Document:

ex10_11.htm

Exhibit 10.11

 

EXECUTION VERSION

 

COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

 

Dated as of March 29, 2007

 

among

 

PLUM POINT ENERGY ASSOCIATES, LLC,

as the Borrower,

PPEA HOLDING COMPANY, LLC,

as Pledgor,

THE ROYAL BANK OF SCOTLAND PLC,

as Administrative Agent,

THE BANK OF NEW YORK,

as Collateral Agent,

AMBAC ASSURANCE CORPORATION,

as Loan Insurer

and

EACH OF THE OTHER PARTIES HERETO FROM TIME TO TIME

  

  

  

TABLE OF CONTENTS

 

	  	  	
Page

	  	  	  
	
SECTION 1.
	
Definitions
	
5

	  	  	  
	
1.1
	
Defined Terms
	
5

	
1.2
	
Rules of Interpretation
	
21

	  	  	  
	
SECTION 2.
	
Contesting Liens; Same Collateral; Same Collateral Documents
	
22

	  	  	  
	
SECTION 3.
	
Enforcement
	
23

	  	  	  
	
3.1
	
Exercise of Remedies; Acceleration Rights
	
23

	
3.2
	
Enforcement of Liens
	
24

	
3.3
	
Consents
	
27

	  	  	  
	
SECTION 4.
	
Payments
	
27

	  	  	  
	
4.1
	
Application of Proceeds
	
27

	
4.2
	
Debt Balances
	
28

	
4.3
	
Payments Over
	
28

	  	  	  
	
SECTION 5.
	
Other Agreements
	
28

	  	  	  
	
5.1
	
Releases
	
28

	
5.2
	
Certain Actions
	
29

	
5.3
	
Debt Service Reserve; Cash Collateral Accounts; Sponsor Support Agreement
	
30

	
5.4
	
Additional Secured Obligations
	
31

	  	  	  
	
SECTION 6.
	
Insolvency or Liquidation Proceedings
	
32

	  	  	  
	
6.1
	
Finance and Sale Issues
	
32

	
6.2
	
Avoidance Issues
	
32

	
6.3
	
Reorganization Securities
	
32

	
6.4
	
Post-Petition Interest
	
33

	  	  	  
	
SECTION 7.
	
Collateral Agent
	
33

	  	  	  
	
7.1
	
Appointment
	
33

	
7.2
	
Delegation of Duties
	
33

	
7.3
	
Exculpatory Provisions
	
34

	
7.4
	
Notice of Event of Default
	
36

	
7.5
	
Non-Reliance on Collateral Agents and Other Secured Parties
	
36

	
7.6
	
Collateral Agents in Individual Capacity
	
36

	
7.7
	
Successor Collateral Agents
	
36

	
7.8
	
Security Documents
	
37

	
7.9
	
No Risk of Funds
	
37

	
7.10
	
Fees; Expenses
	
37

	
7.11
	
Indemnification
	
38

  

  

  

 

	
SECTION 8.
	
Reliance; Waivers; Etc.
	
39

	  	  	  
	
8.1
	
Reliance
	
39

	
8.2
	
No Warranties or Liability
	
39

	
8.3
	
No Waiver of Lien Priorities
	
39

	
8.4
	
Obligations Unconditional
	
40

	  	  	  
	
SECTION 9.
	
Miscellaneous
	
40

	  	  	  
	
9.1
	
Conflicts
	
40

	
9.2
	
Effectiveness; Continuing Nature of this Agreement; Severability
	
40

	
9.3
	
Amendments; Waivers; Controlling Party
	
41

	
9.4
	
Voting
	
41

	
9.5
	
Information Concerning Financial Condition of the Borrower
	
43

	
9.6
	
Application of Payments
	
43

	
9.7
	
CONSENT TO JURISDICTION.
	
44

	
9.8
	
WAIVER OF JURY TRIAL.
	
44

	
9.9
	
Notices
	
45

	
9.10
	
Further Assurances
	
45

	
9.11
	
APPLICABLE LAW
	
45

	
9.12
	
Binding on Successors and Assigns
	
45

	
9.13
	
Specific Performance
	
45

	
9.14
	
Headings
	
45

	
9.15
	
Counterparts
	
45

	
9.16
	
Authorization
	
45

	
9.17
	
No Third Party Beneficiaries; No Partnership
	
46

	
9.18
	
Provisions Solely to Define Relative Rights
	
46

	
EXHIBIT
	  	  
	 	 	 
	
Exhibit A
	
–
	
Form of Accession Agreement

	 	 	 
	ANNEX	 	 
	 	 	 
	
Annex I
	
–
	
Notices

	 	 	 
	SCHEDULE	 	 
	 	 	 
	
Schedule I
	

–

	
Excluded Collateral

  

3

  

 

This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT is dated as of March 29, 2007, and is entered into by and among PLUM POINT ENERGY ASSOCIATES, LLC, a Delaware limited liability company (the “Borrower”), PPEA HOLDING COMPANY, LLC, a Delaware limited
liability company (the “Pledgor”), THE BANK OF NEW YORK, in its capacity as collateral agent for the Secured Parties (as defined below) (the “Collateral Agent”), THE ROYAL BANK OF SCOTLAND PLC, in its capacity as Administrative Agent (as defined below), AMBAC ASSURANCE CORPORATION, in its capacity as Loan Insurer (as defined below), and
EACH OF THE OTHER PERSONS (AS DEFINED BELOW) PARTY HERETO FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS HEREOF.  Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

 

RECITALS

 

(1)           The Borrower has an undivided interest in an approximately 665 MW coal- fired power generation plant to be located near Osceola, Arkansas (the “Project”).

 

(2)           The Borrower, the lenders party thereto from time to time (collectively, the “Construction Lenders”), The Royal Bank of Scotland plc, in its capacity as administrative agent for the
Construction Lenders (the “Administrative Agent”), The Royal Bank of Scotland plc, in its capacity as issuer of letters of credit, RBS Securities Corporation, in its capacity as sole lead arranger and sole bookrunner (in such capacities, the “Lead Arranger”), the Collateral Agent and the other parties thereto from time to time have entered
into that certain Credit Agreement, dated as of the date hereof (the “Credit Agreement”).

 

(3)           The Borrower may incur Additional Senior Debt after the date of this Agreement.

 

(4)           The Borrower will enter into certain interest rate protection agreements after the date of this Agreement, and the Borrower may secure its obligations under certain of such agreements with a first priority lien on the Collateral.

 

(5)          Certain of the Borrower’s obligations under the Credit Agreement, the Secured Interest Rate Protection Agreements and the Secured Funded Debt Documents will be insured and guaranteed by the Loan Insurer, and the Borrower’s reimbursement and other obligations to the Loan
Insurer will be secured on a first priority basis by Liens on the Collateral pursuant to the terms of the Collateral Documents.

 

(6)           The obligations of the Borrower under the Credit Agreement, the Secured Interest Rate Protection Agreements and the Secured Funded Debt Documents will be secured on a first priority basis by Liens on the Collateral pursuant to the terms of the Collateral Documents.

 

(7)           The Transaction Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral and certain other matters.

  

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(8)           In order to induce the Secured Parties to enter into the transactions contemplated by the Transaction Documents, each of the parties hereto has agreed to the agency, intercreditor and other provisions set forth in this Agreement.

 

AGREEMENT

 

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

SECTION 1.  Definitions.

 

1.1           Defined Terms

 

.  Any terms used herein without definition shall have the meaning ascribed thereto in the Collateral Documents.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the term defined):

 

“Accession Agreement” means an Accession Agreement substantially in the form attached hereto as Exhibit A.

 

“Additional Senior Debt” means Debt incurred by the Borrower after the date hereof which is permitted by all of the Transaction Documents and, pursuant to the terms thereof, the Borrower’s obligations to the lenders, tax-exempt bondholders, agents,
trustee, issuing bank and other creditors of the Borrower thereunder are permitted to be secured by a first-priority Lien on the Collateral.

 

“Advance” means (without duplication) (a) a loan (including any Construction Loans, Backstop LC Loans, Revolving Credit Loans and Term Loans under and as defined in the Credit Agreement) or other funded debt obligation made by the Construction Lenders
under the Credit Agreement and/or the New Lenders under any other Secured Funded Debt Document and/or (b) an obligation of the Lenders under the Credit Agreement or the New Lenders under any other Secured Funded Debt Document to reimburse a LC Issuer for a drawing under a Letter of Credit, as the context may require.

 

“Affiliate” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agent” means each of the Administrative Agent, the Collateral Agent, the Depositary Agent, each LC Issuer, the Lead Arranger, the Loan Insurer, and/or each agent, trustee and/or issuing bank under any Secured Funded Debt Document, as the context may
require.

 

“Asset Sale” means a sale, lease (as lessor), sale and leaseback, assignment, conveyance, exclusive license (as licensor), transfer or other disposition to, or any exchange of Property with, any Person, in one transaction or a series of transactions,
of part of the Borrower’s Properties, whether now owned or hereafter acquired, leased or licensed, to the extent such sale, lease, sale and leaseback, assignment, conveyance, license, transfer or other disposition is permitted under the terms of all of the Transaction Documents.

  

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“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

 

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

 

“Bankruptcy Event” shall be deemed to occur, with respect to any Person, if that person shall institute a voluntary case seeking liquidation or reorganization under the Bankruptcy Law, or shall consent to the institution of an involuntary case thereunder
against it; or such Person shall file a petition or shall otherwise institute any similar proceeding under any other applicable Federal or state law, or shall consent thereto; or such Person shall apply for the appointment, or by consent or acquiescence there shall be an appointment, of a receiver, liquidator, sequestrator, trustee or other officer or custodian with similar powers for itself or any substantial part of its property or assets; or such Person shall make an assignment for the benefit of its creditors;
or such Person shall become insolvent, or admit in writing its inability or unwillingness to pay its debts generally as they become due; or if an involuntary case shall be commenced seeking liquidation or reorganization of such Person under the Bankruptcy Law or any similar proceedings shall be commenced against such Person under any other applicable Federal or state law and (i) the petition commencing the involuntary case is not timely controverted, (ii) the petition commencing the involuntary case is not dismissed
within sixty (60) days of its filing, (iii) an interim trustee is appointed to take possession of all or a portion of the property, and/or to operate all or any part of the business, of such Person and such appointment is not vacated within sixty (60) days, or (iv) an order for relief shall have been issued or entered therein; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee or other officer having similar powers, of such
Person or all or a part of its property shall have been entered; or any other similar relief shall be granted against such Person under any applicable federal or state law.

 

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

 

“Borrower” has the meaning specified in the preamble hereto.

 

“Breakage Costs” means, with respect to any Advance, the loss, cost and expense attributable to (a) the prepayment of the principal amount of such Advance other than on the last day of the applicable interest period for such Advance or (b) the revocation
by the Borrower of any notice of borrowing or notice of issuance submitted pursuant to the Credit Agreement or any other Secured Funded Debt Document, as applicable, after the applicable minimum period for the submission of such notice of borrowing or notice of issuance, as applicable, specified therein or the failure of the conditions precedent to be met after delivery of any such notice of borrowing or notice of issuance and, shall in any event include any amount payable pursuant to Section 2.16 of the Credit
Agreement.

  

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“Business Day” means any day other than a Saturday or Sunday or other day on which banks in New York, New York or in the State of Arkansas are authorized or required by law or executive order to remain closed.

 

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

 

“Cash” means money, currency or a credit balance in any demand account or deposit account.

 

“Claims” means any and all actions, suits, penalties, claims and demands and reasonable out-of-pocket liabilities, losses, costs and expenses (including reasonable and documented attorney’s fees and expenses) of any nature whatsoever.

 

“Closing Date” means March 29, 2007.

 

“Co-Participants” means ETEC, MJMEUC, MEAM and Empire.

 

“Collateral” means the Equity Interests in and all Property of the Borrower (other than any Property which is specifically excluded from the Collateral pursuant to the Collateral Documents, including, from and after the disposition thereof, any Excluded
Collateral), now owned or hereinafter acquired.

 

“Collateral Documents” means the Mortgage, the Pledge Agreement, the Security Agreement, this Agreement, the Depositary Agreement, each Consent,
any fixture filings, financing statements, or other similar documents filed, recorded or delivered in connection with the foregoing, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Secured Obligations or under which rights or remedies with respect to such Liens are governed.

 

“Commitments” means the commitments of the Construction Lenders and the New Lenders to make Advances, to fund, issue and take participation interests in Letters of Credit, and/or to make other extensions of credit to the Borrower, as more particularly
provided for in the Credit Agreement or the applicable Secured Funded Debt Document.

 

“Consent” means each Consent and Agreement entered into on or prior to the Closing Date (including any “acknowledgment letter” delivered by the applicable counterparties on or before the Closing Date with respect to any Consent and Agreements
entered into prior to the Closing Date) or from time to time thereafter among the applicable counterparty, the Borrower and the Collateral Agent (for the benefit of the Secured Parties).

 

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

  

7

  

“Controlling Parties” means (a) in the case of the Credit Agreement, (i) until the Credit Agreement has been Refinanced in full, the “Controlling Party” under and as defined in the Credit Agreement and (ii) if the Credit Agreement has been
Refinanced in full and the Loan Insurer is not guaranteeing or insuring any other Insured Debt, the administrative agent under any successor credit facility (subject to the requirements thereunder regarding majority or supermajority lender voting) and (b) in the case of any other Insured Debt, the “Controlling Party”, “Directing Party” or analogous entity in respect of such other Insured Debt.

 

“Debt” of any Person at any date means, without duplication:

 

(a)           indebtedness created, issued or incurred by such Person for borrowed money (whether by loan or the issuance and sale of debt securities or the sale of Property of such Person to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property of such Person from such Person);

 

(b)           notes payable and drafts accepted by such Person representing extensions of credit whether or not representing obligations for borrowed money;

 

(c)           any obligation owed by such Person for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is due more than six months from the date of incurrence of the obligation
in respect thereof;

 

(d)           the face amount of any letter of credit or similar instrument issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings;

 

(e)           the direct or indirect Guarantee, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another (provided that such
obligation of such person shall be “Debt” hereunder only if and to the extent that the assurance such Person is providing to such obligee is in respect of an obligation that otherwise constitutes “Debt” hereunder);

 

(f)           any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged or the holders thereof will be protected (in whole or in part) against
loss in respect thereof (provided that such obligation of such Person shall be “Debt” hereunder only if and to the extent that the assurance such Person is providing to such obligee is in respect of an obligation that otherwise constitutes “Debt” hereunder);

 

(g)          any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (i) or (ii) of this clause
(g), the primary purpose or intent thereof is as described in clause (f) above (provided that such liability of such Person shall be “Debt” hereunder only if and to the extent that the related obligation otherwise constitutes “Debt” hereunder);

  

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(h)          all ordinary course trade payables which are more than 90 days overdue;

 

(i)           all obligations of such person in respect of any exchange traded or over the counter derivative transaction or any interest rate protection or commodity hedging transaction, including any transaction under any Hedging Agreement (including any Interest
Rate Protection Agreement), whether entered into for hedging or speculative purposes; and

 

(j)           Capital Lease Obligations.

 

“Debt Service Reserve” means any Permitted Investments deposited into a Debt Service Reserve Account as contemplated by the Depositary Agreement.

 

“Debt Service Reserve Account” has the meaning assigned to such term in the Depositary Agreement.

 

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

 

“Depositary Agent” means The Bank of New York, a New York banking corporation, not in its individual capacity but solely as depositary agent, bank and securities intermediary under the Depositary Agreement.

 

“Depositary Agreement” means the Depositary Agreement, dated as of the date hereof, among the Borrower, the Depositary Agent, the Administrative Agent and the Collateral Agent.

 

“DIP Financing” has the meaning specified in Section 6.1.

 

“direction of the Required First Lien Secured Parties” means any instruction or direction given to the Collateral Agent in accordance with the terms of this Agreement (including Section 9.4 hereof and as contemplated by the definition of Required First
Lien Secured Parties) to take or refrain from taking any action hereunder or under any other Collateral Document.  Each such instruction or direction shall be accompanied by a certificate from each Secured Debt Representative certifying the dollar amount that such Secured Debt Representative (on behalf of its applicable Secured Parties) is entitled to vote pursuant to the applicable terms and conditions hereof.  The Collateral Agent shall be entitled to conclusively rely on the accuracy of
each such certificate of each Secured Debt Representative and the Collateral Agent shall provide a copy of each such certificate to the other Secured Debt Representatives.

  

9

  

“Discharge Date” means the date on which:

 

(a)           payment in full in cash of (i) the outstanding principal amount of the Advances, (ii) unreimbursed amounts with respect to any Letter of Credit issued under the Credit Agreement or the other Secured Funded Debt Documents and (iii) Interest Expense (including interest
accruing (or which would, absent the commencement of an Insolvency or Liquidation Proceeding, accrue) on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding) has been made under the Transaction Documents;

 

(b)           the termination or expiration of all (i) Commitments, (ii) Secured Interest Rate Protection Agreements and (iii) Secured Fuel Supply Agreements has occurred;

 

(c)           cancellation, termination or cash collateralization at 102.5% of the Available Amount thereof (in a manner reasonably satisfactory to the applicable LC Bank and the applicable Secured Debt Representative or, if such Letters of Credit are Insured Debt, the Controlling
Party) of all Letters of Credit issued and outstanding under the Credit Agreement or the other Secured Funded Debt Documents has occurred; and

 

(d)           payment in full in cash of all other Secured Obligations that are then due and payable or otherwise accrued has been made (or provision has been made for the payment and discharge in full of such other Secured Obligations in accordance with the terms and conditions of
the applicable Secured Funded Debt Documents).

 

“Early Termination Event” means, with respect to any Secured Fuel Supply Agreement or any Secured Interest Rate Protection Agreement, the occurrence of any “Early Termination Event”
or the designation of an “Early Termination Date” (however defined) or any event of default (howsoever defined) under such Secured Fuel Supply Agreement or such Secured Interest Rate Protection Agreement (as the case may be) which results in the termination of such Secured Fuel Supply Agreement or such Secured Interest Rate Protection Agreement (as the case may be).

 

“Eligible Fuel Supply Agreement Amount” means, as of any date of determination, the amounts which the Borrower owes to the applicable Secured Fuel Supply Agreement Counterparty under such Secured Fuel Supply Agreement in respect of coal actually delivered
to the Project under such Secured Fuel Supply Agreement (and not, for the avoidance of doubt, any termination payments, mark-to-market payments or consequential, special, punitive, liquidated or indirect damage payments) as of such date of determination.

 

“Eligible Swap Amount” means, as of any date of determination, the amount of the Termination Payments (if any) due and owing to the applicable Interest Rate Hedge Provider as of such of date of determination.

 

“Empire” means The Empire District Electric Company, a Kansas corporation.

 

“Empire PPA” means the Power Purchase Agreement, dated as of March 3, 2006, between the Borrower and Empire.

  

10

  

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any person, or any obligations convertible into or exchangeable
for, or giving any person a right, option or warrant to acquire, such equity interests or such convertible or exchangeable obligations.

 

“ETEC” means East Texas Electric Cooperative, Inc., a generation and transmission electric cooperative existing under the laws of the State of Texas.

 

“Event of Default” means the occurrence of (a) any “Event of Default” under and as defined in the Credit Agreement or any other Collateral Document, (b) any “Event of Default”, “Early Termination Event” or “Additional
Termination Event”, under and as defined in the Secured Interest Rate Protection Agreement, (c) any similar term describing an event of default or early termination event under and however defined in any Secured Interest Rate Protection Agreement or (d) any similar term describing an event of default under any other Transaction Document.

 

“Excluded Collateral” means any of the Borrower’s Properties set forth on Schedule 1.01(a) hereto.

 

“FERC” means the Federal Energy Regulatory Commission and its successors.

 

“GAAP” means generally accepted accounting principles in the United States.

 

“Governmental Authority” means the government of the United States of America or any other nation, any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Governmental Rule” means, with respect to any Person, any law, rule, regulation, ordinance, order, code, treaty, judgment, decree, directive, guideline, policy or similar form of decision of any Governmental Authority binding on such Person.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of (a) the guarantor or (b) another Person (including any bank under
a letter of credit) to induce the creation of which the guarantor has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation, contingent or otherwise, of the guarantor, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation or (v) to otherwise assure or hold harmless the owner of such Debt or other obligation against loss in respect thereof; provided, however, that the term “Guarantee” shall
not include endorsements for collection or deposit in the ordinary course of business.

  

11

  

“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, fuel or other commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided, however, that no phantom stock or similar plan providing for payments and on account of services provided by current or former directors, officers, employees or consultants of the Borrower or
any Affiliate of the Borrower shall be a Hedging Agreement.

 

“Indemnified Person” has the meaning assigned to such term in Section 7.11(a).

 

“Independent Engineer” means Stone & Webster Management Consultants, Inc., or its successor appointed pursuant to the Credit Agreement.

 

“Insolvency or Liquidation Proceeding” means:

 

(a)           any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Loan Party;

 

(b)           any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Loan Party or with respect to a material portion of their respective
assets;

 

(c)           any liquidation, dissolution, reorganization or winding up of any Loan Party whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

 

(d)           any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Loan Party.

 

“Insurance Policies” has the meaning assigned to such term in the Depositary Agreement.

 

“Insured Debt” has the meaning assigned to such term in Section 9.4(d).

 

“Interest Expense” means, for any period, cash interest expense (including default interest) of the Borrower for such period (including all commissions, discounts and other fees and charges owed by the Borrower with respect to letters of credit and
bankers’ acceptance financing) under any of the Secured Funded Debt Documents.

 

“Interest Rate Hedge Provider” means any Person providing an Interest Rate Protection Agreement; provided, that such Person’s long-term unsecured debt is rated at least “AA-”
by S&P and “Aa3” by Moody’s at the time such Person enters into an Interest Rate Protection Agreement (including the applicable confirmation thereunder) with the Borrower.

  

12

  

“LC Issuer” means (a) The Royal Bank of Scotland plc, in its capacity as issuer of Letters of Credit under the Credit Agreement and (b) any other issuer of Letters of Credit under any of the Secured Funded Debt Documents.

 

“Lenders Exposure Amount” means, with respect to the Credit Agreement and the other Secured Funded Debt Documents, at any time, an amount equal to (without duplication) (a) the sum of the aggregate principal amount of the Advances outstanding under
the Credit Agreement or such other Secured Funded Debt Document at such time, plus (b) the sum of the aggregate Available Amount under all Letters of Credit at such time plus (c) the sum of the aggregate amount of undrawn (and then uncancelled) Commitments under the Credit Agreement or such other Secured Funded Debt Document at such time (provided that for purposes of this clause (c), if the
applicable Secured Funded Debt Document contemplates Advances made under one class of Commitments to convert to Advances made under another class Commitments (e.g., Construction Loans under the Credit Agreement being converted into Term Loans under the Credit Agreement), then the Commitments under such other class shall be disregarded for purposes of calculating Lenders Exposure Amount (e.g., the Term Loan Commitments under the Credit Agreement shall be disregarded prior to Term-Conversion).

 

“Letters of Credit” means each of the letters of credit issued by the LC Issuer under any of the Secured Funded Debt Documents (including the Letters of Credit under and as defined in the Credit Agreement).

 

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

 

“Loan Insurance Agreement” means the Loan Insurance Agreement, dated as of the date hereof, between the Borrower and the Loan Insurer.

 

“Loan Insurance Policy” means the Financial Guaranty Insurance Policy No. SF0881BE, dated as of the date hereof, made by the Loan Insurer to the Administrative Agent, for the benefit of the Construction Lenders, as beneficiary.

 

“Loan Insurer” means Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company, in its capacity as the issuer of the Insurance Policies.

 

“Loan Insurer Payments” shall have the meaning assigned to such term in the Loan Insurance Agreement.

 

“Loan Party” means each of the Borrower, the Pledgor and any other Person which provides collateral security for the benefit of the Secured Parties.

  

13

  

“Major Maintenance” means all expenditures by the Borrower for major maintenance of the Project in accordance with Prudent Utility Practices, the Project Contracts and vendor and supplier requirements and recommendations (including overhauls and replacements
of major components of the Project).  For the avoidance of doubt, “Major Maintenance” excludes any ordinary course expenditures by the Borrower related to the operation and maintenance of the Project.

 

“Management Fee” means an operating period management fee payable to the Project Manager in accordance with Section 6.2.2 of the Project Management Agreement in an aggregate amount not to exceed the Borrower’s portion of such operating period
management fee in accordance with Section 6.2.2 of the Project Management Agreement (as in effect on the date hereof), which Management Fee shall at all times be subordinate to the Secured Obligations.  For the avoidance of doubt, the Management Fee shall not include (a) any costs or expenses reimbursable to the Project Manager under Section 6.1 of the Project Management Agreement (as in effect on the date hereof) or (b) any construction period management fee payable to the Project Manager in accordance
with Section 6.2.1 of the Project Management Agreement (as in effect on the date hereof).

 

“Management Services Agreement” means the Management Services Agreement, dated as of March 29, 2007, between Plum Point Management Company, LLC and the Borrower.

 

“MEAM” means Municipal Energy Agency of Mississippi, a public body corporate and politic and a joint agency organized under the laws of Mississippi.

 

“MJMEUC” means Missouri Joint Municipal Electric Utility Commission, a body public and corporate of the State of Missouri.

 

“MJMEUC PPA” means the Power Purchase Agreement, dated as of December 4, 2006, between the Borrower and MJMEUC.

 

“Mortgage” means each deed of trust, real property debenture, mortgage, leasehold mortgage, assignment of rents, and similar document made by the Borrower in favor of or for the benefit of the Collateral Agent (on behalf of the Secured Parties) on the
Closing Date or from time to time thereafter pursuant to any of the Transaction Documents.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Net Cash Proceeds” means (a) with respect to any Asset Sale or Recovery Event, the proceeds thereof in the form of cash and cash equivalents (including any such proceeds subsequently received (as and when received) in respect of noncash consideration
initially received), net of (a) selling expenses (including reasonable and customary broker’s fees or commissions, legal fees, transfer and similar Taxes incurred by the Borrower in connection therewith and the Borrower’s good faith estimate of income Taxes paid or payable in connection with such sale, after taking into account any available tax credits or deductions and any tax sharing arrangements), (b) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification
obligations or purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Debt for borrowed money (other than the Secured Obligations) which is secured by the asset sold in such Asset Sale and which is required to be repaid
with such proceeds (other than any such Debt assumed by the purchaser of such asset).

  

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“New Lenders” means the lenders, noteholders, tax-exempt bondholders and/or other creditors who make Advances to the Borrower or otherwise extend Commitments to the Borrower under any Secured Funded Debt Document (other than the Credit Agreement) and
their respective Secured Debt Representatives.

 

“O&M Costs” means all actual cash maintenance and operation costs incurred and paid for the Project on account of the Borrower’s interest in the Project (or any other Co-Participant’s interest that the Borrower has chosen to fund in
accordance with the Participation Agreement) in any particular calendar or fiscal year or period to which said term is applicable, including payments made by the Borrower:

 

(1)           for fuel and/or guaranteed heat rate payments made by the Borrower under the Power Purchase Agreements;

 

(2)           under the PILOT Agreements;

 

(3)           under Permitted Rail Car Leases;

 

(4)           for coal, additives or chemicals and transportation costs related thereto;

 

(5)           for its Taxes (other than those based upon the Borrower’s income);

 

(6)           for insurance, consumables, spare parts, equipment, material, repair and maintenance services;

 

(7)           lease payments;

 

(8)           under the Permitted O&M Agreement;

 

(9)           under Additional Project Contracts (as defined in the Credit Agreement);

 

(10)         under the Management Services Agreement;

 

(11)         under any parts or combustion turbine services agreement;

 

(12)         for legal fees and consulting fees and expenses paid by the Borrower in connection with the financing, management, maintenance or operation of the Project;

  

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(13)           Loan Insurer Payments and interest payments contemplated by Section 2.01 of the Loan Insurance Agreement;

 

(14)           fees paid in connection with obtaining, transferring, maintaining or amending any permits;

 

(15)           investments by the Borrower in any Permitted Project Company, provided that (i) such investments are made in accordance with the terms of the Transaction Documents  and (ii) the proceeds of such investments
are applied to pay for items which would be “O&M Costs” if the Borrower purchased such items; and

 

(16)           reasonable general and administrative expenses, including all expenditures incurred to prevent the occurrence of any default under any Transaction Document or Project Document or any Default or Event of Default, and/or to keep the Collateral free and clear of all Liens
(other than Permitted Liens).

 

Notwithstanding anything to the contrary herein, O&M Costs shall not include (i) Major Maintenance expenditures, (ii) Restricted Payments of any kind to the Borrower or its Affiliates, (iii) non-cash charges, including depreciation or obsolescence charges or reserves therefore, amortization of intangibles or other bookkeeping entries
of a similar nature, (iv) Capital Expenditures, (v) payments for restoration or repair of the Project from the Loss Proceeds Account in accordance with the terms of this Agreement and the Depositary Agreement, (vi) payments in respect of Debt of the Borrower (other than Debt of the type referred to in clauses (h) and (j) of the definition thereof), (vii) the Management Fee and (viii) the Borrower’s income taxes.

 

“Other Credit Support” means any (a) letter of credit, (b) guaranty (other than any such guaranty issued by the Borrower) or (c) cash collateral issued or pledged, as applicable, in favor of any Secured Party to support the obligations of the Borrower
under the applicable Transaction Document.

 

“Other Credit Support Exception” means (a) with respect to any Other Credit Support constituting a guaranty, the guarantor thereunder fails to make payment after receipt of a demand for payment thereunder made in accordance with the terms of such guaranty,
within three Business Days of its receipt of such demand and (b) with respect to any Other Credit Support constituting a letter of credit, the occurrence and continuance of any of the following:  (i) a restraint or injunction shall be threatened or pending against the issuer of such letter of credit or Secured Party that is the beneficiary thereof that restrains or limits or seek to restrain or limit a draw upon, or the application of proceeds from, such letter of credit prior to, concurrent with, or
following such draw or application, (ii) the issuing bank of such letter of credit shall be subject to a bankruptcy, or (iii) the issuing bank shall have disavowed, repudiated or dishonored its obligations under such letter of credit after, if applicable, delivery to such issuing bank of a conforming draw request thereunder.

 

“Participation Agreement” shall mean that certain Participation Agreement, dated as of March 3, 2006 by and between the Borrower, ETEC, MJMEUC, Empire and MEAM (pursuant to the Joinder to Participation Agreement, dated as of June 8, 2006).

  

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“Permitted Investments” has the meaning assigned to such term in the Depositary Agreement.

 

“Permitted Liens” means any Lien (a) on the Collateral or (b) which the Borrower may incur or suffer to exist on any of its Properties, in each case to the extent permitted by all of the Transaction Documents.

 

“Permitted O&M Agreement” means any operation and maintenance agreement with a third party contractor or an Affiliate of Dynegy Inc. to provide day-to-day operation and maintenance services to the Project which contains terms and conditions reasonably
acceptable to the Controlling Party, in consultation with the Independent Engineer.

 

“Permitted Project Company” means any subsidiary of the Borrower formed in accordance with the Participation Agreement and in accordance with the terms of all the Transaction Documents.

 

“Permitted Rail Car Leases” means any lease agreement for the supply of railcars for fuel supply which contains terms and conditions reasonably acceptable to the Controlling Party, in consultation with the Independent Engineer.

 

“Permitted Tax-Exempt Bond Refinancing” means the Refinancing of the Tax-Exempt Bonds, as contemplated by the definition of “Permitted Tax-Exempt Bond Refinancing” in the Credit Agreement.

 

“Person” means any natural person, corporation, trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental Authority or other entity.

 

“PILOT Agreements” means (i) the PILOT Lease, (ii) that certain PILOT Bond Trust Indenture, dated as of March 1, 2006, by and between the City and the PILOT Bond Trustee, (iii) the HOPA Agreements, (iv) the PILOT, (v) the Guaranty Agreement, dated as
of March 1, 2006, made by the Borrower in favor of the PILOT Bond Trustee, (vi) the Empire Participating Co-Tenant Agreement, (vii) the Empire Asset Purchase Agreement, (viii) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of Empire, (ix) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of ETEC, (x) the Assignment of Undivided Tenancy-In-Common Interest, by the Borrower in favor of MJMEUC, (xi) the Assignment of Undivided Tenancy-In-Common Interest,
by the Borrower in favor of MEAM, and (xii) any other agreement related thereto.

 

“Pledge Agreement” means the Pledge and Security Agreement, dated as of the date hereof, between the Pledgor and the Collateral Agent (for the benefit of the Secured Parties) in respect of the pledge by the Pledgor of the membership interests in the
Borrower.

 

“Power Purchase Agreements” means the Empire PPA, the MJMEUC PPA, the SMEPA PPA and the SWECI PPA.

 

“Project Contracts” has the meaning assigned to such term in the Credit Agreement.

  

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“Project Management Agreement” means that certain Project Management Agreement, dated as of March 3, 2006, among the Borrower, the Co-Participants and the Project Manager.

 

“Project Manager” means LSP Services Plum Point, LLC, in its role as project manager pursuant to the Project Management Agreement.

 

“Property” means any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

 

“Prudent Utility Practices” means, as to the Project, those practices, methods, equipment, specifications and standards of safety and performance, as the same may change from time to time, as are commonly used by electric generation stations in the
United States of a type and size similar to the Project, including as to fuel type and configuration of the Project, as good, safe and prudent engineering practices in connection with operation, maintenance, repair, improvement and use of electrical and other equipment, facilities and improvements of such electrical station, with commensurate standards of safety, performance, dependability, efficiency and economy. The term “Prudent Utility
Practices” does not necessarily mean one particular practice, method, equipment specification or standard in all cases, but is instead intended to encompass a broad range of acceptable practices, methods, equipment specifications and standards.

 

“Recovery Event” means any settlement of or payment in respect of any property or casualty insurance claim or any taking under power of eminent domain or by condemnation or similar proceeding of or relating to any property or asset of the Borrower,
in each case, if not used to repair or rebuild the Project in accordance with the Participation Agreement.

 

“Refinanced” means, in respect of any Debt, or the agreement or contract pursuant to which such Debt is incurred, (a) such Debt (or more than 20% of the principal amount thereof) or related agreement or contract is extended, renewed, defeased, refinanced,
replaced, refunded or repaid, and (b) any other Debt issued in exchange or replacement for or to refinance such Debt (or more than 20% of the principal amount thereof), in whole or in part, whether with the same or different lenders, arrangers and/or agents and whether with a larger or smaller aggregate principal amount and/or a longer or shorter maturity, in each case to the extent permitted under the terms of the Transaction Documents.

 

“Required First Lien Secured Parties” means, at any time and calculated in accordance with the terms of this Agreement (including Section 9.4 hereof), Secured Parties owed or holding more
than 50% of the sum of (without duplication):

 

(a)           the Lenders Exposure Amount under the Credit Agreement and the other Secured Funded Debt Documents at such time;

 

(b)           from and after the date on which an Early Termination Event under any Secured Interest Rate Protection Agreement has occurred, the Eligible Swap Amount thereunder at such time;

  

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(c)           from and after the date on which an Early Termination Event under any Secured Fuel Supply Agreement has occurred, the Eligible Fuel Supply Agreement Amount at such time; and

 

(d)           the amounts owed to the Loan Insurer under the Loan Insurance Agreement at such time.

 

“Responsible Officer” of any Person, means, any executive officer, chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such Person and any other officer or similar official thereof responsible for the
administration of the obligations of such Person in respect of this Agreement and the other Transaction Documents; provided that, with respect to the Collateral Agent, such term shall mean the Person in the corporate trust offices of the Collateral Agent responsible for the administration of this Agreement.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, defeasance, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower, in any case, excluding (a) the Developer Conversion Fee referred to in the Depositary Agreement and (b) to the extent contemplated by Section 3.8(c) of the Depositary Agreement any payments in respect of the Empire Buy-In (as defined in the Depositary
Agreement) after application of the net proceeds thereof pursuant to Section 3.11 of the Depositary Agreement.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

 

“Secured Funded Debt Documents” means (a) the Credit Agreement and (b) any other agreement, document, indenture or instrument providing for or evidencing the obligations of the Borrower to any of the New Lenders in respect of Advances made by such New
Lenders to the Borrower, Commitments made by such New Lenders to the Borrower or other extensions of credit extended by such New Lenders to the Borrower, to the extent such are effective at the relevant time.  For the avoidance of doubt, the definition of “Secured Funded Debt Documents” does not include the Collateral Documents, the Loan Insurance Agreement, the Secured Fuel Supply Agreement or the Secured Interest
Rate Protection Agreements.

 

“Secured Debt Representative” means (a) with respect to the Credit Agreement, the Administrative Agent (subject to Section 9.4(d)), (b) with respect to any other Secured Funded Debt Document, the agent or trustee for the New Lenders thereunder (as designated
in the applicable Accession Agreement) (subject to Section 9.4(d)), (c) with respect to any Secured Interest Rate Protection Agreement, the Interest Rate Hedge Provider party thereto, (d) with respect to any Secured Fuel Supply Agreement, the Secured Fuel Supply Agreement Counterparty party thereto and (e) with respect to the Loan Insurance Agreement, the Loan Insurer.

  

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“Secured Fuel Supply Agreement Counterparties” means each counterparty to a Secured Fuel Supply Agreement which is bound by this Agreement.

 

“Secured Fuel Supply Agreements” means any coal and other fuel supply agreements entered into by the Borrower and relating to the Project and entered into in accordance with the terms of the Transaction
Documents, provided that the Secured Fuel Supply Agreement Counterparty has become bound by this Agreement pursuant to Section 5.4.

 

“Secured Interest Rate Protection Agreement” means any Interest Rate Protection Agreement which has been entered into by the Borrower and an Interest Rate Hedge Provider.

 

“Secured Obligations” means, collectively, without duplication: (a) all of the Borrower’s financial liabilities and obligations, of whatsoever nature and however evidenced (including, but not limited to, principal, interest, premium, fees, reimbursement
obligations, penalties, termination payments, settlement amounts, amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Law, indemnities and legal and other expenses, whether due after acceleration, termination or otherwise) to the Secured Parties in their capacity as such under the Transaction Documents or any other agreement, document or instrument evidencing, securing or relating to such financial liabilities or obligations, in each case, direct or
indirect, primary or secondary, fixed or contingent, now or hereafter arising out of or relating to any such agreements; (b) any and all sums advanced by any of the Secured Parties in order to preserve the Collateral or preserve its security interest in the Collateral; and (c) in the event of any proceeding for the collection or enforcement of the obligations described in clauses (a) and (b) above,
after an Event of Default has occurred and is continuing and unwaived, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by any of the Secured Parties of its rights under the Collateral Documents, together with reasonable attorneys’ fees and court costs.  For the avoidance of doubt, (i) with respect to each Secured Fuel Supply Agreement, the Secured Obligations shall only include the Eligible Fuel
Supply Agreement Amount for such Secured Fuel Supply Agreement and (ii) with respect to the Tax-Exempt Bonds, prior to the occurrence of a Permitted Tax-Exempt Bond Refinancing, the obligations of the Borrower under the Tax-Exempt Bonds and related documents and agreement shall not be Secured Obligations.

 

“Secured Parties” means the Construction Lenders, the New Lenders, the Agents, the Interest Rate Hedge Providers, the Secured Fuel Supply Agreement Counterparties and the Loan Insurer and their respective Secured Debt Representatives.

 

“Security Agreement” means the Security Agreement, dated as of the date hereof, between the Borrower and the Collateral Agent.

 

“SMEPA PPA” means the Power Purchase Agreement, dated as of July 31, 2006, between the Borrower and SMEPA

 

“SWECI PPA” means the Amended and Restated Power Purchase Agreement, dated as of March 28, 2007, between the Borrower and SWECI.

  

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“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges, liabilities or withholdings imposed by any Governmental Authority and any and all interest and penalties related thereto.

 

“Tax-Exempt Bonds” means the tax-exempt bonds in an aggregate principal amount of $100,000,000 issued by the City of Osceola, Arkansas pursuant to the terms and conditions of that certain Trust Indenture, dated as of April 1, 2006, the proceeds of which
were lent to the Borrower by the City pursuant to the terms and conditions of a loan agreement, dated as of April 1, 2006.

 

“Term-Conversion” has the meaning assigned to such term in the Credit Agreement.

 

“Termination Payment” means any amounts payable to or by the Borrower in connection with a termination (whether as a result of the occurrence of an event of default or other termination event) of any Secured Interest Rate Protection Agreement, together
with any Interest Expense due and payable by the Borrower in connection with such amounts.

 

“Transaction Documents” means the Secured Interest Rate Protection Agreements, the Secured Fuel Supply Agreements, the Collateral Documents (including this Agreement), the Loan Insurance Agreement, the Secured Funded Debt Documents and any other related
agreement.

 

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of the security interest in any Collateral (as hereinafter defined) is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions related to such provisions.

 

1.2           Rules of Interpretation.

 

For all purposes of this Agreement and the other Collateral Documents, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)           all definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined;

 

(b)           all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

 

(c)           the expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein with respect to the Secured Obligations shall mean the payment in full in cash of all Secured Obligations;

 

(d)           unless otherwise expressly provided, all references in this Agreement to designated “Articles,” “Sections,” “Annex,” “Exhibits,” “Schedules,” “clauses” and other subdivisions are to the designated
Articles, Sections, Annex, Exhibits, Schedules, clauses and other subdivisions of this Agreement;

  

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(e)           the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

 

(f)            unless otherwise expressly specified, any agreement, contract or document defined or referred to herein shall mean such agreement, contract or document as in effect as of the date hereof, as the same may thereafter be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof and of this Agreement and the other Transaction Documents and including any agreement, contract or document in substitution or replacement of any of the foregoing in accordance with the terms of this Agreement and the other Transaction Documents;

 

(g)           unless the context clearly intends to the contrary, pronouns having a masculine or feminine gender shall be deemed to include the other;

 

(h)           any reference to any Person shall include its successors and permitted assigns in the capacity indicated, and in the case of any Governmental Authority, any Person succeeding to its functions and capacities;

 

(i)             the word “will” shall be construed to have the same meaning and effect as the word “shall”;

 

(j)            the words “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrases or words of like import;

 

(k)           except as otherwise expressly provided herein, any reference to any Debt shall mean such Debt as Refinanced from time to time in accordance with all of the Transaction Documents; and

 

(l)            if the Credit Agreement is Refinanced in full, then any term used herein which is expressly provided to be defined in the Credit Agreement shall mean such term as defined in the Credit Agreement prior to and without giving effect to any such Refinancing or amendments
made in contemplation thereof.

 

SECTION 2.  Contesting Liens; Same Collateral; Same Collateral Documents.

 

(a)           Each of the parties hereto agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the priority, validity, perfection or enforceability of a Lien
held by or on behalf of any of the Secured Parties in the Collateral or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any party hereto to enforce this Agreement.

  

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(b)           Subject to clause (c) below, each of the parties hereto agrees that no Loan Party shall grant or permit any additional Liens on any Property to secure any Secured Obligations unless it has granted or concurrently
grants a Lien on such Property to secure all Secured Obligations.   To the extent that the foregoing provision is not complied with for any reason, without limiting any other rights and remedies available to the Collateral Agent and/or the Secured Parties, each Secured Party agrees that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2(b) shall be subject
to Section 4.3.

 

(c)           Other than as provided in Section 5.3, the parties hereto agree that it is their intention that the Collateral be identical.  In furtherance of the foregoing, the parties hereto agree, subject
to the other provisions of this Agreement:

 

(i)            upon request by the Collateral Agent or any Secured Debt Representative, each party hereto agrees to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Collateral
and the steps taken to perfect their respective Liens thereon; and

 

(ii)           that the documents, agreements and instruments creating or evidencing the Collateral shall be the same documents.

 

Nothing in this Section shall be construed as expanding the obligations under the Secured Fuel Supply Agreements which may be secured hereunder.

 

SECTION 3.  Enforcement.

 

3.1           Exercise of Remedies; Acceleration Rights.  (a)           Until
the Discharge Date has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Loan Party, the Collateral Agent, in accordance with a direction of the Required First Lien Secured Parties, shall have the exclusive right to enforce rights, exercise remedies (including setoff and the right to credit bid the Secured Obligations) and make determinations regarding the release, sale, disposition or restrictions with respect to the Collateral.  In
exercising rights and remedies with respect to the Collateral, the Collateral Agent, in accordance with a direction of the Required First Lien Secured Parties, may enforce the provisions of the Collateral Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include the rights of the Collateral Agent (or any other agent appointed by the Required First Lien Secured Parties)
to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and the Collateral Documents and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction, in each case in accordance with a direction of the Required First Lien Secured Parties.

 

(b)           Notwithstanding any provision to the contrary in this Agree­ment (including clause (c) below), upon the occurrence of an Event of Default caused by a Bankruptcy Event of the Borrower, (i) the unutilized Commit­ments shall forth­with terminate immediately and
(ii) all Advances and accrued Interest Expense in respect of the Secured Obligations owed to each Secured Party shall be immedi­ately due and pay­able without present­ment, demand, protest or notice of any kind whatsoever.

  

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(c)           Notwithstanding any provision to the contrary in any Transaction Documents (but subject to clause (b) above), the relevant Secured Parties may only accelerate the Secured Obligations owed to such Secured Parties under their respective Transaction Documents if (i) the
Collateral Agent has been authorized pursuant to a direction of the Required First Lien Secured Parties to exercise rights and remedies with respect to the Collateral as contemplated by Section 3.1(a) above, (ii) the aggregate principal amount outstanding under the applicable Transaction Documents is greater than $85,000,000 at such time or greater than an amount equal to 25% of the aggregate Lenders Exposure Amount at such time or (iii) the Borrower shall become the subject of a Bankruptcy Event.

 

3.2           Enforcement of Liens.  (a)  At all times prior to the Discharge Date, the Collateral Agent, in accordance
with a direction of the Required First Lien Secured Parties as contemplated by Section 3.1 above, will have all rights to take action under any of the Collateral Documents with respect to the Collateral (other than as expressly provided for in the Depositary Agreement), including, without limitation, the exclusive right to enforce, collect or realize on any Collateral or exercise any other right or remedy with respect to the Collateral.

 

(b)           Until the Discharge Date, except to the extent directed or consented to by the Required First Lien Secured Parties, none of the Collateral Agent, any Secured Debt Representative or any other Secured Party will:

 

(i)            request judicial relief, in any Insolvency or Liquidation Proceeding or in any other court, that would hinder, delay, limit or prohibit the lawful exercise or enforcement of any right or remedy otherwise available to the Secured Parties in respect of the Liens granted
to the Collateral Agent, for the benefit of the Secured Parties;

 

(ii)           oppose or otherwise contest any motion for relief from the automatic stay or for any injunction against foreclosure or enforcement of Liens granted to the Collateral Agent, for the benefit of the Secured Parties, made by the Collateral Agent, acting at the direction
of, or as consented to by, the Required First Lien Secured Parties, in any Insolvency or Liquidation Proceeding;

 

(iii)           oppose or otherwise contest any lawful exercise by the Collateral Agent, acting at the direction of, or as consented to by, the Required First Lien Secured Parties, of the right to credit bid the Secured Obligations at any sale in foreclosure of the Liens granted to
the Collateral Agent, for the benefit of the Secured Parties; or

 

(iv)           oppose or otherwise contest any other request for judicial relief made in any court by the Collateral Agent, acting at the direction of, or as consented to by, the Required First Lien Secured Parties; relating to the lawful enforcement of any Lien;

  

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provided, however, that the Collateral Agent may take such actions as it deems desirable to create, prove, preserve or protect the Liens upon any Collateral.  Notwithstanding the foregoing, both before and during an
Insolvency and Liquidation Proceeding, any Secured Party and any Secured Debt Representative may take any actions and exercise any and all rights that they would have as an unsecured creditor, including, without limitation, the commencement of an Insolvency or Liquidation Proceeding against any Loan Party in accordance with applicable law and the termination of any Transaction Document in accordance with the terms thereof; provided that the Secured Parties
and the Secured Debt Representatives may not take any of the actions prohibited by clauses (i) through (iv) above or oppose or contest any other claim that it has agreed not to oppose or contest under Section 6.

 

(c)           In exercising rights and remedies with respect to the Collateral after the occurrence and during the continuance of any Event of Default, the Required First Lien Secured Parties may, acting through their respective Secured Debt Representatives as contemplated by Section
9.4, instruct the Collateral Agent to enforce (or to refrain from enforcing) the provisions of the Collateral Documents in respect of the Secured Obligations and exercise (or refrain from exercising) remedies thereunder or any such rights and remedies, all in such order and in such manner as the Collateral Agent may determine, unless otherwise directed by the Required First Lien Secured Parties, including:

 

(i)            the exercise or forbearance from exercise of all rights and remedies in respect of the Collateral and/or the Secured Obligations;

 

(ii)           the enforcement or forbearance from enforcement of any Lien in respect of the Collateral;

 

(iii)          the exercise or forbearance from exercise of rights and powers of a holder of Equity Interests or any other form of securities or membership interests included in the Collateral to the extent provided in the Collateral Documents;

 

(iv)          the acceptance of the Collateral in full or partial satisfaction of the Secured Obligations; and

 

(v)           the exercise or forbearance from exercise of all rights and remedies of a secured lender under the UCC or any similar law of any applicable jurisdiction or in equity.

 

(d)           Without in any way limiting the generality of clause (c) above (but subject to the rights of the Borrower and the other Loan Parties expressly provided for under the Transaction Documents), the Collateral
Agent, the Administrative Agent, the Loan Insurer and each other Secured Party and any of them may, at any time and from time to time in accordance with the applicable Transaction Documents and/or applicable law, without the consent of or notice to any other Secured Party, without incurring responsibility to any other Secured Party and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of any other Secured
Party is affected, impaired or extinguished thereby), do one or more of the following:

 

(i)            change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the Secured Obligations or any Lien on any Collateral or guaranty thereof or any liability of the Borrower or any
other Loan Party, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Secured Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by the Collateral Agent or any of the Secured Parties, the Secured Obligations or any of the Transaction Documents;

  

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(ii)           sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Collateral or any liability of the Borrower or any other Loan Party to the Secured Parties or the Collateral, or any liability incurred directly
or indirectly in respect thereof;

 

(iii)           settle or compromise any Secured Obligation or any other liability of the Borrower or any other Loan Party or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any
liability (including the Secured Obligations) in any manner or order; and

 

(iv)           exercise or delay in or refrain from exercising any right or remedy against the Borrower or any security or any other Loan Party or any other Person, elect any remedy and otherwise deal freely with the Borrower, any other Loan Party or any Collateral and any security
and any guarantor or any liability of the Borrower or any other Loan Party to the Secured Parties or any liability incurred directly or indirectly in respect thereof.

 

As provided for in Section 9.18, nothing in this clause (d) is intended to impair or affect the Borrower’s or any other Loan Party’s obligations to the Secured Parties to comply with the terms of the Transaction Documents.

 

(e)           Following notice of any Event of Default received pursuant to Section 5.2, any Secured Debt Representative may request in writing that the Collateral Agent pursue any lawful action in respect of the Collateral
in accordance with the terms of the Collateral Documents.  Upon any such written request, the Collateral Agent shall seek the consent of the Required First Lien Secured Parties to pursue such action (it being understood that the Collateral Agent shall not be required to advise the Required First Lien Secured Parties to pursue any such action).  Prior to the Discharge Date and following receipt of any notice that an Event of Default has occurred, the Collateral Agent may await direction from
the Required First Lien Secured Parties and will act, or decline to act, pursuant to a direction of the Required First Lien Secured Parties, in the exercise and enforcement of the Collateral Agent’s interests, rights, powers and remedies in respect of the Collateral or under the Collateral Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Agent will act, or decline to act, with respect to the manner of such exercise of remedies pursuant to a direction
of the Required First Lien Secured Parties.  Subsequent to the Collateral Agent receiving written notice that any Event of Default has occurred entitling the Collateral Agent to foreclose upon, collect or otherwise enforce the Liens on the Collateral then, unless it has been directed to the contrary pursuant to a direction of the Required First Lien Secured Parties, the Collateral Agent in any event may (but will not be obligated to) take all lawful and commercially reasonable actions permitted under
the Collateral Documents that it may deem necessary or advisable in its reasonable judgment to protect or preserve its interest in the Collateral and the interests, rights, powers and remedies granted or available to the Collateral Agent under, pursuant to or in connection with the Collateral Documents.

  

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3.3           Consents.  Notwithstanding anything to the contrary contained herein or in any of the other Collateral Documents,
with respect to the exercise of any rights or remedies of any of the Secured Parties under any of the Consents and Agreements, the Collateral Agent shall have the sole right to exercise such rights or remedies in accordance with the direction of the Required First Lien Secured Parties.

 

SECTION 4.  Payments.

 

4.1           Application of Proceeds.  (a)  Regardless of any Insolvency or Liquidation Proceeding which has been
commenced by or against the Borrower or any other Loan Party, (i) the Collateral or any proceeds thereof received in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies in accordance with Section 3 and (ii) any amounts intended to be paid to any of the Secured Parties during the pendency of any Insolvency or Liquidation Proceeding shall, in each case, be applied in the following order
(it being agreed that the Collateral Agent shall apply such amounts in the following order as promptly as is reasonably practicable after the receipt thereof):

 

first, on a pro rata basis, to (i) the payment of all amounts (including fees, expenses and indemnity payments) due to the Collateral Agent or any other Agent (in each case, in such Agent’s capacity as an agent, arranger
or issuing bank and not in such Agent’s capacity as a Construction Lender, New Lender, Loan Insurer or other Secured Party) under any of the Transaction Documents and (ii) to the payment of all fees, expenses, Interest Expense, indemnity payments and premiums, if any, due to the Loan Insurer under the Loan Insurance Agreement;

 

second, on a pro rata basis, to (i) the payment of all Interest Expense, fees and other amounts (other than principal, Termination Payments or other amounts expressly provided for in clause third or  fourth below)
due to any of the Secured Parties under any of the Secured Funded Debt Documents, (ii) the payment of all ordinary course settlement payments (excluding any Termination Payments) and Interest Expense due to the applicable Interest Rate Hedge Providers under the applicable Interest Rate Protection Agreements, (iii) the payment of all Interest Expense due to the applicable Secured Fuel Supply Agreement Counterparties under the applicable Secured Fuel Supply Agreements and (iii) the payment of any Level 2 Defaulted
Payments (as defined in the Depositary Agreement) that have not previously been reimbursed by the Borrower to the Loan Insurer;

 

third, on a pro rata basis, to (i) the payment of all principal (and any applicable premium) due to any of the Secured Parties under any of the Secured Funded Debt Documents, (ii) the payment of the applicable Eligible Fuel
Supply Agreement Amount due to the applicable Secured Fuel Supply Agreement Counterparties under the applicable Secured Fuel Supply Agreements, (iii) the payment of any other amounts that have not previously been reimbursed or paid by the Borrower to the Loan Insurer under any of the Transaction Documents (including all amounts then due under Section 2.01 of the Loan Insurance Agreement to the extent such amounts have not been paid under clause first or second above)
and (iv) to the payment of all Termination Payments and any other amounts due to the applicable Interest Rate Hedge Providers under the applicable Interest Rate Protection Agreements; and

  

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last, the balance, if any, after all of the Secured Obligations have been paid in full in cash, to the Borrower or as otherwise required by applicable law.

 

4.2           Debt Balances. (a)  Upon the written request of the Collateral Agent, each Secured Debt Representative shall
promptly (and, in any event, within five Business Days) give the Collateral Agent written notice of the aggregate amount of the Secured Obligations then outstanding and owed by the Borrower or any other Loan Party to the Secured Parties represented by such Secured Debt Representative under the applicable Transaction Documents and any other information that the Collateral Agent may reasonably request.

 

(b)           Without limiting the foregoing, upon receipt of any of the monies referred to in Section 4.1 above, the Collateral Agent shall promptly provide notice to each Secured Debt Representative of the receipt of
such monies.  Within 10 Business Days of the receipt of such notice, each Secured Debt Representative shall give the Collateral Agent written certification by an authorized officer or representative thereof of the aggregate amount of the Secured Obligations then outstanding owed by the Borrower or any other Loan Party to the Secured Parties represented by such Secured Debt Representative under the applicable Transaction Documents to be certified
to as presently due and owing (and, promptly upon receipt thereof, the Collateral Agent shall provide a copy of each such certification to each other Secured Debt Representative).  Unless otherwise directed by a court of competent jurisdiction or each Secured Debt Representative, the Collateral Agent shall use the information provided for in such notices as the basis for applying such monies in accordance with Section 4.1 above.

 

4.3           Payments Over.  Whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the
Borrower or any other Loan Party, any Collateral or proceeds thereof received by any Secured Party in connection with the exercise of any right or remedy relating to the Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Collateral Agent for the benefit of the Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.

 

SECTION 5.  Other Agreements.

 

5.1           Releases. (a) Upon the request of the Borrower in connection with any Asset Sale (other than in connection with the exercise
of the Collateral Agent’s rights and remedies in respect of the Collateral provided for in Section 3) by the Borrower, to the extent permitted by the terms of all of the Transaction Documents, or in connection with the disposal of any Excluded Collateral, the Collateral Agent will, at the Borrower’s expense, execute and deliver to the Borrower such documents (including UCC termination statements) as the Borrower may reasonably request
to evidence and effectuate the irrevocable and concurrent release of any Lien granted under any of the Collateral Documents in any Collateral being disposed of in connection with such Asset Sale or Excluded Collateral transaction; provided that in each case the Borrower shall have delivered to each Collateral Agent and each Secured Debt Representative, at least 10 Business Days, or such lesser period of time as the Collateral Agent or each Secured Debt
Representative may agree, prior to the date of the proposed release, a written request for release identifying (generally) the relevant Collateral and the provisions under the Transaction Documents which permit such Asset Sale, together with a certification by the Borrower stating that such Asset Sale or Excluded Collateral transaction is in compliance with the terms of all of the Transaction Documents and that the proceeds of such Asset Sale will be applied in accordance with the terms of the Transaction Documents.  The
Borrower shall provide the Collateral Agent and each Secured Debt Representative with all information as such Person may reasonably request to verify the accuracy of such certification.  The Collateral Agent shall not be required to deliver any such release documents until its (and its legal counsel) expenses have been paid in connection therewith.

  

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(b)           Upon the Discharge Date, all rights to the Collateral shall revert to the Borrower, and, upon the written request of the Borrower, the Collateral Agent will, at the Borrower’s expense, (i) promptly cause to be transferred and delivered, without any recourse, warranty
or representation whatsoever, any Collateral and any proceeds received in respect thereof, (ii) execute and deliver to the Borrower such UCC termination statements and other documentation as the Borrower may reasonably request to effect the termination and release of the Liens on the Collateral and (iii) execute and deliver to the Borrower such other documentation as the Borrower may reasonably request to affect the termination of the Borrower’s and the Pledgor’s obligations under the Transaction
Documents to which it is a party (other than any such obligation which is intended by its terms to survive the Discharge Date).

 

5.2           Certain Actions.  So long as any Secured Obligations remain outstanding in respect of more than one class of
Secured Parties, the following provisions shall apply:

 

(a)           Each Secured Debt Representative hereby agrees to give, pursuant to the terms set forth in the Transaction Documents, as the case may be, the Collateral Agent and each other Secured Debt Representative prompt written notice of the occurrence of (i) any Event of Default
under such Person’s Transaction Documents, as applicable, of which such Person has written notice, and (ii) acceleration of the maturity of any Secured Obligations under any of the Transaction Documents for which it acts as a Secured Debt Representative wherein such Secured Obligations have been declared to be or have automatically become due and payable earlier than the scheduled maturity thereof or termination date thereunder (or similar remedial actions including demands for cash collateral, have been
taken) and setting forth the aggregate amount of Secured Obligations that have been so accelerated under such Transaction Documents, in each case, as soon as practicable after the occurrence thereof (and, in any event, within five Business Days after the occurrence thereof); provided, however, that the failure to provide such notice shall not limit or impair the rights of the Secured Parties, or the obligations of the Borrower or any other Loan Party, hereunder
or under the other Transaction Documents.  No Agent shall be deemed to have knowledge or notice of the occurrence of an Event of Default under the Transaction Documents to which it is a party until such Agent has received a written notice of such Event of Default from any other Agent, the Borrower, the other Loan Parties or any other Secured Party for whom such Agent is acting as agent or trustee.

  

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(b)           The Collateral Agent hereby agrees to give each Secured Debt Representative written notice of the occurrence of an Event of Default following receipt thereof of written notice to it and provide a copy of all other information provided to it by the Borrower, any other
Loan Party under the Collateral Documents upon request.

 

(c)            Each Loan Party hereby agrees that, at any time and from time to time, at its sole cost and expense, it shall promptly execute and deliver all further agreements, instruments, documents and certificates and take all further action that may be necessary in order
to fully effect the purposes of this Agreement and the Collateral Documents (including, to the extent required by any Collateral Document, the delivery of possession of any Collateral represented by certificated securities that hereafter comes into existence or is acquired in the future to the applicable Collateral Agent as pledgee for the benefit of the Secured Parties) and to enable the Collateral Agents to exercise and enforce its rights and remedies under the Collateral Documents with respect to the Collateral
or any part thereof.

 

(d)           As of the date hereof, the Loan Insurer is the Controlling Party under and as defined in the Credit Agreement.   In the event the Administrative Agent becomes the Controlling Party under and as defined in the Credit Agreement, it shall deliver a notice
thereof to each party hereto and, thereafter, in event the Loan Insurer becomes once again the Controlling Party under and as defined in the Credit Agreement, the Loan Insurer and the Administrative Agent shall jointly deliver a notice thereof to each party hereto.

 

5.3           Debt Service Reserve; Cash Collateral Accounts; Sponsor Support Agreement.

 

(a)           Notwithstanding anything to the contrary herein (including, without limitation, Section 4.1), each Secured Party hereby acknowledges and agrees that (i) the Lien on all of the Borrower’s rights, titles
and interests in, to and under the Lenders Debt Service Reserve Account (as defined in the Depositary Agreement) shall be solely for the benefit of the Administrative Agent, the Collateral Agent (solely in its capacity as agent for the Loan Insurer, the Lenders and the Administrative Agent), the Depositary (solely in its capacity as agent for the Loan Insurer, the Lenders and the Administrative Agent), the Loan Insurer and the Lenders and (ii) the Lien on all of the Borrower’s rights, titles and interests
in, to and under a Permitted Additional Debt Service Reserve Account (as defined in the Depositary Agreement) shall be solely for the benefit of the applicable Secured Parties entitled to receive amounts on deposit therein or credited thereto pursuant to Section 3.6 of the Depositary Agreement.  For the avoidance of doubt, it is the intention of the parties that (i) each Debt Service Reserve Account and the funds on deposit therein and credited thereto shall be separate from each other Debt Service
Reserve Account, (ii) funds on deposit in or credited to a Debt Service Reserve Account shall not be commingled with any funds on deposit in or credited to any other Debt Service Reserve Account and (iii) any Lenders Debt Service Reserve Surety and Tax-Exempt Bond Debt Service Reserve Surety (each as defined in the Depositary Agreement) shall only be credited to, and available to be drawn under, the Debt Service Reserve Account to which it is intended to be credited.

  

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(b)           Notwithstanding anything to the contrary herein, nothing contained herein shall be construed to impair the rights of any of the Collateral Agent, the LC Issuers, the Loan Insurer or the Administrative Agent to exercise their rights and remedies in respect of the cash
collateral accounts established for the purpose of cash collateralizing any Letters of Credit under the Credit Agreement or as otherwise contemplated by the Sponsor Support Agreement, and each of the parties hereto acknowledges and agrees that the Lien and rights of any the Collateral Agent, the LC Issuers, the Loan Insurer or the Administrative Agent in, to and under such cash collateral accounts and all funds on deposit therein or credited thereto shall be solely for the benefit of the specified beneficiaries
thereof.  In the event any additional cash collateral accounts are established in connection with cash collateralizing Letters of Credit as contemplated by the definition of Discharge Date or as otherwise contemplated by the Secured Funded Debt Documents (provided, that no more than 102.5% of the Available Amount of such Letters of Credit is cash collateralized), such collateral account shall only be for the benefit of the particular Secured Party
who issued or has participation interests in or, in the case of the Loan Insurer, who has insured such Letters of Credit being cash collateralized.

 

(c)           Notwithstanding anything to the contrary herein, each Secured Party hereby acknowledges and agrees that the Sponsor Support Agreement, and the Sponsor Support Payments thereunder and the credit support provided by the Sponsors (as defined therein) thereunder, shall only
be for the benefit of the Loan Insurer, the Administrative Agent and the Construction Lenders.

 

5.4           Additional Secured Obligations.

 

(a)           Subject to the limitations set forth in the Transaction Documents, each Loan Party and each Secured Party acknowledges and agrees that the Collateral may secure additional Secured Obligations of the Borrower to Interest Rate Hedge Providers, Secured Fuel Supply Agreement
Counterparties and/or New Lenders (and the Agents thereof), as contemplated hereby.  Upon execution and delivery to the Collateral Agent and the Borrower of an Accession Agreement by the Secured Debt Representative for such Interest Rate Hedge Providers, Secured Fuel Supply Agreement Counterparties and/or New Lenders (and the Agents thereof) (as applicable), such Persons shall become “Secured Parties” hereunder,
as applicable and the Loan Parties’ obligations to such Persons shall become “Secured Obligations”.  Each Loan Party and each Secured Party agrees that this Agreement and the applicable Collateral Documents may be amended by the Loan Parties, the Loan Insurer and the Collateral Agent without the consent of any other Secured Party to the extent necessary or desirable to (i) effectuate the intent of this Section
5.4, (ii) cause the Liens granted thereby to be in favor of such Persons (to the extent Liens in favor of such Persons are expressly permitted by the terms of all of the Transaction Documents) and (iii) cause such Persons to be treated in the same manner as the other Secured Parties under this Agreement and the other Collateral Documents (other than as expressly provided hereby).

 

(b)           The Borrower shall deliver to the Collateral Agent and each Secured Debt Representative, at least 10 Business Days, or such lesser period of time as the Collateral Agent and each Secured Debt Representative may agree, prior to the date any such Accession Agreement is
entered into and the proposed Secured Obligations referred to therein incurred a certificate by the Borrower stating that the incurrence of the Debt contemplated by such Accession Agreement (or the Secured Fuel Supply Agreement contemplated thereby) is being entered into in compliance with the terms of all of the Transaction Documents (and such certifications shall contain, to the extent requested by the Collateral Agent, the Borrower’s analysis thereof).  The Borrower shall provide the Collateral
Agent and each Secured Debt Representative with all information as such Person may reasonably request to verify the accuracy of such certificate.

  

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SECTION 6.  Insolvency or Liquidation Proceedings.

 

6.1           Finance and Sale Issues.  Until the Discharge Date has occurred, if the Borrower or any other Loan Party shall
be subject to any Insolvency or Liquidation Proceeding and the Collateral Agent (acting in accordance with a direction of the Required First Lien Secured Parties) shall desire to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code), on which the Collateral Agent or any other creditor has a Lien or to permit the Borrower or any other Loan Party to obtain financing, whether from the Secured Parties
or any other Person under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”), then each Secured Party agrees that it will raise no objection to such Cash Collateral use or DIP Financing; provided that (a) notwithstanding the foregoing, each Secured Debt Representative and each Secured Party retains the right to object to any ancillary
agreements or ancillary arrangements regarding the Cash Collateral use or the DIP Financing that are materially prejudicial to their interests and (b) the DIP Financing (i) does not compel the Borrower or any Loan Party to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document or (ii) the DIP Financing document or Cash Collateral order does not expressly require the liquidation of the
Collateral prior to a default under the DIP Financing documentation or Cash Collateral order.

 

6.2           Avoidance Issues.  If any Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise
to turn over or otherwise pay to the estate of the Borrower or any other Loan Party any amount paid in respect of the Secured Obligations (a “First Lien Recovery”), then such Secured Party shall be entitled to a reinstatement of Secured Obligations with respect to all such recovered amounts.  In such event (a) the Discharge Date shall be deemed not to have occurred and (b) if this Agreement shall have been terminated
prior to such First Lien Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

 

6.3           Reorganization Securities.  If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized
debtor secured by Liens upon any Property of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, on account of the Secured Obligations, then, to the extent the debt obligations distributed on account of the Secured Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

  

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6.4           Post-Petition Interest.  None of the Secured Parties shall oppose or seek to challenge any claim by any Secured
Party, for allowance in any Insolvency or Liquidation Proceeding of Secured Obligations consisting of post-petition interest, fees or expenses.

 

SECTION 7.  Collateral Agent.

 

7.1           Appointment.  (a)  The Bank of New York is hereby appointed Collateral Agent hereunder and under the other
Collateral Documents and each of the Secured Parties hereby authorizes The Bank of New York to act as Collateral Agent in accordance with the terms hereof and the other Collateral Documents.  The Collateral Agent hereby agrees to act in its capacity as such upon the express conditions contained herein and the other Collateral Documents, as applicable.  In performing its functions and duties hereunder, the Collateral Agent shall act solely as an agent of the Secured Parties and does not assume
and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for any Loan Party or any of its subsidiaries.  Each of the Secured Parties irrevocably authorizes the Collateral Agent to take such action on their behalf and to exercise such powers, rights and remedies hereunder and under the other Collateral Documents as are specifically delegated or granted to the Collateral Agent by the terms hereof and thereof or contained in an act of the Required First
Lien Secured Parties, together with such powers, rights and remedies as are reasonably incidental thereto.  The Collateral Agent shall have only those duties and responsibilities that are expressly specified herein and the other Collateral Documents or contained in a direction of the Required First Lien Secured Parties.  The Collateral Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees.  The Collateral Agent shall not
have, by reason hereof or any of the other Transaction Documents, a fiduciary relationship in respect of any Secured Party, and nothing herein or any of the other Transaction Documents, expressed or implied, is intended to or shall be so construed as to impose upon the Collateral Agent any obligations in respect hereof or any of the other Transaction Documents except as expressly set forth herein or therein.

 

(b)           The provisions of this Section 7 are solely for the benefit of the Collateral Agent and the other Secured Parties and no Loan Party shall have any rights as a third party beneficiary of any of the provisions
hereof.

 

7.2           Delegation of Duties.  (a)  The Collateral Agent may execute any of its duties under this Agreement and
the Collateral Documents (including for purposes of holding or enforcing any Lien on the Collateral or any portion thereof granted under the Collateral Documents or of exercising any rights or remedies thereunder) by or through agents or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts of its choice concerning all matters pertaining to such duties.  The Collateral Agent shall be responsible for the negligence or misconduct of any agent or attorney-in-fact
selected by it with reasonable care.

 

(b)           The Collateral Agent may also from time to time, when the Collateral Agent deems it to be necessary or desirable, appoint one or more trustees, co-trustees, collateral co-agents, collateral subagents or attorneys-in-fact (each, a “Supplemental
Collateral Agent”) with respect to all or any part of the Collateral; provided, however, that no such Supplemental Collateral Agent shall be authorized to take any action with respect to any Collateral unless and except to the extent expressly authorized in writing by the Collateral Agent.  Should any instrument in writing from the Borrower or any other Loan Party be required
by any Supplemental Collateral Agent so appointed by the Collateral Agent to more fully or certainly vest in and confirm to such Supplemental Collateral Agent such rights, powers, privileges and duties, the Borrower shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon request by the Collateral Agent.  If any Supplemental Collateral Agent, or successor thereto, shall die, become incapable of acting, resign or be removed, all rights, powers,
privileges and duties of such Supplemental Collateral Agent, to the extent permitted by law, shall automatically vest in and be exercised by the Collateral Agent until the appointment of a new Supplemental Collateral Agent.

  

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(b)           Any notice, request or other writing given to the Collateral Agent shall be deemed to have been given to each Supplemental Collateral Agent.  Every instrument appointing any Supplemental Collateral Agent shall refer to this Agreement and the conditions of this Section
7.2.

 

(c)           Any Supplemental Collateral Agent may at any time appoint the Collateral Agent as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf or in its name.

 

7.3           Exculpatory Provisions.  (a)  Neither the Collateral Agent nor any of its officers, partners, directors,
employees or agents shall be liable to the Secured Parties for any action taken or omitted by the Collateral Agent under or in connection with any of the Collateral Documents except to the extent caused by the Collateral Agent’s gross negligence, willful misconduct or breach of this Agreement.  The Collateral Agent shall be entitled to refrain from any act or the taking of any action (including the failure to take an action) in connection herewith or any of the other Collateral Documents or from
the exercise of any power, discretion or authority vested in it hereunder or thereunder unless and until the Collateral Agent shall have received a direction of the Required First Lien Secured Parties and, upon receipt of such direction the Collateral Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such power, discretion or authority, in accordance with such directions.  Without prejudice to the generality of the foregoing, (i) the Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for a Loan Party), accountants, experts and other professional advisors selected by it; (ii) no Secured Party shall have any right of action whatsoever against the Collateral Agent
as a result of the Collateral Agent acting or (where so instructed) refraining from acting hereunder or any of the other Collateral Documents in accordance with a direction of the Required First Lien Secured Parties; and (iii) the Collateral Agent shall be fully protected in performing (and is hereby authorized by the Secured Parties to perform) the ministerial and administrative acts contemplated by or expressly provided in the Collateral Documents.  Whenever in the administration of this Agreement
the Collateral Agent shall deem it necessary or desirable that a factual or legal matter be proved or established in connection with the Collateral Agent taking, suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of a Responsible Officer of the Borrower or, if appropriate, from a legal opinion from counsel to the Borrower.

  

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(b)           Beyond the exercise of reasonable care in the custody thereof and as otherwise specifically set forth herein, the Collateral Agent shall not have any duty as to any of the Collateral in its possession or control or in the possession or control of any agent or bailee or
any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral.  The Collateral Agent shall not be liable or responsible for any loss or diminution in the value of any of the
Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Collateral Agent in good faith.

 

(c)           The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action
or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, willful misconduct or breach of this Agreement on the part of the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of any Loan Party to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the
Collateral.

 

(d)           In the event that the Collateral Agent is required to acquire title to any Property for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any obligation for the benefit of another, which in the Collateral Agent’s sole
discretion may cause the Collateral Agent to be considered an “owner or operator” under the provisions of CERCLA, or otherwise cause the Collateral Agent to incur liability under CERCLA or any other federal, state or local law, the Collateral Agent reserves the right, instead of taking such action, to either resign as Collateral Agent or arrange for the transfer of the title or control of the asset to a court-appointed receiver.  The
Collateral Agent shall not be liable to the Secured Parties, the Loan Parties or any other Person for any Environmental Actions under any federal, state or local law, rule or regulation by reason of the Collateral Agent’s actions and conduct as authorized, empowered and directed hereunder or relating to the discharge, release or threatened release of hazardous materials into the environment.  If at any time it is necessary or advisable for any part of the Properties of the Loan Parties to be possessed,
owned, operated or managed by any Person (including the Collateral Agent) other than a Loan Party or the Secured Parties, the Required First Lien Secured Parties shall direct the Collateral Agent to appoint an appropriately qualified Person (excluding the Collateral Agent) who they shall designate to possess, own, operate or manage, as the case may be, such part of the Project.

 

(e)           The Collateral Agent shall be fully justified in failing or refusing to take any action under this Agreement or under any other Collateral Document (i) if such action would, in the reasonable opinion of the Collateral Agent, be contrary to applicable law or the terms
of this Agreement or (ii) if such action is not specifically provided for in this Agreement or under any other Collateral Document, it shall not have received a direction of the Required First Lien Secured Parties (or, to the extent expressly provided for in the Depositary Agreement, the Administrative Agent or the Controlling Party, as applicable) to take such action.

  

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7.4           Notice of Event of Default.  The Collateral Agent shall be deemed to not have actual knowledge or notice of the
occurrence of any Event of Default unless the Collateral Agent has received written notice from an authorized officer of a Secured Party or a Loan Party referring to this Agreement and the applicable document or documents governing such Event of Default, describing such Event of Default and stating that such notice is a “Notice of Event of Default”.  In the event that the Collateral Agent receives such a written
notice, the Collateral Agent shall give notice thereof to the Secured Debt Representatives.

 

7.5           Non-Reliance on Collateral Agents and Other Secured Parties.  Each
of the Secured Parties expressly acknowledges that none of the Collateral Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Collateral Agent hereinafter taken, including any review of the affairs of the Borrower or any of its Affiliates, shall be deemed to constitute any representation or warranty by the Collateral Agent to any such Person.

 

(b)           The Collateral Agent shall not be responsible to any Secured Party for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency hereof or any other Transaction Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by the Collateral Agent to Secured Parties or by or on behalf of any Loan Party, to any Secured Party or the Collateral Agent in connection with the Transaction Documents and the transactions contemplated thereby or for the financial condition or business affairs of any Loan Party or any other Person liable for the payment of any
Secured Obligations, nor shall the Collateral Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Transaction Documents or as to the use of the proceeds of the Advances or as to the existence or possible existence of any Event of Default or to make any disclosures with respect to the foregoing.

 

7.6           Collateral Agents in Individual Capacity.  The agency hereby created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon, the Collateral Agent in its individual capacity as a Secured Party hereunder.  With respect to Secured Obligations made or renewed by it or any of its Affiliates, the Collateral Agent and its Affiliates shall have the same rights and powers under this Agreement and the other Transaction Documents as any Secured Party, and may exercise the same as though the Collateral Agent
were not a Collateral Agent, and the term “Secured Party” shall (to the extent applicable), unless the context clearly otherwise indicates, include the Collateral Agent in its individual capacity.

 

7.7           Successor Collateral Agents.  The Bank of New
York may resign as Collateral Agent upon 30 days’ notice to each other Secured Party party hereto and the Borrower.  In addition, in accordance with a direction of the Required First Lien Secured Parties, The Bank of New York (or any successor thereto) may be removed as Collateral Agent.   If The Bank of New York (or any successor thereto) should resign or be removed as Collateral Agent, the Required First Lien Secured Parties shall appoint a successor agent (in consultation with
the Borrower) whereupon such successor agent shall succeed to the rights, powers and duties of the Collateral Agent, and the term “Collateral Agent” shall mean such successor agent effective upon such appointment and approval, and The Bank of New York’s (or any successor thereto) rights, powers and duties as Collateral Agent shall be terminated, without any other or further act or deed on the part of any of the parties to this Agreement
or any Secured Party.  If no successor agent has accepted appointment as Collateral Agent by the date that is 30 days following The Bank of New York’s (or any successor thereto) notice of resignation or removal, The Bank of New York (or any successor thereto) resignation or removal shall nevertheless thereupon become effective and the Administrative Agent shall assume and perform all of the duties of the Collateral Agent hereunder until
such time, if any, as a successor agent as contemplated above.  After any Person’s resignation as a Collateral Agent, the provisions of this Section shall inure to its benefit as to any actions taken or omitted to be taken by it while it was a Collateral Agent under this Agreement and the other Collateral Documents.

  

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7.8           Security Documents.  (a)    Each party hereto hereby further authorizes the Collateral Agent
on behalf of and for the benefit of the Secured Parties, to be the agent for and representative of the Secured Parties with respect to the Collateral and the Collateral Documents.  Without further written consent or authorization from the Secured Parties, the Collateral Agent may execute any documents or instruments as contemplated hereby (including the Collateral Documents and release documents pursuant to Section 5.1).

 

(b)           Anything contained in any of the Collateral Documents to the contrary notwithstanding, the Borrower, the Collateral Agent and each Secured Party hereby agree that (i) no Secured Party shall have any right individually to realize upon any of the Collateral, it being understood
and agreed that all powers, rights and remedies under the Collateral Documents may be exercised solely by the Collateral Agent, and (ii) in the event of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a public or private sale or other disposition, the Collateral Agent or any Secured Party may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition and the Collateral Agent, as agent for and representative of the Secured Parties shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any collateral payable by the Collateral Agent at such sale or other disposition.

 

7.9           No Risk of Funds.  None of the provisions of this Agreement or the other Collateral Documents shall be construed
to require the Collateral Agent in its individual capacity to expend or risk its own funds or otherwise to incur any personal financial liability in the performance of any of its duties hereunder or thereunder.

 

7.10           Fees; Expenses.  The Borrower agrees to pay to the Collateral Agent (a) the Collateral Agent’s fees in
accordance with a fee schedule provided by the Collateral Agent to the Borrower prior to the date hereof and (b) the amount of any and all of the Collateral Agent’s reasonable and documented out-of-pocket expenses, including the reasonable and documented fees and expenses of its counsel (and any local counsel) and of any accountants, experts or agents, which the Collateral Agent may incur in connection with (i) the execution and administration
of this Agreement and the other Collateral Documents, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral or (iii) the exercise or enforcement (whether through negotiations, legal proceedings or otherwise) of any of the rights of the Collateral Agent under this Agreement and the other Collateral Documents.

  

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7.11         Indemnification.

 

(a)           The Borrower, whether or not any of the transactions contemplated hereby shall be consummated, hereby assumes liability for and agrees to defend, indemnify and hold harmless the Collateral
Agent, including its officers, directors, agents, Affiliates and employees (each, an “Indemnified Person”), from and against any Claims (including, without limitations, the cost and expenses of defending themselves and the related costs and fees of their counsel) which may be imposed on, incurred by or asserted against an Indemnified Person in any way relating to or arising or alleged to arise out of:  (i) its acceptance
or administration of this Agreement and the other Collateral Documents; (ii) the financing, construction, ownership, operation or maintenance of the Project, or any part thereof; (iii) any latent or other defects in the Project whether or not discoverable by an Indemnified Person or the Borrower; (iv) a violation of laws or other loss of or damage relating to the Project; (v) any breach by the Borrower of any of its representations or warranties under the Transaction Documents or failure by the Borrower to perform
or observe any covenant or agreement to be performed by it under any of the Transaction Documents; (vi) personal injury, death or property damage relating to the Project, including Claims based on strict liability in tort; and (vii) the transactions contemplated hereby (including (A) the performance by the Collateral Agent of its duties, rights and obligations hereunder, (B) any action taken by the Collateral Agent pursuant to a direction of the Required First Lien Secured Parties and (C) any action contemplated
to be taken by it hereunder or under any of the Collateral Documents); provided that the foregoing indemnities in clauses (i) through (vii) shall not, as to any Indemnified Person, apply to Claims to the extent they arise out of or result from (A) the gross negligence or willful misconduct of such Indemnified Person as determined in a final, non-appealable judgment by a court of competent jurisdiction, (B) any breach of any obligation or representation
or warranty of such Indemnified Person under any Transaction Document, or (C) any Taxes owed by the Indemnified Person in its individual capacity.

 

(b)           All amounts due under clause (a) shall be payable not later than 30 days after written demand therefor.  To the extent that the Borrower fails to pay any amount required to be paid by it to the Collateral Agent under clause (a) of this Section, each Secured
Party severally agrees to pay to the Collateral Agent such Secured Party’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Collateral Agent in its capacity as such.  For purposes hereof,
a Secured Parties’s “pro rata share” shall be determined based upon its share of the aggregate amount of Secured Obligations at such time.

 

(c)           To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in clause (a) may be unenforceable in whole or in part because they are violative of any law or public policy, the Borrower or the applicable Secured Parties (as applicable) shall
contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all indemnified liabilities incurred pursuant to clause (a) by any Indemnified Person.

  

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(d)           The agreements in this Section 7.11 shall survive the resignation of the Collateral Agent and any termination of this Agreement, including any termination under any Bankruptcy Law.

 

SECTION 8.  Reliance; Waivers; Etc.

 

8.1           Reliance.  Other than any reliance on the terms of this Agreement, each Secured Party acknowledges that it has,
independently and without reliance on the Collateral Agent, the Administrative Agent, the Loan Insurer, or any other Secured Party and based on documents and information deemed by it appropriate, made its own credit analysis and decision to enter into the applicable Transaction Documents and be bound by the terms of this Agreement and it will continue to make its own credit decision in taking or not taking any action under the applicable Transaction Documents or this Agreement.

 

8.2           No Warranties or Liability. (a)  Each Secured Party acknowledges and agrees that none of the Collateral Agent,
the Administrative Agent, the Loan Insurer or any other Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Transaction Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  Except as otherwise expressly provided herein, the Secured Parties will be entitled to manage and supervise their respective loans and extensions
of credit under the Transaction Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.

 

8.3           No Waiver of Lien Priorities. (a)  No right of the Secured Parties, the Collateral Agent or any of them to enforce
any provision of this Agreement or any Transaction Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Borrower or any other Loan Party or by any act or failure to act by any Secured Party or the Collateral Agent, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement or any Transaction Document, regardless of any knowledge thereof which the Collateral Agent or any Secured Party, or any of them, may have or be
otherwise charged with.

 

(b)           Notwithstanding anything to the contrary in any of the Collateral Documents (but subject to Section 9.4(d)), none of the Collateral Documents shall be amended, modified or supplemented (i) in any manner materially adverse to any class of the Secured Parties without the
consent of the Secured Debt Representative for each such affected class, (ii) in any manner which modifies the voting rights of any class of the Secured Parties without the consent of the Secured Debt Representative for each such affected class or (iii) in any manner inconsistent with the payment and lien priorities established hereby and by the Depositary Agreement for any class of Secured Parties without the consent of the Secured Debt Representative for such affected class.

  

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8.4           Obligations Unconditional.  All rights, interests, agreements and obligations of each of the Collateral Agent,
Administrative Agent, the Loan Insurer and the Secured Parties, respectively, hereunder shall remain in full force and effect irrespective of:

 

(a)           any lack of validity or enforceability of any Transaction Documents;

 

(b)           except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Secured Obligations or any amendment or waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of any Transaction Document;

 

(c)           except as otherwise expressly set forth in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Secured
Obligations or any guarantee thereof;

 

(d)           the commencement of any Insolvency or Liquidation Proceeding in respect of the Borrower or any other Loan Party; or

 

(e)           any other circumstances which otherwise might constitute a defense available to, or a discharge of, the Pledgor, the Borrower or any other Loan Party in respect of the Collateral Agent, the Secured Obligations or any Secured Party.

 

SECTION 9.  Miscellaneous.

 

9.1           Conflicts.  With respect to the matters covered hereby, in the event of any conflict between the provisions of
this Agreement and the provisions of any other Transaction Document, the provisions of this Agreement shall govern and control.

 

9.2           Effectiveness; Continuing Nature of this Agreement; Severability.  (a)  This
Agreement shall become effective when executed and delivered by each of the parties hereto.

 

(b)           The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding.

 

(c)           Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.  All references to any Loan Party shall include such Loan Party as debtor and debtor-in-possession and any receiver or trustee for such Loan Party (as the case may be) in any Insolvency or Liquidation Proceeding.

 

(d)           This Agreement shall terminate and be of no further force and effect on the Discharge Date.  Upon the repayment in full in cash of all Secured Obligations owing to a particular series of Secured Parties, and the termination of all such Secured Parties’
Commitments and Transaction Documents related specifically thereto, such Secured Parties, at their request, may be released from all of their obligations hereunder so long as such Secured Parties concurrently disclaim and waive any rights to the Collateral or the other benefits hereof (other than Section 6).

  

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9.3           Amendments; Waivers; Controlling Party. (a)  Subject Sections
8.3(b), 9.3(b) and 9.4(d), no amendment, modification or waiver of any of the provisions of this Agreement by any Agent or Secured Debt Representative shall be deemed to be made unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver
or the obligations of the other parties to such party in any other respect or at any other time.  Each of the parties hereto acknowledges and agrees that if the Loan Insurer is the Controlling Party under and as defined in the Credit Agreement or any other Secured Funded Debt Document, then the Loan Insurer shall have all rights to take all actions (including granting waivers, approving amendments or otherwise) for the Agents under the Credit Agreement or any such Secured Funded Debt Document (as applicable)
hereunder; provided that no such actions shall, in the absence of the Collateral Agent’s consent (such consent not to be unreasonably withheld or delayed), be effective as against the Collateral Agent to the extent that the effect of such action would be to increase or otherwise materially amend or modify the duties of the Collateral Agent hereunder.

 

(b)           Notwithstanding Section 9.3(a), neither the Borrower nor any other Loan Party shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except
to the extent its rights are directly affected (which includes, but is not limited to any amendment to the Borrower’s ability to cause additional obligations to constitute Secured Obligations as the Borrower may designate or any amendment, modification or waiver of Section 5.1, 5.4, 6.1, 9.1, 9.2, 9.3, 9.4, 9.8 or 9.9)
or such amendment, modification or waiver, if adopted, would cause any Loan Party to be in default under any of the Transaction Documents.

 

(c)           Notwithstanding the other provisions of this Section 9.3, the Borrower, the Pledgor, the Loan Insurer (so long as it is the Controlling Party under the Credit Agreement or any other Secured Funded Debt Document)
and the Collateral Agent may (but shall have no obligation to) amend or supplement this Agreement or the Collateral Documents without the consent of any other Secured Party:  (i) to cure any ambiguity, defect or inconsistency; (ii) to make any change that would provide any additional rights or benefits to the Secured Parties; or (iii) to make, complete or confirm any grant of Collateral permitted or required by this Agreement or any of the Collateral Documents or any release of any Collateral that is
otherwise permitted under the terms of this Agreement and the Transaction Documents.

 

9.4           Voting. (a)  Without limiting anything contained herein (including Section
9.3(b) and 9.3(c)) and other than ministerial and administrative acts contemplated by or expressly provided in the Collateral Documents to which it is a party, the Collateral Agent shall not take any other action (including the exercise of remedies, the amendment of Collateral Documents or the granting of waivers under such Collateral Documents), or grant its consent under any Collateral Documents, unless pursuant to a direction of the Required
First Lien Secured Parties.  If the Collateral Agent determines that discretion is needed in the taking of any action, it may refrain from taking such action until such directions or instructions are received pursuant to a direction of the Required First Lien Secured Parties and shall have no liability to the Secured Parties for so refraining.

  

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(b)           In connection with any act or decision by the Required First Lien Secured Parties under this Agreement or any of the Collateral Documents, (i) the vote of the Construction Lenders or the New Lenders (as applicable) shall be calculated based on the amount of the Lenders
Exposure Amount owed to such Construction Lenders or the New Lenders (as applicable) at the time the applicable matter is presented for a vote, (ii) the vote of the Interest Rate Hedge Providers shall be calculated based on the amount of the Eligible Swap Amount at the time the applicable matter is presented for a vote, (iii) the vote of the Secured Fuel Supply Agreement Counterparties shall be calculated based on the amount of the Eligible Fuel Supply Agreement Amount at the time the applicable matter is presented
for a vote and (iv) the vote of the Loan Insurer (as contemplated by clause (d) of the definition of “Required First Lien Secured Parties” and not including its rights to vote any Secured Party’s claims in respect of the Insured Debt as contemplated by clause (d) below) shall be calculated based on the amount owed by the Borrower to the Loan Insurer under the Loan Insurance Agreement at the time the applicable matter is presented for a vote.

 

(c)           In calculating the percentage of Secured Parties voting for any matter that is the subject of a vote, consent, waiver, approval or other­wise provid­ing direction with respect to a deci­sion, the total number of votes cast by the Secured Parties (taken as
a single class and series of Debt) in favor of such decision shall be di­vided by the total number of votes eligible to be cast by the Secured Parties which are entitled to so vote, consent, waive, approve or otherwise provide direction (and, for the avoidance of doubt, no series of Debt hereunder will vote as a block or separate class).

 

(d)           Notwithstanding anything to the contrary herein, as and to the extent provided for in (1) the Credit Agreement, (2) any Interest Rate Protection Agreement, if the Borrower’s scheduled payment obligations thereunder are insured pursuant to an Insurance Policy and
(3) from and after the occurrence of a Permitted Tax-Exempt Bond Refinancing, any Secured Funded Debt Documents relating to such Permitted Tax-Exempt Bond Refinancing (if the Borrower’s scheduled principal and interest payment obligations under such Secured Funded Debt Documents are guaranteed by the Loan Insurer pursuant to an Insurance Policy) (collectively, the Credit Agreement, such Secured Funded Debt Documents, such Interest Rate Protection Agreements and the Secured Obligations thereunder being referred
to herein as the “Insured Debt”), the Loan Insurer (so long as it is the “Controlling Party” for such Insured Debt or the person thereunder entitled to exercise the applicable Secured Parties’ voting rights) shall be treated as the holder of all such Insured Debt and shall have all of the rights afforded to it under Article X of the Credit Agreement (in the case of the Credit Agreement), any comparable provision
of such other Secured Funded Debt Documents and/or such Interest Rate Protection Agreements (in the case of other Insured Debt), including:

 

(i)           having the exclusive power after the Closing Date to determine, control and direct any request, demand, authorization, direction, notice, consent, waiver, funding decision, or other action to be given, made or taken by any party to the Credit Agreement (including the
Administrative Agent and the Construction Lenders, but excluding the Borrower), such Secured Funded Debt Documents (including the applicable trustee and tax-exempt bond holders, but excluding the Borrower) and such Interest Rate Protection Agreements (including the applicable Interest Rate Hedge Providers, but excluding the Borrower), hereunder;

  

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(ii)            having the exclusive power under the Transaction Documents (including this Agreement) to vote on behalf of such Insured Debt to determine the exercise of, and otherwise control and direct the enforcement of, all rights and remedies in respect of any Event of Default
and the Collateral (including the exclusive power to provide to the Collateral Agent any “direction of the Required First Lien Secured Parties”); and

 

(iii)           having the sole right to vote all of the Construction Lenders’ claims hereunder (i.e., their “Lenders Exposure Amount”), the applicable trustee and tax-exempt bond holders claims hereunder (i.e., their “Lenders Exposure Amount”), and the
applicable  Interest Rate Hedge Providers claims hereunder (i.e., their “Eligible Swap Amount”), and having the sole right to exercise the applicable Secured Debt Representative’s voting rights hereunder (including, in each case, votes with respect to any matters contemplated by Sections 3, 8.3(b) and 9.3(a) and
this Section 9.4).

 

Nothing in this clause (d) shall impair or affect the Administrative Agent’s or any other Agent’s obligations, as a Secured Debt Representative, to provide the information, notices and other documentation required of it hereunder.

 

9.5           Information Concerning Financial Condition of the Borrower.  Each Secured Party shall each be responsible for
keeping themselves informed of (a) the financial condition of the Borrower and (b) all other circumstances bearing upon the risk of nonpayment of the Secured Obligations.  No Agent or Secured Party shall have any duty to advise any other Agent or Secured Party of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event that any Agent or Secured Party, in its or their sole discretion, undertakes at any time or from time to time to provide
any such information to any other Agent or Secured Party, it or they shall be under no obligation:

 

(a)           to make, and the Agents and the Secured Parties shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided;

 

(b)           to provide any additional information or to provide any such information on any subsequent occasion;

 

(c)           to undertake any investigation; or

 

(d)           to disclose any information, which pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

 

9.6           Application of Payments.  All payments received by the Collateral Agent (on behalf of the Secured Parties) or
any Secured Party in accordance with the terms hereof and the other Collateral Documents may be applied, reversed and reapplied, in whole or in part, to such part of the Secured Obligations as provided for herein and in the applicable Transaction Documents.

  

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9.7           CONSENT TO JURISDICTION.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO SHALL
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 9.9; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEED­ING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES THAT EACH PARTY RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY OTHER PARTY IN THE COURTS OF
ANY OTHER JURISDICTION.

 

9.8           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
9.8 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

  

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9.9           Notices.  All notices to the Secured Parties permitted or required under this Agreement shall also be sent to
the Collateral Agent.  Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed.  For
the purposes hereof, the addresses of the parties hereto shall be as set forth on Annex I hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.   Each Secured Debt Representative shall provide the Collateral Agent with current contact and notice information at all times hereunder.

 

9.10          Further Assurances.  Each Loan Party agrees that, at the sole cost and expense of the Borrower, it shall take such
further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the Collateral Agent may reasonably request to effectuate the terms of and the Liens contemplated by this Agreement.

 

9.11          APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

9.12          Binding on Successors and Assigns.  This Agreement (including any decision by the Secured Parties hereunder) shall
be binding upon the parties hereto, Secured Parties and the Loan Parties and their respective successors and permitted assigns.

 

9.13          Specific Performance.  The Collateral Agent and each Secured Debt Representative may demand specific performance of
this Agreement.  Each party hereto hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the Collateral Agent or any Secured Debt Representative.

 

9.14          Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any substantive effect.

 

9.15          Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

 

9.16          Authorization.  By its signature, each Person executing this Agreement on behalf of a party hereto represents and
warrants to the other parties hereto that it is duly authorized to execute this Agreement.

  

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9.17          No Third Party Beneficiaries; No Partnership.  Subject
to Section 9.18, this Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the Secured Parties.  Nothing contained in this Agreement and no action by any Secured Party is intended to constitute or shall be deemed to consti­tute such Secured Parties (or any of them) a partner­ship, association, joint
venture or other entity.

 

9.18          Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are intended for the purpose
of defining the relative rights of the Collateral Agent and the other Secured Parties.  None of the Borrower, any other Loan Party or any other creditor thereof shall have any rights hereunder and neither the Borrower nor any other Loan Party may rely on the terms hereof, other than, in each case, the provisions of Sections 4.1, 5.1, 5.4, 6.1, 9.3, 9.4 and 9.16 (and
the related definitions) hereof.  Nothing in this Agreement is intended to or shall impair the obligations of the Borrower or any other Loan Party, which are absolute and unconditional, (a) to pay the Secured Obligations as and when the same shall become due and payable in accordance with their terms or (b) otherwise comply with the terms of the Transaction Documents.

  

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IN WITNESS WHEREOF, the parties hereto have executed this Collateral Agency and Intercreditor Agreement as of the date first written above.

 

	  	
BORROWER
	 
	  	  	  	 
	  	
PLUM POINT ENERGY ASSOCIATES, LLC,
	 
	  	
a Delaware limited liability company
	 
	  	  	  	 
	  	  	  	 
	  	
By:
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 
	  	  	  	 
	  	
PLEDGOR
	 
	  	  	  	 
	  	  	  	 
	  	
PPEA HOLDING COMPANY, LLC,
	 
	  	
a Delaware limited liability company
	 
	  	  	  	 
	  	  	  	 
	  	
By
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 
	  	  	  	 
	  	
COLLATERAL AGENT
	 
	  	  	  	 
	  	
THE BANK OF NEW YORK
	 
	  	  	  	 
	  	  	  	 
	  	
By:
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 
	  	  	  	 
	  	
By:
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 

 

 

[SIGNATURE PAGE TO COLLATERAL AGENCY AGREEMENT]

  

 

  

 

	  	
ADMINISTRATIVE AGENT
	 
	  	  	  	 
	  	
THE ROYAL BANK OF SCOTLAND PLC
	 
	  	  	  	 
	  	  	  	 
	  	
By:
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 
	  	  	  	 
	  	  	  	 
	  	
LOAN INSURER
	 
	  	  	  	 
	  	
AMBAC ASSURANCE CORPORATION
	 
	  	  	  	 
	  	  	  	 
	  	
By:
	  	 
	  	  	
Name:
	 
	  	  	
Title:
	 

 

 

[SIGNATURE PAGE TO COLLATERAL AGENCY AGREEMENT]

  

 

  

Execution Version

 

EXHIBIT A

 

FORM OF

ACCESSION AGREEMENT

 

THIS ACCESSION AGREEMENT (this “Agreement”), dated as of ________, 20__, is entered into by __________, a __________ (the “Joining Party”), and acknowledged by PLUM
POINT ENERGY PARTNERS, LLC, a Delaware limited liability company (the “Borrower”), and THE BANK OF NEW YORK, not in its individual capacity, but solely as Collateral Agent under the Collateral Agency Agreement (as defined below).

 

Reference is made to that certain Collateral Agency and Intercreditor Agreement (as amended, modified, restated or supplemented from time to time, the “Collateral Agency Agreement”), dated as of March 29, 2007, by and among the Borrower, PPEA Holding
Company, LLC, a Delaware limited liability company, the Collateral Agent, The Royal Bank of Scotland plc, in its capacity as Administrative Agent, Ambac Assurance Corporation, in its capacity as Loan Insurer, and certain other Persons party thereto from time to time. Capitalized terms used herein without definition shall have the meaning assigned thereto in the Collateral Agency Agreement.

 

[ADD DESCRIPTION OF SECURED INTEREST RATE PROTECTION AGREEMENT / SECURED FUNDED DEBT DOCUMENTS / SECURED FUEL SUPPLY AGREEMENT TO WHICH JOINING PARTY IS A PARTY AND WHICH REPRESENTS THE SECURED OBLIGATIONS OWED TO SUCH JOINING PARTY [(the “[Secured Interest Rate
Protection Agreement] [Secured Funded Debt Document] [Secured Fuel Supply Agreement]”)]].

 

The Joining Party hereby becomes a [SECURED PARTY] and [NEW LENDER] [LC ISSUER] [AGENT] [INTEREST RATE HEDGE PROVIDER] [SECURED FUEL SUPPLY AGREEMENT COUNTERPARTY].

 

The Joining Party hereby agrees for the benefit of the Secured Parties as follows:

 

1.           The Joining Party hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Joining Party will be deemed to be a party to the Collateral Agency Agreement, and, from and after the date hereof, shall have all of the obligations of a [SECURED
PARTY] and [NEW LENDER] [LC ISSUER] [AGENT] [INTEREST RATE HEDGE PROVIDER] [SECURED FUEL SUPPLY AGREEMENT COUNTERPARTY] thereunder as if it had executed the Collateral Agency Agreement. The Joining Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the [SECURED PARTY] and [NEW LENDER] [LC ISSUER] [AGENT] [INTEREST RATE HEDGE PROVIDER] [SECURED FUEL SUPPLY AGREEMENT COUNTERPARTY] contained in the Collateral Agency Agreement.

 

2.           To the extent the Joining Party is an agent or trustee for one or more Secured Parties, the Joining Party acknowledges that it has the authority to bind such Secured

 

 

[SIGNATURE PAGE TO COLLATERAL AGENCY AGREEMENT]

  

 

  

 

Parties to the Collateral Agency Agreement and such Secured Parties are hereby bound by the terms and conditions of the Collateral Agency Agreement. The Joining Party hereby agrees (on behalf of itself and any Secured Party claiming through it) to comply with the terms of the Collateral Agency Agreement.

 

3.           The Secured Debt Representative, in respect of such [Secured Interest Rate Protection Agreement] [Secured Funded Debt Document] [Secured Fuel Supply Agreement] is ____________________. The address of the Secured Debt Representative for purposes of all notices and other
communications is __________, __________, Attention of __________ (Facsimile No. __________, electronic mail address: ____________).

 

4.           The address of the Joining Party for purposes of all notices and other communications is __________, __________, Attention of __________ (Facsimile No. __________, electronic mail address: ____________).

 

5.           [The “Controlling Party”/person entitled to vote on behalf of the holders of such new Secured Obligation is ____________________. The address of such person for purposes of all notices and other communications is __________, __________, Attention of __________
(Facsimile No. __________, electronic mail address: ____________).]

 

6.           This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

 

7.           THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

[Signature Page Follows]

  

 

  

 

IN WITNESS WHEREOF, the Joining Party has caused this Accession Agreement to be duly executed by its authorized representative, and each of the Borrower and the Collateral Agent have caused the same to be accepted by its authorized representative, as of the day and year first above written.

 

	  	
[JOINING PARTY]

	  	  	  
	  	
By:
	  	  
	  	
Name:

	  	
Title:

	  	  	  
	  	
Acknowledged:

	  	  
	  	
PLUM POINT ENERGY ASSOCIATES, LLC

	  	  	  
	  	
By:
	  	  
	  	
Name:

	  	
Title:

	  	  	  
	  	
Acknowledged and accepted:

	  	  
	  	
THE BANK OF NEW YORK, not in its individual capacity, but solely as Collateral Agent under the Collateral Agency Agreement

	  	  	  
	  	
By:
	  	  
	  	
Name:

	  	
Title:

  

 

  

 

	  	
Annex I: Notice Addresses

	  	  
	
Borrower:
	
Plum Point Energy Associates, LLC

	  	
Two Tower Center, 11th Floor

	  	
East Brunswick, NJ 08816

	  	
Attention: General Counsel

	  	
Fax. (732) 249-7290

	  	  
	
Pledgor:
	
PPEA Holding Company, LLC

	  	
Two Tower Center, 11th Floor

	  	
East Brunswick, NJ 08816

	  	
Attention: General Counsel

	  	
Fax. (732) 249-7290

	  	  
	
Loan Insurer:
	
Ambac Assurance Corporation

	  	
One State Street Plaza

	  	
New York, New York 10004

	  	
Attn: Surveillance - Utilities

	  	
Tel. (212) 668-0340

	  	
Fax. (212) 363-1459 and (212) 509-9190

	  	  
	
Administrative Agent:
	
The Royal Bank of Scotland plc

	  	
101 Park Avenue – 6th Floor

	  	
New York, NY 10178

	  	
Attn: Luis Montanti

	  	
Tel. (212) 401-1402

	  	
Fax. (212) 401-1478

	  	
email gbmnaagency@rbos.com

	  	  
	
Collateral Agent:
	
The Bank of New York

	  	
101 Barclay Street, Floor 8W

	  	
New York, NY 10286

	  	
Fax. (212) 815-5707 or (212) 815-5074

	  	
Attention: Corporate Trust Administration-Corporate Finance

  

 

  

Schedule I

 

EXCLUDED COLLATERAL

 

Items to be transferred in connection with Unit I

 

1.  Switchyard Easement

 

A 33.30 acre easement for a switchyard lying in the Northeast Quarter (NE1/4) of Section 24, Township Twelve North (T-12-N), Range Ten East (R-10-E), Mississippi County (Osceola District), Arkansas and being more particularly described as:

 

Commencing at the Northeast corner of Section 24, T-12-N, R-10-E, thence South 89 degrees 43 minutes 56 seconds West 414.54 feet along the North line of said Section 24 to its intersection with a drainage ditch, said point being the Point of Beginning, thence South 30 degrees 21 minutes 46 seconds East 784.78 feet along the ditch centerline,
thence South 15 degrees 20 minutes 18 seconds East 98.04 feet along the ditch centerline, thence South 12 degrees 20 minutes 04 seconds West 125.44 feet along the ditch centerline to its intersection with the centerline of Arkansas Highway No. 198, thence South 50 degrees 14 minutes 21 seconds West 1002.98 feet along the centerline of Arkansas Highway No. 198, thence North 30 degrees 21 minutes 46 seconds West 1415.15 feet to a point on the Easterly right-of-way line of the Burlington-Northern Railroad main line,
thence North 17 degrees 57 minutes 19 seconds East 36.18 feet along said Easterly right-of-way line, thence North 17 degrees 02 minutes 55 seconds East 117.91 feet along said Easterly right-of-way line, thence North 15 degrees 26 minutes 22 seconds East 168.95 feet along said Easterly right-of-way line to its intersection with the North line of said Section 24, thence North 89 degrees 43 minutes 56 seconds East 999.82 feet along the North line of said Section 24 to the Point of Beginning, containing 33.30 acres
more or less.

 

2.  Transmission Line Easement

 

A 320 foot wide easement for a power transmission line lying in Section 24, the NW 1/4 of Section 25 and the NE1/4 of Section 26, T-12-N, R-10-E, Mississippi County (Osceola District), Arkansas and being more particularly described as:

 

Beginning at a point lying 555.79 feet South of and 1364.93 feet West of the Northeast corner of Section 24, T-12-N, R-10-E, thence South 34 degrees 42 minutes 03 seconds West 1725.25 feet to a point on the Easterly right-of-way line of the Burlington-Northern Railroad main line, said point being 50 feet and perpendicular to the centerline
of said Burlington-Northern Railroad, thence continue South 34 degrees 42 minutes 03 seconds West 6765.18 feet along the Easterly right-of-way of the Burlington-Northern Railroad, to its intersection with the centerline of an existing easement for a 500kV Transmission Line, thence South 51 degrees 41 minutes 20 seconds East 320.64 feet along the centerline of the existing easement for a 500kV Transmission Line, thence North 34 degrees 42 minutes 03 seconds East 8362.80 feet along a line 320 feet parallel to the
Easterly right-of-way line and its extension of the Burlington-Northern Railroad main line, thence North 30 degrees 21 minutes 46 seconds West 352.49 feet to the Point of Beginning. Containing 61.90 acres more or less.

  

 

  

 

3.  BNSF Easements:1

 

a) BNSF Easement #1

 

An easement for a railroad in the Northeast Quarter of Section 24 Township 12 North, Range 10 East, Mississippi County, Arkansas being more particularly described as:

 

Commencing at a FOUND BRASS CAP at the Northeast corner of Section 24, also being on the South line of the Plum Point Power Property; thence along the North line of Section 24, the line being the South line of the Plum Point Power Property S88°21’04”W, 1149.31 feet to the point being the beginning of a non-tangent curve,
concave to the southeast, having a radius of 739.49 feet, a central angle of 37°31’41”, a chord of 475.74 feet bearing S41°19’41”W and point also being the point of beginning; thence Southwest along said curve, 484.36 feet; thence S22°33’52”W, 13.57 feet; thence N31°55’13”W, 52.58 feet; thence N15°29’28”E, 42.55 feet to the point of curvature of a non-tangent curve, concave to the southeast, having a radius of 789.49 feet a central
angle of 27°05’29”, and a chord of 369.83 feet bearing N40°23’50”E; thence Northeast along said curve, 373.30 feet; thence N88°21’04”E, 96.01 feet to the point of beginning; and containing 0.52 Acres, more or less.

 

b) BNSF Easement #2

 

An easement for a railroad in the North Half of Section 24 Township 12 north, Range 10 East, Mississippi County, Arkansas being more particularly described as:

 

Commencing at a FOUND BRASS CAP at the Northeast corner of Section 24, also being on the South line of Plum Point Power Property; thence along the North line of Section 24, the line being the South line of the Plum Point Power Property S88°21’04”W, 1149.31 feet to the point being the beginning of a non-tangent curve, concave
to the southeast, having a radius of 739.49 feet, a central angle of 37°31’41”, a chord of 475.74 feet bearing S41°19’41”W, thence Southwest along said curve, 484.36 feet; thence S22°33’52”W, 13.57 feet to the POINT OF BEGINNING; thence S22°33’52”W, 620.54 feet to the point of curvature of a tangent curve, concave to the northwest, having a radius of 5754.71 feet and a central angle of 13°31’22”; thence Southwest along said curve,
1358.21 feet, curving to the right; thence N34°04’39”E, 141.45 feet to the point of curvature of a non-tangent curve, concave to the northwest, having a radius of 5877.71 feet a central angle of 18°12’30”, and a chord of 1860.06 feet bearing N25°17’58”E, point also being on the existing East right-of-way of the BNSF Railroad; thence Northeast along said curve and the East right-of-way of the BNSF Railroad, 1867.91 feet; thence S31°55’13”E, 52.28
feet to the POINT OF BEGINNING; and containing 0.41 Acres, more or less.

 

____________________________________

1 Note that the BNSF Easement descriptions are not final and should not be considered final until such time, after the Closing Date, as a survey may be completed.ex10_4.htm

Exhibit 10.4

 

 

 

LEASE BY AND BETWEEN

REXAHN PHARMACEUTICALS, INC.

and

THE REALTY ASSOCIATES FUND V, L.P.

of

15245 Shady Grove Road

Rockville, Maryland 20850

dated

June 5, 2009

 

 

  

  

  

TABLE OF CONTENTS

 

	  	  	  	
page

	  	  	  	  
	
1.
	
Basic Lease Provisions.
	
1

	  	  	  	  
	
2.
	
Premises.
	
3

	  	
2.1.
	
Lease of Premises and Definition of Project.
	
3

	  	
2.2.
	
Calculation of Size of Building and Premises.
	
3

	  	
2.3.
	
Common Areas-Defined.
	
3

	  	  	  	  
	
3.
	
Term.
	
3

	  	
3.1.
	
Term and Commencement Date.
	
3

	  	
3.2.
	
Delay in Possession.
	
3

	  	
3.3.
	
Delays Caused by Tenant.
	
3

	  	
3.4.
	
Tender of Possession.
	
3

	  	
3.5.
	
Early Possession.
	
3

	  	  	  	  
	
4.
	
Rent.
	
3

	  	
4.1.
	
Base Rent.
	
3

	  	
4.2.
	
Operating Expense Increases.
	
3

	  	
4.3.
	
Base Rent Increase.
	
5

	  	  	  	  
	
5.
	
Security Deposit.
	
5

	  	  	  	  
	
6.
	
Use.
	  	
5

	  	
6.1.
	
Use.
	
5

	  	
6.2.
	
Compliance with Law.
	
5

	  	
6.3.
	
Condition of Premises.
	
5

	  	  	  	  
	
7.
	
Maintenance, Repairs and Alterations.
	
6

	  	
7.1.
	
Landlord's Obligations.
	
6

	  	
7.2.
	
Tenant's Obligations.
	
6

	  	
7.3.
	
Alterations and Additions.
	
6

	  	
7.4.
	
Failure of Tenant to Remove Property.
	
7

	  	  	  	  
	
8.
	
Insurance.
	
7

	  	
8.1.
	
Insurance-Tenant.
	
7

	  	
8.2.
	
Insurance-Landlord.
	
7

	  	
8.3.
	
Insurance Policies.
	
7

	  	
8.4.
	
Waiver of Subrogation.
	
8

	  	
8.5.
	
Coverage.
	
8

	  	  	  	  
	
9.
	
Damage or Destruction.
	
8

	  	
9.1.
	
Effect of Damage or Destruction.
	
8

	  	
9.2.
	
Definition of Material Damage.
	
8

	  	
9.3.
	
Abatement of Rent.
	
8

	  	
9.4.
	
Tenant's Acts.
	
8

	  	
9.5.
	
Tenant's Property.
	
8

	  	
9.6.
	
Waiver.
	
8

	  	  	  	  
	
10.
	
Real and Personal Property Taxes.
	
8

	  	
10.1.
	
Payment of Taxes.
	
8

	  	
10.2.
	
Definition of "Real Property Tax."
	
9

	  	
10.3.
	
Personal Property Taxes.
	
9

	  	
10.4.
	
Reassessments.
	
9

	  	  	  	  
	
11.
	
Utilities.
	
10

	  	
11.1.
	
Services Provided by Landlord.
	
10

	  	
11.2.
	
Occupant Density.
	
10

	  	
11.3.
	
Hours of Service.
	
10

	  	
11.4.
	
Excess Usage by Tenant.
	
10

	  	
11.5.
	
Interruptions.
	
10

	  	  	  	  
	
12.
	
Assignment and Subletting.
	
10

	  	
12.1.
	
Landlord's Consent Required.
	
10

	  	
12.2.
	
Leveraged Buy-Out.
	
10

	  	
12.3.
	
Standard For Approval.
	
10

	  	
12.4.
	
Additional Terms and Conditions.
	
10

	  	
12.5.
	
Additional Terms and Conditions Applicable to Subletting.
	
11

	  	
12.6.
	
Transfer Premium from Assignment or Subletting.
	
11

	  	
12.7.
	
Landlord's Option to Recapture Space.
	
11

	  	
12.8.
	
Landlord's Expenses.
	
12

 

 

i

 

 

TABLE OF CONTENTS

(Continued)

 

	
13.
	
Default; Remedies.
	
12

	  	
13.1.
	
Default by Tenant.
	
12

	  	
13.2.
	
Remedies.
	
12

	  	
13.3.
	
Default by Landlord.
	
13

	  	
13.4.
	
Late Charges.
	
13

	  	
13.5.
	
Interest on Past-due Obligations.
	
13

	  	
13.6.
	
Payment of Rent and Security Deposit After Default.
	
13

	  	  	  	  
	
14.
	
Landlord's Right to Cure Default; Payments by Tenant.
	
14

	  	  	  	  
	
15.
	
Condemnation.
	
14

	  	  	  	  
	
16.
	
Vehicle Parking.
	
14

	  	
16.1.
	
Use of Parking Facilities.
	
14

	  	
16.2.
	
Parking Charges.
	
14

	  	  	  	  
	
17.
	
Broker's Fee.
	
14

	  	  	  	  
	
18.
	
Estoppel Certificate.
	
14

	  	
18.1.
	
Delivery of Certificate.
	
14

	  	
18.2.
	
Failure to Deliver Certificate.
	
14

	  	  	  	  
	
19.
	
Landlord's Liability.
	
14

	  	  	  	  
	
20.
	
Indemnity.
	
15

	  	  	  	  
	
21.
	
Exemption of Landlord from Liability.
	
15

	  	  	  	  
	
22.
	
Hazardous Material.
	
15

	  	
22.1.
	
Definition and Consent.
	
15

	  	
22.2.
	
Duty to Inform Landlord.
	
15

	  	
22.3.
	
Inspection; Compliance.
	
15

	  	  	  	  
	
23.
	
Medical Waste.
	
16

	  	
23.1.
	
Disposal of Medical Waste.
	
16

	  	
23.2.
	
Duty to Inform Landlord.
	
16

	  	
23.3.
	
Inspection; Compliance.
	
16

	  	  	  	  
	
24.
	
Tenant Improvements.
	
16

	  	  	  	  
	
25.
	
Subordination.
	
16

	  	
25.1.
	
Effect of Subordination.
	
16

	  	
25.2.
	
Execution of Documents.
	
16

	  	  	  	  
	
26.
	
Options.
	
16

	  	
26.1.
	
Definition.
	
16

	  	
26.2.
	
Options Personal.
	
16

	  	
26.3.
	
Multiple Options.
	
17

	  	
26.4.
	
Effect of Default on Options.
	
17

	  	
26.5.
	
Limitations on Options.
	
17

	  	
26.6.
	
Notice of Exercise of Option.
	
17

	  	  	  	  
	
27.
	
Landlord Reservations.
	
17

	  	  	  	  
	
28.
	
Changes to Project.
	
17

	  	  	  	  
	
29.
	
Substitution of Other Premises.
	
17

	  	  	  	  
	
30.
	
Holding Over.
	
17

	  	  	  	  
	
31.
	
Landlord's Access.
	
17

	  	
31.1.
	
Access.
	
17

	  	
31.2.
	
Keys.
	
18

	
32.
	
Security Measures.
	
18

	  	  	  	  
	
33.
	
Easements.
	
18

 

 

ii

 

 

TABLE OF CONTENTS

(Continued)

 

	
34.
	
Transportation Management.
	
18

	  	  	  	  
	
35.
	
Severability.
	
18

	  	  	  	  
	
36.
	
Time of Essence.
	
18

	  	  	  	  
	
37.
	
Definition of Additional Rent.
	
18

	  	  	  	  
	
38.
	
Incorporation of Prior Agreements.
	
18

	  	  	  	  
	
39.
	
Amendments.
	
18

	  	  	  	  
	
40.
	
Notices.
	
18

	  	  	  	  
	
41.
	
Waivers.
	
18

	  	  	  	  
	
42.
	
Covenants.
	
18

	  	  	  	  
	
43.
	
Binding Effect; Choice of Law.
	
19

	  	  	  	  
	
44.
	
Attorneys' Fees.
	
19

	  	  	  	  
	
45.
	
Auctions.
	
19

	  	  	  	  
	
46.
	
Signs.
	
19

	  	  	  	  
	
47.
	
Merger.
	
19

	  	  	  	  
	
48.
	
Quiet Possession.
	
19

	  	  	  	  
	
49.
	
Authority.
	
19

	  	  	  	  
	
50.
	
Conflict.
	
19

	  	  	  	  
	
51.
	
Multiple Parties.
	
19

	  	  	  	  
	
52.
	
Interpretation.
	
19

	  	  	  	  
	
53.
	
Prohibition Against Recording.
	
19

	  	  	  	  
	
54.
	
Relationship of Parties.
	
19

	  	  	  	  
	
55.
	
Rules and Regulations.
	
19

	  	  	  	  
	
56.
	
Right to Lease.
	
19

	  	  	  	  
	
57.
	
Security Interest.
	
19

	  	  	  	  
	
58.
	
Security for Performance of Tenant's Obligations.
	
20

	  	  	  	  
	
59.
	
Financial Statements.
	
20

	  	  	  	  
	
60.
	
Attachments.
	
20

	  	  	  	  
	
61.
	
Confidentiality.
	
20

	  	  	  	  
	
62.
	
Effect of Force Majeure Events.
	
20

	  	  	  	  
	
63.
	
OFAC Certification.
	
20

	  	  	  	  
	
64.
	
WAIVER OF JURY TRIAL.
	
20

	  	  	  	  
	
ADDENDUM
	
Add-1

	  	  	  	  
	
EXHIBIT A
	
A-1

	  	  	  	  
	
EXHIBIT B
	
B-1

 

 

iii

 

 

TABLE OF CONTENTS

(Continued)

 

	
EXHIBIT C
	
C-1

	  	  	  	  
	
EXHIBIT D
	
D-1

	  	  	  	  
	
SCHEDULE 1
	
Sch 1-1

	  	  	  	  
	
SCHEDULE 1-A
	
Sch 1-A-1

  

iv

  

15245 SHADY GROVE ROAD 

ROCKVILLE, MARYLAND

STANDARD OFFICE LEASE

1.  Basic Lease Provisions.

	
  
	
1.1.
	
Parties:  This Lease, dated for reference purposes only June 5, 2009, is made by and between THE REALTY ASSOCIATES FUND V, L.P., a Delaware limited partnership, ("Landlord") and REXAHN PHARMACEUTICALS, INC., a Delaware corporation ("Tenant").

	
  
	
1.2.
	
Premises:  Suite Number 455, as shown on Exhibit "A" attached hereto (the "Premises").

	
  
	
1.3.
	
Rentable Area of Premises:  5,466 rentable square feet.

	
  
	
1.4.
	
Building Address:  15245 Shady Grove Road, Rockville, Maryland 20850.

	
  
	
1.5.
	
Use:  General office use, subject to the requirements and limitations contained in Section 6.­

	
  
	
1.6.
	
Term:  Five (5) years.

	
  
	
1.7.
	
Commencement Date:  June 29, 2009.

	
  
	
1.8.
	
Base Rent:  $6,377.00 per month.

	
  
	
1.9.
	
Base Rent Paid Upon Execution:  $6,377.00 for the first month of the Term for which Rent is due.

	
  
	
1.10.
	
Security Deposit:  $100,000.00  See Addendum Paragraph 2

	
  
	
1.11.
	
Tenant's Share:  2.99%.

	
  
	
1.12.
	
Base Year:  The calendar year 2009.

	
  
	
1.13.
	
Number of Parking Spaces:  Reserved: N/A  Unreserved: 18.

	
  
	
1.14.
	
Parking Rates Per Space:  Reserved: $N/A  Unreserved: $0.00

	
  
	
1.15.
	
Real Estate Broker:

	
  
	
Landlord:
	
McShea & Company, Inc.

	
  
	
Tenant:
	
Studley, Inc.

	
  
	
1.16.
	
Attachments to Lease:  Addendum; Exhibit A - "Premises", Exhibit B - "Verification Letter", Exhibit C - "Rules and Regulations", Exhibit D – “Form of Letter of Credit”, Schedule 1 - "Work Letter Agreement”, Schedule 1-A – “Space Plan”.

	
  
	
1.17.
	
Address for Notices:

	
  
	
Landlord:
	
The Realty Associates Fund V, L.P.

c/o McShea & Company, Inc.

100 Lakeforest Boulevard

Suite 500

Gaithersburg, Maryland  20877

Attention:  Laurie Craft

	
  
	
With Copy To:
	
TA Associates Realty

28 State Street

Boston, Massachusetts  02109

Attention:  Asset Manager-Maryland

	
  
	
Tenant:
	
Rexahn Pharmaceuticals, Inc.

	
  
	
Prior to
	
9620 Medical Center Drive

	
  
	
Occupancy:
	
Rockville, Maryland 20850

Attention:  Tae Heum “Ted” Jeong

	
  
	
After Occupancy:
	
Rexahn Pharmaceuticals, Inc.

15245 Shady Grove Road, Suite 455

Rockville, Maryland 20850

Attention:  Tae Heum “Ted” Jeong

	
  
	
1.18.
	
Rent Payment Address:

Realty Associates Fund V, LP

c/o McShea Management, Inc.

Box 223342

Pittsburgh, PA 15251-2342

  

1

  

	
  
	
1.19.
	
Agent for Service of Process:  If Tenant is a corporation, the name and address of Tenant's registered agent for service of process is:

CSC-Lawyers Incorporating Service

7 St. Paul Street, Suite 1660

Baltimore, Maryland

	
  
	
1.20.
	
Interpretation.  The Basic Lease Provisions shall be interpreted in conjunction with all of the other terms and conditions of this Lease.  Other terms and conditions of this Lease modify and expand on the Basic Lease Provisions.  If there is a conflict between the Basic Lease Provisions and the other terms and conditions of this
Lease, the other terms and conditions shall control.

  

2

  

2.  Premises.

2.1.  Lease of Premises and Definition of Project. The “Premises” shall mean the area shown on Exhibit “A” to this Lease.  Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon all of the conditions set forth herein the Premises, together with certain rights to the Common Areas (as defined in Section 2.3 below) as hereinafter specified.  The Premises shall not include an easement for light, air or view.  The building of which the Premises is a part (the "Building"), the Common Areas, the land upon which the same are located, along with all other buildings and improvements thereon or thereunder, including all parking facilities, are herein collectively
referred to as the "Project."

2.2.  Calculation of Size of Building and Premises. The number of rentable square feet in the Premises has been calculated in accordance with the Standard Method for measuring Floor Area in Office Buildings, ANSI
Z65.1-1996, as promulgated by the Building Owners and Managers Association (“BOMA”) International.  If the rentable square feet in the Premises changes after this Lease is executed by Landlord and Tenant, the Base Rent and any advance rent shall be adjusted by multiplying the actual number of rentable square feet in the Premises by the per square foot rental obtained by dividing the Base Rent initially set forth in Section 1.8 by the number of rentable square feet initially set forth in
Section 1.3.  If the number of rentable square feet in the Premises is changed, Tenant's Share shall be adjusted as provided in Section 4.2(a).

2.3.  Common Areas-Defined.  The term "Common Areas" is defined as all areas and facilities outside the Premises and within
the exterior boundary line of the Project that are designated by Landlord from time to time for the general non-exclusive use of Landlord, Tenant and the other tenants of the Project and their respective employees, suppliers, customers and invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas, roadways and sidewalks.  Landlord may also designate other land and improvements outside the boundaries
of the Project to be a part of the Common Areas, provided that such other land and improvements have a reasonable and functional relationship to the Project.

3.  Term.

3.1.  Term and Commencement Date. The Term and Commencement Date of this Lease are as specified in Sections 1.6 and 1.7. Tenant shall, within five (5) business days after Landlord's request, complete and execute
the letter attached hereto as Exhibit "B" and deliver it to Landlord.  Tenant's failure to execute the letter attached hereto as Exhibit "B" within said five (5) business day period shall be a material default hereunder and shall constitute Tenant's acknowledgement of the truth of the facts contained in the letter delivered by Landlord to Tenant.

3.2.  Intentionally Omitted.

3.3.  Intentionally Omitted.

3.4.  Intentionally Omitted.

3.5.  Early Possession.  Provided that Tenant does not interfere with or delay the completion by Landlord or its agents or contractors of the construction of any tenant improvements, Tenant shall have the right to enter
the Premises up to fifteen (15) days prior to the Commence­ment Date for the purpose of installing furniture, trade fixtures, equipment, and similar items. Tenant shall be liable for any damages or delays caused by Tenant's activities at the Premises.  Provided that Tenant has not begun operating its business from the Premises, and subject to all of the terms and conditions of the Lease, the foregoing activity shall not constitute the delivery of possession of the Premises to Tenant and the Term
of the Lease shall not commence as a result of said activities.  Prior to entering the Premises, Tenant shall obtain all insurance it is required to obtain by the Lease and shall provide certificates of said insurance to Landlord.  Tenant shall coordinate such entry with Landlord's building manager, and such entry shall be made in compliance with all terms and conditions of this Lease and the Rules and Regulations attached hereto.

4.  Rent.

4.1.  Base Rent.  Subject to adjustment as hereinafter provided in Section 4.3, Tenant shall pay to Landlord the Base Rent for the Premises set forth in Section 1.8, without offset or deduction on the first day of each
calendar month during the Term of this Lease.  At the time Tenant executes this Lease it shall pay to Landlord the advance Base Rent described in Section 1.9.  Base Rent for any period during the Term hereof which is for less than one month shall be prorated based upon the actual number of days of the calendar month involved.  Base Rent and all other amounts payable to Landlord hereunder shall be payable to Landlord in lawful money of the United States and Tenant shall be responsible
for delivering said amounts to Landlord at the address stated herein or to such other persons or to such other places as Landlord may designate in writing.

4.2.  Operating Expense Increases.  Tenant shall pay to Landlord during the Term hereof, in addition to the Base Rent, Tenant's Share of the amount by which all Operating Expenses, as defined in Section 4.2(c) below, for
each Comparison Year (as defined in Section 4.2(b) below) exceeds the amount of all Operating Expenses for the Base Year.  If less than 95% of the rentable square feet in the Project is occupied by tenants or Landlord is not supplying services to 95% of the rentable square feet of the Project at any time during any calendar year (including the Base Year), Operating Expenses for such calendar year shall be an amount equal to the Operating Expenses which would normally be expected to be incurred had 95%
of the Project's rentable square feet been occupied and had Landlord been supplying services to 95% of the Project's rentable square feet throughout such calendar year (hereinafter the "Grossed Up Operating Expenses").  Tenant's Share of Operating Expense increases shall be determined in accordance with the following provisions:

(a)  "Tenant's Share" is defined as the percentage set forth in Section 1.11, which percentage has been determined by dividing the number of rentable square feet in the Premises by ninety-five percent (95%) of the total number of rentable square feet in the Project and multiplying
the resulting quotient by one hundred (100).  In the event that the number of rentable square feet in the Project or the Premises changes, Tenant's Share shall be adjusted in the year the change occurs, and Tenant's Share for such year shall be determined on the basis of the days during such year that each Tenant's Share was in effect.

(b)  "Comparison Year" is defined as each calendar year during the Term of this Lease after the Base Year.  Tenant's Share of the Operating Expense increases for the last Comparison Year of the Term of this Lease shall be prorated according to that portion of such
Comparison Year as to which Tenant is responsible for a share of such increase.

  

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(c)  "Operating Expenses" shall include all costs, expenses and fees incurred by Landlord in connection with or attributable to the Project, including but not limited to, the following items: (i) all costs, expenses and fees associated with or attributable to the ownership,
management, operation, repair, maintenance, improvement, alteration and replacement of the Project, or any part thereof, including but not limited to, the following: (A) all surfaces, coverings, decorative items, carpets, drapes, window coverings, parking areas, loading and unloading areas, trash areas, roadways, sidewalks, stairways, walls, structural elements, landscaped areas, striping, bumpers, irrigation systems, lighting facilities, building exteriors and roofs, fences and gates; (B) all heating, ventilating
and air conditioning equipment ("HVAC") (including, but not limited to, the cost of replacing or retrofitting HVAC equipment to comply with laws regulating or prohibiting the use or release of chlorofluorocarbons or hydrochlorofluorocarbons), plumbing, mechanical, electrical systems, life safety systems and equipment, telecommunication equipment, elevators, escalators, tenant directories, fire detection systems including sprinkler system maintenance and repair; (ii) the cost of trash disposal, janitorial and
cleaning services and security services and systems; (iii) the cost of all insurance purchased by Landlord and enumerated in Section 8 of this Lease, including any deductibles; (iv) the cost of water, sewer, gas, electricity, and other utilities available at the Project and paid by Landlord; (v) the cost of labor, salaries and applicable fringe benefits incurred by Landlord; (vi) the cost of materials, supplies and tools used in managing, maintaining and/or cleaning the Project; (vii) the cost of reasonable accounting
fees, management fees (not to exceed four percent (4%) of gross revenues collected annually),  legal fees and consulting fees attributable to the ownership, operation, management, maintenance and repair of the Project plus the cost of any space occupied by the property manager (if Landlord is the property manager, Landlord shall be entitled to receive a fair market management fee); (viii) the cost of operating, replacing, modifying and/or adding improvements or equipment mandated by any law, statute,
regulation or directive of any governmental agency and any repairs or removals necessitated thereby (including, but not limited to, the cost of complying with the Americans With Disabilities Act and regulations of the Occupational Safety and Health Administration); (ix) payments made by Landlord under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the payment or sharing of costs among property owners; (x) any business property taxes or personal property
taxes imposed upon the fixtures, machinery, equipment, furniture and personal property used in connection with the operation of the Project; (xi) the cost of all business licenses, including Business Professional and Occupational License Taxes and Business Improvements Districts Taxes, any gross receipt taxes based on rental income or other payments received by Landlord, commercial rental taxes or any similar taxes or fees; (xii) transportation taxes, fees or assessments, including but not limited to, mass transportation
fees, metrorail fees, trip fees, regional and transportation district fees; (xiii) all costs and expenses associated with or related to the implementation by Landlord of any transportation demand management program or similar program; (xiv) fees assessed by any air quality management district or other governmental or quasi-governmental entity regulating pollution; (xv) the cost of maintaining, repairing, securing and replacing existing intra-building network cabling; and (xvi) the cost of any other service reasonably
provided by Landlord or any cost that is elsewhere stated in this Lease to be an "Operating Expense".  Real Property Taxes (as defined in Section 10 hereof) shall be paid in accordance with Section 10 below and shall not be included in Operating Expenses.  Landlord shall have the right but not the obligation, from time to time, to equitably allocate some or all of the Operating Expenses among different tenants of the Project or among the different buildings which comprise the Project (the
"Cost Pools").

(d)  Notwithstanding anything to the contrary, Operating Expenses shall not include: (i) any expenses paid by any tenant directly to third parties, or as to which Landlord is otherwise reimbursed by any third party or by insurance proceeds; (ii) any amounts which would otherwise be included in Operating Expenses paid to any person,
firm or corporation related or otherwise affiliated with Landlord or any general partner, officer or director of Landlord or any of its general partners, to the extent same exceeds arms-length competitive prices paid in the Washington, D.C. metropolitan area for the services or goods provided (i.e., that portion of the costs and expenses for such services that exceed the competitive rate shall not be included in Operating Expenses); and (iii) salaries, wages and benefits of any employee above the level of senior
property manager; or any salary, wages, or other compensation or benefits for off-site employees applicable to the time spent working at other buildings, other than the Building manager (provided that with respect to each employee that services the Building and other buildings, a pro rata portion of such employee's salary shall be included in Operating Expenses).

(e)  If the cost incurred in making an improvement or replacing any equipment is not fully deductible as an expense in the year incurred in accordance with generally accepted accounting principles, the cost shall be amortized over the useful life of the improvement or equipment, as reasonably determined by Landlord in accordance
with Generally Accepted Accounting Principles, together with an interest factor on the unamortized cost of such item equal to the lesser of (i) eight percent (8%) per annum, or (ii) the maximum rate of interest permitted by applicable law.

(f)  Tenant's Share of Operating Expense increases shall be payable by Tenant within thirty (30) days after a reasonably detailed statement of actual expenses is presented to Tenant by Landlord.  At Landlord's option, however, Landlord may, from time to time, reasonably estimate what Tenant's Share of Operating Expense
increases will be, and the same shall be payable by Tenant monthly during each Comparison Year of the Term of the Lease, on the same day as the Base Rent is due hereunder.  In the event that Tenant pays Landlord's estimate of Tenant's Share of Operating Expense increases, Landlord shall use its best efforts to deliver to Tenant within one hundred eighty (180) days after the expiration of each Comparison Year a reasonably detailed statement (the "Statement") showing Tenant's Share of the actual Operating
Expense increases incurred during such year. Landlord's failure to deliver the Statement to Tenant within said period shall not constitute Landlord's waiver of its right to collect said amounts or otherwise prejudice Landlord's rights hereunder.  If Tenant's payments under this Section 4.2(f) during said Comparison Year exceed Tenant's Share as indicated on the Statement, Tenant shall be entitled to credit the amount of such overpayment against Tenant's Share of Operating Expense increases next falling
due.  If Tenant's payments under this Section 4.2(f) during said Comparison Year were less than Tenant's Share as indicated on the Statement, Tenant shall pay to Landlord the amount of the deficiency within thirty (30) days after delivery by Landlord to Tenant of the Statement.  Landlord and Tenant shall forthwith adjust between them by cash payment any balance determined to exist with respect to that portion of the last Comparison Year for which Tenant is responsible for Operating Expense
increases, notwithstanding that the Term of the Lease may have terminated before the end of such Comparison Year; and this provision shall survive the expiration or earlier termination of the Lease.

(g)  The computation of Tenant's Share of Operating Expense increases is intended to provide a formula for the sharing of costs by Landlord and Tenant and will not necessarily result in the reimbursement to Landlord of the exact costs it has incurred.

(h)  If Tenant disputes the amount set forth in the Statement, Tenant shall have the right, at Tenant's sole expense, not later than one hundred eighty (180) days following receipt of such Statement, to cause Landlord's books and records in respect to the calendar year which is the subject of the Statement to be audited by a
certified public accountant acceptable to Landlord. The audit shall take place at the offices of Landlord where its books and records are located at a mutually convenient time during Landlord's regular business hours.  Before conducting any audit, Tenant must pay the full amount of Operating Expenses billed.  Tenant shall have no right to conduct an audit or to give Landlord notice that it desires to conduct an audit at any time Tenant is in default under the Lease.  The accountant
conducting the audit shall be compensated on an hourly basis and shall not be compensated based upon a percentage of overcharges it discovers.  No subtenant shall have any right to conduct an audit, and no assignee shall conduct an audit for any period during which such assignee was not in possession of the Premises.  Tenant's right to undertake an audit with respect to any calendar year shall expire one hundred eighty (180) days after Tenant's receipt of the Statement for such calendar year,
and such Statement shall be final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct, at the end of such one hundred eighty (180) day period, unless prior thereto Tenant shall have given Landlord written notice of its intention to audit Operating Expenses for the calendar year which is the subject of the Statement.  If Tenant gives Landlord notice of its intention to audit Operating Expenses, it must commence such audit within sixty (60) days after such notice
is delivered to Landlord, and the audit must be completed within one hundred twenty (120) days after such notice is delivered to Landlord.  If Tenant does not commence and complete the audit within such periods, the Statement which Tenant elected to audit shall be deemed final and binding upon Tenant and shall, as between the parties, be conclusively deemed correct. If the parties agree to the results of such audit, Tenant's Share of Operating Expenses shall be appropriately adjusted based upon the
results of such audit, and the results of such audit shall be final and binding upon Landlord and Tenant.  If the parties do not agree upon the inclusion or amount of any Operating Expense charged by Landlord, the sole remedy of Tenant shall be to conduct an audit within the time specified in this Lease and, if still in disagreement with Landlord, to submit the matter to arbitration within thirty (30) days after completion of the audit to request an adjustment to any disputed Operating Expense item.  In
no event will this Lease be terminable nor shall Landlord be liable for damages based upon any disagreement regarding an adjustment of Operating Expenses. Tenant agrees that the results of any Operating Expenses audit shall be kept strictly confidential by Tenant and shall not be disclosed to any other person or entity.  Any audit conducted pursuant to this Section 4.2(h) shall be conducted at Tenant's sole cost and expense, unless
such audit determines that an error has been made in Landlord's determination and calculation of Operating Expenses which results in an adjustment to the amounts determined and calculated by Landlord in the amount of five percent (5%) or more, in which case Landlord shall pay for the commercially reasonable fees and expenses of Tenant's accounting firm or third party representative (provided such fees shall not exceed the total amount of Landlord's refund to Tenant in connection with any adjustment made pursuant
to this Section 4.2(h)), but if such adjustment is less than five percent (5%), Tenant shall pay for such fees and expenses.

  

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4.3.  Base Rent Increase.      See Addendum Paragraph 1

5.  Security Deposit.  Tenant shall deliver to Landlord at the time it executes this Lease the Security Deposit set forth in Section 1.10 as security for Tenant's faithful performance of Tenant's obligations hereunder.  If
Tenant fails to pay Base Rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may use all or any portion of said deposit for the payment of any Base Rent or other charge due hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant's default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby.  If Landlord so uses or applies all or any portion of said deposit, Tenant shall within
ten (10) days after written demand therefor deposit cash with Landlord in an amount sufficient to restore said deposit to its full amount.  Landlord shall not be required to keep said Security Deposit separate from its general accounts.  If Tenant performs all of Tenant's obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by Landlord, shall be returned, without payment of interest or other amount for its use, to Tenant (or, at Landlord's option, to the
last assignee, if any, of Tenant's interest hereunder) at the expiration of the Term hereof, and after Tenant has vacated the Premises.  No trust relationship is created herein between Landlord and Tenant with respect to said Security Deposit.  Tenant acknowledges that the Security Deposit is not an advance payment of any kind or a measure of Landlord's damages in the event of Tenant's default.  Tenant hereby waives the provisions of any law which is inconsistent with this Section
5.

See Addendum Paragraph 2

6.  Use.

6.1.  Use.  The Premises shall be used and occupied only for the purpose set forth in Section 1.5 and for no other purpose.  If Section 1.5 gives Tenant the right to use the Premises for general office use, by
way of example and not limitation, general office use shall not include medical office use or any similar use, laboratory use, classroom use, any use not characterized by applicable zoning and land use restrictions as general office use, or any use which would require Landlord or Tenant to obtain a conditional use permit or variance from any federal, state or local authority, or any use not compatible, in Landlord's sole but reasonable judgment, with a first class office building.  Notwithstanding any
permitted use inserted in Section 1.5, Tenant shall not use the Premises for any purpose which would violate the Project's certificate of occupancy, any conditional use permit or variance applicable to the Project or violate any covenants, conditions or other restrictions applicable to the Project.  No exclusive use has been granted to Tenant hereunder.

6.2.  Compliance with Law.

(a)  Landlord represents and warrants to Tenant that, to the best of Landlord's knowledge, the Premises, in the state existing on the Commencement Date of this Lease, but without regard to alterations or improvements to be made by the Tenant or the use for which Tenant will occupy the Premises, does not violate any covenants
or restrictions of record, or any applicable building code, regulation or ordinance in effect on such date.  If Tenant occupies the Premises at the time this Lease is executed, this warranty shall be of no force or effect.

(b)  Tenant shall, at Tenant's sole expense, promptly comply with all applicable laws, ordinances, rules, regulations, orders, certificates of occupancy, conditional use or other permits, variances, covenants and restrictions of record, the recommendations of Landlord's engineers or other consultants, and requirements of any
fire insurance underwriters, rating bureaus or government agencies, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the Term or any part of the Term hereof, relating in any manner to the Premises or the occupation and use by Tenant of the Premises.  Tenant shall, at Tenant's sole expense, comply with all requirements of the Americans With Disabilities Act that relate to the Premises, and all federal, state and local
laws and regulations governing occupational safety and health.  Tenant shall conduct its business and use the Premises in a lawful manner and shall not use or permit the use of the Premises or the Common Areas in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Project. Tenant shall obtain, at its sole expense, any permit or other governmental authorization required to operate its business from the Premises.  Landlord shall not be liable
for the failure of any other tenant or person to abide by the requirements of this Section or to otherwise comply with applicable laws and regulations, and Tenant shall not be excused from the performance of its obligations under this Lease due to such a failure.  To the extent that Landlord receives any notice from a governmental entity that the Common Areas of the Project are in violation of any requirement of the Americans with Disabilities Act ("ADA") and the Landlord is obligated pursuant to a
final determination to undertake action in order to comply with ADA, then in such event Landlord agrees to undertake such remedial action.  If such requirement was in effect as of the date hereof and such violation existed as of the date hereof, Landlord shall be responsible for the cost of curing such violation.  If such requirement was not in effect as of the date hereof or such violation did not exist as of the date hereof, then the cost of curing such violation shall be included in Operating
Expenses, except to the extent such costs would otherwise be excluded from Operating Expenses pursuant to the terms of Section 4.2 hereof.  To the extent that such notice requires action with regard to Tenant's particular use of the Premises or in connection with any alterations or improvements to be constructed at the Premises either by Tenant or on behalf of Tenant, Tenant shall be obligated to undertake such action at Tenant's sole cost and expense.  Tenant shall be solely responsible,
at Tenant's sole cost and expense, for complying with all requirements of the ADA which relate to the interior of the Premises.  Notwithstanding anything to the contrary contained herein, and subject to reimbursement (if applicable) in accordance with Section 4.2 hereinabove, Landlord shall be responsible for all ADA and code compliance of Common Areas including, without limitation, any bathrooms, stairs, and elevators, but shall not be responsible for such compliance within Tenant’s Premises
to the extent such compliance is caused by Tenant’s particular use of the Premises or any construction to the Premises undertaken by Tenant or on behalf of Tenant

6.3.  Condition of Premises.  Except as otherwise provided in this Lease, Tenant hereby accepts the Premises and the Project in their condition existing as of the Commencement Date of this Lease, subject to all applicable
federal, state and local laws, ordinances, regulations and permits governing the use of the Premises, the Project's certificate of occupancy, any applicable conditional use permits or variances, and any easements, covenants or restrictions affecting the use of the Premises or the Project.  Tenant acknowledges that it has satisfied itself by its own independent investigation that the Premises and the Project are suitable for its intended use, and that neither Landlord nor Landlord's agents has made any
representation or warranty as to the present or future suitability of the Premises, or the Project for the conduct of Tenant's business. Landlord shall deliver the Premises with the electrical system, plumbing system, HVAC system and other mechanical systems and components of the Premises in good working order.

  

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7.  Maintenance, Repairs and Alterations.

7.1.  Landlord's Obligations.  Landlord shall keep the Project (excluding the interior of the Premises and space leased to other occupants of the Project) in good condition and repair.  If plumbing pipes, electrical
wiring, HVAC ducts or vents within the Premises are in need of repair, Tenant shall immediately notify Landlord, and Landlord shall cause the repairs to be completed within a reasonable time, and, unless necessitated by the negligent or intentional acts of Tenant, its agents, employees or contractors, the entire cost of the repairs shall be considered an Operating Expense and reimbursed in accordance with Section 4.2 herein. Except as provided in Section 9.3, there shall be no abatement of rent or liability to
Tenant on account of any injury or interference with Tenant's business with respect to any improvements, alterations or repairs made by Landlord to the Project or any part thereof.  Tenant expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord's expense or to terminate this Lease because of Landlord's failure to keep the Project in good order, condition and repair but only to the extent the provisions of any such
statute conflict with the terms and provisions of this Lease; provided, however, nothing in this Section 7 shall be deemed to be a waiver of Tenant’s right to a claim of constructive eviction.

7.2.  Tenant's Obligations.  

 

(a)  Subject to the requirements of Section 7.3, Tenant shall be responsible for keeping the Premises in good condition and repair, at Tenant's sole expense.  By way of example, and not limitation, Tenant shall be responsible, at Tenant's sole expense, for repairing and/or replacing, carpet, marble, tile or other flooring,
paint, wall coverings, corridor and interior doors and door hardware, telephone and computer equipment, interior glass, window treatments, ceiling tiles, shelving, cabinets, millwork and other tenant improvements, and for the maintenance, repair and/or replacement of any supplemental and/or dedicated HVAC equipment for the Premises which serves the Premises exclusively. In addition, Tenant shall be responsible for the installation, maintenance and repair of all telephone, computer and related cabling from the
telephone terminal room on the floor on which the Premises is located to and throughout the Premises, and Tenant shall be responsible for any loss, cost, damage, liability and expense (including attorneys' fees) arising out of or related to the installation, maintenance, repair and replacement of such cabling.  If Tenant fails to keep the Premises in good condition and repair, Landlord may, but shall not be obligated to, make any necessary repairs following written notice to Tenant and the expiration
of a ten (10) day cure period (except in the event of situations reasonably believed by Landlord to constitute an emergency).  If Landlord makes such repairs, Landlord shall bill Tenant for the reasonable cost of the repairs as additional rent, and said additional rent shall be payable by Tenant within ten (10) business days.

(b)  On the last day of the Term hereof, or on any sooner termination, Tenant shall surrender the Premises to Landlord in the same condition as received, ordinary wear and tear and casualty damage excepted, clean and free of debris and Tenant's personal property.  Tenant shall repair any damage to the Premises occasioned
by the installation or removal of Tenant's trade fixtures, furnishings and equipment.  Tenant shall leave the electrical distribution systems, plumbing systems, lighting fixtures, HVAC ducts and vents, window treatments, wall coverings, carpets and other floor coverings, doors and door hardware, millwork, ceilings and other tenant improvements at the Premises and in good condition, ordinary wear and tear excepted.

7.3.  Alterations and Additions.

(a)  Tenant shall not, without Landlord's prior written consent, which may be given or withheld in Landlord's sole discretion, make any alterations, improvements, additions, utility installations or repairs (hereinafter collectively referred to as "Alteration(s)") in, on or about the Premises or the Project.  Alterations
shall include, but shall not be limited to, the installation or alteration of security or fire protection systems, communication systems, millwork, shelving, file retrieval or storage systems, carpeting or other floor covering, window and wall coverings, electrical distribution systems, lighting fixtures, telephone or computer system wiring, HVAC and plumbing.  At the expiration of the Term, Landlord may require the removal of any Alterations installed by Tenant and the restoration of the Premises and
the Project to their prior condition, at Tenant's expense.  To the extent Landlord's consent is required pursuant to this subsection, then, at the written request of Tenant, Landlord agrees to notify Tenant concurrently with Landlord's decision concerning such Alteration whether Landlord will require Tenant to remove such Alteration at the end of the Term. If a work letter agreement is entered into by Landlord and Tenant, Tenant shall not be obligated to remove the tenant improvements constructed in
accordance with the work letter agreement.  If, as a result of any Alteration made by Tenant, Landlord is obligated to comply with the Americans With Disabilities Act or any other law or regulation and such compliance requires Landlord to make any improvement or Alteration to any portion of the Project, as a condition to Landlord's consent, Landlord shall have the right to require Tenant to pay to Landlord prior to the construction of any Alteration by Tenant, the entire cost of any improvement or Alteration
Landlord is obligated to complete by such law or regulation.  Should Landlord permit Tenant to make its own Alterations, Tenant shall use only such contractor as has been expressly approved by Landlord, and Landlord may require Tenant to provide to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alterations, to insure Landlord against any liability for mechanic's and materialmen's liens and to insure completion
of the work.  In addition, Tenant shall pay to Landlord a fee equal to six percent (6%) of the cost of the Alterations to compensate Landlord for the overhead and other costs it incurs in reviewing the plans for the Alterations and in monitoring the construction of the Alterations.  Should Tenant make any Alterations without the prior approval of Landlord, or use a contractor not expressly approved by Landlord, Landlord may, at any time during the Term of this Lease, require that Tenant remove
all or part of the Alterations and return the Premises to the condition it was in prior to the making of the Alterations.  In the event Tenant makes any Alterations, Tenant agrees to obtain or cause its contractor to obtain, prior to the commencement of any work, "builders all risk" insurance in an amount approved by Landlord and workers compensation insurance. Notwithstanding anything to the contrary contained herein, Landlord will not unreasonably withhold, condition or delay its consent to any non-structural
Alterations provided that Tenant otherwise complies with the provisions of this Section 7.3 and that (i) such Alterations are not visible from the exterior of the Premises, and (ii) such Alterations do not affect any of the Building systems or structure.  Furthermore, Tenant shall have the right to make cosmetic, non-structural Alterations (consisting of painting, carpeting, wall papering only) (hereinafter, “Cosmetic Alterations”) to the Premises without obtaining Landlord's prior written
consent, provided that Tenant has given Landlord prior written notice of its intention to make such Alterations and that Tenant otherwise complies with the provisions of this Section 7.3. For purposes of the Lease, it shall be deemed reasonable for Landlord: (i) to require Tenant to perform Alterations during non-business hours if such Alterations will create unreasonable noise, noxious fumes or otherwise interfere with the quiet enjoyment of the other tenants in the Building, and (ii) to require Tenant to perform
Alterations in accordance with a reasonable schedule approved by the manager of the Building.

(b)  Any Alterations in or about the Premises that Tenant shall desire to make shall be presented to Landlord in written form, with plans and specifications which are sufficiently detailed to obtain a building permit.  If Landlord consents to an Alteration, the consent shall be deemed conditioned upon Tenant acquiring
a building permit from the applicable governmental agencies, furnishing a copy thereof to Landlord prior to the commencement of the work, and compliance by Tenant with all conditions of said permit in a prompt and expeditious manner.  Tenant shall provide Landlord with as-built plans and specifications for any Alterations made to the Premises.

(c)  Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or the Project, or any interest therein.  If Tenant shall, in
good faith, contest the validity of any such lien, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to not less than one and one half times the amount of such contested lien or claim indemnifying Landlord against liability arising out of such lien or claim.  Such bond shall be sufficient in form and amount to free the Project from the effect of such lien.  In addition, Landlord may require Tenant to pay Landlord's reasonable attorneys' fees and costs
in participating in such action.

  

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(d)  Tenant shall give Landlord not less than ten (10) days' advance written notice prior to the commencement of any work in the Premises by Tenant, and Landlord shall have the right to post notices of non-responsibility in or on the Premises or the Project.

(e)  All Alterations (whether or not such Alterations constitute trade fixtures of Tenant) which may be made to the Premises by Tenant shall be paid for by Tenant, at Tenant's sole expense, and shall be made and done in a good and workmanlike manner and with new materials satisfactory to Landlord and such Alterations shall be
the property of Landlord and remain upon and be surrendered with the Premises at the expiration of the Term of the Lease.  Provided Tenant is not in default, Tenant's personal property and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises or the Project, shall remain the property of Tenant and may be removed by Tenant subject to the provisions of Section 7.2(b).

7.4.  Failure of Tenant to Remove Property.  If this Lease is terminated due to the expiration of its Term or otherwise, and Tenant fails to remove its property as required by Section 7.2(b), in addition to any other remedies
available to Landlord under this Lease, and subject to any other right or remedy Landlord may have under applicable law, Landlord may remove any property of Tenant from the Premises and store the same elsewhere at the expense and risk of Tenant.

8.  Insurance.

8.1.  Insurance-Tenant.

(a)  Tenant shall obtain and keep in force during the Term of this Lease a commercial general liability policy of insurance with coverages reasonably acceptable to Landlord, in Landlord's sole discretion, which by way of example and not limitation, protects Tenant and Landlord (as an additional insured) against claims for bodily
injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto.  Such insurance shall be on an occurrence basis providing single limit coverage in an amount of not less than Three Million Dollars ($3,000,000) combined single limit with an "Additional Insured-Managers and Landlords of Premises Endorsement" and contain the "Amendment of the Pollution Exclusion" for damage caused by heat,
smoke or fumes from a hostile fire.  The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Tenant's indemnity obligations under this Lease.

(b)  Tenant shall obtain and keep in force during the Term of this Lease "special" extended coverage property insurance with coverages reasonably acceptable to Landlord, in Landlord's sole discretion.  Said insurance shall be written on a one hundred percent (100%) replacement cost basis on Tenant's personal property,
all tenant improvements installed at the Premises by Landlord or Tenant, Tenant's trade fixtures and other property.  By way of example and not limitation, such policies shall provide protection against any peril included within the classification "fire and extended coverage," against vandalism and malicious mischief, theft, sprinkler leakage and earthquake damage.  If this Lease is terminated as the result of a casualty in accordance with Section 9, the proceeds of said insurance attributable
to the replacement of all tenant improvements at the Premises which were paid for by Landlord shall, if permitted by Tenant’s insurance company, be paid to Landlord (otherwise Tenant shall turn over the insurance proceeds attributable to tenant improvements at the Premises which were paid for by Landlord to Landlord promptly following Tenant’s receipt of such insurance proceeds from Tenant’s insurance company).  If insurance proceeds are available to repair the tenant improvements,
at Landlord's option, all insurance proceeds Tenant is entitled to receive to repair the tenant improvements shall, to the extent permitted by the insurance company, be paid by the insurance company directly to Landlord.  Landlord shall select the contractor to repair and/or replace the tenant improvements, and Landlord shall cause the tenant improvements to be repaired and/or replaced in a timely manner to the extent insurance proceeds are available.

(c)  Tenant shall, at all times during the Term hereof, maintain in effect workers' compensation insurance as required by applicable law (but not less than $1,000,000) and business interruption and extra expense insurance satisfactory to Landlord. In addition, Tenant shall maintain in effect during the Term hereof a policy of
automobile liability insurance with combined single limit of $1,000,000.00.

8.2.  Insurance-Landlord.

(a)  Landlord shall obtain and keep in force a policy of general liability insurance with coverage against such risks and in such amounts as Landlord deems advisable insuring Landlord against liability arising out of the ownership, operation and management of the Project.

(b)  Landlord shall also obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Project in the amount of not less than eighty percent (80%) of the full replacement cost thereof, as determined by Landlord from time to time.  The terms and conditions of
said policies and the perils and risks covered thereby shall be determined by Landlord, from time to time, in Landlord's sole discretion.  In addition, at Landlord's option, Landlord shall obtain and keep in force, during the Term of this Lease, a policy of rental interruption insurance, with loss payable to Landlord, which insurance shall, at Landlord's option, also cover all Operating Expenses.  At Landlord's option, Landlord may obtain insurance coverages and/or bonds related to the operation
of the parking areas.  At Landlord's option, Landlord may obtain coverage for flood and earthquake damages.  In addition, Landlord shall have the right to obtain such additional insurance as is customarily carried by owners or operators of other comparable office buildings in the geographical area of the Project.  Tenant will not be named as an additional insured in any insurance policies carried by Landlord and shall have no right to any proceeds therefrom.  The policies
purchased by Landlord shall contain such deductibles as Landlord may determine.  In addition to amounts payable by Tenant in accordance with Section 4.2, Tenant shall pay any increase in the property insurance premiums for the Project over what was payable immediately prior to the increase to the extent the increase is specified by Landlord's insurance carrier as being caused by the nature of Tenant's occupancy or any act or omission of Tenant.

8.3.  Insurance Policies.  Tenant shall deliver to Landlord copies of the insurance policies or certificates of insurance evidencing those coverages and limits required under Section 8.1 within fifteen (15) days prior to
the Commencement Date of this Lease, and Landlord shall have the right to approve the terms and conditions of said policies, such approval not to be unreasonably withheld, conditioned or delayed. Tenant's insurance policies shall not be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Landlord.  Tenant shall, at least thirty (30) days prior to the expiration of such policies, furnish Landlord with renewals thereof.  Tenant's
insurance policies shall be issued by insurance companies authorized to do business in the state in which the Project is located, and said companies shall maintain during the policy term a "General Policyholders’ Rating" of at least "A" and a financial rating of at least "Class X" (or such other rating as may be required by any lender having a lien on the Project), as set forth in the most recent edition of "Best Insurance Reports."  All insurance obtained by Tenant shall be primary to and not
contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only.  Landlord, and at Landlord's option, the holder of any mortgage or deed of trust encumbering the Project and any person or entity managing the Project on behalf of Landlord, shall be named as an additional insured on all insurance policies Tenant is obligated to obtain by Section 8.1 above.  Tenant's insurance policies shall not include deductibles in excess of Ten Thousand
Dollars ($10,000).

  

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8.4.  Waiver of Subrogation.  Landlord waives any and all rights of recovery against Tenant for or arising out of damage to, or destruction of, the Project to the extent that Landlord's insurance policies then in force
insure against such damage or destruction and permit such waiver, and only to the extent of the insurance proceeds actually received by Landlord for such damage or destruction.  Landlord's waiver shall not relieve Tenant from liability under Section 21 below except to the extent Landlord's insurance company actually satisfies Tenant's obligations under Section 21 in accordance with the requirements of Section 21.  Tenant waives any and all rights of recovery against Landlord, Landlord's employees,
agents and contractors for liability or damages if such liability or damage is covered by Tenant's insurance policies then in force or the insurance policies Tenant is required to obtain by Section 8.1 (whether or not the insurance Tenant is required to obtain by Section 8.1 is then in force and effect), whichever is broader.  Tenant's waiver shall not be limited by the amount of insurance then carried by Tenant or the deductibles applicable thereto.  Tenant shall cause the insurance policies
it obtains in accordance with this Section 8 to provide that the insurance company waives all right of recovery by subrogation against Landlord in connection with any liability or damage covered by Tenant's insurance policies.

8.5.  Coverage.  Landlord makes no representation to Tenant that the limits or forms of coverage specified above or approved by Landlord are adequate to insure Tenant's property or Tenant's obligations under this Lease,
and the limits of any insurance carried by Tenant shall not limit Tenant’s obligations or liability under any indemnity provision included in this Lease or under any other provision of this Lease.

9.  Damage or Destruction.

9.1.  Effect of Damage or Destruction. . If all or part of the Project is damaged by fire, earthquake, flood, explosion,
the elements, riot, the release or existence of Hazardous Substances (as defined in Section 22 below) or by any other cause whatsoever (hereinafter collectively referred to as "Damages"), but the Damages are not "Material" (as defined in Section 9.2 below), Landlord shall repair the Damages to the Project as soon as is reasonably possible, and this Lease shall remain in full force and effect.  If all or part of the Project is destroyed or Materially Damaged, Landlord shall have the right, in its sole
and complete discretion, to repair or to rebuild the Project or to terminate this Lease. Landlord shall use commercially reasonable efforts within sixty (60) days but in no event later than ninety (90) days after the discovery of such Material Damage or destruction notify Tenant in writing of Landlord's intention to repair or to rebuild or to terminate this Lease. Tenant shall in no event be entitled to compensation or damages on account of annoyance or inconvenience in making any repairs, or on account of construction,
or on account of Landlord's election to terminate this Lease. Notwithstanding the foregoing, if Landlord shall elect to rebuild or repair the Project after Material Damage or destruction, but in good faith determines that the Premises cannot be substantially repaired within two hundred seventy (270) days after the date of the discovery of the Material Damage or destruction, without payment of overtime or other premiums, and the Damage to the Project will render the entire Premises unusable during said two hundred
seventy (270) day period, Landlord shall notify Tenant thereof in writing at the time of Landlord's election to rebuild or repair, and Tenant shall thereafter have a period of fifteen (15) days within which Tenant may elect to terminate this Lease, upon thirty (30) days’ advance written notice to Landlord, provided further, however, in the event Landlord pursues reconstruction or restoration of the Project and such reconstruction and restoration is not substantially complete due to delays within Landlord’s
control, within two hundred two hundred seventy (270) days after the date of the occurrence of the Damage, then Tenant shall have a further right to terminate this Lease upon written notice to Landlord, so long as Tenant’s written notice is delivered to Landlord prior to Landlord’s delivery of the Premises substantially completed to Tenant.  Tenant's termination right described in the preceding sentence shall not apply if the Damage was caused by the negligent or intentional acts of Tenant
or its employees, agents, contractors or invitees.  Failure of Tenant to exercise said election within said fifteen (15) day period shall constitute Tenant's agreement to accept delivery of the Premises under this Lease whenever tendered by Landlord, provided Landlord thereafter pursues reconstruction or restoration diligently to completion, subject to delays caused by Force Majeure Events, as hereinafter defined.  If Landlord is unable to repair the Damage to the Premises or the Project during
such two hundred seventy (270) day period due to Force Majeure Events, the two hundred seventy (270) day period shall be extended by the period of delay caused by the Force Majeure Events but no more than sixty (60) additional days at which time Tenant may elect to terminate this Lease.  Subject to Section 9.3 below, if Landlord or Tenant terminates this Lease in accordance with this Section 9.1, Tenant shall continue to pay all Base Rent, Operating Expense increases, Real Property Tax increases and
other amounts due hereunder which arise prior to the date of termination.

9.2.  Definition of Material Damage.  "Material Damage" to the Project shall occur if, in Landlord's reasonable judgment, the uninsured cost of repairing the Damage will exceed Twenty-Five Thousand Dollars ($25,000).  If
insurance proceeds are available to Landlord in an amount which is sufficient to pay the entire cost of repairing all of the Damage to the Project, the Damage shall be deemed material if the cost of repairing the Damage exceeds One Hundred Thousand Dollars ($100,000).  Damage to the Project shall be deemed Material if (a) the Project cannot be rebuilt or repaired to substantially the same condition it was in prior to the Damage due to laws or regulations in effect at the time the repairs will be made,
(b) the holder of any mortgage or deed of trust encumbering the Project requires that insurance proceeds available to repair the Damage in excess of Twenty-Five Thousand Dollars ($25,000) be applied to the repayment of the indebtedness secured by the mortgage or the deed of trust, or (c) the Damage occurs during the last twelve (12) months of the Term of the Lease.

9.3.  Abatement of Rent.  If Landlord elects to repair Damage to the Project and all or part of the Premises will be unusable or inaccessible to Tenant in the ordinary conduct of its business until the Damage is repaired,
and the Damage was not caused by the negligence or intentional acts of Tenant or its employees, agents, contractors or invitees, Tenant's Base Rent, Tenant's Share of Operating Expense increases and Tenant’s Share of Real Property Taxes shall be abated until the repairs are completed in proportion to the amount of the Premises which is unusable or inaccessible to Tenant in the ordinary conduct of its business.  Notwithstanding the foregoing, there shall be no abatement of Base Rent, Tenant’s
Share of Operating Expense increases and Tenant’s Share of Real Property Taxes by reason of any portion of the Premises being unusable or inaccessible for a period equal to five (5) consecutive business days or less.

9.4.  Tenant's Acts.  If such Damage or destruction occurs as a result of the negligence or the intentional acts of Tenant or Tenant's employees, agents, contractors or invitees, and the proceeds of insurance which are
actually received by Landlord are not sufficient to pay for the repair of all of the Damage, Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon demand, the difference between the cost of repairing the Damage and the insurance proceeds received by Landlord.

9.5.  Tenant's Property.  As more fully set forth in Section 21, Landlord shall not be liable to Tenant or its employees, agents, contractors, invitees or customers for loss or Damage to merchandise, tenant improvements,
fixtures, automobiles, furniture, equipment, computers, files or other property (hereinafter collectively “Tenant’s property”) located at the Project.  Tenant shall repair or replace all of Tenant’s property at Tenant's sole cost and expense.  Tenant acknowledges that it is Tenant's sole responsibility to obtain adequate insurance coverage to compensate Tenant for Damage to Tenant's property.

10.  Real and Personal Property Taxes.

10.1.  Payment of Taxes.  Tenant shall pay to Landlord during the Term hereof, in addition to Base Rent and Tenant’s Share of Operating Expense increases, Tenant’s Share of the amount by which all “Real
Property Taxes” (as defined in Section 10.2 below) for each Comparison Year exceeds the amount of all Real Property Taxes for the Base Year.  Tenant’s Share of Real Property Tax increases shall be payable by Tenant at the same time, in the same manner and under the same terms and conditions as Tenant pays Tenant’s Share of Operating Expense increases as provided in Section 4.2(f) of this Lease.  Except as expressly provided in Section 10.4 below, if the Real Property Taxes
incurred during any Comparison Year are less that the Real Property Taxes incurred during the Base Year, Tenant shall not be entitled to receive any credit, offset, reduction or benefit as a result of said occurrence.

  

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10.2.  Definition of "Real Property Tax."  As used herein, the term "Real Property Tax" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, improvement bond or bonds imposed
on the Project or any portion thereof by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Landlord in the Project or in any portion thereof, unless such tax is defined as an Operating Expense by Section 4.2(c).  Real Property Taxes shall not include income, inheritance and gift taxes.

10.3.  Personal Property Taxes.  Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant contained in the Premises
or related to Tenant's use of the Premises.  If any of Tenant's personal property shall be assessed with Landlord's real or personal property, Tenant shall pay to Landlord the taxes attributable to Tenant within ten (10) days after receipt of a written statement from Landlord setting forth the taxes applicable to Tenant's property.

10.4.  Reassessments.  From time to time Landlord may challenge the assessed value of the Project as determined by applicable taxing authorities and/or Landlord may attempt to cause the Real Property Taxes to be reduced
on other grounds.  If Landlord is successful in causing the Real Property Taxes to be reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter collectively referred to as a "reduction"), Landlord shall to the extent practicable, credit the reduction(s) to Real Property Taxes for the calendar year to which a reduction applies and to recalculate the Real Property Taxes owed by Tenant for years after the year in which the reduction applies based on the reduced Real Property Taxes
(if a reduction applies to Tenant's Base Year, the Base Year Real Property Taxes shall be reduced by the amount of the reduction and Tenant's Share of Real Property Tax increases shall be recalculated for all Comparison Years following the year of the reduction based on the lower Base Year amount).  All costs incurred by Landlord in obtaining the Real Property Tax reductions shall be considered an Operating Expense and Landlord shall determine, in its sole discretion to which years any reductions will
be applied.  In addition, all accounting and related costs incurred by Landlord in calculating new Base Years for tenants and in making all other adjustments shall be an Operating Expense.

11.  Utilities.

11.1.  Services Provided by Landlord.  Subject to all governmental rules, regulations and guidelines applicable thereto, Landlord shall use its best efforts to provide HVAC to the Premises for normal office use during the
times described in Section 11.4, reasonable amounts of electricity for normal office lighting and fractional horsepower office machines, water in the Premises or in the Common Areas for reasonable and normal drinking and lavatory use, replacement light bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures, and building standard janitorial services. In addition, Tenant shall be responsible for all electricity costs associated with Tenant’s use and operation of any dedicated HVAC units
and computer rooms.

11.2.  Intrabuilding Network Cabling.  In addition to the items described in Section 11.1 above, Landlord shall also provide Tenant with access to a reasonable amount of INC.  For purposes of this Section 11.2,
a reasonable amount of INC shall not exceed two (2) cable pairs per one thousand (1,000) usable square feet of space in the Premises.  If Tenant requires additional INC capacity, the cost of providing, maintaining, repairing and replacing such capacity shall be borne solely by Tenant.  Additional INC capacity may only be installed, maintained, repaired and replaced by a contractor approved by Landlord, in Landlord's sole discretion.  The Building's minimum point of entry ("MPOE")
for telephone service, the INC risers and the telephone terminal rooms located on each floor of the Building may only be accessed with Landlord's prior consent and by contractors approved by Landlord, in Landlord's sole discretion.  Tenant shall be responsible for any loss, cost, damage, liability and expense (including attorneys' fees) arising out of or related to the installation, maintenance, repair and replacement of additional INC capacity.

11.3.  Occupant Density.  Tenant acknowledges that the Building is currently equipped to accommodate a ratio of not more than one Occupant for each two hundred (200) square feet of rentable area in the Premises.  For
purposes of this Section, "Occupants" shall include employees, visitors, contractors and other people that visit the Premises but shall not include people not employed by Tenant that deliver or pick up mail or other packages at the Premises, employees of Landlord or employees of Landlord's agents or contractors.  In the event Tenant exceeds such density ratio in connection with its use of the Premises, however, Tenant understands and acknowledges that Tenant, and not Landlord, shall be solely responsible
for any discomfort or inconvenience experienced by Tenant and its Occupants in connection with such use or for any additional wear and tear on the Premises and the Common Areas, or if such excess usage shall result from other than periodic use of the conference facilities in the Premises, any additional use of electricity, water and other utilities, and additional demand by Tenant for other Building services resulting from exceeding such density ratio. To the extent that Tenant’s use of the Premises exceeds
such density ratio, the cost to (i) supply additional services and utilities to the Premises, (ii) install additional systems and equipment to the Premises, and (iii) if such excess usage shall result from other than periodic use of the conference facilities in the Premises, repair wear and tear to the Premises and the Common Areas occasioned by such usage shall be borne by Tenant solely.  Such increased density ratio shall in no way be construed by Tenant as an implicit increase in the number of parking
spaces allocated to Tenant in Section 1.13 of the Lease.

11.4.  Hours of Service.  Building services and utilities shall be provided Monday through Friday from 8:00 a.m. to 5:30 p.m. and Saturdays from 9:00 a.m. to 1:00 p.m.  Janitorial services shall be provided Monday
through Friday.  HVAC and other Building services shall not be provided at other times or on nationally recognized holidays.  Tenant acknowledges that there will be no air circulation or temperature control within the Premises when the HVAC is not operating and , consequently, during such times the Premises may not be suitable for human occupation or for the operation of computers and other heat sensitive equipment.  Nationally recognized holidays shall include, but shall not necessarily
be limited to, New Year's Day, Martin Luther King Jr. Day, Presidents' Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.  Landlord shall use its best efforts to provide HVAC to Tenant at times other than those set forth above subject to (a) the payment by Tenant of Landlord's standard charge, as determined by Landlord from time to time, in Landlord's sole discretion, for after hours HVAC and (b) Tenant providing to Landlord at least one (1) business day's advance written
notice of Tenant's need for after hours HVAC.  As of the date of this Lease, and subject to future increases, the standard charge for after hours HVAC is Forty-Five Dollars ($45.00) per hour per half floor and Ninety Dollars ($90.00) per hour per full floor.  Tenant shall pay all after hours HVAC charges to Landlord within five (5) business days after Landlord bills Tenant for said charges.

11.5.  Excess Usage by Tenant.  Notwithstanding the use set forth in Section 1.5, Tenant shall not use Building utilities or services in excess of those used by the average office building tenant using its premises for
ordinary office use.  Tenant shall not install at the Premises office machines, lighting fixtures or other equipment which will generate above average heat, noise or vibration at the Premises or which will adversely effect the temperature maintained by the HVAC system.  If Tenant does use Building utilities or services in excess of those used by the average office building tenant, Landlord shall have the right, in addition to any other rights or remedies it may have under this Lease, to (a)
at Tenant's expense, install separate metering devices at the Premises, and to charge Tenant for its usage, (b) require Tenant to pay to Landlord all costs, expenses and damages incurred by Landlord as a result of such usage, and (c) require Tenant to stop using excess utilities or services.

  

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11.6.  Interruptions.  Tenant agrees that Landlord shall not be liable to Tenant for its failure to furnish gas, electricity, telephone service, water, HVAC or any other utility services or building services when such failure
is occasioned, in whole or in part, by repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, telephone service or other utility at the Project, by any accident, casualty or event arising from any cause whatsoever, including the negligence of Landlord, its employees, agents and contractors, by act, negligence or default of Tenant or any other person or entity, or by an other cause, and such failures shall never be deemed to constitute
an eviction or disturbance of Tenant's use and possession of the Premises or relieve Tenant from the obligation of paying rent or performing any of its obligations under this Lease.  Furthermore, Landlord shall not be liable under any circumstances for loss of property or for injury to, or interference with, Tenant's business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any such services or utilities.  Landlord
may comply with voluntary controls or guidelines promulgated by any governmental entity relating to the use or conservation of energy, water, gas, light or electricity or the reduction of automobile or other emissions without creating any liability of Landlord to Tenant under this Lease. Notwithstanding anything contained herein to the contrary, if any interruption of utilities or services caused by Landlord's gross negligence or willful misconduct shall continue for more than five (5) consecutive business days
and shall render all or any portion of the Premises unusable for the normal conduct of Tenant's business, and if Tenant does not in fact use or occupy such portion of the Premises, then all Base Rent and additional rent payable hereunder with respect to such portion of the Premises which Tenant does not occupy shall be abated from and after the sixth (6th) consecutive business day until full use of such portion of the Premises is restored
to Tenant.

12.  Assignment and Subletting.

12.1.  Landlord's Consent Required.  Tenant shall not voluntarily or by operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise transfer or encumber all or any part of Tenant's interest in this Lease
or in the Premises (hereinafter collectively a "Transfer"), without Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed.  Landlord shall respond to Tenant's written request for consent hereunder within thirty (30) days after Landlord's receipt of the written request from Tenant.  Any attempted Transfer without such consent shall be void and shall constitute a material default and breach of this Lease.  Tenant's written request for Landlord's
consent shall include, and Landlord's thirty (30) day response period referred to above shall not commence, unless and until Landlord has received from Tenant, all of the following information: (a) financial statements for the proposed assignee or subtenant for the past three (3) years prepared in accordance with generally accepted accounting principles, (b) federal tax returns for the proposed assignee or subtenant for the past three (3) years, (c) a TRW credit report or similar report on the proposed assignee
or subtenant, (d) a detailed description of the business the assignee or subtenant intends to operate at the Premises, (e) the proposed effective date of the assignment or sublease, (f) a copy of the proposed sublease or assignment agreement which includes all of the terms and conditions of the proposed assignment or sublease, (g) a detailed description of any ownership or commercial relationship between Tenant and the proposed assignee or subtenant, and (h) a detailed description of any Alterations the proposed
assignee or subtenant desires to make to the Premises.  If the obligations of the proposed assignee or subtenant will be guaranteed by any person or entity, Tenant's written request shall not be considered complete until the information described in (a), (b) and (c) of the previous sentence has been provided with respect to each proposed guarantor. "Transfer" shall also include the transfer (a) if Tenant is a corporation, and Tenant's stock is not publicly traded over a recognized securities exchange,
of more than forty nine percent (49%) of the voting stock of such corporation during the Term of this Lease (whether or not in one or more transfers) or the dissolution, merger or liquidation of the corporation, or (b) if Tenant is a partnership or other entity, of more than forty nine percent (49%) of the profit and loss participation in such partnership or entity during the Term of this Lease (whether or not in one or more transfers) or the dissolution, merger or liquidation of the partnership or entity.  If
Tenant is a limited or general partnership (or is comprised of two or more persons, individually or as co-partners), Tenant shall not be entitled to change or convert to (i) a limited liability company, (ii) a limited liability partnership or (iii) any other entity which possesses the characteristics of limited liability without the prior written consent of Landlord, which consent may be given or withheld in Landlord’s sole discretion.  Tenant's sole remedy in the event that Landlord shall wrongfully
withhold consent to or disapprove any assignment or sublease shall be to obtain an order by a court of competent jurisdiction that Landlord grant such consent; in no event shall Landlord be liable for damages with respect to its granting or withholding consent to any proposed assignment or sublease.  If Landlord shall exercise any option to recapture the Premises, or shall deny a request for consent to a  proposed assignment or sublease, Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all losses, liabilities, damages, costs and claims that may be made against Landlord by the proposed assignee or subtenant, or by any brokers or other persons claiming a commission or similar compensation in connection with the proposed assignment or sublease.

12.2.  Leveraged Buy-Out.  Subject to the provisions of Section 12.8, the involvement by Tenant or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, refinancing, transfer,
leveraged buy-out or otherwise) whether or not a formal assignment or hypothecation of this Lease or Tenant's assets occurs, shall be considered to be an assignment of this Lease by Tenant to which Landlord may reasonably withhold its consent unless after such transaction or series of transactions the surviving entity will have a net worth of no less than Ten Million and No/100 Dollars ($10,000,000.00).

12.3.  Standard For Approval.  Landlord shall not unreasonably withhold, condition or delay its consent to a Transfer provided that Tenant has complied with each and every requirement, term and condition of this Section
12.  Tenant acknowledges and agrees that each requirement, term and condition in this Section 12 is a reasonable requirement, term or condition.  It shall be deemed reasonable for Landlord to withhold its consent to a Transfer if any requirement, term or condition of this Section 12 is not complied with or: (a) the Transfer would cause Landlord to be in violation of its obligations under another lease or agreement to which Landlord is a party; (b) in Landlord's reasonable judgment, a proposed
assignee or subtenant has a smaller net worth than Tenant had on the date this Lease was entered into with Tenant or is less able financially to pay the rents due under this Lease as and when they are due and payable; (c) a proposed assignee's or subtenant's business will impose a burden on the Project's parking facilities, elevators, Common Areas or utilities that is greater than the burden imposed by Tenant, in Landlord's reasonable judgment; (d) the terms of a proposed assignment or subletting will allow the
proposed assignee or subtenant to exercise a right of renewal, right of expansion, right of first offer, right of first refusal or similar right held by Tenant; (e) a proposed assignee or subtenant refuses to enter into a written assignment agreement or sublease, reasonably satisfactory to Landlord, which provides that it will abide by and assume all of the terms and conditions of this Lease for the term of any assignment or sublease and containing such other terms and conditions as Landlord reasonably deems
necessary; (f) the use of the Premises by the proposed assignee or subtenant will not be identical to the use permitted by this Lease;  (g) any guarantor of this Lease refuses to consent to the Transfer or to execute a written agreement reaffirming the guaranty; (h) Tenant is in default as defined in Section 13.1 at the time of the request; (i) if requested by Landlord, the assignee or subtenant refuses to sign a non-disturbance and attornment agreement in favor of Landlord's lender; (j) Landlord has
sued or been sued by the proposed assignee or subtenant or has otherwise been involved in a legal dispute with the proposed assignee or subtenant; (k) the assignee or subtenant is involved in a business which is not in keeping with the then current standards of the Project; (l) the proposed assignee or subtenant is an existing tenant of the Project or is a person or entity then negotiating with Landlord for the lease of space in the Project; (m) the assignment or sublease will result in there being more than
one subtenant of the Premises (e.g., the assignee or subtenant intends to use the Premises as an executive suite); (n) the assignee or subtenant is a governmental or quasi-governmental entity or an agency, department or instrumentality of a governmental or quasi-governmental agency; or (o) the terms of a proposed assignment or subletting will allow the proposed assignee or subtenant to pay a base rent less than the prevailing rental rate in the Building
at the time of Tenant’s request to such Transfer.

12.4.  Additional Terms and Conditions.  The following terms and conditions shall be applicable to any Transfer:

(a)  Regardless of Landlord's consent, no Transfer shall release Tenant from Tenant's obligations hereunder or alter the primary liability of Tenant to pay the rent and other sums due Landlord hereunder and to perform all other obligations to be performed by Tenant hereunder or release any guarantor from its obligations under
its guaranty.

  

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(b)  Landlord may accept rent from any person other than Tenant pending approval or disapproval of an assignment or subletting.

(c)  Neither a delay in the approval or disapproval of a Transfer, nor the acceptance of rent, shall constitute a waiver or estoppel of Landlord's right to exercise its rights and remedies for the breach of any of the terms or conditions of this Section 12.

(d)  The consent by Landlord to any Transfer shall not constitute a consent to any subsequent Transfer by Tenant or to any subsequent or successive Transfer by an assignee or subtenant.  However, Landlord may consent to subsequent Transfers or any amendments or modifications thereto without notifying Tenant or anyone
else liable on the Lease and without obtaining their consent, and such action shall not relieve such persons from liability under this Lease.

(e)  In the event of any default under this Lease, Landlord may proceed directly against Tenant, any guarantors or anyone else responsible for the performance of this Lease, including any subtenant or assignee, without first exhausting Landlord's remedies against any other person or entity responsible therefor to Landlord, or
any security held by Landlord.

(f)  Landlord's written consent to any Transfer by Tenant shall not constitute an acknowledgment that no default then exists under this Lease nor shall such consent be deemed a waiver of any then existing default.

(g)  The discovery of the fact that any financial statement relied upon by Landlord in giving its consent to an assignment or subletting was materially false shall, at Landlord's election, render Landlord's consent null and void.

(h)  Landlord shall not be liable under this Lease or under any sublease to any subtenant.

(i)  No assignment or sublease may be modified or amended without Landlord's prior written consent.

(j)   Any assignee of, or subtenant under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed, for the benefit of Landlord, to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Tenant
during the term of said assignment or sublease, other than such obligations as are contrary or inconsistent with provisions of an assignment or sublease to which Landlord has specifically consented in writing.

12.5.  Additional Terms and Conditions Applicable to Subletting.  The following terms and conditions shall apply to any subletting by Tenant of all or any part of the Premises and shall be deemed included in all subleases
under this Lease whether or not expressly incorporated therein:

(a)  Tenant hereby absolutely and unconditionally assigns and transfers to Landlord all of Tenant's interest in all rentals and income arising from any sublease entered into by Tenant, and Landlord may collect such rent and income and apply same toward Tenant's obligations under this Lease; provided, however, that until a default
shall occur in the performance of Tenant's obligations under this Lease, Tenant may receive, collect and enjoy the rents accruing under such sublease.  Landlord shall not, by reason of this or any other assignment of such rents to Landlord nor by reason of the collection of the rents from a subtenant, be deemed to have assumed or recognized any sublease or to be liable to the subtenant for any failure of Tenant to perform and comply with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any Security Deposit.  Tenant hereby irrevocably authorizes and directs any such subtenant, upon receipt of a written notice from Landlord stating that a default exists in the performance of Tenant's obligations under this Lease, to pay to Landlord the rents due as they become due under the sublease.  Tenant agrees that such subtenant shall have the right to rely upon any such statement and request from Landlord, and that such subtenant
shall pay such rents to Landlord without any obligation or right to inquire as to whether such default exists and notwithstanding any notice from or claim from Tenant to the contrary.

(b)  In the event Tenant shall default in the performance of its obligations under this Lease, Landlord at its option and without any obligation to do so, may require any subtenant to attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant under such sublease from the time of the exercise of said
option to the termination of such sublease; provided, however, Landlord shall not be liable for any prepaid rents or Security Deposit paid by such subtenant to Tenant or for any other prior defaults of Tenant under such sublease.

12.6.  Transfer Premium from Assignment or Subletting.  Landlord shall be entitled to receive from Tenant (as and when received by Tenant) as an item of additional rent one-half of all amounts received by Tenant from the
subtenant or assignee in excess of the amounts payable by Tenant to Landlord hereunder (hereinafter the “Transfer Premium”).  The Transfer Premium shall be reduced by the reasonable brokerage commissions and legal fees actually paid by Tenant in order to assign the Lease or to sublet a portion of the Premises.  "Transfer Premium" shall mean all Base Rent, additional rent or other consideration of any type whatsoever payable by the assignee or subtenant in excess of the Base Rent
and additional rent payable by Tenant under this Lease.  If less than all of the Premises is transferred, the Base Rent and the additional rent shall be determined on a per rentable square foot basis.  Transfer Premium shall also include, but not be limited to, key money and bonus money paid by the assignee or subtenant to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to the assignee or subtenant or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to the assignee or subtenant in connection with such Transfer.  For purposes of calculating the Transfer Premium, expenses will be amortized over the life of the sublease.

12.7.  Landlord's Option to Recapture Space.   Notwithstanding anything to the contrary contained in this Section 12, Landlord shall have the option, by giving written notice to Tenant within thirty (30) days
after receipt of any request by Tenant (i) to assign this Lease, or (ii) to sublease space in the Premises if the term of such sublease expires during the last twelve (12) months of the Term of the Lease, to terminate this Lease with respect to said space as of the date thirty (30) days after Landlord's election.    In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Base Rent, Tenant's Share of Operating Expense increases,
Tenant’s Share of Real Property Tax increases and the number of parking spaces Tenant may use shall be adjusted on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the original Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of same.  If Landlord recaptures only a portion of the Premises, it
shall construct and erect at its sole cost such partitions as may be required to sever the space to be retained by Tenant from the space recaptured by Landlord.  Landlord may, at its option, lease any recaptured portion of the Premises to the proposed subtenant or assignee or to any other person or entity without liability to Tenant.  Tenant shall not be entitled to any portion of the profit, if any, Landlord may realize on account of such termination and reletting.  Tenant acknowledges
that the purpose of this Section 12.7 is to enable Landlord to receive profit in the form of higher rent or other consideration to be received from an assignee or sublessee, to give Landlord the ability to meet additional space requirements of other tenants of the Project and to permit Landlord to control the leasing of space in the Project.  Tenant acknowledges and agrees that the requirements of this Section 12.7 are commercially reasonable and are consistent with the intentions of Landlord and Tenant.

  

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12.8.  Permitted Transfers.   Notwithstanding anything to the contrary contained in this Section 12 of the Lease, provided Tenant is not in default after expiration of all applicable notice
and cure periods, Tenant shall have the right, without Landlord's consent, upon thirty (30) days advance written notice to Landlord, to assign the Lease or sublet the whole or any part of the Premises (a) to any entity or entities which are owned by Tenant, or which owns Tenant, (b) in connection with the sale or transfer of substantially all of the assets of the Tenant or the sale or transfer of substantially all of the outstanding ownership interests in Tenant, or (c) in connection with a merger, consolidation
or other corporate reorganization of Tenant (each of the transactions referenced in the above subparagraphs (a), (b), and (c) are hereinafter referred to as a "Permitted Transfer," and each surviving entity shall hereinafter be referred to as a "Permitted Transferee"); provided, that such assignment or sublease is subject to the following conditions:

(i)           Tenant shall remain fully liable under the terms of the Lease;

(ii)           such Permitted Transfer shall be subject to all of the terms, covenants and conditions of the Lease;

(iii)           such Permitted Transferee has a net worth at least equal to Ten Million and No/100 Dollars ($10,000,000.00); and

(iv)           such Permitted Transferee shall expressly assume the obligations of Tenant under the Lease by a document reasonably satisfactory to Landlord.

12.9.  Landlord's Expenses.  In the event Tenant shall assign this Lease or sublet the Premises or request the consent of Landlord to any Transfer, then Tenant shall pay Landlord's reasonable costs and expenses incurred
in connection therewith, including, but not limited to, attorneys', architects', accountants', engineers' or other consultants' fees.

13.  Default; Remedies.

13.1.  Default by Tenant.  Landlord and Tenant hereby agree that the occurrence of any one or more of the following events is a material default by Tenant under this Lease and that said default shall give Landlord the rights
described in Section 13.2.  Landlord or Landlord's authorized agent shall have the right to execute and deliver any notice of default, notice to pay rent or quit or any other notice Landlord gives Tenant.

(a)  Tenant's failure to make any payment of Base Rent, Tenant's Share of Operating Expense increases, Tenant’s Share of Real Property Tax increases, charges for after hours HVAC, late charges, or any other payment required to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of
three (3) days after written notice thereof from Landlord to Tenant.  In the event that Landlord serves Tenant with a notice to pay rent or quit pursuant to applicable unlawful detainer statutes, such notice shall also constitute the notice required by this Section 13.1(a).

(b)  The abandonment of the Premises by Tenant in which event Landlord shall not be obligated to give any notice of default to Tenant.

(c)  The failure of Tenant to comply with any of its obligations under Sections 6.1, 6.2(b), 7.2, 7.3, 8, 12, 18, 20, 22, 23, 25, 33, 34, and 55 and 59 where Tenant fails to comply with its obligations or fails to cure any earlier breach of such obligation within ten (10) business days following written notice from Landlord to
Tenant.  In the event Landlord serves Tenant with a notice to quit or any other notice pursuant to applicable unlawful detainer statutes, said notice shall also constitute the notice required by this Section 13.1(c).

(d)  The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Tenant (other than those referenced in Sections 13.1(a), (b) and (c), above), where such failure shall continue for a period of ten (10) business days after written notice thereof from Landlord
to Tenant; provided, however, that if the nature of Tenant's non-performance is such that more than ten (10) business days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said ten (10) business day period and thereafter diligently pursues such cure to completion.  In the event that Landlord serves Tenant with a notice to quit pursuant to applicable unlawful detainer statutes, said notice shall also constitute the notice required
by this Section 13.1(d).

(e)  (i) The making by Tenant or any guarantor of Tenant’s obligations hereunder of any general arrangement or general assignment for the benefit of creditors; (ii) Tenant or any guarantor becoming a "debtor" as defined in 11 U.S.C. 101 or any successor statute thereto (unless, in the case of a petition filed against Tenant
or guarantor, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; (iv) the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) the insolvency of Tenant.  In the event that any provision of this Section 13.1(e) is contrary to any applicable law, such provision shall be of no force or effect.

(f)  The discovery by Landlord that any financial statement, representation or warranty given to Landlord by Tenant, or by any guarantor of Tenant's obligations hereunder was materially false at the time given.  Tenant acknowledges that Landlord has entered into this Lease in material reliance on such information.

(g)  If Tenant is a corporation, a partnership, or a limited liability company, the dissolution or liquidation of Tenant.

(h)  If Tenant’s obligations under this Lease are guaranteed; (i) the death of a guarantor, (ii) the termination of a guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a guarantor becoming insolvent or the subject of a bankruptcy filing, (iv)a guarantor’s
refusal to honor the guaranty, or (v) a guarantor’s breach of its guaranty obligation on an anticipatory breach basis.
 

13.2.  Remedies.

 

(a)  In the event of any material default or breach of this Lease by Tenant, Landlord may, at any time thereafter, with or without notice or demand, and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such default:

 

  

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(i)  Terminate Tenant’s right to possession of the Premises.  Upon any such termination, Tenant shall immediately surrender possession of the Premises to Landlord.  Landlord reserves all rights and remedies available to it pursuant to the terms and conditions of this Lease as well as under applicable
law.  Tenant hereby grants Landlord the full and free right to enter the Premises with or without process of law.  Tenant releases Landlord of any liability for any damage resulting therefrom and waives any right to claim damage for such re-entry.  Tenant also agrees that Landlord’s right to re-lease or any other right given to Landlord as a consequence of Tenant’s default hereunder or by operation of law is not relinquished.  On termination of Tenant’s
right of possession, Landlord shall be entitled to recover from Tenant: (i) the unpaid rent which had been earned at the time of the termination; (ii) the amount by which the unpaid rent which would have been earned after termination until the time of the award exceeds the amount of any rental, if any, received for the Premises during such time period; (iii) the amount by which the unpaid rent for the balance of the Term of the Lease after the time of award exceeds the amount of any rent to be received (net of
re-letting expenses as described below) from any replacement tenant occupying the Premises at the time of the award, or, if the Premises are not occupied at the time of the award by a rent-paying replacement tenant, the full amount of the rent to be earned hereunder for the balance of the Term of the Lease discounted to net present value assuming a discount rate of one percent (1%) above the discount rate of the Federal Reserve Bank of Richmond in effect at the time of the award; and provided further, however,
that Landlord shall repay to Tenant the excess of the foregoing amount over any rent received for the Premises during the balance of the Term of the Lease (net of reletting expenses as described below) similarly discounted; and (iv) at the time of the award any other amount necessary to compensate Landlord for all the damage proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of events would likely result therefrom, including but not limited
to, all costs and expenses attributable to recovering possession of the Premises, re-letting expenses (including the costs and expenses of any necessary repairs, renovations and alterations to the Premises), costs of carrying the Premises (including but not limited to, Landlord’s payment of real property taxes and insurance premiums), actual legal fees and associated costs and expenses, the unamortized portion of all brokerage commissions paid in connection with this Lease and all costs of tenant improvements
(amortized without interest on a straight line basis over the initial Term of the Lease), and reimbursement of any deferred rent or other Lease execution inducement.

(ii)  maintain Tenant's right of possession in which event Landlord shall have the remedy which permits Landlord to continue this Lease in effect after Tenant's breach and abandonment and recover rent as it becomes due. Acts of maintenance or preservation, efforts to relet the Premises, or removal or storage of Tenant’s
personal property, shall not constitute a termination of Tenant’s right to possession or act as an acceptance of any surrender of the Premises.  Landlord shall not be required to relet any or all of the Premises prior to leasing other vacant space at the Project, nor shall Landlord be required to accept a tenant:  (i) that does not otherwise meet Landlord’s financial and other criteria, nor (ii) a tenant who intends to make a use other than the use permitted by the Lease.

(iii)  collect sublease rents (or appoint a receiver to collect such rent) and otherwise perform Tenant's obligations at the Premises, it being agreed, however, that the appointment of a receiver for Tenant shall not constitute an election by Landlord to terminate this Lease.

(iv)  pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the state in which the Premises are located.

(b)  No remedy or election hereunder shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies at law or in equity.  The expiration or termination of this Lease and/or the termination of Tenant’s right to possession of the Premises shall not relieve Tenant of liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the Term hereof or by reason of Tenant’s occupancy of the Premises.

(c)  If Tenant abandons or vacates the Premises, Landlord may re-enter the Premises and such re-entry shall not be deemed to constitute Landlord's election to accept a surrender of the Premises or to otherwise relieve Tenant from liability for its breach of this Lease.  No surrender of the Premises shall be effective
against Landlord unless Landlord has entered into a written agreement with Tenant in which Landlord expressly agrees to (i) accept a surrender of the Premises and (ii) relieve Tenant of liability under the Lease.  The delivery by Tenant to Landlord of possession of the Premises shall not constitute the termination of the Lease or the surrender of the Premises.

13.3.  Default by Landlord.  Landlord shall not be in default under this Lease unless Landlord fails to perform obligations required of Landlord within thirty (30) days after written notice by Tenant to Landlord and to
the holder of any mortgage or deed of trust encumbering the Project whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for its cure, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently pursues the same to completion.  In
no event shall Tenant have the right to terminate this Lease as a result of Landlord’s default, and Tenant’s remedies shall be limited to damages and/or an injunction.  This Lease and the obligations of Tenant hereunder shall not be affected or impaired because Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of a Force Majeure Event, and the time for Landlord's performance shall be extended for the period
of any such delay.  Any claim, demand, right or defense by Tenant that arises out of this Lease or the negotiations which preceded this Lease shall be barred unless Tenant commences an action thereon, or interposes a defense by reason thereof, within the earlier to occur of (i) the expiration of the applicable statute of limitations with respect to the inaction, omission, event or action that gave rise to such claim, demand, right or defense, and (ii) eighteen (18) months after the expiration or earlier
termination of this Lease.

13.4.  Late Charges.  Tenant hereby acknowledges that late payment by Tenant to Landlord of Base Rent, Tenant's Share of Operating Expense increases, Tenant’s Share of Real Property Tax increases, parking charges,
after hours HVAC charges, or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed encumbering the Project.  Accordingly, if any installment of Base Rent, Tenant's Share of Operating Expense increases, Tenant’s
Share of Real Property Tax increases, parking charges, after hours HVAC charges or any other sum due from Tenant shall not be received by Landlord when such amount shall be due, then, without any requirement for notice or demand to Tenant, Tenant shall immediately pay to Landlord a late charge equal to six percent (6%) of such overdue amount.  The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant.  Acceptance
of such late charge by Landlord shall in no event constitute a waiver of Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder including the assessment of interest under Section 13.5.

13.5.  Interest on Past-due Obligations.  Except as expressly herein provided, any amount due to Landlord that is not paid when due shall bear interest at the lesser of ten percent (10%) per annum, or the maximum rate permitted
by applicable law.  Payment of such interest shall not excuse or cure any default by Tenant under this Lease; provided, however, that interest shall not be payable on late charges incurred by Tenant nor on any amounts upon which late charges are paid by Tenant.

13.6.  Payment of Rent and Security Deposit After Default.  If Tenant fails to pay Base Rent, Tenant's Share of Operating Expense increases, Tenant’s Share of Real Property Tax increases, parking charges or any other
monetary obligation due hereunder on the date it is due, after Tenant's third failure to pay any monetary obligation on the date it is due, at Landlord's option, all monetary obligations of Tenant hereunder shall thereafter be paid by cashiers check, and Tenant shall, upon demand, provide Landlord with an additional Security Deposit equal to three (3) months’ Base Rent.  If Landlord has required Tenant to make said payments by cashiers check or to provide an additional Security Deposit, Tenant's
failure to make a payment by cashiers check or to provide an additional Security Deposit, shall be a material default hereunder.

  

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14.  Landlord's Right to Cure Default; Payments by Tenant.  All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any reduction
of rent.  If Tenant shall fail to perform any of its obligations under this Lease, within a reasonable time after such performance is required by the terms of this Lease, Landlord may, but shall not be obligated to, after three (3) days' prior written notice to Tenant, make any such payment or perform any such act on Tenant's behalf without waiving its rights based upon any default of Tenant and without releasing Tenant from any obligations hereunder.  Tenant shall pay to Landlord, within
ten (10) days after delivery by Landlord to Tenant of statements therefor, an amount equal to the expenditures reasonably made by Landlord in connection with the remedying by Landlord of Tenant's defaults pursuant to the provisions of this Section 14.

15.  Condemnation.  If any portion of the Premises or the Project are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "Condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs; provided that if so much of the Premises or Project are taken by such Condemnation as would substantially and adversely affect the operation and profitability of Tenant's business conducted from the Premises, and said taking lasts for ninety (90) days or more, Tenant shall have the option, to be exercised only in writing within thirty (30) days after Landlord shall have given
Tenant written notice of such taking (or in the absence of such notice, within thirty (30) days after the condemning authority shall have taken possession), to terminate this Lease as of the date the condemning authority takes such possession.  If a taking lasts for less than ninety (90) days, Tenant's rent shall be abated during said period but Tenant shall not have the right to terminate this Lease.  If Tenant does not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining, except that the rent, Tenant's Share of Operating Expenses and Tenant’s Share of Real Property Tax increases shall be reduced in the proportion that the usable floor area of the Premises taken bears to the total usable floor area of the Premises.  Common Areas taken shall be excluded from the Common Areas usable by Tenant and no reduction of rent shall occur with respect thereto or by reason thereof.  Landlord
shall have the option in its sole discretion to terminate this Lease as of the taking of possession by the condemning authority, by giving written notice to Tenant of such election within thirty (30) days after receipt of notice of a taking by Condemnation of any part of the Premises or the Project; provided that if such taking does not involve the Premises all leases for spaces similarly affected are also terminated.  Any award for the taking of all or any part of the Premises or the Project under
the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Landlord, whether such award shall be made as compensation for diminution in value of the leasehold, for good will, for the taking of the fee, as severance damages, or as damages for tenant improvements; provided, however, that Tenant shall be entitled to any separate award for loss of or damage to Tenant's removable personal property, loss of profits and for moving expenses.  In the event
that this Lease is not terminated by reason of such Condemnation, and subject to the requirements of any lender that has made a loan to Landlord encumbering the Project, Landlord shall to the extent of severance damages received by Landlord in connection with such Condemnation, repair any damage to the Project caused by such Condemnation except to the extent that Tenant has been reimbursed therefore by the condemning authority.  This Section, not general principles of law or the State of Maryland Code
of Civil Procedure shall govern the rights and obligations of Landlord and Tenant with respect to the Condemnation of all or any portion of the Project.

16.  Vehicle Parking.

16.1.  Use of Parking Facilities.  During the Term and subject to the rules and regulations attached hereto as Exhibit "C", as modified by Landlord from time to time (the "Rules"), Tenant shall be entitled to use the number
of parking spaces set forth in Section 1.13 in the parking facility of the Project at no additional charge.  Landlord may, in its sole discretion, assign tandem parking spaces to Tenant and designate the location of any reserved parking spaces.  For purposes of this Lease, a “parking space” refers to the space in which one (1) motor vehicle is intended to park (e.g., a tandem parking stall includes two tandem parking spaces).  Landlord
reserves the right at any time to relocate Tenant's reserved and unreserved parking spaces within the Project.  If Tenant commits or allows in the parking facility any of the activities prohibited by the Lease or the Rules, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord.  Tenant's
parking rights are the personal rights of Tenant and Tenant shall not transfer, assign, or otherwise convey its parking rights separate and apart from this Lease.

16.2.  Intentionally Omitted.

17.  Broker's Fee.  Tenant and Landlord each represent and warrant to the other that neither has had any dealings or entered into any agreements with any person, entity, broker or finder other than the persons, if any, listed
in Section 1.15, in connection with the negotiation of this Lease, and no other broker, person, or entity is entitled to any commission or finder's fee in connection with the negotiation of this Lease, and Tenant and Landlord each agree to indemnify, defend and hold the other harmless from and against any claims, damages, costs, expenses, attorneys' fees or liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings, actions or
agreements of the indemnifying party.

18.  Estoppel Certificate.

18.1.  Delivery of Certificate.  Tenant shall at any time upon not less than ten (10) business days' prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing certifying such
information as Landlord may reasonably request including, but not limited to, the following: (a) that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) (b) the date to which the Base Rent and other charges are paid in advance and the amounts so payable, (c) that there are not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on the part of Landlord, or
specifying such defaults or unfulfilled obligations, if any are claimed, (d) that all tenant improvements to be constructed by Landlord, if any, have been completed in accordance with Landlord's obligations and (e) that Tenant has taken possession of the Premises.  Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Project.

18.2.  Failure to Deliver Certificate.  . If Tenant shall fail to execute and deliver such statement within such ten (10) business day period, then Landlord shall
send Tenant a second written request for such statement.  If Tenant shall fail to so execute and deliver such written statement within five (5) business days after this second request then, at Landlord's option, the failure of Tenant to deliver such statement within such time shall constitute a material default of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) there are no uncured defaults in Landlord's performance, (c) not more than one month's Base Rent has been paid in advance, (d) all tenant improvements to be constructed by Landlord, if any, have been completed in accordance with Landlord's obligations and (e) Tenant has taken possession of the Premises.

19.  Landlord's Liability.  Tenant acknowledges that Landlord shall have the right to transfer all or any portion of its interest in the Project and to assign this Lease to the transferee.  Tenant agrees that in
the event of such a transfer Landlord shall automatically be released from all liability under this Lease from and after such transfer; and Tenant hereby agrees to look solely to Landlord's transferee for the performance of Landlord's obligations hereunder after the date of the transfer.  Upon such a transfer, Landlord shall, at its option, return Tenant's Security Deposit to Tenant or transfer Tenant's Security Deposit to Landlord's transferee and, in either event, Landlord shall have no further liability
to Tenant for the return of its Security Deposit.  Subject to the rights of any lender holding a mortgage or deed of trust encumbering all or part of the Project, Tenant agrees to look solely to Landlord's equity interest in the Project (including insurance proceeds and condemnation awards) for the collection of any judgment requiring the payment of money by Landlord arising out of (a) Landlord's failure to perform its obligations
under this Lease or (b) the negligence or willful misconduct of Landlord, its partners, employees and agents.  No other property or assets of Landlord shall be subject to levy, execution or other enforcement procedure for the satisfaction of any judgment or writ obtained by Tenant against Landlord.  No partner, employee or agent of Landlord shall be personally liable for the performance of Landlord's obligations hereunder or be named as a party in any lawsuit arising out of or related to,
directly or indirectly, this Lease and the obligations of Landlord hereunder.  The obligations under this Lease do not constitute personal obligations of the individual partners of Landlord and Tenant shall not seek recourse against the individual partners of Landlord or their assets.

  

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20.  Indemnity.  Except as set forth in Section 8.4 of the Lease, Tenant hereby agrees to indemnify, defend and hold harmless Landlord and its employees, partners, agents, lenders and ground lessors (said persons and entities
are hereinafter collectively referred to as the "Landlord Indemnified Parties") from and against any and all liability, loss, cost, damage, claims, loss of rents, liens, judgments, penalties, fines, settlement costs, investigation costs, the cost of consultants and experts, attorneys' fees, court costs and other legal expenses, the effect of environmental contamination, the removal, remediation and/or abatement of Hazardous Substances (as said term is defined in Section 22 of the Lease) and other expenses (hereinafter
collectively referred to as "Damages") arising out of or related to a "Landlord Indemni­fied Matter," as defined below.  For purposes of this Section 20, a "Landlord Indemnified Matter" shall mean any matter for which one or more of the Landlord Indemnified Parties incurs liability or Damages if the liability or Damages arise out of or involve, (i) Tenant or its employees, agents, contractors, invitees, subtenants, assignees or licensees, (all of said persons or entities are hereinafter collectively
referred to individually as a “Tenant Party” or collectively as "Tenant Parties") negligent use of the Premises or the Project; (ii) any negligent act or omission of a Tenant Party; (iii) Tenant's failure to perform any of its obligations under the Lease; (iv) the existence, use or disposal of any Hazardous Substance brought on to the Project by a Tenant Party; or (v) any other matter for which Tenant has agreed to indemnify Landlord pursuant to any other provision of this Lease.  Except
as set forth in Section 8.4 of the Lease, Landlord hereby agrees to indemnify, defend and hold harmless Tenant and its shareholders, affiliated entities, employees, partners, agents, and lenders (said persons and entities are hereinafter collectively referred to as the "Tenant Indemnified Parties") from and against any and all Damages arising out of or related to "Tenant Indemnified Matters," as defined below.  For purposes of this Section 20, a "Tenant Indemnified Matter" shall mean any matter for
which one or more of the Tenant Indemnified Parties incurs liability or Damages if the liability or Damages arise out of or involve, (i) Landlord or its employees, contractors, partners agents, lenders and ground lessors (said persons are hereinafter collectively referred to as "Landlord Parties") negligent use, occupancy or operation of the Project; (ii) any negligent act or omission of a Landlord Party; (iii) Landlord’s failure to perform any of its obligations under the Lease; (iv) the existence, use
or disposal of any Hazardous Substances brought on to the Project by a Landlord Party; or (v) any other matters for which Landlord has agreed to indemnify Tenant pursuant to any other provisions of this Lease.  Landlord's and Tenant's obligations hereunder shall include, but shall not be limited to (a) compen­sating the Landlord Indemnified Parties or the Tenant Indemnified Parties, as the case may be, for damages arising out of Landlord Indemnified Matters or Tenant Indemnified Matters, as applicable,
and (ii) providing defense, with counsel reasonably satisfactory to such indemnified party, at the indemnifying party's sole expense, of any claims, actions or proceedings arising out of or relating to a Landlord Indemnified Matter or a Tenant Indemnified Matter, as the case may be, whether or not litigated or reduced to judgment and whether or not well founded.  The indemnified parties need not first pay any Damages to be indemnified hereunder.  This indemnity is intended to apply to the
fullest extent permitted by applicable law.  Each party’s obligations under this Section shall survive the expiration or termination of the Lease.

21.  Exemption of Landlord from Liability.  Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom or for loss of or damage to the merchandise, tenant improvements,
fixtures, furniture, equipment, computers, files, automobiles, or other property of Tenant, Tenant's employees, agents, contractors or invitees, or any other person in or about the Project, nor shall Landlord be liable for injury to the person of Tenant, Tenant's employees, agents, contractors or invitees, whether such damage or injury is caused by or results from any cause whatsoever including, but not limited to, theft, criminal activity at the Project, negligent security measures, bombings or bomb scares,
Hazardous Substances or Medical Waste, fire, steam, electricity, gas, water or rain, flooding, breakage of pipes, sprinklers, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises or upon other portions of the Project, or from other sources or places, or from new construction or the repair, alteration or improvement of any part of the Project, unless the cause of the damage or injury arises out of Landlord's or
its employees, agents or contractors grossly negligent or intentional acts.  Landlord shall not be liable for any damages arising from any act or neglect of any employees, agents, contractors or invitees of any other tenant, occupant or user of the Project, nor from the failure of Landlord to enforce the provisions of the lease of any other tenant of the Project.  Tenant, as a material part of the consideration to Landlord hereunder, hereby assumes all risk of damage to Tenant's property or
business or injury to persons, in, upon or about the Project arising from any cause, excluding Landlord's gross negligence or willful misconduct or the gross negligence or willful misconduct of its employees, agents or contractors, and Tenant hereby waives all claims in respect thereof against Landlord, its employees, agents and contractors.

22.  Hazardous Material.  For purposes of this Lease, the term "Hazardous Material" means any hazardous substance, hazardous waste, infectious waste, or toxic substance, material, or waste which becomes regulated or is defined
as such by any local, state or federal governmental authority. Except for small quantities of ordinary office supplies such as copier toners, liquid paper, glue, ink and common household cleaning materials, Tenant shall not cause or permit any Hazardous Material to be brought, kept or used in or about the Premises or the Project by Tenant, its agents, employees, contractors, or invitees.  Tenant hereby agrees to indemnify Landlord from and against any breach by Tenant of the obligations stated in the
preceding sentence, and agrees to defend and hold Landlord harmless from and against any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses (including, without limitation, diminution in value of the Project, damages for the loss or restriction or use of rentable space or of any amenity of the Project, damages arising from any adverse impact on marketing of space in the Project, sums paid in settlement of claims, attorneys' fees, consultant fees and expert fees) which arise during
or after the Term of this Lease as result of such breach.  This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions and any cleanup, remedial removal, or restoration work required due to the presence of Hazardous Material.  Tenant shall promptly notify Landlord of any release of a Hazardous Material in the Premises or at the Project of which Tenant becomes aware, whether caused by Tenant or any other person
or entity.  The provisions of this Section 22 shall survive the termination of the Lease.

22.1.  Definition and Consent.  The term "Hazardous Substance" as used in this Lease shall mean any product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release or affect, either by itself or in combination with other materials expected to be on the Premises, is either: (a) potentially injurious to the public health, safety or welfare, the environment or the Premises, (b) regulated or monitored by any governmental entity, (c) a basis for liability of Landlord to any governmental entity or third party under any federal, state or local statute or common law theory or (d) defined as a hazardous material or substance by any federal,
state or local law or regulation.  Except for small quantities of ordinary office supplies such as copier toner, liquid paper, glue, ink and common household cleaning materials, Tenant shall not cause or permit any Hazardous Substance to be brought, kept, or used in or about the Premises or the Project by Tenant, its agents, employees, contractors or invitees.

22.2.  Duty to Inform Landlord.  If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance, or a condition involving or resulting from same, has come to be located in, on or under or about the Premises
or the Project, Tenant shall immediately give written notice of such fact to Landlord.  Tenant shall also immediately give Landlord (without demand by Landlord) a copy of any statement, report, notice, registration, application, permit, license, given to or received from, any governmental authority or private party, or persons entering or occupying the Premises, concerning the presence, spill, release, discharge of or exposure to, any Hazardous Substance or contamination in, on or about the Premises
or the Project.

22.3.  Inspection; Compliance.  Landlord and Landlord's employees, agent, contractors and lenders shall have the right to enter the Premises at any time in the case of an emergency, and otherwise at reasonable times upon
reasonable prior notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Tenant with this Section 22.  Landlord shall have the right to employ experts and/or consultants in connection with its examination of the Premises and with respect to the installation, operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the Premises.  The costs and expenses of any such inspections shall be paid by the party requesting same,
unless a contamination, caused or materially contributed to by Tenant, is found to exist or be imminent, or unless the inspection is requested or ordered by governmental authority as the result of any such existing or imminent violation or contamination.  In any such case, Tenant shall upon request reimburse Landlord for the cost and expenses of such inspection.

  

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23.  Medical Waste.

23.1.  Disposal of Medical Waste.  Tenant hereby agrees, at Tenant's sole expense, to dispose of its medical waste in compliance with all federal, state and local laws, rules and regulations relating to the disposal of
medical waste and to dispose of the medical waste in a prudent and reasonable manner.  Tenant shall not place any medical waste in refuse containers emptied by Landlord's janitorial staff or in the Project's refuse containers.  At Landlord's option, in Landlord's sole discretion, Landlord shall have the right, upon sixty (60) days' advance written notice to Tenant, at any time and from time to time, to elect to provide medical waste disposal services to Tenant.  If Landlord elects
to provide medical waste disposal services to Tenant, all costs incurred by Landlord in providing such services shall be paid by Tenant to Landlord as additional rent.  Landlord may bill Tenant for said costs based upon the actual cost of providing said services to Tenant, as determined by Landlord, in Landlord's sole discretion, or Landlord may bill said expenses based upon Tenant's Share of the total cost of providing said services.

23.2.  Duty to Inform Landlord.  Within ten (10) days following Landlord's written request, Tenant shall provide Landlord with any information requested by Landlord concerning the existence, generation or disposal of medical
waste at the Premises, including, but not limited to, the following information:  (a) the name, address and telephone number of the person or entity employed by Tenant to dispose of its medical waste, including a copy of any contract with said person or entity,  (b) a list of each type of medical waste generated by Tenant at the Premises and a description of how Tenant disposes of said medical waste, (c) a copy of any laws, rules or regulations in Tenant's possession relating to the disposal
of the medical waste generated by Tenant, and (d) copies of any licenses or permits obtained by Tenant in order to generate or dispose of said medical waste.  Tenant shall also immediately provide to Landlord (without demand by Landlord) a copy of any notice, registration, application, permit, or license given to or received from any governmental authority or private party, or persons entering or occupying the Premises, concerning the presence, release, exposure or disposal of any medical waste in or
about the Premises or the Project.

23.3.  Inspection; Compliance.  Landlord and Landlord's employees, agents, contractors and lenders shall have the right to enter the Premises at any time in the case of an emergency, and otherwise at reasonable times upon
reasonable prior notice, for the purpose of verifying compliance by Tenant with this Section 23.  Landlord shall have the right to employ experts and/or consultants in connection with its examination of the Premises and with respect to the generation and disposal of medical waste on or from the Premises.  The cost and expenses of any such inspection shall be paid by Landlord, unless it is determined that Tenant is not disposing of its medical waste in a manner permitted by applicable law,
in which case Tenant shall immediately reimburse Landlord for the cost of such inspection.

24.  Tenant Improvements.  Tenant acknowledges and agrees that Landlord shall not be obligated to construct any tenant improvements on behalf of Tenant except as stated in the work letter agreement (the "Work Letter") attached
to this Lease as Schedule 1.  If a space plan is attached to the Work Letter, the space plan shall not be binding on Landlord unless the space plan has been approved by Landlord in writing.  Except as set forth in a Work Letter, it is specifically understood and agreed that Landlord has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate the Premises, the Project, or any part thereof, or to provide any allowance for such purposes, and that no representations
respecting the condition of the Premises or the Project have been made by Landlord to Tenant.

See Addendum Paragraph 3

25.  Subordination.

25.1.  Effect of Subordination.  This Lease, and any Option (as defined in Section 26 below) granted hereby, upon Landlord’s written election, shall be subject and subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed upon the Project and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof.  Notwithstanding such subordination, Tenant's right to quiet possession of the Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms.  At the request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such person or entity.  If any mortgagee, trustee or ground lessor shall elect to have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Tenant, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease or such Options
are dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.  In the event of the foreclosure of a security device, the new owner shall not (a) be liable for any act or omission of any prior landlord or with respect to events occurring prior to its acquisition of title, (b) be liable for the breach of this Lease by any prior landlord, (c) be subject to any offsets or defenses which Tenant may have against the prior landlord or (d) be liable
to Tenant for the return of its Security Deposit.

25.2.  Execution of Documents.  Tenant agrees to execute and acknowledge any documents Landlord reasonably requests that Tenant execute to effectuate an attornment, a subordination, or to make this Lease or any Option granted
herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be.  Tenant's failure to execute such documents within ten (10) business days after written demand shall constitute a material default by Tenant hereunder.

26.  Options.

26.1.  Definition.  As used in this Lease, the word "Option" has the following meaning: (1) the right or option to extend the Term of this Lease or to renew this Lease, and (2) the option or right of first refusal to lease
the Premises or the right of first offer to lease the Premises or the right of first refusal to lease other space within the Project or the right of first offer to lease other space within the Project, and (3) the right or option to terminate this Lease prior to its expiration date or to reduce the size of the Premises.  Any Option granted to Tenant by Landlord must be evidenced by a written option agreement attached to this Lease as a rider or addendum or said option shall be of no force or effect.

26.2.  Options Personal.  Each Option granted to Tenant in this Lease, if any, is personal to the original Tenant and may be exercised only by the original Tenant while occupying the entire Premises and may not be exercised
or be assigned, voluntarily or involuntarily, by or to any person or entity other than Tenant, including, without limitation, any permitted transferee as defined in Section 12.  The Options, if any, herein granted to Tenant are not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise.  If at any time an Option is exercisable by Tenant, the Lease has been assigned, or a sublease exists as to any portion
of the Premises, the Option shall be deemed null and void and neither Tenant nor any assignee or subtenant shall have the right to exercise the Option.

  

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26.3.  Multiple Options.  In the event that Tenant has multiple Options to extend or renew this Lease a later Option cannot be exercised unless the prior Option to extend or renew this Lease has been so exercised.

26.4.  Effect of Default on Options.  Tenant shall have no right to exercise an Option (i) during the time commencing from the date Landlord gives to Tenant a notice of default pursuant to Section 13.1 and continuing until
the noncompliance alleged in said notice of default is cured, or (ii) if Tenant is in default beyond applicable notice and cure periods of any of the terms, covenants or conditions of this Lease.  The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise an Option because of the provisions of this Section 26.4.

26.5.  Intentionally Omitted.

26.6.  Notice of Exercise of Option.  Notwithstanding anything to the contrary contained in Section 40, Tenant may only exercise an option by delivering its written notice of exercise to Landlord by certified mail, return
receipt and date of delivery requested.  It shall be Tenant’s obligation to prove that such notice was so sent in a timely manner and was delivered to Landlord by the U.S. Postal Service.

See Addendum Paragraph 4

27.  Landlord Reservations.  Landlord shall have the right: (a) to change the name and address of the Project or Building upon not less than ninety (90) days prior written notice; (b) to provide and install Building standard
graphics on or near the door of the Premises and such portions of the Common Areas as Landlord shall determine, in Landlord's sole discretion the cost of which shall be included as an Operating Expense reimbursable in accordance with Section 4.2 herein; (c) to permit any tenant the exclusive right to conduct any business as long as such exclusive right does not conflict with any rights expressly given herein; and (d) to place signs, notices or displays upon the roof, interior, exterior or Common Areas of the
Project.  Tenant shall not use a representation (photographic or otherwise) of the Building or the Project or their name(s) in connection with Tenant's business or suffer or permit anyone, except in an emergency, to go upon the roof of the Building.  Landlord reserves the right to use the exterior walls of the Premises, and the area beneath, adjacent to and above the Premises, together with the right to install, use, maintain and replace equipment, machinery, pipes, conduits and wiring through
the Premises, which serve other parts of the Project, provided that Landlord's use does not unreasonably interfere with Tenant's use of the Premises.

28.  Changes to Project.  Landlord shall have the right, in Landlord's sole discretion, from time to time, to make changes to the size, shape, location, number and extent of the improvements comprising the Project (hereinafter
referred to as "Changes") including, but not limited to, the Project interior and exterior, the Common Areas, elevators, escalators, restrooms, HVAC, electrical systems, communication systems, fire protection and detection systems, plumbing systems, security systems, parking control systems, driveways, entrances, parking spaces, parking areas and landscaped areas so long as such Changes do not have a permanent material adverse effect on Tenant’s access to or use and enjoyment of the Premises.  In
connection with the Changes, Landlord may, among other things, erect scaffolding or other necessary structures at the Project, limit or eliminate access to portions of the Project, including portions of the Common Areas, or perform work in the Building, which work may create noise, dust or leave debris in the Building.  Tenant hereby agrees that such Changes and Landlord's actions in connection with such Changes shall in no way constitute a constructive eviction of Tenant or entitle Tenant to any abatement
of rent.  Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the Changes, nor shall Tenant be entitled to any compensation or damages from Landlord for any inconvenience or annoyance occasioned by such Changes or Landlord's actions in connection with such Changes. Landlord shall use reasonable efforts to minimize unreasonable interference with Tenant's use and occupancy of the Premises during
Landlord's actions in connection with such Changes.

29.  Substitution of Other Premises.  Landlord shall have the right, but not more than once during the Term of this Lease, to move Tenant to any other comparable, leasable space in the Building provided that said space shall
be approximately the same size as the Premises and that Landlord shall pay the cost of moving Tenant's furniture and equipment to the new space as well as the reasonable cost of rewiring Tenant’s computers, Tenant’s cost of replacing existing stationery on hand and other similar, customary and reasonable moving costs.  The new space shall include tenant improvements that are substantially equivalent to the tenant improvements contained in the Premises, and the cost of any required tenant
improvements shall be paid by Landlord.  If Landlord elects to relocate Tenant, Landlord shall give Tenant written notice of its election and Tenant shall have thirty (30) days thereafter to agree to be relocated in accordance with the terms and conditions of this Section 29 or to elect to terminate this Lease.  If Tenant elects to terminate this Lease within said thirty (30) day period or fails to respond to Landlord's notice within said thirty (30) day period, this Lease shall then terminate
on the date which is sixty (60) days after the date Landlord gave Tenant its written notice electing to relocate Tenant. Landlord shall have no liability to Tenant as a result of Tenant's election to terminate this Lease.  Prior to said termination, Landlord and Tenant shall perform all of their obligations under this Lease.  If Tenant elects to be relocated, Landlord shall deliver substitute space to Tenant not more than one hundred eighty (180) days after (a) Tenant agrees to be relocated
and (b) approves plans for the construction of required tenant improvements at the new space, if any.  Tenant shall not unreasonably withhold or delay its approval of any plans for the construction of tenant improvements.  Landlord shall give Tenant thirty (30) days' advance notice of the estimated move in date.  Landlord agrees to coordinate such move outside of regular business hours as defined in Section 11.4.  Prior to the date that Tenant is moved to the new space,
Tenant shall remain in the Premises and shall continue to perform all of its obligations under this Lease.  After Tenant moves into the new space, this Lease shall remain in full force and effect and be deemed applicable to such new space, except as to Base Rent, Tenant's Share of Operating Expense increases, Tenant’s Share of Real Property Tax increases and the number of parking spaces Tenant shall be entitled to use, all of which shall be adjusted based on the relationship between the number
of rentable square feet in the original Premises and the number of rentable square feet in the substituted space.  Upon Tenant's election to be relocated, Landlord and Tenant shall amend this Lease to provide for the relocation of the Premises.

30.  Holding Over.  If Tenant remains in possession of the Premises or any part thereof after the expiration or earlier termination of the term hereof with Landlord's consent, such occupancy shall be a tenancy from month
to month upon all the terms and conditions of this Lease pertaining to the obligations of Tenant, except that the Base Rent payable shall be one hundred fifty percent (150%) of the Base Rent payable immediately preceding the termination date of this Lease, and all Options, if any, shall be deemed terminated and be of no further effect. If Tenant remains in possession of the Premises or any part thereof after the expiration of the Term hereof without Landlord's consent, Tenant shall, at Landlord's option, be treated
as a tenant at sufferance or a trespasser.  Nothing contained herein shall be construed to constitute Landlord's consent to Tenant holding over at the expiration or earlier termination of the Term.  In addition, in the event that Tenant remains in possession of the Premises for more than forty-five (45) days following the expiration or earlier termination of the Term of the Lease, Tenant hereby agrees to indemnify, hold harmless and defend Landlord from any cost, loss, claim or liability (including
attorneys' fees) Landlord may incur as a result of Tenant's failure to surrender possession of the Premises to Landlord upon the termination of this Lease.

31.  Landlord's Access.

31.1.  Access.  Landlord and Landlord's agents, contractors and employees shall have the right to enter the Premises at reasonable times and upon reasonable notice (except in the event of an emergency) for the purpose of
inspecting the Premises, performing any services required of Landlord, showing the Premises to prospective purchasers, lenders, or tenants, undertaking safety measures and making alterations, repairs, improvements or additions to the Premises or to the Project.  In the event of an emergency, Landlord may gain access to the Premises by any reasonable means, and Landlord shall not be liable to Tenant for damage to the Premises or to Tenant's property resulting from such access.  Landlord may
at any time place on or about the Building for sale or for lease signs and Landlord may at any time during the last one hundred twenty (120) days of the Term hereof place on or about the Premises for lease signs.

  

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31.2.  Keys.  Landlord shall have the right to retain keys to the locks on the entry doors to the Premises and all interior doors at the Premises.  At Landlord’s option, Landlord may require Tenant to obtain
all keys to door locks at the Premises from Landlord’s engineering staff or Landlord’s locksmith and to only use Landlord’s engineering staff or Landlord’s locksmith to change locks at the Premises.  Tenant shall pay Landlord’s or its locksmith’s standard charge for all keys and other services obtained from Landlord’s engineering staff or locksmith.

32.  Security Measures.  Tenant hereby acknowledges that Landlord shall have no obligation whatsoever to provide guard service or other security measures for the benefit of the Premises or the Project, and Landlord shall
have no liability to Tenant due to its failure to provide such services.  Tenant assumes all responsibility for the protection of Tenant, its agents, employees, contractors and invitees and the property of Tenant and of Tenant's agents, employees, contractors and invitees from acts of third parties.  Nothing herein contained shall prevent Landlord, at Landlord's sole option, from implementing security measures for the Project or any part thereof, in which event Tenant shall participate in
such security measures and the cost thereof shall be included within the definition of Operating Expenses, and Landlord shall have no liability to Tenant and its agents, employees, contractors and invitees arising out of Landlord’s negligent provision of security measures.  Landlord shall have the right, but not the obligation, to require all persons entering or leaving the Project to identify themselves to a security guard and to reasonably establish that such person should be permitted access
to the Project.

33.  Easements.  Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of parcel maps and restrictions,
so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Tenant.  Tenant shall sign any of the aforementioned documents within ten (10) business days after Landlord's request and Tenant's failure to do so shall constitute a material default by Tenant.  The obstruction of Tenant's view, air, or light by any structure erected in the vicinity of the Project, whether by Landlord or third parties, shall in no way affect
this Lease or impose any liability upon Landlord.

34.  Transportation Management.  Tenant shall fully comply at its sole expense with all present or future programs implemented or required by any governmental or quasi-governmental entity or Landlord to manage parking, transportation,
air pollution, or traffic in and around the Project or the metropolitan area in which the Project is located.

35.  Severability.  The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

36.  Time of Essence.  Time is of the essence with respect to each of the obligations to be performed by Tenant and Landlord under this Lease.

37.  Definition of Additional Rent.  All monetary obligations of Tenant to Landlord under the terms of this Lease, including, but not limited to, Base Rent, Tenant's Share of Operating Expenses, Tenant's Share of Real Property
Taxes, late charges and charges for after hours HVAC shall be deemed to be rent.

38.  Incorporation of Prior Agreements.  This Lease and the attachments listed in Section 1.16 contain all agreements of the parties with respect to the lease of the Premises and any other matter mentioned herein.  No
prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective.  Except as otherwise stated in this Lease, Tenant hereby acknowledges that no real estate broker nor Landlord or any employee or agents of any of said persons has made any oral or written warranties or representations to Tenant concerning the condition or use by Tenant of the Premises or the Project or concerning any other matter addressed by this Lease.

39.  Amendments.  This Lease may be modified in writing only, signed by the parties in interest at the time of the modification.

 

40.  Notices.  Subject to the requirements of Section 26.6 of this Lease, all notices required or permitted by this Lease shall be in writing and may be delivered (a) in person (by hand, by messenger or by courier service),
(b) by U.S. Postal Service regular mail, (c) by U.S. Postal Service certified mail, return receipt requested, (d) by U.S. Postal Service Express Mail, Federal Express or other overnight courier, or (e) by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Section 40.  Any notice permitted or required hereunder, and any notice to pay rent or quit or similar notice, shall be deemed personally delivered to Tenant on the date the notice is personally delivered
to any employee of Tenant at the Premises.  The addresses set forth in Section 1.17 of this Lease shall be the address of each party for notice purposes.  Landlord or Tenant may by written notice to the other specify a different address for notices purposes, except that upon Tenant's taking possession of the Premises, the Premises shall constitute Tenant's address for the purpose of mailing or delivering notices to Tenant.  A copy of all notices required or permitted to be given
to Landlord hereunder shall be concurrently transmitted to such party or parties at such addresses as Landlord may from time to time hereinafter designate by written notice to Tenant.  Any notice sent by regular mail or by certified mail, return receipt requested, shall be deemed given three (3) days after deposited with the U.S. Postal Service.  Notices delivered by U.S. Express Mail, Federal Express or other courier shall be deemed given on the date delivered by the carrier to the appropriate
party's address for notice purposes.  If any notice is transmitted by facsimile transmission, the notice shall be deemed delivered upon telephone confirmation of receipt of the transmission thereof at the appropriate party's address for notice purposes.  A copy of all notices delivered to a party by facsimile transmission shall also be mailed to the party on the date the facsimile transmission is completed.  If notice is received on Saturday, Sunday or a legal holiday, it shall be
deemed received on the next business day.  Nothing contained herein shall be construed to limit Landlord's right to serve any notice to pay rent or quit or similar notice by any method permitted by applicable law, and any such notice shall be effective if served in accordance with any method permitted by applicable law whether or not the requirements of this Section have been met.

41.  Waivers.  No waiver by Landlord or Tenant of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Landlord or Tenant of the same or any other provision.  Landlord's
consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Landlord's consent to or approval of any subsequent act by Tenant.  The acceptance of rent hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent.  No acceptance by Landlord of partial
payment of any sum due from Tenant shall be deemed a waiver by Landlord of its right to receive the full amount due, nor shall any endorsement or statement on any check or accompanying letter from Tenant be deemed an accord and satisfaction.

42.  Covenants.  This Lease shall be construed as though the covenants contained herein are independent and not dependent and Tenant hereby waives the benefit of any statute to the contrary.  All provisions of
this Lease to be observed or performed by Tenant are both covenants and conditions.

  

18

  

43.  Binding Effect; Choice of Law.  Subject to any provision hereof restricting assignment or subletting by Tenant, this Lease shall bind the parties, their heirs, personal representatives, successors and assigns.  This
Lease shall be governed by the laws of the state in which the Project is located and any litigation concerning this Lease between the parties hereto shall be initiated in the county in which the Project is located.

44.  Attorneys' Fees.  If Landlord or Tenant brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, or appeal thereon, shall be entitled to its reasonable attorneys'
fees and court costs to be paid by the losing party as fixed by the court in the same or separate suit, and whether or not such action is pursued to decision or judgment.  The attorneys' fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees and court costs reasonably incurred in good faith. Landlord shall be entitled to reasonable attorneys' fees and all other costs and expenses incurred in the preparation and service of
notices of monetary default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such default.  Landlord and Tenant agree that attorneys’ fees incurred with respect to defaults and bankruptcy are actual pecuniary losses within the meaning of Section 365(b)(1)(B) of the Bankruptcy Code or any successor statute.

45.  Auctions.  Tenant shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises or the Common Areas.  The holding of any auction on the Premises or Common
Areas in violation of this Section 45 shall constitute a material default hereunder.

46.  Signs.  Tenant shall not place any sign upon the Premises (including on the inside or the outside of the doors or windows of the Premises) or the Project without Landlord's prior written consent, which may be given
or withheld in Landlord's sole discretion.  Landlord shall have the right to place any sign it deems appropriate on any portion of the Project except the interior of the Premises.  Any sign Landlord permits Tenant to place upon the Premises shall be maintained by Tenant, at Tenant's sole expense.  If Landlord permits Tenant to include its name in the Building's directory, the cost of placing Tenant's name in the directory and the cost of any subsequent modifications thereto shall
be paid by Tenant, at Tenant's sole expense.

See Addendum Paragraph 5

47.  Merger.  The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall not result in the merger of Landlord's and Tenant's estates, and shall, at the
option of Landlord, terminate all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

48.  Quiet Possession.  Subject to the other terms and conditions of this Lease, and the rights of any lender, and provided Tenant is not in default hereunder, Tenant shall have quiet possession of the Premises for the entire
term hereof, subject to all of the provisions of this Lease.

49.  Authority.  If Tenant is a corporation, trust, general or limited partnership, or other entity, Tenant, and each individual executing this Lease on behalf of such entity, represents and warrants that such individual
is duly authorized to execute and deliver this Lease on behalf of said entity, that said entity is duly authorized to enter into this Lease, and that this Lease is enforceable against said entity in accordance with its terms.  If Tenant is a corporation, trust or partnership, Tenant shall deliver to Landlord upon demand evidence of such authority satisfactory to Landlord.

50.  Conflict.  Except as otherwise provided herein to the contrary, any conflict between the printed provisions, exhibits, addenda or riders of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.

51.  Multiple Parties.  If more than one person or entity is named as Tenant herein, the obligations of Tenant shall be the joint and several responsibility of all persons or entities named herein as Tenant.  Service
of a notice in accordance with Section 40 on one Tenant shall be deemed service of notice on all Tenants.

52.  Interpretation.  This Lease shall be interpreted as if it was prepared by both parties and ambiguities shall not be resolved in favor of Tenant because all or a portion of this Lease was prepared by Landlord.  The
captions contained in this Lease are for convenience only and shall not be deemed to limit or alter the meaning of this Lease.  As used in this Lease the words tenant and landlord include the plural as well as the singular. Words used in the neuter gender include the masculine and feminine gender. Notwithstanding anything to the contrary contained in this Lease, if the Term of the Lease has not commenced within twenty-one (21) years after the date of this Lease, this Lease shall automatically terminate
on the twenty-first (21st) anniversary of such date.  The sole purpose of this provision is to avoid any interpretation of this Lease as a violation of the Rule Against Perpetuities, or any other rule of law or equity concerning restraints on alienation.

53.  Prohibition Against Recording.  Neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant.  Landlord
shall have the right to record a memorandum of this Lease, and Tenant shall execute, acknowledge and deliver to Landlord for recording any memorandum prepared by Landlord.

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

55.  Rules and Regulations.  Tenant agrees to abide by and conform to the Rules and to cause its employees, suppliers, customers and invitees to so abide and conform.  Landlord shall have the right, from time to
time, to modify, amend and enforce the Rules.  Landlord shall not be responsible to Tenant for the failure of other persons including, but not limited to, other tenants, their agents, employees and invitees to comply with the Rules.

56.  Right to Lease.  Landlord reserves the absolute right to effect such other tenancies in the Project as Landlord in its sole discretion shall determine, and Tenant is not relying on any representation that any specific
tenant or number of tenants will occupy the Project.

57.  Security Interest.  In consideration of the covenants and agreements contained herein, and as a material consideration to Landlord for entering into this Lease, Tenant hereby unconditionally grants to Landlord a continuing
security interest in and to all personal property of Tenant located or left at the Premises and the Security Deposit, if any, and any advance rent payment or other deposit, now in or hereafter delivered to or coming into the possession, custody or control of Landlord, by or for the account of Tenant, together with any increase in profits or proceeds from such property.  The security interest granted to Landlord hereunder secures payment and performance of all obligations of Tenant under this Lease now
or hereafter arising or existing, whether direct or indirect, absolute or contingent, or due or to become due.  In the event of a default under this Lease which is not cured within the applicable grace period, if any, Landlord is and shall be entitled to all the rights, powers and remedies granted a secured party under the State of Maryland Commercial Code and otherwise available at law or in equity, including, but not limited to, the right to retain as damages the personal property, Security Deposit
and other funds held by Landlord, without additional notice or demand regarding this security interest.  Tenant agrees that it will execute such other documents or instruments as may be reasonably necessary to carry out and effectuate the purpose and terms of this Section, or as otherwise reasonably requested by Landlord, including without limitation, execution of a UCC-1 financing statement.  Tenant's failure to execute such documents within ten (10) days after written demand shall constitute
a material default by Tenant hereunder.  Tenant hereby waives any rights it may have under the State of Maryland Civil Code which are inconsistent with Landlord's rights under this Section.  Landlord's rights under this Section are in addition to Landlord's rights under Sections 5 and 13.

  

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58.  Security for Performance of Tenant's Obligations.  Notwithstanding any Security Deposit held by Landlord pursuant to Section 5 and any security interest held by Landlord pursuant to Section 57, Tenant hereby agrees
that in the event of a default by Tenant, Landlord shall be entitled to seek and obtain a writ of attachment and/or a temporary protective order and Tenant hereby waives any rights or defenses to contest such a writ of attachment and/or temporary protective order on the basis of the State of Maryland Code of Civil Procedure or any other related statute or rule.

59.  Financial Statements.  From time to time, at Landlord's request, Tenant shall cause the following financial information to be delivered to Landlord, at Tenant's sole cost and expense, upon not less than ten (10) days'
advance written notice from Landlord:  (a) a current financial statement for Tenant and Tenant's financial statements for the previous two accounting years, (b) a current financial statement for any guarantor(s) of this Lease and the guarantor's financial statements for the previous two accounting years and (c) such other financial information pertaining to Tenant or any guarantor as Landlord or any lender or purchaser of Landlord may reasonably request.  All financial statements shall be
prepared in accordance with generally accepted accounting principals consistently applied and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant.  Tenant hereby authorizes Landlord, from time to time, without notice to Tenant, to obtain a credit report or credit history on Tenant form any credit reporting company. Notwithstanding the foregoing, so long as Tenant is a publicly traded company, Tenant needs only to submit its annual report to comply
with the provisions of this Section 59.

60.  Attachments.  The items listed in Section 1.16 are a part of this Lease and are incorporated herein by this reference.

61.  Confidentiality.  Tenant acknowledges and agrees that the terms of this Lease are confidential and constitute propriety information of Landlord.  Disclosure of the terms hereof could adversely affect the ability
of Landlord to negotiate other leases with respect to the Project and may impair Landlord's relationship with other tenants of the Project.  Tenant agrees that it and its partners, officers, directors, employees, brokers, and attorneys, if any, shall not disclose the terms and conditions of this Lease to any other person or entity without the prior written consent of Landlord which may be given or withheld by Landlord, in Landlord's sole discretion.  It is understood and agreed that damages
alone would be an inadequate remedy for the breach of this provision by Tenant, and Landlord shall also have the right to seek specific performance of this provision and to seek injunctive relief to prevent its breach or continued breach.

62.  Effect of Force Majeure Events.  Landlord's and Tenant's time to perform their respective obligations under this Lease because of, from or through strike or other labor problems, acts of God, riot, insurrection,
governmental actions or requirements, or any other cause beyond the reasonable control of Landlord or Tenant, as the case may be, shall extend such party's time to perform by the period of such delay or such prevention which shall be deemed added to the time herein provided for the performance of any such obligation (hereinafter, a “Force Majeure Event”).  Notwithstanding the foregoing, Tenant's failure to pay Base Rent, additional rent or any other sums due hereunder shall not be excused
by any Force Majeure Event.

63.  OFAC Certification.

63.1.  Tenant certifies that:  (i) it is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated National and
Blocked Person,” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) it is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity, or nation.

63.2.  Tenant hereby agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities, and expenses (including attorney’s fees and costs) arising from or related to any breach of the foregoing certification.

64.  WAIVER OF JURY TRIAL.  LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

 

 

20

 

 

LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.  TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION.  PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE PREMISES.  THIS LEASE SHALL BECOME BINDING UPON
LANDLORD AND TENANT ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT.

  

  

	
LANDLORD
	  	
TENANT

	  	  	  	  	  	  	  
	
THE REALTY ASSOCIATES FUND V, L.P.,
	  	
REXAHN PHARMACEUTICALS, INC.,

	
a Delaware limited partnership
	  	
a Delaware corporation

	  	  	  	  	  	  	  	  
	
By:
	
Realty Associates Fund V LLC, a Massachusetts limited liability company, general partner
	  	  	  
	  	  	  	  	  	  	  	  
	  	
By:
	
Realty Associates Advisors LLC, a Delaware limited liability company, manager
	  	
By:
	  
	  	  	  	  	  	  	  	  
	  	  	
By:
	
Realty Associates Advisors Trust, a Massachusetts business trust, manager
	  	  	
Tae Heum Jeong

	  	  	  	  	  	  	  	
(Print Name)

	  	  	  	
By:
	  	  	  	  
	  	  	  	  	
[Officer]
	  	
Its:
	
Senior Vice President and CFO

	  	  	  	  	  	  	  	
(Print Title)

  

21

  

addendum

THIS ADDENDUM (the "Addendum") is attached to the Lease dated as of June 5, 2009 by and between THE REALTY ASSOCIATES FUND V, L.P., a Delaware limited partnership ("Landlord") and REXAHN PHARMACEUTICALS, INC., a Delaware corporation
("Tenant") and incorporated herein by reference thereto.  To the extent that there are any conflicts between the provisions of the Lease and the provisions of this Addendum, the provisions of this Addendum shall supersede the conflicting provisions of the Lease.

1.           Base Rent Increase.  Section 4.3 of the Lease is hereby deleted in its entirety and the following Section 4.3 is substituted
in its place:  The Base Rent set forth in Section 1.8 hereinabove shall be adjusted during the Term of the Lease as follows:

 

	
Lease Period in Months
	 	
Annual Base Rent
	 	 	
Monthly Base Rent
	 
	
7/01/09 – 6/30/10
	 	$	76,524.00	 	 	$	6,377.00	 
	
 7/01/10 –6/30/11
	 	$	140,312.28	 	 	$	11,692.69	 
	
 7/01/11 –6/30/12
	 	$	156,874.20	 	 	$	13,072.85	 
	
 7/01/12 –6/30/13
	 	$	160,796.04	 	 	$	13,399.67	 
	
 7/01/13 –6/30/14
	 	$	164,815.92	 	 	$	13,734.66	 

2.           Security Deposit.  Section 5 of the Lease is hereby amended by adding the following at the end of Section 5:

(a)  The security deposit shall be in the form of an irrevocable, unconditional letter of credit (the "Security Deposit L/C") in the amount set forth in Section 1.10, as security for Tenant’s full and faithful performance of Tenant’s obligations hereunder.  The Security Deposit L/C shall be delivered to
Landlord at Tenant's sole cost and expense.  The Security Deposit L/C shall be issued by and drawn on a bank reasonably acceptable to Landlord, in Landlord's sole discretion, and shall name Landlord as Beneficiary. The Security Deposit L/C shall be substantially in the form attached hereto as Exhibit D. If the maturity date of the Security Deposit L/C is prior to the end of the Term of the Lease, Tenant shall renew the Security Deposit
L/C as often as is necessary with the same bank or financial institution (or a similar bank or financial institution reasonably acceptable to Landlord) and upon the same terms and conditions, not less than thirty (30) days prior to the purported expiration date of the Security Deposit L/C.  In the event that Tenant fails to timely renew the Security Deposit L/C as aforesaid, Landlord shall be entitled to draw against the entire amount of the Security Deposit L/C. The Security Deposit L/C shall be assignable
by Landlord and upon such assignment to any party assuming in writing the lessor interest in this Lease, Landlord shall be relieved from all liability to Tenant therefor.

(b)  Upon the occurrence of any default by Tenant in the payment of Base Rent or upon the occurrence of the events described in Section 13.1 of the Lease or in the event that Landlord terminates this Lease in accordance with the terms hereof following a default by Tenant, Landlord shall have the right to draw the entire amount
of the Security Deposit L/C.  Landlord agrees to copy Tenant on any notice to the issuing bank requesting a draw against the Security Deposit L/C.  In the event that Tenant defaults in making any money payment required to be made by Tenant under the terms of this Lease other than the payment of Base Rent, then Landlord shall be entitled to draw upon so much of the Security Deposit L/C as equals the defaulted payment(s), plus any interest or other charges due thereon in accordance with this
Lease. If Landlord elects to make a partial draw upon the Security Deposit L/C, Tenant shall promptly restore the Security Deposit L/C to its original amount within ten (10) days after written demand herefor. Landlord's election to make a partial draw upon the Security Deposit L/C shall in no event prejudice or waive Landlord's right to terminate this Lease if permitted under applicable provisions of this Lease, nor shall such election prejudice or waive any other remedy of Landlord reserved under the terms of
this Lease, including the right to draw the entire amount of the Security Deposit L/C, if applicable.  The Security Deposit L/C shall be available for payment against the presentation of a sight draft by the Landlord together with a certificate from Landlord that Tenant is in default of its obligations hereunder beyond expiration of any applicable notice and cure periods and that Landlord is entitled, by the terms of this Lease, to draw upon the Security Deposit L/C.  The proceeds of the Security
Deposit L/C, if drawn by Landlord pursuant to the terms hereof, shall be held by Landlord and applied to reduce any amount owed by Tenant to Landlord.  Interest shall be payable in accordance with Section 5 of the Lease for any Security Deposit L/C proceeds held on account.

(c)  In the event that (1) Landlord draws the full amount of the Security Deposit L/C as a result of a default by Tenant, (2) this Lease is not terminated by Landlord as a result of such default, (3) such default is fully cured by Tenant, and (4) there is no outstanding uncured default by Tenant, then the balance of the sums
drawn (after the payment of any sums related to the curing of any defaults) shall be applied first to obtain a replacement letter of credit as security for Tenant's performance hereunder, and the remaining balance, if any, will be refunded to Tenant. Upon the termination of this Lease and the payment in full to Landlord of all damages, costs and expenses to which Landlord is entitled, the balance of any funds drawn from the Security Deposit L/C after satisfying such obligations in full shall be refunded to Tenant.

(d)  To the extent that the Security Deposit L/C is either lost or the issuing bank will not honor the Security Deposit L/C, Tenant personally guarantees the proceeds of the Security Deposit L/C and will immediately remit to Landlord the amount of the Security Deposit in cash to be held in accordance with this Section 5 of the
Lease.

(e)  (1)      Notwithstanding anything to the contrary contained in Section 5 of the Lease, provided (i) Tenant has not been in default under the Lease beyond the expiration of any applicable notice and cure period at anytime during the Term of the Lease, and (ii) Tenant provides evidence satisfactory
to Landlord that Tenant has received a cash infusion of at least Eight Million Dollars ($8,000,000.00) in cash within the first six (6) months of the Term, Landlord shall permit the Security Deposit L/C to be amended (at Tenant's sole cost and expense) to reduce the face amount of the Security Deposit L/C to Fifty Thousand and No/100 Dollars ($50,000.00) as of the first day of the seventh (7th) full calendar month of the Term.  The
remaining Fifty Thousand and No/100 Dollars ($50,000.00) shall be reduced according to the following schedule:

	
Date of Reduction
	 	
Reduction Amount
	 	 	
New Face Amount
	 
	
1st day of the 19th month of the Term of the Lease
	 	$	12,500.00	 	 	$	37,500.00	 
	
1st day of the 32nd month of the Term of this Lease
	 	$	12,500.00	 	 	$	25,000.00	 
	
1st day of the 44tth  month of the Term of this Lease
	 	$	12,500.00	 	 	$	12,500.00	 
	
1st day of the 57tth  month of the Term of this Lease
	 	$	12,500.00	 	 	$	0.00	 

  

Add-1

  

(2)  Notwithstanding anything to the contrary contained in Section 5 of the Lease, in the event the conditions contained in subsection (1) above are not met but provided Tenant has not been in default under the Lease beyond the expiration of any applicable notice and cure period at anytime during the Term of the Lease, Landlord
shall permit the Security Deposit L/C to be amended (at Tenant's sole cost and expense) to reduce the face amount of the Security Deposit L/C according to the following schedule:

	
Date of Reduction
	 	
Reduction Amount
	 	 	
New Face Amount
	 
	
1st day of the 13th month of the Term of the Lease
	 	$	20,000.00	 	 	$	80,000.00	 
	
1st day of the 25 th  month of the Term of this Lease
	 	$	20,000.00	 	 	$	60,000.00	 
	
1st day of the 37tth  month of the Term of this Lease
	 	$	20,000.00	 	 	$	40,000.00	 
	
1st day of the49tth  month of the Term of this Lease
	 	$	20,000.00	 	 	$	20,000.00	 

In no event shall a reduction to the amount of the Security Deposit L/C be deemed to have occurred absent a written amendment to the Security Deposit L/C by the issuing bank.  It shall be Tenant's sole obligation to obtain such written amendment from the issuing bank.  If Tenant is in default beyond the expiration of
any applicable notice and cure period prescribed under the Lease at anytime during the Term of this Lease, then Tenant's right thereafter to reduce the amount of the Security Deposit L/C set forth in this subparagraph (e) shall no longer apply and shall become null and void and of no further force and effect."

3.           Tenant Improvements.

a.           Tenant hereby agrees to accept the Premises in its “as-is” condition existing on the Commencement Date, subject to Landlord’s completion of “Improvements” defined in subsection (b) below.

b.            Landlord shall construct improvements ("Improvements") for the Premises in accordance with the Work Letter Agreement attached hereto as Schedule 1. In connection thereto, Landlord hereby grants to Tenant
an “Improvement Allowance” of up to One Hundred Thousand and No/100 Dollars ($100,000.00) which Improvement Allowance shall be used only for the items specified in the Cost Breakdown, as that term is defined in the Work Letter Agreement, and for telephone and data cabling and wiring in the Premises. In the event the total cost of construction of the Improvements exceeds the Improvement Allowance, Tenant shall pay to Landlord the sum in excess of the Improvement Allowance by cashier's check, which
payment shall be made within five (5) days of Landlord's notice to Tenant that Landlord is prepared to commence construction.  In the event the actual cost of the Improvements is less than the Improvement Allowance, the unused portion of the Improvement Allowance shall not be paid or refunded to Tenant or be available to Tenant as a credit against any obligations of Tenant under the Lease.

c.           To the extent the Improvements are not substantially completed by the Commencement Date, Landlord shall permit Tenant to move into the Premises as of the Commencement Date provided Tenant agrees to pay any additional costs incurred by Landlord to complete the Improvements
after the Commencement Date due to Tenant’s occupancy of the Premises during such construction. Tenant hereby acknowledges that the Improvements may be constructed in accordance with this Paragraph while Tenant is in occupancy of the Premises, and Landlord's actions in connection with such Improvements shall in no way constitute a constructive eviction of Tenant or entitle Tenant to any abatement of rent. Unless directly caused by Landlord’s or Landlord’s agents gross negligence or willful misconduct,
Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the construction of the Improvements, nor shall Tenant be entitled to any compensation or damages from Landlord for any inconvenience or annoyance occasioned by such construction or Landlord's actions in connection with such construction.  Notwithstanding the foregoing, Landlord shall use commercially reasonable efforts to minimize unreasonable
interference with Tenant’s use and occupancy of the Premises during any such construction.

4.           Options to Renew.

(a)           Subject to the provisions of Section 26 of the Lease, and provided that Tenant is not in default at the time of Tenant's exercise of the applicable Option or at the commencement of the extended term, Tenant shall have one
(1) five (5) year Option to renew this Lease.  Tenant shall provide to Landlord on a date which is prior to the date that the Option period would commence (if exercised) by at least two hundred seventy (270) days and not more than three hundred sixty-five (365) days, a written notice of the exercise of the Option to extend the Lease for such additional Option term, time being of the essence.  Such notice shall be given in accordance with Section 40 of the Lease, as amended by Section 26.6.  If
notification of the exercise of the Option is not so given and received, all Options granted hereunder shall automatically expire.  Base Rent applicable to the Premises for the Option term shall be equal to the "Fair Market Rental" as hereinafter defined.  All other terms and conditions of the Lease shall remain the same, except that after Tenant’s exercise of the Option, Tenant shall have no further Option to renew the Lease.

(b)           If the Tenant exercises the Option, the Landlord shall determine the Fair Market Rental by using its good faith judgment.  Landlord shall provide Tenant with written notice of such amount within fifteen (15) days after Tenant exercises its Option.  Tenant
shall have fifteen (15) days ("Tenant's Review Period") after receipt of Landlord's notice of the new base rent within which to accept such rental.  In the event Tenant fails to accept in writing such rental proposal by Landlord, then such proposal shall be deemed rejected and Landlord and Tenant shall attempt to agree upon such Fair Market Rental, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within fifteen (15) days following Tenant's Review Period ("Outside Agreement
Date") then the parties shall each within ten (10) days following the Outside Agreement Date appoint a real estate broker who shall be licensed in the State of Maryland and who specializes in the field of commercial office space leasing in the Rockville, Maryland market, has at least five (5) years of experience and is recognized within the field as being reputable and ethical.  If one party does not timely appoint a broker, then the broker appointed by the other party shall promptly appoint a broker
for such party.  Such two individuals shall each determine within ten (10) days after their appointment such base rent.  If such individuals do not agree on Fair Market Rental, then the two individuals shall, within five (5) days, render separate written reports of their determinations and together appoint a third similarly qualified individual having the qualifications described above.  If the two brokers are unable to agree upon a third broker, the third broker shall be appointed
by the President of the Montgomery County Board of Realtors.  In the event the Montgomery County Board of Realtors is no longer in existence, the third broker shall be appointed by the President of its successor organization. If no successor organization is in existence, the third broker shall be appointed by the Chief Judge of the Circuit Court of Montgomery County, Maryland.  The third individual shall within ten (10) days after his or her appointment make a determination of such Fair Market
Rental.  The third individual shall determine which of the determinations of the first two individuals is closest to his own and the determination that is closest shall be final and binding upon the parties, and such determination may be enforced in any court of competent jurisdiction.  Landlord and Tenant shall each bear the cost of its broker and shall share equally the cost of the third broker.  Upon determination of the base rent payable pursuant to this Section, the parties
shall promptly execute an amendment to this Lease stating the rent so determined.

(c)           The term "Fair Market Rental" shall mean the annual amount per rentable square foot that a willing, comparable renewal tenant would pay and a willing, comparable landlord of a similar office building would accept at arm's length for similar space, giving appropriate consideration
to the following matters: (i) annual rental rates per rentable square foot; (ii) the type of escalation clauses (including, without limitation, operating expenses, real estate taxes, and CPI) and the extent of liability under the escalation clauses (i.e., whether determined on a "net lease" basis or by increases over a particular base year or base dollar amount); (iii) rent abatement provisions reflecting free rent and/or no rent during the lease term; (iv) length of lease term; (v) size and location of premises
being leased; (vi) the value of the tenant improvements; and (vii) other generally applicable terms and conditions of tenancy for similar space; provided, however, Tenant shall not be entitled to any tenant improvement or refurbishment allowance.  The Fair Market Rental may also designate periodic rental increases, a new Base Year and similar economic adjustments.  The Fair Market Rental shall be the Fair Market Rental in effect as of the beginning of the applicable Option period, even though
the determination may be made in advance of that date, and the parties may use recent trends in rental rates in determining the proper Fair Market Rental as of the beginning of the applicable Option period.

  

Add-2

  

5.           Signs.  Section 46 of the Lease is hereby modified by adding the following to the end of Section 46:  "Landlord will provide, at Landlord’s sole cost and expense,
suite entry signage and Building directory signage.  The design, size, location and materials of such signage shall be in accordance with Landlord's standard Building signage package.  The cost of any changes in the Building standard graphics on the door to the Premises or the Building directory following their initial installation are subject to Landlord's approval and shall be paid by Tenant, at Tenant's sole cost and expense.  Tenant shall also have the right, at Landlord’s
sole cost and expense, and subject to all applicable codes and regulations and Landlord’s signage and design criteria, and otherwise subject to Landlord’s prior approval, to place one line of signage on the Building identity monument sign for the Building’s major tenants. The signage rights granted to Tenant in this Section 46 are personal to the original Tenant and may not be assigned by or to any person or entity other than Tenant.  In addition, Tenant shall have the right, at Tenant’s
sole cost and expense and subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, to install a reception area sign mounted on the wall behind the existing receptionist desk and visible from Tenant’s reception area per Tenant’s reasonable specifications as to size, color and material.”

  

Add-3

  

exhibit a

 

premises

 

floor plan

  

A-1

  

exhibit b

verification letter

REXAHN PHARMACEUTICALS, INC., a Delaware corporation ("Tenant") hereby certifies that it has entered into a lease with THE REALTY ASSOCIATES FUND V, L.P., a Delaware limited partnership ("Landlord") and verifies the following
information as of the _______ day of _______________, 20___:

	
Number of Rentable Square Feet in Premises:
	  	  	 
	  	  	  	 
	
Commencement Date:
	  	  	 
	  	  	  	 
	
Lease Termination Date:
	  	  	 
	  	  	  	 
	
Tenant's Share:
	  	  	 
	  	  	  	 
	
Initial Base Rent:
	  	  	 
	  	  	  	 
	
Billing Address for Tenant:
	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	  	  	  	 
	 	 	 	 
	
Attention:
	  	  	 
	  	  	  	 
	
Telephone Number:
	  	  	 
	  	  	  	 
	
Federal Tax I.D. No.:
	  	  	 

Tenant acknowledges and agrees that all tenant improvements Landlord is obligated to make to the Premises, if any, have been completed and that Tenant has accepted possession of the Premises and that as of the date hereof, there exist no offsets or defenses to the obligations of Tenant under the Lease.  Tenant acknowledges that
it has inspected the Premises and found them suitable for Tenant's intended commercial purposes.

	  	  	
TENANT

	  	  	  	  
	  	  	
REXAHN PHARMACEUTICALS, INC.,

	  	  	  	  
	  	  	
By:
	  
	  	  	  	  
	  	  	  	
Tae Heum Jeong

	  	  	  	
(print name)

	  	  	  	  
	  	  	
Its:
	
Senior Vice President and CFO

	  	  	  	
(print title)

	
ACKNOWLEDGED AND AGREED TO:
	  
	  	  	  	  	  	  
	
LANDLORD

 
	  
	
THE REALTY ASSOCIATES FUND V, L.P.,
	  
	
a Delaware limited partnership
	  
	  	  	  	  	  	  
	
By:
	
Realty Associates Fund V LLC, a Massachusetts limited liability company, general partner
	  
	  	  	  	  	  	  
	  	
By:
	
Realty Associates Advisors LLC, a Delaware limited liability company, manager
	  
	  	  	  	  	  	  
	  	  	
By:
	
Realty Associates Advisors Trust, a Massachusetts business trust, manager
	  
	  	  	  	  	  	  
	  	  	  	By: 	
 
	  
	  	  	  	  	
[Officer]
	  

  

B-1

  

exhibit c

rules and regulations

GENERAL RULES

Tenant shall faithfully observe and comply with the following Rules and Regulations.

1.   Tenant shall not alter any locks or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  Tenant shall bear the cost of any lock changes or repairs required
by Tenant.  Keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord.

2.   All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises.  Tenant shall assume any and all responsibility for protecting the Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises
closed.

3.   Landlord reserves the right to close and keep locked all entrance and exit doors of the Project except during the Project's normal hours of business as defined in Section 11.4 of the Lease.  Tenant, its employees and agents must be sure that the doors to the Project are securely closed and locked when leaving
the Premises if it is after the normal hours of business of the Project.  Tenant, its employees, agents or any other persons entering or leaving the Project at any time when it is so locked, or any time when it is considered to be after normal business hours for the Project, may be required to sign the Project register.  Access to the Project may be refused unless the person seeking access has proper identification or has a previously received authorization for access to the Project.  Landlord
and its agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Project of any person.  In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right to prevent access to the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property.

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

5.   The requirements of Tenant will be attended to only upon application at the management office for the Project or at such office location designated by Landlord.  Tenant shall not ask employees of Landlord to do anything outside their regular duties without special authorization from Landlord.

6.   Tenant shall not disturb, solicit, or canvass any occupant of the Project and shall cooperate with Landlord and its agents to prevent the same.  Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the purpose
of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises.  Smoking shall not be permitted in the Common Areas.

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

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

9.   Tenant shall not use or keep in or on the Premises or the Project any kerosene, gasoline or other inflammable or combustible fluid or material.  Tenant shall not bring into or keep within the Premises or the Project any animals, birds, bicycles or other vehicles.

10.   Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors, or vibrations, or to otherwise interfere
in any way with the use of the Project by other tenants.

11.   No cooking shall be done or permitted on the Premises, nor shall the Premises be used for the storage of merchandise, for loading or for any improper, objectionable or immoral purposes.  Notwithstanding the foregoing, Underwriters' Laboratory approved equipment and microwave ovens may be used in the Premises
for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors of Tenant, provided that such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations; and provided further that such cooking does not result in odors escaping from the Premises.

12.   Landlord shall have the right to approve where and how telephone wires are to be introduced to the Premises.  No boring or cutting for wires shall be allowed without the consent of Landlord.  The location of telephone call boxes and other office equipment affixed to the Premises shall be subject
to the approval of Landlord, such approval not to be unreasonably withheld, conditioned or delayed.  Tenant shall not mark, drive nails or screws, or drill into the partitions, woodwork or plaster contained in the Premises or in any way deface the Premises or any part thereof without Landlord's prior written consent.  Tenant shall not install any radio or television antenna, satellite dish, loudspeaker or other device on the roof or exterior walls of the Project without Landlord’s prior
written consent, which such consent shall not be unreasonably withheld, conditioned or delayed.  Tenant shall not interfere with broadcasting or reception from or in the Project or elsewhere.

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

14.   Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Project's heating and air conditioning system, and shall refrain from attempting to adjust any controls.  Tenant shall not without the prior written consent
of Landlord use any method of heating or air conditioning other than that supplied by Landlord.

  

C-1

  

15.   Tenant shall store all its trash and garbage within the interior of the Premises.  No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash in the vicinity of the Project
without violation of any law or ordinance governing such disposal.  All trash, garbage and refuse disposal shall be made only through entry-ways and elevators provided for such purposes at such times as Landlord shall designate.

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

17.   No awnings or other projection shall be attached to the outside walls or windows of the Project by Tenant.  No curtains, blinds, shades or screens shall be attached to or hung in any window or door of the Premises without the prior written consent of Landlord.  All electrical ceiling fixtures hung
in the Premises must be fluorescent and/or of a quality, type, design and bulb color approved by Landlord.  Tenant shall abide by Landlord's regulations concerning the opening and closing of window coverings which are attached to the windows in the Premises.  The skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Project shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be
placed on the windowsills.

18.   Tenant shall not employ any person or persons other than the janitor of Landlord for the purpose of cleaning the Premises unless otherwise agreed to in writing by Landlord.  Except with the prior written consent of Landlord, no person or persons other than those approved by Landlord shall be permitted to enter
the Project for the purpose of cleaning same.  Landlord shall in no way be responsible to Tenant for any loss of property on the Premises, however occurring, or for any damage done to the effects of Tenant or any of its employees or other persons by the janitor of Landlord.  Janitor service shall include ordinary dusting and cleaning by the janitor assigned to such work and shall not include cleaning of carpets or rugs, except normal vacuuming, or moving of furniture and other special services.  Window
cleaning shall be done only by Landlord at reasonable intervals and as Landlord deems necessary.

PARKING RULES

1.   Parking areas shall be used only for parking by vehicles no longer than full size, passenger automobiles herein called "Permitted Size Vehicles".

2.   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.  Users of the parking area will obey all posted
signs and park only in the areas designated for vehicle parking.

3.   Parking stickers or identification devices shall be the property of Landlord and shall be returned to Landlord by the holder thereof upon termination of the holder's parking privileges.  Tenant will pay such replacement charges as is reasonably established by Landlord for the loss of such devices.  Loss
or theft of parking identification stickers or devices from automobiles must be reported to the parking operator immediately.  Any parking identification stickers or devices reported lost or stolen found on any unauthorized car will be confiscated and the illegal holder will be subject to prosecution.

4.   Landlord reserves the right to relocate all or a part of parking spaces from floor to floor, within one floor, and/or to reasonably adjacent off site locations(s), and to allocate them between compact and standard size and tandem spaces, as long as the same complies with applicable laws, ordinances and regulations.

5.   Unless otherwise instructed, every person using the parking area is required to park and lock his own vehicle.  Landlord will not be responsible for any damage to vehicles, injury to persons or loss of property, all of which risks are assumed by the party using the parking area.

6.   Validation of visitor parking, if established, will be permissible only by such method or methods as Landlord may establish at rates determined by Landlord, in Landlord's sole discretion.

7.   The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common Areas is prohibited.

8.   Tenant shall be responsible for seeing that all of its employees, agents and invitees comply with the applicable parking rules, regulations, laws and agreements.  Garage managers or attendants are not authorized to make or allow any exceptions to these Parking Rules and Regulations. Landlord reserves the right
to terminate parking rights for any person or entity that willfully refuses to comply with these rules and regulations.

9.   Every driver is required to park his own car.  Where there are tandem spaces, the first car shall pull all the way to the front of the space leaving room for a second car to park behind the first car.  The driver parking behind the first car must leave his key with the parking attendant. Failure to
do so shall subject the driver of the second car to a Fifty Dollar ($50.00) fine.  Refusal of the driver to leave his key when parking in a tandem space shall be cause for termination of the right to park in the parking facilities.  The parking operator, or his employees or agents, shall be authorized to move cars that are parked in tandem should it be necessary for the operation of the garage.  Tenant agrees that all responsibility for damage to cars or the theft of or from cars
is assumed by the driver, and further agrees that Tenant will hold Landlord harmless for any such damages or theft.

10.   No vehicles shall be parked in the parking garage overnight.  The parking garage shall only be used for daily parking and no vehicle or other property shall be stored in a parking space.

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

  

C-2

  

exhibit D

FORM OF LETTER OF CREDIT

IRREVOCABLE STANDBY LETTER OF CREDIT

NUMBER ________

	
LETTER OF CREDIT AMOUNT
	
ISSUE DATE
	
EXPIRY DATE

 

 

	
US [AMOUNT]
	
[DATE]
	
[DATE]

 

 

	
BENEFICIARY:
	
APPLICANT:

	  	  
	
[LANDLORD]

C/O TA ASSOCIATES REALTY

28 STATE STREET

BOSTON, MASSACHUSETTS 02109

ATTENTION:  LEASE ADMINISTRATOR
	
[TENANT]

[ADDRESS OF PROPERTY]

 

	  	  
	
WITH COPY TO:

[PROPERTY MANAGER]

[ADDRESS]
	  

 

GENTLEMEN:

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR FOR THE ACCOUNT OF THE ABOVE REFERENCED APPLICANT IN THE AGGREGATE AMOUNT OF US [AMOUNT] WHICH IS AVAILABLE BY PAYMENT OF YOUR DRAFT(S), AT SIGHT, DRAWN ON OURSELVES, WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENTS:

	
1.
	
A STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF [LANDLORD] (HEREIN CALLED “THE LANDLORD”) STATING THAT: “THIS CERTIFIES THAT A DEFAULT EXISTS PURSUANT TO  THAT CERTAIN DEED OF LEASE BETWEEN [LANDLORD], LANDLORD AND [TENANT], TENANT, AS AMENDED FROM TIME TO TIME.”

-OR-

“[TENANT] (THE “TENANT”) HAS FAILED TO RENEW OR REPLACE THIS LETTER OF CREDIT THIRTY (30) DAYS BEFORE ITS CURRENT EXPIRATION DATE AND LANDLORD IS ACCORDINGLY ENTITLED TO DRAW UPON THIS LETTER OF CREDIT.”

	
2.
	
THE ORIGINAL OF THIS LETTER OF CREDIT.

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT WRITTEN AMENDMENT FOR ONE YEAR FROM THE PRESENT OR ANY FUTURE EXPIRY DATE UNLESS AT LEAST FORTY-FIVE (45) DAYS PRIOR TO SUCH EXPIRATION DATE, WE NOTIFY YOU IN WRITING AT THE ABOVE ADDRESS BY EXPRESS COURIER THAT WE ELECT NOT TO RENEW THIS LETTER
OF CREDIT FOR ANY SUCH ADDITIONAL PERIODS(S).  UPON RECEIPT BY YOU OF SUCH NOTICE, YOU MAY DRAW HEREUNDER BY PRESENTATION OF YOUR DRAFT AT SIGHT ON US.

PARTIAL DRAWINGS ARE PERMITTED.

THIS LETTER OF CREDIT IS TRANSFERABLE BY BENEFICIARY.

THIS IRREVOCABLE LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING.  THIS UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED, AMPLIFIED OR INCORPORATED BY REFERENCE TO ANY DOCUMENT OR CONTRACT REFERRED TO HEREIN.

WE HEREBY AGREE WITH YOU THAT DRAFT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS CREDIT SHALL BE DULY HONORED IF PRESENTED TOGETHER WITH DOCUMENT(S) AS SPECIFIED ABOVE AND THE ORIGINAL OF THIS CREDIT, AT OUR OFFICE LOCATED AT [MUST BE ADDRESS LOCAL TO ___________ AREA] ON
OR BEFORE THE ABOVE STATED EXPIRY DATE.  DRAFT(S) DRAWN UNDER THIS CREDIT MUST SPECIFICALLY REFERENCE OUR CREDIT NUMBER.  DRAFTS DRAWN IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT SHALL BE HONORED BY US WITHOUT INQUIRY AS OF THE TRUTH OF THE STATEMENTS SET FORTH IN THE DRAW REQUEST AND REGARDLESS OF WHETHER APPLICANT DISPUTES THE CONTENT OR ACCURACY OF SUCH STATEMENTS. FACSIMILE DRAWINGS ARE PERMITTED.  IF A DRAFT IS PRESENTED TO US BY FACSIMILE TO OUR FAX NUMBER _______________,
THE ORIGINAL LETTER  OF CREDIT IS NOT REQUIRED.

WE HEREBY ENGAGE WITH YOU THAT DRAWINGS PRESENTED UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT WILL BE DULY HONORED WITHIN TWO (2) BUSINESS DAYS AFTER OUR RECEIPT OF YOUR PRESENTATION OF THE CERTIFICATE AND ANY SUCH DOCUMENTS AT THE ABOVE ADDRESS.

EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, ESTABLISHED BY THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN EFFECT ON THE DATE OF ISSUANCE OF THIS CREDIT.

SINCERELY,

	
 
	  
	
AUTHORIZED REPRESENTATIVE
	  

  

D-1

  

 

SCHEDULE 1

work letter agreement

1.           Tenant Improvements.  Landlord shall furnish and install, in or for the benefit of the Premises, the improvements ("Improvements") described in the
Space Plan attached hereto as Schedule 1-A.  All architectural and engineering work for such Improvements and any required occupancy permits for the Premises shall also be provided at Landlord's sole cost and expense, subject to reimbursement by Tenant pursuant to Paragraph 5 below.

2.           Plans and Specifications.

2.1.           Space Plan.  The Space Plan is attached hereto as Schedule 1-A.

2.2.           Plans.  Based on the approved Space Plan, Landlord shall cause its architects and engineers to prepare and submit to Tenant for approval detailed plans, specifications
and working drawings ("Plans") for the construction of Tenant's leasehold improvements to the Premises ("Improvements").  Landlord reserves the right to approve any space planner, architect or engineer if employed by Tenant.  As used herein, the term "Improvements" shall include all non-base building work to be done in the Premises pursuant to the Plans, including, but not limited to: demolition work, partitioning, doors, ceiling, floor coverings, wall finishes (including paint and wall coverings),
window coverings, electrical (excluding the cost of computer cabling, Tenant’s telephone system and wiring, and any other special electrical or wiring dedicated to the Tenant’s operations or business), plumbing, heating, ventilating and air conditioning, fire protection, cabinets and other millwork.  If Tenant has leased an entire floor, the Improvements shall include finished toilet rooms, corridors and elevator vestibules.  Landlord shall submit the Plans to Tenant for approval
within fifteen (15) business days following Tenant's approval of the Space Plan. Within three (3) days after receipt by Tenant of the Plans, Tenant (i) shall give its written approval with respect thereto, or (ii) shall notify Landlord in writing of its disapproval and state with specificity the grounds for such disapproval and the revisions or modifications necessary in order for Tenant to give its approval.  Within five (5) days following Landlord's receipt of Tenant's disapproval, Landlord shall
submit to Tenant for approval the requested revisions or modifications.  Within three (3) days following receipt by Tenant of such revisions or modifications, Tenant shall give its written approval with respect thereto or shall request other revisions or modifications therein.  After approval of the Plans by Tenant, no further changes to the Plans shall be made without the prior written approval of Landlord.

3.           Specifications for Building Standard Improvements.  Specifications and details for building standard improvements ("Standards") are available in the office of the
Building.  Except as specified in Section 4 below, the Space Plan and Plans shall be consistent with the Standards, and no deviations shall be permitted from the Standards without Landlord's consent as set forth in Section 4 below.

4.           Grounds for Disapproval.  Tenant may request deviations from the Standards for Improvements provided that the deviations ("Non-Standards") shall not be of lesser
quality than the Standards.  Landlord shall not be required to approve any item of the Space Plan, the Plans or the Non-Standards that (a) does not conform to applicable governmental regulations or is disapproved by any governmental agency; (b) requires building service (including electrical power) beyond the level normally provided to other tenants in the Building; or (c) overloads the floors.

5.           Improvement Cost and Allowance.

5.1.           Cost Breakdown.  Within a reasonable period following approval of the Plans, Landlord shall provide Tenant with a breakdown of the estimated total cost of the
Improvements ("Cost Breakdown"), including, without limitation: construction cost of the Improvements; architectural and engineering fees relating to the preparation and review of the Space Plan and the Plans (inclusive of the initial Space Plan and all design work above and below the ceiling); governmental agency plan check, permit and other fees; sales and use taxes; testing and inspection costs; and construction fees (including general contractor's overhead and supervision fees).  Within five (5)
days after receipt by Tenant of the Cost Breakdown, Tenant shall either approve the same in writing or shall provide Landlord with a detailed list of revisions to the approved Plans.

5.2.           Improvement Allowance.  Landlord hereby grants to Tenant an "Improvement Allowance", of up to One Hundred Thousand and No/100 Dollars ($100,000.00) which Improvement
Allowance shall be used only for the items specified in the Cost Breakdown, and for telephone and data cabling and wiring in the Premises. In the event that the Cost Breakdown exceeds the Improvement Allowance, Tenant shall pay to Landlord the sum in excess of the Improvement Allowance by cashier's check, which payment shall be made within five (5) days of Landlord's notice to Tenant that Landlord is prepared to commence construction.

5.3.           No Refund.  If the actual cost of the Improvements does not exceed the Improvement Allowance, the unused portion of the Improvement Allowance shall not be paid
or refunded to Tenant or be available to Tenant as a credit against any obligations of Tenant under the Lease. 

6.           Construction of Improvements.

6.1           Construction.  Within a reasonable period following approval of the Plans by Tenant, Landlord shall
instruct its contractor to secure a building permit and commence construction of the Improvements in accordance with the Plans.

6.2           Change in Plans.  If there are any changes requested by Tenant after the final approval by Landlord
and Tenant of the Plans and Landlord approves such change, then upon the completion of any required revisions to the Plans, Landlord shall notify Tenant of the cost which will be chargeable to Tenant by reason of such change and Tenant shall notify Landlord whether Tenant desires to proceed with such change.  Until such time as Tenant has approved such change and Landlord has received payment in full of the total costs of such change (including payment for all architectural and engineering costs and
related design expenses), Landlord shall not be obligated to stop or alter any work to incorporate the desired change and may continue to work on Tenant's Premises in accordance with the Plans.

6.3           Completion.  Landlord shall endeavor to cause the contractor to substantially complete construction
of the Improvements in a diligent manner, but Landlord shall not be liable for any loss or damage as a result of delays in construction or delivery of possession of the Premises.

  

Sch1-1

  

7.           Commencement Date.  The Commencement Date and Tenant's obligation to pay rent under the Lease shall be governed by Section 3 of the Lease.

8.           Final Inspection.  Tenant together with Landlord and Landlord's contractor shall make a final inspection of the Premises to ensure that the construction
has been accomplished substantially in accordance with the Plans.  A punch list (the "Punch List") of items to be completed or corrected shall be prepared at the time of such inspection.  Landlord agrees to use reasonable efforts to complete all items on such Punch List as soon as reasonably possible thereafter.

9.           Incorporation.  This Agreement is and shall be incorporated by reference in the Lease, and all of the terms and conditions of the Lease are and shall
be incorporated herein by this reference.

  

Sch1-2

  

schedule 1-a

improvements

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