the term of any Licensed Patent Rights (including patent term restoration and supplementary protection certificates).  
7.4Reimbursement by AVEO
(a)Subject to clause 7.4(b), AVEO shall reimburse St Vincent's for all reasonable costs and expenses incurred by St Vincent's:
(i)before the Effective Date in patent management, filing, prosecuting and maintaining the division of European Patent Application No. [**] at AVEO's request, in the amount set forth in Schedule 5;
(ii)after the Effective Date in patent management, filing, prosecuting and maintaining the Licensed Patent Rights, 
within [**] days after presentation by St Vincent's of invoices for those amounts, together with copies of Third Party invoices, receipts and other documents evidencing those costs.  
(b)AVEO's obligation to reimburse St Vincent's its reasonable costs and expenses incurred in patent management, filing, prosecuting and maintaining the Licensed Patent Rights under which any Third Party is licensed to commercially Exploit any product or process will be reduced [**].  
(c)If St Vincent’s enters into any commercial agreement after the Effective Date under which it grants to any Third Party a license under any Licensed Patent Rights to commercially Exploit any product or process, then St Vincent’s shall promptly notify AVEO in writing, which writing shall update the number of grants under all other such commercial agreements then in effect.  
7.5Prosecution and maintenance of Patent Rights for Improvements
(a)AVEO shall have the sole right, but not the obligation, for filing, prosecuting and maintaining any Patent Rights in the Territory in or in relation to any AVEO Improvements, and subject to clause 7.6, AVEO may do so in its sole discretion.  
(b)Subject to any license agreement the parties may enter into under clause 4.2(b), St Vincent's is and shall remain solely responsible for filing, prosecuting and maintaining any Patent Rights in the Territory in or in relation to any St Vincent's Improvements, and may do so in its sole discretion.  
7.6Term extensions in Single Patent Countries
(a)If AVEO wishes to make any application for extension of the term (including seeking any supplementary protection certificate) of any Patent Rights of AVEO or its Affiliates which Cover Licensed Therapeutic Products (or based on marketing approval of any Licensed Therapeutic Product) in any country in which the term of only one patent may be extended based on the marketing approval of a product (a "Single Patent Country"), then AVEO shall notify St Vincent's in writing at least [**] days before making the application, identifying the Patent Rights which AVEO intends to apply to extend.  
(b)If within [**] days of a notice under clause 7.6(a) St Vincent's notifies AVEO in writing of any Licensed Patent Rights eligible for extension which St Vincent's would prefer to have extended (an "SVH Alternative Patent"), then:
									
		25
	

(i)AVEO in its discretion may select the Patent Rights it wishes to apply to extend and make the application for term extension; and
(ii)if AVEO makes an application for extension of any Patent Rights of AVEO and not the SVH Alternative Patent, then royalties shall continue to be payable to St Vincent's under clause 5.3 in the Single Patent Country on Net Sales of the Licensed Therapeutic Product after the expiry of the SVH Alternative Patent, and the Licensed Therapeutic Product shall not become a Reduced Royalty Product (but the applicable royalty rates in clauses 5.3(b)(i), 5.3(c)(i) and 5.3(d)(i) on Net Sales of such Licensed Therapeutic Product in such Single Patent Country shall each reduce by [**]%), for the period for which the term of the SVH Alternative Patent would otherwise have been extended.  
7.7Common interest
The parties acknowledge that the exchange of information and documents between them in the course of the prosecution and maintenance of Patent Rights under this clause 7 is pursuant to the common interest of the parties in obtaining advice about the validity and enforceability of the relevant Patent Rights, and obtaining, maintaining and potentially enforcing the relevant Patent Rights.  
8.INTELLECTUAL PROPERTY RIGHTS AND INFRINGEMENT CLAIMS
8.1Acknowledgments
(a)AVEO acknowledges that St Vincent's remains the legal and beneficial owner of the Licensed IP and nothing in this Agreement effects an assignment or transfer to AVEO of any right, title or interest in the Licensed IP.  
(b)AVEO shall not represent that it has any right, title or interest in the Licensed IP other than the rights expressly granted to it under this Agreement.  
8.2Notification
Each party shall notify the other party immediately upon becoming aware of:
(a)any actual or apparent infringement or misappropriation by any Third Party of the Licensed IP in the Therapeutic Field; 
(b)any Claim by any Third Party to the effect that any Licensed IP is invalid or unenforceable; or
(c)any Claim by any Third Party that the activities of a party under this Agreement infringe the Intellectual Property Rights of any Person.  
8.3Infringement Claims by AVEO
(a)Subject to clauses 8.3(b), 8.3(c) and clause 8.5:
(i)in its discretion and at its cost, AVEO may make or commence an Infringement Claim to enforce the Licensed IP against any Person for infringement or misappropriation of the Licensed IP in the Therapeutic Field; and
(ii)in the event it does so, AVEO shall have the sole right to conduct and control the Infringement Claim, including the right to settle it.  
									
		26
	

(b)If AVEO makes or commences an Infringement Claim, AVEO shall:
(i)keep St Vincent's reasonably informed of the progress of the Infringement Claim and all material developments in and in relation to it; 
(ii)consult in good faith with St Vincent's in making decisions which are material to the conduct or resolution of the Infringement Claim; 
(iii)have reasonable regard to any comments or suggestions by St Vincent's in the conduct or resolution of the Infringement Claim; and
(iv)indemnify and keep indemnified St Vincent's against any reasonable costs incurred by St Vincent's as a result of providing requested assistance to AVEO in relation to the Infringement Claim.  
(c)AVEO shall not:
(i)make any admission in or in relation to any Infringement Claim which is adverse to St Vincent's interest in any Licensed IP, including the validity, enforceability or registration of the Licensed IP; or
(ii)make any offer of settlement or compromise of any Infringement Claim or agree to settle or compromise any Infringement Claim on terms which involve any admission adverse to, or which compromise or jeopardise the validity, enforceability or registration of any Licensed IP,
in each case, without the prior written consent of St Vincent's.  
(d)If AVEO makes or commences an Infringement Claim, then subject to clause 8.3(b), St Vincent's shall, at AVEO's cost, provide to AVEO all reasonable assistance and execute any documents AVEO reasonably requests, in relation to the Infringement Claim.  
8.4Joinder and participation of St Vincent's
If it is necessary that St Vincent's be a party to any Infringement Claim commenced by AVEO, then:
(a)St Vincent's shall join the Infringement Claim as a plaintiff; and
(b)St Vincent's hereby waives any objection to being a party to the Infringement Claim, including any objection as to jurisdiction or venue.  
8.5Infringement Claims by St Vincent's
(a)If AVEO fails to make or prosecute an Infringement Claim in any country in the Territory within [**] days after receipt of a notice by St Vincent's requesting that it do so, then, subject to clauses 8.5(b) and 8.5(c):
(i)St Vincent's may in its discretion and at its cost make or prosecute the Infringement Claim itself; and 
(ii)in the event it does so, St Vincent's shall have the sole right to conduct and control the Infringement Claim, including the right to settle it on such terms as it thinks fit.  
(b)Before St Vincent's makes or prosecutes an Infringement Claim referred to in paragraph (a), St Vincent's shall confer with AVEO and give reasonable consideration to AVEO's reasons for not making or prosecuting the Infringement Claim.  
									
		27
	

(c)If St Vincent's makes or commences an Infringement Claim, St Vincent's shall:
(i)keep AVEO reasonably informed of the progress of the Infringement Claim and all material developments in and in relation to it; 
(ii)consult in good faith with AVEO in making decisions which are material to the conduct or resolution of the Infringement Claim so far as they relate to the Therapeutic Field; and
(iii)have reasonable regard to any comments or suggestions by AVEO in the conduct or resolution of the Infringement Claim so far as they relate to the Therapeutic Field.  
(d)If St Vincent's makes or commences an Infringement Claim, AVEO shall provide to St Vincent's at AVEO's cost all reasonable assistance, and execute any documents St Vincent's reasonably requests, in relation to the Infringement Claim.  
8.6Joinder and participation of AVEO
If it is necessary that AVEO be a party to any Infringement Claim commenced by St Vincent's, then:
(a)AVEO shall join the Infringement Claim as a plaintiff; and
(b)AVEO hereby waives any objection to being a party to the Infringement Claim, including any objection as to jurisdiction or venue.  
8.7Damages and settlement amounts
(a)If damages, an account of profits or any other amount is awarded to any party in any Infringement Claim referred to in clause 8.3(b), or any amount is received by any party by way of settlement or compromise of an Infringement Claim referred to in clause 8.3(b), then: 
(i)the parties shall first apply the amount by way of reimbursement of all unreimbursed legal costs of AVEO and St Vincent's (on a pro-rata basis if the amount is insufficient); and 
(ii)the parties shall allocate any remaining amount between the parties so that St Vincent's is paid or retains [**]% of the net amount and AVEO is paid or retains [**]% of the net amount.  
(b)If damages, an account of profits or any other amount is awarded to any party in any Infringement Claim referred to in clause 8.5, or any amount is received by any party by way of settlement or compromise of an Infringement Claim referred to in clause 8.5, then: 
(i)the parties shall first apply the amount by way of reimbursement of all unreimbursed legal costs of AVEO and St Vincent's (on a pro-rata basis if the amount is insufficient); and
(ii)the parties shall allocate any remaining amount so that St Vincent's is paid or retains [**]% of the net amount.  
8.8Common interest
The parties acknowledge that the exchange of information and documents between them in the course of the making, conduct or resolution of any Infringement Claim under this clause 8 is pursuant to the common interest of the parties in obtaining advice about the 
									
		28
	

Infringement Claim, the facts giving rise to it or the validity and enforceability of the Licensed Patent Rights, or in anticipation of legal proceedings.  
9.CONFIDENTIAL INFORMATION
9.1Confidentiality
Subject to clause 9.3, each party shall:
(a)keep and maintain all Confidential Information of the other party strictly confidential;
(b)use Confidential Information of the other party only for the purposes for which it is disclosed; and
(c)not disclose Confidential Information of the other party other than to its or its Affiliates’: 
(i)officers, directors or employees requiring the Confidential Information for the purposes of this Agreement; or 
(ii)legal and professional advisers, auditors or other consultants, authorised sub-contractors or Sub-licensees requiring the Confidential Information for the purposes of this Agreement upon those entities first undertaking in writing (or having a professional obligation) to keep that Confidential Information confidential on terms substantially the same as those in this clause 9.  
9.2Security
For the purposes of clause 9.1, each party shall establish and maintain reasonable security measures no less than the measures maintained for its own Confidential Information, to safeguard the Confidential Information of the other party from unauthorised use or access and shall notify the Disclosing Party immediately upon becoming aware of any suspected or actual unauthorised use or disclosure of the Disclosing Party’s Confidential Information.  
9.3Permitted disclosures
Notwithstanding clauses 9.1 and 9.2, each party shall be permitted to disclose the Disclosing Party’s Confidential Information to the extent that:
(a)a party is required by applicable Law to disclose any of the Disclosing Party’s Confidential Information, provided such party promptly gives notice to the Disclosing Party of that requirement and discloses only that portion of such Confidential Information which it is legally required to disclose;
(b)disclosure is reasonably necessary under applicable Law to obtain any Authorisation contemplated by this Agreement, including any Authorisation AVEO may be required to obtain to fulfil its obligations under clause 3, provided such party promptly gives notice to the Disclosing Party and discloses only that portion of such Confidential Information which is reasonably necessary to disclose;
(c)disclosure is reasonably necessary in prosecuting or defending Claims, provided that such party takes all reasonable measures, including seeking protective orders, to minimize unnecessary disclosure of such Confidential Information;
(d)disclosure is reasonably necessary to (i) prospective and actual licensees, Sub-licensees, distributors, acquirors, bankers, lenders or investors, and (ii) others in order to (and solely to the extent required to) exercise such party’s rights or fulfil 
									
		29
	

its obligations under this Agreement (including commercialization or Sub-licensing of Licensed Patent Rights, Licensed Know How or Licensed Products) on a need to know basis, each of whom in (i) and (ii) prior to disclosure must be bound by similar obligations of confidentiality and non-use on terms substantially the same as those in this clause 9 that are of reasonable duration in view of the circumstances of the disclosure; and 
(e)to the extent mutually agreed to in writing by the parties.  
9.4Publicly available
No piece or body of Confidential Information shall be regarded as publicly available merely because it contains some information which is publicly available or is embraced by a more general disclosure which is publicly available.  
9.5Agreed press releases and announcements
(a)Neither party shall make or publish any press release or other public announcement of or concerning the existence or terms of this Agreement, other than the press release attached hereto as Schedule 7, without the prior written consent of the other party, which shall not be unreasonably withheld or delayed.  
(b)If either party wishes to make or publish any press release or other public announcement referred to in paragraph (a), then:
(i)it shall provide to the other party a draft of the proposed publication as soon as is reasonably practicable (and in any event no later than [**] Business Days) before the proposed release or publication date (unless such press release or other public announcement must be released or published in a shorter time frame to comply with any applicable Laws or requirements of any Government Agency); 
(i)subject to any applicable Laws and the requirements of any Government Agency, the party shall make any amendments to the proposed publication which the other party reasonably requests before the proposed release or publication date; 
(ii)Either party shall be entitled to redact from any press release or other public announcement that the other party proposes to make any financial information relating to this Agreement; and
(iii)Either party shall be entitled to include in any press release or other public announcement that it proposes to make a description of the scope of the license granted to AVEO under this Agreement.  
(c)Notwithstanding clauses 9.5(a) and 9.5(b), a party that is legally required to file a copy of this Agreement with a Government Agency (including the SEC or its counterpart in any country other than the United States) in connection with any public offering of such party’s securities or regular reporting obligations as a public company, shall be permitted to do so, provided that such party shall attempt to obtain confidential treatment of all Confidential Information of the other party  for which such treatment is reasonably available in accordance with applicable Laws and requirements of the relevant Government Agency.  To that end, the filing party shall, at least [**] days in advance of any such filing, provide the other party with a draft set of redactions to this Agreement for which confidential treatment will be sought, incorporate the other party’s comments as to additional terms it would like to see redacted, and seek confidential treatment for such additional terms (except only in the limited circumstances where confidential treatment is manifestly unavailable).  
									
		30
	

10.PUBLICATIONS
10.1Acknowledgements 
St Vincent's acknowledges AVEO's interest in obtaining valid Patent Rights and in protecting the confidentiality of its Confidential Information.  AVEO in turn acknowledges St Vincent's interest in obtaining valid Patent Rights, protecting the confidentiality of its Confidential Information and publishing the results of its research to obtain recognition within the scientific community and to advance the state of scientific knowledge.  Accordingly, AVEO must consider in good faith any request by St Vincent's to publish any of the results of St Vincent’s research in accordance with this clause 10.  
10.2Notification of Proposed Publications
If St Vincent's wishes to submit for publication, publish, present or otherwise make available to any Third Party any information referring or relating to the Licensed Know How in the Therapeutic Field (a "Proposed Publication"), St Vincent's shall give written notice to AVEO including:
(a)a copy of a draft of the Proposed Publication, together with any visual aids; and
(b)the circumstances of the presentation or publication of the Proposed Publication, including the proposed date.  
10.3Review of Proposed Publications
On receipt of a notice under clause 10.2, AVEO must:
(a)within [**] days in the case of abstracts, oral presentations and poster presentations; or 
(b)within [**] days in the case of publications in peer reviewed journals:
(i)review the Proposed Publication and determine whether any step should be taken to protect any Intellectual Property Rights or Confidential Information of AVEO before the Proposed Publication is published or presented, including seeking advice from a patent attorney, filing any patent application or amendment of the Proposed Publication; and
(ii)notify St Vincent's of any step AVEO considers should be taken to protect any Intellectual Property Rights or Confidential Information of AVEO before the Proposed Publication is published or presented.  
10.4Consequences
If AVEO notifies St Vincent's under clause 10.3 of its view that any step should be taken, then:
(a)St Vincent's shall not submit for publication, publish, present or otherwise make available to any Third Party the Proposed Publication in the form provided to AVEO until the earlier of [**] days after receipt of AVEO’s notice or the date on which all such steps are taken; and
(b)AVEO shall use its best endeavours to take all such steps promptly and shall notify St Vincent's promptly upon such steps being taken.  
									
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11.REPRESENTATIONS AND WARRANTIES
11.1Representations and warranties by each party
On the Effective Date each party represents and warrants to the other party that:
(a)(status) it is a company incorporated and validly existing under the Laws of its jurisdiction;
(b)(power) it has full legal capacity and power to:
(i)own its property and to carry on its business; and
(ii)enter into this Agreement and to carry out the transactions that this Agreement contemplates;
(c)(corporate authority) it has taken all corporate action that is necessary or desirable to authorise its entry into this Agreement and its carrying out the transactions that this Agreement contemplates;
(d)(Authorisations) it holds each Authorisation that is necessary or desirable to:
(i)enable it to properly execute this Agreement and to carry out the transactions that this Agreement contemplates;
(ii)ensure that this Agreement is legal, valid, binding and admissible in evidence; or
(iii)enable it to properly carry on its business,
and it is complying with any conditions to which any of these Authorisations is subject;
(e)(documents effective) this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms (except to the extent limited by equitable principles and Laws affecting creditors' rights generally); and
(f)(no litigation) no litigation, arbitration, mediation, conciliation or administrative proceedings are taking place, pending, or to the best of its actual knowledge, threatened which, if adversely decided, could have a material adverse effect on its ability to fulfil its obligations under this Agreement; and
(g)(no contravention) neither its execution of this Agreement nor the carrying out by it of the transactions that this Agreement contemplates, does or will: 
(i)contravene any Law to which it or any of its property is subject or any order of any Government Agency that is binding on it or any of its property;
(ii)contravene any Authorisation;
(iii)contravene any agreement binding on it or any of its property; or
(iv)contravene its constitution.  
									
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11.2Representations and warranties by St Vincent's
On the Effective Date St Vincent's represents and warrants to AVEO that:
(a)(ownership) St Vincent's is the legal owner of the Licensed Patent Rights (or co-owner with the Garvan Institute of Medical Research ("Garvan") with respect to the Licensed Patent Rights listed in Schedule 1 as co-owned by Garvan), including the patents and patent applications set out in Schedule 1, and has the right to grant the full scope of the licenses it grants to AVEO hereunder;  
(b)(no dealings) St Vincent's has not transferred, assigned or granted to any Person any right, title or interest in the Licensed IP in the Therapeutic Field or the Diagnostic Field which is inconsistent with the rights granted to AVEO in clause 2.1, 2.2 or 2.3, other than: (i) the rights of inventors to receive a share of licensing income under St Vincent's intellectual property policies; and (ii) the rights of Garvan under the Inter-Institutional Agreement between St Vincent's and Garvan dated 2 May 2011, as amended on 25 June 2012; 
(c)(filing, prosecution and maintenance) it has filed, prosecuted and maintained the patent applications listed in Schedule 1, and as at the Effective Date all filing, prosecution and maintenance fees which have become due for payment have been paid; 
(d)(disclosure) it has disclosed to AVEO all IPR owned by St Vincent’s that, to the best of its knowledge, is necessary to Exploit products and practice processes in the Therapeutic Field or in the Diagnostic Field, for cachexia, decreased appetite or body weight; 
(e)(duty of candor) to the best of its knowledge, it has not done or omitted to do anything in its dealings with the US Patent and Trademark Office in the filing and prosecution of the US Patent Rights in the Licensed Patent Rights which is a breach of the duty of candor required by applicable United States Law;
(f)(no Claims) it has not received any written Claim to the effect that any other Person has any legal or beneficial interest in the Licensed IP, and to the best of its knowledge there are no facts or circumstances likely to give rise to any such Claim; 
(g)(oppositions etc.) none of the patents or patent applications listed in Schedule 1 is subject to a pending interference action, opposition action, re-examination proceeding, litigation or other similar action by a Third Party challenging such patents or patent applications, other than actions by patent authorities in connection with the prosecution of patent applications; 
(h)(St Vincent’s Research Tools) Schedule 3 is a complete list of all MIC-1 antagonists, reagents and antibodies owned by St Vincent’s that, to the best of the knowledge of [**], (i) were developed in the laboratory of [**] under his supervision before 1 March 2011, (ii) are directly related to the Therapeutic Field or the Diagnostic Field, and (iii) are necessary or useful to AVEO to research and develop Licensed Therapeutic Products in the Therapeutic Field and Licensed Diagnostic Products in the Diagnostic Field in the Territory, on the terms and conditions of this Agreement; and
(i)(Patent costs apportionment) St Vincent's has disclosed to AVEO in writing the Licensed Patent Rights that are licensed to a Third Party to commercially Exploit any product or process as of the Effective Date and the number of such licenses.  
11.3Knowledge of St Vincent's
(a)In clause 11.2(d), the reference to "to the best of the knowledge" of St Vincent's means to the best of the actual knowledge or belief of: (i) [**]; and (ii) 
									
		33
	

[**] in his capacity as an employee of Australian patent attorneys involved in patent management, filing and prosecution, and maintenance of Licensed Patent Rights.  
(b)In clause 11.2(e), the reference to "to the best of the knowledge" of St Vincent's means to the best of the actual knowledge or belief of: (i) [**]; (ii) [**] in his capacity as Australian patent attorney involved in patent management, filing and prosecution, and maintenance of Licensed Patent Rights; (iii) [**] in his capacity as an employee of Australian patent attorneys involved in patent management, filing and prosecution, and maintenance of Licensed Patent Rights; and (iv) [**] in his capacity as US patent counsel involved in patent management, filing and prosecution, and maintenance of the US Patent Rights in the Licensed Patent Rights.  
(c)In clause 11.2(f), the reference to "to the best of the knowledge" of St Vincent's means to the best of the actual knowledge or belief of: (i) [**]; and (ii) [**] in his capacity as Australian patent attorney involved in patent management, filing and prosecution, and maintenance of Licensed Patent Rights; and (iii) [**] in his capacity as an employee of Australian patent attorneys involved in patent management, filing and prosecution, and maintenance of Licensed Patent Rights.  
11.4Investigations and Licensed Patent Rights
(a)AVEO acknowledges that it has had the opportunity to, and has, conducted such investigations as it considers appropriate in relation to the Licensed Patent Rights and the Licensed Know How in existence as at the Effective Date, and has conducted such investigations, including inquiries of St Vincent's, as it has considered necessary.  
(b)Except as set out in clause 11.2, AVEO acknowledges that St Vincent's makes and has made no representation, warranty, statement or promise to the effect:
(i)that any patent will be issued or granted in respect of any Licensed IP in any country in the Territory;
(ii)that if any patent is granted or issued in respect of any Licensed IP in any country in the Territory, such patent is or will be valid or enforceable; or
(iii)that the Exploitation of Licensed Products in any country in the Territory does not or will not infringe the IPR of any Third Party.  
11.5Representation and warranty by AVEO
On the Effective Date AVEO represents and warrants to St Vincent's that: (a) there are no reasonable grounds to believe that in the [**] years following the Effective Date it will not be able to pay its debts as and when they become due and payable; and (b) it does not believe that during the Term it will not be able to pay its debts as and when they become due and payable.  
11.6Exclusion of conditions and warranties
Except for the warranties expressly made in this Agreement, all conditions, warranties, undertakings or representations, express or implied, arising by statute, general law or otherwise are expressly excluded, to the extent permitted by Law.  
11.7Reliance on representations and warranties
Each party acknowledges that the other party has executed this Agreement and agreed to take part in the transactions that this Agreement contemplates in reliance on the representations and warranties that are expressly made in this Agreement.  
									
		34
	

12.LIABILITY AND INDEMNITY
12.1Limitation of liability 
(a)To the extent permitted by Law, the liability of St Vincent's to AVEO under or in connection with this Agreement and the transactions this Agreement contemplates, whether in contract, tort (including negligence and breach of statutory duty) or otherwise is limited to AUD$10 million.  
(b)The limitation of St Vincent's liability in clause 12.1(a) shall not apply to the extent that the arbitrator holds St Vincent's liable, and awards damages to AVEO, for St Vincent's gross negligence or fraud.  
12.2Indirect and consequential loss
Subject to clause 12.3, and to the extent permitted by Law, in no circumstances is either party liable under or in connection with this Agreement or the transactions this Agreement contemplates, whether in contract (including breach of warranty or any other obligation under or in connection with this Agreement), tort (including negligence and breach of statutory duty) or otherwise, to compensate the other party for any special, indirect, incidental, or consequential loss or damage of any nature.  
12.3Indemnity by AVEO
(a)Subject to clause 12.3(b), AVEO shall indemnify and keep indemnified St Vincent's, its Affiliates and its and its Affiliates' directors, officers, employees and agents ("St Vincent's Indemnitees") from and against any Loss as a result of or in respect of any Claim which may be brought or commenced by a Person that is not a St Vincent’s Indemnitee as a result of or in relation to:
(i)a breach by AVEO of any of its representations and warranties or obligations under this Agreement; and
(ii)the Exploitation by AVEO or its Affiliates, or any Sub-licensee of AVEO or its Affiliates of Licensed Products;
(iii)any sale, supply or other disposal by AVEO or its Affiliates, or any Sub-licensee of AVEO or its Affiliates of Licensed Products;
(iv)any personal injury or damage to property caused or allegedly caused by the use of any Licensed Product sold, supplied or otherwise disposed of by AVEO or its Affiliates, or any Sub-licensee of AVEO or its Affiliates; or
(v)any failure of AVEO or its Affiliates, or any Sub-licensee of AVEO or its Affiliates or any of their officers, employees, contractors or agents to comply with any applicable Law.  
(b)AVEO's obligation to indemnify St Vincent's Indemnitees in paragraph (a) shall be reduced if, and shall not apply to the extent that, the Loss or Claim was caused by:
(i)the gross negligence, unlawful conduct or wilful misconduct by St Vincent's, its Affiliates, its or its Affiliates’ directors, employees or agents; or
(ii)a breach by St Vincent's of any of its representations, warranties or obligations under this Agreement.  
(c)AVEO agrees that St Vincent's holds the benefit of the indemnity in clause 12.3(a) on trust for the St Vincent’s Indemnitees and may enforce the indemnity on their behalf and for their benefit.  
									
		35
	

(d)St Vincent’s shall provide AVEO with prompt notice of the Claim giving rise to the indemnification obligation pursuant to this clause 12.3 and subject to clause 12.3(e), allow AVEO the exclusive right to defend (with the reasonable cooperation of St Vincent’s, at AVEO’s expense) or settle such Claim.  St Vincent’s shall have the right to participate, at its own expense and with counsel of its choice, in the defence of any Claim that has been assumed hereunder by AVEO.  
(e)In conducting and controlling a Claim that has been assumed by AVEO under this clause 12.3, AVEO shall:
(i)keep St Vincent's reasonably informed of the progress of the Claim and all material developments in and in relation to it; 
(ii)consult in good faith with St Vincent's in making decisions which are material to the conduct or resolution of the Claim; and 
(iii)have reasonable regard to any comments or suggestions by St Vincent's in relation to the conduct or resolution of the Claim.  
(f)AVEO's obligation to indemnify a St Vincent’s Indemnitee under clause 12.3(a) shall be reduced to the extent any Loss incurred by the St Vincent’s Indemnitee is increased as a result of a failure by St Vincent's to comply with clause 12.3(d).  
13.INSURANCE
13.1AVEO's insurance policies 
AVEO must (and shall ensure its Affiliates) take out Comprehensive General Liability insurance (including Personal & Advertising Injury and Products Liability), in relation to all Licensed Products, consistent with normal business practices of prudent companies similarly situated, to cover its obligations under this Agreement.  
13.2Name of St Vincent's
If requested by St Vincent's, AVEO must ensure that St Vincent's is included on the policies referred to in clause 13.1 as a joint insured or loss payee.  
13.3Certificates of currency
At the request of St Vincent's from time to time, AVEO shall provide to St Vincent's a certificate of currency or other evidence demonstrating its compliance with its obligations under this clause 13.  
13.4Expiry
AVEO shall (and shall ensure its Affiliates) maintain each insurance policy referred to in clause 13.1 until the expiry date of the last Licensed Product supplied, sold or otherwise disposed of by or on behalf of AVEO, its Affiliates or Sub-licensees.  
14.FORCE MAJEURE
14.1Notice and suspension of obligations
If a party to this Agreement is affected, or likely to be affected, by a Force Majeure Event:
(a)that party shall immediately give the other prompt notice of that fact including:
(i)full particulars of the Force Majeure Event;
(ii)an estimate of its likely duration;
									
		36
	

(iii)the obligations affected by it and the extent of its effect on those obligations; and
(iv)the steps taken to rectify it; and
(b)if the Force Majeure Event is a Disruption, then the obligations under this Agreement of the party giving the notice, are suspended to the extent to which they are affected by the relevant Disruption as long as the Disruption continues; and
(c)if the Force Majeure Event is not a Disruption, then the obligations under this Agreement of the party giving the notice, other than obligations under clause 3.3, are suspended to the extent to which they are affected by the relevant Force Majeure Event as long as the Force Majeure Event continues.  
14.2Effort to overcome
A party claiming a Force Majeure Event must use its best endeavours to remove, overcome or minimise the effects of that Force Majeure Event as quickly as possible.  This does not require a party to settle any industrial dispute in any way that it considers inappropriate.  
14.3Termination
If a Force Majeure Event continues for more than 4 months, the other party may terminate this Agreement by giving at least 45 days’ notice.  
15.TERM AND TERMINATION
15.1Term
The rights and obligations of the parties under this Agreement begin on the Effective Date, and unless this Agreement is terminated earlier in accordance with this clause 15 or otherwise, end on the later of:
(a)the date of expiry, lapse, withdrawal or revocation of the last Licensed Patent Right in the Territory to expire, lapse or be withdrawn or revoked; or
(b)the 10th anniversary of the First Commercial Sale of Licensed Products in the last country in the Territory in which a First Commercial Sale is made 
(the "Term").  
15.2Termination by either party
A party may terminate this Agreement:
(a)immediately by notice to the other party in writing if the other party commits a material breach of its obligations under this Agreement (including failure to make a payment or to meet a Milestone) and fails to remedy that material breach within [**] days after receipt of notice from the other party of the material breach requesting that the material breach be remedied; or
(b)immediately by notice to the other party in writing if an Insolvency Event occurs in relation to the other party.  
									
		37
	

15.3Insolvency of St Vincent's
(a)It is the intention of the parties that: 
(i)the occurrence of an Insolvency Event in respect of St Vincent's will not, in itself, impact AVEO's rights under this Agreement, nor adversely impact the right of St Vincent’s (or its successors or assigns) to receive payments; 
(ii)upon the occurrence of an Insolvency Event in respect of St Vincent’s, AVEO, as a licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections; and
(iii)upon the occurrence of an Insolvency Event in respect of St Vincent’s, AVEO shall pay to St Vincent’s (or its successors or assigns), in accordance with the terms of this Agreement, all Milestone Fees, royalties and other payments which would have been payable to St Vincent's pursuant to this Agreement by AVEO, but for the Insolvency Event.  
(b)The provisions of this clause 15.3 are without prejudice to any rights either party (or their respective successors or assigns) may have arising under any applicable insolvency statute or other applicable Law and are effective only to the extent permitted by applicable Law.  
15.4Termination by St Vincent's
(a)Subject to clause 15.4(b), St Vincent's may terminate this Agreement on 30 days' notice in writing if AVEO or its Affiliates or any Sub-licensee of AVEO or its Affiliates challenges or contests the validity, enforceability or registration of any Licensed Patent Rights (a "Patent Challenge"), or causes or induces any other person to make a Patent Challenge.  
(b)If the only Patent Challenge identified in a notice given by St Vincent's under clause 15.4(a) was made, caused or induced by a Sub-licensee (and such Patent Challenge by the Sub-licensee was not itself caused or induced by AVEO), and the Sub-licensee has withdrawn such Patent Challenge before the end of the 30 day notice period, then such notice shall be deemed to have been withdrawn.  
15.5Termination by AVEO
(a)AVEO may terminate this Agreement at any time and for any reason before the first anniversary of the Effective Date, on 60 days' notice in writing.  
(b)Subject to clause 15.5(c), AVEO may terminate this Agreement after the first anniversary of the Effective Date upon no less than 6 months' prior written notice to St Vincent's in the event AVEO terminates its MIC-1 research and development programs:
(i)as a result of failure of Licensed Therapeutic Products in pre-clinical or clinical development; or
(ii)if AVEO forms the reasonable view that further MIC-1 research and development is not commercially viable.  
(c)Clause 15.5(b) does not apply, and the right referred to in clause 15.5(b) is not exercisable, if AVEO is in breach of any obligation under this Agreement.  
15.6Lapse, withdrawal etc. of certain Patent Rights
(a)Subject to clause 15.6(b), AVEO may terminate this Agreement on 60 days' notice in writing if all Patent Rights in the patent applications set forth in Schedule 4 
									
		38
	

lapse, are withdrawn, are revoked, cancelled or disclaimed, or held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision, before the second anniversary of the Effective Date.  
(b)Clause 15.6(a) does not apply, and the right referred to in clause 15.6(a) is not exercisable, if: 
(i)AVEO is in material breach of any obligation under this Agreement (including a failure to make a payment); or
(ii)AVEO or its Affiliates or any Sub-licensee of AVEO or its Affiliates has challenged or contested the validity, enforceability or registration of any Licensed Patent Rights, or has caused or induced any other person to do so.  
15.7Consequences of termination – default or election by AVEO
(a)If this Agreement is terminated by AVEO under clause 15.5(b)(ii) before the first Milestone Fee in Part A of Schedule 2 falls due, then AVEO shall pay to St Vincent's the first Milestone Fee in Part A of Schedule 2 on the date of termination.  
(b)If this Agreement is terminated by AVEO under clause 15.5(b)(ii) after the first Milestone Fee in Part A of Schedule 2 has fallen due but before the second Milestone Fee in Part A of Schedule 2 falls due, then AVEO shall pay to St Vincent's the second Milestone Fee in Part A of Schedule 2 on the date of termination.  
(c)If this Agreement is terminated by AVEO under clause 15.5(b) or in its entirety by St Vincent's under clause 15.2 or 15.4, then: 
(i)by this Agreement AVEO grants to St Vincent's a non-exclusive, perpetual, irrevocable, free license (with the right to Sub-license and grant sub-licenses to Affiliates), under: (a) all IPR in AVEO Improvements, and (b) subject to paragraph (iii), all Know How of AVEO or its Affiliates relating to the research, reduction to practise or development of Licensed Therapeutic Products, Licensed Diagnostic Products and Licensed Processes, to:
(A)Exploit Licensed Therapeutic Products and Licensed Diagnostic Products in the Territory; and
(B)practice or have practiced Licensed Processes in the Therapeutic Field and the Diagnostic Field in the Territory; 
(ii)AVEO shall deliver to St Vincent's within [**] days after the date of termination, all information comprising the AVEO Improvements and Know How referred to in paragraph (i); and
(iii)the license in paragraph (i) does not include a license under the Know How of an Affiliate of AVEO which Controls AVEO, which Know How was created before the date on which such Affiliate became an Affiliate of AVEO.  
15.8Sub-licensees in good standing
(iii)If: 
(a)this Agreement is terminated: (i) in its entirety by St Vincent's under clause 15.2(a); or (ii) in part by St Vincent's under clause 15.11, for failure by AVEO to make a payment under this Agreement; 
(b)before the date on which notice of termination was given under clause 15.2(a) AVEO had granted a Sub-license which complies with clause 2.5(c) and includes provisions to substantially the same effect as those set out in Schedule 6 (an 
									
		39
	

"Eligible Sub-license") which terminates, or terminates in part, as a result of the termination referred to in paragraph (a);
(c)the Sub-licensee under the Eligible Sub-license: (i) is not and was not in material breach of any obligation in the Sub-license agreement; and (ii) did not contribute by any act or omission to the events that led to such termination (or partial termination) and is and was otherwise in good standing under the Sub-licence agreement; and (iii) has not challenged or contested the validity, enforceability or registration of any Licensed Patent Rights, or caused or induced any other person to do so; and
(d)within [**] days of the date of termination of this Agreement (or partial termination) the Sub-licensee: (i) notifies St Vincent's in writing of its desire to become a direct licensee of St Vincent's on the terms and conditions of the Eligible Sub-license; and (ii) pays to St Vincent's all amounts which became due and payable by AVEO under this Agreement but which were unpaid as of the date of termination of this Agreement (or partial termination), 
then St Vincent's shall not unreasonably withhold its consent to entering into a new license agreement with such Sub-licensee on the terms and conditions of the Eligible Sub-license, insofar as it relates to a Sub-license under the Therapeutic License or Diagnostic License, on terms that: (i) the Sub-licensee is a direct licensee of St Vincent's under the Licensed IP rather than AVEO; (ii) all obligations owed by the Sub-licensee to AVEO under the Eligible Sub-license are owed to St Vincent’s; and (iii) the Sub-licensee indemnifies and keeps indemnified St Vincent's, its Affiliates and its and its Affiliates' directors, officers, employees and agents from any Claim, and against any Loss as a result of or in respect of any Claim, which may be brought or commenced by the Sub-licensee, its Affiliates or any Person claiming by or through the Sub-licensee or its Affiliates in respect of any breach by AVEO of the Eligible Sub-license or any of its representations, warranties or obligations under it.  
15.9Regulatory approvals 
If this Agreement is terminated by St Vincent’s, or by AVEO under clause 15.5(b), then within [**] days after the date of termination, AVEO shall, and shall ensure that its Affiliates:
(a)transfer to St Vincent's or its nominee all Authorisations held by it or its Affiliates to commercially Exploit Licensed Products in any country in the Territory;
(b)to the extent any Authorisation referred to in paragraph (a) is not transferrable or assignable under the laws of any jurisdiction, hold the benefit of the Authorisation on trust for St Vincent's or its nominee; and
(c)deliver to St Vincent's or its nominee copies of all documents (in any form or media) held by AVEO or its Affiliates in relation to each Authorisation referred to in paragraph (a), including all files and dossiers held during the Term in order to comply with any applicable Laws or requirements of any Government Agency.  
15.10Return or destruction of Confidential Information
(a)Subject to clauses 15.10(b), within [**] days after termination of this Agreement:
(i)St Vincent's shall return to AVEO or destroy at AVEO's election all Confidential Information of AVEO in the possession, custody or power of St Vincent's or any of its Affiliates, other than the information referred to in clause 15.7(c), if applicable; and
(ii)AVEO shall return to St Vincent's or destroy at St Vincent's election all Confidential Information of St Vincent's, all Licensed Know How and all St 
									
		40
	

Vincent's Research Tools in the possession, custody or power of AVEO or any of its Affiliates and Sub-licensees.  
(b)Each party may retain in its legal department a single copy of the Confidential Information of the other party the purpose of for record keeping and to fulfil the requirements of any applicable Laws.  
15.11Alternatives to termination
If St Vincent's has a right to terminate this Agreement under clause 14.3, 15.2(a) or 15.4, then in addition to any other rights St Vincent's may have and subject to clause 15.12, St Vincent's may in its discretion:
(a)terminate this Agreement as to any particular country, state or territory in the Territory; 
(b)terminate this Agreement as to a particular Licensed Product; 
(c)terminate this Agreement as to a particular Licensed Process;
(d)terminate this Agreement as to certain parts of the Therapeutic Field or the Diagnostic Field;
(e)terminate this Agreement as to particular Licensed IP; or
(f)by notice in writing convert the Therapeutic License to a non-exclusive license as a whole or:
(i)as to any particular country, state or territory in the Territory;
(ii)as to a particular Licensed Therapeutic Product;
(iii)as to a particular Licensed Process;
(iv)as to certain parts of the Therapeutic Field; or
(v)as to particular Licensed IP.  
15.12Restrictions on partial termination
If St Vincent’s exercises its rights under clause 15.11 to partially terminate rights granted under this Agreement, then it shall do so with respect to the applicable country, state or territory in the Territory, Licensed Product, Licensed Process, portion of the Therapeutic Field or Diagnostic Field, or Licensed IP in relation to which St Vincent’s right to terminate this Agreement arose.  For example, if St Vincent's exercises its rights under clause 15.11 to partially terminate rights granted under this Agreement as a result of an uncured material breach by AVEO of its obligation to achieve the Milestone for Marketing Approval for a Licensed Diagnostic Product in Japan, St Vincent’s may do so with respect to Japan or with respect to Licensed Diagnostic Products, but not with respect to the US (and not Japan) or with respect to Licensed Therapeutic Products (and not Licensed Diagnostic Products).  
15.13Survival and accrued rights
Upon termination under this clause 15 or otherwise, this Agreement is at an end as to its future operation except for:
(a)the enforcement of any right or Claim which arises on or has arisen before termination; and
									
		41
	

(b)the rights and obligations of the parties under clauses 1, 6.1, 6.3, 6.4, clauses 8.3(b), 8.3(c) and 8.7 (with respect to any Infringement Claim commenced before the date of termination), and clauses 9, 12, 13, 15, 16, 17 and 19, which survive termination in accordance with their terms; and 
(c)the rights and obligations of the parties under clause 5 and clause 6.3 with respect to:
(i)any Milestone occurring before the date of termination;
(ii)any Net Sales of Licensed Products before the date of termination; and
(iii)any Diagnostic License Commercialisation Income derived from any relevant assignment, Sub-licensing or other dealing before the date of termination.  
16.DISPUTE RESOLUTION
16.1Disputes
If a dispute arises out of or in relation to this Agreement (including any dispute as to breach or termination of this Agreement) (a "Dispute"), the Dispute must be determined in accordance with the procedure in this clause 16, and a party may not commence any court or arbitration proceedings relating to the Dispute unless it has complied with this clause 16, except that a party may seek urgent interlocutory or injunctive relief from any court having competent jurisdiction.  
16.2Notice of Dispute
A party claiming that a Dispute has arisen shall give written notice to the other party specifying the nature of the Dispute (a "Dispute Notice").  
16.3Negotiation
Within [**] days of the receipt by a party of a Dispute Notice, St Vincent's and AVEO shall procure that their respective Chief Executive Officers meet at least [**] (either in person, by webcast or via teleconference) to endeavour to resolve the Dispute expeditiously by negotiation.  The parties must not delegate the function of the Chief Executive Officers to any other person, and each party warrants that its Chief Executive Officer has full authority to resolve any Dispute.  
16.4Resolution of Dispute
If the parties have not resolved the Dispute within [**] days after receipt of a Dispute Notice, if requested by a party the parties shall negotiate whether to use informal dispute resolution techniques such as mediation, expert evaluation or determination or similar techniques agreed by the parties.  
16.5Arbitration
(a)If the parties have not resolved the Dispute within [**] days after receipt of a Dispute Notice (or such further period as the parties agree in writing), then the Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce ("ICC"), by one or more arbitrators appointed in accordance with those Rules, which Rules are deemed to be incorporated by reference into this clause 16.5.  
(b)The seat of the arbitration shall be Singapore and the language of the arbitration shall be English.  
									
		42
	

17.NOTICES
17.1Notices
(a)Any notice, consent or other communication under this Agreement is only effective if it is in writing, signed and either left at the addressee's address or sent to the addressee by mail, fax or electronic form such as email.  
(b)A notice, consent or other communication that complies with this clause is regarded as given and received:
(i)if it is delivered, when it has been left at the addressee's address;
(ii)if it is sent by mail, five Business Days after it is posted; and
(iii)if it is sent by fax or in electronic form, when the addressee actually receives it in full and in legible form.  
17.2Addresses for notices
A party's address and fax number are those set out below, or as the party notifies the other party:
St Vincent's
Address:        Level 4, 406 Victoria Street, Darlinghurst, NSW 2010,
                Australia
Fax number:        +61 2 8382 7172
Attention:        Chief Executive Officer
With a copy to:
Executive Office
Address:    Level 3 deLacy Building, St Vincent’s Hospital, Victoria Street, Darlinghurst NSW 2010, Australia
Fax number:        +61 (0)2 8382 2494
Attention:        Executive Director, St Vincent’s Public Health Services
With a copy to:
Address:    Level 8 Lowy Packer Building, St Vincent’s Hospital, 405 Liverpool Street, Darlinghurst NSW 2010, Australia
Fax number:    +61 (0)2 8382 4965
Attention:    Professor Samuel N Breit, Professor of Medicine and Director of Immunopathology and Head, Cytokine Biology and Inflammation Research Group, St Vincent’s Centre for Applied Medical Research
AVEO
AVEO Pharmaceuticals, Inc.
Address:        One Broadway, 14th Floor, Cambridge, MA  02142  USA
Fax number:    +1 617 621 1406
Attention:     Vice President, Corporate Development and Alliance Management
With a copy to:
AVEO Pharmaceuticals, Inc.
Address:    One Broadway, 14th Floor, Cambridge, MA  02142  USA
Fax number:    +1 617 699 2394
Attention:     Senior Corporate Counsel
									
		43
	

18.AMENDMENT AND ASSIGNMENT
18.1Amendment
This Agreement can only be amended, supplemented, replaced or novated by another document signed by both parties.  
18.2Assignment
(a)Subject to clause 18.2(b), a party may only assign, encumber, declare a trust over or otherwise deal with its rights under this Agreement with the prior written consent of the other party.  
(b)A party may assign its rights under this Agreement to another Person in connection with a merger or transaction under which all or substantially all of a party's business or assets are acquired by that other Person, without the consent of the other party.  
19.GENERAL
19.1Governing law
(a)This Agreement is governed by the laws of New South Wales, Australia.  
(b)Each party submits to the non-exclusive jurisdiction of the courts of the State of New South Wales, Australia, and the state and U.S. courts located in the Commonwealth of Massachusetts, USA, and any court that may hear appeals from any of those courts, for any proceedings seeking urgent interlocutory or injunctive relief in connection with this Agreement.  
(c)Each party irrevocably waives:
(i)any objection to the venue of any proceedings seeking urgent interlocutory or injunctive relief on the ground that they have been brought in an inconvenient forum; and
(ii)any immunity from set off, suits, proceedings and execution to which it or any of its property may now or in the future be entitled under any applicable Law.  
19.2Liability for expenses
Each party shall pay its own expenses incurred in negotiating and executing this Agreement.  
19.3Relationship of the parties
Nothing in this Agreement creates a relationship of employment, partnership or joint venture between the parties under the Laws of any applicable jurisdiction and no party may act or has the authority to act as agent of or in any way bind or commit another party to any obligation.  
19.4Giving effect to this Agreement
Each party shall take such actions and execute such documents as may be reasonably necessary to implement the provisions of this Agreement and to accomplish the purposes of this Agreement and the transactions set forth in this Agreement.  
									
		44
	

19.5Variation of rights
The exercise of a right does not prevent any further exercise of that right or of any other right.  Neither the exercise of a right nor a delay in the exercise of a right operates as an election or variation of the terms of this Agreement.  
19.6Operation of this Agreement
(a)Subject to paragraph (b), this Agreement contains the entire agreement between the parties about its subject matter.  Any previous understanding, agreement, representation or warranty relating to that subject matter is replaced by this Agreement and has no further effect.  
(b)Any right that a Person may have under this Agreement is in addition to, and does not replace or limit, any other right that the Person may have.  
(c)Any provision of this Agreement which is unenforceable or partly unenforceable is, where possible, to be severed to the extent necessary to make this Agreement enforceable, unless this would materially change the intended effect of this Agreement.  
19.7Counterparts
This Agreement may be executed in counterparts.  Delivery of a counterpart of this Agreement by email attachment or fax constitutes an effective mode of delivery.  

									
		45
	

EXECUTED as an agreement as of the Amendment Effective Date
Each person who executes this Agreement on behalf of a party under a power of attorney declares that he or she is not aware of any fact or circumstance that might affect his or her authority to do so under that power of attorney.
			
	SIGNED for ST VINCENT'S HOSPITAL SYDNEY LIMITED, by its duly authorised officer:

	
	/s/ Robert Beetson
	Signature of officer
	Robert Beetson
	Name

			
	SIGNED for AVEO Pharmaceuticals, Inc., by its duly authorised officer:

	
	/s/ Michael P. Bailey
	Signature of officer
	/s/ Michael P. Bailey
	Name

									
		46Exhibit 10.1

 

 

 

 

 

 

LEASE

 

BETWEEN

 

DISCOVERY BUSINESS CENTER LLC

 

AND

 

LANTRONIX, INC.

 

 

 

 

 

 

 

 

 

 

 

 

    	 	1	 

     

    

 

LEASE

 

THIS LEASE is made as of November 5, 2021, by and between
DISCOVERY BUSINESS CENTER LLC, a Delaware limited liability company, hereafter called “Landlord,” and LANTRONIX,
INC., a Delaware corporation, hereafter called “Tenant.”

 

ARTICLE 1. BASIC LEASE PROVISIONS

 

Each reference
in this Lease to the “Basic Lease Provisions” shall mean and refer to the following collective terms, the application
of which shall be governed by the provisions in the remaining Articles of this Lease.

 

		1.	Tenant’s Trade Name: N/A

 

		2.	Premises:	Suite No. 250 (The Premises are more particularly described in Section 2.1.)
	 	 	Building:	48 Discovery, Irvine, CA 92618
	 	 	Project:	Discovery Park (as shown on Exhibit Y to this Lease)

 

		3.	Permitted Use: General office, research and development, light warehousing and any other use permitted
under all applicable laws and zoning.

 

		4.	Estimated Commencement Date: February 1, 2022

 

		5.	Lease Term: 84 months, plus such additional days as may be required to cause this Lease to expire
on the final day of the calendar month.

 

		6.	Basic Rent:

 

	Months of Term or Period	Monthly Rate Per Rentable 

Square Foot	Monthly Basic Rent
	1 to 12	$2.10	$28,910.70
	13 to 24	$2.17	$29,874.39
	25 to 36	$2.25	$30,975.75
	37 to 48	$2.33	$32,077.11
	49 to 60	$2.41	$33,178.47
	61 to 72	$2.49	$34,279.83
	73 to 84	$2.58	$35,518.86

 

Notwithstanding the above schedule of
Basic Rent to the contrary, as long as Tenant is not in Default (as defined in Section 14.1) under this Lease, Tenant shall be entitled
to an abatement of 3 full calendar months of Basic Rent in the aggregate amount of $86,732.10 (i.e. $28,910.70 per month) (the “Abated
Basic Rent”) for the first 3 full calendar months of the Term (the “Abatement Period”). In the event Tenant
Defaults at any time during the Term beyond any applicable “cure” period with the result that Tenant’s right to possession
of the Premises is terminated, then unamortized Abated Basic Rent to the date of such termination (amortized over the initial 84 months
of the Term) shall immediately become due and payable. The payment by Tenant of the unamortized Abated Basic Rent in the event of a Default
shall not limit or affect any of Landlord's other rights, pursuant to this Lease or at law or in equity. Only Basic Rent shall be abated
during the Abatement Period and all other additional rent and other costs and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of this Lease.

 

 

 

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		7.	Expense Recovery Period: Every twelve month period during the Term (or portion thereof during the
first and last Lease years) ending June 30.

 

		8.	Floor Area of Premises: approximately 13,767 rentable square feet

Floor Area of Building: approximately 53,840 rentable square feet

 

		9.	Security Deposit or Letter of Credit: $50,000.00

 

		10.	Broker(s): Irvine Management Company (“Landlord’s Broker”) is the agent
of Landlord exclusively and Newmark Knight Frank (“Tenant’s Broker”) is the agent of Tenant exclusively.

 

		11.	Parking: 55 parking spaces in accordance with the provisions set forth in Exhibit F to this
Lease.

 

		12.	Address for Payments and Notices:

 

	
    LANDLORD

     

    Payment Registration Address:

     

    Email tenantportal@irvinecompany.com
    to request an account for the Tenant Payment Portal.

     

    Notice Address:

     

    THE IRVINE COMPANY LLC

    550 Newport Center Drive

    Newport Beach, CA 92660

    Attn: Senior Vice President, Operations Office Properties
	
    TENANT

     

     

     

    LANTRONIX, INC.

    48 Discovery, Suite 250

    Irvine, CA 92618

 

LIST OF LEASE EXHIBITS (All exhibits, riders
and addenda attached to this Lease are hereby incorporated into and made a part of this Lease):

 

	 	Exhibit A	Description of Premises

	 	Exhibit B	Operating Expenses

	 	Exhibit C	Utilities and Services

	 	Exhibit D	Tenant’s Insurance

	 	Exhibit E	Rules and Regulations

	 	Exhibit F	Parking

	 	Exhibit G	Additional Provisions

	 	Exhibit H	Landlord’s Disclosures

	 	Exhibit I	Irrevocable Standby Letter of Credit Form

	 	Exhibit J	Survey Form

	 	Exhibit X	Work Letter

	 	Exhibit Y	Project Description

 

 

 

 

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ARTICLE 2. PREMISES

 

2.1. LEASED
PREMISES. Landlord leases to Tenant and Tenant leases from Landlord the Premises shown in Exhibit A (the “Premises”),
containing approximately the floor area set forth in Item 8 of the Basic Lease Provisions (the “Floor Area”). The Premises
are located in the building identified in Item 2 of the Basic Lease Provisions (the “Building”), which is a portion
of the project described in Item 2 (the “Project”). Landlord and Tenant stipulate and agree that the Floor Area of
Premises set forth in Item 8 of the Basic Lease Provisions is correct.

 

2.2. ACCEPTANCE
OF PREMISES. Tenant acknowledges that neither Landlord nor any representative of Landlord has made any representation or warranty
with respect to the Premises, the Building or the Project or the suitability or fitness of either for any purpose, except as set forth
in this Lease. Tenant acknowledges that the flooring materials which may be installed within portions of the Premises located on the ground
floor of the Building may be limited by the moisture content of the Building slab and underlying soils. Except as set forth in Section
2.3 below, the taking of possession or use of the Premises by Tenant for any purpose other than construction shall conclusively establish
that the Premises and the Building were in satisfactory condition and in conformity with the provisions of this Lease in all respects,
except for those matters which Tenant shall have brought to Landlord’s attention on a written punch list. The punch list shall be
limited to any items required to be accomplished by Landlord under the Work Letter (if any) attached as Exhibit X, and shall be
delivered to Landlord within 30 days after the Commencement Date (as defined herein). If there is no Work Letter, or if no items are required
of Landlord under the Work Letter, by taking possession of the Premises Tenant accepts the improvements in their existing condition, and
waives any right or claim against Landlord arising out of the condition of the Premises. Nothing contained in this Section 2.2 shall affect
the commencement of the Term or the obligation of Tenant to pay rent. Landlord shall diligently complete all punch list items of which
it is notified as provided above.

 

2.3. GOOD WORKING
ORDER WARRANTY. Landlord warrants to Tenant that the windows and seals, fire sprinkler system, lighting, heating, ventilation and
air conditioning systems and all plumbing and electrical systems serving the Building and the Premises (collectively, the “Building
Systems”), and the roof and structural components of the Building, shall be in good operating condition and in compliance with
current building codes and all other applicable Federal, State and local laws, including but not limited to the Americans with Disabilities
Act (“ADA”), as of the Commencement Date of this Lease. Provided that Tenant shall notify Landlord that the Building
Systems are not in good operating condition within 30 days following the Commencement Date, then Landlord shall, except as otherwise provided
in this Lease, promptly after receipt of such notice from Tenant setting forth the nature and extent of such noncompliance, rectify same
at Landlord’s sole cost and expense and not as part of the Operating Expenses described in Exhibit B of this Lease.

 

ARTICLE 3. TERM

 

3.1. GENERAL.
The term of this Lease (“Term”) shall be for the period shown in Item 5 of the Basic Lease Provisions. The Term shall
commence (“Commencement Date”) on the earlier of (a) the date the Premises are deemed “ready for occupancy”
(as hereinafter defined) and possession thereof is delivered to Tenant, but not earlier than February 1, 2022 or (b) the date Tenant commences
its regular business activities within the Premises. Promptly following request by Landlord, the parties shall memorialize on a form provided
by Landlord (the “Commencement Memorandum”) the actual Commencement Date and the expiration date (“Expiration
Date”) of this Lease; should Tenant fail to execute and return the Commencement Memorandum to Landlord within 10 business days
(or provide specific written objections thereto within that period), then Landlord’s determination of the Commencement and Expiration
Dates as set forth in the Commencement Memorandum shall be conclusive. The Premises shall be deemed “ready for occupancy”
when Landlord, to the extent applicable, (i) has substantially completed all the work required to be completed by Landlord pursuant to
the Work Letter (if any) attached to this Lease but for minor punch list matters, and (ii) has obtained the requisite governmental approvals
for Tenant’s occupancy in connection with such work.

 

3.2. DELAY IN
POSSESSION. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date set forth in Item 4 of the Basic Lease Provisions, this Lease shall not be void or voidable nor shall Landlord be liable
to Tenant for any resulting loss or damage. However, Tenant shall not be liable for any rent until the Commencement Date occurs as provided
in Section 3.1 above, except that if Landlord’s failure to substantially complete all work required of Landlord pursuant to Section
3.1(i) above is attributable to any action or inaction by Tenant (including without limitation any Tenant Delay described in the Work
Letter, if any, attached to this Lease), then the Premises shall be deemed ready for occupancy, and Landlord shall be entitled to full
performance by Tenant (including the payment of rent), as of the date Landlord would have been able to substantially complete such work
and deliver the Premises to Tenant but for Tenant’s delay(s).

 

 

 

 

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ARTICLE 4. RENT AND OPERATING EXPENSES

 

4.1. BASIC RENT.
From and after the Commencement Date, Tenant shall pay to Landlord without deduction or offset, except as provided in this Lease, a Basic
Rent for the Premises in the total amount shown (including subsequent adjustments, if any) in Item 6 of the Basic Lease Provisions (the
“Basic Rent”). If the Commencement Date is other than the first day of a calendar month, any rental adjustment shown
in Item 6 shall be deemed to occur on the first day of the next calendar month following the specified monthly anniversary of the Commencement
Date. The Basic Rent shall be due and payable in advance commencing on the Commencement Date and continuing thereafter on the first day
of each successive calendar month of the Term, as prorated for any partial month. No demand, notice or invoice shall be required. An
installment in the amount of 1 full month’s Basic Rent at the initial rate specified in Item 6 of the Basic Lease Provisions, and
1 month’s estimated Tenant’s Share of Operating Expenses shall be delivered to Landlord not later than the Commencement Date
and shall be applied against the Basic Rent and Operating Expenses first due hereunder; the next installment of Basic Rent shall be due
on the first day of the fifth calendar month of the Term, which installment shall, if applicable, be appropriately prorated to reflect
the amount prepaid for that calendar month.

 

4.2. OPERATING
EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses in accordance with Exhibit B of this Lease.

 

4.3. SECURITY
DEPOSIT. Concurrently with Tenant’s delivery of this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item
9 of the Basic Lease Provisions (the “Security Deposit”), to be held by Landlord as security for the full and faithful
performance of Tenant’s obligations under this Lease, to pay any rental sums, including without limitation such additional rent
as may be owing under any provision hereof, and to maintain the Premises as required by Sections 7.1 and 15.2 or any other provision of
this Lease. Upon any breach of the foregoing obligations by Tenant, Landlord may apply all or part of the Security Deposit as full or
partial compensation. If any portion of the Security Deposit is so applied, Tenant shall within 5 business days after written demand by
Landlord deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. Landlord shall not
be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security
Deposit. In no event may Tenant utilize all or any portion of the Security Deposit as a payment toward any Rent due under this Lease.
Any unapplied balance of the Security Deposit shall be returned to Tenant or, at Landlord’s option, to the last assignee of Tenant’s
interest in this Lease within 30 days following the termination of this Lease and Tenant’s vacation of the Premises. Tenant hereby
waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor laws now or hereafter in effect, in
connection with Landlord’s application of the Security Deposit to prospective rent that would have been payable by Tenant but for
the early termination due to Tenant’s Default (as defined herein).

 

4.4. LETTER
OF CREDIT. Landlord agrees that in lieu of a cash Security Deposit, Tenant may deliver to Landlord, not later than the Commencement
Date, a letter of credit in the amount stated in Item 9 of the Basic Lease Provisions, which letter of credit shall be in form and with
the substance of Exhibit I attached hereto. The letter of credit shall be issued by a financial institution acceptable to Landlord
(and Landlord hereby approves Silicon Valley Bank as an acceptable financial institution) with a branch in Orange County or Santa Clara
County, California, at which draws on the letter of credit will be accepted. The letter of credit shall provide for automatic yearly renewals
throughout the Term of this Lease and shall have an outside expiration date (if any) that is not earlier than 30 days after the expiration
of the Lease Term. In the event the letter of credit is not continuously renewed through the period set forth above, or upon any breach
under this Lease by Tenant, including specifically Tenant’s failure to pay Rent or to abide by its obligations under Sections 7.1
and 15.2 below, Landlord shall be entitled to draw upon all or part of said letter of credit by the issuance of Landlord's sole written
demand to the issuing financial institution. In the event of any such draw, Tenant shall promptly provide Landlord with an additional
letter of credit in an amount sufficient to restore the letter of credit to the amount required hereunder. Any such draw shall be without
waiver of any rights Landlord may have under this Lease or at law or in equity as a result of any Default hereunder by Tenant. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor laws now or hereafter in effect.

 

 

 

 

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ARTICLE 5. USES

 

5.1. USE.
Tenant shall use the Premises only for the purposes stated in Item 3 of the Basic Lease Provisions and for no other use whatsoever. 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; or (iii) schools, temporary employment agencies or other training facilities which are not ancillary to
corporate, executive or professional office use. Tenant shall not do or permit anything to be done in or about the Premises which will
in any way interfere with the rights or quiet enjoyment of other occupants of the Building or the Project, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant permit any nuisance or commit any waste in the Premises or the Project. Tenant shall
not perform any work or conduct any business whatsoever in the Project other than inside the Premises. Tenant shall comply at its expense
with all present and future laws, ordinances and requirements of all governmental authorities that pertain to Tenant or its use of the
Premises, and with all energy usage reporting requirements of Landlord. Pursuant to California Civil Code § 1938, Landlord hereby
states that the Premises have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil Code §
55.52(a)(3)). Pursuant to Section 1938 of the California Civil Code, Landlord hereby provides the following notification to Tenant: “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.”

 

During the Term,
Landlord shall be responsible, at its cost (except to the extent properly included in Project Costs), for correcting any violations of
Title III of the Americans with Disabilities Act (“ADA”) in which it is notified by governmental authorities with respect
to the Common Areas of the Building except for any obligations specifically imposed upon Tenant pursuant to this Lease. Notwithstanding
the foregoing, Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right
to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by law and the right to
appeal any decisions, judgments or rulings to the fullest extent permitted by law. Landlord, after the exhaustion of any and all rights
to appeal or contest, will make all repairs, additions, alterations or improvements necessary to comply with the terms of any final order
or judgment. Notwithstanding the foregoing, Tenant, not Landlord, shall be responsible for the correction of any violations that arise
out of or in connection with any claims brought under any provision of the Americans with Disabilities Act other than Title III, the specific
nature of Tenant's business in the Premises (other than general office use), the acts or omissions of Tenant, its agents, employees or
contractors, Tenant's arrangement of any furniture, equipment or other property in the Premises, any repairs, alterations, additions or
improvements performed by or on behalf of Tenant (including the Tenant Improvements) and any design or configuration of the Premises specifically
requested by Tenant after being informed that such design or configuration may not be in strict compliance with the ADA.

 

5.2. SIGNS.
Provided Tenant continues to occupy the entire Premises, Tenant shall have the non-exclusive right to one exterior “eyebrow”
sign on the Building for Tenant’s name and graphics in a location designated by Landlord, subject to Landlord's right of prior approval
that such exterior signage is in compliance with the Signage Criteria (defined below). Except as provided in the foregoing provisions
of this Section, and except for Landlord’s standard lobby directory and suite signage identifying Tenant’s name and/or logo,
Tenant shall have no right to maintain signs in any location in, on or about the Premises, the Building or the Project and shall not place
or erect any signs that are visible from the exterior of the Building. The size, design, graphics, material, style, color and other physical
aspects of any permitted sign shall be subject to Landlord’s written determination, as determined solely by Landlord, prior to installation,
that signage is in compliance with any covenants, conditions or restrictions encumbering the Premises and Landlord’s signage program
for the Project, as in effect from time to time and approved by the City in which the Premises are located (“Signage Criteria”).
Prior to placing or erecting any such signs, Tenant shall obtain and deliver to Landlord a copy of any applicable municipal or other governmental
permits and approvals, except to Landlord’s lobby directory and standard suite signage. Tenant shall be responsible for all costs
of any permitted sign, including, without limitation, the fabrication, installation, maintenance and removal thereof and the cost of any
permits therefor, except that Landlord shall pay for the initial installation costs only of the standard suite signage. If Tenant fails
to maintain its sign in good condition, or if Tenant fails to remove same upon termination of this Lease and repair and restore any damage
caused by the sign or its removal, Landlord may do so at Tenant’s expense. Landlord shall have the right to temporarily remove any
signs in connection with any repairs or maintenance in or upon the Building and Landlord shall repair and restore any damage caused by
such temporary removal. The term “sign” as used in this Section shall include all signs, designs, monuments, displays,
advertising materials, logos, banners, projected images, pennants, decals, pictures, notices, lettering, numerals or graphics. Tenant’s
exterior signage rights under this Section 5.2 belong solely to Lantronix, Inc., a Delaware corporation, and, subject to Landlord’s
approval, any transferee pursuant to a Permitted Transfer, and any other attempted assignment or transfer of such rights shall be void
and of no force and effect. Should Tenant fail to have the exterior signage installed on or before 6 months from and after the Commencement
Date, then Tenant’s right to install same thereafter shall be deemed null and void.

 

 

 

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5.3 HAZARDOUS MATERIALS.

 

(a)       
For purposes of this Lease, the term “Hazardous Materials” means (i) any “hazardous material” as defined
in Section 25501(n) of the California Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or asbestos, (iii) any toxic
or hazardous materials, substances, wastes or materials as defined pursuant to any other applicable state, federal or local law or regulation,
and (iv) any other substance or matter which may result in liability to any person or entity as a result of such person’s possession,
use, storage, release or distribution of such substance or matter under any statutory or common law theory.

 

(b)       
Tenant shall not cause or permit any Hazardous Materials to be brought upon, stored, used, generated, released or disposed of on, under,
from or about the Premises (including without limitation the soil and groundwater thereunder) without the prior written consent of Landlord,
which consent may be given or withheld in Landlord’s sole and absolute discretion. Notwithstanding the foregoing, Tenant shall have
the right, without obtaining prior written consent of Landlord, to utilize within the Premises a reasonable quantity of standard office
products that may contain Hazardous Materials (such as photocopy toner, “White Out”, and the like), provided however,
that (i) Tenant shall maintain such products in their original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise comply with all applicable laws with respect to such products,
and (ii) all of the other terms and provisions of this Section 5.3 shall apply with respect to Tenant’s storage, use and disposal
of all such products. Landlord may, in its sole and absolute discretion, place such conditions as Landlord deems appropriate with respect
to Tenant’s use, storage and/or disposal of any Hazardous Materials requiring Landlord’s consent. Tenant understands that
Landlord may utilize an environmental consultant to assist in determining conditions of approval in connection with the storage, use,
release, and/or disposal of Hazardous Materials by Tenant on or about the Premises, and/or to conduct periodic inspections of the storage,
generation, use, release and/or disposal of such Hazardous Materials by Tenant on and from the Premises, and Tenant agrees that any costs
incurred by Landlord in connection therewith shall be reimbursed by Tenant to Landlord as additional rent hereunder upon demand.

 

(c)       
Prior to the execution of this Lease, Tenant shall complete, execute and deliver to Landlord a Hazardous Material Survey Form (the “Survey
Form”) in the form of Exhibit J attached hereto. The completed Survey Form shall be deemed incorporated into this Lease
for all purposes, and Landlord shall be entitled to rely fully on the information contained therein. Following the written request of
Landlord on or after each anniversary of the Commencement Date until the expiration or sooner termination of this Lease, Tenant shall
disclose to Landlord in writing the names and amounts of all Hazardous Materials which were stored, generated, used, released and/or disposed
of on, under or about the Premises for the twelve-month period prior thereto, and which Tenant desires to store, generate, use, release
and/or dispose of on, under or about the Premises for the succeeding twelve-month period. In addition, to the extent Tenant is permitted
to utilize Hazardous Materials upon the Premises, Tenant shall promptly provide Landlord with complete and legible copies of all the following
environmental documents relating thereto: reports filed pursuant to any self-reporting requirements; permit applications, permits, monitoring
reports, emergency response or action plans, workplace exposure and community exposure warnings or notices and all other reports, disclosures,
plans or documents (even those which may be characterized as confidential) relating to water discharges, air pollution, waste generation
or disposal, and underground storage tanks for Hazardous Materials; orders, reports, notices, listings and correspondence (even those
which may be considered confidential) of or concerning the release, investigation, compliance, cleanup, remedial and corrective actions,
and abatement of Hazardous Materials; and all complaints, pleadings and other legal documents filed by or against Tenant related to Tenant’s
storage, generation, use, release and/or disposal of Hazardous Materials.

 

(d)       
Landlord and its agents shall have the right, but not the obligation, to inspect, sample and/or monitor the Premises and/or the soil
or groundwater thereunder at any time to determine whether Tenant is complying with the terms of this Section 5.3, and in connection
therewith Tenant shall provide Landlord with reasonable access to all facilities, records and personnel related thereto. Except in
cases of emergency (where no notice shall be required), Landlord shall provide Tenant with at least 24 hours’ prior verbal
notice or any such inspection, which shall occur during normal business hours, and Landlord shall use its reasonable efforts to
minimize any interference with Tenant’s business operations during any such inspection. If Tenant is not in compliance with
any of the provisions of this Section 5.3, or in the event of a release of any Hazardous Material on, under, from or about the
Premises caused or permitted by Tenant, its agents, employees, contractors, licensees, subtenants or invitees, Landlord and its
agents shall have the right, but not the obligation, without limitation upon any of Landlord’s other rights and remedies under
this Lease, to immediately enter upon the Premises without notice and to discharge Tenant’s obligations under this Section 5.3
at Tenant’s expense, including without limitation the taking of emergency or long-term remedial action. Landlord and its
agents shall endeavor to minimize interference with Tenant’s business in connection with any such entry in the Premises. In
addition, Landlord, at Tenant’s expense, shall have the right, but not the obligation, to join and participate in any legal
proceedings or actions initiated in connection with any claims arising out of the storage, generation, use, release and/or disposal
by Tenant or its agents, employees, contractors, licensees, subtenants or invitees of Hazardous Materials on, under, from or about
the Premises.

 

 

 

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(e)       
If the presence of any Hazardous Materials on, under, from or about the Premises or the Project caused or permitted by Tenant or its agents,
employees, contractors, licensees, subtenants or invitees results in (i) injury to any person, (ii) injury to or any contamination of
the Premises or the Project, or (iii) injury to or contamination of any real or personal property wherever situated, Tenant, at its expense,
shall promptly take all actions necessary to return the Premises and the Project and any other affected real or personal property owned
by Landlord to the condition existing prior to the introduction of such Hazardous Materials and to remedy or repair any such injury or
contamination, including without limitation, any cleanup, remediation, removal, disposal, neutralization or other treatment of any such
Hazardous Materials. Notwithstanding the foregoing, Tenant shall not, without Landlord’s prior written consent, which consent may
be given or withheld in Landlord’s sole and absolute discretion, take any remedial action in response to the presence of any Hazardous
Materials on, under, from or about the Premises or the Project or any other affected real or personal property owned by Landlord or enter
into any similar agreement, consent, decree or other compromise with any governmental agency with respect to any Hazardous Materials claims;
provided however, Landlord’s prior written consent shall not be necessary in the event that the presence of Hazardous Materials
on, under, from or about the Premises or the Project or any other affected real or personal property owned by Landlord (i) imposes an
immediate threat to the health, safety or welfare of any individual and (ii) is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Landlord’s consent before taking such action. To the fullest extent permitted by law,
Tenant shall indemnify, hold harmless, protect and defend (with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord’s interest in the Premises and the Project and any other real or personal property owned by Landlord from
and against any and all liabilities, losses, damages, diminution in value, judgments, fines, demands, claims, recoveries, deficiencies,
costs and expenses (including without limitation attorneys’ fees, court costs and other professional expenses), whether foreseeable
or unforeseeable, arising directly or indirectly out of the use, generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the Premises, the Building or the Project and any other real or personal
property owned by Landlord caused or permitted by Tenant, its agents, employees, contractors, licensees, subtenants or invitees. Such
indemnity obligation shall specifically include, without limitation, the cost of any required or necessary repair, restoration, cleanup
or detoxification of the Premises, the Building and the Project and any other real or personal property owned by Landlord, the preparation
of any closure or other required plans, whether such action is required or necessary during the Term or after the expiration of this Lease
and any loss of rental due to the inability to lease the Premises or any portion of the Building or Project as a result of such Hazardous
Materials, the remediation thereof or any repair, restoration or cleanup related thereto. If it is at any time discovered that Tenant
or its agents, employees, contractors, licensees, subtenants or invitees may have caused or permitted the release of any Hazardous Materials
on, under, from or about the Premises, the Building or the Project or any other real or personal property owned by Landlord, Tenant shall,
at Landlord’s request, immediately prepare and submit to Landlord a comprehensive plan, subject to Landlord’s approval, specifying
the actions to be taken by Tenant to return the Premises, the Building or the Project or any other real or personal property owned by
Landlord to the condition existing prior to the introduction of such Hazardous Materials. Upon Landlord’s approval of such plan,
Tenant shall, at its expense, and without limitation of any rights and remedies of Landlord under this Lease or at law or in equity, immediately
implement such plan and proceed to cleanup, remediate and/or remove all such Hazardous Materials in accordance with all applicable laws
and as required by such plan and this Lease. The provisions of this Section 5.3(e) shall expressly survive the expiration or sooner termination
of this Lease.

 

(f)        
Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly described in Exhibit H attached hereto. Tenant shall have
no liability or responsibility with respect to the Hazardous Materials facts described in Exhibit H, nor with respect to any Hazardous
Materials which Tenant proves were not caused or permitted by Tenant, its agents, employees, contractors, licensees, subtenants or invitees.
Notwithstanding the preceding two sentences, Tenant agrees to notify its agents, employees, contractors, licensees, subtenants, and invitees
of any exposure or potential exposure to Hazardous Materials at the Premises that Landlord brings to Tenant’s attention. Tenant
hereby acknowledges that this disclosure satisfies any obligation of Landlord to Tenant pursuant to California Health & Safety Code
Section 25359.7, or any amendment or substitute thereto or any other disclosure obligations of Landlord. Landlord shall take responsibility,
at its sole cost and expense, for any governmentally-ordered clean-up, remediation, removal, disposal, neutralization or other treatment
of those Hazardous Materials conditions described in this Section 5.3(f) for which Tenant has no liability or responsibility. The foregoing
obligation on the part of Landlord shall include the reasonable costs (including, without limitation, reasonable attorney’s fees)
of defending Tenant from and against any legal action or proceeding instituted by any governmental agency in connection with such clean-up,
remediation, removal, disposal, neutralization or other treatment of such conditions, provided that Tenant promptly tenders such defense
to Landlord. Tenant agrees to notify its agents, employees, contractors, licensees, and invitees of any exposure or potential exposure
to Hazardous Materials at the Premises that Landlord brings to Tenant’s attention.

 

 

 

    	 	8	 

     

    

 

Except as disclosed
in Exhibit H (and/or as may otherwise be disclosed to Tenant in writing), Landlord warrants that, to “Landlord’s knowledge”
(as hereinafter defined), there are no Hazardous Materials in or about the Premises as of the date of this Lease which are in violation
of any applicable federal, state or local law, ordinance or regulation. As used herein, “Landlord’s knowledge” shall
mean the actual knowledge, without duty of inquiry or investigation, of the current employees or authorized agents of Landlord responsible
for Hazardous Materials compliance matters.

 

ARTICLE 6. LANDLORD SERVICES

 

6.1. UTILITIES
AND SERVICES. Landlord and Tenant shall be responsible to furnish those utilities and services to the Premises to the extent provided
in Exhibit C, subject to the conditions and payment obligations and standards set forth in this Lease. Landlord shall not be liable
for any failure to furnish any services or utilities when the failure is the result of any accident or other cause beyond Landlord’s
reasonable control, nor shall Landlord be liable for damages resulting from power surges or any breakdown in telecommunications facilities
or services. Landlord’s temporary inability to furnish any services or utilities shall not entitle Tenant to any damages, relieve
Tenant of the obligation to pay rent or constitute a constructive or other eviction of Tenant, except that Landlord shall diligently attempt
to restore the service or utility promptly. Tenant shall comply with all rules and regulations which Landlord may reasonably establish
for the provision of services and utilities, and shall cooperate with all reasonable conservation practices established by Landlord. Landlord
shall at all reasonable times have free access to all electrical and mechanical installations of Landlord. However, if the Premises, or
a material portion of the Premises, are made untenantable for a period in excess of 5 consecutive business days as a result of a service
interruption or repair that is reasonably within the control of Landlord to correct and through no fault of Tenant and for reasons other
than as contemplated in Article 11, then Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder
during the period beginning on the 6th consecutive business day of the service interruption or repair and ending on the day the service
has been restored.

 

6.2. OPERATION
AND MAINTENANCE OF COMMON AREAS. During the Term, Landlord shall operate all Common Areas within the Building and the Project. The
term “Common Areas” shall mean all areas within the Building and other buildings in the Project which are not held
for exclusive use by persons entitled to occupy space, and all other appurtenant areas and improvements provided by Landlord for the common
use of Landlord and other tenants and their respective employees and invitees of the Building and other buildings in the Project, including
without limitation parking areas and structures, driveways, sidewalks, landscaped and planted areas, hallways and interior stairwells
not located within the premises of any tenant, common electrical rooms, entrances and lobbies, elevators, and restrooms not located within
the premises of any tenant.

 

6.3. COMMON
AREAS. The occupancy by Tenant of the Premises shall include the use of the Common Areas in common with Landlord and with all others
for whose convenience and use the Common Areas may be provided by Landlord, subject, however, to compliance with Rules and Regulations
set forth in Exhibit E. Landlord shall at all times during the Term have exclusive control of the Common Areas, and may restrain
or permit any use or occupancy, except as otherwise provided in this Lease or in Landlord’s rules and regulations. Tenant shall
keep the Common Areas clear of any obstruction or unauthorized use related to Tenant’s operations. Landlord may temporarily close
any portion of the Common Areas for repairs, remodeling and/or alterations, to prevent a public dedication or the accrual of prescriptive
rights, or for any other reasonable purpose, so long as such closure of the Common Areas shall not unreasonably and adversely interfere
with Tenant’s use of the Premises or to the parking areas.

 

6.4. CHANGES
AND ADDITIONS BY LANDLORD. Landlord reserves the right to make alterations or additions to the Building or the Project or to the attendant
fixtures, equipment and Common Areas, and such change shall not entitle Tenant to any abatement of rent or other claim against Landlord.
No change by Landlord to the Common Areas shall: (i) materially interfere with access to the Premises from the parking areas, or (ii)
reduce the number of vehicle parking spaces to which Tenant is entitled under Exhibit F of this Lease.

 

ARTICLE 7. REPAIRS AND MAINTENANCE

 

7.1. TENANT’S
MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Tenant at its sole expense shall make all repairs necessary to keep the Premises
and all improvements and fixtures therein in good condition and repair, excepting ordinary wear and tear. Notwithstanding Section 7.2
below, Tenant’s maintenance obligation shall include without limitation all appliances, interior glass, doors, door closures, hardware,
fixtures, electrical, plumbing, fire extinguisher equipment and other equipment installed in the Premises and all Alterations constructed
by Tenant pursuant to Section 7.3 below, together with any supplemental HVAC equipment servicing only the Premises. All repairs and other
work performed by Tenant or its contractors shall be subject to the terms of Sections 7.3 and 7.4 below. Alternatively, should Landlord
or its management agent agree to make a repair on behalf of Tenant and at Tenant’s request, Tenant shall promptly reimburse Landlord
as additional rent for all reasonable costs incurred (including the standard supervision fee of 15%) upon submission of an invoice.

 

 

 

    	 	9	 

     

    

 

7.2. LANDLORD’S
MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Landlord shall provide service, maintenance and repair with respect to the
heating, ventilating and air conditioning (“HVAC”) equipment of the Building (exclusive of any supplemental HVAC equipment
servicing only the Premises) and shall maintain in good repair the Common Areas, roof, foundations, footings, the exterior surfaces of
the exterior walls of the Building (including exterior glass), and the structural, electrical, mechanical and plumbing systems of the
Building (including elevators, if any, serving the Building), except to the extent provided in Section 7.1 above. Landlord need not make
any other improvements or repairs except as specifically required under this Lease, and nothing contained in this Section 7.2 shall limit
Landlord’s right to reimbursement from Tenant for maintenance, repair costs and replacement costs as provided elsewhere in this
Lease. Notwithstanding any provision of the California Civil Code or any similar or successor laws to the contrary, Tenant understands
that it shall not make repairs at Landlord’s expense or by rental offset. Except as provided in Section 11.1 and Article 12 below,
there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business
arising from the making of any repairs, alterations or improvements to any portion of the Building, including repairs to the Premises,
nor shall any related activity by Landlord constitute an actual or constructive eviction; provided, however, that in making repairs, alterations
or improvements, Landlord shall interfere as little as reasonably practicable with the conduct of Tenant’s business in 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 any similar or successor laws now or hereafter in effect.

 

7.3. ALTERATIONS.
Except for cosmetic alteration projects that do not exceed $10,000.00 during each calendar year, that do not require a permit from the
City of Irvine and that do not affect the structural, electrical or mechanical components or systems of the Building, are not visible
from the exterior of the Premises, do not change the basic floor plan of the Premises, and utilize only Landlord’s building standard
materials (which work shall require notice to Landlord but not Landlord’s consent), Tenant shall make no alterations, additions,
decorations, or improvements (collectively referred to as “Alterations”) to the Premises without the prior written
consent of Landlord. Landlord’s consent shall not be unreasonably withheld, conditioned or delayed as long as the proposed Alterations
do not affect the structural, electrical or mechanical components or systems of the Building, are not visible from the exterior of the
Premises, do not change the basic floor plan of the Premises, and utilize only Landlord’s building standard materials (“Standard
Improvements”). Landlord may impose, as a condition to its consent, any requirements that Landlord in its discretion may deem
reasonable or desirable. Without limiting the generality of the foregoing, Tenant shall use Landlord’s designated mechanical and
electrical contractors for all Alterations work affecting the mechanical or electrical systems of the Building. Should Tenant perform
any Alterations work that would necessitate any ancillary Building modification or other expenditure by Landlord, then Tenant shall promptly
fund the cost thereof to Landlord. Tenant shall obtain all required permits for the Alterations and shall perform the work in compliance
with all applicable laws, regulations and ordinances with contractors reasonably acceptable to Landlord, and except for cosmetic Alterations
not requiring a permit, Landlord shall be entitled to a supervision fee in the amount of 5% of the cost of the Alterations. Any request
for Landlord’s consent shall be made in writing and shall contain architectural plans describing the work in detail reasonably satisfactory
to Landlord. Landlord may elect to cause its architect to review Tenant’s architectural plans, and the reasonable cost of that review
shall be reimbursed by Tenant. Should the Alterations proposed by Tenant and consented to by Landlord change the floor plan of the Premises,
then Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD disks compatible with Landlord’s systems. Alterations
shall be constructed in a good and workmanlike manner using materials of a quality reasonably approved by Landlord Unless Landlord otherwise
agrees in writing, all Alterations affixed to the Premises, including without limitation all Tenant Improvements constructed pursuant
to the Work Letter (except as otherwise provided in the Work Letter), but excluding moveable trade fixtures and furniture, shall become
the property of Landlord and shall be surrendered with the Premises at the end of the Term, except that Landlord may, by notice to Tenant
given simultaneously with Landlord’s consent, require Tenant to remove by the Expiration Date, or sooner termination date of this
Lease, all or any Alterations (including without limitation all telephone and data cabling) installed either by Tenant or by Landlord
at Tenant’s request (collectively, the “Required Removables”), and to replace any non-Standard Improvements with
the applicable Standard Improvements. Tenant, at the time it requests approval for a proposed Alteration, may request in writing that
Landlord advise Tenant whether the Alteration or any portion thereof, is a Required Removable. Within 10 days after receipt of Tenant’s
request, Landlord shall advise Tenant in writing as to which portions of the subject Alterations are Required Removables. In connection
with its removal of Required Removables, Tenant shall repair any damage to the Premises arising from that removal and shall restore the
affected area to its preexisting condition, reasonable wear and tear excepted.

 

 

 

    	 	10	 

     

    

 

7.4. MECHANIC’S
LIENS. Tenant shall keep the Premises free from any liens arising out of any work performed, materials furnished, or obligations incurred
by or for Tenant. Upon request by Landlord, Tenant shall promptly cause any such lien to be released by posting a bond in accordance with
California Civil Code Section 8424 or any successor statute. In the event that Tenant shall not, within 15 days following the imposition
of any lien, cause the lien to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other
available remedies, the right to cause the lien to be released by any means it deems proper, including payment of or defense against the
claim giving rise to the lien. All expenses so incurred by Landlord, including Landlord’s attorneys’ fees, shall be reimbursed
by Tenant promptly following Landlord’s demand, together with interest from the date of payment by Landlord at the maximum rate
permitted by law until paid. Tenant shall give Landlord no less than 20 days’ prior notice in writing before commencing construction
of any kind on the Premises.

 

7.5. ENTRY AND
INSPECTION. Landlord shall at all reasonable times and with reasonably prior verbal notice (at least 24 hours), except in emergencies
or to provide Building services, have the right to enter the Premises to inspect them, to supply services in accordance with this Lease,
to make repairs and renovations as reasonably deemed necessary by Landlord, and to submit the Premises to prospective or actual purchasers
or encumbrance holders (or, during the final twelve months of the Term or when an uncured Default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement of rent except as provided elsewhere in this Lease. If
reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions. If,
as a result of work being performed by Landlord, Landlord temporarily closes all or any portion of the Premises for a period in excess
of 5 consecutive business day(s), Tenant, as its sole remedy, shall be entitled to receive a per diem abatement of Basic Rent in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented from using, and does not use, bears to the total rentable
area of the Premises during the period beginning on the 6th consecutive business day of closure and ending on the date on which the Premises
are returned to Tenant in a tenantable condition. Tenant, however, shall not be entitled to an abatement if the repairs, alterations and/or
additions to be performed are required as a result of the acts or omissions of Tenant, its agents, employees or contractors, including,
without limitation, a Default by Tenant in its maintenance and repair obligations under the Lease. Except in emergencies or to provide
Building services, Landlord shall provide Tenant with reasonable prior verbal notice of entry and shall use reasonable efforts to minimize
any interference with Tenant’s use of the Premises.

 

ARTICLE 8. SPACE PLANNING AND SUBSTITUTION

 

Landlord shall
have the right, upon providing not less than 45 days prior written notice, to move Tenant to other space of comparable size in the Building
or in the Project or in other space owned by Landlord or its affiliate(s) within 3 miles of the Building. The new space shall be provided
with improvements of comparable quality to those within the Premises. Landlord shall pay the reasonable out-of-pocket costs to relocate
and reconnect Tenant’s personal property and equipment within the new space; provided that Landlord may elect to cause such work
to be done by its contractors. Landlord shall also reimburse Tenant for such other reasonable out-of-pocket costs that Tenant may incur
in connection with the relocation, including without limitation necessary stationery revisions. Within 10 days following request by Landlord,
Tenant shall execute an amendment to this Lease prepared by Landlord to memorialize the relocation. Should Tenant fail timely to execute
and deliver the amendment to Landlord, or should Tenant thereafter fail to comply with the terms thereof, then Landlord may at its option
elect to terminate this Lease upon not less than 60 days prior written notice to Tenant.

 

ARTICLE 9. ASSIGNMENT AND SUBLETTING

 

9.1. RIGHTS OF PARTIES.

 

(a)       
Except as otherwise specifically provided in this Article 9, Tenant may not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant’s interest in this Lease, or permit the Premises to be occupied by anyone
other than Tenant (each, a “Transfer”), without Landlord’s prior written consent, which consent shall not unreasonably
be withheld, conditioned or delayed in accordance with the provisions of Section 9.1(b). For purposes of this Lease, references to any
subletting, sublease or variation thereof shall be deemed to apply not only to a sublease effected directly by Tenant, but also to a sub-subletting
or an assignment of subtenancy by a subtenant at any level. Except as otherwise specifically provided in this Article 9, no Transfer (whether
voluntary, involuntary or by operation of law) shall be valid or effective without Landlord’s prior written consent and, at Landlord’s
election, such a Transfer shall constitute a material default of this Lease.

 

 

 

    	 	11	 

     

    

 

(b)       
Except as otherwise specifically provided in this Article 9, if Tenant or any subtenant hereunder desires to transfer an interest in this
Lease, Tenant shall first notify Landlord in writing and shall request Landlord’s consent thereto. Tenant shall also submit to Landlord
in writing: (i) the name and address of the proposed transferee; (ii) the nature of any proposed subtenant’s or assignee’s
business to be carried on in the Premises; (iii) the terms and provisions of any proposed sublease or assignment (including without limitation
the rent and other economic provisions, term, improvement obligations and commencement date); (iv) evidence that the proposed assignee
or subtenant will comply with the requirements of Exhibit D to this Lease; and (v) any other information requested by Landlord
and reasonably related to the Transfer. Landlord shall not unreasonably withhold its consent, provided: (1) the use of the Premises will
be consistent with the provisions of this Lease and with Landlord’s commitment to other tenants of the Building and Project; (2)
any proposed subtenant or assignee demonstrates that it is financially responsible by submission to Landlord of all reasonable information
as Landlord may request concerning the proposed subtenant or assignee, including, but not limited to, a balance sheet of the proposed
subtenant or assignee as of a date within 90 days of the request for Landlord’s consent and statements of income or profit and loss
of the proposed subtenant or assignee for the two-year period preceding the request for Landlord’s consent; (3) the proposed assignee
or subtenant is neither an existing tenant or occupant of the Building or Project nor a prospective tenant with whom Landlord or Landlord’s
affiliate has been actively negotiating to become a tenant at the Building or Project, except that Landlord will not enforce this restriction
if it does not have sufficient available space to accommodate the proposed transferee; and (4) the proposed transferee is not an SDN (as
defined below) and will not impose additional burdens or security risks on Landlord. If Landlord consents to the proposed Transfer, then
the Transfer may be effected within 90 days after the date of the consent upon the terms described in the information furnished to Landlord;
provided that any material change in the terms shall be subject to Landlord’s consent as set forth in this Section 9.1(b). Landlord
shall approve or disapprove any requested Transfer within 20 days following receipt of Tenant’s written notice and the information
set forth above. Except in connection with a Permitted Transfer (as defined below), if Landlord approves the Transfer Tenant shall pay
a transfer fee of $750.00 to Landlord concurrently with Tenant’s execution of a Transfer consent prepared by Landlord. Notwithstanding
the foregoing, however, should Landlord so elect to recapture the portion of the Premises Tenant is proposing to transfer, Tenant may,
by notice to Landlord within 5 business days thereafter, elect to rescind its transfer request, in which event Landlord’s recapture
election shall be null and void and Tenant will not consummate its proposed transfer.

 

(c)       
Notwithstanding the provisions of Subsection (b) above, and except in connection with a “Permitted Transfer” (as defined
below), in lieu of consenting to a proposed assignment or subletting of all or substantially all of the Premises for all or substantially
all of the remaining Term, Landlord may elect to terminate this Lease in its entirety in the event of an assignment, or terminate this
Lease as to the portion of the Premises proposed to be subleased with a proportionate abatement in the rent payable under this Lease,
such termination to be effective on the date that the proposed sublease or assignment would have commenced. Landlord may thereafter, at
its option, assign or re-let any space so recaptured to any third party, including without limitation the proposed transferee identified
by Tenant. Tenant shall not be obligated to pay Landlord any additional Rent or other consideration which Tenant receives as a result
of a Permitted Transfer of this Lease to an Affiliate.

 

(d)       
Should any Transfer occur, Tenant shall, except in connection with a Permitted Transfer, promptly pay or cause to be paid to Landlord,
as additional rent, 50% of any amounts paid by the assignee or subtenant, however described and whether funded during or after the Lease
Term, to the extent such amounts are in excess of the sum of (i) the scheduled Rent payable by Tenant hereunder (or, in the event of a
subletting of only a portion of the Premises, the Rent allocable to such portion as reasonably determined by Landlord) and (ii) the direct
out-of-pocket costs, as evidenced by third party invoices provided to Landlord, incurred by Tenant to effect the Transfer, which costs
shall be amortized over the remaining Term of this Lease or, if shorter, over the term of the sublease.

 

(e)       
The sale of all or substantially all of the assets of Tenant (other than bulk sales in the ordinary course of business), the merger or
consolidation of Tenant, the sale of all or substantially all of Tenant’s capital stock, or any other direct or indirect change
of control of Tenant, including, without limitation, change of control of Tenant’s parent company or a merger by Tenant or its
parent company, shall be deemed a Transfer within the meaning and provisions of this Article. Notwithstanding the foregoing, Tenant may
assign this Lease to a successor to Tenant by merger, consolidation or the purchase of substantially all of Tenant’s assets, or
assign this Lease or sublet all or a portion of the Premises to an Affiliate (defined below), without the consent of Landlord but subject
to the provisions of Section 9.2, provided that all of the following conditions are satisfied (a “Permitted Transfer”):
(i) Tenant is not then in Default hereunder; (ii) Tenant gives Landlord written notice at least 10 business days before such Permitted
Transfer; and (iii) the successor entity resulting from any merger or consolidation of Tenant or the sale of all or substantially all
of the assets of Tenant, has a net worth (computed in accordance with generally accepted accounting principles, except that intangible
assets such as goodwill, patents, copyrights, and trademarks shall be excluded in the calculation (“Net Worth”)) at
the time of the Permitted Transfer that is at least equal to the Net Worth of Tenant immediately before the Permitted Transfer. Tenant’s
notice to Landlord shall include reasonable information and documentation evidencing the Permitted Transfer and showing that each of
the above conditions has been satisfied. If requested by Landlord, Tenant’s successor shall sign and deliver to Landlord a commercially
reasonable form of assumption agreement. “Affiliate” shall mean an entity controlled by, controlling or under common
control with Tenant. Notwithstanding anything in this Lease to the contrary, any rights of Tenant under this Lease that are personal
to Lantronix, Inc., a Delaware corporation, shall also inure to the benefit of any transferee pursuant to a Permitted Transfer.

 

 

 

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9.2. EFFECT
OF TRANSFER. No subletting or assignment, even with the consent of Landlord, shall relieve Tenant, or any successor-in-interest to
Tenant hereunder, of its obligation to pay rent and to perform all its other obligations under this Lease. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall be liable jointly and severally with Tenant for the payment
of all rent, and for the due performance of all of Tenant’s obligations, under this Lease. Such joint and several liability shall
not be discharged or impaired by any subsequent modification or extension of this Lease. Consent by Landlord to one or more transfers
shall not operate as a waiver or estoppel to the future enforcement by Landlord of its rights under this Lease.

 

9.3. SUBLEASE
REQUIREMENTS. Any sublease, license, concession or other occupancy agreement entered into by Tenant shall be subordinate and subject
to the provisions of this Lease, and if this Lease is terminated during the term of any such agreement, Landlord shall have the right
to: (i) treat such agreement 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 (or licensor, as applicable) under such agreement. Landlord shall not, by reason of such attornment
or the collection of sublease rentals, be deemed liable to the subtenant for the performance of any of Tenant’s obligations under
the sublease. If Tenant is in Default (hereinafter defined), Landlord is irrevocably authorized to direct any transferee under any such
agreement to make all payments under such agreement directly to Landlord (which Landlord shall apply towards Tenant’s obligations
under this Lease) until such Default is cured. No collection or acceptance of rent by Landlord from any transferee shall be deemed a waiver
of any provision of Article 9 of this Lease, an approval of any transferee, or a release of Tenant from any obligation under this Lease,
whenever 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.

 

ARTICLE 10. INSURANCE AND INDEMNITY

 

10.1. TENANT’S
INSURANCE. Tenant, at its sole cost and expense, shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the Commencement Date.

 

10.2. LANDLORD’S
INSURANCE. Landlord shall provide the following types of insurance, with or without deductible and in amounts and coverages as may
be determined by Landlord in its discretion: property insurance, subject to standard exclusions (such as, but not limited to, earthquake
and flood exclusions), covering the Building or Project. In addition, Landlord may, at its election, obtain insurance coverages for such
other risks as Landlord or its Mortgagees may from time to time deem appropriate, including earthquake and commercial general liability
coverage. Landlord shall not be required to carry insurance of any kind on any tenant improvements or Alterations in the Premises installed
by Tenant or its contractors or otherwise removable by Tenant (collectively, “Tenant Installations”), or on any trade
fixtures, furnishings, equipment, interior plate glass, signs or items of personal property in the Premises, and Landlord shall not be
obligated to repair or replace any of the foregoing items should damage occur. All proceeds of insurance maintained by Landlord upon the
Building and Project shall be the property of Landlord, whether or not Landlord is obligated to or elects to make any repairs.

 

10.3. JOINT INDEMNITY.

 

(a)       
To the fullest extent permitted by law, but subject to Section 10.5 below, Tenant shall defend, indemnify and hold harmless Landlord,
its agents, lenders, and any and all affiliates of Landlord, from and against any and all claims, liabilities, costs or expenses arising
either before or after the Commencement Date from Tenant’s use or occupancy of the Premises, the Building or the Common Areas, or
from the conduct of its business, or from any activity, work, or thing done, permitted or suffered by Tenant or its agents, employees,
subtenants, vendors, contractors, invitees or licensees in or about the Premises, the Building or the Common Areas, or from any Default
in the performance of any obligation on Tenant’s part to be performed under this Lease, or from any act or negligence of Tenant
or its agents, employees, subtenants, vendors, contractors, invitees or licensees. Landlord may, at its option, require Tenant to assume
Landlord’s defense in any action covered by this Section 10.3(a) through counsel reasonably satisfactory to Landlord. Notwithstanding
the foregoing, Tenant shall not be obligated to indemnify Landlord against any liability or expense to the extent such liability or expense:
(i) is ultimately determined to have been caused by the negligence or willful misconduct of Landlord, its agents, contractors or employees,
or (ii) is covered by Landlord’s indemnity obligations set forth in Section 10.3(b) below.

 

 

 

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(b)       
To the fullest extent permitted by law, but subject to Section 10.5 below, Landlord shall defend, indemnify and hold harmless Tenant,
its agents, lenders, and any and all affiliates of Tenant, from and against any and all claims, liabilities, costs or expenses arising
either before or after the Commencement Date from any default by Landlord of its obligations under this Lease or from the active negligence
or willful misconduct of Landlord, its employees, agents or contractors, or of any vendors under contract with Landlord, in connection
with the maintenance or repair of the Common Areas of the Project. Tenant may, at its option, require Landlord to assume Tenant’s
defense in any action covered by this Section 10.3(b) through counsel reasonably satisfactory to Tenant. Notwithstanding the foregoing,
Landlord shall not be obligated to indemnify Tenant against any liability or expense to the extent such liability or expense: (i) is ultimately
determined to have been caused by the negligence or willful misconduct of Tenant, its agents, employees, subtenants, vendors, contractors,
invitees or licensees, or (ii) is covered by Tenant’s indemnity obligations set forth in Section 10.3(a) above.

 

10.4. WAIVER
OF CLAIMS. Unless caused by the negligence or intentional misconduct of Landlord, its agents, employees or contractors but subject
to Section 10.5 below, Landlord shall not be liable to Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord, its employees and agents for loss of or damage to any property, or any injury to any person, resulting from any condition
including, but not limited to, acts or omissions (criminal or otherwise) of third parties and/or other tenants of the Project, or their
agents, employees or invitees, fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak or flow from or
into any part of the Premises or from the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances,
plumbing, air conditioning, electrical works or other fixtures in the Building, whether the damage or injury results from conditions arising
in the Premises or in other portions of the Building. It is understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Should Tenant elect to receive any service from a concessionaire, licensee or third party
tenant of Landlord, Tenant shall not seek recourse against Landlord for any breach or liability of that service provider. Notwithstanding
anything to the contrary contained in this Lease, in no event shall Landlord be liable for Tenant’s loss or interruption of business
or income (including without limitation, Tenant’s consequential damages, lost profits or opportunity costs), or for interference
with light or other similar intangible interests.

 

10.5. WAIVER
OF SUBROGATION. Landlord and Tenant waive all rights of recovery against the other on account of loss and damage to the property of
such waiving party to the extent that the waiving party is entitled to proceeds for such loss and damage under any property insurance
policies carried or otherwise required to be carried by this Lease; provided however, that the foregoing waiver shall not apply to the
extent of Tenant’s obligation to pay deductibles under any such policies and this Lease. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance company (by way of subrogation or otherwise) insuring the other
party for any loss or damage insured against under any property insurance policies, even though such loss or damage might be occasioned
by the negligence of such party, its agents, employees, contractors or invitees. The foregoing waiver by Tenant shall also inure to the
benefit of Landlord’s management agent for the Building.

 

ARTICLE 11. DAMAGE OR DESTRUCTION

 

11.1. RESTORATION.

 

(a)       
If the Building of which the Premises are a part, or the parking areas for the Building, are damaged as the result of an event of casualty,
then subject to the provisions below, Landlord shall repair that damage as soon as reasonably possible unless Landlord reasonably determines
that: (i) the Premises have been materially damaged and there is less than 1 year of the Term remaining on the date of the casualty; (ii)
any Mortgagee (defined in Section 13.1) requires that the insurance proceeds be applied to the payment of the mortgage debt; or (iii)
proceeds necessary to pay the full cost of the repair are not available from Landlord’s insurance, including without limitation
earthquake insurance. Should Landlord elect not to repair the damage for one of the preceding reasons, Landlord shall so notify Tenant
in the “Casualty Notice” (as defined below), and this Lease shall terminate as of the date of delivery of that notice. If
Landlord has the right to terminate this Lease pursuant to this Section 11.1(a), Landlord agrees to exercise such right in a nondiscriminatory
fashion among tenants in the Building. Consideration of the following factors in arriving at its decision shall not be deemed discriminatory:
length of term remaining on the Lease, time needed to repair and restore, costs of repair and restoration not covered by insurance proceeds,
Landlord's plans to repair and restore Common Areas serving the Premises, Landlord's plans for repair and restoration of the Building,
and other factors (other than the rental rates payable under the leases in question) relevant to Landlord's decision as long as they are
applied to Tenant in the same manner as other tenants.

 

 

 

 

    	 	14	 

     

    

 

(b)       
As soon as reasonably practicable following the casualty event but not later than 60 days thereafter, Landlord shall notify Tenant in
writing (“Casualty Notice”) of Landlord’s election, if applicable, to terminate this Lease. If this Lease is
not so terminated, the Casualty Notice shall set forth the anticipated period for repairing the casualty damage. If the anticipated repair
period exceeds 180 days and if the damage is so extensive as to reasonably prevent Tenant’s substantial use and enjoyment of the
Premises, then either party may elect to terminate this Lease by written notice to the other within 10 days following delivery of the
Casualty Notice. In addition, if (i) the Premises have been materially damaged and there is less than 1 year of the Term remaining at
the date of casualty, and (ii) the material damage is so extensive as to reasonably prevent Tenant’s substantial use and enjoyment
of the Premises, then Tenant may elect to terminate this Lease by written notice to Landlord within 15 days following the date of the
casualty.

 

(c)       
In the event that neither Landlord nor Tenant terminates this Lease pursuant to Section 11.1(b), Landlord shall repair all material damage
to the Premises or the Building as soon as reasonably possible and this Lease shall continue in effect for the remainder of the Term.
Upon notice from Landlord, Tenant shall assign or endorse over to Landlord (or to any party designated by Landlord) all property insurance
proceeds payable to Tenant under Tenant’s insurance with respect to any Tenant Installations; provided if the estimated cost to
repair such Tenant Installations exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier,
the excess cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of repairs. Within 15 days
of demand, Tenant shall also pay Landlord for any additional excess costs that are determined during the performance of the repairs to
such Tenant Installations.

 

(d)       
From and after the 6th business day following the casualty event, the rental to be paid under this Lease shall be abated in
the same proportion that the Floor Area of the Premises that is rendered unusable by the damage from time to time bears to the total Floor
Area of the Premises. Notwithstanding the foregoing, if the Premises are partially destroyed and the remaining portion is not usable for
Tenant's business purposes, the rental abatement described herein shall apply to the entire Premises.

 

(e)       
Notwithstanding the provisions of subsections (a), (b) and (c) of this Section 11.1, but subject to Section 10.5, the cost of any repairs
shall be borne by Tenant, and Tenant shall not be entitled to rental abatement or termination rights, if the damage is due to the willful
misconduct of Tenant or its employees, subtenants, contractors, invitees or representatives. In addition, the provisions of this Section
11.1 shall not be deemed to require Landlord to repair any Tenant Installations, fixtures and other items that Tenant is obligated to
insure pursuant to Exhibit D or under any other provision of this Lease, except as expressly provided in Section 11.1(c).

 

11.2. LEASE
GOVERNS. Tenant agrees that the provisions of this Lease, including without limitation Section 11.1, shall govern any damage or destruction
and shall accordingly supersede any contrary statute or rule of law.

 

ARTICLE 12. EMINENT DOMAIN

 

Either party may
terminate this Lease if (i) any material part of the Premises, (ii) any material points of vehicle access serving the Building, or (iii)
any material parking rights under this Lease are taken or condemned for any public or quasi-public use under Law, by eminent domain or
private purchase in lieu thereof (a “Taking”). Landlord shall also have the right to terminate this Lease if there
is a Taking of any portion of the Building or Project which would have a material adverse effect on Landlord’s ability to profitably
operate the remainder of the Building. The termination shall be effective as of the effective date of any order granting possession to,
or vesting legal title in, the condemning authority. If this Lease is not terminated, Basic Rent and Tenant’s Share of Operating
Expenses shall be appropriately adjusted to account for any reduction in the square footage of the Building or Premises. All compensation
awarded for a Taking shall be the property of Landlord and the right to receive compensation or proceeds in connection with a Taking are
expressly waived by Tenant; provided, however, Tenant may file a separate claim for Tenant’s personal property and Tenant’s
reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award. If only a part
of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining
portion of the Premises as nearly as practicable to the condition immediately prior to the Taking. Tenant agrees that the provisions of
this Lease shall govern any Taking and shall accordingly supersede any contrary statute or rule of law.

 

 

 

    	 	15	 

     

    

 

ARTICLE 13. SUBORDINATION; ESTOPPEL CERTIFICATE

 

13.1. SUBORDINATION.
Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently
arising upon the Premises, the Building or the Project, and to renewals, modifications, refinancings and extensions thereof (collectively
referred to as a “Mortgage”). The party having the benefit of a Mortgage shall be referred to as a “Mortgagee”.
This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination and
attornment agreement in favor of the Mortgagee, provided such agreement provides a non-disturbance covenant benefitting Tenant. Alternatively,
a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. Upon request, Tenant, without charge, shall attorn
to any successor to Landlord’s interest in this Lease in the event of a foreclosure of any Mortgage. Tenant agrees that any purchaser
at a foreclosure sale or lender taking title under a deed in lieu of foreclosure shall not be responsible for any act or omission of a
prior landlord, shall not be subject to any offsets or defenses Tenant may have against a prior landlord, and shall not be liable for
the return of the Security Deposit not actually recovered by such purchaser nor bound by any rent paid in advance of the calendar month
in which the transfer of title occurred; provided that the foregoing shall not release the applicable prior landlord from any liability
for those obligations. Tenant acknowledges that Landlord’s Mortgagees and their successors-in-interest are intended third party
beneficiaries of this Section 13.1.

 

13.2. ESTOPPEL
CERTIFICATE. Tenant shall, within 15 days after receipt of a written request from Landlord, execute and deliver a commercially reasonable
estoppel certificate in favor of those parties as are reasonably requested by Landlord (including a Mortgagee or a prospective purchaser
of the Building or the Project).

 

ARTICLE 14. DEFAULTS AND REMEDIES

 

14.1. TENANT’S
DEFAULTS. In addition to any other event of default set forth in this Lease, the occurrence of any one or more of the following events
shall constitute a “Default” by Tenant:

 

(a)      
The failure by Tenant to make any payment of Rent required to be made by Tenant, as and when due, where the failure continues for a period
of 5 business days after written notice from Landlord to Tenant. The term “Rent” as used in this Lease shall be deemed
to mean the Basic Rent and all other sums required to be paid by Tenant to Landlord pursuant to the terms of this Lease.

 

(b)      
The assignment, sublease, encumbrance or other Transfer of the Lease by Tenant, either voluntarily or by operation of law, whether by
judgment, execution, transfer by intestacy or testacy, or other means, without the prior written consent of Landlord unless otherwise
authorized in Article 9 of this Lease.

 

(c)       
Intentionally omitted.

 

(d)       
Except 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), the failure or inability by Tenant to observe or perform any of the covenants
or provisions of this Lease to be observed or performed by Tenant, other than as specified in any other subsection of this Section 14.1,
where the failure continues for a period of 30 days after written notice from Landlord to Tenant. However, if the nature of the failure
is such that more than 30 days are reasonably required for its cure, then Tenant shall not be deemed to be in Default if Tenant commences
the cure within 30 days, and thereafter diligently pursues the cure to completion.

 

The notice periods
provided herein are in lieu of, and not in addition to, any notice periods provided by law, and Landlord shall not be required to give
any additional notice under California Code of Civil Procedure Section 1161, or any successor statute, in order to be entitled to commence
an unlawful detainer proceeding.

 

 

 

    	 	16	 

     

    

 

14.2. LANDLORD’S
REMEDIES. In addition to all other rights or remedies of Landlord set forth in this Lease, if a Default occurs, Landlord shall have
all rights available to Landlord under California law, without further notice or demand to Tenant, including, without limitation, the
right to terminate this Lease. In addition, Landlord has the remedy described in California Civil Code Section 1951.4 (Landlord may continue
this Lease in effect after Tenant's breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable limitations). In any case in which Landlord re-enters and occupies the Premises, by unlawful detainer proceedings
or otherwise, Landlord, at its option, may repair, alter, subdivide or change the character of the Premises as Landlord deems best, relet
all or any part of the Premises and receive the rents therefor, and none of these actions shall constitute a termination of this Lease,
a release of Tenant from any liability, or result in the release of any Guarantor. Landlord shall not be deemed to have terminated this
Lease or the liability of Tenant to pay any Rent or other charges later becoming due by any re-entry of the Premises pursuant to this
Section 14.2, or by any action in unlawful detainer or otherwise to obtain possession of the Premises, unless Landlord has first given
Tenant notice that it is terminating this Lease. Any notice given by Landlord pursuant to Section 14.1 shall be in lieu of, and not in
addition to, any notice required by Section 1161 of the California Code of Civil Procedure or superseding statute. Any payment of Rent
following Landlord’s delivery of notice to Tenant pursuant to Section 14.1 shall not constitute acceptance of Rent. If Landlord
elects to terminate this Lease pursuant to the provisions of this Section 14.2, damages shall include, without limitation, the remedy
and measure of damages specified pursuant to California Civil Code Section 1951.2, which shall include the worth at the time of award
of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of Rent loss Tenant proves
could have been reasonably avoided.

 

14.3. LATE PAYMENTS.
Any Rent due under this Lease that is not paid to Landlord within 5 business days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid. The payment of interest shall not cure any Default by Tenant under this Lease.
In addition, Tenant acknowledges that the late payment by Tenant to Landlord of rent will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be extremely difficult and impracticable to ascertain. Those costs may include, but are
not limited to, administrative, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any Rent due from Tenant shall not be received by Landlord
or Landlord’s designee within 5 business days after the date due, then Tenant shall pay to Landlord, in addition to the interest
provided above, a late charge for each delinquent payment equal to the greater of (i) 5% of that delinquent payment or (ii) $100.00; provided
that Landlord shall waive the payment of said late charge for the initial delinquent payment of Basic Rent or Operating Expenses by Tenant.
Acceptance of a late charge by Landlord shall not constitute a waiver of Tenant’s Default with respect to the overdue amount, nor
shall it prevent Landlord from exercising any of its other rights and remedies.

 

14.4. RIGHT
OF LANDLORD TO PERFORM. If Tenant is in Default of any of its obligations under the Lease, Landlord shall have the right to perform
such obligations. Tenant shall reimburse Landlord for the cost of such performance upon demand together with an administrative charge
equal to 10% of the cost of the work performed by Landlord.

 

14.5. DEFAULT
BY LANDLORD. Landlord shall not be deemed to be in default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within 30 days after written notice by Tenant to Landlord specifying in reasonable detail the
nature and extent of the failure; provided, however, that if the nature of Landlord’s obligation is such that more than 30 days
are required for its performance, then Landlord shall not be deemed to be in default if it commences performance within the 30 day period
and thereafter diligently pursues the cure to completion. Tenant agrees that its remedies shall be limited to a suit for actual damages
and/or injunction and shall in no event include any consequential damages, lost profits or opportunity costs.

 

14.6. EXPENSES
AND LEGAL FEES. Should either Landlord or Tenant bring any action in connection with this Lease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys’ fees, and all other reasonable costs. The prevailing party for the
purpose of this paragraph shall be determined by the trier of the facts.

 

 

 

    	 	17	 

     

    

 

14.7. JUDICIAL
REFERENCE/WAIVER OF JURY TRIAL. Landlord and Tenant agree that any disputes arising in connection with this Lease (including but not
limited to a determination of any and all of the issues in such dispute, whether of fact or of law) shall be resolved (and a decision
shall be rendered) by way of a general reference as provided for in Part 2, Title 8, Chapter 6 (§§ 638 et. seq.) of the California
Code of Civil Procedure, or any successor California statute governing resolution of disputes by a court appointed referee. Nothing within
this Section 14.7 shall apply to an unlawful detainer action. LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE
ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY, AND, TO THE EXTENT PERMITTED BY LAW, EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE.

 

14.8. SATISFACTION
OF JUDGMENT. The obligations of Landlord do not constitute the personal obligations of the individual partners, trustees, directors,
officers, members or shareholders of Landlord or its constituent partners or members. Should Tenant recover a money judgment against Landlord,
such judgment shall be satisfied only from the interest of Landlord in the Project and out of the rent or other income from such property
receivable by Landlord or out of consideration received by Landlord from the sale or other disposition of all or any part of Landlord’s
right, title or interest in the Project, and no action for any deficiency may be sought or obtained by Tenant.

 

ARTICLE 15. END OF TERM

 

15.1. HOLDING
OVER. If Tenant holds over for any period after the Expiration Date (or earlier termination of the Term) without the prior written
consent of Landlord, such tenancy shall constitute a tenancy at sufferance only and a Default by Tenant; such holding over with the prior
written consent of Landlord shall constitute a month-to-month tenancy commencing on the 1st day following the termination
of this Lease and terminating 30 days following delivery of written notice of termination by either Landlord or Tenant to the other.
In either of such events, possession shall be subject to all of the terms of this Lease, except that the monthly rental shall be 150%
of the total monthly rental for the month immediately preceding the date of termination, subject to Landlord’s right to modify
same upon 30 days’ notice to Tenant. The acceptance by Landlord of monthly hold-over rental in a lesser amount shall not constitute
a waiver of Landlord’s right to recover the full amount due unless otherwise agreed in writing by Landlord. If Tenant fails to
surrender the Premises upon the expiration of this Lease despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability, including without limitation, any claims made by any succeeding tenant relating to such failure
to surrender. The foregoing provisions of this Section 15.1 are in addition to and do not affect Landlord’s right of re-entry or
any other rights of Landlord under this Lease or at law.

 

15.2. SURRENDER
OF PREMISES; REMOVAL OF PROPERTY. Upon the Expiration Date or upon any earlier termination of this Lease, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition and repair as when received or as hereafter may be improved by Landlord
or Tenant, reasonable wear and tear and repairs which are Landlord’s obligation excepted, and shall remove or fund to Landlord the
cost of removing all wallpapering installed in the Premises during the Term of this Lease, voice and/or data transmission cabling installed
by or for Tenant and Required Removables, together with all personal property and debris, and shall perform all work required under Section
7.3 of this Lease. If Tenant shall fail to comply with the provisions of this Section 15.2, and remove any personal property within 10
days following the expiration or earlier termination of this Lease, such personal property shall be conclusively deemed to have been abandoned,
then Landlord may effect the removal and/or make any repairs, and the cost to Landlord shall be additional rent payable by Tenant within
15 days following Landlord’s written demand. Tenant hereby waives all rights under and benefits of Section 1993.03 of the California
Civil Code, or any similar or successor laws now or hereafter in effect and authorizes Landlord to dispose of any personal property remaining
at the Premises following the expiration or earlier termination of this Lease without further notice to Tenant.

 

 

 

    	 	18	 

     

    

 

 

ARTICLE 16. PAYMENTS AND NOTICES

 

All sums payable
by Tenant to Landlord shall be paid, without deduction or offset, except as provided in this Lease, in lawful money of the United States
to Landlord at its address set forth in Item 12 of the Basic Lease Provisions, or at any other place as Landlord may designate in writing.
Unless this Lease expressly provides otherwise, as for example in the payment of rent pursuant to Section 4.1, all payments shall be due
and payable within 5 business days after demand. All payments requiring proration shall be prorated on the basis of the number of days
in the pertinent calendar month or year, as applicable. Any notice, election, demand, consent, approval or other communication to be given
or other document to be delivered by either party to the other may be delivered to the other party, at the address set forth in Item 12
of the Basic Lease Provisions, by personal service, or by any courier or “overnight” express mailing service. Either party
may, by written notice to the other, served in the manner provided in this Article, designate a different address. The refusal to accept
delivery of a notice, or the inability to deliver the notice (whether due to a change of address for which notice was not duly given or
other good reason), shall be deemed delivery and receipt of the notice as of the date of attempted delivery. If more than one person or
entity is named as Tenant under this Lease, service of any notice upon any one of them shall be deemed as service upon all of them.

 

ARTICLE 17. RULES AND REGULATIONS

 

Tenant agrees to
comply with the Rules and Regulations attached as Exhibit E, and any reasonable and nondiscriminatory amendments, modifications
and/or additions as may be adopted and published by written notice to tenants by Landlord for the safety, care, security, good order,
or cleanliness of the Premises, Building, Project and/or Common Areas; provided such rules and regulations adopted by Landlord after the
date of this Lease shall not impose any additional unreasonable burdens or additional unreasonable liabilities on Tenant. Landlord shall
not be liable to Tenant for any violation of the Rules and Regulations or the breach of any covenant or condition in any lease or any
other act or conduct by any other tenant, and the same shall not constitute a constructive eviction hereunder. One or more waivers by
Landlord of any breach of the Rules and Regulations by Tenant or by any other tenant(s) shall not be a waiver of any subsequent breach
of that rule or any other. Tenant’s failure to keep and observe the Rules and Regulations shall constitute a default under this
Lease. In the case of any conflict between the Rules and Regulations and this Lease, this Lease shall be controlling.

 

ARTICLE 18. BROKER’S COMMISSION

 

The parties recognize
as the broker(s) who negotiated this Lease the firm(s) whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and agree
that Landlord shall be responsible for the payment of brokerage commissions to those broker(s) unless otherwise provided in this Lease.
It is understood that Landlord’s Broker represents only Landlord in this transaction and Tenant’s Broker represents only Tenant.
Each party warrants that it has had no dealings with any other real estate broker or agent in connection with the negotiation of this
Lease, and agrees to indemnify and hold the other party harmless from any cost, expense or liability (including reasonable attorneys’
fees) for any compensation, commissions or charges claimed by any other real estate broker or agent employed or claiming to represent
or to have been employed by the indemnifying party in connection with the negotiation of this Lease. The foregoing agreement shall survive
the termination of this Lease.

 

ARTICLE 19. TRANSFER OF LANDLORD’S INTEREST

 

In the event of any
transfer of Landlord’s interest in the Premises, the transferor shall be automatically relieved of all obligations on the part
of Landlord accruing under this Lease from and after the date of the transfer, provided that Tenant is duly notified of the transfer.
Any funds held by the transferor in which Tenant has an interest, including without limitation, the Security Deposit, shall be turned
over, subject to that interest, to the transferee, and that Landlord and its successors, as the case may be, shall remain liable after
their respective periods of ownership with respect to any sums due in connection with a breach or default by such party that arose during
such period of ownership by such party. No Mortgagee to which this Lease is or may be subordinate shall be responsible in connection
with the Security Deposit unless the Mortgagee actually receives the Security Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject to the foregoing, be binding on Landlord, its successors and assigns,
only during and in respect to their respective successive periods of ownership.

 

 

 

    	 	19	 

     

    

 

ARTICLE 20. INTERPRETATION

 

20.1. NUMBER.
Whenever the context of this Lease requires, the words “Landlord” and “Tenant” shall include the plural as well
as the singular.

 

20.2. HEADINGS.
The captions and headings of the articles and sections of this Lease are for convenience only, are not a part of this Lease and shall
have no effect upon its construction or interpretation.

 

20.3. JOINT
AND SEVERAL LIABILITY. If more than one person or entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature of, any one or more of them shall be binding on all of
them with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension, termination or modification of
this Lease.

 

20.4. SUCCESSORS.
Subject to Sections 13.1 and 22.3 and to Articles 9 and 19 of this Lease, all rights and liabilities given to or imposed upon Landlord
and Tenant shall extend to and bind their respective heirs, executors, administrators, successors and assigns. Nothing contained in this
Section 20.4 is intended, or shall be construed, to grant to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.

 

20.5. TIME 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.

 

20.6. CONTROLLING
LAW/VENUE. This Lease shall be governed by and interpreted in accordance with the laws of the State of California. Should any litigation
be commenced between the parties in connection with this Lease, such action shall be prosecuted in the applicable State Court of California
in the county in which the Building is located.

 

20.7. SEVERABILITY.
If any term or provision of this Lease, the deletion of which would not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely affected, shall be held invalid or unenforceable to any extent,
the remainder of this Lease shall not be affected and each term and provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.

 

20.8. WAIVER.
One or more waivers by Landlord or Tenant of any breach of any term, covenant or condition contained in this Lease shall not be a waiver
of any subsequent breach of the same or any other term, covenant or condition. Consent to any act by one of the parties shall not be deemed
to render unnecessary the obtaining of that party’s consent to any subsequent act. No breach of this Lease shall be deemed to have
been waived unless the waiver is in a writing signed by the waiving party.

 

20.9. INABILITY
TO PERFORM. In the event that either party shall be delayed or hindered in or prevented from the performance of any work or in performing
any act required under this Lease by reason of any cause beyond the reasonable control of that party, then the performance of the work
or the doing of the act shall be excused for the period of the delay and the time for performance shall be extended for a period equivalent
to the period of the delay. The provisions of this Section 20.9 shall not operate to excuse Tenant from the prompt payment of Rent.

 

20.10. ENTIRE
AGREEMENT. This Lease and its exhibits and other attachments cover in full each and every agreement of every kind between the parties
concerning the Premises, the Building, and the Project, and all preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect. Tenant waives its rights to rely on any representations
or promises made by Landlord or others which are not contained in this Lease. No verbal agreement or implied covenant shall be held to
modify the provisions of this Lease, any statute, law, or custom to the contrary notwithstanding.

 

 

 

    	 	20	 

     

    

 

20.11. QUIET
ENJOYMENT. Upon the observance and performance of all the covenants, terms and conditions on Tenant’s part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall have the right of quiet enjoyment and use of the Premises for
the Term without hindrance or interruption by Landlord or any other person claiming by or through Landlord.

 

20.12. SURVIVAL.
All covenants of Landlord or Tenant which reasonably would be intended to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder, shall so survive and continue to be binding upon and inure to the benefit
of the respective parties and their successors and assigns.

 

ARTICLE 21. EXECUTION AND RECORDING

 

21.1. COUNTERPARTS;
DIGITAL SIGNATURES. This Lease may be executed in one or more counterparts, each of which shall constitute an original and all of
which shall be one and the same agreement. The parties agree to accept a digital image (including but not limited to an image in the form
of a PDF, JPEG, GIF file, or other e-signature) of this Lease, if applicable, reflecting the execution of one or both of the parties,
as a true and correct original.

 

21.2. CORPORATE
AND PARTNERSHIP AUTHORITY. If Tenant is a corporation, limited liability company or partnership, each individual executing this Lease
on behalf of the entity represents and warrants that such individual is duly authorized to execute and deliver this Lease and that this
Lease is binding upon the corporation, limited liability company or partnership in accordance with its terms. Tenant shall, at Landlord’s
request, deliver a certified copy of its organizational documents or an appropriate certificate authorizing or evidencing the execution
of this Lease.

 

21.3. EXECUTION
OF LEASE; NO OPTION OR OFFER. The submission of this Lease to Tenant shall be for examination purposes only, and shall not constitute
an offer to or option for Tenant to lease the Premises. Execution of this Lease by Tenant and its return to Landlord shall not be binding
upon Landlord, notwithstanding any time interval, until Landlord has in fact executed and delivered this Lease to Tenant, it being intended
that this Lease shall only become effective upon execution by Landlord and delivery of a fully executed counterpart to Tenant.

 

21.4. RECORDING.
Tenant shall not record this Lease without the prior written consent of Landlord. Tenant, upon the request of Landlord, shall execute
and acknowledge a “short form” memorandum of this Lease for recording purposes.

 

21.5. AMENDMENTS.
No amendment or mutual termination of this Lease shall be effective unless in writing signed by authorized signatories of Tenant and Landlord,
or by their respective successors in interest. No actions, policies, oral or informal arrangements, business dealings or other course
of conduct by or between the parties shall be deemed to modify this Lease in any respect.

 

21.6. BROKER
DISCLOSURE. By the execution of this Lease, each of Landlord and Tenant hereby acknowledge and confirm (a) receipt of a copy of a
Disclosure Regarding Real Estate Agency Relationship conforming to the requirements of California Civil Code 2079.16, and (b) the agency
relationships specified in Item 10 of the Basic Lease Provisions, which acknowledgement and confirmation is expressly made for the benefit
of Tenant’s Broker identified in Item 10 of the Basic Lease Provisions. If there is no Tenant’s Broker so identified in Item
10 of the Basic Lease Provisions, then such acknowledgement and confirmation is expressly made for the benefit of Landlord’s Broker.
By the execution of this Lease, Landlord and Tenant are executing the confirmation of the agency relationships set forth in Item 10 of
the Basic Lease Provisions.

 

ARTICLE 22. MISCELLANEOUS

 

22.1. NONDISCLOSURE
OF LEASE TERMS. Tenant acknowledges that the content of this Lease and any related documents are confidential information. Except
to the extent disclosure is required by law, 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, provided,
however, that Tenant may disclose the terms to prospective subtenants or assignees under this Lease or pursuant to legal requirement.

 

 

 

 

    	 	21	 

     

    

 

22.2. TENANT’S
FINANCIAL STATEMENTS. The application, financial statements and tax returns, if any, submitted and certified to by Tenant as an accurate
representation of its financial condition have been prepared, certified and submitted to Landlord as an inducement and consideration to
Landlord to enter into this Lease. Tenant shall during the Term furnish Landlord with current annual financial statements accurately reflecting
Tenant’s financial condition upon written request from Landlord within 10 days following Landlord’s request; provided, however,
that (i) unless Tenant is in Default, Landlord shall not request such statements more frequently than once during each calendar year during
the Term, and (ii) so long as Tenant is a publicly traded corporation on a nationally recognized stock exchange, the foregoing obligation
to deliver the statements shall be waived. Except to the extent disclosure is required by law or in connection with any litigation, arbitration,
or judicial reference proceeding brought to enforce the terms of this Lease, Landlord shall keep confidential any financial statements
marked or otherwise designated by Tenant as “confidential” and shall not disclose same, without Tenant’s consent, to
any person or entity other than Landlord’s financial, legal and other consultants with a “need to know”; provided, however,
that Landlord may disclose same to any prospective lender or buyer or pursuant to legal requirement. The provisions of this Section 22.2
shall supersede and terminate any prior confidentiality agreement executed by Landlord and Tenant.

 

22.3. MORTGAGEE
PROTECTION. No act or failure to act on the part of Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder or to terminate this Lease shall result in such a release or termination unless (a) Tenant has given notice by registered or
certified mail to any Mortgagee of a Mortgage covering the Building whose address has been furnished to Tenant and (b) such Mortgagee
is afforded a reasonable opportunity to cure the default by Landlord (which shall in no event be less than 60 days), including, if necessary
to effect the cure, time to obtain possession of the Building by power of sale or judicial foreclosure provided that such foreclosure
remedy is diligently pursued. Tenant shall comply with any written directions by any Mortgagee to pay Rent due hereunder directly to such
Mortgagee without determining whether a default exists under such Mortgagee’s Mortgage.

 

22.4. SDN
LIST. Landlord and Tenant hereby represent and warrant that neither Landlord or Tenant or any of its respective officers,
directors, partners, members or other principals of Tenant (collectively, “Tenant Parties”) is listed as a
Specially Designated national and Blocked Person (“SDN”) on the list of such persons and entitles issued by the
U.S. Treasury Office of Foreign Assets Control (“OFAC”). In the event Tenant or any Tenant Party is or becomes
listed as an SDN, Tenant shall be deemed in breach of this Lease and Landlord shall have the right to terminate this Lease 30 days
following written notice to Tenant.

 

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

 

 

	LANDLORD:	 	TENANT:
	 	 	 
	DISCOVERY BUSINESS CENTER LLC,

                    a Delaware limited liability company
	 	LANTRONIX, INC.,

                  a Delaware corporation

	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Steven M. Case	 	By:	/s/  Jeremy Whitaker
	 	 Steven M. Case	 	Printed Name: Jeremy Whitaker
	 	Executive Vice President, Leasing & Marketing Office Properties	 	Title: CFO
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Holly McManus 	 	By:	/s/ David Goren
	 	Holly McManus 	 	Printed Name: David Goren
	 	Vice President, Operations 	 	Title: Vice President
	 	Office Properties	 	 	 

 

 

 

 

    	 	22	 

     

    

 

EXHIBIT A

 

 

 

48 Discovery

2nd Floor

 

 

 

 

 

 

    	 	23	 

     

    

 

EXHIBIT B

 

OPERATING EXPENSES

(Net)

 

(a)       From and after
the Commencement Date, Tenant shall pay to Landlord, as additional rent, Tenant’s Share of all Operating Expenses, as defined in
Section (f) below, incurred by Landlord in the operation of the Building and the Project. The term “Tenant’s Share”
means that portion of any Operating Expenses determined by multiplying the cost of such item by a fraction, the numerator of which is
the Floor Area of Premises and the denominator of which is the total rentable square footage, as determined from time to time by Landlord,
of (i) the Building, for expenses determined by Landlord to benefit or relate substantially to the Building rather than the entire Project,
and (ii) all or some of the buildings in the Project, for expenses determined by Landlord to benefit or relate substantially to all or
some of the buildings in the Project rather than any specific building. Landlord reserves the right to allocate to the entire Project
any Operating Expenses which may benefit or substantially relate to a particular building within the Project in order to maintain greater
consistency of Operating Expenses among buildings within the Project. In the event that Landlord determines that the Premises or the
Building incur a non-proportional benefit from any expense, or is the non-proportional cause of any such expense, Landlord may allocate
a greater percentage of such Operating Expense to the Premises or the Building. In the event that any management and/or overhead fee
payable or imposed by Landlord for the management of Tenant’s Premises is calculated as a percentage of the rent payable by Tenant
and other tenants of Landlord, then the full amount of such management and/or overhead fee which is attributable to the rent paid by
Tenant shall be additional rent payable by Tenant, in full, provided, however, that Landlord may elect to include such full amount as
part of Tenant’s Share of Operating Expenses.

 

(b)       
Commencing prior to the start of the first full “Expense Recovery Period” of the Lease (as defined in Item 7 of the
Basic Lease Provisions), and prior to the start of each full or partial Expense Recovery Period thereafter, Landlord shall give Tenant
a written estimate of the amount of Tenant’s Share of Operating Expenses for the applicable Expense Recovery Period. Tenant shall
pay the estimated amounts to Landlord in equal monthly installments, in advance, concurrently with payments of Basic Rent. If Landlord
has not furnished its written estimate for any Expense Recovery Period by the time set forth above, Tenant shall continue to pay monthly
the estimated Tenant’s Share of Operating Expenses in effect during the prior Expense Recovery Period; provided that when the new
estimate is delivered to Tenant, Tenant shall, at the next monthly payment date, pay any accrued estimated Tenant’s Share of Operating
Expenses based upon the new estimate. Landlord may from time to time change the Expense Recovery Period to reflect a calendar year or
a new fiscal year of Landlord, as applicable, in which event Tenant’s Share of Operating Expenses shall be equitably prorated for
any partial year.

 

(c)       
Within 180 days after the end of each Expense Recovery Period, Landlord shall furnish to Tenant a statement (a “Reconciliation
Statement”) showing in reasonable detail the actual or prorated Tenant’s Share of Operating Expenses incurred by Landlord
during such Expense Recovery Period, and the parties shall within 30 days thereafter make any payment or allowance necessary to adjust
Tenant’s estimated payments of Tenant’s Share of Operating Expenses, if any, to the actual Tenant’s Share of Operating
Expenses as shown by the Reconciliation Statement. Any delay or failure by Landlord in delivering any Reconciliation Statement shall not
constitute a waiver of Landlord’s right to require Tenant to pay Tenant’s Share of Operating Expenses pursuant hereto. Any
amount due Tenant shall be credited against installments next coming due under this Exhibit B, and any deficiency shall be paid
by Tenant together with the next installment. Should Tenant fail to object in writing to Landlord’s determination of Tenant’s
Share of Operating Expenses within 90 days following delivery of Landlord’s Reconciliation Statement, Landlord’s determination
of Tenant’s Share of Operating Expenses for the applicable Expense Recovery Period shall be conclusive and binding on Tenant for
all purposes and any future claims by Tenant to the contrary shall be barred.

 

(d)       
Even though this Lease has terminated and the Tenant has vacated the Premises, when the final determination is made of Tenant’s
Share of Operating Expenses for the Expense Recovery Period in which this Lease terminates, Tenant shall within 30 days of written notice
pay the entire increase over the estimated Tenant’s Share of Operating Expenses already paid. Conversely, any overpayment by Tenant
shall be promptly rebated by Landlord to Tenant not later than 30 days after such final determination. However, in lieu thereof, Landlord
may deliver a reasonable estimate of the anticipated reconciliation amount to Tenant prior to the Expiration Date of the Term, in which
event the appropriate party shall fund the amount by the Expiration Date.

 

 

 

 

    	 	24	 

     

    

 

(e)       
If, at any time during any Expense Recovery Period, any one or more of the Operating Expenses are increased to a rate(s) or amount(s)
in excess of the rate(s) or amount(s) used in calculating the estimated Tenant’s Share of Operating Expenses for the year, then
the estimate of Tenant’s Share of Operating Expenses may be increased by written notice from Landlord for the month in which such
rate(s) or amount(s) becomes effective and for all succeeding months by an amount equal to the estimated amount of Tenant’s Share
of the increase. Landlord shall give Tenant written notice of the amount or estimated amount of the increase, the month in which the increase
will become effective, Tenant’s Share thereof and the months for which the payments are due. Tenant shall pay the increase to Landlord
as part of the Tenant’s monthly payments of estimated expenses as provided in paragraph (b) above, commencing with the month in
which effective.

 

(f)        
The term “Operating Expenses” shall mean and include all Project Costs, as defined in Section (g) below, and Property
Taxes, as defined in Section (h) below.

 

(g)       
The term “Project Costs” shall mean all expenses of operation, management, repair, replacement and maintenance of
the Building and the Project, including without limitation all appurtenant Common Areas (as defined in Section 6.2 of the Lease), and
shall include the following charges by way of illustration but not limitation: water and sewer charges; insurance premiums, deductibles,
or reasonable premium equivalents or deductible equivalents should Landlord elect to self insure any risk that Landlord is authorized
to insure hereunder; license, permit, and inspection fees; light; power; window washing; trash pickup; janitorial services to any interior
Common Areas; heating, ventilating and air conditioning; supplies; materials; equipment; tools; reasonable fees for consulting services;
access control/security costs, inclusive of the reasonable cost of improvements made to enhance access control systems and procedures;
establishment of reasonable reserves for replacement of the roof of the Building; costs incurred in connection with compliance with any
laws or changes in laws applicable to the Building or the Project becoming effective after the Commencement Date; the cost of any capital
improvements or replacements (other than tenant improvements for specific tenants) to the extent of the amortized amount thereof over
the useful life of such capital improvements or replacements (or, if such capital improvements or replacements are anticipated to achieve
a cost savings as to the Operating Expenses, any shorter estimated period of time over which the cost of the capital improvements or
replacements would be recovered from the estimated cost savings) calculated at a market cost of funds, all as determined by Landlord,
for each year of useful life or shorter recovery period of such capital expenditure whether such capital expenditure occurs during or
prior to the Term; provided that such capital expenditures shall be limited to (1) improvements which are reasonably intended to increase
or enhance building security and/or safety (such as lighting, life/fire safety systems, etc.), (2) repairs or replacements of the Building
or its systems or to the Common Areas for functional (and not aesthetic) reasons, (3) improvements required to comply with any law or
change in law becoming effective as to the Building or Project after the Commencement Date; and/or (4) expenditures incurred as a cost
or labor saving measure or to affect other economies in the operation or maintenance of the Building or the Common Areas (collectively,
“Permitted Capital Items”); costs associated with the maintenance of an air conditioning, heating and ventilation
service agreement, and maintenance of any communications or networked data transmission equipment, conduit, cabling, wiring and related
telecommunications facilitating automation and control systems, remote telecommunication or data transmission infrastructure within the
Building and/or the Project, and any other maintenance, repair and replacement costs associated with such infrastructure; capital costs
associated with a requirement related to demands on utilities by Project tenants, including without limitation the cost to obtain additional
voice, data and modem connections; labor; reasonably allocated wages and salaries, fringe benefits, and payroll taxes for administrative
and other personnel directly applicable to the Building and/or Project, including both Landlord’s personnel and outside personnel;
any expense incurred pursuant to Sections 6.1, 6.2, 7.2, and 10.2, and Exhibits C and F of the Lease; and reasonable overhead
and/or management fees for the professional operation of the Project. It is understood and agreed that Project Costs may include competitive
charges for direct services (including, without limitation, management and/or operations services) provided by any subsidiary, division
or affiliate of Landlord.

 

(h)       
The term “Property Taxes” shall include any form of federal, state, county or local government or municipal taxes,
fees, charges or other impositions of every kind (whether general, special, ordinary or extraordinary) related to the ownership, leasing
or operation of the Premises, Building or Project, including without limitation, the following: (i) all real estate taxes or personal
property taxes levied against the Premises, the Building or Project, as such property taxes may be reassessed from time to time; and (ii)
other taxes, charges and assessments which are levied with respect to this Lease or to the Building and/or the Project, and any improvements,
fixtures and equipment and other property of Landlord located in the Building and/or the Project, (iii) all assessments and fees for public
improvements, services, and facilities and impacts thereon, including without limitation arising out of any Community Facilities Districts,
“Mello Roos” districts, similar assessment districts, and any traffic impact mitigation assessments or fees; (iv) any tax,
surcharge or assessment which shall be levied in addition to or in lieu of real estate or personal property taxes, and (v) taxes based
on the receipt of rent (including gross receipts or sales taxes applicable to the receipt of rent), and (vi) costs and expenses incurred
in contesting the amount or validity of any Property Tax by appropriate proceedings. Notwithstanding the foregoing, general net income
or franchise taxes imposed against Landlord shall be excluded.

 

 

 

    	 	25	 

     

    

 

(i)        
Notwithstanding the foregoing, Operating Expenses shall exclude the following:

 

(1)     
Any ground lease rental;

 

(2)     
Costs incurred by Landlord with respect to goods and services (including utilities sold and supplied to tenants and occupants of the Building)
to the extent that Landlord is reimbursed for such costs other than through the Operating Expense pass-through provisions of such tenants'
lease;

 

(3)     
Costs incurred by Landlord for repairs, replacements and/or restoration to or of the Building to the extent that Landlord is reimbursed
by insurance or condemnation proceeds or by tenants (other than through Operating Expense pass-throughs), warrantors or other third persons;

 

(4)     
Costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for other
tenants in the Building or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants
or other occupants of the Building;

 

(5)     
Costs arising from Landlord's charitable or political contributions;

 

(6)     
Attorneys' fees and other costs and expenses incurred in connection with negotiations or disputes with present or prospective tenants
or other occupants of the Building, except those attorneys' fees and other costs and expenses incurred in connection with negotiations,
disputes or claims relating to items of Operating Expenses, enforcement of rules and regulations of the Building and such other matters
relating to the maintenance of standards required of Landlord under this Lease;

 

(7)     
Capital expenditures as determined in accordance with generally accepted accounting principles, consistently applied, and as generally
practiced in the real estate industry (“GAAP”), except as otherwise provided above;

 

(8)     
Brokers’ commissions, finders' fees, attorneys' fees, entertainment and travel expenses and other costs incurred by Landlord in
leasing or attempting to lease space in the Building;

 

(9)     
Expenses in connection with services or other benefits which are not offered to Tenant or for which Tenant is charged for directly but
which are provided to another tenant or occupant of the Building;

 

(10)    
Costs incurred by Landlord due to the violation by Landlord of any law, code, regulation, or ordinance, or as a result of Landlord’s
gross negligence or willful misconduct;

 

(11)    
Overhead and profit increments paid to subsidiaries or affiliates of Landlord for services provided to the Building to the extent the
same exceeds the costs that would generally be charged for such services if rendered on a competitive basis (based upon a standard of
similar office buildings in the general market area of the Premises) by unaffiliated third parties capable of providing such service;

 

(12)    
Interest on debt or amortization on any mortgage or mortgages encumbering the Building;

 

(13)    
Landlord's general corporate overhead, except as it relates to the specific management, operation, repair, replacement and maintenance
of the Building or Project;

 

 

 

 

    	 	26	 

     

    

 

(14)    
Costs of installing the initial landscaping and the initial sculpture, paintings and objects of art for the Building and Project;

 

(15)    
Advertising expenditures;

 

(16)    
Any bad debt loss, rent loss, or reserves for bad debts or rent loss;

 

(17)    
Costs 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 the operation, management, repair, replacement and maintenance of the Project, including partnership accounting and
legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of 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;

 

(18)    
The 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-à-vis time spent on matters unrelated
to operating and managing the Project; provided that in no event shall Project Costs include wages and/or benefits attributable to personnel
above the level of portfolio property manager or chief engineer;

 

(19)    
Costs incurred by Landlord for improvements or replacements (including structural additions), repairs, equipment and tools which are of
a “capital” nature and/or which are considered “capital” improvements or replacements under GAAP, except to the
extent included in Project Costs pursuant to the definition above or by other express terms of this Lease;

 

(20)    
Legal fees and costs, settlements, judgments or awards paid or incurred because of disputes between Landlord and other tenants or prospective
occupants or prospective tenants/occupants or providers of goods and services to the Project;

 

(21)    
Costs incurred to remove, remedy, contain, or treat any hazardous material, which hazardous material is located on, under, within or about
the Project prior to the Commencement Date or is brought onto the Project by Landlord or any other tenant of the Project or any other
person other than Tenant, its employees, agents, licensees, subtenants or invitees, and is of such a nature, at that time, that a federal,
state 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 on the Project, would have then required the removal of such hazardous material or other remedial
or containment action with respect thereto;

 

 

 

 

 

 

 

 

 

 

 

 

    	 	27	 

     

    

 

EXHIBIT C

 

UTILITIES AND SERVICES

 

Tenant shall be responsible
for and shall pay promptly, directly to the appropriate supplier, all charges for telephone, telecommunications service, interior landscape
maintenance and all other utilities, materials and services furnished directly to Tenant or the Premises or used by Tenant in, on or
about the Premises during the Term, together with any taxes thereon. Landlord shall make a reasonable determination of Tenant's proportionate
share of the cost of water, gas, sewer, refuse pickup and any other utilities and services that are not separately metered to the Premises,
and Tenant shall pay such amount to Landlord, as an item of additional rent, within 10 business days after delivery of Landlord's statement
or invoice therefor. Alternatively, Landlord may elect to include such cost in the definition of Project Costs in which event Tenant
shall pay Tenant's proportionate share of such costs in the manner set forth in Section 4.2. Tenant shall also pay to Landlord as an
item of additional rent, within 10 business days after delivery of Landlord’s statement or invoice therefor, Landlord’s “standard
charges” (as hereinafter defined) for “after hours” usage by Tenant of each HVAC unit servicing the Premises. If the
HVAC unit(s) servicing the Premises also serve other leased premises in the Building, “after hours” shall mean usage
of said unit(s) before 6:00 A.M. or after 6:00 P.M. on Mondays through Fridays, before 9:00 A.M. or after 1:00 P.M. on Saturdays, and
all day on Sundays and nationally-recognized holidays, subject to reasonable adjustment of said hours by Landlord. If the HVAC unit(s)
serve only the Premises, “after hours” shall mean more than 66 hours of usage during any week during the Term. “After
hours” usage shall be determined based upon the operation of the applicable HVAC unit during each of the foregoing periods on a
“non-cumulative” basis (that is, without regard to Tenant’s usage or nonusage of other unit(s) serving the Premises,
or of the applicable unit during other periods of the Term). As used herein, “standard charges” shall mean $25.25
per hour for each hour of “after hours” use (inclusive of the applicable electricity charges paid to the utility provider).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	28	 

     

    

 

EXHIBIT D

 

TENANT’S INSURANCE

 

The following requirements for Tenant’s
insurance shall be in effect during the Term, and Tenant shall also cause any subtenant to comply with the requirements. Landlord reserves
the right to adopt reasonable nondiscriminatory modifications and additions to these requirements.

 

1.     
Tenant shall maintain, at its sole cost and expense, during the entire Term: (i) commercial general liability insurance with respect to
the Premises and the operations of Tenant in, on or about the Premises, on a policy form that is at least as broad as Insurance Service
Office (ISO) CGL 00 01 (if alcoholic beverages are sold on the Premises, liquor liability shall be explicitly covered), which policy(ies)
shall be written on an “occurrence” basis and for not less than $2,000,000 combined single limit per occurrence for bodily
injury, death, and property damage liability; (ii) workers’ compensation insurance coverage as required by law, together with employers’
liability insurance coverage of at least $1,000,000 each accident and each disease; (iii) with respect to Alterations constructed by Tenant
under this Lease, builder’s risk insurance, in an amount equal to the replacement cost of the work; and (iv) insurance against fire,
vandalism, malicious mischief and such other additional perils as may be included in a standard “special form” policy, insuring
all Alterations, tenant improvements installed by or for the benefit of tenant, trade fixtures, furnishings, equipment and items of personal
property in the Premises, in an amount equal to not less than 90% of their replacement cost (with replacement cost endorsement), which
policy shall also include business interruption coverage in an amount sufficient to cover 1 year of loss. In no event shall the limits
of any policy be considered as limiting the liability of Tenant under this Lease.

 

2.     
All policies of insurance required to be carried by Tenant pursuant to this Exhibit D shall be written by insurance companies authorized
to do business in the State of California and with a general policyholder rating of not less than “A-” and financial rating
of not less than “VIII” in the most current Best’s Insurance Report. The deductible or other retained limit under any
policy carried by Tenant shall be commercially reasonable, and Tenant shall be responsible for payment of such deductible or retained
limit with waiver of subrogation in favor of Landlord. Any insurance required of Tenant may be furnished by Tenant under any blanket policy
carried by it or under a separate policy. A certificate of insurance, certifying that the policy has been issued, provides the coverage
required by this Exhibit and contains the required provisions, together with endorsements acceptable to Landlord evidencing the waiver
of subrogation and additional insured provisions required below, shall be delivered to Landlord prior to the date Tenant is given the
right of possession of the Premises. In the event of a loss covered by any policy under which Landlord is an additional insured, Landlord
shall be entitled to review a copy of such policy.

 

3.     
Tenant’s commercial general liability insurance shall contain a provision that the policy shall be primary to and noncontributory
with any policies carried by Landlord, together with a provision including Landlord, The Irvine Company LLC, and any other parties in
interest designated by Landlord as additional insureds. Tenant’s policies described in Subsections 1(ii), (iii) and (iv) above shall
each contain a waiver by the insurer of any right to subrogation against Landlord, its agents, employees, contractors and representatives.
Tenant also waives its right of recovery for any deductible or retained limit under same policies enumerated above. Tenant shall not cancel
or change the coverage provided by the policy without first giving Landlord 30 days’ prior written notice. Tenant shall also name
Landlord as an additional insured on any excess or umbrella liability insurance policy carried by Tenant.

 

NOTICE TO TENANT: IN ACCORDANCE WITH
THE TERMS OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR TO BEING AFFORDED
ACCESS TO THE PREMISES.

 

 

 

 

 

 

 

    	 	29	 

     

    

 

EXHIBIT E

 

RULES AND REGULATIONS

 

The following
Rules and Regulations shall be in effect at the Building. Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time. In the case of any conflict between these regulations and the Lease, the Lease shall be controlling.

 

1.       
The sidewalks, halls, passages, elevators, stairways, and other common areas shall not be obstructed by Tenant or used by it for storage,
for depositing items, or for any purpose other than for ingress to and egress from the Premises. Should Tenant have access to any balcony
or patio area, Tenant shall not place any furniture other personal property in such area without the prior written approval of Landlord.

 

2.       
Neither Tenant nor any employee or contractor of Tenant shall go upon the roof of the Building without the prior written consent of Landlord.

 

3.       
Tenant shall, at its expense, be required to utilize the third party contractor designated by Landlord for the Building to provide any
telephone wiring services from the minimum point of entry of the telephone cable in the Building to the Premises.

 

4.       
No antenna or satellite dish shall be installed by Tenant without the prior written agreement of Landlord.

 

5.       
The sashes, sash doors, windows, glass lights, solar film and/or screen, and any lights or skylights that reflect or admit light into
the halls or other places of the Building shall not be covered or obstructed. If Landlord, by a notice in writing to Tenant, shall object
to any curtain, blind, tinting, shade or screen attached to, or hung in, or used in connection with, any window or door of the Premises,
the use of that curtain, blind, tinting, shade or screen shall be immediately discontinued and removed by Tenant. Interior of the Premises
visible from the exterior must be maintained in a visually professional manner and consistent with a first class office building. Tenant
shall not place any unsightly items (as determined by Landlord in its reasonable discretion) along the exterior glass line of the Premises
including, but not limited to, boxes, and electrical and data cords. No awnings shall be permitted on any part of the Premises.

 

6.       
The installation and location of any unusually heavy equipment in the Premises, including without limitation file storage units, safes
and electronic data processing equipment, shall require the prior written approval of Landlord. The moving of large or heavy objects shall
occur only between those hours as may be designated by, and only upon previous notice to, Landlord. No freight, furniture or bulky matter
of any description shall be received into or moved out of the lobby of the Building or carried in any elevator other than the freight
elevator (if available) designated by Landlord unless approved in writing by Landlord.

 

7.       
Any pipes or tubing used by Tenant to transmit water to an appliance or device in the Premises must be made of copper or stainless steel,
and in no event shall plastic tubing be used for that purpose.

 

8.       
Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent
shall not be unreasonably withheld. Upon the termination of its tenancy, Tenant shall deliver to Landlord all the keys to offices, rooms
and toilet rooms and all access cards which shall have been furnished to Tenant or which Tenant shall have had made.

 

9.       
Tenant shall not install equipment requiring electrical or air conditioning service in excess of that to be provided by Landlord under
the Lease without prior written approval from Landlord.

 

10.      
Tenant shall not use space heaters within the Premises.

 

11.      
Tenant shall not do or permit anything to be done in the Premises, or bring or keep anything in the Premises, which shall in any way increase
the insurance on the Building, or on the property kept in the Building, or interfere with the rights of other tenants, or conflict with
any government rule or regulation.

 

12.      
Tenant shall not use or keep any foul or noxious gas or substance in the Premises.

 

 

 

    	 	30	 

     

    

 

13.    
Tenant shall not permit the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the
Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business with other tenants.

 

14.    
Tenant shall not permit any pets or animals in or about the Building. Bona fide service animals are permitted provided such service animals
are pre-approved by Landlord, remain under the direct control of the individual they serve at all times, and do not disturb or threaten
others.

 

15.    
Neither Tenant nor its employees, agents, contractors, invitees or licensees shall bring any firearm, whether loaded or unloaded, into
the Project at any time.

 

16.    
Smoking tobacco, including via personal vaporizers or other electronic cigarettes, anywhere within the Premises, Building or Project is
strictly prohibited except that smoking tobacco may be permitted outside the Building and within the Project only in areas designated
by Landlord. Smoking, vaping, distributing, growing or manufacturing marijuana or any marijuana derivative anywhere within the Premises,
Building or Project is strictly prohibited.

 

17.    
Tenant shall not install an aquarium of any size in the Premises unless otherwise approved by Landlord.

 

18.    
Tenant shall not utilize any name selected by Landlord from time to time for the Building and/or the Project as any part of Tenant’s
corporate or trade name. Landlord shall have the right to change the name, number or designation of the Building or Project without liability
to Tenant. Tenant shall not use any picture of the Building in its advertising, stationery or in any other manner.

 

19.    
Tenant shall, upon request by Landlord, supply Landlord with the names and telephone numbers of personnel designated by Tenant to be contacted
on an after-hours basis should circumstances warrant.

 

20.    
Landlord may from time to time grant tenants individual and temporary variances from these Rules, provided that any variance does not
have a material adverse effect on the use and enjoyment of the Premises by Tenant.

 

21.    
Fitness Center Rules. Tenant shall cause its employees (whether members or prospective members of the Fitness Center) to comply
with the following Fitness Center rules and regulations (subject to change from time to time as Landlord may solely determine):

 

		(a)	Membership in the Fitness Center is open to the tenants of Landlord or its affiliates
only. No guests will be permitted to use the Fitness Center without the prior written approval of Landlord or Landlord’s representative.

 

		(b)	Fitness Center users are not allowed to be in the Fitness Center other than the
hours designated by Landlord from time to time. Landlord shall have the right to alter the hours of use of the Fitness Center, at Landlord’s
sole discretion.

 

		(c)	All Fitness Center users must execute Landlord’s Waiver of Liability prior
to use of the Fitness Center and agree to all terms and conditions outlined therein.

 

		(d)	Individual membership and guest keycards to the Fitness Center shall not be shared
and shall only be used by the individual to whom such keycard was issued. Failure to abide by this rule may result in immediate termination
of such Fitness Center user’s right to use the Fitness Center.

 

		(e)	All Fitness Center users and approved guests must have a pre-authorized keycard
to enter the Fitness Center. A pre-authorized keycard shall not be issued to a prospective Fitness Center user until receipt by Landlord
of Landlord’s initial fee, if any, for use of the Fitness Center by such Fitness Center user(s).

 

		(f)	Use of the Fitness Center is a privilege and not a right. Failure to follow gym
rules or to act inappropriately while using the facilities shall result in termination of Tenant’s Fitness Center privileges.

 

 

    	 	31	 

     

    

 

EXHIBIT F

 

PARKING

 

Tenant
shall be entitled to the number of vehicle parking spaces set forth in Item 11 of the Basic Lease Provisions, which spaces shall be
unreserved and unassigned, on those portions of the Common Areas designated by Landlord for parking. Tenant shall not use more
parking spaces than such number. Such parking shall be without obligation for payment of additional parking charges during the
initial 84-month Term of this Lease. All parking spaces shall be used only for parking of vehicles no larger than full size
passenger automobiles, sport utility vehicles or pickup trucks. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded, unloaded or parked in
areas other than those designated by Landlord for such activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, upon reasonable notice, in addition to such other rights and remedies that
Landlord may have, to remove or tow away the vehicle involved and charge the costs to Tenant. Parking within the Common Areas shall
be limited to striped parking stalls, and no parking shall be permitted in any driveways, access ways or in any area which would
prohibit or impede the free flow of traffic within the Common Areas. There shall be no parking of any vehicles for longer than a
seventy-two (72) hour period unless otherwise authorized by Landlord, and vehicles which have been abandoned or parked in violation
of the terms hereof may, upon reasonable notice, be towed away at the owner’s expense. Nothing contained in this Lease shall
be deemed to create liability upon Landlord for any damage to motor vehicles of visitors or employees, for any loss of property from
within those motor vehicles, or for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by
the sole negligence or willful misconduct of Landlord. Landlord shall have the right to establish, and from time to time amend, and
to enforce against all users all reasonable rules and regulations (including the designation of areas for employee parking) that
Landlord may deem necessary and advisable for the proper and efficient operation and maintenance of parking within the Common Areas.
Landlord shall have the right to construct, maintain and operate lighting facilities within the parking areas; to change the area,
level, location and arrangement of the parking areas and improvements therein; to restrict parking by tenants, their officers,
agents and employees to employee parking areas; after the expiration of the initial 84-month Term of the Lease, to enforce parking
charges (by operation of meters or otherwise); and to do and perform such other acts in and to the parking areas and improvements
therein as, in the use of good business judgment, Landlord shall determine to be advisable. Any person using the parking area shall
observe all directional signs and arrows and any posted speed limits. In no event shall Tenant interfere with the use and enjoyment
of the parking area by other tenants of the Project or their employees or invitees. Parking areas shall be used only for parking
vehicles. Washing, waxing, cleaning or servicing of vehicles, or the storage of vehicles for longer than 72 hours, is prohibited
unless otherwise authorized by Landlord. Tenant shall be liable for any damage to the parking areas caused by Tenant or
Tenant’s employees, suppliers, shippers, customers or invitees, including without limitation damage from excess oil leakage.
Tenant shall have no right to install any fixtures, equipment or personal property in the parking areas. Tenant shall not assign or
sublet any of the vehicle parking spaces, either voluntarily or by operation of law, without the prior written consent of Landlord,
except in connection with an authorized assignment of this Lease or subletting of the Premises.

 

 

 

 

 

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EXHIBIT G

 

ADDITIONAL PROVISIONS

 

The following additional provisions shall be binding on
Landlord and Tenant:

 

1.    
RIGHT TO EXTEND. Provided that no Default has occurred under any provision of this Lease, either at the time of exercise of the extension
right granted herein or at the time of the commencement of such extension, and provided further that Tenant is occupying the entire Premises
and has not assigned or sublet any of its interest in this Lease, then Tenant may extend the Term of this Lease for one (1) extension
period of 60 months. Tenant shall exercise its right to extend the Term by and only by delivering to Landlord, not less than 12 months
or more than 15 months prior to the Expiration Date of the Term, Tenant's irrevocable written notice of its commitment to extend (the
“Commitment Notice”). The Basic Rent payable under the Lease during any extension of the Term shall be determined as
provided in the following provisions.

 

If Landlord and
Tenant have not by then been able to agree upon the Basic Rent for the extension of the Term, then not less than 90 days or more than
120 days prior to the Expiration Date of the Term, Landlord shall notify Tenant in writing of the Basic Rent that would reflect the prevailing
market rental rate for a 60-month renewal of comparable space in the Project (together with any increases thereof during the extension
period) as of the commencement of the extension period (“Landlord's Determination”). Should Tenant disagree with the
Landlord's Determination, then Tenant shall, not later than 20 days thereafter, notify Landlord in writing of Tenant's determination of
those rental terms (“Tenant's Determination”). Within 10 business days following delivery of the Tenant's Determination,
the parties shall attempt to agree on an appraiser to determine the fair market rental. If the parties are unable to agree in that time,
then each party shall designate an appraiser within 10 business days thereafter. Should either party fail to so designate an appraiser
within that time, then the appraiser designated by the other party shall determine the fair market rental. Should each of the parties
timely designate an appraiser, then the two appraisers so designated shall appoint a third appraiser who shall, acting alone, determine
the fair market rental for the Premises. Any appraiser designated hereunder shall have an MAI certification with not less than 5 years’
experience in the valuation of commercial industrial buildings in the vicinity of the Project.

 

Within 30 days
following the selection of the appraiser and such appraiser's receipt of the Landlord's Determination and the Tenant's Determination,
the appraiser shall determine whether the rental rate determined by Landlord or by Tenant more accurately reflects the fair market rental
rate for the 60-month renewal of the Lease for the Premises, as reasonably extrapolated to the commencement of the extension period. Accordingly,
either the Landlord's Determination or the Tenant's Determination shall be selected by the appraiser as the fair market rental rate for
the extension period. In making such determination, the appraiser shall consider rental comparables for the Project (provided that if
there are an insufficient number of comparables within the Project, the appraiser shall consider rental comparables for similarly improved
space owned by Landlord in Irvine Spectrum within a 2-mile radius of the Project with appropriate adjustment for location and quality
of project), but the appraiser shall not attribute any factor for brokerage commissions in making its determination of the fair market
rental rate. At any time before the decision of the appraiser is rendered, either party may, by written notice to the other party, accept
the rental terms submitted by the other party, in which event such terms shall be deemed adopted as the agreed fair market rental. The
fees of the appraiser(s) shall be borne entirely by the party whose determination of the fair market rental rate was not accepted by the
appraiser.

 

Within 20 days
after the determination of the fair market rental, Landlord shall prepare an appropriate amendment to this Lease for the extension period,
and Tenant shall execute and return same to Landlord within 10 business days after Tenant’s receipt of same. Should the fair market
rental not be established by the commencement of the extension period, then Tenant shall continue paying rent at the rate in effect during
the last month of the initial Term, and a lump sum adjustment shall be made promptly upon the determination of such new rental.

 

 

 

 

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If Tenant fails
to timely exercise the extension right granted herein within the time period expressly set forth for exercise by Tenant in the initial
paragraph of this Section, Tenant's right to extend the Term shall be extinguished and the Lease shall automatically terminate as of the
expiration date of the Term, without any extension and without any liability to Landlord. Tenant’s rights under this Section shall
belong solely to Lantronix, Inc., a Delaware corporation, and any Affiliate, and any other attempted assignment or transfer of such rights
shall be void and of no force and effect. Tenant shall have no other right to extend the Term beyond the single 60-month extension period
created by this Section. Unless agreed to in a writing signed by Landlord and Tenant, any extension of the Term, whether created by an
amendment to this Lease or by a holdover of the Premises by Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this Section.

 

2.    
FITNESS CENTER. Subject to the provisions of this Section, so long as Tenant is not in Default under this Lease, and provided Tenant’s
employees execute Landlord’s standard waiver of liability form and pay the applicable one time or monthly fee, if any, then Tenant’s
employees (the “Fitness Center Users”) shall be entitled to use the fitness center and the shower facility located
at the Project (collectively, the “Fitness Center”). No separate charges shall be assessed to Fitness Center Users
for the use of the Fitness Center (with the exception of towel/laundry fees, if any) during the initial Term of this Lease, provided,
however, that the costs of operating, maintaining and repairing the Fitness Center shall be included as part of Operating Expenses. The
use of the Fitness Center shall be subject to the reasonable rules and regulations (including rules regarding hours of use) established
from time to time by Landlord. Landlord and Tenant acknowledge that the use of the Fitness Center by the Fitness Center Users shall be
at their own risk and that the terms and provisions of Section 10.3 of this Lease shall apply to Tenant and the Fitness Center User’s
use of the Fitness Center. Tenant acknowledges that the provisions of this Section shall not be deemed to be a representation by Landlord
that Landlord shall continuously maintain the Fitness Center (or any other fitness facility) throughout the Term of this Lease, and Landlord
shall have the right, at Landlord’s sole discretion, to expand, contract, eliminate or otherwise modify the Fitness Center. No
expansion, contraction, elimination or modification of the Fitness Center, and no termination of Tenant’s or the Fitness Center
Users’ rights to the Fitness Center shall entitle Tenant to an abatement or reduction in Basic Rent constitute a constructive eviction,
or result in an event of default by Landlord under this Lease. Landlord reserves the right to reasonably limit, restrain, or condition
the use of the Fitness Center by tenants of the Building (including Tenant’s Fitness Center Users) if Landlord reasonably determines
that their use of the Fitness Center has a disproportionate and/or inequitable impact on the ability of other tenants to use the Fitness
Center. Tenant hereby voluntarily releases, discharges, waives and relinquishes any and all actions or causes of action for personal
injury or property damage occurring to Tenant or its employees or agents arising as a result of the use of the Fitness Center, or any
activities incidental thereto, wherever or however the same may occur, and further agrees that Tenant will not prosecute any claim for
personal injury or property damage against Landlord or any of its officers, agents, servants or employees for any said causes of action.
It is the intention of Tenant with respect to the Fitness Center to exempt and relieve Landlord from liability for personal injury or
property damage caused by negligence. Tenant’s right to use the Fitness Center shall belong solely to Tenant and may not be transferred
or assigned without Landlord’s prior written consent, which may be withheld by Landlord in Landlord’s sole discretion.

 

3. CONFERENCE
CENTER. Landlord currently provides a conference center (the “Conference Center”) in the Project capable of accommodating
groups of people for use by Project tenants (including Tenant) on a reserved basis. Tenant shall, subject to availability, have the use
of the Conference Center subject to Landlord’s procedures and charges, if any. The use of the Conference Center shall be subject
to the reasonable rules and regulations (including rules regarding hours of use and priorities for the tenants of the particular building
in which a Conference Center is located, set up and clean up charges, etc.) established from time to time by Landlord for the Conference
Center. Landlord and Tenant acknowledge that the terms and provisions of Section 10.3 of this Lease shall apply to Tenant’s use
of the Conference Center. Further, Landlord shall have no liability whatsoever with respect to the existence, condition or availability
of any Conference Center nor shall Landlord have any obligation whatsoever to enforce or make reservations thereof, and Tenant hereby
expressly waives all claims against Landlord with respect to the same. No expansion, contraction, elimination, unavailability or modification
of the Conference Center, and no termination of or interference with Tenant’s rights to the Conference Center, shall entitle Tenant
to an abatement or reduction in rent or constitute a constructive eviction or an event of default by Landlord under this Lease.

 

 

 

 

 

    	 	34	 

     

    

 

EXHIBIT H

 

LANDLORD’S DISCLOSURES

 

SPECTRUM

 

The capitalized
terms used and not otherwise defined in this Exhibit shall have the same definitions as set forth in the Lease. The provisions of this
Exhibit shall supersede any inconsistent or conflicting provisions of the Lease.

 

1.       Landlord
has been informed that the El Toro Marine Corps Air Station (MCAS) has been listed as a Federal Superfund site as a result of chemical
releases occurring over many years of occupancy. Various chemicals including jet fuel, motor oil and solvents have been discharged in
several areas throughout the MCAS site. A regional study conducted by the Orange County Water District has estimated that groundwaters
beneath more than 2,900 acres have been impacted by Trichloroethylene (TCE), an industrial solvent. There is a potential that this substance
may have migrated into the ground water underlying the Premises. The U.S. Environmental Protection Agency, the Santa Ana Regional Water
Quality Control Board, and the Orange County Health Care Agency are overseeing the investigation/cleanup of this contamination. To the
Landlord's current actual knowledge, the ground water in this area is used for irrigation purposes only, and there is no practical impediment
to the use or occupancy of the Premises due to the El Toro discharges.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	35	 

     

    

 

EXHIBIT I

 

LETTER OF CREDIT

 

 

IRREVOCABLE STANDBY LETTER OF CREDIT

  

	 	Number:	 	 
	 	Date:	 	 
	 	Amount:	 
	 	Expiration:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	BENEFICIARY	ACCOUNT PARTY
	 	 	 	 
	Discovery Business Center LLC	 	 	 
	550 Newport Center Drive	 	 	 
	Newport Beach, CA 92660	 	 	 
	Attn: Senior Vice President, Finance, Office Properties	 	 	 

 

We hereby issue our Irrevocable Letter of Credit No. __________________
in favor of Discovery Business Center LLC (“Beneficiary”), its successors and assigns, for the account of_____________.
We undertake to honor your sight draft, upon presentation at our office in _______________________, California, for any sum or sums
not to exceed a total of _________________________       ($___       )
in favor of Beneficiary when accompanied by the original of this Letter of Credit.

 

Partial and multiple drawings are
permitted under this Letter of Credit. In the event of a partial draw, the amount of the draft shall be endorsed on the reverse side hereof
by the negotiating bank.

 

This Letter of Credit is transferable
in its entire undrawn balance to a successor beneficiary upon presentation by Beneficiary of the original of this Letter of Credit, together
with a written request for transfer executed by Beneficiary.

 

Draw requests may be submitted in person, by courier, by
fax, or by mail to our address stated above.

 

It is a condition of this Letter of Credit that it shall
remain enforceable against us for a period of________________from this date and further, that it shall be deemed automatically extended
for successive one-year periods without amendment thereafter unless sixty (60) days prior to the expiration date set forth above, or
within sixty (60) days prior to the end of any yearly Anniversary Date thereafter, you shall receive our notice in writing by certified
mail, return receipt requested, that we elect not to renew this Letter of Credit for any subsequent year.

 

The draft must be marked “Drawn
under ________________ Letter of Credit No. ____________ dated ____________ .”

 

There are no other conditions of
this letter of credit. Except so far as otherwise stated, this credit is subject to the Standby Practices, ICC Publication No. 590 (ISP98),
except to the extent the same would be inconsistent with the express provisions hereof, and is otherwise governed by the laws of the State
of California.

 

__________________________

__________________________

 

By: _______________________

 

By: _______________________

 

 

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EXHIBIT X

 

WORK LETTER

BUILD TO SUIT

 

Landlord, at Landlord’s
sole cost and expense except as provided below, shall cause a contractor engaged by Landlord and selected on the basis of competitive
bids submitted by one general contractor designated by Landlord and up to 2 other general contractors approved in writing by Landlord
to construct the tenant improvements (the “Tenant Improvements”) for the Premises as shown in the Preliminary Pricing
plan (the “Plan”) prepared by Environ and dated September 21, 2021, and the Preliminary Pricing #2 (the “Cost
Estimate”) prepared by DSC, Inc. and dated October 6, 2021, including Alternates A, C and D. If the contractor designated by
Landlord submits the lowest qualified bid, it shall be utilized to perform the work. Each bidding contractor shall use the electrical,
mechanical, plumbing and fire/life safety engineers and subcontractors designated by Landlord. All other subcontractors shall be subject
to Landlord’s reasonable approval, and Landlord may require that one or more designated subtrades be union contractors. The lowest
responsible bidder shall be selected as the general contractor for the Tenant Improvements. Any additional cost resulting from changes
requested by Tenant shall be borne solely by Tenant and paid to Landlord prior to the commencement of construction. Unless otherwise specified
in the Plan or Cost Estimate or hereafter agreed in writing by Landlord, all materials and finishes utilized in constructing the Tenant
Improvements shall be Landlord's building standard. Should Landlord submit any additional plans, equipment specification sheets, or other
matters to Tenant for approval or completion, Tenant shall respond in writing, as appropriate, within 5 business days unless a shorter
period is provided herein. Tenant shall not unreasonably withhold its approval of any matter, and any disapproval shall be limited to
items not previously approved by Tenant in the Plan or otherwise.

 

In the event that
Tenant requests in writing a revision in the Plan or in any other plans hereafter approved by Tenant, then provided such change request
is acceptable to Landlord, Landlord shall advise Tenant by written change order of any additional cost and/or Tenant Delay (as defined
below) such change would cause. Tenant shall approve or disapprove such change order in writing within 2 business days following its receipt.
Tenant's approval of a change order shall not be effective unless accompanied by payment in full of the additional cost of the tenant
improvement work resulting from the change order. It is understood that Landlord shall have no obligation to interrupt or modify the tenant
improvement work pending Tenant's approval of a change order.

 

Notwithstanding
any provision in the Lease to the contrary, if Tenant fails to comply with any of the time periods specified in this Work Letter, requests
any changes to the work, fails to make timely payment of any sum due hereunder, furnishes inaccurate or erroneous specifications or other
information, or otherwise delays in any manner the completion of the Tenant Improvements or the issuance of an occupancy certificate (any
of the foregoing being referred to in this Lease as a “Tenant Delay”), then Tenant shall bear any resulting additional
construction cost or other expenses and the Commencement Date shall be deemed to have occurred for all purposes, including Tenant's obligation
to pay Rent, as of the date Landlord reasonably determines that it would have been able to deliver the Premises to Tenant but for the
collective Tenant Delays. Notwithstanding the foregoing, except for failure to meet specified time deadlines, and except for Tenant Delays
specified in Landlord’s response to change order requests accepted by Tenant, a Tenant Delay shall not be deemed to have occurred
unless Landlord has provided notice (which may be by electronic mail to Tenant’s representative notwithstanding any notice provisions
or requirements in the Lease to the contrary) to Tenant specifying that a Tenant Delay shall be deemed to have occurred because of actions,
inaction or circumstances specified in the notice in reasonable detail. If such actions, inaction or circumstances are not cured by Tenant
within 2 business days after receipt of such notice (“Count Date”), and if such actions, inaction or circumstances
otherwise qualify as a Tenant Delay, then a Tenant Delay shall be deemed to have occurred commencing as of the Count Date.

 

Landlord shall
permit Tenant and its agents to enter the Premises at least 15 days prior to the Commencement Date of the Lease in order that Tenant may
install its telephones, furniture, equipment and computers and perform any work to be performed by Tenant hereunder through its own contractors,
subject to Landlord's prior written approval, and in a manner and upon terms and conditions and at times satisfactory to Landlord's representative.
The foregoing license to enter the Premises prior to the Commencement Date is, however, conditioned upon Tenant's contractors and their
subcontractors and employees working in harmony and not interfering with the work being performed by Landlord. If at any time that entry
shall cause disharmony or interfere with the work being performed by Landlord, this license may be withdrawn by Landlord upon 24 hours
written notice to Tenant. That license is further conditioned upon the compliance by Tenant's contractors with all requirements imposed
by Landlord on third party contractors, including without limitation the maintenance by Tenant and its contractors and subcontractors
of workers' compensation and public liability and property damage insurance in amounts and with companies and on forms satisfactory to
Landlord, with certificates of such insurance being furnished to Landlord prior to proceeding with any such entry. The entry shall be
deemed to be under all of the provisions of the Lease except as to the covenants to pay Rent unless Tenant commences business activities
within the Premises. Landlord shall not be liable in any way for any injury, loss or damage which may occur to any such work being performed
by Tenant, the same being solely at Tenant's risk. In no event shall the failure of Tenant's contractors to complete any work in the Premises
extend the Commencement Date of this Lease.

 

Tenant hereby designates
Michael Fink, Telephone No. (949) 450-7200, Email: michael.fink@lantronix.com, as its representative,
agent and attorney-in-fact for the purpose of receiving notices, approving submittals and issuing requests for changes, and Landlord shall
be entitled to rely upon authorizations and directives of such person(s) as if given by Tenant. Tenant may amend the designation of its
construction representative(s) at any time upon delivery of written notice to Landlord.

 

 

    	 	41	 

     

    

 

EXHIBIT Y

 

Discovery Park

 

 

    	 	42

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