Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



[x]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 26, 2015



[_]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-23985

NVIDIA CORPORATION

(Exact name of registrant as specified in its charter)



Delaware	94-3177549
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

2701 San Tomas Expressway

Santa Clara, California 95050

(408) 486-2000

(Address, including zip code, and telephone number,

including area code, of principal executive offices)

N/A

(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The number of shares of common stock, $0.001 par value, outstanding as of August 14, 2015, was 539 million.

NVIDIA CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED July 26, 2015

TABLE OF CONTENTS



		Page
	PART I : FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	a) Condensed Consolidated Statements of Income for the three and six months ended July 26, 2015 and July 27, 2014	3

	b) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 26, 2015 and July 27, 2014	4

	c) Condensed Consolidated Balance Sheets as of July 26, 2015 and January 25, 2015	5

	d) Condensed Consolidated Statements of Cash Flows for the six months ended July 26, 2015 and July 27, 2014	6

	e) Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	35

	PART II : OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

Item 6.	Exhibits	38

Signature		39

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD:

NVIDIA Twitter Account (https://twitter.com/NVIDIA)

NVIDIA Company Blog (http://blogs.nvidia.com/)

NVIDIA Facebook Page (https://www.facebook.com/NVIDIA)

NVIDIA LinkedIn Page (http://www.linkedin.com/company/nvidia?trk=hb_tab_compy_id_3608)

In addition, investors and others can use the Pulse news reader to subscribe to the NVIDIA Daily News feed and can view NVIDIA videos on YouTube.

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this quarterly report on Form 10-Q. These channels may be updated from time to time on NVIDIA's investor relations website.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In millions, except per share data)



	Three Months Ended						Six Months Ended
	July 26,			July 27,			July 26,			July 27,
	2015			2014			2015			2014

Revenue	$	1,153		$	1,103		$	2,304		$	2,206
Cost of revenue	519			484			1,018			983
Gross profit	634			619			1,286			1,223
Operating expenses
Research and development	320			337			658			672
Sales, general and administrative	149			119			289			237
Restructuring and other charges	89			—			89			—
Total operating expenses	558			456			1,036			909
Income from operations	76			163			250			314
Interest income	9			7			18			13
Interest expense	(12		)	(12		)	(22		)	(23		)
Other income (expense), net	(1		)	(3		)	(2		)	14
Income before income tax	72			155			244			318
Income tax expense	46			27			84			53
Net income	$	26		$	128		$	160		$	265

Net income per share:
Basic	$	0.05		$	0.23		$	0.29		$	0.47
Diluted	$	0.05		$	0.22		$	0.28		$	0.46

Weighted average shares used in per share computation:
Basic	541			558			545			559
Diluted	556			571			563			571

Cash dividends declared and paid per common share	$	0.0975		$	0.0850		$	0.1825		$	0.1700

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)



	Three Months Ended						Six Months Ended
	July 26,			July 27,			July 26,			July 27,
	2015			2014			2015			2014

Net income	$	26		$	128		$	160		$	265
Other comprehensive loss, net of tax:
Net change in unrealized losses on available-for-sale securities, net of tax	(7		)	(2		)	(4		)	—
Reclassification adjustments for net realized losses on available-for-sale securities included in net income, net of tax	—			—			(2		)	—
Other comprehensive loss	(7		)	(2		)	(6		)	—
Total comprehensive income	$	19		$	126		$	154		$	265

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In millions)



	July 26,			January 25,
	2015			2015
ASSETS
Current assets:
Cash and cash equivalents	$	435		$	497
Marketable securities	4,070			4,126
Accounts receivable, net	514			474
Inventories	441			483
Prepaid expenses and other current assets	89			70
Deferred income taxes	59			63
Total current assets	5,608			5,713
Property and equipment, net	497			557
Goodwill	618			618
Intangible assets, net	190			222
Other assets	66			91
Total assets	$	6,979		$	7,201

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	277		$	293
Accrued and other current liabilities	659			603
Total current liabilities	936			896

Long-term debt	1,399			1,384
Other long-term liabilities	447			489
Capital lease obligations, long-term	12			14
Commitments and contingencies - see Note 11	—			—
Shareholders’ equity:
Preferred stock	—			—
Common stock	1			1
Additional paid-in capital	3,938			3,855
Treasury stock, at cost	(3,765		)	(3,395		)
Accumulated other comprehensive income	1			8
Retained earnings	4,010			3,949
Total shareholders' equity	4,185			4,418
Total liabilities and shareholders' equity	$	6,979		$	7,201

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In millions)



	Six Months Ended
	July 26,			July 27,
	2015			2014
Cash flows from operating activities:
Net income	$	160		$	265
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	103			111
Stock-based compensation expense	93			74
Restructuring and other charges	32			—
Amortization of debt discount	14			14
Net gain on sale and disposal of long-lived assets and investments	(3		)	(14		)
Deferred income taxes	65			38
Tax benefits from stock-based compensation	(6		)	(7		)
Other	11			14
Changes in operating assets and liabilities:
Accounts receivable	(41		)	(46		)
Inventories	42			1
Prepaid expenses and other assets	(13		)	3
Accounts payable	(13		)	(64		)
Accrued and other current liabilities	60			(12		)
Other long-term liabilities	(95		)	(130		)
Net cash provided by operating activities	409			247
Cash flows from investing activities:
Purchases of marketable securities	(1,861		)	(1,683		)
Proceeds from sale of marketable securities	1,415			869
Proceeds from maturities of marketable securities	487			451
Proceeds from sale of long-lived assets and investments	2			21
Reimbursement of headquarters building development costs from banks	24			—
Purchases of property and equipment and intangible assets	(54		)	(52		)
Other	(1		)	—
Net cash provided by (used in) investing activities	12			(394		)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	64			98
Payments under capital lease obligations	(2		)	(1		)
Tax benefits from stock-based compensation	6			7
Payments related to repurchases of common stock	(452		)	(500		)
Dividends paid	(99		)	(94		)
Net cash used in financing activities	(483		)	(490		)
Change in cash and cash equivalents	(62		)	(637		)
Cash and cash equivalents at beginning of period	497			1,152
Cash and cash equivalents at end of period	$	435		$	515

Other non-cash activity:
Assets acquired by assuming related liabilities	$	2		$	6

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 25, 2015 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015.

Significant Accounting Policies

For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K.

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal year 2016 is a 53-week year and fiscal year 2015 was a 52-week year. The second quarters of fiscal years 2016 and 2015 were both 13-week quarters.

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and its wholly-owned subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

Restructuring and Other Charges

Our restructuring and other charges primarily comprise of employee severance and related costs, write-down of assets, and other exit costs. The severance and related costs could include one-time termination benefits as well as certain statutory termination benefits or employee terminations under ongoing benefit arrangements. One-time termination benefits are recognized as a liability at estimated fair value when the approved plan of termination has been communicated to employees, unless employees must provide future service, in which case the benefits are recognized ratably over the future service period. Ongoing termination benefits arrangements are recognized as a liability at estimated fair value when the amount of such benefits becomes estimable and payment is probable. Any contract termination costs are recognized at estimated fair value when we terminate the contract in accordance with the contract terms. Other associated costs are recognized in the period the liability is incurred.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, warranty liabilities, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Adoption of New and Recently Issued Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board, or FASB, issued an accounting standard update for the subsequent measurement of inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. The update is effective for us beginning in our first quarter of fiscal year 2018, with early adoption permitted to be applied prospectively. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements.

In April 2015, the FASB issued a new accounting standards update that requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. The update will be effective for us beginning in our first quarter of fiscal year 2017. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued a new accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries, effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On July 9, 2015, the FASB voted to defer the effective date by one year, such that the new standard will be effective for us beginning in our first quarter of fiscal year 2019. The FASB will also permit entities to adopt the standard one year earlier if they choose (i.e., the original effective date). We will adopt this guidance either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements and have not yet determined which transition method we will apply.

Note 2 - Stock-Based Compensation

Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

We estimate the fair value of employee stock options on the date of grant using a binomial model and recognize the expense using a straight-line attribution method over the requisite employee service period. We use the closing trading price of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of RSUs and PSUs, and we use a Monte Carlo simulation on the date of grant to estimate the fair value of market-based PSUs. We use a Black-Scholes valuation at the commencement of an offering period in March and September of each year to estimate the fair value of the shares to be issued under our ESPP.

Stock-based compensation expense for stock options, RSUs and market-based PSUs is recognized using a straight-line attribution method over the requisite employee service period, while compensation expense for PSUs and ESPP is recognized using an accelerated amortization model.

Our condensed consolidated statements of income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:



	Three Months Ended				Six Months Ended
	July 26, 2015		July 27, 2014		July 26, 2015		July 27, 2014
	(In millions)
Cost of revenue	$	3	$	3	$	6	$	6
Research and development	27		21		54		42
Sales, general and administrative	17		14		33		26
Total	$	47	$	38	$	93	$	74

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Equity Award Activity

The following summarizes the stock option, RSU, PSU and market-based PSU activity under our equity incentive plans:



	Awards Outstanding		Weighted Average Exercise Price
Stock Options	(In millions)		(Per share)
Balances, January 25, 2015	21		$14.61
Granted	—		—
Exercised	(4	)	$14.16
Cancelled	—		—
Balances, July 26, 2015	17		$14.61



	Awards Outstanding		Weighted Average Grant-Date Fair Value
RSUs, PSUs and Market-based PSUs	(In millions)		(Per share)
Balances, January 25, 2015	23		$15.94
Granted (1) (2)	4		$21.65
Vested	(4	)	$15.04
Cancelled	(1	)	$15.99
Balances, July 26, 2015	22		$17.12

(1)

Includes the total PSUs issuable if the corporate financial performance maximum target level for fiscal year 2016 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2016, the PSUs issued could range from 0 to 2 million shares. We granted PSUs during the first quarter of fiscal year 2016 to our CEO and senior management as approved by our Compensation Committee.

(2)

Includes the market-based PSUs issuable if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could range from 0 to 0.4 million shares. We granted market-based PSUs during the first quarter of fiscal year 2016 to our CEO and senior management as approved by our Compensation Committee.

Of the estimated total grant-date fair value, the stock-based compensation expense related to the equity awards that are not expected to vest was $2 million and $8 million for the three and six months ended July 26, 2015, respectively, and $2 million and $12 million for three and six months ended July 27, 2014, respectively.

The following summarizes aggregated unearned stock-based compensation expense and estimated weighted average amortization period as of July 26, 2015 and January 25, 2015:



	July 26,	January 25,
	2015	2015
	(In millions)
Aggregated unearned stock-based compensation expense	$288	$291

Estimated weighted average amortization period	(In years)
Stock options	1.5	1.8
RSUs, PSUs and market-based PSUs	2.6	2.8
ESPP	0.7	0.5

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3 – Net Income Per Share

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented:



	Three Months Ended				Six Months Ended
	July 26,		July 27,		July 26,		July 27,
	2015		2014		2015		2014
	(In millions, except per share data)
Numerator:
Net income	$	26	$	128	$	160	$	265
Denominator:
Denominator for basic net income per share, weighted average shares	541		558		545		559
Effect of dilutive securities:
Equity awards outstanding	11		13		13		12
Assumed conversion of 1% Convertible Senior Notes Due 2018	4		—		5		—
Denominator for diluted net income per share, weighted average shares	556		571		563		571
Net income per share:
Basic net income per share	$	0.05	$	0.23	$	0.29	$	0.47
Diluted net income per share	$	0.05	$	0.22	$	0.28	$	0.46
Potentially dilutive equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	1		4		4		8

The 1.00% Convertible Senior Notes, or the Notes, are included in the calculation of diluted net income per share if their inclusion is dilutive. The Notes will generally have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the conversion price of $20.16 per share. For the three and six months ended July 26, 2015, our average stock price for the reporting periods exceeded the conversion price, causing the Notes to have a dilutive impact for these periods.

The denominator for diluted net income per share does not include any effect from the convertible note hedge transaction, or the Note Hedges, that we entered into concurrently with the issuance of the Notes, as its effect would be anti-dilutive. In the event an actual conversion of any or all of the Notes occurs, the shares that would be delivered to us under the Note Hedges are designed to neutralize the dilutive effect of the shares that we would issue under the Notes.

The denominator for diluted net income per share will not include any effect from the warrants, which we entered into concurrently with the issuance of the Notes, unless our average stock price for the reporting period exceeds the strike price of $27.13 per share.

Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Notes.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 4 – Income Taxes

We recognized income tax expense of $46 million and $84 million for the three and six months ended July 26, 2015, respectively, and $27 million and $53 million for the three and six months ended July 27, 2014, respectively. Income tax expense as a percentage of income before tax, or our effective tax rate, was 64.0% and 34.3% for the three and six months ended July 26, 2015, respectively, and 17.2% and 16.8% for the three and six months ended July 27, 2014, respectively.

Our income tax expense for the three months ended July 26, 2015 included a charge of $27 million for the write-down of a deferred tax asset related to our Icera modem operations, partially offset by a $13 million tax benefit related to the restructuring and other charges.

The increase in our effective tax rate in the three months ended July 26, 2015 as compared to the same period in the prior fiscal year was primarily due to the tax related charges in connection with the wind-down of the Icera modem operations, an increase in the amount of earnings subject to U.S. tax, and increase of permanent tax differences related to stock-based compensation in the six months ended July 26, 2015.

Our effective tax rate on income before tax for the six months ended July 26, 2015 of 34.3% was lower than the U. S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate. Further, our actual effective tax rate for the six months ended July 26, 2015 of 34.3% differs from our annual projected effective tax rate for this period of 22.2% due to certain discrete items, including the tax related charges attributable to the wind-down of the Icera modem operations, partially offset by tax benefits recognized upon the expiration of statutes of limitations in certain non-U.S. jurisdictions.

Our effective tax rate on income before tax for the six months ended July 27, 2014 of 16.8% was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. statutory tax.

For the six months ended July 26, 2015, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no other material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 25, 2015, other than the recognition of tax benefits upon the expiration of statute of limitation in certain non-U.S. jurisdictions in the six months ended July 26, 2015.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where it is believed not more-likely-than-not that the position will be sustained upon examination, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of July 26, 2015, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 5 - Marketable Securities

All of our cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value, with the related unrealized gains and losses included in accumulated other comprehensive income, a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in other income, net, on the Condensed Consolidated Statements of Income.

We performed an impairment review of our investment portfolio as of July 26, 2015. Based on our quarterly impairment review, we concluded that our investments were appropriately valued and that no other than temporary impairment charges were necessary on our portfolio as of July 26, 2015.

The following is a summary of cash equivalents and marketable securities at July 26, 2015 and January 25, 2015:



	July 26, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(In millions)
Corporate debt securities	$	1,972	$	1	$	(3	)	$	1,970
Debt securities of U.S. government agencies	893		1		(1		)	893
Asset-backed securities	489		—		(1		)	488
Debt securities issued by U.S. Treasury	385		—		—			385
Mortgage-backed securities issued by U.S. government-sponsored enterprises	261		4		—			265
Foreign government bonds	75		—		—			75
Money market funds	30		—		—			30
Total	$	4,105	$	6	$	(5	)	$	4,106
Classified as:
Cash equivalents								$	36
Marketable securities								4,070
Total								$	4,106



	January 25, 2015
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value
	(In millions)
Corporate debt securities	$	2,185	$	2	$	(1	)	$	2,186
Debt securities of U.S. government agencies	750		1		(1		)	750
Asset-backed securities	453		—		—			453
Debt securities issued by U.S. Treasury	534		3		—			537
Mortgage-backed securities issued by U.S. government-sponsored enterprises	274		5		(1		)	278
Foreign government bonds	85		—		—			85
Money market funds	132		—		—			132
Total	$	4,413	$	11	$	(3	)	$	4,421
Classified as:
Cash equivalents								$	295
Marketable securities								4,126
Total								$	4,421

The following table provides the breakdown of the investments with unrealized losses at July 26, 2015:



	Less than 12 months					12 months or greater				Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In millions)
Corporate debt securities	$	1,098	$	(3	)	$	40	$	—	$	1,138	$	(3	)
Debt securities of U.S. government agencies	504		(1		)	—		—		504		(1		)
Asset-backed securities	313		(1		)	23		—		336		(1		)
Total	$	1,915	$	(5	)	$	63	$	—	$	1,978	$	(5	)

The gross unrealized losses related to fixed income securities were due to changes in interest rates. We have determined that the gross unrealized losses on investment securities at July 26, 2015 are temporary in nature. Currently, we have the intent and ability to hold our investments with impairment indicators until maturity.

The amortized cost and estimated fair value of cash equivalents and marketable securities, which are primarily debt instruments, are classified as available-for-sale at July 26, 2015 and January 25, 2015 and are shown below by contractual maturity.



	July 26, 2015				January 25, 2015
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Less than 1 year	$	1,174	$	1,174	$	1,570	$	1,571
Due in 1 - 5 years	2,812		2,811		2,720		2,726
Mortgage-backed securities issued by government-sponsored enterprises not due at a single maturity date	119		121		123		124
Total	$	4,105	$	4,106	$	4,413	$	4,421

Net realized gains were not significant for the three months ended July 26, 2015 and for the three and six months ended July 27, 2014. Net realized gains were $3 million for the six months ended July 26, 2015.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 6 – Fair Value of Financial Assets and Liabilities

Financial assets measured at fair value

We measure our cash equivalents and marketable securities at fair value. The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. Our Level 1 assets consist of our money market funds. We classify securities within Level 1 assets when the fair value is obtained from real time quotes for transactions in active exchange markets involving identical assets. Our available-for-sale securities are classified as having Level 2 inputs. Our Level 2 assets are valued utilizing a market approach where the market prices of similar assets are provided by a variety of independent industry standard data providers to our investment custodian. We review the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no significant transfers between Levels 1 and 2 assets for the three and six months ended July 26, 2015.

Financial assets measured at fair value are summarized below:



			Fair Value Measurement as of July 26, 2015 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs
	July 26, 2015		(Level 1)		(Level 2)
	(In millions)
Corporate debt securities (1)	$	1,970	$	—	$	1,970
Debt securities of U.S. government agencies (2)	893		—		893
Asset-backed securities (2)	488		—		488
Debt securities issued by U.S. Treasury (2)	385		—		385
Mortgage-backed securities issued by government-sponsored enterprises (2)	265		—		265
Foreign government bonds (2)	75		—		75
Money market funds (3)	30		30		—
Total cash equivalents and marketable securities	$	4,106	$	30	$	4,076


(1)	Included $6 million in cash equivalents and $1,964 million in marketable securities on the Condensed Consolidated Balance Sheets.


(2)	Included in marketable securities on the Condensed Consolidated Balance Sheets.


(3)	Included in cash equivalents on the Condensed Consolidated Balance Sheets.

Financial liabilities measured at fair value

We issued $1.50 billion of Notes in December 2013. The Notes are carried at their original issuance value, net of unamortized debt discount, and are not marked to market each period. The estimated fair value of the Notes was $1.72 billion and $1.68 billion as of July 26, 2015 and January 25, 2015, respectively. The estimated fair value of the Notes was determined on the basis of market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy. Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for discussion regarding the Notes.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 7 - Intangible Assets

The components of our amortizable intangible assets are as follows:



	July 26, 2015							January 25, 2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In millions)
Acquisition-related intangible assets	$	193	$	(143	)	$	50	$	189	$	(134	)	$	55
Patents and licensed technology	451		(311		)	140		449		(282		)	167
Total intangible assets	$	644	$	(454	)	$	190	$	638	$	(416	)	$	222

Amortization expense associated with intangible assets was $19 million and $38 million for the three and six months ended July 26, 2015, respectively, and $19 million and $38 million for the three and six months ended July 27, 2014, respectively. Future amortization expense related to the net carrying amount of intangible assets at July 26, 2015 is estimated to be $35 million for the remainder of fiscal year 2016, $65 million in fiscal year 2017, $50 million in fiscal year 2018, $22 million in fiscal year 2019, $13 million in fiscal year 2020 and a total of $5 million in fiscal year 2021 and beyond.

Note 8 - Balance Sheet Components

Certain balance sheet components are as follows:



	July 26,		January 25,
	2015		2015
Inventories:	(In millions)
Raw materials	$	139	$	157
Work in-process	107		92
Finished goods	195		234
Total inventories	$	441	$	483

At July 26, 2015, we had outstanding inventory purchase obligations totaling $487 million.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)



	July 26,		January 25,
	2015		2015
Accrued and Other Current Liabilities:	(In millions)
Unearned revenue (1)	$	321	$	296
Customer related liabilities (2)	130		143
Accrued payroll and related expenses	111		112
Warranty accrual (3)	28		8
Professional service fees	29		17
Accrued restructuring and other charges (4)	18		—
Coupon interest on Notes	3		3
Taxes payable	3		3
Facilities related liabilities	1		8
Other	15		13
Total accrued and other current liabilities	$	659	$	603


(1)	Unearned revenue primarily includes deferred revenue.


(2)	Customer related liabilities primarily includes accrued customer programs. Please refer to Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, for discussion regarding the nature of accrued customer programs and their accounting treatment related to our revenue recognition policies and estimates.


(3)	Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for discussion regarding the warranty accrual.


(4)	Please refer to Note 14 of these Notes to Condensed Consolidated Financial Statements for discussion regarding the restructuring and other charges accrual.



	July 26,		January 25,
	2015		2015
Other Long-Term Liabilities:	(In millions)
Deferred income tax liability	$	292	$	232
Income taxes payable	124		121
Asset retirement obligation	7		7
Deferred revenue (1)	1		108
Other	23		21
Total other long-term liabilities	$	447	$	489

(1) Consists primarily of consideration received in advance of our performance obligations under the patent cross licensing agreement that we entered into with Intel Corporation in January 2011. The decrease in deferred revenue, long-term, is a result of revenue recognized during the six months ended July 26, 2015.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 9 - Guarantees

U.S. GAAP requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, U.S. GAAP requires disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities.

Accrual for Product Warranty Liabilities

We record a reduction to revenue for estimated product returns at the time revenue is recognized primarily based on historical return rates. Cost of revenue includes the estimated cost of product warranties. Under limited circumstances, we may offer an extended limited warranty to customers for certain products. Additionally, we accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.

On July 31, 2015, we announced a voluntary recall and replacement of our SHIELD 8-inch tablets that were sold between July 2014 and July 2015. We have determined that the battery in these tablets can overheat, posing a fire hazard. The recall does not affect any other NVIDIA products. During the six months ended July 26, 2015, we recorded a $21 million charge against cost of revenue, including $15 million during our fiscal quarter ended July 26, 2015, to cover anticipated customer warranty, repair, return, replacement and other associated costs.

The estimated product warranty liabilities for the three and six months ended July 26, 2015 and July 27, 2014 were as follows:



	Three Months Ended						Six Months Ended
	July 26,			July 27,			July 26,			July 27,
	2015			2014			2015			2014
	(In millions)
Balance at beginning of period	$	13		$	8		$	8		$	8
Additions	16			1			22			3
Deductions	(1		)	(1		)	(2		)	(3		)
Balance at end of period	$	28		$	8		$	28		$	8

In connection with certain agreements that we have executed in the past, we have at times provided indemnities to cover the indemnified party for matters such as tax, product, and employee liabilities. We have also on occasion included intellectual property indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. As such, we have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 10 - Long-Term Debt

1.00 % Convertible Senior Notes Due 2018

On December 2, 2013, we issued $1.50 billion in Notes. The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually at a rate of 1.00% per annum. The Notes will mature on December 1, 2018 unless earlier repurchased or converted in accordance with their terms prior to such date. Under the terms of the Notes, they may be converted based on an initial conversion rate of 49.60 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of $20.16 per share of common stock), subject to adjustment as described in the indenture governing the Notes.

As of July 26, 2015, none of the conditions allowing holders of the Notes to convert had been met. The determination of whether or not the Notes are convertible must be performed quarterly. If the Notes become convertible at the option of the holder, the carrying value of the Notes would be classified as a current liability and the difference between the principal amount and the carrying value of the Notes would be reflected as convertible debt in the mezzanine equity section on our Condensed Consolidated Balance Sheets.

The initial debt component of the Notes was valued at $1.35 billion based on the contractual cash flows discounted at an appropriate market rate for a non-convertible debt at the date of issuance, which was determined to be 3.15%. The carrying value of the permanent equity component reported in additional paid-in-capital was valued at $126 million and recorded as a debt discount. This amount, together with the $23 million purchaser's discount to the par value of the Notes represents the total unamortized debt discount of $149 million we recorded at the time of issuance of the Notes. The aggregate debt discount is amortized as interest expense over the contractual term of the Notes using the effective interest method using an interest rate of 3.15%.

The following table presents the carrying amounts of the liability and equity components:



	July 26,			January 25,
	2015			2015
	(In millions)
Amount of the equity component	$	126		$	126

1.00% Convertible Senior Notes Due 2018	$	1,500		$	1,500
Unamortized debt discount (1)	(101		)	(116		)
Net carrying amount	$	1,399		$	1,384

(1) As of July 26, 2015, the unamortized debt discount will be amortized over a remaining period of 3.4 years.

The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs:



	Three Months Ended				Six Months Ended
	July 26,		July 27,		July 26,		July 27,
	2015		2014		2015		2014
	(In millions)
Contractual coupon interest expense	$	4	$	4	$	8	$	8
Amortization of debt discount and issuance costs	7		7		14		14
Total interest expense related to Notes	$	11	$	11	$	22	$	22

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 11 - Commitments and Contingencies

Operating Lease Financing Arrangement

In the second quarter of fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the fourth quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. As a part of this arrangement, we leased the real property we own where the building will be constructed under a 99 year ground lease to a syndicate of banks and concurrently leased back the building under a real property lease.

Under the real property lease, we pay rent, taxes, maintenance costs, utilities, insurance and other property related costs. The lease has an initial 7.5 year term expiring on December 19, 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks.

We will oversee the construction of the headquarters building. The banks have committed to fund up to $380 million of costs relating to construction. Advances will be made periodically to reimburse us for construction costs we incur. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest will be capitalized into the lease balance. Following construction, we will pay rent in the form of interest. We have guaranteed the obligations under the lease held by any of our subsidiaries.

During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. Under certain default circumstances, the lease guarantee may be 100% of the banks’ investment in the building plus any and all accrued but unpaid interest and all other rent due and payable under the operative agreements.

The operative agreements are subject to customary default provisions, including, for example, those relating to payment and performance defaults, and events of bankruptcy. We are also subject to financial covenants including a covenant to maintain a maximum total leverage ratio not to exceed 3.0 to 1.0 and a minimum interest coverage ratio in excess of 3.5 to 1.0 during the term. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease.

Securities Cases

In September 2008, three putative securities class actions were filed in the United States District Court for the Northern District of California arising out of our announcements on July 2, 2008, that we would take a charge against cost of revenue to cover anticipated costs and expenses arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products and that we were revising financial guidance for our second quarter of fiscal year 2009. The actions purport to be brought on behalf of purchasers of NVIDIA stock and assert claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Securities Exchange Act.

On January 22, 2010, Plaintiffs filed a Consolidated Amended Class Action Complaint, asserting claims for violations of Section 10(b), Rule 10b-5, and Section 20(a) of the Securities Exchange Act and seeking unspecified compensatory damages. We moved to dismiss the consolidated complaint and on October 19, 2010, Judge Seeborg granted our motion with leave to amend. On December 2, 2010, Plaintiffs filed a Second Consolidated Amended Complaint. We again moved to dismiss and on October 12, 2011, Judge Seeborg again granted our motion to dismiss, this time denying Plaintiffs leave to amend. On November 8, 2011, Plaintiffs filed a Notice of Appeal to the Ninth Circuit. Oral argument was held on January 14, 2014. On October 2, 2014, the Ninth Circuit issued an order affirming the dismissal. On October 16, 2014, Plaintiffs requested a rehearing or en banc review of the Ninth Circuit’s opinion affirming the dismissal. Plaintiffs’ request was denied on November 10, 2014. On February 9, 2015, Plaintiffs filed a petition for writ of certiorari to the United States Supreme Court. On April 15, 2015, we filed an opposition to Plaintiffs’ petition and the petition was denied on May 26, 2015. The case is now over.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Patent Infringement Cases

On September 4, 2014, NVIDIA filed complaints against Qualcomm, Inc., or Qualcomm, and various Samsung entities with both the United States International Trade Commission, or ITC, and the United States District Court for the District of Delaware for alleged infringement of seven patents relating to graphics processing. In the ITC action, NVIDIA seeks to block shipments of Samsung Galaxy mobile phones and tablets and other consumer electronics and display devices containing Qualcomm’s Adreno, ARM’s Mali or Imagination’s PowerVR graphics architectures. On October 6, 2014, the ITC initiated an investigation of NVIDIA’s claim. On February 2 and 3, 2015, the court conducted a claim construction hearing on certain claim language from five of the seven patents at issue. In June 2015, NVIDIA moved to terminate all asserted claims on four patents, which motions have not yet been acted upon. Certain asserted claims of the three remaining patents pending before the ITC were tried at a hearing on June 22-26, 2015. The post-hearing briefing was concluded on July 24, 2015, and the parties expect a decision on October 9, 2015.

In the Delaware action, NVIDIA seeks unspecified damages for Samsung and Qualcomm’s alleged patent infringement. On October 22, 2014, Samsung and Qualcomm moved to stay the Delaware proceedings in light of the pending ITC action and NVIDIA did not oppose the motion. The court granted the motion to stay on October 23, 2014.

On November 10, 2014, Samsung filed a complaint against NVIDIA and Velocity Micro, Inc., in the United States District Court for the Eastern District of Virginia, alleging that NVIDIA infringed six patents and falsely advertised that the Tegra K1 processor is the world’s fastest mobile processor. On December 19, 2014, and then on April 10, 2015, Samsung filed amended, longer complaints, but which continued to assert the same claims against NVIDIA. Samsung seeks unspecified damages and an injunction prohibiting NVIDIA from any future violations. NVIDIA answered the second amended complaint on April 16, 2015, and asserted counter-claims against Samsung for infringing four of NVIDIA’s patents and for non-infringement and invalidity of the six patents asserted in Samsung’s second amended complaint. On April 24, 2015, Samsung moved to sever NVIDIA’s counter-claims for patent infringement and its motion was granted on May 19, 2015. NVIDIA voluntarily withdrew its counter-claims on May 19, 2015. On June 17, 2015, Velocity Micro, Inc. voluntarily agreed to a permanent injunction preventing it from infringing certain patents and was dismissed from the case with prejudice. A Markman hearing was held on June 29, 2015 and trial is set to begin in January 2016. Samsung’s false advertising claim was dismissed with prejudice on July 30, 2015.

On November 23, 2014, Samsung filed a complaint against NVIDIA, among others, in the ITC claiming infringement of four United States patents. Samsung seeks to permanently bar several products purportedly relying on these allegedly infringed patents in the United States. On December 23, 2014, the ITC initiated an investigation of Samsung’s claims. On June 5, 2015, Samsung withdrew one patent from the case. A hearing on Samsung’s three remaining patents began on August 18, 2015.

NVIDIA and Samsung have also challenged the validity of certain of each other’s patents through inter partes review before the United States Patent and Trademark Office. NVIDIA has filed ten requests for inter partes review on eight of Samsung’s asserted patents. Samsung has filed six requests for inter partes review on six patents asserted by NVIDIA. The United States Patent and Trademark Office has not yet decided whether to institute review as to any of the patents.

Accounting for Loss Contingencies

While there can be no assurance of favorable outcomes, we believe the claims made by other parties in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of July 26, 2015, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, any possible range of loss in these matters cannot be reasonably estimated at this time. We are engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 12 - Shareholders’ Equity

Share Repurchase Program

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. In May 2015, the Board extended the previously authorized repurchase program through December 2018 and authorized an additional $1.62 billion under the repurchase program.

In May 2015 we entered into an accelerated share repurchase agreement, or ASR, with an investment bank, under which we made an upfront payment of $400 million to purchase shares of our common stock and received an initial delivery of 14 million shares. Upon final settlement of the ASR, we may either (1) receive additional shares of our common stock, or (2) be required to deliver shares of our common stock or elect to make a cash payment to the investment bank, based on the terms and conditions under the ASR. The shares we receive result in a reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share.

We accounted for the ASR program as two separate transactions: (i) the 14 million shares of common stock initially delivered to us were accounted for as a treasury stock transaction and (ii) the unsettled contract was determined to be a forward contract indexed to our own common stock. The initial delivery of 14 million shares resulted in an immediate reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share. We have determined that the forward contract, indexed to our common stock, met all of the applicable criteria for equity classification. As a result, we recorded $289 million as treasury stock and $111 million, the implied value of the forward contract, as additional paid-in-capital, or APIC, in our Condensed Consolidated Balance Sheets as of July 26, 2015. The remainder of the shares are anticipated to be delivered to us in the third quarter of fiscal year 2016, and at that time, the forward contract will be reclassified from APIC to treasury stock.

Through July 26, 2015, we have repurchased an aggregate of 222 million shares under our share repurchase program for a total cost of $3.72 billion. All shares delivered from these repurchases have been placed into treasury stock. As of July 26, 2015, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $1.60 billion.

Cash Dividends

During the three and six months ended July 26, 2015, we paid $52 million and $99 million, respectively, in cash dividends to our common shareholders. These dividends were equivalent to $0.0975 and $0.085 per share for the three months ended July 26, 2015 and April 26, 2015, respectively.

Convertible Preferred Stock

There are no shares of preferred stock outstanding.

Common Stock

We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 13 - Segment Information

Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Our operating segments are equivalent to our reportable segments.

We report our business in two primary reporting segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture.

Our GPU product brands aimed at specialized markets include GeForce for gamers; Quadro for designers; Tesla for researchers, deep learning and big-data analysts; and GRID for cloud-based visual computing users.

We also integrate our GPUs into mobile chips called system-on-a-chip (SOC) processors, which power tablets, and automotive infotainment and safety systems. Our Tegra brand integrates an entire computer onto a single chip, incorporating GPUs and multi-core CPUs with audio, video and input/output capabilities. They can also be integrated with baseband processors to add voice and data communication. Tegra conserves power while delivering state-of-the-art graphics and multimedia processing.

We have a single unifying architecture for our GPU and Tegra Processors. This architecture unification leverages our visual computing expertise by charging the operating expenses of certain core engineering functions to the GPU business, while charging the Tegra Processor business for the incremental cost of the teams working directly for that business. In instances where the operating expenses of certain functions benefit both reporting segments, our CODM assigns 100% of those expenses to the reporting segment that benefits the most.

The “All Other” category presented below represents the revenue and expenses that our CODM does not assign to either the GPU business or the Tegra Processor business for purposes of making operating decisions or assessing financial performance. The revenue includes primarily patent licensing revenue and the expenses include corporate infrastructure and support costs, stock-based compensation costs, amortization of acquisition-related intangible assets, other acquisition-related costs, product warranty charge, restructuring and other charges, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

Our CODM does not review any information regarding total assets on a reporting segment basis. Reporting segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for NVIDIA as a whole. The table below presents details of our reportable segments and the “All Other” category.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)



	GPU		Tegra Processor			All Other			Consolidated
	(In millions)
Three Months Ended July 26, 2015
Revenue	$	959	$	128		$	66		$	1,153
Depreciation and amortization expenses	$	27	$	11		$	11		$	49
Operating income (loss)	$	273	$	(41	)	$	(156	)	$	76

Three Months Ended July 27, 2014
Revenue	$	878	$	159		$	66		$	1,103
Depreciation and amortization expenses	$	29	$	15		$	12		$	56
Operating income (loss)	$	241	$	(55	)	$	(23	)	$	163

Six Months Ended July 26, 2015
Revenue	$	1,899	$	273		$	132		$	2,304
Depreciation and amortization expense	$	55	$	26		$	22		$	103
Operating income (loss)	$	551	$	(99	)	$	(202	)	$	250

Six Months Ended July 27, 2014
Revenue	$	1,776	$	298		$	132		$	2,206
Depreciation and amortization expense	$	59	$	29		$	23		$	111
Operating income (loss)	$	476	$	(116	)	$	(46	)	$	314



	Three Months Ended						Six Months Ended
	July 26, 2015			July 27, 2014			July 26, 2015			July 27, 2014
	(In millions)
Reconciling items included in "All Other" category :
Unallocated revenue	$	66		$	66		$	132		$	132
Unallocated cost of revenue and operating expenses	(67		)	(42		)	(124		)	(85		)
Stock-based compensation	(47		)	(38		)	(93		)	(74		)
Acquisition-related costs	(4		)	(9		)	(13		)	(19		)
Product warranty charge	(15		)	—			(15		)	—
Restructuring and other charges	(89		)	—			(89		)	—
Total	$	(156	)	$	(23	)	$	(202	)	$	(46	)

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if our customers’ revenue is attributable to end customers that are located in a different location. The following table summarizes information pertaining to our revenue from customers based on invoicing address in different geographic regions:



	Three Months Ended				Six Months Ended
	July 26,		July 27,		July 26,		July 27,
	2015		2014		2015		2014
	(In millions)
Revenue:
Taiwan	$	445	$	331	$	832	$	704
Other Asia Pacific	185		151		373		306
China	181		252		354		475
United States	138		206		318		379
Europe	106		80		225		167
Other Americas	98		83		202		175
Total revenue	$	1,153	$	1,103	$	2,304	$	2,206

Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 23% and 21% of our total revenue from two customers for the three months ended July 26, 2015 and July 27, 2014, respectively. Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 21% of our total revenue from two customers and 10% of our total revenue from one customer for the six months ended July 26, 2015 and July 27, 2014, respectively.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, aggregated approximately 22% of our accounts receivable balance from one customer at July 26, 2015 and approximately 30% of our accounts receivable balance from two customers at January 25, 2015.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 14 - Restructuring and Other Charges

The results of any remaining ongoing Icera modem operations are reported in the Tegra Processor reporting segment, however, restructuring and other charges associated with the wind-down of the Icera modem operations are separately reported with other non-recurring charges and benefits that our CODM deems to be enterprise in nature. Please refer to Note 13 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our reporting segments.

Our operating expenses for the three months ended July 26, 2015 included $89 million of restructuring and other charges. Please refer to Note 4 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding the income tax charges associated with the wind-down of Icera modem operations.



	Three Months Ended
	July 26,
	2015
	(In millions)
Employee severance and related costs	$	56
Tax subsidy impairment	17
Fixed assets impairment	11
Facilities and related costs	2
Other exit costs	3
Balance at July 26, 2015	$	89

We expect to incur additional restructuring charges to operating expense of $15 million to $25 million for the remainder of fiscal year 2016. These restructuring activities will impact approximately 5% of our global workforce, and we expect them to be substantially completed by the end of fiscal year 2016. The following table provides a summary of the restructuring activities and related liabilities recorded in accrued liabilities in our Consolidated Balance Sheets as of July 26, 2015:



	(In millions)
Balance at April 26, 2015	$	—
Restructuring and other charges	89
Cash payments	(39		)
Non-cash charges	(32		)
Balance at July 26, 2015	$	18

The remaining balance of $18 million as of July 26, 2015 is expected to be paid during the third and fourth quarters of fiscal year 2016.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this Quarterly Report on Form 10-Q in greater detail under the heading “Risk Factors.” Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries, except where it is made clear that the term means only the parent company.

NVIDIA, the NVIDIA logo, GeForce, GeForce Experience, GTX, ICERA, Iray, Maxwell, NVIDIA DRIVE, NVIDIA GRID, NVIDIA SHIELD, Pascal, Quadro, SHIELD, Tegra, Tesla, and TITAN are trademarks and/or registered trademarks of NVIDIA Corporation in the United States and other countries. Other company and product names may be trademarks of the respective companies with which they are associated.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Item 6. Selected Financial Data” of our Annual Report on Form 10-K for the fiscal year ended January 25, 2015 and “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q and our Condensed Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q, before deciding to purchase or sell shares of our common stock.

Overview

Our Company and Our Businesses

NVIDIA is dedicated to advancing visual computing, enabling individuals to interact with digital ideas, data and entertainment with an ease and efficiency unmatched by any other communication medium.

Our business model has three elements: creating NVIDIA-branded products and services, offering our processors to original equipment manufacturers, or OEMs, and licensing our intellectual property. NVIDIA’s products and services are built on three computing platforms - PC, Datacenter/Cloud, and Mobile, and address primarily four large markets: Gaming, Enterprise, High Performance Computing & Cloud, and Automotive.

Our two business segments - GPU and Tegra Processor - are based on a single underlying graphics architecture. In addition to the two reporting segments, the “All Other” category primarily includes licensing revenue from our patent cross licensing agreement with Intel, which we expect to recognize through March 2017.

GPUs, the engines of visual computing, are among the world's most complex processors. Our GPU product brands aimed at specialized markets include GeForce for gamers; Quadro for designers; Tesla for researchers, deep learning and big-data analysts; and GRID for cloud-based visual computing users.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.

Recent Developments, Future Objectives and Challenges

GPU Business

During the second quarter of fiscal year 2016, we released our new GeForce GTX 980 Ti GPU and we nearly doubled the users of our GeForce Experience PC gaming platform from a year earlier. Additionally, we shipped cuDNN 3.0, which improves performance of deep learning training on GPUs.

During the first quarter of fiscal year 2016, we launched the GeForce GTX TITAN X, a GPU with twice the performance and double the power efficiency of its predecessor. We also introduced Quadro M6000, a powerful professional GPU and the Quadro Visual Computing Appliance, containing eight M6000 GPUs. Further, we introduced a roadmap for physically based rendering, including Iray 2015 rendering software. During the quarter we also announced that our next-generation Pascal GPU architecture. This architecture is expected to accelerate deep learning applications faster than the current-generation Maxwell processors.

Tegra Processor Business

During the second quarter of fiscal year 2016, we launched the NVIDIA SHIELD Android TV device - our first living-room entertainment device powered by our Tegra X1 processor - which connects TVs to entertainment apps and services. For the automotive market, we are partnering with more than 50 companies to use our NVIDIA DRIVE PX platform - a car computer that utilizes deep learning to enable self-driving capabilities - previously announced in the first quarter of fiscal year 2016, in their autonomous driving efforts.

Capital Return to Shareholders

During the second quarter of fiscal year 2016, as part of our stock repurchase program, we entered into an accelerated share repurchase agreement, or ASR, with an investment bank, under which we made an upfront payment of $400 million to purchase shares of our common stock and received an initial delivery of 14 million shares. Upon final settlement of the ASR, we may either (1) receive additional shares of our common stock, or (2) be required to deliver shares of our common stock or elect to make a cash payment to the investment bank, based on the terms and conditions under the ASR. Additionally, we paid $52 million in cash dividends for the second quarter of fiscal year 2016. In the aggregate for the second quarter of fiscal year 2016, we returned a total of $452 million of capital to shareholders. Please refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for further disclosure regarding the ASR.

Litigation

In September 2014, we filed lawsuits against Qualcomm, Inc. and various Samsung entities in the United States International Trade Commission, or ITC, and the United States District Court for the District of Delaware for using our GPU patents without a license. The ITC action was heard in June 2015 and sought to permanently bar several Samsung products that rely on our patents in the United States. The Delaware case has been stayed during the pendency of the ITC action.

On November 10, 2014, Samsung filed a complaint against NVIDIA and Velocity Micro, Inc., in the United States District Court for the Eastern District of Virginia. That complaint and subsequent amended complaints allege that we infringed six patents and falsely advertised that the Tegra K1 processor is the world’s fastest mobile processor. We have answered the most recent complaint and asserted counter-claims against Samsung for infringing four of NVIDIA’s patents and for non-infringement and invalidity of the six patents asserted by Samsung. After the court severed our counter-claims from the main action, we voluntarily dismissed our counter-claims from the case. In June 2015, Velocity Micro voluntarily agreed to a permanent injunction preventing it from infringing certain patents and was dismissed from the case with prejudice. A Markman hearing was held in June 2015 and trial on Samsung’s claims is currently set to begin in January 2016. Samsung’s false advertising claim was dismissed with prejudice in July 2015.

On November 23, 2014, Samsung filed a complaint against NVIDIA, among others, in the ITC claiming infringement of four United States patents. Samsung seeks to permanently bar several products purportedly relying on these allegedly infringed patents in the United States. An ITC hearing on Samsung’s patents is scheduled to begin in August 2015.

NVIDIA and Samsung have also challenged the validity of certain of each other’s patents through inter partes review before the United States Patent and Trademark Office. The United States Patent and Trademark Office has not yet decided whether to institute review as to any of these patents.

Please refer to Note 11 of the Notes to Condensed Consolidated Financial Statements for further discussion.

Operating Lease Financing Arrangement

Restructuring and Other Charges

Our operating expenses for the three months ended July 26, 2015 included $89 million of restructuring and other charges. We expect to incur additional restructuring charges to operating expense of $15 million to $25 million for the remainder of fiscal year 2016. These restructuring activities will impact approximately 5% of our global workforce, and we expect them to be substantially completed by the end of fiscal year 2016. Please refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for further discussion.

Product Recall

Financial Information by Business Segment and Geographic Data

We report our business in two primary reporting segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture.

Please refer to Note 13 of the Notes to Condensed Consolidated Financial Statements for further disclosure regarding segment information.

Results of Operations

The following table sets forth, for the periods indicated, certain items in our condensed consolidated statements of operations expressed as a percentage of revenue.



	Three Months Ended				Six Months Ended
	July 26, 2015		July 27, 2014		July 26, 2015		July 27, 2014
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	45.0		43.9		44.2		44.5
Gross profit	55.0		56.1		55.8		55.5
Operating expenses:
Research and development	27.8		30.6		28.6		30.4
Sales, general and administrative	12.9		10.8		12.5		10.8
Restructuring and other charges	7.7		—		3.9		—
Total operating expenses	48.4		41.4		45.0		41.2
Operating income	6.7		14.7		10.8		14.3
Interest income	0.8		0.6		0.8		0.6
Interest expense	(1.0	)	(1.0	)	(1.0	)	(1.0	)
Other income (expense), net	(0.1	)	(0.3	)	(0.1	)	0.6
Income before income tax	6.4		14.0		10.5		14.5
Income tax expense	4.0		2.4		3.6		2.4
Net income	2.4	%	11.6	%	6.9	%	12.1	%

Revenue

NVIDIA’s products and services are built for three computing platforms - PC, Datacenter/Cloud, and Mobile. In the first half of fiscal year 2016, approximately 75% of our revenue stemmed from products and services associated with the PC computing platform, of which GPUs for gaming and enterprise markets comprised over 85% while PC OEM represented less than 15%.



	Three Months Ended									Six Months Ended
	July 26, 2015		July 27, 2014		$ Change			% Change		July 26, 2015		July 27, 2014		$ Change			% Change
	(In millions)									(In millions)
GPU	$	959	$	878	$	81		9	%	$	1,899	$	1,776	$	123		7	%
Tegra Processor	128		159		(31		)	(19	)	273		298		(25		)	(8	)
All Other	66		66		—			—		132		132		—			—
Total	$	1,153	$	1,103	$	50		5	%	$	2,304	$	2,206	$	98		4	%

Revenue for the second quarter of fiscal year 2016 increased by 5% when compared to the second quarter of fiscal year 2015. Revenue for the first half of fiscal year 2016 increased 4% when compared to the first half of fiscal year 2015.

Revenue by Operating Segments

GPU Business. GPU business revenue increased by 9% in the second quarter of fiscal year 2016 compared to the second quarter of fiscal year 2015. This increase was due primarily to growth in revenue from high-end GeForce GPUs for gaming, which increased over 50% fueled by continued strength in PC gaming. Revenue from Tesla GPUs for high performance computing and cloud decreased, reflecting variability in project purchasing. Revenue from Quadro GPUs for enterprise declined due to weakness in the overall workstation market. Revenue from GeForce GPU products for mainstream PC OEMs declined year-over-year compared to the second quarter of fiscal year 2015, reflecting the decline in overall consumer PCs.

GPU business revenue increased by 7% in the first half of fiscal year 2016 compared to the first half of fiscal year 2015. This increase was due primarily to increased revenue from sales of high-end GeForce GPU products for gaming, which increased over 30% reflecting a combination of continued strength in PC gaming and increased sales of our Maxwell-based GPU products. Revenue from Tesla GPUs for high performance computing and cloud increased, driven by strong demand with cloud service providers. Revenue from Quadro GPUs for enterprise declined due to weakness in the overall workstation market. Revenue from GeForce GPU products for mainstream PC OEMs declined compared to last year.

Tegra Processor Business. Tegra Processor business revenue decreased by 19% in the second quarter of fiscal year 2016 compared to the second quarter of fiscal year 2015. This decrease was driven by a decline in sales of Tegra products for OEM smartphones and tablets of over 80%, partially offset by an increase in sales of Tegra products serving automotive systems of over 75%, plus increases in revenue from development services and sales of SHIELD devices.

Tegra Processor business revenue decreased by 8% in the first half of fiscal year 2016 compared to the first half of fiscal year 2015. This decrease was driven by a decline in sales of Tegra products for OEM smartphones and tablets of over 80%, partially offset by an increase in Automotive sales of Tegra products of nearly 100%. Revenue also grew from development services and sales of SHIELD devices.

All Other. We recognized $66 million in revenue during the second quarter of both fiscal years 2016 and 2015 and $132 million in revenue during the first half of both fiscal years 2016 and 2015, from the patent cross licensing arrangement with Intel.

Concentration of Revenue

Revenue from sales to customers outside of the United States and Other Americas accounted for 80% of total revenue for the second quarter and 77% of total revenue for the first half of fiscal year 2016. Revenue from sales to customers outside of the United States and Other Americas accounted for 74% of total revenue for the second quarter and 75% of total revenue for the first half of fiscal year 2015. Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if the revenue is attributable to end customers in a different location.

We generated revenue from significant customers, those representing 10% or more of total revenue. Please refer to Note 13 of the Notes to Condensed Consolidated Financial Statements for further disclosure regarding significant customers.

Gross Profit and Gross Margin

Gross profit consists of total revenue, net of allowances, less cost of revenue. Cost of revenue consists primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, board and device costs, manufacturing support costs, including labor and overhead associated with such purchases, final test yield fallout, inventory and warranty provisions and shipping costs. Cost of revenue also includes development costs for license and service arrangements and stock-based compensation related to personnel associated with operations.

Gross margin is the percentage of gross profit to revenue. Our gross margin can vary in any period depending on the mix of types of products sold. Our gross margin is impacted by the mix of products we sell. Product mix is difficult to estimate with accuracy. Therefore, if we experience product transition challenges, including the introduction of NVIDIA-branded products such as SHIELD devices, if we achieve significant revenue growth in lower margin product lines or if we are unable to earn as much revenue as we expect from higher margin product lines, our gross margin may be negatively impacted.

Our overall gross margin was 55.0% and 56.1% for the second quarter of fiscal years 2016 and 2015, respectively, and 55.8% and 55.5% for the first half of fiscal years 2016 and 2015, respectively.

Charges to cost of sales for inventory provisions totaled $18 million and $13 million for the second quarter of fiscal years 2016 and 2015, respectively, unfavorably impacting our gross margin by 1.5% and 0.9%, respectively. Sales of inventory that was previously written-off or written-down totaled $10 million and $5 million for the second quarter of fiscal years 2016 and 2015, respectively, favorably impacting our gross margin by 0.9% and 0.7%, respectively. As a result, the overall net effect on our gross margin from charges to cost of sales for inventory provisions and sales of items previously written-off or written-down was a 0.6% unfavorable impact for the second quarter of fiscal year 2016 and a 0.2% unfavorable impact for the second quarter of fiscal year 2015.

Charges to cost of sales for inventory provisions totaled $31 million and $23 million for the first half of fiscal years 2016 and 2015, respectively, unfavorably impacting our gross margin by 1.4% and 1.2%, respectively. Sales of inventory that was previously written-off or written-down totaled $19 million and $31 million for the first half of fiscal years 2016 and 2015, respectively, favorably impacting our gross margin by 0.8% and 1.6%, respectively. As a result, the overall net effect on our gross margin from charges to cost of sales for inventory provisions and sales of items previously written-off or written-down was a 0.6% unfavorable impact for the first half of fiscal year 2016 and a 0.4% favorable impact for the first half of fiscal year 2015.

A discussion of our gross margin results for each of our operating segments is as follows:

GPU Business. The gross margin of our GPU business increased in the second quarter and first half of fiscal year 2016 compared to the second quarter and first half of fiscal year 2015, respectively. GPU margins increased primarily due to a richer product mix resulting from lower sales of GeForce GPU products for mainstream PC OEMs and stronger sales of our GeForce GPU products for gaming.

Tegra Processor Business. The gross margin of our Tegra Processor business decreased in the second quarter and first half of fiscal year 2016 compared to the second quarter and first half of fiscal year 2015, respectively, primarily due to the warranty charge associated with the SHIELD 8-inch tablet product recall.

Operating Expenses



	Three Months Ended											Six Months Ended
	July 26, 2015			July 27, 2014			$ Change			% Change		July 26, 2015			July 27, 2014			$ Change			% Change
	(In millions)											(In millions)
Research and development expenses	$	320		$	337		$	(17	)	(5	)%	$	658		$	672		$	(14	)	(2	)%
Sales, general and administrative expenses	149			119			30			25		289			237			52			22
Restructuring and other charges	89			—			89			100		89			—			89			100
Total operating expenses	$	558		$	456		$	102		22	%	$	1,036		$	909		$	127		14	%
Research and development as a percentage of net revenue	28		%	31		%						29		%	30		%
Sales, general and administrative as a percentage of net revenue	13		%	11		%						13		%	11		%
Restructuring and other charges as a percentage of net revenue	8		%	—		%						4		%	—		%

Research and Development

Research and development expenses decreased by 5% during the second quarter of fiscal year 2016 compared to the second quarter of fiscal year 2015 and decreased by 2% during the first half of fiscal year 2016 compared to the first half of fiscal year 2015. These decreases were primarily driven by the wind-down of Icera modem operations and other organization efficiencies, partially offset by increases in employee compensation and related costs, including stock-based compensation expense.

Sales, General and Administrative

Sales, general and administrative expenses increased by 25% during the second quarter of fiscal year 2016 compared to the second quarter of fiscal year 2015. Outside professional fees increased, primarily due to $24 million of legal fees associated with our litigation against Samsung and Qualcomm. Compensation and benefits increased by $6 million resulting from employee additions, employee compensation increases and related costs, including stock-based compensation expense.

Sales, general and administrative expenses increased by 22% during the first half of fiscal year 2016 compared to the first half of fiscal year 2015. Outside professional fees increased, primarily due to $40 million of legal fees associated with our litigation against Samsung and Qualcomm. Compensation and benefits increased by $15 million resulting from employee additions, employee compensation increases and related costs, including stock-based compensation expense.

Restructuring and Other Charges

In May 2015, we announced our intent to wind-down our Icera modem operations and that we were open to a sale of the technology or operations. During the three months ended July 26, 2015, we pursued the sale of Icera’s technology and operations but were unable to identify a viable buyer with genuine interest. As a result, we began the wind-down of Icera modem operations. The wind-down of Icera modem operations allows for continued investment in strategic growth areas including our growth initiatives of deep learning, self-driving cars, and gaming.

Our operating expenses for the three months ended July 26, 2015 included $89 million of restructuring and other charges, as follows:



	Three Months Ended
	July 26,
	2015
	(In millions)
Employee severance and related costs	$	56
Tax subsidy impairment	17
Fixed assets impairment	11
Facilities and related costs	2
Other exit costs	3
Balance at July 26, 2015	$	89

We expect to incur additional restructuring charges to operating expense of $15 million to $25 million for the remainder of fiscal year 2016. These restructuring activities will impact approximately 5% of our global workforce, and we expect them to be substantially completed by the end of fiscal year 2016. Please refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for further discussion.

Interest Income and Interest Expense

Interest income consists of interest earned on cash, cash equivalents and marketable securities. Interest expense is primarily comprised of coupon interest and debt discount amortization related to the convertible notes issued in December 2013. Interest income was $9 million and $7 million during the second quarter of fiscal years 2016 and 2015, respectively. Interest income was $18 million and $13 million during the first half of fiscal years 2016 and 2015, respectively. The increase in interest income was primarily due to higher average cash balances invested in interest bearing securities as well as higher purchased yields. Interest expense was $12 million and $22 million during the second quarter and first half of fiscal year 2016, respectively, relatively comparable to $12 million and $23 million during the second quarter and first half of fiscal year 2015, respectively.

Other Income (Expense), net

Other income (expense), net consists primarily of realized gains and losses from the sale of marketable securities, sales of investments in non-affiliated companies, and the impact of changes in foreign currency rates. During the second quarter of fiscal years 2016 and 2015, we recorded other expense, net, of $1 million and $3 million, respectively. During the first half of fiscal years 2016 and 2015 we recorded other expense, net, of $2 million and other income, net, of $14 million, respectively. Other income in the first half of fiscal year 2015 included a $17 million gain from the sale of a non-affiliated investment.

Income Taxes

We recognized income tax expense of $46 million and $84 million for the second quarter and first half of fiscal year 2016, respectively, and $27 million and $53 million for the second quarter and first half of fiscal year 2015, respectively. Income tax expense as a percentage of income before taxes, or our effective tax rate, was 64.0% and 34.3% for the second quarter and first half of fiscal year 2016, respectively, and 17.2% and 16.8% for the second quarter and first half of fiscal year 2015, respectively.

The increase in our effective tax rate in the second quarter of fiscal year 2016 as compared to the same period in the prior fiscal year was primarily due to the tax related charges in connection with the wind-down of the Icera modem operations, an increase in the amount of earnings subject to U.S. tax, and increase of permanent tax differences related to stock-based compensation in the first half of fiscal year 2016.

Our effective tax rate on income before tax for the first half of fiscal year 2016 of 34.3% was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate. Further, our actual effective tax rate for the first half of fiscal year 2016 of 34.3% differs from our annual projected effective tax rate for this period of 22.2% due to certain discrete items, including the tax related charges attributable to the wind-down of the Icera modem operations, partially offset by tax benefits recognized upon the expiration of statutes of limitations in certain non-U.S. jurisdictions.

Our effective tax rate on income before tax for the first half of fiscal year 2015 of 16.8% was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax.

On July 27, 2015, the U.S. Tax Court in Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015) issued an opinion with respect to Altera’s litigation with the Internal Revenue Service, or IRS, concerning the treatment of stock-based compensation expense in an inter-company cost sharing arrangement. In ruling in favor of Altera, the Tax Court invalidated the portion of the Treasury regulations requiring the inclusion of stock-based compensation expense in such inter-company cost-sharing arrangements. The IRS has a 90 day period to appeal the decision, in which case the matter would come before the Ninth Circuit Court of Appeals. Accordingly, we will continue to monitor the progress of this case for any significant impact on our consolidated financial statements.

Please refer to Note 4 of the Notes to Condensed Consolidated Financial Statements for further information.

Liquidity and Capital Resources



	As of
	July 26, 2015		January 25, 2015
	(In millions)
Cash and cash equivalents	$	435	$	497
Marketable securities	4,070		4,126
Cash, cash equivalents, and marketable securities	$	4,505	$	4,623

As of July 26, 2015, we had $4.51 billion in cash, cash equivalents and marketable securities, a decrease of $118 million from $4.62 billion as of January 25, 2015. This decrease was primarily due to share repurchases totaling $452 million and $99 million of dividends we paid during the first half of fiscal year 2016, offset by cash generated from operations.



	Six Months Ended
	July 26, 2015			July 27, 2014
	(In millions)
Net cash provided by operating activities	$	409		$	247
Net cash provided by (used in) investing activities	$	12		$	(394	)
Net cash used in financing activities	$	(483	)	$	(490	)

Cash provided by operating activities increased in the first half of fiscal year 2016 compared to the first half of fiscal year 2015. The increase was primarily due to changes in working capital, partially offset by a decline in net income.

Cash provided by (used in) investing activities increased in the first half of fiscal year 2016 compared to the first half of fiscal year 2015. The increase was primarily due to higher proceeds from sales and maturities of marketable securities.

Cash used in financing activities remained relatively comparable during both the first half of fiscal years 2016 and 2015.

Liquidity

Our primary source of liquidity is cash generated by our operations. Our investment portfolio consists principally of cash and cash equivalents, debt securities of corporations and United States government and its agencies, asset-backed securities, mortgage-backed securities issued by government-sponsored enterprises, money market funds and foreign government bonds. These investments are denominated in United States dollars. As of July 26, 2015, we did not have any investments in auction-rate preferred securities.

Please refer to Note 5 of the Notes to Condensed Consolidated Financial Statements for additional information.

As of July 26, 2015 and January 25, 2015, we had $4.51 billion and $4.62 billion, respectively, in cash, cash equivalents and marketable securities. Our investment policy requires the purchase of high grade investment securities and the diversification of asset types and includes certain limits on our portfolio duration, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. As of July 26, 2015, we were in compliance with our investment policy. As of July 26, 2015, our investments in government agencies and government-sponsored enterprises represented 35% of our total investment portfolio, while the financial sector accounted for 27% of our total investment portfolio. All of our investments are in A/A3 or better rated securities.

Our cash balances are held in numerous locations throughout the world, including substantial amounts held outside of the United States. Most of the amounts held outside the United States may be repatriated to the United States. However, if we repatriate foreign earnings for cash requirements in the United States, we would incur U.S. federal income tax at rate of 35% less utilization of any net operating loss carryforwards, and further offset by any applicable research and foreign tax credits, plus any state income taxes on such income. Repatriation of some foreign balances may be restricted by local laws.

Dividend payments and any share repurchases must be made from cash held in the United States. In the second quarter and first half of fiscal year 2016, we made total cash dividend payments of $52 million and $99 million, respectively, and repurchased $400 million and $452 million of our common stock in the second quarter and first half of fiscal year 2016, respectively, utilizing U.S. cash previously taxed as of July 26, 2015.

In the second quarter of fiscal year 2016, we began the wind-down of Icera modem operations. Our operating expenses for the three months ended July 26, 2015 included $89 million of restructuring and other charges. We expect to incur additional restructuring charges to operating expense of $15 million to $25 million for the remainder of fiscal year 2016. Please refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for further discussion.

We believe our cash, cash equivalents and marketable securities balance will be sufficient to fund our capital needs.

Capital Return to Shareholders

During the second quarter of fiscal year 2016, as part of our stock repurchase program, we entered into an accelerated share repurchase agreement, or ASR, with an investment bank, under which we made an upfront payment of $400 million to purchase shares of our common stock and received an initial delivery of 14 million shares. Upon final settlement of the ASR, we may either (1) receive additional shares of our common stock, or (2) be required to deliver shares of our common stock or elect to make a cash payment to the investment bank, based on the terms and conditions under the ASR. Additionally, we paid $52 million in cash dividends for the second quarter of fiscal year 2016. As such, in the aggregate for the second quarter of fiscal year 2016, we returned a total of $452 million of capital to shareholders.

Our cash dividend program and the payment of future cash dividends under that program are subject to continued capital availability and best interests of our shareholders and compliance of laws and agreements of NVIDIA.

Operating Capital and Capital Expenditure Requirements

We believe that our existing cash balances and anticipated cash flows from operations will be sufficient to meet our operating, acquisition, share repurchase, cash dividend and capital requirements for at least the next twelve months. However, there is no assurance that we will not need to raise additional equity or debt financing within this time frame. Additional financing may not be available on favorable terms or at all and may be dilutive to our then-current shareholders. We also may require additional capital for other purposes not presently contemplated.

During the second quarter of fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the fourth quarter of fiscal year 2018. This headquarters building is being financed as an operating lease arrangement. Under terms of this financing arrangement, costs incurred by us that are associated with the construction will be reimbursed by the banks.

Off-Balance Sheet Arrangements

During the second quarter of fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the fourth quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. The banks have committed to fund up to $380 million of costs relating to construction. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest will be capitalized into the lease balance. Following construction, we will pay rent in the form of interest. The lease has an initial 7.5 year term expiring on December 19, 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks. During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. Please refer to Note 11 of the Notes to Condensed Consolidated Financial Statements for a discussion regarding our operating lease financing arrangement.

Contractual Obligations

As of July 26, 2015, we had outstanding inventory purchase obligations totaling $487 million. Other than the off-balance sheet arrangement described above, there were no other material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015.

Please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in our Annual Report on Form 10-K for a description of our contractual obligations.

Adoption of New and Recently Issued Accounting Pronouncements

Please see Note 1 of the Notes to Condensed Consolidated Financial Statements for a discussion of adoption of new and recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial market risks related to investment and interest rate risk and exchange rate risk are described in our 2015 Annual Report on Form 10-K. At July 26, 2015, there have been no material changes to the financial market risks described at January 25, 2015 with the exception of the risk identified below.

In order to mitigate the interest rate risk on the operating lease financing arrangement, in August 2015, we entered into an interest rate swap for a portion of the operating lease financing arrangement, which entitles us to pay amounts based on a fixed rate in exchange for receipt of amounts based on variable rates. If the syndicate of banks that are participants to the operating lease financing arrangement were to fail to fund loans for any reason, we would remain liable for payments due under the swap unless we were to settle the swap. If we were to settle the swap at a time when interest rates have fallen (relative to the swap’s inception), the price to settle the swap could be significant.

The notional amount of the interest rate swap is $200 million and the termination date is December 19, 2022. The interest rate swap will be designated as a cash flow hedge. Gains or losses on this swap will be recorded in accumulated other comprehensive income and will be subsequently reclassified into earnings as the future interest expense is recognized in earnings or if ineffectiveness of the swap should occur.

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

Disclosure Controls and Procedures

Based on their evaluation as of July 26, 2015, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) were effective to provide reasonable assurance.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during our fiscal quarter ended July 26, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NVIDIA have been detected.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please see Part I, Item 1, Note 11 of the Notes to Condensed Consolidated Financial Statements for a discussion of our legal proceedings.

ITEM 1A. RISK FACTORS

Please refer to the description of the risk factors associated with our business previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended January 25, 2015. There have been no material changes from the risk factors previously described under Item 1A of our Annual Report on Form 10-K for the year ended January 25, 2015 with the exception of the risks identified below.

Before you buy our common stock, you should know that making such an investment involves some risks including, but not limited to, the risks described in Item 1A of our Annual Report on Form 10-K for the year ended January 25, 2015 and the risks set forth below. Additionally, any one of those risks could harm our business, financial condition and results of operations, which could cause our stock price to decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

We are subject to risks associated with development and construction of our headquarters building under an operating lease financing arrangement.

In the second quarter of fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the fourth quarter of fiscal year 2018. We are financing this construction under an operating lease arrangement. We may encounter unanticipated occurrences or conditions during construction that may increase the expense of the project. We may also encounter unanticipated delays in the construction of the new building and final city approval for occupancy may be delayed. Delays and cost overruns during construction could result in a default under the operating lease financing arrangement described below, which could result in liabilities and expenses and could harm our business, prospects, financial condition and results of operations.

Additionally, any such difficulties could result in our default under the operative agreements executed with a syndicate of banks that are participants to the operating lease financing arrangement to finance development and construction of our headquarters. We have pledged our assets that relate to the new headquarters building in order to secure our obligations under the operating lease financing arrangement. We will need to maintain compliance with the requirements governing such agreements, including compliance with financial and other covenants, certain of which may be subject to events outside of our control. If we fail to comply with the covenants, we may be unable to obtain or utilize all or a portion of the financing contemplated by the operating lease financing arrangement. Further, noncompliance with such covenants or other event of default could lead to a termination of our lease of the property, and the lenders could have the right to, among other things, foreclose on the collateral for our obligations under the operating lease financing arrangement. A loss of financing for the new headquarters building or foreclosure on the collateral could adversely affect our liquidity and business.

If we do not effectively manage the wind-down of our Icera modem operations, our financial condition and results of operations could be adversely affected.

In the second quarter of fiscal year 2016, we began the wind-down of our Icera modem operations. As a result, our operating expenses for the three months ended July 26, 2015 included $89 million of restructuring and other charges. We expect to incur additional restructuring charges to operating expense of $15 million to $25 million for the remainder of fiscal year 2016. These restructuring activities will impact approximately 5% of our global workforce, and we expect them to be substantially completed by the end of fiscal year 2016.

Although the wind-down of the Icera modem operations is expected to benefit our non-GAAP operating expenses beginning in the second half of fiscal year 2016, there is no guarantee that a wind-down will be completed in the expected timeframe. Additionally, if we experience inefficiencies or incremental costs in connection with our restructuring activities, we may be unable to meaningfully realize cost savings and we may incur expenses in excess of what we anticipate. Either of these outcomes could adversely impact our results of operations and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The repurchases will be made from time to time in the open market, in privately negotiated transactions, or in structured share repurchase programs, and may be made in one or more larger repurchases, in compliance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate NVIDIA to acquire any particular amount of common stock and the program may be suspended at any time at our discretion. As part of our share repurchase program, we have entered into, and we may continue to enter into, structured share repurchase transactions with financial institutions. These agreements generally require that we make an up-front payment in exchange for the right to receive a fixed number of shares of our common stock upon execution of the agreement, and a potential incremental number of shares of our common stock, within a pre-determined range, at the end of the term of the agreement.

The following table presents details of our share repurchase transactions during the three months ended July 26, 2015 (in millions, except per share amounts):



Period	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 27, 2015 - May 24, 2015	14	$	28.81	14	$	1,600
May 25, 2015 - June 21, 2015	—	—		—	$	1,600
June 22, 2015 - July 26, 2015	—	—		—	$	1,600
Total	14	$	28.81	14

(1) In May 2015, we entered into an accelerated share repurchase agreement, or ASR, with an investment bank, under which we made an upfront payment of $400 million to purchase shares of our common stock and received an initial delivery of 14 million shares. The calculation of the $28.81 average price per share for the period April 27, 2015 to July 26, 2015 is based solely on the result of dividing the $400 million we have paid towards the ASR by the 14 million shares that we received during the month of May 2015. We expect to receive additional shares at the time of settlement of the ASR in the third quarter of fiscal year 2016, without any further cash payment. The price we will ultimately pay per share will be no more than the volume-weighted average price over the period of the contract, which we anticipate will be less than $28.81. Please refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for a discussion regarding the accelerated share repurchase program.

In addition to our share repurchase program, we withhold common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock unit awards under our equity incentive program. During the first half of fiscal year 2016, we withheld 1 million shares at a total cost of $29 million through net share settlements. Please refer to Note 2 of the Notes to Consolidated Financial Statements for further discussion regarding our equity incentive plan.

ITEM 6. EXHIBITS

EXHIBIT INDEX



Exhibit No.	Exhibit Description	Schedule /Form	File Number	Exhibit	Filing Date
10.1*^	Participation Agreement dated June 19, 2015 among NVIDIA Land Development, LLC, Wachovia Service Corporation, Wells Fargo Bank, National Association, and a syndicate of other institutions
10.2*	Agency Agreement dated June 19, 2015 between NVIDIA Land Development, LLC and Wachovia Service Corporation
10.3*	Real Property Lease Agreement dated June 19, 2015 between Wachovia Service Corporation and NVIDIA Land Development, LLC
31.1*	Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2*	Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1#*	Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
32.2#*	Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith

^ Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from the exhibit and have been filed separately with the U.S. Securities and Exchange Commission.

# In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Copies of above exhibits not contained herein are available to any shareholder upon written request to:

Investor Relations: NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, CA 95050.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 19, 2015



	NVIDIA Corporation
By:	/s/ Colette M. Kress

	Colette M. Kress
	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

EXHIBIT INDEX



Exhibit No.	Exhibit Description	Schedule /Form	File Number	Exhibit	Filing Date
10.1*^	Participation Agreement dated June 19, 2015 among NVIDIA Land Development, LLC, Wachovia Service Corporation, Wells Fargo Bank, National Association, and a syndicate of other institutions
10.2*	Agency Agreement dated June 19, 2015 between NVIDIA Land Development, LLC and Wachovia Service Corporation
10.3*	Real Property Lease Agreement dated June 19, 2015 between Wachovia Service Corporation and NVIDIA Land Development, LLC
31.1*	Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2*	Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1#*	Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
32.2#*	Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* Filed herewith

Copies of above exhibits not contained herein are available to any shareholder upon written request to:

Investor Relations: NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, CA 95050.

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

PARTICIPATION AGREEMENT

Dated as of June 19, 2015

among

NVIDIA LAND DEVELOPMENT, LLC,
as the Construction Agent and the Lessee,

THE VARIOUS ENTITIES WHICH ARE PARTIES HERETO FROM TIME TO TIME,
as the Guarantor,

WACHOVIA SERVICE CORPORATION,
as the Lessor,

THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS
WHICH ARE PARTIES HERETO FROM TIME TO TIME,
as the Credit Lenders,

THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS
WHICH ARE PARTIES HERETO FROM TIME TO TIME,

as the Mortgage Lenders,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as the Agent

WELLS FARGO SECURITIES, LLC,

as Sole Lead Arranger and Sole Bookrunner

TABLE OF CONTENTS



		Page
Section 1. THE FINANCING.		2
Section 2. [reserved].		2
Section 3. SUMMARY OF TRANSACTIONS.		2
3.1	Operative Agreements.	2
3.2	Property Purchase.	2
3.3	Construction of Improvements; Commencement of Basic Rent.	2
Section 4. THE CLOSINGS.		3
4.1	Closing Date.	3
4.2	Closing Date; Acquisition Advance; Construction Advances.	3
Section 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION DATE; THE LESSEE’S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS; OTHER PROVISIONS.		3
5.1	General.	3
5.2	Procedures for Funding.	4
5.3	Conditions Precedent for the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders Relating to the Closing Date and the Advance of Funds for the Acquisition of a Property.	6
5.4	Conditions Precedent for the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders Relating to the Advance of Funds after the Acquisition Advance.	10
5.4A	Conditions Precedent to Payment or Incurrence of Property Cost.	10
5.5	Additional Reporting and Delivery Requirements on Completion Date.	12
5.6	Restrictions on Liens.	13
5.7	Payments.	13
5.8	Unilateral Right to Increase the Lessor Commitment, the Mortgage Loan Commitments and the Credit Loan Commitments.	13
5.9	Maintenance of the Lessee as a Wholly-Owned Entity.	14
5.10	Rent Under the Ground Lease as Property Cost.	14
5.11	Lessor Basic Rent Adjustment.	14
5.12	Limitation on Requested Advances regarding Available Credit Loan Commitments, Available Mortgage Loan Commitments and Available Lessor Commitment.	14
5.13	Limitation on Purchase Option under the Lease.	15
5.14	Equity Cure Rights, Etc.	15
5.15	[Reserved].	15
5.16	Special Provision Regarding the Funding of Uninsured Force Majeure Losses.	15
5.17	Construction Servicer and Inspection Consultant.	15
5.18	Extension of Target Construction Period Termination Date.	18
5.19	Reassignment of Construction Contracts.	18
5.20	Notices from the Construction Agent/the Lessee.	19
5.21	Ratable Reduction of Commitments.	19



SECTION 5A. LESSOR ADVANCE		19
5A.1	Procedure for Lessor Advance.	19
5A.2	Lessor Yield.	19
5A.3	Scheduled Return of Lessor Advance.	20
5A.4	Early Return of Lessor Advance.	20
5A.5	Computation of Lessor Yield.	21
Section 6. REPRESENTATIONS AND WARRANTIES.		21
6.1	Representations and Warranties of Each Credit Party.	21
6.1A	Additional Representations and Warranties of Each Credit Party.	24
6.2	Representations and Warranties of the Lessor.	31
SECTION 6B. GUARANTY		33
6B.1	Guaranty of Payment and Performance	33
6B.2	Obligations Unconditional.	33
6B.3	Modifications.	34
6B.4	Waiver of Rights.	35
6B.5	Reinstatement.	35
6B.6	Remedies.	36
6B.7	Limitation of Guaranty.	36
6B.8	Payment of Amounts to the Agent.	36
6B.9	Joinder of Guarantors.	36
6B.10	Additional Waivers and Provisions.	37
6B.11	Keepwell.	38
6B.12	Representations; Separateness.	38
Section 7. PAYMENT OF CERTAIN EXPENSES.		38
7.1	Transaction Expenses.	38
7.2	Fee Calculation.	39
7.3	Certain Fees and Expenses.	39
7.4	Unused Fee.	39
7.5	Upfront Fee.	40
7.6	Administrative Agency Fee.	40
7.7	Structuring Fee.	40
Section 8. OTHER COVENANTS AND AGREEMENTS.		41
8.1	Cooperation with the Lessee.	41
8.2	Covenants of the Lessor.	41
8.3	Credit Party Covenants, Consent and Acknowledgment.	42
8.3A	Additional Credit Party Affirmative Covenants.	44
8.3B	Additional Credit Party Negative Covenants.	51
8.4	Sharing of Certain Payments.	62
8.5	Grant of Easements, Agreement regarding Restrictive Covenants, etc.	62
8.6	Appointment of the Agent by the Lessor; Acknowledgement by the Secured Parties.	63



8.7	Collection and Allocation of Payments and Other Amounts.	63
8.8	Release of Property, etc.	68
8.9	Secured Hedge Agreements.	68
Section 9. CREDIT LOAN AGREEMENT, MORTGAGE LOAN AGREEMENT AND RIGHTS UNDER SECTION 5A OF THIS AGREEMENT.		68
9.1	The Construction Agent’s and the Lessee’s Credit Loan Agreement Rights.	68
9.2	The Construction Agent’s and the Lessee’s Mortgage Loan Agreement Rights.	69
9.3	The Construction Agent’s and the Lessee’s Rights under Section 5A of this Agreement.	70
Section 10. TRANSFER OF INTEREST.		70
10.1	Restrictions on Transfer.	70
10.2	Effect of Transfer.	71
10.3	Successor Agent.	71
Section 11. INDEMNIFICATION.		71
11.1	General Indemnity.	72
11.2	General Tax Indemnity.	74
11.3	Yield Protection Amount.	80
11.4	Funding/Contribution Indemnity.	82
11.5	EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.	82
11.6	Limitations on Indemnification Obligations.	83
11.7	Increase of Mortgage Loans, Credit Loans and Lessor Advances.	84
11.8	Survival.	84
Section 12. MISCELLANEOUS.		85
12.1	Survival of Agreements.	85
12.2	Notices.	85
12.3	Counterparts.	87
12.4	Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters.	87
12.5	Headings, etc.	89
12.6	Parties in Interest.	89
12.7	GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.	89
12.8	Severability.	90
12.9	Liability Limited.	90
12.10	Rights of the Credit Parties.	91
12.11	Further Assurances.	91
12.12	Calculations under Operative Agreements.	92
12.13	Confidentiality.	92
12.14	Financial Reporting/Tax Characterization.	93
12.15	Set-off.	93
12.16	Limited Obligation of the Lessee to Pay on behalf of the Lessor.	94
12.17	USA Patriot Act Notice.	94

EXHIBITS

A Form of Requisition ‑ Section 4.2

B Form of Officer’s Certificate ‑ Section 5.3(u)

C Form of Secretary’s Certificate ‑ Section 5.3(w)

D Form of Outside Counsel Opinion for the Lessor – Section 5.3(x)

E Form of Officer’s Certificate (Completion) – Section 5.5


F	Form of Construction Agent Certificate – Section 5.17(b)(i)(A)

G Form of Guarantor Joinder and Assumption Agreement – Section 6B.9

H Form of Compliance Certificate - Appendix A definition of “Compliance Certificate”

SCHEDULES

Schedule I Lessor Commitment

Schedule 6.1A(a) Jurisdictions of Organization and Qualification

Schedule 6.1A(b) Subsidiaries and Capitalization

Schedule 6.1A(f) Tax Matters

Schedule 6.1A(i) ERISA Plans

Schedule 6.1A(l) Material Contracts

Schedule 6.1A(q) Real Property

Schedule 6.1A(w) Insurance

Schedule 6.1A(x) Labor and Collective Bargaining Agreements

Schedule 8.3B(a) Existing Indebtedness

Schedule 8.3B(b) Existing Liens

Schedule 8.3B(c) Existing Loans, Advances and Investments

Schedule 8.3B(g) Transactions with Affiliates

APPENDICES

Appendix A ‑ Rules of Usage and Definitions

PARTICIPATION AGREEMENT

THIS PARTICIPATION AGREEMENT dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, this “Agreement”) is by and among NVIDIA LAND DEVELOPMENT, LLC, a Delaware limited liability company (the “Construction Agent” or “Lessee”); the various entities which are parties hereto from time to time as guarantors (individually, a “Guarantor” and collectively, the “Guarantors”); WACHOVIA SERVICE CORPORATION, a Delaware corporation (the “Lessor”); the various banks and other lending institutions which are parties hereto from time to time as credit lenders (individually, a “Credit Lender” and collectively, the “Credit Lenders”); the various banks and other lending institutions which are parties hereto from time to time as mortgage lenders (individually, a “Mortgage Lender” and collectively, the “Mortgage Lenders”); and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as the agent for the Credit Lenders and the Mortgage Lenders and, respecting the Security Documents, as agent for the Secured Parties (in such capacity, the “Agent”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto.

WITNESSETH:

A. WHEREAS, subject to the terms and conditions of this Agreement, the Agency Agreement and the other Operative Agreements (as defined herein), Lessor desires to (i) ground lease the Land, including the existing Improvements thereon, from the Construction Agent, and (ii) fund the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property by the Construction Agent; and

B. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the Property pursuant to this Agreement, the Lease and the other Operative Agreements;

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.
THE FINANCING.

Subject to the terms and conditions of this Agreement and the other Operative Agreements and in reliance on the representations and warranties of each of the parties hereto contained herein or made pursuant hereto, (i) the Credit Lenders have agreed to make Credit Loans to the Lessor from time to time in an aggregate principal amount of up to the aggregate amount of the Credit Loan Commitments, (ii) the Mortgage Lenders have agreed to make Mortgage Loans to the Lessor from time to time in an aggregate principal amount of up to the aggregate amount of the Mortgage Loan Commitments and (iii) the Lessor has agreed to make Lessor Advances from time to time in an aggregate principal amount of up to the Lessor Commitment, respectively, to permit the Lessor to lease and develop the Property. In consideration of the receipt of the proceeds of the Loans, the Lessor will issue the Notes. The Loans shall be made and the Notes shall be issued pursuant to the applicable Loan Agreements. The Lessor Advances shall be made pursuant to this Agreement. The obligations of the Lessor to the Lenders under the applicable Operative Agreements (including the Loans) shall be secured by the Collateral.

SECTION 2.
[RESERVED].

SECTION 3.
SUMMARY OF TRANSACTIONS.


3.1	Operative Agreements.

On the date hereof, each of the respective parties hereto and thereto shall execute and deliver this Agreement, the Agency Agreement, the Lease, each applicable Ground Lease, the Mortgage Loan Agreement, the Credit Loan Agreement, the Mortgage Notes, the Credit Notes, the Security Agreement, each applicable Mortgage Instrument and such other documents, instruments, certificates and opinions of counsel as agreed to by the parties hereto.


3.2	Property Purchase.

On the Closing Date and subject to the terms and conditions of this Agreement (a)(i) the Lenders will make Loans in accordance with Sections 1 and 5 of this Agreement and the terms and provisions of the applicable Loan Agreement and (ii) the Lessor will make Lessor Advances in accordance with Sections 1 and 5 of this Agreement, (b) the Lessor will ground lease the Land and all existing Improvements thereon pursuant to the Ground Lease and grant the Agent a lien on the Property by execution of the required Security Documents, (c) the Agent, the Lessee and the Lessor shall execute and deliver a memorandum regarding the Lease and (d) the Term shall commence with respect to the Property.


3.3	Construction of Improvements; Commencement of Basic Rent.

Construction Advances will be made with respect to the Improvements to be constructed and with respect to ongoing Work regarding the Equipment and construction of the Improvements, in each case, pursuant to the terms and conditions of this Agreement and the Agency Agreement. The Construction Agent will act as a construction agent on behalf of the Lessor respecting the Work regarding the Equipment, the construction of the Improvements and the expenditures of the Construction Advances related to the foregoing. During the Construction Period, the Construction Agent shall have sole management and control over, and

shall be solely responsible for, the construction, means, methods, sequences and procedures with respect to the Property. The Construction Agent shall promptly notify the Lessor upon Completion of the Improvements and the Lessee shall commence to pay Basic Rent as of the Rent Commencement Date.

SECTION 4.
THE CLOSINGS.


4.1	Closing Date.

All documents and instruments required to be delivered on the Closing Date shall be delivered at the offices of Moore & Van Allen, PLLC, Charlotte, North Carolina, or at such other location as may be determined by the Lessor, the Agent and the Lessee.


4.2	Closing Date; Acquisition Advance; Construction Advances.

The Construction Agent shall deliver to the Agent a requisition (a “Requisition”), in the form attached hereto as EXHIBIT A or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion, (a) no later than a time as reasonably agreed with the Agent regarding the Closing Date Advance, (b) 3:00pm (Charlotte, North Carolina time) at least three (3) Business Days prior to the proposed Borrowing Date and the date of any proposed Lessor Advance in connection with the Acquisition Advance pursuant to Section 5.3 (except with respect to the Acquisition Advance made as of the Closing Date, as such shall be subject to the consent of the Financing Parties, in their commercially reasonable discretion, in which case such Requisition shall be delivered as of the Closing Date) and (c) at least seven (7) days prior to the proposed Borrowing Date and the proposed Lessor Advance, in each case in connection with each Construction Advance pursuant to Section 5.4. Each Requisition shall (x) specify the desired amount of such Borrowing and Lessor Advance which in the aggregate must be in a minimum amount of $500,000 and (y) specify the date of such Borrowing and Lessor Advance. Delivery of a Requisition shall be deemed to be a certification by the Lessee that all applicable conditions precedent (except those relating to performance by the Financing Parties) under Sections 5.3 and/or 5.4 of this Agreement shall have been satisfied by the date of the particular Advance, unless waived by the Agent. No Requisition shall be required for the funding by the Lessor and the Lenders of an Advance to pay Transaction Expenses or for the increase of Loan amounts or Lessor Advances described in Section 5.1(b). As a clarification of the foregoing and not in limitation thereof, the Construction Agent shall be permitted to submit Requisitions (and the Lessor and the Lenders shall fund Advances therefor, subject to the terms of the Operative Agreements) during the Construction Period for Property Costs, including with regard to (u) the costs and expenses required for construction of the Improvements in accordance with the Construction Documents, (v) certain amounts of Supplemental Rent (including, regarding the Property, for Taxes, utilities, insurance premiums, Casualty occurrences and Condemnation occurrences), (w) capitalized interest on the Loans, (x) capitalized Yield on the Lessor Advances, (y) rent payable pursuant to the Ground Lease and (z) the Transaction Expenses.

SECTION 5.
FUNDING OF ADVANCES; CONDITIONS PRECEDENT;
REPORTING REQUIREMENTS ON COMPLETION DATE; THE LESSEE’S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS; OTHER PROVISIONS.


5.1	General.

(a) To the extent funds have been advanced to the Lessor pursuant to this Section 5, the Lessor will use such funds from time to time in accordance with the terms and conditions of this Agreement and the other Operative Agreements (i) at the direction of the Construction Agent to ground lease the Land in accordance with the terms of this Agreement, the Agency Agreement and the other Operative Agreements, (ii) at the direction of the Construction Agent to make Advances to the Construction Agent to permit the acquisition, testing, engineering, installation, development, construction, modification, design, and renovation, as applicable, of the Property (or components thereof) in accordance with the terms of the Agency Agreement and the other Operative Agreements (including construction of the Improvements and acquisition and installation of the Equipment), (iii) to pay Transaction Expenses and (iv) otherwise pursuant to the terms of the Operative Agreements.

(b) On each Scheduled Payment Date during the period prior to the Rent Commencement Date, and as long as no Lease Event of Default shall have occurred and be continuing (i) the Credit Lenders’ Credit Loans shall automatically be increased by the amount of interest accrued and unpaid on such Credit Loans for such period, and the Credit Loan Property Cost shall be automatically increased by such amount, (ii) the Mortgage Lenders’ Mortgage Loans shall automatically be increased by the amount of interest accrued and unpaid on such Mortgage Loans for such period, and the Mortgage Loan Property Cost shall be automatically increased by such amount, and (iii) the principal amount of the Lessor Advance shall automatically be increased by the amount of Lessor Yield accrued and unpaid on such Lessor Advance for such period, and the Lessor Property Cost shall be automatically increased by such amount.


5.2	Procedures for Funding.

(a) The Construction Agent shall designate the date for Advances hereunder in accordance with the terms and provisions hereof; provided, however, it is understood and agreed that no more than one (1) Advance (excluding any conversion and/or continuation of any Loans or Lessor Advances) may be requested during any calendar month and that no such designation shall be required for the funding of Transaction Expenses or for the increase of Loan amounts or Lessor Advances described in Section 5.1(b); provided, further, except with respect to the Closing Date Advance and the Acquisition Advance concurrent therewith, if any, the funding of Transaction Expenses or the increase of Loan amounts or Lessor Advances described in Section 5.1(b), no Advance shall be requested on a date that is not a Payment Date; provided, further, the Closing Date Advance and the Acquisition Advance, if concurrent with the Closing Date Advance, must be approved by the Agent, in its commercially reasonable discretion, which discretion shall include the right to require a funding indemnity letter regarding any such Advance on the Closing Date based on the LIBOR Rate. The Construction Agent shall deliver a Requisition to the Agent in connection with each Advance, as specified in more detail in Section 4.2.

(b) Each Requisition shall: (i) be irrevocable, (ii) request funds in an amount that is not in excess of the total aggregate of the Available Mortgage Loan Commitments plus the Available Credit Loan Commitments plus the Available Lessor Commitment at such time, and (iii) request that the Lessor make Lessor Advances and that the Lenders make Loans to the Lessor for the payment of Property Costs that have previously been incurred or are to be incurred on the date of such Advance to the extent such were not subject to a prior Requisition, in each case as specified in the Requisition.

(c) (i) Subject to the satisfaction of the conditions precedent set forth in Section 5.3 or 5.4, as applicable, and subject to Section 5.16 hereof with respect to the funding of Uninsured Force Majeure Losses, on the Closing Date or the date on which the Construction Advance (other than as specified in Section 5.2(c)(ii)) is to be made, as applicable, (A) each Credit Lender shall make a Credit Loan based on (but not to exceed) its Credit Loan Commitment in an amount such that the aggregate of all Credit Loans at such time shall be eighty-five percent (85%) of the Requested Funds specified in any Requisition plus (to the extent not so specified) any additional amount of Transaction Expenses, and (B) each Mortgage Lender shall make a Mortgage Loan based on (but not to exceed) its Mortgage Loan Commitment in an amount such that the aggregate of all Mortgage Loans at such time shall be ten percent (10%) of the Requested Funds specified in such Requisition plus (to the extent not so specified) any additional amount of Transaction Expenses, and (C) the Lessor shall make an advance based on its Lessor Commitment (each, a “Lessor Advance”) in an amount such that the aggregate of all Lessor Advances at such time shall be five percent (5%) of the Requested Funds specified in such Requisition plus (to the extent not so specified) any additional amount of Transaction Expenses, and (D) the total amount of such Credit Loans, Mortgage Loans and Lessor Advance made on such date shall (x) be used by the Lessor to pay Property Costs (including Transaction Expenses) within five (5) Business Days of the receipt by the Lessor of such Advance or (y) be advanced by the Lessor on the date of such Advance to the Construction Agent or the Lessee to pay Property Costs (including Transaction Expenses), as applicable, previously paid or incurred by the Construction Agent or the Lessee. Notwithstanding that the Operative Agreements state that Advances shall be directed to the Lessor, each Advance shall in fact be directed to the Construction Agent or the Lessee or to the Construction Agent’s or the Lessee’s designee (for the benefit of the Lessor) and applied by the Lessee (for the benefit of the Lessor) pursuant to the requirements imposed on the Lessor under the Operative Agreements.

(ii) Notwithstanding the foregoing, with respect to the final Construction Advance regarding the Property only and subject to the satisfaction of the conditions precedent set forth in Section 5.4, (A) each Credit Lender shall make a Credit Loan such that the aggregate Credit Loan Property Cost following such final Construction Advance shall equal eighty-five percent (85%) of the Property Cost (exclusive of any amount of Lessor Property Cost attributable to any Lessor Advance for any Uninsured Force Majeure Loss pursuant to Section 5.16), up to an aggregate principal amount equal to the aggregate of the Credit Loan Commitments, (B) each Mortgage Lender shall make a Mortgage Loan such that the aggregate Mortgage Loan Property Cost following such final Construction Advance shall equal ten percent (10%) of the Property Cost (exclusive of any amount of Lessor Property Cost attributable to any Lessor Advance for any Uninsured Force Majeure Loss pursuant to Section 5.16), up to an aggregate principal amount equal to the aggregate of the Mortgage Loan Commitments, and (C) the Lessor shall make an advance such that the aggregate Lessor Property Cost (exclusive of any amount of Lessor Property Cost attributable to any Lessor Advance for any Uninsured Force Majeure Loss pursuant to Section 5.16) following such final Construction Advance shall equal five percent (5%) of the Property Cost (exclusive of any amount of Lessor Property Cost attributable to any Lessor Advance for any Uninsured Force Majeure Loss pursuant to Section 5.16), up to an aggregate principal amount equal to the aggregate of the Lessor Commitments; provided, in the event that any Financing Party shall have previously funded an amount in excess of the amount otherwise required to be funded by such Financing Party under this Section 5.2(c)(ii) (any such amount, an “Overfunded Amount”), the Construction Agent shall pay (from

amounts received in connection with such final Construction Advance) to such Financing Party an amount equal to such Overfunded Amount; provided, notwithstanding the foregoing provisions of subsection (C), the Lessor shall remain responsible for funding in connection with events of Uninsured Force Majeure Loss pursuant to Section 5.16.

(d) With respect to an Advance to pay for actual Property Costs previously incurred or intended by the Construction Agent to be paid directly to third parties and not expended by the Lessor for such purpose on the date of such Advance, such amounts shall be held by the Agent until the applicable conditions precedent therefor under the Operative Agreements have been satisfied or, if such does not occur within three (3) Business Days of the date of the Agent’s receipt of such Advance, shall be applied regarding the applicable Advance to repay the Credit Lenders, the Mortgage Lenders and the Lessor and, subject to the terms hereof, of the Credit Loan Agreement and the Mortgage Loan Agreement, shall remain available for future Advances. Any such amounts held by the Agent shall be subject to the Lien of the Security Agreement and shall accrue interest or Lessor Yield, as appropriate, from the date advanced to the Agent until such amounts are repaid to the Credit Lenders, the Mortgage Lenders and the Lessor, as appropriate.

(e) All Operative Agreements which are to be delivered to the Lessor, the Agent, the Mortgage Lenders or the Credit Lenders shall be delivered to the Agent, on behalf of the Lessor, the Agent and the Lenders, and such items (except for Mortgage Notes, Credit Notes, the Ground Lease and chattel paper originals, with respect to which in each case there shall be only one original) shall be delivered with originals sufficient for the Lessor, the Agent and the Lenders. All other items which are to be delivered to the Lessor, the Agent or the Lenders shall be delivered to the Agent, on behalf of the Lessor, the Agent and the Lenders and such other items shall be held by the Agent. To the extent any such other items are requested in writing from time to time by the Lessor or any of the Lenders, the Agent shall provide a copy of such item to the party requesting it.

(f) Notwithstanding the completion of any closing under this Agreement pursuant to Section 5.3 or 5.4, each condition precedent in connection with any such closing may be subsequently enforced by the Agent (unless such has been expressly waived in writing by the Agent).


5.3	Conditions Precedent for the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders Relating to the Closing Date and the Advance of Funds for the Acquisition of a Property.

The obligations (i) on the Closing Date of the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders to enter into the transactions contemplated by this Agreement, including the obligation to execute and deliver the applicable Operative Agreements to which each is a party on the Closing Date, (ii) on the Closing Date of the Lessor to make Lessor Advances, of the Mortgage Lenders to make Mortgage Loans and of the Credit Lenders to make Credit Loans in order to pay Property Costs constituted as Transaction Expenses (the “Closing Date Advance”) and (iii) on the Closing Date of the Lessor to make Lessor Advances, of the Mortgage Lenders to make Mortgage Loans and of the Credit Lenders to make Credit Loans in order to pay (or reimburse the Construction Agent or the Lessee for the payment of) the Property Acquisition Cost (the “Acquisition Advance”), in each case (with regard to the foregoing Sections 5.3(i), (ii) and (iii)) are subject to the satisfaction or waiver by the Agent of the following conditions precedent on or prior to the Closing Date (to the extent such conditions precedent require the delivery of any agreement, certificate, instrument, memorandum, legal or other opinion, appraisal, commitment, title insurance commitment, lien

report or any other document of any kind or type, such shall be in form and substance satisfactory to the Agent, in its commercially reasonable discretion; notwithstanding the foregoing, the obligations of each party shall not be subject to any conditions contained in this Section 5.3 which are required to be performed by such party):

(a) the correctness of the representations and warranties of the parties to this Agreement contained herein, in each of the other Operative Agreements and each certificate delivered pursuant to any Operative Agreement in all material respects, except for any representation or warranty that is qualified by materiality or references Material Adverse Effect, which such representation or warranty shall be true and correct in all respects (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or references Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date);

(b) [Reserved];

(d) title to the Property shall conform to the representations and warranties set forth in Section 6.1(h) hereof;

(e) the Construction Agent or the Lessee shall have delivered to the Lessor a copy of the Ground Lease;

(f) there shall not have occurred and be continuing any Lease Default or Lease Event of Default and no Lease Default or Lease Event of Default will have occurred prior to or after giving effect to the Advance requested by each such Requisition;

(g) the Construction Agent or the Lessee shall have delivered to the Agent title insurance commitments to issue policies respecting the Property in an amount no less than the Property Cost, with such endorsements as the Agent deems necessary, in its commercially reasonable discretion, and which are customary for transactions of this type and in the applicable state, in favor of the Lessor and the Agent from a title insurance company selected by the Construction Agent or the Lessee and acceptable to the Agent, in its commercially reasonable discretion, but only with such title exceptions thereto that are Permitted Liens, the Construction Agent or the Lessee shall have delivered to the Agent a current title report;

(h) the Construction Agent or the Lessee shall have delivered to the Agent an environmental site assessment respecting the Property certified to the Agent prepared by an independent recognized professional selected by the Construction Agent or the Lessee and acceptable to the Agent, in its commercially reasonable discretion, and evidencing no Environmental Condition with respect to which there is more than a remote risk of loss;

(i) (i) the Construction Agent or the Lessee shall have delivered to the Agent an ALTA survey (with a flood hazard certification) respecting the Property certified to the Agent and the Lessor prepared by (A) an independent recognized professional selected by the Construction Agent or the

Lessee and acceptable to each of the Agent and the Lessor, in their commercially reasonable discretion and (B) in a manner and including such information as is required by the Agent, in its commercially reasonable discretion and (ii) the Agent shall have obtained the necessary documentation concerning flood hazard certification;

(j) counsel for the Lessee or the Construction Agent admitted in the state where the Property is located and otherwise acceptable to the Agent shall have issued to the Lessor, the Credit Lenders, the Mortgage Lenders and the Agent its legal opinion in such other form as is satisfactory to the Agent, in its commercially reasonable discretion, with respect to local law real property issues respecting the law where the Property is located;

(k) the Lessee shall have caused to be delivered to the Agent the Mortgage Instrument, Lessor Financing Statements and Lender Financing Statements respecting the Property, all in recordable form;

(l) the Lessee shall have caused to be delivered to the Agent a memorandum regarding the Lease, in the form attached to the Lease as Exhibit B, or in such other form as is acceptable to the Agent, in its commercially reasonable discretion, in recordable form;

(m) the sum of the Available Credit Loan Commitments plus the Available Mortgage Loan Commitment plus the Available Lessor Commitment will be sufficient to pay the Closing Date Advance and the Acquisition Advance;

(n) the Construction Agent or the Lessee shall have caused a copy of a memorandum of Ground Lease (or short form lease) to be delivered to the Agent for such Ground Lease together with a copy of the Ground Lease, in recordable form;

(o) the sum of the Available Credit Loan Commitments plus the Available Mortgage Loan Commitment plus the Available Lessor Commitment shall be sufficient for Completion of the Property pursuant to the Construction Documents;

(p) the Construction Agent or the Lessee shall have provided to the Agent a certificate of insurance evidencing the insurance with respect to the Property as required by the Lease or the Agency Agreement, as the case may be;

(q) the Construction Agent or the Lessee shall cause (i) Uniform Commercial Code lien searches, tax lien searches and judgment lien searches regarding the Lessee to be conducted (and copies thereof to be delivered to the Agent) in such jurisdictions as determined by the Agent by a nationally recognized search company acceptable to the Agent (unless such searches in such jurisdictions have previously been provided to the Agent or if the Agent causes the searches to be run themselves), and (ii) the liens referenced in such lien searches which are not Permitted Liens and which are objectionable to the Agent, in its commercially reasonable discretion, to be either removed or otherwise handled in a manner satisfactory to the Agent, in its commercially reasonable discretion;

(r) all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of the Operative Agreements and/or documents related thereto as the parties have agreed to record or file (and in any event all such taxes, fees and other charges in

connection with any and all UCC financing statements and fixture filings) and the payment of the title insurance premiums shall have been paid or provisions for such payment shall have been made to the satisfaction of the Agent, in its commercially reasonable discretion;

(s) each of the Operative Agreements to be entered into on such date shall have been duly authorized, executed and delivered by the parties thereto, enforceable against such parties, and shall be in full force and effect, and the Agent shall have received a fully executed copy of each of the Operative Agreements;

(t) [Reserved];

(u) the Agent shall have received (i) a certificate of an Officer of each Credit Party, dated as of the Closing Date, in the form attached hereto as EXHIBIT B or in such other form as is acceptable to the Agent, in its commercially reasonable discretion, attaching and certifying as to (A) its articles of incorporation or other charter documents, certified as of a recent date by the Secretary of State of its state of formation, (B) its by‑laws or other similar document, certified as of a recent date by an appropriate officer of the Credit Party, (C) the resolutions duly authorizing the execution, delivery and performance by it of each of the Operative Agreements to which it is or will be a party and (D) the incumbency and signature of persons authorized to execute and deliver on its behalf the Operative Agreements to which it is or will be a party and (ii) a good standing certificate (or local equivalent) from the appropriate office of the respective states where such Credit Party is formed and (except with regard to NVIDIA International Holdings Inc.) where the principal place of business of such Credit Party is located as to its good standing in each such state;

(v) [Reserved];

(w) the Agent shall have received (i) a certificate of the Secretary or an Assistant Secretary of the Lessor in the form attached hereto as EXHIBIT C or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion, attaching and certifying as to (A) its articles of incorporation or other equivalent charter documents certified as of a recent date by the Secretary of State of its state of formation, (B) its by‑laws or other similar document, certified as of a recent date by an appropriate officer of the Lessor, (C) the resolutions duly authorizing the execution, delivery and performance by the Lessor of each of the Operative Agreements to which it is or will be a party, and (D) the incumbency and signature of persons authorized to execute and deliver on its behalf the Operative Agreements to which it is a party and (ii) a good standing certificate (or local equivalent) from the appropriate office of the state where the Lessor is incorporated and where the principal place of business of the Lessor is located as to good standing in each such state;

(x) counsel for the Lessor acceptable to the Agent shall have issued to the Lessee, the Guarantors, the Lessor, the Credit Lenders, the Mortgage Lenders and the Agent its legal opinion in the form attached hereto as EXHIBIT D or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion;

(y) counsel for the Lessee reasonably acceptable to the Agent shall have issued to the Lessor, the Credit Lenders, the Mortgage Lenders and the Agent its legal opinion in such other form as is satisfactory to the Agent, in its commercially reasonable discretion;

(z) no law or regulation shall prohibit, and no order, judgment or decree of any court or governmental body, agency or instrumentality shall prohibit or enjoin Lessor from making the Lessor Advances, any Credit Lender from making the Credit Loans or any Mortgage Lender from making the Mortgage Loans;

(aa) in the case of the Credit Lenders, immediately after and giving effect to the applicable Credit Loans contemplated hereby, the aggregate outstanding Credit Loans do not exceed the Credit Loan Commitments and in the case of the Mortgage Lenders, immediately after and giving effect to the applicable Mortgage Loans contemplated hereby, the aggregate outstanding Mortgage Loans do not exceed the Mortgage Loan Commitments;

(bb) the Lessor shall have arranged to have an RVI Policy issued with respect to the Property from an insurer selected by the Lessor; provided, the premium for such RVI Policy shall not exceed a reasonable and customary amount; and

(cc) the Agent shall have received an Appraisal regarding the Property certified to the Agent and the Lessor prepared by (i) an independent recognized professional selected by the Agent and (ii) in a manner and including such information as is required by the Agent.


5.4	Conditions Precedent for the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders Relating to the Advance of Funds after the Acquisition Advance.

From and after the Closing Date Advance and the Acquisition Advance, the obligations of the Credit Lenders to make Credit Loans, of the Mortgage Lenders to make Mortgage Loans and of the Lessor to make Lessor Advances in connection with Advances to the Construction Agent to permit the acquisition, testing, engineering, installation, development, construction, modification, design, and renovation, as applicable, of the Property (or components thereof) in accordance with the terms of the Agency Agreement and the other Operative Agreements (including construction of the Improvements and acquisition and installation of the Equipment) are subject to the delivery of a Requisition, in the form as specified in and satisfying the requirements of EXHIBIT A to this Agreement.

As a clarification and not in limitation of the foregoing, and notwithstanding anything contained in the Operative Agreements to the contrary and except with respect to the Closing Date Advance and the Acquisition Advance, so long as (a) the Construction Agent delivers a Requisition, in the form as specified in and satisfying the requirements of EXHIBIT A to this Agreement, (b) the conditions precedent described in Section 5.4A were satisfied in full or waived by the Agent at each point in time that the Construction Agent paid or incurred any Property Cost for which the Construction Agent seeks reimbursement or direct payment pursuant to such Requisition and (c) after giving effect to the applicable Advances contemplated by such Requisition, the Credit Loans do not exceed the Credit Loan Commitment¸ the Mortgage Loans do not exceed the Mortgage Loan Commitment and the Lessor Advances do not exceed the Lessor Commitment, then to the extent each of the foregoing subsections (a), (b) and (c) have been satisfied, the Credit Lenders, the Mortgage Lenders and the Lessor shall each make their respective Construction Advances to reimburse the Construction Agent for all Property Costs referenced in such Requisition, in accordance with and subject to the limitations of the Operative Agreements, including Section 2.4(d) of the Agency Agreement.


5.4A	Conditions Precedent to Payment or Incurrence of Property Cost.

The Construction Agent shall not pay or incur any Property Cost after the Closing Date Advance and the Acquisition Advance unless the following conditions precedent have been satisfied or waived by the Agent as of the date(s) of each such payment or incurrence of Property Cost (to the extent such conditions precedent require the delivery of any agreement, certificate, instrument, memorandum, legal or other opinion, appraisal, commitment, title insurance commitment, lien report or any other document of any kind or type, such shall be in form and substance satisfactory to the Agent, in its commercially reasonable discretion):

(b) the performance by the parties to this Agreement of their respective agreements contained herein and in the other Operative Agreements to be performed by them on or prior to each such date;

(c) Prior to commencement of construction of the Property, the Construction Agent shall have delivered to the Financing Parties, and the Financing Parties shall have approved (which approval shall not be unreasonably withheld, conditioned or delayed) the builder’s risk insurance policy (including earthquake coverage) as required pursuant to Article XIV of the Lease;

(d) the sum of the Available Credit Loan Commitments plus the Available Mortgage Loan Commitments plus the Available Lessor Commitment will be sufficient for Completion pursuant to the Construction Documents;

(e) there shall not have occurred and be continuing any Lease Default or Lease Event of Default and no Lease Default or Lease Event of Default will have occurred after giving effect to the Construction Advance requested by the applicable Requisition;

(f) the title insurance policy delivered in connection with the requirements of Section 5.3(g) shall provide for (or shall be endorsed to provide for) insurance in an amount at least equal to the maximum total Property Cost indicated by the Construction Budget (as adjusted from time to time, including with regard to any additional Lessor Advances pursuant to Section 5.16) and there shall be no title change or exception objectionable to the Agent, in its commercially reasonable discretion, including any Lien for labor or materials;

(g) all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of the Operative Agreements (and in any event all such taxes, fees and other charges in connection with any and all UCC financing statements and fixtures filings) and the cost of any title endorsement or update shall have been paid or provisions for such payment shall have been made to the satisfaction of the Agent, in its commercially reasonable discretion;

(h) prior to the initial Construction Advance following the Closing Date, the Construction Agent shall have delivered to the Agent copies of the Plans and Specifications for applicable Improvements;

(i) prior to the initial Construction Advance following the Closing Date, the Construction Agent shall deliver to the Agent the Construction Budget;

(j) in the case of the Credit Lenders, immediately after and giving effect to the applicable Credit Loans contemplated by the applicable Requisition, the aggregate outstanding Credit Loans do not exceed the Credit Loan Commitments, in the case of the Mortgage Lenders, immediately after and giving effect to the applicable Mortgage Loans contemplated by the applicable Requisition, the aggregate outstanding Mortgage Loans do not exceed the Mortgage Loan Commitments and in the case of the Lessor, immediately after and giving effect to the applicable Lessor Advance contemplated by the applicable Requisition, the aggregate outstanding Lessor Advances do not exceed the Lessor Commitment;

(k) no applicable law or regulation shall prohibit, and no order, judgment or decree of any court or governmental body, agency or instrumentality shall prohibit or enjoin the Lessor from making the Lessor Advances, any Credit Lender from making the Credit Loans or any Mortgage Lender from making the Mortgage Loans;

(l) the requirements of Section 5.17 shall have been satisfied;

(m) with respect to any Advances not contemplated in the original applicable Construction Budget, including by the Lessor pursuant to Section 5.16, the Lessee shall have caused to be delivered to the Agent an amendment to the applicable Mortgage Instrument (as is acceptable to the Agent, with revisions as necessary to conform to statutory recording requirements and customary practice under Applicable Law); and

(n) Completion can be achieved by the Construction Period Termination Date.


5.5	Additional Reporting and Delivery Requirements on Completion Date.

On or prior to the Completion Date, the Construction Agent shall deliver to the Agent an Officer’s Certificate in the form attached hereto as EXHIBIT E or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion, specifying (a) the address for the Property, (b) the Completion Date, (c) the Property Cost and (d) that every representation and warranty of each Credit Party contained in the Operative Agreements to which it is a party is true and correct on and as of the Completion Date in all material respects, except for any representation or warranty that is qualified by materiality or references Material Adverse Effect, which such representation or warranty shall be true and correct in all respects (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or references Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date). The Agent shall have the right to reasonably contest the information contained in such Officer’s Certificate. Furthermore, on or prior to the Completion Date, the Construction Agent shall deliver or cause to be delivered to the Agent (unless previously delivered to the Agent) originals of the following relating to the Property, each of which shall be in form and substance acceptable to the Agent, in its commercially

reasonable discretion: (v) a title insurance endorsement regarding the title insurance policy delivered in connection with the requirements of Section 5.3(g), but only to the extent such endorsement is necessary to provide for insurance in an amount at least equal to the maximum total Property Cost and, if endorsed, the endorsement shall not include a title change or exception that has or could reasonably be expected to have a Material Adverse Effect; (w) an as‑built survey for the Property; (x) insurance certificates respecting the Property as required hereunder and under the Lease; (y) at the Lessor’s prior written request, an Appraisal regarding the Property; and (z) with respect to any Advances not contemplated in the original applicable Construction Budget, including by the Lessor pursuant to Section 5.16, the Lessee shall have caused to be delivered to the Agent an amendment to the applicable Mortgage Instrument (as is acceptable to the Agent, with revisions as necessary to conform to statutory recording requirements and customary practice under Applicable Law). In addition, on the Completion Date, the Construction Agent covenants and agrees that the recording fees, documentary stamp taxes or similar amounts required to be paid in connection with the related Mortgage Instrument shall have been paid in an amount required by Applicable Law, subject, however, to the obligations of the Lessor, the Mortgage Lenders and the Credit Lenders to fund such costs to the extent required pursuant to Section 7.1.


5.6	Restrictions on Liens.

On the Closing Date, the Construction Agent or the Lessee shall cause the Property to be free and clear of all Liens except Permitted Liens. On the date the Property is either sold to a third party in accordance with the terms of the Operative Agreements or, pursuant to Section 21.1(a) of the Lease, retained by the Lessor, the Lessee shall cause the Property to be free and clear of all Liens (other than Lessor Liens and such other Liens that are expressly set forth as title exceptions on the title commitment issued under Section 5.3(g) with respect to the Property, Liens for Taxes that are not yet due and such other Liens on the Property theretofore approved by the required Financing Parties in accordance with the Operative Agreements).


5.7	Payments.

Subject to Section 5.1(b), all payments of principal, interest, Lessor Advances, Lessor Yield, Fees and other amounts to be made by the Credit Parties under this Agreement or any other Operative Agreements (excluding Excepted Payments which shall be paid directly to the party to whom such payments are owed) shall be made to the Agent at the office designated by the Agent from time to time in Dollars and in immediately available funds, without set-off, deduction, or counterclaim. Subject to the definition of “Interest Period” in Appendix A attached hereto, whenever any payment under this Agreement or any other Operative Agreements shall be stated to be due on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time in such case shall be included in the computation of interest, Lessor Yield and fees payable pursuant to the Operative Agreements, as applicable and as the case may be.


5.8	Unilateral Right to Increase the Lessor Commitment, the Mortgage Loan Commitments and the Credit Loan Commitments.

Notwithstanding any other provision of any Operative Agreement or any objection by any Person (including any objection by the Lessee or the Construction Agent), (a) the Lessor, in its sole discretion, may unilaterally elect to increase its Lessor Commitment if necessary to fund Transaction Expenses, (b) each Mortgage Lender, in its sole discretion, may unilaterally elect to increase its Mortgage Loan Commitment if necessary to fund Transaction Expenses, and (c) each Credit Lender, in its sole discretion, may unilaterally

elect to increase its Credit Loan Commitments if necessary to fund Transaction Expenses. The Credit Parties shall promptly cause to be taken, executed, acknowledged or delivered, at the sole expense of the Lessee, all such further acts, conveyances, documents and assurances as the Financing Parties may from time to time reasonably request in order to carry out and effectuate the intent and purposes of this Section 5.8 (including the preparation and execution of a Requisition for amounts funded by any of the Financing Parties as a result of any increase in the Lessor Commitment, the Mortgage Loan Commitments or the Credit Loan Commitments pursuant to this Section 5.8).


5.9	Maintenance of the Lessee as a Wholly-Owned Entity.

From the Closing Date and thereafter until such time as all obligations of all Credit Parties under the Operative Agreements have been satisfied and performed in full, the Parent shall retain the Lessee as a Wholly-Owned Entity.


5.10	Rent Under the Ground Lease as Property Cost.

The parties to this Agreement hereby agree that the rent payable from time to time pursuant to the Ground Lease (from the Closing Date to and including the Completion Date) shall be an appropriate item of Property Cost to be funded through Advances.


5.11	Lessor Basic Rent Adjustment.

On the sixth Payment Date after the Rent Commencement Date, the Lessee shall make a payment of Supplemental Rent to the Lessor (for the account of the Lessor) equal to the lesser of (a) five percent (5%) of the then current Lessor Advances for the Property or (b) $1,000,000 (the “Accelerated Rent Amount”). Payment of the Accelerated Rent Amount shall be applied as a Dollar for Dollar reduction of the Lessor Advances. Beginning with the seventh (7th) Payment Date after the Rent Commencement Date, the parties to this Agreement agree that the Lessee shall reduce each of its payments of Lessor Basic Rent by the amount of Lessor Basic Rent due and payable on such Payment Date (each such individual reduction of Lessor Basic Rent for a given Payment Date may be referred to herein as a “Lessor Basic Rent Adjustment”); provided, if the Cumulative Lessor Basic Rent Adjustment is less than the Accelerated Rent Amount (the “Shortfall Amount”), then the Shortfall Amount shall be credited against each subsequent payment of Lessor Basic Rent, and the Lessee shall not pay any additional Lessor Basic Rent until the Shortfall Amount is reduced to zero. Each such Lessor Basic Rent Adjustment shall increase the Lessor Advances on a Dollar for Dollar basis. In any event, the Lessee shall reduce its payments of Lessor Basic Rent pursuant to the Lessor Basic Rent Adjustment until such time as the Cumulative Lessor Basic Rent Adjustment equals the Accelerated Rent Amount.


5.12	Limitation on Requested Advances regarding Available Credit Loan Commitments, Available Mortgage Loan Commitments and Available Lessor Commitment.

Neither the Lessor nor the Lessee shall submit any Requisition or any other request for funding pursuant to the Operative Agreements requesting that the Credit Lenders make Credit Loans in excess of the aggregate Available Credit Loan Commitments, requesting that the Mortgage Lenders make Mortgage Loans in excess of the aggregate Available Mortgage Loan Commitments or requesting any Lessor Advance in excess of the Available Lessor Commitment. No Credit Lender shall be obligated to make Credit Loans in excess of its Credit Loan Commitments, no Mortgage Lender shall be obligated to make Mortgage Loans in excess of its Mortgage Loan Commitment and the Lessor shall not be obligated to fund any Lessor Advance in excess of its Lessor Commitment.


5.13	Limitation on Purchase Option under the Lease.

The Lessee may purchase the Property pursuant to the Purchase Option in the Lease; provided, that in connection with the purchase of the Property in connection with the Purchase Option, Lessee (or its designee) shall have paid Termination Value for all, but not less than all, the Property.


5.14	Equity Cure Rights, Etc.

Each Credit Lender and Mortgage Lender agrees that if (i) (x) an Event of Default, which also constitutes a Lease Event of Default, shall have occurred and be continuing for a period of at least one hundred and five (105) days without any of the Notes having been accelerated or the Agent having exercised any remedy under the Lease intended to dispossess the Lessee of the Property, (y) the Notes have been accelerated pursuant to Section 6 of the respective Loan Agreement and such acceleration has not theretofore been rescinded, or (z) a notice of the intent of the Agent to foreclose on the Property or otherwise dispossess the Lessee of the Property (the “Enforcement Notice”) has been given pursuant to Section 17.2 of the Lease within the previous thirty (30) days, (ii) no Mortgage Loan Event of Default or Credit Loan Event of Default described in Section 6(a) (other than such an Event of Default caused by a Lease Event of Default) or Section 6(e) of either Loan Agreement shall have occurred and be continuing and (iii) the Lessor shall give written notice to the Agent of the Lessor’s intention to purchase all of the Notes in accordance with this paragraph, then, upon receipt within ten (10) Business Days after such notice from the Lessor of an amount equal to the aggregate unpaid principal amount of any unpaid Notes then held by the applicable Lender, together with accrued but unpaid interest thereon, to the date of such receipt (as well as any interest on overdue principal and, to the extent permitted by Applicable Law, overdue interest), plus the aggregate amount, if any, of all sums which the Lenders would be entitled to be paid before any payments were to be made to the Lessor but excluding any payment in the nature of a premium, each Lender will forthwith sell, assign, transfer and convey to the Lessor (without recourse or warranty of any kind other than of title to the Notes so conveyed) all of the right, title and interest of such Lender (other than rights to indemnity arising with respect to matters occurring prior to any such sale, assignment, transfer or conveyance to the Lessor) in and to the Property and the Operative Agreements held by such Lender, and the Lessor shall thereupon assume all of each Lender’s rights and obligations in such documents; provided, that no Lender shall be required to so convey unless (A) the Lessor shall have simultaneously tendered payment on all other Notes then outstanding pursuant to this paragraph and (B) such conveyance is not in violation of any Applicable Law. All charges and expenses required to be paid in connection with the issuance of any new Notes in connection with this paragraph shall be borne by the Lessor.


5.15	[Reserved].


5.16	Special Provision Regarding the Funding of Uninsured Force Majeure Losses.

Notwithstanding any provision herein or in any other Operative Agreement to the contrary, the parties hereto agree that, upon the occurrence of a Force Majeure Event that occurs during the Construction Period with respect to the Property and subject to the satisfaction of the conditions for a Construction Advance set forth in Section 5.4, the Lessor shall make a Lessor Advance (in addition to any Lessor Advance otherwise made pursuant to the provisions of Section 5.2(c)) in an amount sufficient to pay any Uninsured Force Majeure Loss attributable to such Force Majeure Event, and such amount so advanced shall be added to the Lessor Property Cost for the Property.


5.17	Construction Servicer and Inspection Consultant.

(a) The Agent shall be permitted to hire (i) the Construction Servicer to act as the Agent’s agent to review the submissions by or on behalf of the Construction Agent in connection with the Requisitions and (ii) the Inspection Consultant to act as the Agent’s agent to oversee construction of the Property. Promptly after the Closing Date, the Agent shall, or shall cause each of the Construction Advisers to, provide the notice information for the Construction Advisers to the Construction Agent. Upon submission by the Agent (on behalf of the Construction Advisers) to the Construction Agent of invoices (including payment instructions) for the respective services of the Construction Advisers from time to time, the Construction Agent shall include all such invoiced amounts in its next Requisition, unless any such invoice is submitted less than three (3) Business Days prior to the date of submission of the Requisition to the Construction Agent in which case such invoiced amounts shall be included in the next following Requisition. Without the need for any further action, all such invoiced amounts from the Construction Advisers shall constitute Transaction Expenses and once those invoiced amounts are paid, they shall be added to the Property Cost. As more fully described below, and not in limitation of the other conditions precedent of Sections 5.4 and 5.4A, the determination by either of the Construction Advisers that any Requisition and/or the supporting documentation therefor is not satisfactory, in its commercially reasonable judgment, shall be a basis to instruct the Construction Agent to cease immediately to pay or incur any additional Property Costs from and after such date, and the Construction Agent hereby agrees to comply immediately with any such instruction.

(b) As referenced in Section 5.4A(l) and in addition to the other requirements of Section 5.4A, the Construction Agent shall pay or incur any Property Cost after the Closing Date if, and only if, the following conditions precedent have been satisfied or waived by the Agent as of the date of each such payment or incurrence of Property Cost:

(i) On or prior to the Monthly Notice Date, the Construction Agent shall furnish or cause to be furnished to the Agent, in all cases, and to the Construction Servicer and/or the Inspection Consultant as set forth below or as otherwise directed by the Agent, the prior month’s Requisition and the following documents covering each disbursement included in the prior month’s Requisition and in each case with regard to the Property, in form and substance satisfactory to the Agent (and for this purpose, it is acknowledged that the Agent may consult with the Construction Advisers to determine what is satisfactory), in its commercially reasonable discretion:

(A) To the Agent and the Construction Servicer, a completed certificate of the Construction Agent in the form attached hereto as EXHIBIT F or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion, (the “Construction Agent Certificate”), and the prior month’s completed Requisition, each executed by an authorized representative of the Construction Agent;

(B) To the Agent, the Construction Servicer and the Inspection Consultant, a completed standard AIA Form G702 and Form G703 signed by the applicable general contractor and the applicable architect, and sworn statements and conditional waivers of lien covering all work to be paid with the proceeds of the currently contemplated Advances, which shall become unconditional upon such payment;

(C) To the Agent, the Construction Servicer and the Inspection Consultant, fully executed copies of any proposed or executed change orders on standard AIA Form G701 form or, if substantively similar, the form used by the general contractor, or other form acceptable in writing to the Agent, in its commercially reasonable discretion, which have not been previously furnished and which require and are not valid without the signatures of the general contractor and the Construction Agent;

(D) To the Agent and the Construction Servicer, copies of all permits and other Governmental Actions required under Law to be obtained and not delivered to the Agent and Construction Servicer prior thereto, and in any event copies of all such permits and other Governmental Actions not previously delivered and then needed in connection with the Property;

(E) To the Agent and the Inspection Consultant executed copies of all subcontracts and supplier contracts executed between the dates of the two prior months’ Requisitions between the applicable general contractor and a subcontractor or a supplier, as applicable, in each case that provides for an aggregate contract price equal to or greater than $1,000,000;

(F) To the Agent, the Construction Servicer and the Inspection Consultant, such other instruments, documents and information as the Construction Servicer or the Inspection Consultant may request, in their commercially reasonable discretion, including conditional waivers of lien covering all work by the applicable general contractor or any subcontractors or suppliers (to the extent such subcontractor or suppliers meet the $1,000,000 threshold of the foregoing subsection (E)) paid with the proceeds of the prior Advances;

(G) To the Agent, the Construction Servicer and the Inspection Consultant, an updated Construction Budget, showing the sources and uses by cost category in form acceptable to the Agent, in its commercially reasonable discretion; and

(H) To the Agent, the Construction Servicer and the Inspection Consultant regarding each requested disbursement of Transaction Expenses, invoices which (1) are in writing, (2) contain the applicable vendor’s name and address, on letterhead if available, (3) contain the Construction Agent’s name and the location of the project and (4) contain an invoice number and amount.

(ii) In connection with the review of each prior month’s Requisition, the Agent and the Construction Servicer shall have received a report, satisfactory to each of them, in their commercially reasonable discretion, of the Inspection Consultant, reflecting its periodic site observation and review of the documents substantiating the Property Costs being requested pursuant to the prior month’s Requisition, including progress and quality of the Improvements, the construction schedule and related Construction Documents. The Inspection Agent shall deliver such report not later than the Business Day next following six (6) days after receipt by the Agent, the Construction Servicer and the Inspection

Consultant, as applicable, of all items that the Construction Agent is required to provide pursuant to Section 5.17(b)(i).

(iii) On the Business Day next following seven (7) days after receipt by the Agent, the Construction Servicer and the Inspection Consultant, as applicable, of all items that the Construction Agent is required to provide pursuant to Section 5.17(b)(i), the Agent shall request the Construction Advisers to provide either a written approval or a written disapproval of the prior month’s Requisition indicating the reasons for any such disapproval. The Agent shall share, or shall cause the Construction Advisers to share, promptly with the Construction Agent the certificate or other written communication from the Construction Advisers regarding any such approval/disapproval.


5.18	Extension of Target Construction Period Termination Date.

If the Construction Agent becomes aware of a Force Majeure Event a result of which the Completion cannot reasonably be expected to occur on or before the Target Construction Period Termination Date, then the Financing Parties shall, at the written request of the Construction Agent accompanied by the certificate hereinafter described, in good faith, but for a period not in excess of twenty (20) days (provided, that such period shall not extend beyond the Target Construction Period Termination Date), discuss the terms and conditions applicable to an extension of the Target Construction Period Termination Date to enable the Construction Agent to effect Completion on or prior to such extended date after the Target Construction Period Termination Date. During such twenty (20) day period, none of the Financing Parties may exercise any remedy under any Operative Agreement solely as a result of the Construction Agent being unable to effect Completion by the Target Construction Period Termination Date. It is understood and agreed that while the Lenders and the Lessor are not obligated to extend the Target Construction Period Termination Date for any reason, any such extension shall be effected pursuant to the prior approval of the Majority Credit Lenders, the Majority Mortgage Lenders and the Lessor. In connection with any request for any extension of the Target Construction Period Termination Date, the Construction Agent shall deliver to the Financing Parties (a) a written explanation detailing the reasons why Completion will be unable to occur prior to the Target Construction Period Termination Date and how such delays will be rectified and (b) a confirmation to the effect that the extension of the Construction Period will allow Completion to occur prior to the extended date after the Target Construction Period Termination Date. If by the end of such twenty (20) day period (or, if sooner, the Target Construction Period Termination Date), the Construction Agent is unable to obtain approval for such postponement, then the rights and remedies of the parties with respect thereto will be governed by the Agency Agreement.


5.19	Reassignment of Construction Contracts.

Promptly after any purchase of the Property by the Lessee pursuant to the Operative Agreements or by any third party pursuant to Article XXI of the Lease, the Lessor, subject to the terms of this Section 5.19, shall assign to the Lessee (or its designee) or to such third party, as applicable, (with such assignment documents to be on forms reasonably acceptable to the Lessor and the applicable assignee) all right, title and interest of the Lessor in and to any Construction Documents, to the extent such Construction Documents had been previously assigned to the Lessor by the Parent or any of the Parent’s Subsidiaries. Such assignment by the Lessor shall be free and clear of the Lien of the Lease, the Lien of the Security Documents and any Lessor Liens (but otherwise without representation or warranty of any kind). Notwithstanding the foregoing, such assignment by the Lessor shall be subject to the retention by the Lessor, and the Lessor shall not so

assign, any rights of indemnification pursuant to any such construction contracts in favor of the Lessor with respect to the period of time in which the Lessor was a party to any such applicable construction contract and without regard to whether any indemnified claim arises prior to or after the date of such assignment by the Lessor.


5.20	Notices from the Construction Agent/the Lessee.

If the Construction Agent implements any revision, amendment or modification to the Plans and Specifications pursuant to Section 3.2(b) of the Agency Agreement, then the Construction Agent shall provide prompt notice thereof to the Agent. If the Lessee makes any Modification to the Property, as referenced in Section 11.1 of the Lease, that shall or could reasonably be expected to have a Material Adverse Effect, then the Lessee shall provide prompt notice thereof to the Agent.


5.21	Ratable Reduction of Commitments.

Any reduction in the Commitments shall be on a ratable basis, with (a) the Credit Loan Commitments being reduced by eighty‑five percent (85%) of any such aggregate Commitment reduction, (b) the Mortgage Loan Commitments being reduced by ten percent (10%) of any such aggregate Commitment reduction and (c) the Lessor Commitments being reduced by five percent (5%) of any such aggregate Commitment reduction.

SECTION 5A.
LESSOR ADVANCE

5A.1 Procedure for Lessor Advance.

(a) Upon receipt from the Construction Agent by the Agent of a Requisition pursuant to Section 4.2, and subject to the terms and conditions of this Agreement, the Lessor shall make an Advance in favor of the Construction Agent under the Lessor Commitment equal to five percent (5%) of the amount requested in such Requisition on the applicable Closing Date or on the date for any Construction Advance. The Lessor Advance shall accrue yield at the Lessor Yield from time to time.

(b) To the extent that, subject to Sections 9.1(d) and 9.2(d), the Lessor shall have elected to terminate or reduce the amount of the Credit Loan Commitments or the Mortgage Loan Commitments pursuant to Section 2.5(a) of the applicable Loan Agreement, a pro rata election shall be deemed to have been made with respect to the Lessor Commitment. On any date on which the Credit Loan Commitments or the Mortgage Loan Commitments shall be reduced to zero (0) as a result of a Credit Loan Event of Default, a Mortgage Loan Event of Default or otherwise, as the case may be, the Lessor Commitment shall automatically be reduced to zero (0).

5A.2 Lessor Yield.

(a) The Lessor Advance shall bear yield calculated at the rate of Lessor Yield applicable from time to time. Subject to Section 5.1(b), the Lessee shall pay as Basic Rent to the Agent for distribution to the Lessor the Lessor Yield in arrears on each Scheduled Payment Date or as otherwise provided herein or in Section 8.7 of this Agreement.

(b) If all or a portion of Lessor Yield shall not be received by the Agent for distribution to the Lessor when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall, without limiting the rights of the Lessor hereunder or under any other Operative

Agreement, bear interest at the Lessor Overdue Rate, in each case from the date of nonpayment until paid (whether after or before judgment) and shall be paid upon demand. Upon the occurrence and during the continuance of any Lease Event of Default or Agency Agreement Event of Default, Lessor Yield shall, at the option of the Lessor, be calculated at the Lessor Overdue Rate.

5A.3 Scheduled Return of Lessor Advance.

Subject to the limitations on the Lessee’s payment obligations in connection with an election of the Sale Option under the Lease, the outstanding amount of the Lessor Advance shall be due in full on the Expiration Date. On the Expiration Date, subject to the terms of this Agreement and the Lease, the Agent on behalf of the Lessor shall receive from the Lessee under the Lease the outstanding amount of the Lessor Advance then due, together with all accrued but unpaid Lessor Yield and all other amounts due to Lessor under the Operative Agreements.

5A.4 Early Return of Lessor Advance.

(a) Subject to Sections 11.2(e), 11.3 and 11.4 of this Agreement and further subject to corresponding and concurrent prepayment of the Credit Loans and the Mortgage Loans pursuant to Section 2.6(a) of the Credit Loan Agreement and the Mortgage Loan Agreement, respectively, the Lessor Advance may at any time and from time to time be prepaid by the Lessee as a payment of Supplemental Rent, in whole or in part, without premium or penalty, upon at least three (3) Business Days’ irrevocable notice to the Agent, on behalf of the Lessor, specifying the date and amount of prepayment of the Lessor Advance. Upon receipt of such notice, the Agent shall promptly notify the Lessor thereof. If such notice is given, the amount of the Lessor Advance specified in such notice shall be due and payable on the date specified therein, together with all accrued but unpaid Lessor Yield and all other amounts due to Lessor under the Operative Agreements. Amounts of the Lessor Advance prepaid shall permanently decrease the Lessor Commitment and the Available Lessor Commitment, and such amounts may not be readvanced. Notwithstanding the foregoing, (i) amounts so prepaid in favor of the Lessor must be distributed in accordance with Section 8.7 of this Agreement and (ii) there shall be no such prepayment of the Credit Loans or the Mortgage Loans in connection with the prepayment of the Lessor Advance pursuant to this Section 5A.4(a) made with regard to any Lessor Basic Rent Adjustment.

(b) If on any date the Agent or the Lessor shall receive any payment in respect of (i) any Casualty, Condemnation or Environmental Violation pursuant to Section 15.1(a) or 15.1(g) or Article XVI of the Lease (excluding any payments in respect thereof which are payable to Lessee in accordance with the Lease), or (ii) the Termination Value in connection with the delivery of a Termination Notice pursuant to Article XVI of the Lease, or (iii) the Termination Value of the Property or such other applicable amount in connection with the exercise of a Purchase Option under Article XX of the Lease or the exercise of the option of the Lessor to transfer the Property to the Lessee pursuant to Section 20.3 of the Lease or (iv) any other payment required to be made or elected to be made by the Construction Agent or the Lessee to the Lessor pursuant to the terms of the Agency Agreement or the Lease, then in each case, the Agent or the Lessor shall receive such payment to be distributed in accordance with Section 8.7 of this Agreement.

(c) Upon the occurrence of any Agency Agreement Event of Default or any Lease Event of Default, the obligation to repay the Lessor Advances shall automatically accelerate and such shall be due and payable in full, together with accrued but unpaid Lessor Yield thereon and all other amounts owing to the Lessor under the Operative Agreements.

5A.5 Computation of Lessor Yield.

(a) Lessor Yield shall be calculated on the basis of a year of three hundred sixty (360) days for the actual days elapsed.

(b) Pursuant to Section 12.12 of this Agreement, the calculation of Lessor Yield under this Section 5A.5 shall be made by the Agent. Each determination of Lessor Yield by the Agent shall be conclusive and binding in the absence of manifest error.

(c) If the LIBOR Rate cannot be determined by the Agent in the manner specified in the definition of the term “Lessor Yield”, then commencing on the Scheduled Interest Payment Date next occurring and continuing until such time as such LIBOR Rate can be determined by the Agent in the manner specified in the definition of such term, the outstanding Lessor Advance shall bear a yield at the ABR.

SECTION 6.
REPRESENTATIONS AND WARRANTIES.


6.1	Representations and Warranties of Each Credit Party.

Effective as of the Closing Date, the date of each Advance and the Rent Commencement Date (except to the extent any representation and warranty is otherwise specifically limited to one or more specific dates), each Credit Party represents and warrants to each of the other parties hereto that:

(a) Upon the execution and delivery of the Lease, (i) the Lessee will have unconditionally accepted the Property and will have a valid leasehold interest in the Property, subject only to Permitted Liens, and (ii) no offset will exist with respect to Rent or other sums payable under the Lease;

(b) (i) The Security Documents create, as security for the Secured Obligations, valid and enforceable security interests in, and Liens on, all of the Collateral, subject only to Permitted Liens, in favor of the Agent, for the benefit of the Secured Parties. Upon recordation of the Mortgage Instrument in the real estate recording office in the county or parish in which the Property is located, the Lien created by the Mortgage Instrument in the real property described therein shall be a perfected first priority deed of trust on Lessee’s interest in the Property and a perfected first priority leasehold estate in Lessor’s leasehold interest in the Property pursuant to the Ground Lease, in each case subject only to Permitted Liens in favor of the Agent, for the benefit of the Secured Parties. To the extent that the security interests in the portion of the Collateral comprised of personal property can be perfected by filing in the filing office in the state where the Lessee is located for purposes of the UCC, upon filing of the Lender Financing Statements in such filing offices, the security interests created by the Security Agreement shall be perfected first priority security interests (subject only to Permitted Liens) in such personal property in favor of the Agent, for the benefit of the Secured Parties; and

(ii) The Lease creates, as security for the obligations of the Lessee under the Lease, valid and enforceable security interests in, and Liens on, the Property, subject only to Permitted Liens, in favor of the Lessor. Upon recordation of the memorandum of the Lease (or a short form lease) and the memorandum of a Ground Lease (or a short form lease) in the real estate recording office in the real estate recording office in the county or parish in which the Property is located, the Lien created by the Lease in the real property described

therein (or, in the case of a Ground Lease, on the leasehold estate under such Ground Lease) shall be a perfected first priority lien on the Property subject only to Permitted Liens in favor of the Lessor, which rights pursuant to the Lessor Financing Statements are assigned to the Agent, for the benefit of the Secured Parties. To the extent that the security interests in the portion of the Property comprised of personal property can be perfected by the filing in the filing office in the state where the Lessee is located for purposes of the UCC, upon filing of the Lessor Financing Statements in such filing offices, a security interest created by the Lease shall be a perfected first priority security interests (subject only to Permitted Liens) in such personal property in favor of the Lessor, which rights pursuant to the Lessor Financing Statements are assigned to the Agent, for the benefit of the Secured Parties.

(c) The Plans and Specifications will be prepared prior to the commencement of construction in accordance with all applicable Legal Requirements (including all applicable Environmental Laws and building, planning, zoning and fire codes), except to the extent the failure to comply therewith, individually or in the aggregate, shall not have and would not reasonably be expected to have a Material Adverse Effect. Upon completion of the Improvements in accordance with the Plans and Specifications, such Improvements will be within any building restriction lines and will not encroach in any manner onto any adjoining land (except as permitted by express written easements or those encroachments which have been approved by the Agent).

(d) To the best of the knowledge of the Credit Parties, all written information and written materials which have been prepared and provided by the Credit Parties to (i) an Appraiser in connection with an Appraisal are true and accurate in all material respects on the date as of which such written information and written materials are dated or certified, except for such inaccuracies or misstatements which would not have a Material Adverse Effect, and are not incomplete by omitting to state any material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances under which such information was provided and (ii) the Lessor with respect to the Property is true and accurate on the date as of which such written information and materials are dated or certified, except such as would not reasonably be expected to have a Material Adverse Effect.

(e) Nothing contained in Section 11 limits any payment obligations to additional insureds or loss payees with respect to any insurance policies required to be maintained by the Lessee pursuant to Article XIV of the Lease and amounts payable under such insurance policies to or for the benefit of such additional insureds or loss payees are not limited by the provisions of Section 5.4 of the Agency Agreement.

(f) The location of the Construction Agent and the Lessee for purposes of the UCC is the State of Delaware and, respecting the Construction Agent and the Lessee, its principal place of business, chief executive office and office where the documents, accounts and records related to the transactions contemplated by this Agreement and each other Operative Agreement are located at 2701 San Tomas Expressway, Santa Clara, California 95050.

(g) The Property is a Permitted Facility which consists of (i) unimproved Land, (ii) Land and existing Improvements thereon which Improvements are either suitable for occupancy at the time of acquisition or ground leasing or will be renovated and/or modified in accordance with the terms of this Agreement, and/or (iii) Equipment.

(h) The Lessor will have a valid ground leasehold interest enforceable against the Lessee in accordance with the terms of the Ground Lease, subject only to Permitted Liens.

(i) The Property complies with all Insurance Requirements and all standards of Lessee with respect to similar properties owned by the Lessee or Subsidiaries (direct or indirect) or Affiliates of the Lessee.

(j) The Property complies with all Legal Requirements as of such date (including all zoning and land use laws and Environmental Laws), except to the extent that failure to comply therewith, individually or in the aggregate, shall not have and would not reasonably be expected to have a Material Adverse Effect and there is not and has not been any Environmental Condition at the Property, except as shall not and would not reasonably be expected to have a Material Adverse Effect.

(k) All utility services and facilities necessary for the construction and operation of the Improvements and the installation and operation of the Equipment regarding the Property (including gas, electrical, water and sewage services and facilities) are available at the Land and vehicular access to the Improvements is provided by either public right of way abutting the Property or Appurtenant Rights, except to the extent that the non-availability of such utility services and facilities does not have and would not reasonably be expected to have a Material Adverse Effect, and will be constructed prior to the Completion Date.

(l) The acquisition, installation and testing of the Equipment (if any) and construction of the Improvements (if any) to such date shall have been performed in a good and workmanlike manner, substantially in accordance with the Plans and Specifications, except to the extent that the failure of such performance does not have and would not reasonably be expected to have a Material Adverse Effect.

(m) The rental rates under the Ground Lease are not in excess of fair market rental value.

(n) The Land included in the Property in respect of which an Advance is being requested is a separate parcel for all real estate tax and assessment purposes, and no part of the Land is aggregated with any other parcel for such purposes.

(o) As of the Closing Date and the date of each subsequent Advance, the amount of any Advance then being requested represents an amount previously paid or otherwise owed by the Construction Agent or the Lessee in respect of Property Costs incurred prior to the date of such Advance for which, in each case, the Construction Agent or the Lessee has not previously been reimbursed by an Advance.

(p) As of the Rent Commencement Date only, the Property shall be improved in accordance with the Plans and Specifications in a good and workmanlike manner and shall be operational and a certificate of occupancy shall have been issued therefor.

(q) As of the Closing Date, NVIDIA International Holdings Inc., which has its principal place of business in the State of California, is not required by Applicable Law to register to do business in the State of California because such company does not conduct intrastate business in such state.

6.1A Additional Representations and Warranties of Each Credit Party.

(a) Organization; Power; Qualification. Each Credit Party and each Subsidiary thereof (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) has the power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted and (iii) is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization except in jurisdictions where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect. The jurisdictions in which each Credit Party and each Subsidiary thereof are organized and qualified to do business as of the Closing Date are described on Schedule 6.1A(a).

(b) Ownership. Each Subsidiary of the Parent as of the Closing Date is listed on Schedule 6.1A(b). The Material Domestic Subsidiaries in existence as of the Closing Date are identified on Schedule 6.1A(b), and each of them is a party to this Agreement as a Guarantor. As of the Closing Date (except as to the Parent, which shall be as of the date set forth on Schedule 6.1A(b)), the capitalization of each Credit Party and its Subsidiaries consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 6.1A(b). All outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable and not subject to any preemptive or similar rights, except as described in Schedule 6.1A(b). The shareholders or other owners, as applicable, of each Subsidiary of the Parent and the number of shares owned by each as of the Closing Date are described on Schedule 6.1A(b). As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Credit Party, except as described on Schedule 6.1A(b).

(c) Authorization; Enforceability. Each Credit Party thereof has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Operative Agreements to which it is a party in accordance with their respective terms. This Agreement and each of the other Operative Agreements have been duly executed and delivered by the duly authorized officers of each Credit Party thereof that is a party thereto, and each such document constitutes the legal, valid and binding obligation of each Credit Party thereof that is a party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies.

(d) Compliance of Agreement, Operative Agreements and Borrowing with Laws, Etc. The execution, delivery and performance by each Credit Party of the Operative Agreements to which each such Person is a party, in accordance with their respective terms, the extensions of credit thereunder and the transactions contemplated hereby or thereby do not and will not, by the passage of time, the giving of notice or otherwise, (i) require any Governmental Action or violate any

Applicable Law relating to any Credit Party where the failure to obtain such Governmental Action or such violation would reasonably be expected to have a Material Adverse Effect, (ii) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Credit Party, (iii) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Action relating to such Person, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (iv) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than (A) consents, authorizations, filings or other acts or consents for which the failure to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (B) consents or filings to perfect the Liens created by the Security Documents.

(e) Compliance with Law; Governmental Action. Each Credit Party and each Domestic Subsidiary thereof (i) has obtained all Governmental Actions required by any Applicable Law for it to conduct its business, each of which is in full force and effect, is final and not subject to review on appeal and is not the subject of any pending or, to its knowledge, threatened in writing attack by direct or collateral proceeding, (ii) is in compliance with any requirements of each Governmental Action applicable to it and in compliance with all other Applicable Laws relating to it or any of its respective properties and (iii) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority and has retained all material records and documents required to be retained by it under Applicable Law except in each case (i), (ii) or (iii) where the failure to have, comply or file could not reasonably be expected to have a Material Adverse Effect.

(f) Tax Returns and Payments. Each Credit Party and each Domestic Subsidiary thereof has duly filed or caused to be filed all federal, state, local and other tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all federal, state, local and other taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party). Such returns accurately reflect in all material respects all liability for taxes of any Credit Party or any Domestic Subsidiary thereof for the periods covered thereby. As of the Closing Date, except as set forth on Schedule 6.1A(f), there is no ongoing audit or examination or, to its knowledge, other investigation by any Governmental Authority of the tax liability of any Credit Party or any Domestic Subsidiary thereof. No Governmental Authority has asserted any Lien or other claim against any Credit Party or any Domestic Subsidiary thereof with respect to unpaid taxes which has not been discharged or resolved (other than (i) any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party and (ii) All-Inclusive Permitted Liens). The charges, accruals and reserves on the books of each Credit Party and each Domestic Subsidiary thereof in respect of federal, state, local and other taxes for all Fiscal Years and portions thereof since the organization of any Credit Party or any Domestic Subsidiary thereof are in the judgment the Credit Parties adequate, and the Credit Parties do not anticipate any additional taxes or assessments for any of such years.

(g) Intellectual Property Matters. Each Credit Party thereof owns or possesses rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Credit Party thereof is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations.

(h) Environmental Matters.

(i) Except as, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect or except as disclosed in the environmental site assessment delivered to Agent pursuant to Section 5.3(h), the properties owned, leased or operated by each Credit Party and each Domestic Subsidiary now or in the past do not contain, and to their knowledge have not previously contained, any Hazardous Substances in amounts or concentrations which constitute or constituted a violation of applicable Environmental Laws;

(ii) To its knowledge, each Credit Party and each Domestic Subsidiary thereof and such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, in all material respects, with all applicable Environmental Laws, and there is no contamination at, under or about such properties or such operations which could interfere with the continued operation of such properties or impair the fair saleable value thereof;

(iii) No Credit Party nor any Domestic Subsidiary thereof has received any written notice of violation, alleged violation, non-compliance, liability or potential liability from a Governmental Authority regarding environmental matters, Hazardous Substances, or compliance with Environmental Laws that, if adversely determined, would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, nor does any Credit Party or any Domestic Subsidiary thereof have knowledge or reason to believe that any such notice will be received or is being threatened;

(iv) To its knowledge, Hazardous Substances have not been transported or disposed of to or from the properties owned, leased or operated by any Credit Party or any Domestic Subsidiary thereof in violation of, or in a manner or to a location which would reasonably be expected to give rise to liability under, Environmental Laws, nor have any Hazardous Substances been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that would reasonably be expected to give rise to liability under, any applicable Environmental Laws;

(v) No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of the Credit Parties, threatened in writing, under any Environmental Law to which any Credit Party or any Domestic Subsidiary thereof is or will be named as a potentially responsible party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any applicable Environmental Law with respect to

any Credit Party, any Domestic Subsidiary thereof, with respect to any real property owned, leased or operated by any Credit Party or any Domestic Subsidiary thereof or operations conducted in connection therewith that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and

(vi) There has been no release, or to its knowledge, threat of release, of Hazardous Substances at or from properties owned, leased or operated by any Credit Party or any Domestic Subsidiary, now or in the past, in violation of or in amounts or in a manner that could give rise to liability under applicable Environmental Laws that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(i) Employee Benefit Matters.

(i) As of the Closing Date, no Credit Party nor any ERISA Affiliate maintains or contributes to, or has any obligation under, any Employee Benefit Plans other than those identified on Schedule 6.1A(i);

(ii) Each Credit Party and each ERISA Affiliate is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the Code except for such plans that have not yet received determination letters but for which the remedial amendment period for submitting a determination letter has not yet expired. No liability has been incurred by any Credit Party or any ERISA Affiliate which remains unsatisfied for any taxes or penalties assessed with respect to any Employee Benefit Plan or any Multiemployer Plan except for a liability that could not reasonably be expected to have a Material Adverse Effect;

(iii) As of the Closing Date, no Pension Plan has been terminated, nor has any Pension Plan become subject to funding based benefit restrictions under Section 436 of the Code, nor has any funding waiver from the IRS been received or requested with respect to any Pension Plan, nor has any Credit Party or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Sections 412 or 430 of the Code, Section 302 of ERISA or the terms of any Pension Plan on or prior to the due dates of such contributions under Sections 412 or 430 of the Code or Section 302 of ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

(iv) Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Credit Party nor any ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which remains outstanding other than the payment of premiums

and there are no premium payments which are due and unpaid, (C) failed to make a required contribution or payment to a Multiemployer Plan, or (D) failed to make a required installment or other required payment under Sections 412 or 430 of the Code;

(v) No Termination Event has occurred or is reasonably expected to occur;

(vi) Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or investigation is existing or, to its knowledge, threatened concerning or involving (A) any employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed to by any Credit Party or any ERISA Affiliate, (B) any Pension Plan or (C) any Multiemployer Plan.

(j) Margin Stock. No Credit Party nor any Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System). No part of the proceeds of any of any extensions of credit under the Operative Agreements will be used for purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors. Following the application of the proceeds of each extension of credit under the Operative Agreements, not more than twenty-five percent (25%) of the value of the assets (either of the Lessee only or of the Credit Parties and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 8.3B(b) or Section 8.3B(e) or subject to any restriction contained in any agreement or instrument between any Credit Party and any Financing Party or any Affiliate of any Financing Party relating to Indebtedness in excess of the Threshold Amount will be “margin stock”.

(k) Government Regulation. No Credit Party nor any Subsidiary thereof is an “investment company” or a company “controlled” by an “investment company” (as each such term is defined or used in the Investment Company Act of 1940) and no Credit Party nor any Subsidiary thereof is, or after giving effect to any extension of credit under the Operative Agreements will be, subject to regulation under the Interstate Commerce Act, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

(l) Material Contracts. Each Material Contract (i) has been filed with the SEC and (ii) is, and after giving effect to the consummation of the transactions contemplated by the Operative Agreements will be, in full force and effect in accordance with the terms thereof. To the extent requested by the Agent, each Credit Party has delivered to the Agent a true and complete copy of each Material Contract. As of the Closing Date, no Credit Party (nor, to its knowledge, any other party thereto) is in breach of or in default under any Material Contract in any material respect.

(m) Burdensome Provisions. The Credit Parties and their respective Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect. No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to (i) make dividend payments or other distributions

in respect of its Equity Interests to any Credit Party or any Subsidiary of a Credit Party or (ii) transfer any of its assets or properties to any Credit Party or any other Subsidiary in each case other than existing under or by reason of the Operative Agreements, Applicable Law or, with respect to clause (ii) above only, under any documentation with respect to Indebtedness permitted to be incurred hereunder.

(n) Financial Statements. The audited financial statements for the Fiscal Year ending January 25, 2015 and the unaudited financial statements for the Fiscal Quarter ending April 26, 2015 (excluding, for clarity, the projections) are complete and correct and fairly present on a Consolidated basis the assets, liabilities and financial position of the Credit Parties and their Subsidiaries as of such dates, and the results of the operations and changes of financial position for the periods then ended (other than customary year-end adjustments for unaudited financial statements and the absence of footnotes from unaudited financial statements). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP. Such financial statements show all Material Indebtedness and other material liabilities, direct or contingent, of the Credit Parties and their Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments, and Indebtedness, in each case, to the extent required to be disclosed under GAAP.

(o) No Material Adverse Change. Since January 25, 2015, there has been no material adverse change in the operations, business, assets, properties, prospects, liabilities (actual or contingent) or condition (financial or otherwise) of the Parent and its Subsidiaries and no event has occurred or condition arisen, either individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.

(p) Solvency. The Parent and each of its Subsidiaries, on a consolidated basis, are Solvent.

(q) Title to Properties. As of the Closing Date, the real property listed on Schedule 6.1A(q) constitutes all of the real property that is owned, leased, subleased or used by any Credit Party. Each Credit Party has such title to the real property owned or leased by it as is necessary or desirable to the conduct of its business and valid and legal title to all of its personal properties, except those which have been disposed of by the Credit Parties subsequent to such date which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder.

(r) Litigation. There are no actions, suits or proceedings pending nor, to its knowledge, threatened in writing against any Credit Party or any Domestic Subsidiary thereof or any of their respective properties or revenues in any court or before any arbitrator of any kind or before or by any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

(s) Foreign Assets Control Regulations, Etc.; OFAC. No Credit Party nor any of their respective Subsidiaries nor, to the knowledge of the Credit Parties, any director, officer or Affiliate of any Credit Party or any of their respective Subsidiaries (i) is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), (ii) is in violation of (A) the Trading with the Enemy Act, (B) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) or any enabling legislation or executive order relating thereto or (C) the PATRIOT Act (collectively, the “Anti-Terrorism Laws”) or (iii) is a Sanctioned Person.

(t) Anti‑Corruption Laws. The Credit Parties and their Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

(u) Absence of Default. No event has occurred or is continuing (i) which constitutes a Lease Default or a Lease Event of Default, or (ii) which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by any Credit Party or any Subsidiary thereof under (A) any Material Contract or (B) any judgment, decree or order to which any Credit Party or any Subsidiary thereof is a party or by which any Credit Party or any Subsidiary thereof or any of their respective properties may be bound or which would require any Credit Party or any Subsidiary thereof to make any payment thereunder prior to the scheduled maturity date therefor that, in any case under this clause (B), could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(v) Senior Indebtedness Status. The Obligations of each Credit Party under this Agreement and each of the other Operative Agreements ranks and shall continue to rank at least senior in priority of payment to all Subordinated Indebtedness and all senior unsecured Indebtedness of each such Person and is designated as “Senior Indebtedness” under all instruments and documents, now or in the future, relating to all Subordinated Indebtedness and all senior unsecured Indebtedness of such Person.

(w) Disclosure. The Parent and/or its Subsidiaries have disclosed to the Financing Parties all agreements, instruments and corporate or other restrictions to which any Credit Party and any Subsidiary thereof are subject, and all other matters known to them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statement, material report, material certificate or other material information furnished (whether in writing or orally) by or on behalf of any Credit Party or any Subsidiary thereof to any Financing Party in connection with the transactions contemplated by the Operative Agreements and the negotiation of this Agreement and the other Operative Agreements or delivered hereunder or thereunder (as modified or supplemented by other information so furnished), taken together as a whole, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being recognized by the Financing Parties that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections).

(x) Insurance.

(i) The properties of the Credit Parties are insured with financially sound and reputable insurance companies not Affiliates of the Credit Parties, in such amounts, with such deductibles and covering such risks as are commercially reasonable and otherwise consistent with the insurance in effect on the Closing Date as outlined as to carrier, policy

number, expiration date, type, amount and deductibles on Schedule 6.1A(x). Not in limitation of the foregoing, prior to the commencement of construction of the Property and thereafter, the Property is insured in accordance with the requirements of Article XIV of the Lease.

(ii) With respect to each parcel of real property subject to a Mortgage Instrument, the Agent has received (A) such flood hazard certifications, notices and confirmations thereof, and effective flood hazard insurance policies required pursuant to Section 8.3A(f) hereof, (B) all flood hazard insurance policies required hereunder have been obtained and remain in full force and effect, and the premiums thereon have been paid in full, and (C) except as the Credit Parties have previously given written notice thereof to the Agent, there has been no redesignation of any real property into or out of a special flood hazard area.

(y) Employee Relations. As of the Closing Date, no Credit Party or any Domestic Subsidiary thereof is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of its employees except as set forth on Schedule 6.1A(x). No Credit Party knows of any pending, threatened or contemplated strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(z) Perfection. The Security Documents create valid security interests in, and Liens on, the Collateral purported to be covered thereby, which security interests and Liens are, or upon the execution of the Security Documents will be, currently perfected security interests and Liens, prior to all other Liens other than Permitted Liens.


6.2	Representations and Warranties of the Lessor.

Effective as of each Closing Date, the date of each Advance and the Rent Commencement Date (except to the extent any representation and warranty is otherwise specifically limited to one or more specific dates), the Lessor represents and warrants to each of the other parties hereto that:

(a) It is a Delaware corporation duly organized, validly existing and in good standing in the State of Delaware and the jurisdiction in which the Property is located and has the power and authority to enter into and perform its obligations under each of the Operative Agreements to which it is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before the Closing Date and each other Closing Date in connection with or as contemplated by each such Operative Agreement to which it is, or as the case may be, will be a party;

(b) The execution, delivery and performance of each Operative Agreement to which it is or will be a party has been duly authorized by all necessary action on its part and neither the execution and delivery thereof, nor the consummation of the transactions contemplated thereby, nor compliance by it with any of the terms and provisions thereof (i) does or will require any approval or consent of any holder of any of its indebtedness or obligations or any other consent or approval by any Person that has not previously been obtained, (ii) does or will contravene any Legal Requirement, (iii) does or will contravene or result in any breach of or constitute any default under,

or result in the creation of any lien upon any of its property (except for the Liens created expressly pursuant to the Security Documents) under (A) its articles of organization or other formation documents or (B) any other agreement or instrument to which it is a property or by which it or its properties may be bound or affected;

(c) This Agreement and the other Operative Agreements to which it is or, as the case may be, will be a party, have been or on or before the applicable Closing Date, will be, duly executed and delivered by the Lessor and constitute, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against the Lessor in accordance with the terms thereof, subject to bankruptcy, insolvency, moratorium and similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether considered in a proceeding at law or in equity);

(d) There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party before any Governmental Authority that, if adversely determined, would materially and adversely affect its ability to perform its obligations under the Operative Agreements to which it is a party or would question the validity or enforceability of any of the Operative Agreements to which it is or will become a party;

(e) It has not assumed or transferred any of its right, title or interest in or under the Agency Agreement, the Lease or its interest in the Property or any portion thereof, except in accordance with the Operative Agreements;

(f) No Lease Default or Lease Event of Default has occurred and is continuing;

(g) Except as otherwise expressly contemplated by the Operative Agreements, the proceeds of the Credit Loans, the Mortgage Loans and the Lessor Advances shall not be applied by the Lessor for any purpose other than Property Acquisition Costs, costs incurred to permit the acquisition, testing, engineering, installation, development, construction, modification, design, and renovation, as applicable, of the Property (or components thereof) in accordance with the terms of the Agency Agreement and the other Operative Agreements (including construction of the Improvements and acquisition and installation of the Equipment), in each case, which accrue prior to the Rent Commencement Date;

(h) Neither the Lessor nor any Person authorized by the Lessor to act on its behalf has offered, the Credit Notes, the Mortgage Notes or any other security relating to the Property, or any security the offering of which for the purposes of the Securities Act would be deemed to be part of the same offering as the offering of the aforementioned securities to, or solicited any offer to acquire any of the same from, any Person, other than in the case of the Credit Notes, the Credit Lenders; and in the case of the Mortgage Notes, the Mortgage Lenders, and neither the Lessor nor any Person authorized by the Lessor to act on its behalf will take any action which would subject, as a direct result of such action alone, the issuance or sale of any of the aforementioned securities to the provisions of Section 5 of the Securities Act or require the qualification of any Operative Agreement under the Trust Indenture Act of 1939, as amended;

(i) The location of the Lessor for purpose of the UCC is the State of Delaware, and the Lessor’s principal place of business, chief executive office and office where the documents, accounts

and records relating to the transactions contemplated by this Agreement and each other Operative Agreement are kept are located at 550 South Tryon Street, Charlotte, NC 28202;

(j) The Lessor is not engaged principally in, and does not have as one (1) of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States), and no part of the proceeds of the Credit Loans, the Mortgage Loans or the Lessor Advances will be used by it to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulations T, U, or X of the Board of Governors of the Federal Reserve System of the United States;

(k) The Lessor is not an “investment company” or a company controlled by an “investment company” within the meaning of the Investment Company Act; and

(l) The Property is free and clear of all Lessor Liens attributable to the Lessor.

SECTION 6B.
GUARANTY

6B.1 Guaranty of Payment and Performance.

Subject to Section 6B.7, the Guarantors hereby unconditionally guarantee to each Financing Party and each Hedge Bank the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) or when such is otherwise to be performed; provided, notwithstanding the foregoing, the obligations of the Guarantors under this Section 6B shall not constitute a direct guaranty of the obligations of the Lessor evidenced by the Credit Notes or the Mortgage Notes but rather a guaranty of the Guaranteed Obligations arising under the Operative Agreements and Secured Hedge Agreements. This Section 6B is a guaranty of payment and performance and not of collection and is a continuing guaranty and shall apply to all Guaranteed Obligations whenever arising.

6B.2 Obligations Unconditional.

The Guarantors agree that the obligations of the Guarantors hereunder are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Operative Agreements, any of the Secured Hedge Agreements or any other agreement or instrument referred to therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by Applicable Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety, guarantor or co-obligor, it being the intent of this Section 6B.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. The Guarantors agree that this Section 6B may be enforced by any Financing Party or any Hedge Bank without the necessity at any time of resorting to or exhausting any other security or collateral and without the necessity at any time of having recourse to the Credit Notes, the Mortgage Notes or any other of the Operative Agreements (in the case of the Financing Parties) or any of the Secured Hedge Agreements (in the case of the Hedge Banks) or any collateral, if any, hereafter securing the Guaranteed Obligations or otherwise and the Guarantors hereby waive the right to require the Financing Parties and the Hedge Banks to proceed against the Construction

Agent, the Lessee or any other Person (including a co-guarantor) or to require the Financing Parties or the Hedge Banks to pursue any other remedy or enforce any other right. Each Guarantor hereby waives any and all right of subrogation, indemnity, reimbursement or contribution against the Construction Agent, the Lessee or any other guarantor of the Guaranteed Obligations for amounts paid under this Section 6B until such time as the Mortgage Loans, the Credit Loans, Lessor Advances, accrued but unpaid interest, accrued but unpaid Lessor Yield and all other amounts owing under the Operative Agreements (in the case of the Financing Parties) and all amounts owing under the Secured Hedge Agreements (in the case of the Hedge Banks) have been paid in full. Without limiting the generality of the waiver provisions of this Section 6B, the Guarantors hereby waive any rights to require the Financing Parties or the Hedge Banks to proceed against the Construction Agent, the Lessee or any co-guarantor or to require Lessor to pursue any other remedy or enforce any other right, including any and all rights under N.C. Gen. Stat. § 26-7 through 26-9, or any similar statute. Additionally, the Guarantors hereby waive any rights and defenses that are or may become available to any of them by reason of §§ 2787 to 2855, inclusive, and §§ 2899 and 3433 of the California Civil Code. The foregoing waivers and the provisions otherwise set forth in this Section 6B which pertain to North Carolina law or to California law are included solely out of an abundance of caution, and shall not be construed to mean that any such provisions of North Carolina law or California law are in any way applicable to this Section 6B or the Guaranteed Obligations. The Guarantors further agree that nothing contained in this Section 6B shall prevent the Financing Parties from suing on any Operative Agreement, the Hedge Banks from suing on any Secured Hedge Agreement or the Financing Parties from foreclosing any security interest in or Lien on any collateral, if any, securing the Guaranteed Obligations or from exercising any other rights available to the Financing Parties under any Operative Agreement or available to the Hedge Banks under any Secured Hedge Agreement, or any other instrument of security, if any, and the exercise of any of the aforesaid rights and the completion of any foreclosure proceedings shall not constitute a discharge of the obligations of the Guarantors hereunder; it being the purpose and intent of the Guarantors that the obligations of the Guarantors hereunder shall be absolute, independent and unconditional under any and all circumstances; provided, that any amounts due under this Section 6B which are paid to or for the benefit of (a) any Financing Party shall reduce the Guaranteed Obligations regarding the Operative Agreements by a corresponding amount (unless required to be rescinded at a later date) and (b) any Hedge Bank shall reduce the Guaranteed Obligations regarding the Secured Hedge Agreements by a corresponding amount (unless required to be rescinded at a later date). Neither the obligations of the Guarantors under this Section 6B nor any remedy for the enforcement thereof shall be impaired, modified, changed or released in any manner whatsoever by an impairment, modification, change, release or limitation of the liability of any other Credit Party or by reason of the bankruptcy or insolvency of any other Credit Party. The Guarantors waive any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Financing Party or Hedge Bank upon this Section 6B or acceptance of this Section 6B. The Guaranteed Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Section 6B. All dealings between the Credit Parties, on the one hand, and the Financing Parties or the Hedge Banks, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Section 6B.

6B.3 Modifications.

The Guarantors agree that (a) all or any part of the security now or hereafter held for the Guaranteed Obligations, if any, may be exchanged, compromised or surrendered from time to time; (b) no Financing Party or Hedge Bank shall have any obligation to protect, perfect, secure or insure any such security interests, liens or encumbrances now or hereafter held, if any, for the Guaranteed Obligations or the properties subject thereto; (c) the time or place of payment of the Guaranteed Obligations may be changed or extended, in

whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in part; (d) the Construction Agent, the Lessee and any other party liable for payment under the Operative Agreements or the Secured Hedge Agreements may be granted indulgences generally; (e) any of the provisions of the Credit Notes, the Mortgage Notes, any of the other Operative Agreements or any of the Secured Hedge Agreements may be modified, amended or waived; (f) any party (including any co-guarantor) liable for the payment thereof may be granted indulgences or be released; and (g) any deposit balance for the credit of the Construction Agent, the Lessee or any other party liable for the payment of the Guaranteed Obligations or liable upon any security therefor may be released, in whole or in part, at, before or after the stated, extended or accelerated maturity of the Guaranteed Obligations, all without notice to or further assent by the Guarantor, which shall remain bound thereon, notwithstanding any such exchange, compromise, surrender, extension, renewal, acceleration, modification, indulgence or release.

6B.4 Waiver of Rights.

The Guarantors expressly waive to the fullest extent permitted by Applicable Law: (a) notice of acceptance of this Section 6B by any Financing Party or any Hedge Bank and of all extensions of credit or other Advances by the Lessor, the Mortgage Lenders or the Credit Lenders pursuant to the terms of the Operative Agreements or any other extension of rights in favor of any Credit Party pursuant to the Secured Hedge Agreements; (b) presentment and demand for payment or performance of any of the Guaranteed Obligations; (c) protest and notice of dishonor or of default with respect to the Guaranteed Obligations or with respect to any security therefor; (d) notice of any Financing Party or Hedge Bank obtaining, amending, substituting for, releasing, waiving or modifying any security interest, lien or encumbrance, if any, hereafter securing the Guaranteed Obligations, or any Financing Party’s or Hedge Bank’s subordinating, compromising, discharging or releasing such security interests, liens or encumbrances, if any; (e) all other notices to which the Guarantors might otherwise be entitled. Notwithstanding anything to the contrary herein, (i) payments from the Guarantors hereunder shall be due two (2) Business Days after written demand by the Agent (in the case of Guaranteed Obligations relating to the Operative Agreements) and by any Hedge Bank (in the case of Guaranteed Obligations relating to the Secured Hedge Agreements) for such payment (unless the Guaranteed Obligations are automatically accelerated pursuant to the applicable provisions of the Operative Agreements or the Secured Hedge Agreements, as applicable, in which case payments from the Guarantors shall be automatically due) and (ii) any modification of the Operative Agreements or the Secured Hedge Agreements, as applicable, which has the effect of increasing the Guaranteed Obligations shall not be enforceable against the Guarantors unless the Guarantors execute the document evidencing such modification or otherwise reaffirms its guaranty in writing in connection with such modification and (f) the right to seek through any means to have the obligations of the Guarantors under this Section 6B adjudicated invalid or unenforceable.

6B.5 Reinstatement.

The obligations of the Guarantors under this Section 6B shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Guarantors agree that the Guarantors will indemnify each Financing Party and each Hedge Bank on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by any Financing Party or any Hedge Bank in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

6B.6 Remedies.

The Guarantors agree that, as between the Guarantors, on the one hand, and each Financing Party or Hedge Bank, on the other hand, the Guaranteed Obligations may be declared to be forthwith due and payable as provided in the applicable provisions of the Operative Agreements (in the case of the Financing Parties) and in the applicable provisions of the Secured Hedge Agreements (in the case of the Hedge Banks) (and shall be deemed to have become automatically due and payable in the circumstances provided therein) notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing such Guaranteed Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or such Guaranteed Obligations being deemed to have become automatically due and payable), such Guaranteed Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors in accordance with the applicable provisions of the Operative Agreements or the Secured Hedge Agreements.

6B.7 Limitation of Guaranty.

Notwithstanding any provision to the contrary contained herein or in any of the other Operative Agreements or in any of the Secured Hedge Agreements, to the extent the obligations of the Guarantors shall be adjudicated to be invalid or unenforceable for any reason (including because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of the Guarantors hereunder shall be limited to the maximum amount that is permissible under Applicable Law (whether federal or state and including the Bankruptcy Code). This paragraph shall not apply to NVIDIA Corporation or to any other Guarantor that is the direct or indirect owner of 100% of the equity interest in the Lessee.

Subject to Section 6B.5, upon the indefeasible satisfaction of the Guaranteed Obligations in full, regardless of the source of payment, the obligations of the Guarantors hereunder shall be deemed satisfied, discharged and terminated other than indemnifications set forth herein that expressly survive.

6B.8 Payment of Amounts to the Agent.

Each Financing Party hereby instructs (and each Hedge Bank is hereby deemed to have instructed) the Guarantors, and the Guarantors hereby acknowledge and agree, that (a) regarding the Operative Agreements, until such time as the Mortgage Loans, the Credit Loans and the Lessor Advances are paid in full and the Liens evidenced by the Security Documents have been released any and all Rent (excluding Excepted Payments which shall be payable to the Lessor or other Person as appropriate) and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable to any Person shall instead be paid directly to the Agent (excluding Excepted Payments which shall be payable to the Lessor or other Person as appropriate) or as the Agent may direct from time to time for allocation and distribution in accordance with the procedures set forth in Section 8.7 hereof and (b) regarding the Secured Hedge Agreements, all payments thereunder shall be made in accordance with the terms thereof.

6B.9 Joinder of Guarantors.

The Guarantors shall cause Material Domestic Subsidiaries (other than the Lessee) of the Parent, that are not parties to this Agreement or have not previously executed a Guarantor Joinder in accordance with the requirements of this Agreement, to join this Agreement pursuant to the execution of a Guarantor Joinder in the form of EXHIBIT G or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion and otherwise in accordance with Section 8.3A(n).

6B.10 Additional Waivers and Provisions.

(a) The Guarantors understand, acknowledge and agree that if the Secured Parties foreclose judicially or nonjudicially against any real property security for the Secured Obligations and/or the Guaranteed Obligations, that foreclosure could impair or destroy any ability that any such Guarantor may have to seek reimbursement, contribution, or indemnification from any applicable Person based on any right such Guarantor may have of subrogation, reimbursement, contribution, or indemnification for any amounts paid by such Guarantor hereunder, including by reason of Sections 2787 through 2855 of the California Civil Code. The Guarantors further understand and acknowledge that in the absence of this paragraph, such potential impairment or destruction of the Guarantors’ rights, if any, may entitle the Guarantors, or any of them, to assert a defense to its guaranty obligations under this Section 6B based on Section 580d of the California Code of Civil Procedure as interpreted in Union Bank v. Gradsky, 265 Cal. App. 2d 40 (1968). By executing this Agreement, each Guarantor freely, irrevocably, and unconditionally: (i) waives and relinquishes that defense and agrees that it will be fully liable under this Agreement even though the Secured Parties may foreclose, either by judicial foreclosure or by exercise of power of sale, any deed of trust securing the Secured Obligations and/or the Guaranteed Obligations; (ii) agrees that it will not assert that defense in any action or proceeding which the Secured Parties may commence to enforce this Section 6B; (iii) acknowledges and agrees that the rights and defenses waived by such Guarantor in this Section 6B include any right or defense that it may have or be entitled to assert based upon or arising out of any one or more of §§ 580a, 580b, 580d, or 726 of the California Code of Civil Procedure or § 2848 of the California Civil Code; and (iv) acknowledges and agrees that the Secured Parties are relying on this waiver in creating the Secured Obligations and the Guaranteed Obligations, and that this waiver is a material part of the consideration which the Secured Parties are receiving for creating the Secured Obligations and the Guaranteed Obligations.

(b) The Guarantors waive all rights and defenses that any of them may have because any of the Secured Obligations or the Guaranteed Obligations is secured by real property. This means, among other things: (i) the Secured Parties may collect from any Guarantor without first foreclosing on any real or personal property collateral pledged by the Lessor or the Lessee; and (ii) if the Secured Parties foreclose on any real property collateral pledged by the Lessor or the Lessee: (A) the amount of the Secured Obligations and the Guaranteed Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (B) the Secured Parties may collect from any Guarantor even if the Secured Parties, by foreclosing on the real property collateral, have destroyed any right such Guarantor may have to collect from the Lessor or the Lessee. This is an unconditional and irrevocable waiver of any rights and defenses the Guarantors may have because any of the Secured Obligations or the Guaranteed Obligations is secured by real property. These rights and defenses include any rights or defenses based upon § 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

(c) The Guarantors waive any right or defense any of them may have at law or equity, including California Code of Civil Procedure § 580a, to a fair market value hearing or action to determine a deficiency judgment after a foreclosure.

6B.11 Keepwell.

Each Qualified ECP Guarantor hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds and other support as may be needed from time to time by each other Credit Party to honor all of its obligations under the guaranty evidenced by this Agreement and the other Operative Agreements in respect of Swap Obligations; provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 6B.11 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 6B.11, or otherwise under this Agreement or any other Operative Agreement, voidable under Debtor Relief Laws and not for any greater amount. Subject to Section 6B.5 of this Agreement, the obligations of each Qualified ECP Guarantor under this Section 6B.11 shall remain in full force and effect until all of the Guaranteed Obligations and all the obligations of the Guarantors shall have been paid in full in cash and the Credit Loan Commitments, Mortgage Loan Commitments and Lessor Commitments terminated. Each Qualified ECP Guarantor intends that this Section 6B.11 constitute, and this Section 6B.11 shall be deemed to constitute, a “keepwell, support or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

6B.12 Representations; Separateness.

Each Guarantor represents, warrants and covenants that (a) it does not have and will not acquire any interest in the Property or any portion thereof, and (b) it will not merge or consolidate with the Construction Agent, the Lessee or the Lessor, and (c) it has acted and will act in such a manner that ensures that the separate legal separate legal identity of the Lessee will be respected, including without limitation acting in any manner that could foreseeably mislead others with respect to the Lessee’s separate legal identity.

SECTION 7.
PAYMENT OF CERTAIN EXPENSES.


7.1	Transaction Expenses.

(a) The Lessor and the Lenders agree on the Closing Date, to make Advances to pay all Transaction Expenses arising from the Closing Date, including all reasonable fees, expenses and disbursements of the various legal counsels for the Lessee, the Lessor, the Credit Lenders, the Mortgage Lenders and the Agent in connection with the transactions contemplated by the Operative Agreements and incurred in connection with the Closing Date, all fees, taxes and expenses for the recording, registration and filing of such documents and in any event all such taxes, fees and other charges in connection with any and all UCC financing statements and fixture filings and all other reasonable fees, expenses and disbursements incurred in connection with the Closing Date. On the Closing Date, after satisfaction of the conditions precedent for such date, the Lessor shall make a Lessor Advance, the Mortgage Lenders shall make Mortgage Loans and the Credit Lenders shall make Credit Loans to pay for the Transaction Expenses referenced in this Section 7.1(a) without regard to whether such amounts are referenced in any Requisition.

(b) Assuming no Lease Default or Lease Event of Default shall have occurred and be continuing, the Lessor and the Lenders agree on the Closing Date, the date of each Construction Advance and on the Completion Date to pay all Transaction Expenses including all Fees, all other reasonable fees, expenses and disbursements of the various legal counsels for the Lessee, the Lessor, the Mortgage Lenders, the Credit Lenders and the Agent in connection with the transactions contemplated by the Operative Agreements and billed in connection with the Closing Date, date of Construction Advance or Completion Date, all amounts described in Section 7.1(a) of this Agreement

which have not been previously paid, all fees, expenses and disbursements incurred with respect to the various items referenced in Sections 5.3 and/or 5.4 (including any premiums for title insurance policies and charges for any updates to such policies) and all other reasonable fees, expenses and disbursements in connection with the Closing Date, date of Construction Advance or Completion Date, including all expenses relating to and all fees, taxes and expenses for the recording, registration and filing of such documents and in any event all such taxes, fees and other charges in connection with any and all UCC financing statements and fixture filings. On the Closing Date, on the date of any Construction Advance and on the Completion Date, after satisfaction of the conditions precedent for such date, the Lessor shall make a Lessor Advance, the Mortgage Lenders shall make Mortgage Loans and the Credit Lenders shall make Credit Loans to pay for the Transaction Expenses referenced in this Section 7.1(b) without regard to whether such amounts are referenced in any Requisition.


7.2	Fee Calculation.

All fees payable pursuant to the Operative Agreements shall be calculated on the basis of a year of three hundred sixty (360) days for the actual days elapsed.


7.3	Certain Fees and Expenses.

Subject to Sections 7.1(a) and 7.1(b), the Lessee agrees to pay or cause to be paid (a) all reasonable costs and expenses incurred by the Credit Parties, the Agent, the Mortgage Lenders, the Credit Lenders or the Lessor in entering into any future amendments, modifications, supplements, restatements and/or replacements with respect to any of the Operative Agreements, whether or not such amendments, modifications, supplements, restatements and/or replacements are ultimately entered into, or giving or withholding of waivers of consents hereto or thereto, which have been requested by the Credit Parties, the Agent, the Mortgage Lenders, the Credit Lenders or the Lessor, (b) all reasonable fees, costs and expenses (including reasonable fees and expenses of counsel) incurred by the Credit Parties, the Agent, the Mortgage Lenders, the Credit Lenders or the Lessor in connection with any exercise of remedies under any Operative Agreement following the occurrence and continuance of an Event of Default and (c) all reasonable fees, costs and expenses (including reasonable fees and expenses of counsel) incurred by the Credit Parties, the Agent, the Mortgage Lenders, the Credit Lenders or the Lessor in connection with (i) any transfer or conveyance of the Property, whether or not such transfer or conveyance is ultimately accomplished and (ii) the matters described in Section 2.7(b) of the Credit Loan Agreement and Section 2.7(b) of the Mortgage Loan Agreement.


7.4	Unused Fee.

Subject to Sections 7.1(a) and 7.1(b), during the Commitment Period, the Lessee agrees to pay or to cause to be paid to the Agent monthly on the last Business Day of each calendar month or such other date as agreed with the Agent (a) for the account of the Credit Lenders an unused fee (the “Credit Lender Unused Fee”), calculated as the Available Credit Loan Commitment multiplied by the Applicable Percentage allocated by the Agent ratably among the Credit Lenders based on the Available Credit Loan Commitment of each Credit Lender; (b) for the account of the Mortgage Lenders an unused fee (the “Mortgage Lender Unused Fee”) calculated as the Available Mortgage Loan Commitment multiplied by the Applicable Percentage allocated by the Agent ratably among the Mortgage Lenders based on the Available Mortgage Loan Commitment of each Mortgage Lender; and (c) for the account of the Lessor an unused fee (the “Lessor

Unused Fee”), calculated as the Available Lessor Commitment multiplied by the Applicable Percentage allocated by the Agent to the Lessor.

Notwithstanding the foregoing provisions of this Section 7.4:

(a) No Defaulting Credit Lender shall be entitled to receive any Credit Lender Unused Fee for any period during which that Credit Lender is a Defaulting Credit Lender (and the Lessee shall not be required to pay or to cause to be paid any such fee that otherwise would have been required to have been paid to that Defaulting Credit Lender).

(b) No Defaulting Mortgage Lender shall be entitled to receive any Mortgage Lender Unused Fee for any period during which that Mortgage Lender is a Defaulting Mortgage Lender (and the Lessee shall not be required to pay or to cause to be paid any such fee that otherwise would have been required to have been paid to that Defaulting Mortgage Lender).

(c) With respect to any Credit Lender Unused Fee required to be paid to any Defaulting Credit Lender pursuant to clause (a) above, the Borrower shall (i) pay to each Non-Defaulting Credit Lender that portion of any such fee otherwise payable to the Defaulting Credit Lender with respect to the Defaulting Credit Lender’s Loans that have been reallocated to a Non-Defaulting Credit Lender pursuant to Section 2.3(c)(i)(C) of the Credit Loan Agreement, and (ii) not be required to pay the remaining amount of any such fee.

(d) With respect to any Mortgage Lender Unused Fee not required to be paid to any Defaulting Mortgage Lender pursuant to clause (b) above, the Borrower shall (i) pay to each Non-Defaulting Mortgage Lender that portion of any such fee otherwise payable to the Defaulting Mortgage Lender with respect to the Defaulting Mortgage Lender’s Loans that have been reallocated to a Non-Defaulting Mortgage Lender pursuant to Section 2.3(c)(i)(C) of the Mortgage Loan Agreement, and (ii) not be required to pay the remaining amount of any such fee.


7.5	Upfront Fee.

Subject to Section 7.1(a), on the Closing Date, the Lessee shall pay or cause to be paid to the Agent (a) for the account of the Credit Lenders an upfront fee (the “Credit Lender Upfront Fee”), (b) for the account of the Mortgage Lenders an upfront fee (the “Mortgage Lender Upfront Fee”) and (c) for the account of the Lessor an upfront fee (the “Lessor Upfront Fee”), in each case on the terms and conditions as agreed by the Agent, the Credit Parties and, as applicable, each Credit Lender, Mortgage Lender or the Lessor.


7.6	Administrative Agency Fee.

Subject to Sections 7.1(a) and 7.1(b), during the Commitment Period, the Lessee shall pay or cause to be paid to the Agent, for the account of the Agent, an administrative agency fee (the “Administrative Agency Fee”), on the terms and conditions set forth in the Engagement Letter.


7.7	Structuring Fee.

Subject to Section 7.1(a), on the Closing Date, the Lessee shall pay or cause to be paid a structuring fee (the “Structuring Fee”) to the Agent for the benefit of Wells Fargo Securities, LLC (for its individual account) on the terms and conditions set forth in the Engagement Letter.

SECTION 8.
OTHER COVENANTS AND AGREEMENTS.


8.1	Cooperation with the Lessee.

The Credit Lenders, the Mortgage Lenders, the Lessor and the Agent shall, at the expense of and to the extent reasonably requested by the Lessee (but without assuming additional liabilities on account thereof and only to the extent such is acceptable to the Credit Lenders, the Mortgage Lenders, the Lessor and the Agent in their commercially reasonable discretion), cooperate with the Lessee in connection with the Lessee satisfying its covenant obligations contained in the Operative Agreements including at any time and from time to time, promptly and duly executing and delivering any and all such further instruments, documents and financing statements (and continuation statements related thereto).


8.2	Covenants of the Lessor.

The Lessor hereby agrees that so long as this Agreement is in effect:

(a) The Lessor will not create or permit to exist at any time, and the Lessor will, at its own cost and expense, promptly take such action as may be necessary duly to discharge, or to cause to be discharged, all Lessor Liens on the Property and the Collateral; provided, however, that the Lessor shall not be required to so discharge any such Lessor Lien while the same is being contested in good faith by appropriate proceedings diligently prosecuted so long as such proceedings shall not materially and adversely affect the rights of the Lessee under the Lease and the other Operative Agreements or involve any material danger of impairment of the Liens of the Security Documents or of the sale, forfeiture or loss of, and shall not interfere with the use or disposition of, the Property or title thereto or any interest therein or the payment of Rent;

(b) The Lessor shall give prompt notice to the Lessee and the Agent if the Lessor’s location for purposes of the UCC shall cease to be in the State of Delaware or if the Lessor’s principal place of business, chief executive office or office where the records concerning the accounts or contract rights relating to the Property are kept, shall cease to be located at 550 South Tryon Street, Charlotte, North Carolina 28202 or if it shall change its name; and

(c) The Lessor shall take or refrain from taking such actions and grant or refrain from granting such approvals with respect to the Operative Agreements and/or relating to the Property in each case as directed in writing by the Agent in accordance with the Operative Agreements (until such time as the Credit Notes and the Mortgage Notes are paid in full, and then as determined by the Lessor, but in all cases subject to the provisions of any intercreditor agreements among the Credit Lenders, the Mortgage Lenders and/or the Lessor) or, in connection with Sections 8.5, 9.1 and 9.2 hereof, the Construction Agent or the Lessee; provided, however, that notwithstanding the foregoing provisions of this subparagraph (c) the Lessor shall retain its right to approve or disapprove of each Unanimous Vote Matter or matters for which its consent is required pursuant to Section 8.6 in its sole discretion and without regard to any direction from any other Financing Party, any Credit Party or any other Person and the Lessor shall retain its rights in the Excepted Payments and any and all other rights expressly reserved by the Lessor under the Operative Agreements.

(d) The Lessor shall provide to the Lessee at least twenty (20) days following the end of each calendar quarter and at least forty‑five (45) days following the end of each calendar year, a letter of the same tenor as the Lessor Confirmation Letter; provided, that if there have been any changes to the factual matters set forth in the Lessor Confirmation Letter or the financial accounting

standards referenced therein that bear on the conclusions set forth therein, such letter shall set forth the analysis based on such changed factual matters or financial accounting standards. The parties hereto agree that the Credit Parties and their auditors are the sole beneficiaries of the matters addressed in this Section 8.2(d).


8.3	Credit Party Covenants, Consent and Acknowledgment.

Until all the Obligations of the Lessee and/or the Construction Agent (other than contingent obligations not then due) have been paid and satisfied in full in cash and the covenants terminated, each Credit Party agrees as follows:

(a) Each Credit Party acknowledges and agrees that the Lessor, pursuant to the terms and conditions of the Security Documents, shall create Liens respecting collateral described therein in favor of the Agent. Each Credit Party hereby irrevocably consents to the creation, perfection and maintenance of such Liens. Each Credit Party shall, to the extent reasonably requested by any of the other parties hereto, cooperate with the other parties in accordance with Section 12.11 hereof.

(b) The Lessor hereby instructs each Credit Party, and each Credit Party hereby acknowledges and agrees, that until such time as the Credit Loans, the Mortgage Loans and the Lessor Advances are paid in full and the Liens evidenced by the Security Documents have been released (i) any and all Rent (excluding Excepted Payments which shall be payable to the Lessor or other Person as appropriate) and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable to any Person shall instead be paid directly to the Agent (excluding Excepted Payments which shall be payable to the Lessor or other Person as appropriate) or as the Agent may direct from time to time for allocation and distribution in accordance with the procedures set forth in Section 8.7 hereof, (ii) all rights of the Lessor under the Lease (except in respect of Excepted Payments and as provided in Section 12.4) shall be exercised by the Agent and (iii) each Credit Party shall cause all notices, certificates, financial statements, communications and other information which are delivered, or are required to be delivered, to the Lessor, to also be delivered at the same time to the Agent.

(c) No Credit Party shall consent to or permit any amendment, supplement or other modification of the terms or provisions of any Operative Agreement to which it is a party except in accordance with Section 12.4 of this Agreement.

(d) From and after the Rent Commencement Date, the Lessee hereby covenants and agrees to reimburse the Agent for any Appraisal or reappraisal (in form and substance satisfactory to the Agent and from an appraiser selected by the Agent) to be issued respecting the Property as requested by the Agent from time to time (i) at each and every time as such shall be required to satisfy any regulatory requirements imposed on the Agent, the Lessor, any Mortgage Lender and/or any Credit Lender and (ii) after the occurrence and continuance of a Lease Event of Default. To the extent any such Appraisal or reappraisal is deemed necessary by the Agent prior to the Rent Commencement Date, such shall be paid for as a Transaction Expense.

(e) Each Credit Party hereby covenants and agrees that, except for amounts payable as Basic Rent, any and all payment obligations owing from time to time under the Operative Agreements by any Person to any Financing Party or any other Person shall (without further action) be deemed

to be Supplemental Rent obligations payable by the Lessee and guaranteed by the Guarantors, which is subject to the funding requirements described in this Agreement prior to the Rent Commencement Date. Without limitation, such obligations of the Credit Parties shall include the Transaction Expenses.

(f) At any time the Lessor or the Agent is entitled under the Operative Agreements to possession of the Property or any component thereof, each of the Construction Agent and the Lessee hereby covenants and agrees, at its own cost and expense, to assemble the Equipment and make the same available to the Agent (on behalf of the Lessor) at the Improvements.

(g) Each of the Construction Agent and the Lessee hereby covenants and agrees that (i) each Indemnified Person will, at all times, be covered to the extent so provided in Article XIV of the Lease, as additional insured or loss payee, as the case may be, under the insurance policies required to be maintained by the Construction Agent or the Lessee pursuant to Section 2.6(e) of the Agency Agreement and Article XIV of the Lease, or pursuant to the insurance policies that the Construction Agent or the Lessee requires any relevant contractor or subcontractor to carry, for any Claim arising out of the acts or omissions of any of the contractors or subcontractors of the Construction Agent or the Lessee and (ii) each insurance policy that is carried by the Construction Agent or the Lessee pursuant to the Agency Agreement or the Lease (A) shall at all times contain a waiver of subrogation clause pursuant to which the relevant insurers waive any and all rights to make any claim against any such additional insured or loss payee with respect to any payments made, or any obligation of such insureds under, any such policy and (B) shall at all times cover each such additional insured or loss payee for any and all Claims relating to the Property or the transactions contemplated by the Operative Agreements respecting the Property. The Construction Agent and the Lessee will be liable to each such additional insured or loss payee, on a full recourse basis, for any breach of the foregoing covenants and agreements.

(h) [Reserved].

(i) The Lessee hereby covenants and agrees that it shall give prompt notice to the Agent if the location of the Lessee for purposes of the UCC shall cease to be in the State of Delaware or if the Lessee’s principal place of business, chief executive office or office where the records concerning the account or contract rights relating to the Property are kept shall cease to be located at 2701 San Tomas Expressway, Santa Clara, California 95050or if it shall change its name.

(j) The Lessee hereby covenants and agrees that the rights of the Lessee under this Agreement and under the Lease shall not impair or in any way diminish the obligations of the Construction Agent and/or the rights of the Lessor under the Agency Agreement.

(k) [Reserved].

(l) The Lessee shall cause all financing statements and continuation statements and any other necessary documents covering the right, title and interest of the Agent as agent for the Secured Parties with regard to the Collateral to be promptly produced, to be submitted to the Agent for review and after confirmation thereof by the Agent, to be filed for recordation in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Agent as agent for the Secured Parties hereunder to all property comprising the Collateral.

The Lessee shall deliver to the Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, promptly following such recording, registration or filing. The Lessor shall cooperate fully with the Lessee in connection with the obligations of the Lessee set forth above and will execute or cause the execution (at the expense of the Lessee, which the Lessee agrees to pay) of any and all documents commercially reasonably required to fulfill the intent of this Section 8.3(l).

(m) The Lessee shall perform any and all obligations of Lessor under, and cause Lessor to otherwise remain in full compliance with, the terms and provisions of each Ground Lease, if any.

(n) The Credit Parties shall not permit the Lessee to issue any Equity Interests unless such Equity Interests are pledged in favor of the Agent pursuant to the Pledge Agreement and the certificate evidencing such Equity Interests is delivered to the Agent with a blank membership interest power, all pursuant to documentation satisfactory to the Agent, in its commercially reasonable discretion.

(o) With regard to the Amended and Restated Operating Agreement of NVIDIA Land Development, LLC, dated as of June 2, 2009, as amended by that certain First Amendment to the Amended and Restated Operating Agreement dated as of June 16, 2015, each of the foregoing by the Parent, as the sole member of the Lessee, the Credit Parties shall not permit any amendment, modification, extension, supplement, restatement and/or replacement of such Agreement or such First Amendment, in each case to the extent relating to such First Amendment and/or the subject matter thereof, without the consent of the Agent, to be given or withheld, in its commercially reasonable discretion.


8.3A	Additional Credit Party Affirmative Covenants.

(a) Financial Statements and Budgets. Deliver to the Agent, in form and detail satisfactory to the Agent (which shall promptly make such information available to the Lenders and the Lessor in accordance with its customary practice):

(i) Annual Financial Statements. As soon as practicable and in any event within ninety-five (95) days (or, if earlier, on the date of any required public filing thereof) after the end of each Fiscal Year (commencing with the Fiscal Year ending January 31, 2016), Form 10-K of the Parent as filed with the SEC for such Fiscal Year. Each such Form 10-K of the Parent shall include audited Consolidated Statements of Income; Consolidated Statements of Comprehensive Income; Consolidated Balance Sheets; Consolidated Statements of Shareholders’ Equity; Consolidated Statements of Cash Flows; and notes with respect to the foregoing, in each case, prepared in accordance with GAAP. Such annual financial statements shall be audited by PricewaterhouseCoopers or such other independent certified public accounting firm of recognized national standing, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar

qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Parent or any of its Subsidiaries not in accordance with GAAP.

(ii) Quarterly Financial Statements. As soon as practicable and in any event within fifty (50) days (or, if earlier, on the date of any required public filing thereof) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ending July 26, 2015), Form 10-Q of the Parent as filed with the SEC for such fiscal quarter. Each such Form 10-Q of the Parent shall include unaudited Condensed Consolidated Statements of Income; Condensed Consolidated Statements of Comprehensive Income; Condensed Consolidated Balance Sheets; Condensed Consolidated Statements of Cash Flows; and notes with respect to the foregoing, in each case, prepared by the Credit Parties in accordance with GAAP, certified by the chief financial officer of the Parent to present fairly in all material respects the financial condition of the Parent and its Subsidiaries on a Consolidated basis as of their respective dates and the results of operations of the Parent and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

(iii) Annual Business Plan and Budget. As soon as practicable and in any event within sixty (60) days after the end of each Fiscal Year, an annual operating plan and capital budget of the Parent and its Subsidiaries for the ensuing Fiscal Year, such information to be prepared in accordance with GAAP and to include: an annual projected profit & loss statement (provided on a GAAP basis and under the Company’s non-GAAP basis), an annual projected capital budget along with projected depreciation and amortization, calculations demonstrating projected compliance with the financial covenants set forth in Section 8.3B(n), along with reasonable disclosure of key assumptions and drivers with respect to the information provided, accompanied by a certificate from a Responsible Officer of the Parent to the effect that the information provided contains good faith estimates (utilizing assumptions believed to be reasonable at the time of delivery of such budget) of the financial condition and operations of the Parent and its Subsidiaries for such period.

(b) Certificates; Other Reports. Deliver to the Agent (which shall promptly make such information available to the Lenders and the Lessor in accordance with its customary practice):

(i) at each time financial statements are delivered pursuant to Sections 8.3A(a)(i) or (ii) and at such times as the Agent shall reasonably request, a duly completed Compliance Certificate signed by the chief executive officer, executive vice president and chief financial officer, vice president and chief accounting officer, vice president, finance, treasurer or controller of the Parent and a report containing management’s discussion and analysis of such financial statements;

(ii) [Reserved];

(iii) promptly after the furnishing thereof, copies of any notices of default or event of default furnished to any holder of Indebtedness of any Credit Party or any Subsidiary thereof in excess of the Threshold Amount pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be delivered to the Agent pursuant hereto;

(iv) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Parent, and copies of all annual, regular, periodic and special reports and registration statements which the Parent may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any national securities exchange, and in any case not otherwise required to be delivered to the Agent pursuant hereto;

(v) promptly, and in any event within five (5) Business Days after receipt thereof by any Credit Party or any Subsidiary thereof, copies of each notice or other correspondence (other than comment letters) received from the SEC concerning any investigation by the SEC regarding financial or other operational results of any Credit Party or any Subsidiary thereof (for the avoidance of doubt, an investigation will not include a routine review of the reports that any Credit Party files with the SEC or any correspondence resulting therefrom);

(vi) promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including, without limitation, the PATRIOT Act), as from time to time reasonably requested by any Financing Party; and

(vii) such other reasonably available information regarding the operations, business affairs and financial condition of any Credit Party or any Subsidiary thereof as any Financing Party may reasonably request.

Documents required to be delivered pursuant to Section 8.3A(a)(i) or (ii) or Section 8.3A(b)(v) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Parent posts such documents, or provides a link thereto on the Parent’s website on the Internet at the following website address http://investor.nvidia.com/ or such other website address as is provided to the Financing Parties in accordance with Section 12.2; or (ii) on which such documents are posted on the Parent’s behalf on an Internet or intranet website, if any, to which each Financing Party has access (whether a commercial, third-party website or whether sponsored by the Agent); provided that: (A) the Parent shall deliver paper copies of such documents to any Financing Party that requests the Parent to deliver such paper copies until a written request to cease delivering paper copies is given by any Financing Party and (B) the Parent shall notify the Agent (by facsimile or electronic mail) of the posting of any such documents and provide to the Agent by electronic mail electronic versions of such documents. Notwithstanding anything contained herein, in every instance the Parent shall be required to provide paper copies of the Compliance Certificates required by Section 8.3A(b)(i) to the Agent. Except for such Compliance Certificates, the Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Parent with any such request for delivery, and each Lender and the Lessor shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Parent hereby acknowledges that (a) the Agent will make available to the Lenders and the Lessor materials and/or information provided by or on behalf of the Parent hereunder (collectively, “Company Materials”) by posting the Company Materials on Debt Domain, IntraLinks, SyndTrak Online or another similar electronic system (the “Platform”) and (b) certain of the Lenders or the

Lessor may be “public-side” Lenders/Lessor (i.e., Lenders/Lessor that do not wish to receive material non-public information with respect to the Parent or its securities) (each, a “Public Lender”). The Parent hereby agrees that it will use commercially reasonable efforts to identify that portion of the Company Materials that may be distributed to the Public Lenders and that (w) all such Company Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Company Materials “PUBLIC,” the Parent shall be deemed to have authorized the Financing Parties to treat such Company Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Parent or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Company Materials constitute Information, they shall be treated as set forth in Section 12.13); (y) all Company Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Agent shall be entitled to treat any Company Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the Parent shall be under no obligation to mark any Company Materials “PUBLIC”.

(c) Notice of Litigation and Other Matters. Promptly (but in no event later than ten (10) days after any Responsible Officer of any Credit Party obtains knowledge thereof) notify the Agent in writing of (which shall promptly make such information available to the Lenders and the Lessor in accordance with its customary practice):

(i) the occurrence of any Lease Default or Lease Event of Default;

(ii) the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving any Credit Party or any Subsidiary thereof or any of their respective properties, assets or businesses in each case that if adversely determined could reasonably be expected to result in a Material Adverse Effect;

(iii) any notice of any violation received by any Credit Party or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws which in any such case could (A) reasonably be expected to have a Material Adverse Effect and (B) cause any real property described in the Mortgage Instruments to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law;

(iv) any attachment, judgment, lien, levy or order exceeding the Threshold Amount that may be assessed against or threatened against any Credit Party or any Subsidiary thereof;

(v) any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Material Contract to which a Credit Party is a party or by which a Credit Party or any of its respective properties may be bound which could reasonably be expected to have a Material Adverse Effect;

(vi) (A) any unfavorable determination letter from the IRS regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (B) all notices received by any Credit Party or any ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (C) all notices received by any Credit Party or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA, which liability exceeds $50,000,000 and (D) the Parent obtaining knowledge or reason to know that any Credit Party or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA;

(vii) [Reserved]; and

(viii) any event which makes any of the representations set forth in Section 6 that is subject to materiality or Material Adverse Effect qualifications inaccurate in any respect or any event which makes any of the representations set forth in Section 6 that is not subject to materiality or Material Adverse Effect qualifications inaccurate in any material respect.

Each notice pursuant to Section 8.3A(c) shall be accompanied by a statement of a Responsible Officer of the Parent setting forth details of the occurrence referred to therein and stating what action the Parent has taken and proposes to take with respect thereto. Each notice pursuant to Section 8.3A(c)(i) shall describe with particularity any and all provisions of this Agreement and any other Operative Agreements that have been breached.

(d) Preservation of Corporate Existence and Related Matters. Except as permitted by Section 8.3B(d), preserve and maintain its separate corporate existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation or other entity and authorized to do business in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect.

(e) Maintenance of Property and Licenses.

(i) In addition to the requirements of any of the Security Documents, protect and preserve all of its properties necessary in and material to its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such properties necessary for the conduct of its business, so that the business carried on in connection therewith may be conducted in a commercially reasonable manner, in each case except as such action or inaction would not reasonably be expected to result in a Material Adverse Effect.

(ii) Maintain, in full force and effect in all material respects, each and every license, permit, certification, qualification, approval or franchise issued by any Governmental Authority (each a “License”) required for each of them to conduct their respective businesses as presently conducted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(f) Insurance. Maintain insurance with financially sound and reputable insurance companies against at least such risks and in at least such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and as are required by any Security Documents (including, without limitation, hazard and business interruption insurance). All such insurance shall, (i) provide that no cancellation or material modification thereof shall be effective until at least 30 days after receipt by the Agent of written notice thereof, (ii) name the Agent as an additional insured party thereunder and (iii) in the case of each casualty insurance policy, name the Agent as loss payee. On the Closing Date and from time to time thereafter deliver to the Agent upon its request information in reasonable detail as to the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby. Without limiting the foregoing, the Parent shall and shall cause each appropriate Credit Party to (i) maintain, if available, fully paid flood hazard insurance on all real property that is located in a special flood hazard area and that is subject to a Mortgage Instrument, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Agent, (ii) furnish to the Agent evidence of renewal (and payment of renewal premiums therefor) of all such policies prior to the expiration or lapse thereof, and (iii) furnish to the Agent prompt written notice of any redesignation of any such improved real property into or out of a special flood hazard area.

(g) Accounting Methods and Financial Records. Maintain a system of accounting, and keep proper books, records and accounts (which shall be true and complete in all material respects) as may be required or as may be necessary to permit the preparation of financial statements in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction over it or any of its properties or assets.

(h) Payment of Taxes and Other Obligations. Pay and perform as the same shall become due and payable (i) all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its property and (ii) all other Indebtedness, obligations and liabilities which, if unpaid, would become a Lien (other than Permitted Liens) upon its property; provided, that (1) the Parent or such Subsidiary may contest any item described in clause (i) of this Section in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP, and (2) in the case of clause (ii), except where such failure to pay or perform such items described in clause (ii) could not reasonably be expected to have a Material Adverse Effect.

(i) Compliance with Laws and Approvals. Observe and remain in compliance with all Applicable Laws and maintain in full force and effect all Governmental Action, in each case applicable to the conduct of its business except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(j) Environmental Laws. In addition to and without limiting the generality of Section 8.3A(j), (i) comply with, and use commercially reasonable efforts to ensure such compliance by all tenants and subtenants with all applicable Environmental Laws in all material respects and obtain and comply in all material respects with and maintain, and use commercially reasonable effeorts to ensure that all tenants and subtenants, if any, obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, (ii) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and

promptly comply in all material respects with all lawful orders and directives of any Governmental Authority regarding Environmental Laws; provided that the Credit Parties and their respective Subsidiaries shall not be obligated to comply with with any such lawful order or directive under this clause (ii) to the extent the Credit Parties or the applicable Subsidiary is contesting its obligation to comply with such Environmental Law or Governmental Authority in good faith and by proper proceedings and is accounting for such potential liability in accordance with GAAP, and (iii) defend, indemnify and hold harmless the Financing Parties, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the presence of Hazardous Substances, or the violation of, noncompliance with or liability under any Environmental Laws applicable to the operations of the Parent or any Subsidiary, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor, as determined by a court of competent jurisdiction by final nonappealable judgment.

(k) Compliance with ERISA. In addition to and without limiting the generality of Section 8.3A(j), (i) except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) comply with applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (B) not take any action or fail to take action the result of which could reasonably be expected to result in a liability to the PBGC or to a Multiemployer Plan, (C) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and (D) operate each Employee Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code and (ii) furnish to the Agent upon the Agent’s request such additional information about any Employee Benefit Plan as may be reasonably requested by the Agent.

(l) Compliance with Material Contracts. Comply in all respects with each Material Contract, except as could not reasonably be expected to have a Material Adverse Effect.

(m) Visits and Inspections. Permit representatives of any Financing Party, from time to time upon prior reasonable notice and at such times during normal business hours, all at the expense of the Lessee, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects; provided that excluding any such visits and inspections during the continuation of a Lease Event of Default, the Agent shall not exercise such rights more often than two (2) times during any calendar year at the Lesse’s expense; provided further that upon the occurrence and during the continuance of a Lease Event of Default, any Financing Party may do any of the foregoing at the expense of the Lessee at any time without advance notice.

(n) Additional Subsidiaries. Promptly after the creation or acquisition of any Material Domestic Subsidiary (and, in any event, within thirty (30) days after such creation or acquisition, as such time period may be extended by the Agent in its sole discretion) cause such Person to (i) become a Guarantor by delivering to the Agent a duly executed Guarantor Joinder or such other document as the Agent shall deem appropriate for such purpose, (ii) deliver to the Agent such opinions, documents and certificates referred to in Section 5.3 as may be reasonably requested by the Agent, (iii) deliver to the Agent such updated Schedules to the Operative Agreements as requested by the Agent with respect to such Person, (iv) deliver to the Agent such original certificated Equity Interests or other certificates and stock or other transfer powers evidencing the Equity Interests of such Person, to the extent required pursuant to the Security Documents, and (v) deliver to the Agent such other documents as may be reasonably requested by the Agent, all in form, content and scope reasonably satisfactory to the Agent.

(o) Further Assurances. Execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any Applicable Law, or which the Agent may reasonably request, to effectuate the transactions contemplated by the Operative Agreements or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Credit Parties. The Parent also agrees to provide to the Agent, from time to time upon the reasonable request by the Agent, evidence reasonably satisfactory to the Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(p) Anti-Corruption Laws. Conduct its businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such laws.


8.3B	Additional Credit Party Negative Covenants.

(a) Indebtedness. Create, incur, assume or suffer to exist any Indebtedness except:

(i) the Obligations;

(ii) Indebtedness and obligations owing under Hedge Agreements entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;

(iii) Indebtedness existing on the Closing Date and listed on Schedule 8.3B(a), and any refinancings, refundings, renewals or extensions thereof; provided that (A) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder,

(B) the interest rate applicable to such Indebtedness is at then market rates and (C) such Indebtedness is otherwise on then market terms;

(iv) Indebtedness incurred in connection with Capital Lease Obligations and purchase money Indebtedness in an aggregate amount not to exceed $250,000,000 at any time outstanding;

(v) Indebtedness of a Person existing at the time such Person became a Subsidiary or assets were acquired from such Person in connection with an Investment permitted pursuant to Section 8.3B(c), to the extent that (A) such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, (B) neither the Parent nor any Subsidiary thereof (other than such Person or any other Person that such Person merges with or that acquires the assets of such Person) shall have any liability or other obligation with respect to such Indebtedness and (C) the aggregate outstanding principal amount of such Indebtedness does not exceed $50,000,000 at any time outstanding;

(vi) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (i) through (v), (xi) and (xii) of this Section 8.3B(a);

(vii) unsecured intercompany Indebtedness:

(A) owed by any Credit Party to another Credit Party;

(B) owed by any Credit Party to any Subsidiary that is not a Credit Party (provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Agent);

(D) owed by any Subsidiary that is not a Credit Party to any Credit Party to the extent permitted pursuant to Section 8.3B(c);

(viii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business;

(ix) Indebtedness under performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations or with respect to workers’ compensation claims, in each case incurred in the ordinary course of business, and reimbursement obligations in respect of any of the foregoing;

(x) unsecured or Subordinated Indebtedness of any Credit Party or any Subsidiary thereof not otherwise permitted pursuant to this Section; provided, that in the case of each incurrence of such Subordinated Indebtedness, (A) no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by the incurrence of such Indebtedness, and (B) the Agent shall have received satisfactory written evidence

that the Credit Parties would be in compliance with the financial covenants set forth in Section 8.3B(n) on a Pro Forma Basis after giving effect to the issuance of any such Indebtedness;

(xi) secured Indebtedness of the Parent and its consolidated Subsidiaries not otherwise permitted pursuant to this Section in an aggregate principal amount not to exceed $100,000,000 at any time outstanding; provided, that in the case of each incurrence of such Indebtedness, (A) no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by the incurrence of such Indebtedness, and (B) such Indebtedness and the Liens securing such Indebtedness shall subject to customary intercreditor arrangements with respect to the Obligations and the Liens under the Security Documents reasonably acceptable to the Agent (it being understood and agreed that any Indebtedness incurred under this clause (xi) may be secured by Liens on the Equity Interests of Subsidiaries of the Parent (other than Lessee) without a corresponding pari passi pledge of such Equity Interests to the Agent on behalf of the Secured Parties); and

(xii) secured Indebtedness of the Parent not otherwise permitted pursuant to this Section in an aggregate principal amount not to exceed $500,000,000 at any time outstanding; provided, that in the case of each incurrence of such Indebtedness, (A) no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by the incurrence of such Indebtedness, and (B) such Indebtedness shall only be secured by Liens on the Equity Interests of Subsidiaries of the Parent; provided such Equity Interests also are pledged to the Agent to secure the Obligations on a pari passu basis.

(b) Liens. Create, incur, assume or suffer to exist, any Lien on or with respect to (x) any Collateral, except for those Liens described below in subsection (i) and (y) for any of its property or assets other than the Collateral, whether now owned (including any leasehold interest) or hereafter acquired, except for those Liens described below in subsections (ii) through (xvii)):

(i) Permitted Liens;

(ii) Liens in existence on the Closing Date and described on Schedule 8.3B(b), and the replacement, renewal or extension thereof (including Liens incurred, assumed or suffered to exist in connection with any refinancing, refunding, renewal or extension of Indebtedness pursuant to Section 8.3B(a)(iii) (solely to the extent that such Liens were in existence on the Closing Date and described on Schedule 8.3B(b))); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, as applicable, beyond that in existence on the Closing Date, except for products and proceeds of the foregoing;

(iii) Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) (A) not yet due or as to which the period of grace (not to exceed sixty (60) days), if any, related thereto has not expired or (B) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

(iv) the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (A) are not overdue for a period of more than sixty (60) days, or if more than sixty (60) days overdue, such Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP and (B) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Parent or any of its Domestic Subsidiaries;

(v) deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business, in each case, so long as no foreclosure sale or similar proceeding has been commenced with respect to any portion of the Collateral on account thereof;

(vi) encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, materially detract from the value of such property or materially impair the use thereof in the ordinary conduct of business;

(vii) Liens arising from the filing of UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Parent and its Domestic Subsidiaries;

(viii) Liens securing Indebtedness permitted under Section 8.3B(a)(iv); provided that (i) such Liens shall be created substantially simultaneously with (or in any event within thirty (30) days of) the acquisition, repair, improvement or lease, as applicable, of the related property, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred and (iv) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original price for the purchase, repair improvement or lease amount (as applicable) of such property at the time of purchase, repair, improvement or lease (as applicable);

(ix) Liens securing judgments for the payment of money not constituting a Lease Event of Default or securing appeal or other surety bonds relating to such judgments;

(x) Liens on properties (i) of any Subsidiary which are in existence at the time that such Subsidiary is acquired pursuant to a Permitted Acquisition and (ii) of the Parent or any of its Subsidiaries existing at the time such tangible property or tangible assets are purchased or otherwise acquired by the Parent or such Subsidiary thereof pursuant to a transaction permitted pursuant to this Agreement; provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens are not incurred in connection with, or in anticipation of, such Permitted Acquisition, purchase or other acquisition, (B) such Liens

are applicable only to specific property, (C) such Liens are not “blanket” or all asset Liens, (D) such Liens do not attach to any other property of the Parent or any of its Subsidiaries and (E) the Indebtedness secured by such Liens is permitted under Section 8.3B(a)(v) of this Agreement);

(xi) (i) Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) Liens of any depositary bank in connection with statutory, common law and contractual rights of set-off and recoupment with respect to any deposit account of the Parent or any Subsidiary thereof;

(xii) (i) contractual or statutory Liens of landlords to the extent relating to the properties relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property relating to such contract;

(xiii) any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement entered into in the ordinary course of business which do not (i) interfere in any material respect with the business of the Parent or its Subsidiaries or materially detract from the value of the relevant assets of the Parent or its Subsidiaries or (ii) secure any Indebtedness;

(xiv) Liens securing the Subordinated Indebtedness permitted pursuant to Section 8.3(a)(xi) provided such Liens are subject to subordination provisions satisfactory to the Agent;

(xv) Liens securing the Indebtedness permitted pursuant to Section 8.3(a)(xi); provided, such Liens shall be subject to customary intercreditor arrangements with respect to the Liens under the Security Documents reasonably acceptable to the Agent;

(xvi) Liens on the Equity Interests of Subsidiaries of the Parent securing the Indebtedness permitted pursuant to Section 8.3(a)(xii); provided such Equity Interests also are pledged to the Agent to secure the Obligations on a pari passu basis;

(xvii) Liens not otherwise permitted hereunder on assets other than the Collateral securing Indebtedness or other obligations in the aggregate of (A) principal amount and (B) other amounts owing in connection with Hedge Agreements, in the case of the aggregate amount referenced in the foregoing subsections (A) and (B) not to exceed $10,000,000 at any time outstanding; and

(xviii) Liens on any Subsidiary that is not a Credit Party or any such Subsidiary’s assets which do not constitute a Material Adverse Effect; provided that if any such Subsidiary subsequently becomes a Credit Party, such Liens must be permitted under one of the other subclauses of this Section 8.3B(b).

(c) Investments. Purchase, own, invest in or otherwise acquire (in one transaction or a series of transactions), directly or indirectly, any Equity Interests, interests in any partnership or joint venture (including, without limitation, the creation or capitalization of any Subsidiary), evidence

of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any Person (all the foregoing, “Investments”) except:

(i) (A) Investments existing on the Closing Date in Subsidiaries existing on the Closing Date;

(B) Investments existing on the Closing Date (other than Investments in Subsidiaries existing on the Closing Date) and described on Schedule 8.3B(c);

(D) Investments made after the Closing Date by any Subsidiary that is not a Credit Party in any other Subsidiary that is not a Credit Party; and

(E) Investments made after the Closing Date by any Subsidiary that is not a Credit Party in any Credit Party;

(ii) Investments in cash and Cash Equivalents;

(iii) [Reserved];

(iv) deposits made in the ordinary course of business to secure the performance of leases or other obligations as permitted by Section 8.3B(b);

(v) Hedge Agreements permitted pursuant to Section 8.3B(a);

(vi) purchases of assets in the ordinary course of business;

(vii) Investments in the form of loans and advances to officers, directors and employees in the ordinary course of business in an aggregate amount not to exceed at any time outstanding $2,500,000 (determined without regard to any write-downs or write-offs of such loans or advances);

(viii) Investments in the form of Restricted Payments permitted pursuant to Section 8.3B(f);

(ix) Guaranty Obligations permitted pursuant to Section 8.3B(a); and

(x) Investments received as consideration in connection with an Asset Disposition permitted pursuant to Section 8.3B(e);

(xi) Investments in the form of Permitted Acquisitions;

(xii) Investments in the form of intercompany Indebtedness permitted pursuant to Section 8.3B(a)(vii); and

(xiii) Investments not otherwise permitted pursuant to this Section; provided that, immediately before and immediately after giving pro forma effect to any such Investments, (A) no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by such Investment, and (B) the Agent shall have received satisfactory written evidence that, after giving effect to any such Investment on a Pro Forma Basis, (1) the Leverage Ratio of the Parent and its Subsidiaries, would not exceed 2.50 to 1.0, (2) the Credit Parties would be in compliance with the financial covenants set forth in Section 8.3B(n), and (3) the global unrestricted gross cash and Cash Equivalents of the Parent and its Subsidiaries shall not be less than $1,500,000,000.

For purposes of determining the amount of any Investment outstanding for purposes of this Section 8.3B(c), such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

(d) Fundamental Changes. Merge, consolidate or enter into any similar combination with, or enter into any Asset Disposition of all or substantially all of its assets (whether in a single transaction or a series of transactions) with, any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except:

(i) (A) any Wholly-Owned Subsidiary of the Parent (other than the Lessee) may be merged, amalgamated or consolidated with or into the Parent (provided that the Parent shall be the continuing or surviving entity) or (B) any Wholly-Owned Subsidiary of the Parent (other than the Lessee) may be merged, amalgamated or consolidated with or into any Guarantor (provided that the Guarantor shall be the continuing or surviving entity or simultaneously with such transaction, the continuing or surviving entity shall become a Guarantor and the Credit Parties shall comply with Section 8.3A(o) in connection therewith);

(ii) any Subsidiary that is not a Credit Party may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Subsidiary that is not a Credit Party;

(iii) any Subsidiary (other than the Lessee) may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Parent or any Credit Party; provided that, with respect to any such disposition by any Subsidiary that is not a Credit Party, the consideration for such disposition shall not exceed the fair value of such assets;

(iv) any Subsidiary that is not a Credit Party may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to any other Subsidiary that is not a Credit Party;

(v) any Wholly-Owned Subsidiary of the Parent (other than the Lessee) may merge with or into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with any acquisition permitted hereunder; provided that in the case of any merger involving a Wholly-Owned Subsidiary that is a Material Domestic Subsidiary, (A) a

Guarantor shall be the continuing or surviving entity or (B) simultaneously with such transaction, the continuing or surviving entity shall become a Guarantor and the Credit Parties shall comply with Section 8.3A(o) in connection therewith;

(vi) any Person may merge into the Parent or any of its Wholly-Owned Subsidiaries in connection with a Permitted Acquisition permitted pursuant to Section 8.3B(c); provided that (A) in the case of a merger involving the Parent or the Lessee, the continuing or surviving Person shall be the Parent or the Lessee, as applicable, (B) in the case of a merger involving a Guarantor, the continuing or surviving Person shall be a Guarantor, (C) the continuing or surviving Person shall be the Parent or a Wholly-Owned Subsidiary of the Parent and (D) the Lessee may not merge with the Parent;

(vii) Asset Dispositions permitted by Section 8.3B(e) (other than Section 8.3B(e)(v) to the extent it refers to Section 8.3B(d));

(viii) Any merger (not constituting a Change of Control) where a Credit Party is the surviving entity.

(e) Asset Dispositions. Make any Asset Disposition or enter into any agreement to make any Asset Disposition except:

(i) the sale of obsolete, worn-out or surplus assets no longer used or usable in the business of the Parent or any of its Subsidiaries;

(ii) so long as no Lease Default or Lease Event of Default has occurred and is continuing or would result therefrom, the abandonment, cancellation, non-renewal discontinuance of use or non-maintenance of intellectual property rights in the ordinary course of business not interfering, individually or in the aggregate, in any material respect with the conduct of the business of the Parent and its Subsidiaries;

(iii) leases, subleases, licenses or sublicenses of real or personal property granted by the Parent or any of its Subsidiaries to others in the ordinary course of business not interfering in any material respect with the business of the Parent or any of its Subsidiaries;

(iv) Asset Dispositions in connection with Insurance and Condemnation Events; provided that the requirements of any mandatory prepayment in the Operative Agreements with respect to such Insurance and Condemnation Event, if any, are complied with in connection therewith; provided, further, that the requirements concerning the Property in the Operative Agreements with respect to such Insurance and Condemnation Event are complied with in connection therewith;

(v) Assets Dispositions in connection with transactions permitted by Section 8.3B(d); and

(vi) Asset Dispositions (other than in respect of the Property) not otherwise permitted pursuant to this Section; provided that (i) at the time of such Asset Disposition, no Lease Default or Lease Event of Default shall exist or would result from such Asset Disposition, (ii) such Asset Disposition is made for fair market value, and (iii) at the time

of such Asset Disposition, the aggregate fair market value of all property disposed of in reliance on this clause (vi) over the term of this Agreement shall not exceed 7.5% of consolidated total assets of the Parent and its Subsidiaries as of the end of the most recent Fiscal Year for which the Agent has received the financial statements required to be delivered pursuant to Section 8.3A(a)(i) (net of any proceeds of such Asset Dispositions that have been reinvested in replacement assets or properties within the period of 18 months following such Asset Disposition).

(f) Restricted Payments. Declare or pay any dividend on, or make any payment or other distribution on account of, or purchase, redeem, retire or otherwise acquire (directly or indirectly), or set apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Credit Party or any Subsidiary thereof, or make any distribution of cash or property to the holders of shares of any Equity Interests of any Credit Party or any Subsidiary thereof (all of the foregoing, the “Restricted Payments”); provided that:

(i) so long as no Lease Default or Lease Event of Default has occurred and is continuing or would result therefrom, the Parent or any of its Subsidiaries may pay dividends in shares of its own Qualified Equity Interests;

(ii) any Subsidiary of the Parent may pay cash dividends to the Parent or any Guarantor (and, if applicable, to other holders of its outstanding Qualified Equity Interests on a pro rata basis);

(iii) the Parent may make other Restricted Payments; provided that, immediately before and immediately after giving pro forma effect to any such Restricted Payment, (A) no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by such Restricted Payment, and (B) the Agent shall have received satisfactory written evidence that, after giving effect to any such Restricted Payment on a Pro Forma Basis, (1) the Leverage Ratio of the Parent and its Subsidiaries, would not exceed 2.50 to 1.0, (2) the Credit Parties would be in compliance with the financial covenants set forth in Section 8.3B(n), and (3) the global unrestricted gross cash and Cash Equivalents of the Parent and its Subsidiaries shall not be less than $1,500,000,000.

(g) Transactions with Affiliates. Directly or indirectly enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with (a) any officer, director, holder of any Equity Interests in, or other Affiliate of, the Parent or any of its Subsidiaries, or (b) any Affiliate of any such officer, director or holder, except:

(i) transactions permitted by Sections 8.3B(a), 8.3B(c), 8.3B(d), 8.3B(e) and 8.3B(f);

(ii) transactions existing on the Closing Date and described on Schedule 8.3B(g);

(iii) transactions among (A) the Parent and any of its Subsidiaries or (B) any Subsidiary of the Parent with any other Subsidiary of the Parent;

(iv) other transactions in the ordinary course of business on terms as favorable as would be obtained by it on a comparable arm’s-length transaction with an independent, unrelated third party as determined in good faith by the board of directors (or equivalent governing body) of the Parent;

(v) employment and severance arrangements (including equity incentive plans and employee benefit plans and arrangements) with their respective officers and employees in the ordinary course of business, including without limitation, employment or appointment of officers, employees and/or attorneys-in-fact in common between the Parent and its Subsidiaries or among the Subsidiaries;

(vi) payment in the ordinary course of business of reasonable and customary compensation to officers and employees of the Parent and its Subsidiaries in their capacity as such;

(vii) transactions among any Subsidiaries of the Parent that are not Credit Parties which do not constitute a Material Adverse Effect; and

(viii) payment of customary fees and reasonable out of pocket costs to, and indemnities for the benefit of, directors, officers and employees of the Parent and its Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Parent and its Subsidiaries.

(h) Accounting Changes; Organizational Documents.

(i) Change its Fiscal Year end, or make (without the consent of the Agent) any material change in its accounting treatment and reporting practices except as permitted by GAAP.

(ii) (A) Amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents), (B) amend, modify or change its bylaws (or other similar documents) or (C) amend, modify or change any terms of any Material Contract, in each case, in any manner that would have a material adverse effect on the ability of the Credit Parties to perform their obligations under the Operative Agreements.

(i) Payments and Modifications of Subordinated Indebtedness.

(i) Amend, modify, waive or supplement (or permit the modification, amendment, waiver or supplement of) any of the terms or provisions of any Subordinated Indebtedness in any respect which would materially and adversely affect the rights or interests of any Financing Party under the Operative Agreements.

(ii) Cancel, forgive, make any payment or prepayment on, or redeem or acquire for value (including, without limitation, (A) by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due and (B) at the maturity thereof) any Subordinated Indebtedness, except:

(A) refinancings, refundings, renewals, extensions or exchange of any Subordinated Indebtedness permitted by Section 8.3B(a), and by any subordination provisions applicable thereto;

(B) other prepayments of any Subordinated Indebtedness so long as (A) immediately before and immediately after giving pro forma effect to any such Restricted Payment, no Lease Default or Lease Event of Default shall have occurred and be continuing or would be caused by such prepayment, and (B) the Agent shall have received satisfactory written evidence that, after giving effect to any such prepayment on a Pro Forma Basis, (1) the Leverage Ratio of the Parent and its Subsidiaries, would not exceed 2.50 to 1.0, (2) the Credit Parties would be in compliance with the financial covenants set forth in Section 8.3B(n), and (3) the global unrestricted gross cash and Cash Equivalents of the Parent and its Subsidiaries shall not be less than $1,500,000,000; and

(j) Restrictive Agreements. Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party or any Subsidiary thereof to (i) pay dividends or make any other distributions to any Credit Party or any Subsidiary on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Credit Party or (iii) make loans or advances to any Credit Party, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Operative Agreements and (B) Applicable Law; provided, however, that the foregoing shall not apply to Contractual Obligations that (1) represent Indebtedness of a Subsidiary which is not a Credit Party which is permitted by Section 8.3B(a), (2) are customary restrictions that arise in connection with any Disposition permitted by Section 8.3B(e), (3) are customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 8.3B(c) and applicable solely to such joint venture, (4) are negative pledges and restrictions on Liens in favor of any holder of Indebtedness permitted under Section 8.3B(a) but solely to the extent any negative pledge relates to the property financed by or secured by such Indebtedness (and excluding in any event any Indebtedness junior to the Obligations) or that expressly permits Liens for the benefit of the Financing Parties with respect to the credit facilities established hereunder and the Obligations under the Operative Agreements on a senior basis without the requirement that such holders of such Indebtedness be secured by such Liens on an equal and ratable, or junior, basis, or (5) are customary restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted hereby so long as such restrictions may relate to the assets subject thereto.

(k) Nature of Business. Engage in any business other than the business of visual and accelerated computing and business activities reasonably related or ancillary thereto or that are reasonable extensions thereof.

(l) Use of Proceeds. Use the proceeds of the extensions of credit under the Operative Agreements for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System) or any other purpose other than to finance the Property Costs in connection with the applicable Permitted Facility.

(m) Sanctions; Anticorruption Laws. Directly or indirectly, unlawfully use any part of the proceeds of any extension of credit under the Operative Agreements (A) to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country, or in any other manner that will result in any violation by any Person (including any Financing Party) of any Anti-Terrorism Laws, or (B) for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 or other similar anti-corruption legislation in other jurisdictions.

(n) Financial Covenants.

(i) Leverage Ratio. As of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending July 26, 2015, permit the Leverage Ratio to be greater than 3.0 to 1.0.

(ii) Interest Coverage Ratio. As of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending July 26, 2015, permit the Interest Coverage Ratio to be less than 3.5 to 1.0.

For purposes of calculating the ratios set forth in clauses (i) and (ii) above, (a) the balance of the Property Cost owed will be treated as principal of Indebtedness, (b) Basic Rent will be treated as interest owed on Indebtedness and (c) each of the ratios will be calculated on a consolidated basis for each consecutive four fiscal quarter period.


8.4	Sharing of Certain Payments.

Except for Excepted Payments, the parties hereto acknowledge and agree that all payments due and owing by any Credit Party to the Lessor under the Lease or any of the other Operative Agreements shall be made by such Credit Party directly to the Agent as more particularly provided in Section 8.3(b) hereof. The Financing Parties and the Credit Parties acknowledge the terms of Section 8.7 of this Agreement regarding the allocation of payments and other amounts made or received from time to time under the Operative Agreements and agree, that all such payments and amounts are to be allocated as provided in Section 8.7 of this Agreement.


8.5	Grant of Easements, Agreement regarding Restrictive Covenants, etc.

The Financing Parties hereby agree that, so long as no Event of Default shall have occurred and be continuing, the Lessor shall, from time to time at the request of the Lessee (and with the prior consent of the Agent), in connection with the transactions contemplated by the Agency Agreement, the Lease or the other Operative Agreements, (i) grant easements and other rights in the nature of easements with respect to the Property, (ii) release existing easements or other rights in the nature of easements which are for the benefit of the Property, (iii) execute and deliver to any Person any instrument appropriate to confirm or effect such grants or releases, and (iv) execute and deliver to any Person such other documents or materials in connection with the acquisition, development, construction, testing or operation of the Property, including reciprocal easement agreements, construction contracts, operating agreements, development agreements, plats, replats or subdivision documents; provided, that each of the agreements referred to in this Section 8.5 shall be of the type normally executed by the Lessee in the ordinary course of the Lessee’s business and shall be on commercially reasonable terms so as not to diminish the value or limit the use of the Property in any material respect.


8.6	Appointment of the Agent by the Lessor; Acknowledgement by the Secured Parties.

The Lessor hereby appoints the Agent to act as collateral agent and administrative agent for the Lessor in connection with the Operative Agreements, and the Lessor hereby assigns to the Agent the Lien granted by the Lease to secure the Lessor Advances. The Secured Parties acknowledge, agree and direct that the rights and remedies of the Secured Parties in connection with an Event of Default, including as beneficiaries of the Lien of the Security Documents, shall be exercised by the Agent on behalf of the Secured Parties as directed from time to time (a) by the Majority Secured Parties; provided, notwithstanding the foregoing, the Agent shall not take any action concerning the exercise of remedies or otherwise under any of the Operative Agreements with respect to the Property (regardless of whether an Event of Default has occurred and is continuing) unless the Lessor has expressly consented to such action or (b) pursuant to Sections 8.2(c) and 12.4, by the Credit Lenders, the Mortgage Lenders and the Lessor, as the case may be; provided, that for the avoidance of doubt, nothing in this Section 8.6 shall affect any automatic acceleration or right of acceleration exercised in accordance with the applicable Operative Agreement; and provided further, in all cases, the Agent shall allocate payments and other amounts received in accordance with Section 8.7. Except in the case of Excepted Payments and other rights expressly reserved by the Lessor pursuant to the Operative Agreements and subject to Section 12.4, the Agent is further appointed to provide notices under the Operative Agreements on behalf of the Lessor (as determined by the Agent, in its commercially reasonable discretion) and to receive notices under the Operative Agreements on behalf of the Lessor. The Agent hereby accepts such appointments. The Agent hereby further agrees promptly to provide notices and other documentation received from time to time from the Credit Parties to each of the Lessor, the Mortgage Lenders and the Credit Lenders. For purposes hereof, the provisions of Article 7 of the Mortgage Loan Agreement, together with such other terms and provisions of the Mortgage Loan Agreement and the other Operative Agreements as required for the full interpretation and operation of Article 7 of the Mortgage Loan Agreement are hereby incorporated by reference as if restated herein for the mutual benefit of the Agent and the Lessor as if the Lessor were a Mortgage Lender thereunder. Outstanding Credit Loans, outstanding Mortgage Loans and outstanding Lessor Advances shall be taken into account for purposes of determining Majority Secured Parties. The parties hereto hereby agree to the provisions contained in this Section 8.6. Any appointment of a successor agent under Section 7.8 of the Mortgage Loan Agreement or Section 7.8 of the Credit Loan Agreement shall also be effective as an appointment of a successor agent for purposes of this Section 8.6.


8.7	Collection and Allocation of Payments and Other Amounts.

(a) Each Credit Party has agreed pursuant to Section 5.7 and otherwise in accordance with the terms of this Agreement to pay to (i) the Agent any and all Rent (excluding Excepted Payments) and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable to any Person and (ii) each Person as appropriate the Excepted Payments. Promptly after receipt, the Agent shall apply and allocate, in accordance with the terms of this Section 8.7, such amounts received from any Credit Party and all other payments, receipts and other consideration of any kind whatsoever received by any Secured Party in connection with the Collateral, the Security Documents or any of the other Operative Agreements. Ratable distributions among the Mortgage Lenders, the Credit Lenders and the Lessor under this Section 8.7 shall be made based on (in the case of the Mortgage Lenders) the ratio of the outstanding Mortgage Loans to the Property Cost, (in the case of the Credit Lenders) the ratio of the outstanding Credit Loans to the Property Cost, and (in the case of the Lessor) the ratio of the outstanding Lessor Advances to the Property Cost.

(b) Payments and other amounts received by the Agent from time to time in accordance with the terms of subparagraph (a) shall be applied and allocated as follows (subject in all cases to Sections 8.7(c)(i), (ii) and (iii)):

(i) Any such payment or amount identified as or deemed to be Basic Rent, any amount in respect of a Casualty referenced in the last sentence of Section 3.4(b) of the Agency Agreement or any amount in respect of a Condemnation referenced the last sentence of Section 3.5(b) of the Agency Agreement shall be applied and allocated by the Agent:

first, ratably to the Credit Lenders, the Mortgage Lenders and the Lessor for application and allocation to the payment of interest on the Loans and to the payment of accrued Lessor Yield with respect to the Lessor Advances and thereafter ratably to the principal of the Loans and the portion of the Lessor Advances which is due and payable on such date;

second, if a Lease Default or Lease Event of Default is in effect, such excess (if any) shall be held by the Agent until the earlier of (A) the first date thereafter on which no Lease Default or Lease Event of Default shall be in effect (in which case such payments or returns shall then be made pursuant to “third” below) and (B) the Expiration Date (or, if earlier, the date of any Acceleration), in which case such amounts shall be applied and allocated in the manner contemplated by Section 8.7(b)(iv);

third, ratably to the Hedge Banks for application and allocation to the payment obligations then owing under the Secured Hedge Agreements; and

fourth, any excess shall be paid to the Lessee.

(ii) Except as otherwise specified pursuant to the last sentence of Section 3.4(b) or the last sentence of Section 3.5(b) of the Agency Agreement, if on any date the Agent or the Lessor shall receive any amount in respect of any Casualty or Condemnation pursuant to Section 15.1(a) or 15.1(g) of the Lease or Section 3.4 or 3.5 of the Agency Agreement, then such amount shall be applied and allocated in accordance with Section 8.7(b)(iii)(x) hereof.

(iii) (x) An amount equal to any payment identified as proceeds of the sale or other disposition (or lease upon the exercise of remedies) of the Property or any portion thereof (provided, in connection with the exercise of the Sale Option, an allocation shall be made pursuant to Section 21.1(d) of the Lease with the Lessee retaining the amounts allocable to it under such Section 21.1(d) and the other amounts thereunder being allocated pursuant to the first paragraph of this Section 8.7(b) and thereafter to the following provisions of this Section 8.7(b)(iii)(x)), pursuant to the exercise of remedies under the Security Documents or otherwise, or pursuant to the exercise of remedies set forth in the Agency Agreement (provided, in connection with the exercise of remedies under Section 5.3(b) of the Agency Agreement regarding an Agency Agreement Event of Default other than a Full Recourse Event of Default, an allocation shall be made initially under such Section 5.3(b) with the Construction Agent retaining the amounts allocable to it under such Section 5.3(b)

and the other amounts thereunder being allocated pursuant to the first paragraph of this Section 8.7(b) and thereafter to the following provisions of this Section 8.7(b)(iii)(x)) or pursuant to the exercise of remedies set forth in the Lease (provided, in connection with the exercise of remedies under Section 17.6 of the Lease, an allocation shall be made initially under Section 17.6(c) of the Lease with the Lessee retaining the amounts allocable to it under such Section 17.6(c) and the other amounts thereunder being allocated pursuant to the first paragraph of this Section 8.7(b) and thereafter to the following provisions of this Section 8.7(b)(iii)(x)) and any payment in respect of excess wear and tear pursuant to Section 21.3 of the Lease, in each case shall be applied and allocated by the Agent:

first, ratably to the payment of interest on the Mortgage Loans, then to the principal balance of the Mortgage Loans and then to all other amounts owing under the Operative Agreements to the Mortgage Lenders then outstanding;

second, to the payment to the Lessor of the Lessor Yield with respect to the Lessor Advances, then to the principal balance of the Lessor Advances and then to all other amounts owing under the Operative Agreements to the Lessor then outstanding;

third, ratably to the payment of interest on the Credit Loans, then to the principal balance of the Credit Loans and then to all other amounts owing under the Operative Agreements to the Credit Lenders then outstanding;

fourth, to the extent moneys remain after application and allocation pursuant to clauses first through third above, to the Lessor for application and allocation to any and all other amounts owing under the Operative Agreements as the Lessor shall determine; provided, where no Event of Default shall exist and be continuing and a prepayment is made for any reason with respect to less than the full amount of the outstanding principal amount of the Mortgage Loans, the outstanding principal amount of the Credit Loans and the outstanding Lessor Advances, the proceeds shall be applied and allocated ratably to the Mortgage Lenders, the Credit Lenders and the Lessor;

fifth, ratably to the Hedge Banks for application and allocation to the payment obligations then owing under the Secured Hedge Agreements; and

sixth, to the extent moneys remain after application and allocation pursuant to clauses first through fifth above, to the Lessee.

(y) Notwithstanding any provision in any Operative Agreement to the contrary (including the provisions of clause (x) of this Section 8.7(b)(iii)), any amount paid by a third party purchaser for the purchase of the Property on the

Expiration Date pursuant to the election by the Lessee of the Sale Option shall be applied and allocated by the Agent in the following order of priority:

first, so much of such amount as shall be required to pay actual and reasonable costs of the Financing Parties of selling and transferring the Property, including all recordation fees, legal fees and expenses, finders’ and brokers’ fees and sales commissions allocable to the Property;

second, ratably to the payment of interest on the Mortgage Loans, then to the principal balance of the Mortgage Loans and then to all other amounts owing under the Operative Agreements to the Mortgage Lenders then outstanding;

third, to the payment to the Lessor of the Lessor Yield with respect to the Lessor Advances, then to the principal balance of the Lessor Advances and then to all other amounts owing under the Operative Agreements to the Lessor then outstanding;

fourth, ratably to the payment of interest on the Credit Loans, then to the principal balance of the Credit Loans and then to all other amounts owing under the Operative Agreements to the Credit Lenders then outstanding;

fifth, ratably to the Hedge Banks for application and allocation to the payment obligations then owing under the Secured Hedge Agreements; and

sixth, to the extent monies remain after application and allocation pursuant to clauses first through fifth above, to the Lessee.

(i) An amount equal to (A) any such payment identified as a payment pursuant to the Maximum Residual Guarantee Amount or the Deficiency Balance, as may be required under the Lease, or the Construction Period Guarantee Amount, as may be required under the Agency Agreement, (B) any other amount payable upon any exercise of remedies after the occurrence and continuance of an Event of Default not covered by Section 8.7(b)(i) or 8.7(b)(iii) above (including any amount received in connection with an Acceleration which does not represent proceeds from the sale or liquidation of the Property), (C) any amounts payable by the Guarantors pursuant to Section 6B and (D) any payment of the Termination Value under the Agency Agreement or the Lease, including in connection with Article V of the Agency Agreement, Article XVII of the Lease or the exercise of the Purchase Option under Articles XVI or XX of the Lease, in each case shall be applied and allocated by the Agent:

first, ratably to the payment of interest on the Credit Loans, then to the principal balance of the Credit Loans and then to all other amounts owing under the Operative Agreements to the Credit Lenders then outstanding;

fourth, to the extent moneys remain after application and allocation pursuant to clauses first through third above, to the Lessor for application and allocation to any other amounts owing under the Operative Agreements as the Lessor shall determine; and

fifth, ratably to the Hedge Banks for application and allocation to the payment obligations then owing under the Secured Hedge Agreements.

(ii) An amount equal to any such payment identified as Supplemental Rent shall be applied and allocated by the Agent to the payment of any amounts then owing to the Financing Parties and the other parties to the Operative Agreements (or any of them) (other than any such amounts payable pursuant to the preceding provisions of this Section 8.7(b)) for which such payment is made in accordance with the provisions of Operative Agreements; provided, however, that Supplemental Rent received upon the exercise of remedies after the occurrence and continuance of an Event of Default in lieu of or in substitution of the Maximum Residual Guarantee Amount or as a partial payment thereon shall be applied and allocated as set forth in Section 8.7(b)(iv).

(iii) The Agent in its commercially reasonable judgment shall identify the nature of each payment or amount received by the Agent and apply and allocate each such amount in the manner specified above.

(c) Upon the payment in full of all amounts then due and owing by the Lessee under the Operative Agreements, any moneys remaining with the Agent shall be returned to the Lessee. It is agreed that, prior to the application and allocation of amounts received by the Agent in the order described in Section 8.7(b) above or any distribution of money to the Lessee, any such amounts shall first be applied and allocated to the payment of (i) any and all sums advanced by the Agent or the Lessor in order to preserve the Collateral or to preserve its Lien thereon, (ii) the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Agent or the Lessor of its rights under the Security Documents, together with reasonable attorneys’ fees and expenses and court costs and (iii) any and all other amounts reasonably owed to the Agent under or in connection with the transactions contemplated by the Operative Agreements (including any accrued and unpaid administration fees).

(d) The parties hereto agree that all amounts to be paid to the Credit Lenders and the Mortgage Lenders under the Operative Agreements (except for Excepted Payments) shall be paid first to the Agent for distribution in accordance with the provisions of the Credit Loan Agreement and the Mortgage Loan Agreement, respectively.

(e) Notwithstanding the foregoing, Secured Obligations arising under Secured Hedge Agreements shall be excluded from the application described above in this Section 8.7 if the Agent has not received written notice thereof, together with such supporting documentation as the Agent may request, from the applicable Hedge Bank. Each Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Agent pursuant to the terms of Article VII of the Credit Loan Agreement for itself and its Affiliates as if a “Credit Lender” party thereto.


8.8	Release of Property, etc.

If the Lessee shall at any time purchase the Property pursuant to the Lease, or the Construction Agent shall purchase the Property pursuant to the Agency Agreement, or if the Property shall be sold in accordance with Article XXI of the Lease, then, upon payment of all amounts then due and owing by the Lessee and the Construction Agent under the Operative Agreements, the Agent is hereby authorized and directed to release the Property from the Liens created by the Operative Agreements to the extent of its interest therein. In addition, upon the termination of the Credit Loan Commitments, the Mortgage Loan Commitments and the Lessor Commitment and the payment in full of all amounts then due and owing by the Lessee under the Operative Agreements, the Agent is hereby authorized and directed to release the Property from the Liens created by the Operative Agreements to the extent of its interest therein. Upon request of the Lessor or the Lessee following any such release, the Agent shall, at the sole cost and expense of the Lessee, promptly execute and deliver to the Lessor and the Lessee such documents as the Lessor or the Lessee shall reasonably request to evidence such release.


8.9	Secured Hedge Agreements.

No Hedge Bank that obtains the benefits of Sections 6B or 8.7 or any Collateral by virtue of the provisions hereof or of any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Operative Agreement or otherwise in respect of any provision of the Operative Agreements or of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Operative Agreements. Notwithstanding any other provision of any Operative Agreement to the contrary, the Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Hedge Agreements unless the Agent has received written notice of such Secured Hedge Agreements, together with such supporting documentation as the Agent may request, from the applicable Hedge Bank.

SECTION 9.
CREDIT LOAN AGREEMENT, MORTGAGE LOAN AGREEMENT
AND RIGHTS UNDER SECTION 5A OF THIS AGREEMENT.


9.1	The Construction Agent’s and the Lessee’s Credit Loan Agreement Rights.

Notwithstanding anything to the contrary contained in the Credit Loan Agreement, the Agent, the Credit Lenders, the Credit Parties and the Lessor hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default or Agency Agreement Default or Agency Agreement Event of Default, the Construction Agent and the Lessee shall have the following rights (provided, that Lessee shall have the right to receive all notices and certificates referenced in this Section 9.1 notwithstanding the

occurrence and continuance of any Lease Default or Lease Event of Default or Agency Agreement Default or Agency Agreement Event of Default):

(a) the sole right to request funding of Credit Loans pursuant to Section 2.1 of the Credit Loan Agreement;

(b) the sole right to designate an account to which amounts funded under the Operative Agreements shall be credited pursuant to Section 2.3(a) of the Credit Loan Agreement;

(d) the sole right to terminate or reduce the Credit Loan Commitments pursuant to Section 2.5(a) of the Credit Loan Agreement;

(e) the sole right to provide any notice of prepayment pursuant to Section 2.6(a) of the Credit Loan Agreement;

(f) the sole right to require a Credit Lender assignment pursuant to Section 2.7(b) of the Credit Loan Agreement;

(g) the sole right to provide any notice pursuant to Section 2.11 of the Credit Loan Agreement; and

(h) the right to receive any notice and any certificate, in each case issued to the Lessor or the Lessee pursuant to the Credit Loan Agreement.


9.2	The Construction Agent’s and the Lessee’s Mortgage Loan Agreement Rights.

Notwithstanding anything to the contrary contained in the Mortgage Loan Agreement, the Agent, the Mortgage Lenders, the Credit Parties and the Lessor hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default or Agency Agreement Default or Agency Agreement Event of Default, the Construction Agent and the Lessee shall have the following rights (provided, that Lessee shall have the right to receive all notices and certificates referenced in this Section 9.2 notwithstanding the occurrence and continuance of any Lease Default or Lease Event of Default or Agency Agreement Default or Agency Agreement Event of Default):

(a) the sole right to request funding of Mortgage Loans pursuant to Section 2.1 of the Mortgage Loan Agreement;

(b) the sole right to designate an account to which amounts funded under the Operative Agreements shall be credited pursuant to Section 2.3(a) of the Mortgage Loan Agreement;

(d) the sole right to terminate or reduce the Mortgage Loan Commitments pursuant to Section 2.5(a) of the Mortgage Loan Agreement;

(e) the sole right to provide any notice of prepayment pursuant to Section 2.6(a) of the Mortgage Loan Agreement;

(f) the sole right to require a Mortgage Lender assignment pursuant to Section 2.7(b) of the Mortgage Loan Agreement;

(g) the sole right to provide any notice pursuant to Section 2.11 of the Mortgage Loan Agreement; and

(h) the right to receive any notice and any certificate, in each case issued to the Lessor or the Lessee pursuant to the Mortgage Loan Agreement.


9.3	The Construction Agent’s and the Lessee’s Rights under Section 5A of this Agreement.

Notwithstanding anything to the contrary contained in any Operative Agreement, the Credit Parties and the Lessor hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default, or Agency Agreement Default or Agency Agreement Event of Default, the Construction Agent and the Lessee shall have the following rights (provided, that Lessee shall have the right to receive all notices and certificates referenced in this Section 9.3 notwithstanding the occurrence and continuance of any Lease Default or Lease Event of Default or Agency Agreement Default or Agency Agreement Event of Default):

(a) the sole right to provide any notices of prepayment pursuant to Section 5A.4 of this Agreement; and

(b) the sole right to receive any notice and any certificate, in each case issued pursuant to Section 5A.1 through 5A.5 of this Agreement.

SECTION 10.
TRANSFER OF INTEREST.


10.1	Restrictions on Transfer.

Each Lender may participate, assign or transfer all or a portion of its interest hereunder and under the other Operative Agreements in accordance with Sections 9.7 and 9.8 of the applicable Loan Agreement; provided, that in the event any Lender assigns or transfers all or a portion of its interest hereunder and under the other Operative Agreements, such Lender shall deliver to the Agent a copy of any such assignment agreement or other documents referenced in Section 9.8 of the applicable Loan Agreement. If any assignment of a Lender’s interest pursuant to Section 9.8 of the applicable Loan Agreement is made at such time that a Lease Event of Default shall have occurred and be continuing, then the Lessee shall pay (as Supplemental Rent) the expenses incurred in connection with such assignment. The Lessor may, subject to the rights of the Lessee under the Lease and the other Operative Agreements and to the Lien of the applicable Security Documents but only with the prior written consent of the Agent and (provided, no Lease Default or Lease Event of Default has occurred and is continuing) with the consent of the Lessee (which consent may not be unreasonably withheld or delayed), directly or indirectly, assign, convey, appoint an agent with respect to enforcement of, or otherwise transfer any of its right, title or interest in or to the Property, the Lease and the other Operative Agreements (including any right to indemnification thereunder), or any other document relating to the Property or any interest in the Property as provided in the Lease. Any such transfer by the Lessor shall be only to an Eligible Lessor. It is hereby agreed that it would be reasonable for the Lessee to

withhold its consent to any such assignment by Lessor if and to the extent such assignment would, in the commercially reasonable judgment of the Lessee, materially impair the Lessee’s ability to achieve its desired accounting treatment regarding the transactions evidenced by the Operative Agreements. The provisions of the immediately preceding sentence shall not apply to the obligations of the Lessor to transfer the Property to the Lessee or a third party purchaser pursuant to the Lease or the Agency Agreement upon payment for the Property in accordance with the terms and conditions of the Lease or the Agency Agreement. No Credit Party may assign any of the Operative Agreements or any of their respective rights or obligations thereunder or with respect to the Property in whole or in part to any Person without the prior written consent of the Agent, the Mortgage Lenders, the Credit Lenders and the Lessor. Notwithstanding the foregoing (or any provision in any of the Operative Agreements to the contrary), the Lenders shall have the right to transfer their respective interests or grant a security interest in such interests to any Affiliate or other Lender or to a Federal Reserve bank.


10.2	Effect of Transfer.

From and after any transfer effected in accordance with this Section 10, the transferor shall be released, to the extent of such transfer, from its liability hereunder and under the other documents to which it is a party in respect of obligations to be performed on or after the date of such transfer; provided, however, that any transferor shall remain liable hereunder and under such other documents to the extent that the transferee shall not have assumed the obligations of the transferor thereunder. Upon any transfer by the Lessor, the Credit Lenders or the Mortgage Lenders as above provided, any such transferee shall assume the obligations of the Lessor, the Credit Lender or the Mortgage Lender, as the case may be, and shall be deemed a “Lessor”, “Credit Lender” or a “Mortgage Lender”, as the case may be, for all purposes of such documents and each reference herein to the transferor shall thereafter be deemed a reference to such transferee for all purposes, except as provided in the preceding sentence. Notwithstanding any transfer of all or a portion of the transferor’s interest as provided in this Section 10, the transferor shall be entitled to all benefits accrued and all rights vested prior to such transfer including rights to indemnification under any such document.


10.3	Successor Agent.

The Agent may, at any time, resign upon twenty (20) days’ written notice to the Credit Lenders, the Mortgage Lenders, the Lessor and the Lessee and be removed with cause by the Credit Lenders, the Mortgage Lenders and the Lessor upon thirty (30) days’ written notice to the Agent. Upon any such resignation or removal, the Majority Secured Parties shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed, and shall have accepted such appointment, within thirty (30) days after the notice of resignation or notice of removal, as appropriate, then the retiring Agent shall select a successor Agent provided such successor is a Lender or a commercial bank organized under the laws of the United States of America or of any State thereof, has a combined capital and surplus of at least $100,000,000 or an Affiliate of any such commercial bank. Upon the acceptance of any appointment as Agent hereunder by a successor, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations as Agent under the Operative Agreements. Notwithstanding the foregoing, the provisions of Section 7 of the Credit Loan Credit Agreement and the Mortgage Loan Credit Agreement shall inure to the benefit of the retiring Agent as to any actions taken or omitted to be taken by it while it was Agent under the Operative Agreements.

SECTION 11.
INDEMNIFICATION.


11.1	General Indemnity.

Subject to Section 11.6, whether or not any of the transactions contemplated hereby shall be consummated, the Indemnity Provider hereby assumes liability for and agrees to defend, indemnify and hold harmless each Indemnified Person on an After Tax Basis from and against any Claims, which may be imposed on, incurred by or asserted against an Indemnified Person by any third party (including any other Indemnified Person), including Claims arising from the negligence of such Indemnified Person (but not to the extent such Claims arise from (i) the gross negligence or willful misconduct of such Indemnified Person itself, as determined by a court of competent jurisdiction in final nonappealable judgment, as opposed to gross negligence or willful misconduct imputed to an Indemnified Person, or (ii) a breach in bad faith of such Indemnified Person’s obligations hereunder or under the other Operative Agreements, as determined by a court of competent jurisdiction in final nonappealable judgment), whether or not such Indemnified Person shall also be indemnified as to any such Claim by any other Person and whether or not such Claim is initiated after the Termination Date, so long as such Claim arises out of an act or omission (or other circumstance or condition of any kind or description) which arose or occurred prior to the Termination Date, in any way relating to or arising or alleged to relate to, or arise out of the execution, delivery, performance or enforcement of this Agreement, the Lease, the Agency Agreement or any other Operative Agreement or on or with respect to the Property or any component thereof, including Claims in any way relating to or arising or alleged to arise out of (a) the financing, refinancing, purchase, acceptance, rejection, ownership, design, construction, refurbishment, development, delivery, nondelivery, leasing, subleasing, possession, use, occupancy, operation, maintenance, repair, modification, transportation, condition, sale, return, repossession (whether by summary proceedings or otherwise), or any other disposition of the Property or any part thereof, including the acquisition, holding or disposition of any interest in the Property, lease or agreement comprising a portion of any thereof; (b) any latent or other defects in the Property or any portion thereof whether or not discoverable by an Indemnified Person or the Indemnity Provider; (c) any violation or alleged violation of law or in tort (strict liability or otherwise); (d) any Claim based upon a violation or alleged violation of the terms of any restriction, easement, condition or covenant or other matter affecting title to the Property; (e) any violation of or noncompliance with (or alleged violation or noncompliance with) any Environmental Laws, any Environmental Claims or any loss of or damage to any property or the environment relating to the Property, the Lease or the Indemnity Provider; (f) the Operative Agreements, or any transaction contemplated thereby (including the formation, continuance, operation and ultimate dissolution and liquidation of the Lessor) or any amendment, modification or waiver thereof or the exercise of remedies under any Operative Agreement following the occurrence and continuance of any Lease Event of Default; (g) any breach by the Indemnity Provider, the Construction Agent or any Guarantor of any of its representations or warranties under the Operative Agreements to which the Indemnity Provider, the Construction Agent or any Guarantor is a party or failure by the Indemnity Provider, the Construction Agent or any Guarantor to perform or observe any covenant or agreement to be performed by it under any of the Operative Agreements; (h) the making of any Modifications in violation of the Operative Agreements or any standards imposed by any insurance policies required to be maintained by the Lessee pursuant to the Lease which are in effect at any time with respect to the Property or any part thereof; (i) any Claim for patent, trademark or copyright infringement; (j) the transactions contemplated hereby or by any other Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (k) personal injury, death or property damage, including Claims based on strict or absolute liability in tort; (l) any fees, expenses and/or other assessments by any business park or any other applicable entity with oversight responsibility for the applicable Property; (m) the retaining or employment of any broker, finder or financial advisor by the Lessee to act on its behalf in connection with this Agreement or the other Operative Agreements; (n) Claims arising from any public improvements with respect to the Property resulting in any change or special assessments being levied against the Property

or any plans to widen, modify or realign any street or highway adjacent to the Property, or any Claim for utility “tap‑in” fees; (o) except in all cases for the existence of Lessor Liens and Liens created under the Operative Agreements in favor of any Financing Party, the existence of any Lien on or with respect to the Property, the Improvements or any Equipment relating thereto, title thereto, any interest therein or on any Basic Rent or Supplemental Rent, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Property or by reason of labor or materials furnished or claimed to have been furnished to the Lessor or the Lessor or any predecessor in title, or any of its contractors or agents or by reason of the financing of any personalty or equipment purchased or leased by the Lessee or the Lessor or any predecessor in title or Modifications constructed by the Lessee.

If a written Claim is made against any Indemnified Person or if any proceeding shall be commenced against such Indemnified Person (including a written notice of such proceeding), for any Claim, such Indemnified Person shall promptly notify the Indemnity Provider in writing and shall not take action with respect to such Claim without the consent of the Indemnity Provider for thirty (30) days after the receipt of such notice by the Indemnity Provider; provided, however, that in the case of any such Claim, if action shall be required by law or regulation to be taken prior to the end of such period of thirty (30) days, such Indemnified Person shall endeavor to, in such notice to the Indemnity Provider, inform the Indemnity Provider of such shorter period, and no action shall be taken with respect to such Claim without the consent of the Indemnity Provider before seven (7) days before the end of such shorter period; provided, further, that the failure of such Indemnified Person to give the notices referred to in this sentence shall not diminish the Indemnity Provider’s obligation hereunder except to the extent such failure precludes in any material respect the Indemnity Provider from contesting such Claim.

If, within thirty (30) days of receipt of such notice from the Indemnified Person (or such shorter period as the Indemnified Person has notified the Indemnity Provider is required by law or regulation for the Indemnified Person to respond to such Claim), the Indemnity Provider shall request in writing that such Indemnified Person respond to such Claim, the Indemnified Person shall, at the expense of the Indemnity Provider, in good faith conduct and control such action (including by pursuit of appeals) by, in the sole discretion of the Person conducting and controlling such action (1) resisting payment thereof, (2) not paying the same except under protest, if protest is necessary and proper, (3) if the payment be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or (4) taking such other action as is reasonably requested by the Indemnity Provider from time to time (provided, however, that (A) if such Claim, in the Indemnity Provider’s reasonable discretion, can be pursued by the Indemnity Provider on behalf of or in the name of such Indemnified Person, the Indemnified Person, at the Indemnity Provider’s request, shall allow the Indemnity Provider to conduct and control the response to such Claim unless such Claim cannot be pursued independently from any other claim involving such Indemnified Person or unless such Claim is unrelated to the Property or the transactions contemplated by the Operative Agreements and (B) in the case of any Claim (and notwithstanding the provisions of the foregoing subsection (A)), the Indemnified Person may require the Indemnity Provider to conduct and control the response to such Claim (with counsel to be selected by the Indemnity Provider and consented to by such Indemnified Person, such consent not to be unreasonably withheld); provided, however, that any Indemnified Person may retain separate counsel at the expense of the Indemnity Provider if, in the written opinion of counsel to the Indemnified Person reasonably acceptable to the Indemnity Provider (the expense of which opinion shall be paid by the Indemnity Provider), use of counsel of the Indemnity Provider’s choice would be expected to give rise to a conflict of interest between such Indemnified Person and the Indemnity Provider).

The party controlling the response to any Claim shall consult in good faith with the non‑controlling party and shall keep the non‑controlling party reasonably informed as to the conduct of the response to such Claim; provided, that all decisions ultimately shall be made in the discretion of the controlling party. The parties agree that an Indemnified Person may at any time decline to take further action with respect to the response to such Claim and may settle such Claim if such Indemnified Person shall waive its rights to any indemnity from the Indemnity Provider that otherwise would be payable in respect of such Claim (and any future Claim, the pursuit of which is precluded by reason of such resolution of such Claim) and shall pay to the Indemnity Provider any amount previously paid or advanced by the Indemnity Provider pursuant to this Section 11.1 by way of indemnification or advance for the payment of an amount regarding such Claim (not including the expenses of the contest).

Notwithstanding the foregoing provisions of this Section 11.1, an Indemnified Person shall not be required to take any action and the Indemnity Provider shall not be permitted to respond to any Claim in its own name or that of the Indemnified Person unless (A) the Indemnity Provider shall have agreed in writing to pay and shall pay to such Indemnified Person on demand and on an After Tax Basis all reasonable costs, losses and expenses that such Indemnified Person actually incurs in connection with such Claim, including all reasonable legal, accounting and investigatory fees and disbursements and the Indemnity Provider shall have agreed in writing to indemnify such Indemnified Person in respect of the Claim if and to the extent the contest is not successful, (B) the Indemnified Person shall have reasonably determined that the action to be taken will not result in any material danger of sale, forfeiture or loss of the Property, or any part thereof or interest therein, will not interfere with the payment of Rent, and will not result in risk of criminal liability or civil penalty or risk of sale, forfeiture or loss of or the creation of any Lien (other than a Permitted Lien) on the Property, (C) if such Claim shall involve the payment of any amount prior to the resolution of such Claim, the Indemnity Provider shall provide to the Indemnified Person an interest‑free advance in an amount equal to the amount that the Indemnified Person is required to pay (with no additional net after‑tax cost to such Indemnified Person) prior to the date such payment is due, (D) in the case of an appeal of an adverse determination respecting a Claim that must be pursued in the name of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall have provided to such Indemnified Person an opinion of independent counsel selected by the Indemnity Provider and reasonably satisfactory to the Indemnified Person stating that a reasonable basis exists to pursue such an appeal, and (E) no Lease Default or Lease Event of Default shall have occurred and be continuing. In no event shall an Indemnified Person be required to appeal an adverse judicial determination to the United States Supreme Court. In addition, an Indemnified Person shall not be required to contest any Claim in its name (or that of an Affiliate) if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Section 11.1, unless there shall have been a change in law (or interpretation thereof) and the Indemnified Person shall have received, at the Indemnity Provider’s expense, an opinion of independent counsel selected by the Indemnity Provider and reasonably acceptable to the Indemnified Person stating that as a result of such change in law (or interpretation thereof), it is more likely than not that the Indemnified Person will prevail in such contest. In no event shall the Indemnity Provider be permitted to adjust or settle any Claim without the consent of the Indemnified Person to the extent any such adjustment or settlement involves, or is reasonably likely to involve, any performance by or adverse admission by or with respect to the Indemnified Person.

Notwithstanding anything to the contrary, indemnities provided pursuant to this Section 11.1 shall not include indemnities provided pursuant to Section 11.2.


11.2	General Tax Indemnity.

(a) Subject to Section 11.6, the Indemnity Provider shall pay and assume liability for, and does hereby agree to indemnify, protect and defend the Property and all Indemnified Persons, and hold them harmless against, all Impositions on an After Tax Basis, and all payments pursuant to the Operative Agreements shall be made free and clear of and without deduction for any and all present and future Impositions.

(b) Notwithstanding anything to the contrary in Section 11.2(a) hereof, the following shall be excluded from the indemnity required by Section 11.2(a):

(i) Taxes (other than Taxes that are, or are in the nature of, sales, use, rental, value added, transfer or property taxes) that are imposed on an Indemnified Person (other than the Lessor) by the jurisdiction in which such Indemnified Person is organized that are based on or measured by the net income (including taxes based on capital gains and minimum taxes) of such Person; provided, that this clause (i) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made;

(ii) Taxes (other than Taxes that are, or are in the nature of, sales, use, rental, value added, transfer or property taxes) that are imposed on any Indemnified Person (other than the Lessor) by any state or local jurisdiction or taxing authority within any state or local jurisdiction and that are based upon or measured by the net income (including taxes based on capital gains and minimum taxes) of such Person; provided, that such Taxes shall not be excluded under this subparagraph (ii) to the extent the sole connections between such Indemnified Person and the jurisdiction imposing such Taxes is (A) the location, possession or use of the Property in, the location or the operation of the Lessee or any use of the Property in, or the making of payments under the Operative Agreements from, the jurisdiction imposing such Taxes and/or (B) the activities of any one or more of the Indemnified Persons in the jurisdiction imposing the Taxes in connection with its or their enforcement of remedies under the Operative Agreements; provided, further, that this clause (ii) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made;

(iii) any Taxes which are imposed on an Indemnified Person as a result of the gross negligence or willful misconduct of such Indemnified Person itself, as determined by a court of competent jurisdiction (as opposed to gross negligence or willful misconduct imputed to such Indemnified Person), but not Taxes imposed as a result of ordinary negligence of such Indemnified Person;

(iv) any Taxes subject to indemnification under Section 11.2(e).

(c) (i) Subject to the terms of Sections 11.2(f) and 11.6, the Indemnity Provider shall pay or cause to be paid all Impositions directly to the taxing authorities where feasible and otherwise to the Indemnified Person, as appropriate, and the Indemnity Provider shall at its own expense, upon such Indemnified Person’s reasonable request, furnish to such Indemnified Person copies of official receipts or other satisfactory proof evidencing such payment.

(ii) In the case of Impositions for which no contest is conducted pursuant to Section 11.2(f) and which the Indemnity Provider pays directly to the taxing authorities, the Indemnity Provider shall (subject to Section 11.6) pay such Impositions prior to the latest time permitted by the relevant taxing authority for timely payment. In the case of Impositions for which the Indemnity Provider reimburses an Indemnified Person, the Indemnity Provider shall do so within thirty (30) days after receipt by the Indemnity Provider of demand by such Indemnified Person describing in reasonable detail the nature of the Imposition and the basis for the demand (including the computation of the amount payable), accompanied by receipts, if available, or other reasonable evidence of such demand (and shall make advances with respect to such Impositions in the manner and to the extent provided by Section 11.2(f) and 11.1 prior to such date). In the case of Impositions for which a contest is conducted pursuant to Section 11.2(f), the Indemnity Provider shall (subject to Section 11.6) pay such Impositions or reimburse such Indemnified Person for such Impositions, to the extent not previously paid, advanced or reimbursed pursuant to subsection (a) or (f), prior to the latest time permitted by the relevant taxing authority for timely payment after conclusion of all contests under Section 11.2(f) (and shall make advances with respect to such Impositions in the manner and to the extent provided by Section 11.2(f) and 11.1 prior to such date).

(iii) At the Indemnity Provider’s request, the amount of any indemnification payment by the Indemnity Provider pursuant to subsection (a) shall be verified and certified by an independent public accounting firm mutually acceptable to the Indemnity Provider and the Indemnified Person. The fees and expenses of such independent public accounting firm shall be paid by the Indemnity Provider.

(d) The Indemnity Provider shall be responsible for preparing and filing any real and personal property or ad valorem tax returns in respect of the Property and any other tax returns required of the Lessor respecting the transactions described in the Operative Agreements. In case any report or tax return shall be required to be made with respect to any Tax indemnified by the Indemnity Provider under subsection (a), the Indemnity Provider, at its sole cost and expense, shall notify the relevant Indemnified Person of such requirement and (except if such Indemnified Person notifies the Indemnity Provider that such Indemnified Person intends to prepare and file such report or return) (A) to the extent required or permitted by and consistent with Legal Requirements, make and file in the Indemnity Provider’s name such return, statement or report; and (B) in the case of any other such return, statement or report required to be made in the name of such Indemnified Person, advise such Indemnified Person of such fact and prepare such return, statement or report for filing by such Indemnified Person or, where such return, statement or report shall be required to reflect items in addition to any obligations of the Indemnity Provider under or arising out of subsection (a), provide such Indemnified Person at the Indemnity Provider’s expense with information sufficient to permit such return, statement or report to be properly made with respect to any obligations of the Indemnity Provider under or arising out of subsection (a). Such Indemnified Person shall, upon the Indemnity Provider’s request and at the Indemnity Provider’s expense, provide any data maintained by such Indemnified Person (and not otherwise available to or within the control of the Indemnity Provider) with respect to the Property which the Indemnity Provider may reasonably require to prepare any required tax returns or reports.

(e) As between the Indemnity Provider on one hand, and each Financing Party on the other hand, the Indemnity Provider shall be responsible for, and the Indemnity Provider shall indemnify and hold harmless each Financing Party (including, for purposes of this Section 11.2(e), each Participant to the extent such Participant is entitled to the benefit of this provision pursuant to Section 9.7 of the applicable Loan Agreement) (without duplication of any indemnification required by subsection (a) and subject to Section 11.6) on an After Tax Basis against, any obligation for United States or foreign withholding taxes or similar levies, imposts, charges, fees, deductions or withholdings (collectively, “Withholdings”) imposed in respect of the interest payable on the Credit Notes, the Mortgage Notes, the Lessor Yield payable on the Lessor Advances, Rent payable under the Lease or with respect to any other payments under the Operative Agreements to be made without deduction, withholding or set-off (all such payments being referred to herein as “Exempt Payments”) (including, if any Financing Party receives a demand for such payment from any taxing authority or a Withholding is otherwise required with respect to any Exempt Payment, the Indemnity Provider shall discharge such demand on behalf of such Financing Party); provided, however, that the obligation of the Indemnity Provider under this Section 11.2(e) shall not apply to:

(i) Withholdings on any Exempt Payment to any Financing Party which is a non‑U.S. Person unless such Financing Party is, on the date hereof (or on the date it becomes a Financing Party hereunder) and on the date of any change in the principal place of business or the lending office of such Financing Party, entitled to submit and submits to Agent (which shall be available to the Indemnity Provider upon request) a Form W-8BEN, Form W‑8BEN‑E, Form W‑8IMY, Form W-8ECI or other applicable forms (relating to such Financing Party and entitling it to a complete exemption from Withholding on such Exempt Payment) or is otherwise subject to exemption from Withholding with respect to such Exempt Payment (except (a) in the case of a transferee, if the transferring Lessor, Credit Lender or Mortgage Lender was being indemnified against withholdings at the time of transfer as a result of a change in law after the Closing Date or (b) where the failure of the exemption results from a change in the principal place of business of the Lessee), or

(ii) Any U.S. Taxes imposed solely by reason of the failure by a non‑U.S. Person to comply with applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of America of such non‑U.S. Person if such compliance is required by statute or regulation of the United States of America as a precondition to relief or exemption from such U.S. Taxes (but only if the non-U.S. Person can truthfully and legally comply with such requirement).

For the purposes of this Section 11.2(e), (A) “U.S. Person” shall mean a citizen, national or resident of the United States of America, a corporation, partnership or other entity created or organized in or under any laws of the United States of America or any State thereof, or any estate or trust that is subject to Federal income taxation regardless of the source of its income and (B) “U.S. Taxes” shall mean any present or future tax, assessment or other charge or levy imposed by or on behalf of the United States of America or any taxing authority thereof or therein.

If a Financing Party or an Affiliate with whom such Financing Party files a consolidated tax return (or equivalent) subsequently receives the benefit in any country of a tax credit or an allowance resulting from U.S. Taxes with respect to which it has received a payment of an additional amount

under this Section 11.2(e), so long as no Lease Event of Default has occurred and is continuing (or at such time as such Lease Event of Default is no longer continuing), such Financing Party will pay to the Indemnity Provider such part of that benefit as in the opinion of such Financing Party, in its commercially reasonable discretion, will leave it (after such payment) in a position no more and no less favorable than it would have been in if no additional payment had been required to be paid, provided always that (i) such Financing Party will be the sole judge of the amount of any such benefit and of the date on which it is received, (ii) such Financing Party will have the absolute discretion as to the order and manner in which it employs or claims tax credits and allowances available to it, (iii) such Financing Party will not be obliged to disclose to the Lessor or the Indemnity Provider any information regarding its tax affairs or tax computations, and (iv) after receipt of a written request from the Indemnity Provider, such Financing Party shall provide a written statement generally describing its decision (but subject to the limitation in the preceding clause (iii)).

Each non‑U.S. Person that shall become a Financing Party after the date hereof shall, upon the effectiveness of the related transfer or otherwise upon becoming a Financing Party hereunder, be required to provide all of the forms and statements referenced above or other evidences of exemption from Withholdings to Agent, which shall be available to the Indemnity Provider upon request (unless the transferor of such Financing Party was being indemnified against withholding at the time of the transfer as a result of a change in law after the Closing Date).

(f) If an Imposition is made against any Indemnified Person or if any proceeding shall be commenced against such Indemnified Person (including a written notice of such proceeding), for any Imposition, such Indemnified Person shall promptly notify the Indemnity Provider in writing and shall not take action with respect to such Imposition without the consent of the Indemnity Provider (such consent not to be unreasonably withheld, conditioned or delayed) for thirty (30) days after the receipt of such notice by the Indemnity Provider; provided, however, that in the case of any such Imposition, if action shall be required by law or regulation to be taken prior to the end of such period of thirty (30) days, such Indemnified Person shall endeavor to, in such notice to the Indemnity Provider, inform the Indemnity Provider of such shorter period, and no action shall be taken with respect to such Imposition without the consent of the Indemnity Provider (such consent not to be unreasonably withheld, conditioned or delayed) before seven (7) days before the end of such shorter period; provided, further, that the failure of such Indemnified Person to give the notices referred to in this sentence shall not diminish the Indemnity Provider’s obligation hereunder except to the extent such failure effectively precludes the Indemnity Provider from contesting such Imposition.

Person (provided, however, that (A) if such contest, in the Indemnified Person’s reasonable discretion, can be pursued by the Indemnity Provider in its own name, the Indemnified Person, at the Indemnity Provider’s request, shall allow the Indemnity Provider to conduct and control the contest of such Imposition unless such Imposition cannot be pursued independently from any other claim involving such Indemnified Person or unless such Imposition is unrelated to the Property or the transactions contemplated by the Operative Agreements and (B) in the case of any Imposition (and notwithstanding the provisions of the foregoing subsection (A)), the Indemnified Person may require the Indemnity Provider to conduct and control the contest of such Imposition (with counsel to be selected by the Indemnity Provider and consented to by such Indemnified Person, such consent not to be unreasonably withheld); provided, however, that any Indemnified Person may retain separate counsel at the expense of the Indemnity Provider if, in the written opinion of counsel to the Indemnified Person reasonably acceptable to the Indemnity Provider (the expense of which opinion shall be paid by the Indemnity Provider), use of counsel of the Indemnity Provider’s choice would be expected to give rise to a conflict of interest between such Indemnified Person and the Indemnity Provider).

The party controlling the contest of any Imposition shall consult in good faith with the non‑controlling party and shall keep the non‑controlling party reasonably informed as to the conduct of the contest of such Imposition; provided, that all decisions ultimately shall be made in the discretion of the controlling party. The parties agree that an Indemnified Person may at any time decline to take further action with respect to the contest of such Imposition and may settle such contest if such Indemnified Person shall waive its rights to any indemnity from the Indemnity Provider that otherwise would be payable in respect of such Imposition (and any future Imposition, the pursuit of which is precluded by reason of such resolution of such contest) and shall pay to the Indemnity Provider any amount previously paid or advanced by the Indemnity Provider pursuant to this Section 11.2 by way of indemnification or advance for the payment of an amount regarding such Imposition (not including the expenses of the contest).

Notwithstanding the foregoing provisions of this Section 11.2(f), an Indemnified Person shall not be required to take any action and the Indemnity Provider shall not be permitted to contest any Imposition in its own name or that of the Indemnified Person unless (A) the Indemnity Provider shall have agreed in writing to pay and shall pay to such Indemnified Person on demand and on an After Tax Basis all reasonable costs, losses and expenses that such Indemnified Person actually incurs in connection with such contest, including all reasonable legal, accounting and investigatory fees and disbursements and the Indemnity Provider shall have agreed in writing to indemnify such Indemnified Person in respect of the Imposition if and to the extent the contest is not successful, (B) the Indemnified Person shall have reasonably determined that the action to be taken will not result in any material danger of sale, forfeiture or loss of the Property, or any part thereof or interest therein, will not interfere with the payment of Rent, and will not result in risk of criminal liability or risk of sale, forfeiture or loss of or the creation of any Lien (other than a Permitted Lien) on the Property, (C) if such contest shall involve the payment of any amount prior to the resolution of such contest, the Indemnity Provider shall provide to the Indemnified Person an interest‑free advance in an amount equal to the amount that the Indemnified Person is required to pay (with no additional net after‑tax cost to such Indemnified Person) prior to the date such payment is due, (D) in the case of a contest of an Imposition that cannot and is not to be pursued in the name of the Indemnity Provider, the Indemnity Provider shall have provided to such Indemnified Person an opinion of independent counsel selected by the Indemnity Provider and reasonably satisfactory to the

Indemnified Person stating that a reasonable basis exists to pursue the contest (or in the case of an appeal of adverse judicial determination, the position asserted in such appeal will more likely than not prevail), and (E) no Lease Default or Lease Event of Default shall have occurred and be continuing. In no event shall an Indemnified Person be required to appeal an adverse judicial determination to the United States Supreme Court. In addition, an Indemnified Person shall not be required to contest any Imposition in its name (or that of an Affiliate) if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely by a court of competent jurisdiction pursuant to the contest provisions of this Section 11.2(f), unless there shall have been a change in law (or interpretation thereof) and the Indemnified Person shall have received, at the Indemnity Provider’s expense, an opinion of nationally‑recognized independent counsel selected by the Indemnity Provider and reasonably acceptable to the Indemnified Person stating that as a result of such change in law (or interpretation thereof), that the Indemnified Person should prevail in such contest. In no event shall the Indemnity Provider be permitted to adjust or settle the contest of Imposition without the consent of the Indemnified Person to the extent any such adjustment or settlement involves, or is reasonably likely to involve, any performance by or adverse admission by or with respect to the Indemnified Person.

(g) Each Lender has entered into the transactions contemplated by the Operative Agreements on the assumption that the Loans are properly characterized for Federal, State and local income tax purposes as debt (the “Assumed Characterization”). If for any reason (and notwithstanding anything to the contrary contained in the Operative Agreements and without regard to paragraph (b) hereof, except subsections (iii) and (iv) thereof), any Financing Party shall suffer any adverse Federal, State or local income tax consequences as a result any challenge to the Assumed Characterization (a “Tax Loss”), the Indemnity Provider will pay to such Financing Party an amount sufficient to reimburse such Financing Party, on an After Tax Basis, for the additional Federal, State and local income taxes payable by (or not refundable to) such Financing Party from time to time as a result of such Tax Loss plus all interest, penalties, fines and additions to tax payable by such Financing Party as a result of such Tax Loss. In connection with the foregoing, the applicable Financing Party shall provide written notice to the Indemnity Provider of any claim for indemnification under this Section 11.2(g). Any such claim shall be subject to the contest provisions of Section 11.2(f) and the verification procedure set forth in Section 11.2(c)(iii). Any payments due to such Financing Party pursuant to this Section 11.2(g) shall be paid no later than the date that such Financing Party shall become obligated to pay the additional Federal, State or local income taxes resulting from the Tax Loss.


11.3	Yield Protection Amount.

Subject to Section 11.6, if any Regulatory Change occurring after the date hereof:

(a) shall impose upon any Financing Party (which, for purposes of this Section 11.3, shall include any Participant to the extent such Participant is entitled to the benefit of this provision pursuant to Section 9.7 of the applicable Loan Agreement), modify or deem applicable any reserve, special deposit or similar requirement against assets of any Financing Party, deposits or obligations with or for the account of any Financing Party or with or for the account of any Affiliate (or entity deemed by the Federal Reserve Board to be an Affiliate) of any Financing Party, or credit extended by any Financing Party; or

(b) shall change the amount of capital maintained or required or requested or directed to be maintained by any Financing Party or such Financing Party’s holding company; or

(c) shall impose any other condition affecting any Note, any Lessor Advance or any Operative Agreement (or any Financing Party’s participation therein) or any of its obligations or right to acquire or hold any Note or any Lessor Advance; and the result of any of the foregoing is or would be with regard to the transactions evidenced by the Operative Agreements:

(iv) to increase the cost to (or impose a cost on) a Financing Party funding or acquiring or holding any Note, any Lessor Advance, or loans or other extensions of credit under any Operative Agreement or any obligation or commitment of such Financing Party with respect to any of the foregoing,

(v) to reduce the amount of any sum received or receivable by a Financing Party as a Mortgage Lender, a Credit Lender or as the Lessor (or otherwise in respect of any of the Notes or Lessor Advances), under any Operative Agreement (or its participation in any of the foregoing), or

(vi) to reduce the rate of return on the capital of such a Financing Party as a consequence of its obligations under the Operative Agreements (or its participation therein) to a level below that which such Financing Party could otherwise have achieved,

in each case by an amount deemed by such Financing Party to be material, in its commercially reasonable discretion, then prior to the next Scheduled Payment Date, and in any case within thirty (30) days after demand by such Financing Party, the Lessee shall pay directly to such Financing Party such additional amount or amounts as will compensate such Financing Party for such additional or increased cost or such reduction (the “Yield Protection Amount”).

In determining any amount provided for or referred to in this Section 11.3, a Financing Party may use any reasonable averaging and attribution method that it (in its sole discretion) shall deem applicable. Any Financing Party when making a claim under this Section 11.3 shall submit to the Lessee a statement as to such increased cost or reduced return (including calculation thereof in reasonable detail), which statement shall, in the absence of error, be conclusive and binding upon the Lessee.

(d) Notwithstanding any other provision of this Agreement, if any Financing Party (including, for purposes of this Section 11.3(d), any Participant to the extent such Participant is entitled to the benefit of this provision pursuant to Section 9.7 of the applicable Loan Agreement) shall notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Financing Party to perform its obligations hereunder to make or maintain Eurodollar Loans or Eurodollar Lessor Advances, as the case may be, then (i) each Eurodollar Loan or Eurodollar Lessor Advance, as the case may be, will automatically, at the earlier of the end of the Accrual Period for such Eurodollar Loan or Eurodollar Lessor Advance, as the case may be, or the date required by law, convert into an ABR Loan or an ABR Lessor Advance, as the case may be, and (ii) the obligation of the Financing Parties to make, convert or continue Eurodollar Loans or Eurodollar Lessor

Advances, as the case may be, shall be suspended until the Agent shall notify the Lessee that such Financing Party has determined that the circumstances causing such suspension no longer exist.


11.4	Funding/Contribution Indemnity.

Subject to Section 11.6, the Lessee agrees to indemnify each Financing Party (which, for purposes of this Section 11.4, shall include any Participant to the extent such Participant is entitled to the benefit of this provision pursuant to Section 9.7 of the applicable Loan Agreement) and to hold each Financing Party harmless from (I) all Breakage Costs, and (II) any loss or reasonable expense which such Financing Party may sustain or incur as a consequence of (a) any default in connection with the drawing of funds for any Advance, (b) any default in making any prepayment after a notice thereof has been given in accordance with the provisions of the Operative Agreements or the delivery by the Lessee of a revocation of such a notice (notwithstanding that each such notice is expressly irrevocable and that the Lessee has no right to revoke) pursuant to Section 16.2(a) or 20.2 of the Lease or (c) the making of a voluntary or involuntary payment of Loans (except for ABR Loans), or Lessor Advances (except for ABR Lessor Advances), as the case may be, on a day which is not the last day of an Interest Period with respect thereto. Such indemnification shall be in an amount equal to the excess, if any, of (x) the amount of interest or Lessor Yield, as the case may be, which would have accrued on the amount so paid, or not so borrowed, accepted, converted or continued for the period from the date of such payment or of such failure to borrow, accept, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, accept, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable Interest Rate or Lessor Yield for such Loan or Lessor Advance, as the case may be, for such Interest Period over (y) the amount of interest (as determined by such Financing Party in its commercially reasonable discretion) which would have accrued to such Financing Party on such amount by (i) (in the case of the Lenders) reemploying such funds in loans of the same type and amount during the period from the date of payment or failure to borrow to the last day of the then applicable Interest Period (or, in the case of a failure to borrow, the Interest Period that would have commenced on the date of such failure) and (ii) (in the case of the Lessor) placing such amount on deposit for a comparable period with leading banks in the relevant interest rate market. This covenant shall survive the termination of the Operative Agreements and the payment of all other amounts payable hereunder.


11.5	EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.

WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY AND ALL OF THE OPERATIVE AGREEMENTS (BUT SUBJECT TO SECTION 11.6), EACH PERSON PROVIDING INDEMNIFICATION OF ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE, DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES, EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING ATTORNEY’S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH

BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY.


11.6	Limitations on Indemnification Obligations.

(a) During the Construction Period (but only during the Construction Period), the provisions of Sections 11.1, 11.2, 11.3, 11.4 and 11.5 and any other indemnity provisions in any Operative Agreement shall be subject to the following provisions:

(i) The term “Indemnified Person” shall mean the Lessor and no other Person (including the Agent); provided, that this provision shall not limit the rights of the Financing Parties (other than the Lessor) and their respective successors, assigns, directors, shareholders, members, managers, partners, officers, employees, agents and Affiliates (collectively, the “Other Indemnified Persons”) against the Lessor under Section 11.6(a)(iii). Notwithstanding anything to the contrary in this Agreement, the liability of the Indemnity Provider shall be limited to Claims caused by or resulting from the actions or failures to act of the Indemnity Provider or any other Construction Agency Person while the Indemnity Provider or any Construction Agency Person is in possession or control of the Property.

(ii) The Indemnity Provider shall only be required to indemnify the Lessor for the following Claims (including Claims against the Lessor of any Other Indemnified Person), without duplication, and subject to Section 11.6(c):

(A) Claims caused by or resulting from a Specified Event;

(B) Claims caused by or resulting from the failure to effect Completion; and

(iii) Subject to Section 12.9, the Lessor will, with respect to Claims of a type described in Sections 11.6(a)(ii)(A), (ii)(B) and (ii)(C), indemnify all Persons who would have otherwise been indemnified by the Indemnity Provider, to the extent such Persons would have been so indemnified, but for the foregoing provisions of Section 11.6(a)(i); provided, however, that any obligation of the Lessor pursuant to this subsection shall be discharged solely and exclusively from amounts received by the Lessor from the Indemnity Provider pursuant to Section 11.6(a)(ii)(C) or from Advances and to the extent such amounts are insufficient to pay such Claims, then Lessor shall have no responsibility therefor.

(iv) The Indemnity Provider agrees that any Claim for indemnification by any Person against the Lessor pursuant to and permitted by Section 11.6(a)(iii) shall constitute a Claim entitling the Lessor to be indemnified by the Indemnity Provider pursuant and in accordance with this Section 11.6.

(b) The limitations set forth in this Section 11.6 shall continue to apply on and after the Completion Date with respect to Claims accruing prior to the Completion Date.

(c) Regarding the Claims referenced in Sections 11.6(a)(ii)(B) and 11.6(a)(ii)(C), the out-of-pocket amounts payable by the Indemnity Provider shall be limited in accordance with Section 11.6(d); provided, that even though the maximum out-of-pocket liability of the Indemnity Provider for any such Claim is limited as aforesaid, the balance of any such Claim shall, if requested in writing by the Agent in its commercially reasonable discretion, be funded by Advances to the extent amounts are available therefor with respect to the Available Credit Lender Commitment, the Available Mortgage Lender Commitment and the Available Lessor Commitment (subject to the rights of the Lessor and the Lenders to increase their respective commitment amounts in accordance with Section 5.8) and shall result in an increase in the Property Cost (subject to the following provisions of this subsection (c)), and such Advances shall be made otherwise without regard to any submission of a Requisition or other deliverable for such Advance and without regard to the satisfaction of any other conditions precedent regarding such Advance and, for whatever reason, if there are not sufficient Advances available to pay the balance of any such Claim, it is hereby acknowledged and agreed that Lessor or any Lender may fund such amount itself as an Advance to be added to the Property Cost (subject to the following provisions of this subsection (c)). In the event that any such Claim pursuant to Sections 11.6(a)(ii)(B) or 11.6(a)(ii)(C) is funded through Advances, any increase in Property Cost resulting therefrom shall not be included solely for purposes of (but for no other purpose) determining Property Cost regarding (i) the calculation of the Construction Period Guarantee Amount, (ii) the calculation of the Maximum Residual Guarantee Amount and (iii) the calculation of any Basic Rent that is to accrue prior to the Rent Commencement Date. For all other purposes, Property Cost shall be increased by the amount of any Advance funding a Claim, including for purposes of (i) the determination of Termination Value where the Construction Agent or the Lessee is obligated to pay Termination Value and (ii) the determination and allocation of sale proceeds from any purchase of the Property by the Lessee (or its designee) or the sale of the Property to any other Person (including in connection with the exercise of remedies pursuant to the occurrence of an Event of Default).

(d) Notwithstanding the foregoing, the Indemnity Provider’s indemnification obligations under this Section 11.6 to the extent but only to the extent relating to amounts due and owing regarding Completion (other than Claims relating to a Specified Event) are limited to the Construction Period Guarantee Amount.

THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE LESSOR PURSUANT TO THIS SECTION 11.6 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY REFERENCED IN SECTION 12.9.


11.7	Increase of Mortgage Loans, Credit Loans and Lessor Advances.

The Mortgage Loans, the Credit Loans and the Lessor Advances (and the Mortgage Loan Property Cost and the Credit Loan Property Cost) shall be increased on a dollar-for-dollar basis for amounts so advanced to the Lessor to pay indemnity claims incurred by the Lessor pursuant to Section 11.6.


11.8	Survival.

The obligations of the Indemnifying Party under this Section 11 shall survive in accordance with the provisions of Section 12.1.

SECTION 12.
MISCELLANEOUS.


12.1	Survival of Agreements.

The representations, warranties, covenants, indemnities and agreements of the parties provided for in the Operative Agreements, and the parties’ obligations under any and all thereof, shall survive the execution and delivery of this Agreement, the transfer of the Property to the Lessor, the construction of the Improvements, Completion, any disposition of any interest of the Lessor in the Property, the payment of the Notes and any disposition thereof and shall be and continue in effect notwithstanding any investigation made by any party and the fact that any party may waive compliance with any of the other terms, provisions or conditions of any of the Operative Agreements. Except as otherwise expressly set forth herein or in other Operative Agreements, the indemnities of the parties provided for in the Operative Agreements shall survive the expiration or termination of the Operative Agreements.


12.2	Notices.

All notices required or permitted to be given under any Operative Agreement shall be in writing. Notices may be served by private courier, prepaid; or personally couriered notices shall be deemed delivered when delivered as addressed, or if the addressee refuses delivery, when presented for delivery notwithstanding such refusal. Personal delivery shall be effective when accomplished. Unless a party changes its address by giving notice to the other party as provided herein, notices shall be delivered to the parties at the following addresses:

If to the Lessee, to such entity at the following address:

NVIDIA Land Development, LLC

c/o NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: Colette M. Kress, Executive Vice President and Chief Financial Officer

Telephone: (408) 486-3442

with a copy to:

NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: David M. Shannon, Executive Vice President, Chief Administrative Officer and Secretary

Telephone: (408) 486-8116

and with a copy to:

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attention: Samantha M. LaPine

Telephone: (858) 550-6005

If to the Guarantors, to each such entity at the following address:

NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: Colette M. Kress, Executive Vice President and Chief Financial Officer

Telephone: (408) 486-3442

with a copy to:

NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: David M. Shannon, Executive Vice President, Chief Administrative Officer and Secretary

Telephone: (408) 486-8116

and with a copy to:

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attention: Samantha M. LaPine

Telephone: (858) 550-6005

If to the Lessor, to it at the following address:

Wachovia Service Corporation

c/o Wells Fargo Securities, LLC

MAC D1086-051

550 South Tryon Street

Charlotte, NC 28202

Attention: Jack Altmeyer

Telephone: (704) 410-2405

If to the Agent, to it at the following address:

Wells Fargo Bank, National Association

1525 West WT Harris Blvd

Charlotte, NC 28262

Attention: Tom Nikolic / Lisa Starnes

Telephone: (704) 590-2785 / (704) 590-3481

If to the Lenders, to each such Lender at the address set forth for such Lender on Schedule 2.1 to the applicable Loan Agreement.

From time to time any party may designate additional parties and/or another address for notice purposes by notice to each of the other parties hereto. Each notice hereunder shall be effective upon receipt or refusal thereof.


12.3	Counterparts.

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one (1) and the same instrument.


12.4	Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters.

Except with regard to the Unanimous Vote Matters, each Operative Agreement only may be terminated, amended, supplemented, waived or modified by, or consent granted by, an instrument in writing signed by the Majority Lenders, the Lessor and each Credit Party, to the extent such Credit Party is a party to such Operative Agreement.

Notwithstanding the foregoing, no such termination, amendment, supplement, waiver or modification or consent shall, without the consent of the Agent and, to the extent affected thereby, the Mortgage Lenders, the Credit Lenders and the Lessor, in all cases without the need for any consent from any Defaulting Credit Lender or any Defaulting Mortgage Lender except to the extent required pursuant to the last paragraph of this Section 12.4 (collectively, the “Unanimous Vote Matters”) (i) reduce or increase the Mortgage Loan Commitments, the Credit Loan Commitments and/or the Lessor Commitment except as otherwise provided in Section 2.5 of either Loan Agreement, Sections 9.1, 9.2 and 9.3 of this Agreement and Section 5A.1 of this Agreement, extend the scheduled date of maturity of any Note, extend the scheduled Expiration Date, extend any payment date of any Note or the Lessor Advance, reduce the stated rate of interest payable on any Note, reduce the stated Lessor Yield (other than as a result of waiving the applicability of any post‑default increase in interest rates or Lessor Yield), modify the priority of any Lien in favor of the Agent under any Security Document, consent to any Lien against the Property or other Collateral other than any Permitted Lien, subordinate any obligation owed to the Mortgage Lenders, the Credit Lenders or the Lessor, reduce the Fees under this Agreement, extend the scheduled date of payment of the Fees or (except in accordance with Section 5.18) extend the expiration date of the Mortgage Loan Commitments, the Credit Loan Commitments or the Lessor Commitment, modify any provision of the Operative Agreements requiring ratable payment among the Financing Parties (excluding the Agent), among the Credit Lenders or among the Mortgage Lenders, modify the definition of “Pro Rata Share” in Appendix A to this Agreement or modify any provision of the Operative Agreements requiring the consent of all Financing Parties, all Financing

Parties (excluding the Agent), all Lenders, all Credit Lenders, all Mortgage Lenders or the consent of any Financing Party to the extent such Financing Parity is an affected party with respect to the matter described in such provision or (ii) terminate, amend, supplement, waive or modify any provision of this Section 12.4 or reduce the percentages specified in the definitions of Majority Secured Parties, or release a material portion of the Collateral (except in accordance with Section 8.8) or release any Credit Party from its obligations under any Operative Agreement or otherwise alter any payment obligations of any Credit Party to the Lessor or any Financing Party under the Operative Agreements, or (iii) terminate, amend, supplement, waive or modify any provision of Article 7 of either Loan Agreement. Any such termination, amendment, supplement, waiver or modification shall apply equally to each of the Mortgage Lenders, the Credit Lenders and the Lessor and shall be binding upon all the parties to this Agreement. In the case of any waiver, each party to this Agreement shall be restored to its former position and rights under the Operative Agreements, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. For the avoidance of doubt, the parties to this Agreement agree that, except as provided in Sections 5.8 and 11.6, any increase in the Mortgage Loan Commitments of the Mortgage Lenders, any increase in the Credit Loan Commitments of the Credit Lenders and/or any increase in the Lessor Commitment of the Lessor shall be a matter decided as a Unanimous Vote Matter.

In addition to the foregoing, and notwithstanding any assignments to the Agent pursuant to the Operative Agreements, the Lessor shall at all times retain its rights as the Lessor to (i) approve any insurance deductible and/or co-payment amount, in each case pursuant to Section 14.4 of the Lease or approve any sublease as provided pursuant to Section 24.2 of the Lease, (ii) perform for the Lessee pursuant to Section 18.1 of the Lease, (iii) consent to any amendment of Articles XX or XXI of the Lease or the definitions of Excepted Payments, Termination Value or Maximum Residual Guarantee Amount or Section 12.9 hereof (or any defined terms used therein), (iv) give a direction to the Lessee pursuant to Section 5.4 of this Agreement, (v) give any consent of the Lessor pursuant to Section 12.15 of this Agreement, and (vi) exercise the rights of the Lessor under Section 5.14 of this Agreement. The Lessor shall not, without its consent, be required to take any action at the direction of the Lessee or the Agent that would increase the Lessor’s obligations under the Operative Agreements. The retention of rights by the Lessor referenced in this paragraph shall not diminish or restrict in any manner the rights of the Agent, the Mortgage Lenders, the Credit Lenders or any other Person in connection with the matters described in the foregoing subsections (i) through (vi), and such retention of rights by the Lessor is merely intended to indicate that the Lessor has not assigned or otherwise limited the rights of the Lessor in connection with the matters described in the foregoing subsections (i) through (vi).

Notwithstanding anything to the contrary herein, (i) no Defaulting Credit Lender and no Defaulting Mortgage Lender shall have any right to approve or disapprove of any termination, amendment, supplement, waiver or modification of any Operative Agreement or otherwise to provide a consent with respect to any Operative Agreement (and any termination, amendment, supplement, waiver, modification or consent which by its terms requires the consent of all Credit Lenders or all Mortgage Lenders or each affected Credit Lender or Mortgage Lender may be effected with the consent of the applicable Credit Lenders other than Defaulting Credit Lenders and the applicable Mortgage Lenders other than Defaulting Mortgage Lenders), except that (A) the Credit Loan Commitment of any Defaulting Credit Lender may not be increased or extended without the consent of such Credit Lender, (B) the Mortgage Loan Commitment of any Defaulting Mortgage Lender may not be increased or extended without the consent of such Mortgage Lender, and (C) any termination, amendment, supplement, waiver or modification requiring the consent of all Credit Lenders or all Mortgage Lenders or each affected Credit Lender or Mortgage Lender, that by its terms affects any Defaulting Credit

Lender or Defaulting Mortgage Lender disproportionately adversely relative to other affected Credit Lenders and Mortgage Lenders shall require the consent of such Defaulting Credit Lender or Defaulting Mortgage Lender, as applicable; (ii) each Credit Lender and Mortgage Lender is entitled to vote as such Credit Lender or Mortgage Lender sees fit on any bankruptcy reorganization plan that affects the Credit Loans or Mortgage Loans, and each Credit Lender and Mortgage Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (iii) the Majority Secured Parties shall determine whether or not to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Credit Lenders, the Mortgage Lenders and the Lessor.

If any Lender does not consent to a proposed termination, amendment, supplement, waiver, modification or consent with respect to any Operative Agreement that requires the consent of each Lender and that has been approved by the Majority Credit Lenders, the Majority Mortgage Lenders, the Majority Lenders or the Majority Secured Parties, as applicable, the Borrower (subject to Sections 9.1(f) and 9.2(f)) may replace such Non-Consenting Lender in accordance with a required assignment of the Lender’s interests pursuant to Section 2.7(b) of the Credit Loan Agreement or Section 2.7(b) of the Mortgage Loan Agreement, as applicable; provided, that such termination, amendment, supplement, waiver, modification or consent can be effected as a result of such assignment (together with all other such assignments required by the Lessee to be made pursuant to this paragraph).


12.5	Headings, etc.

The Table of Contents and headings of the various Articles and Sections of this Agreement are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof.


12.6	Parties in Interest.

Except as expressly provided herein, none of the provisions of this Agreement are intended for the benefit of any Person except the parties hereto.


12.7	GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.

(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT LOCAL LAW IS PROPERLY APPLICABLE FOR MATTERS OF REAL PROPERTY. Any legal action or proceeding with respect to this Agreement or any other Operative Agreement may be brought in the courts of the State of New York in New York County or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each of the parties to this Agreement hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each of the parties to this Agreement further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by overnight courier delivery to it at the address set out for notices pursuant to Section 12.2, such service to become effective in the manner provided in Section 12.2. Nothing herein shall affect the right of any party to serve process in any

other manner permitted by Law or to commence legal proceedings or to otherwise proceed against any party in any other jurisdiction.

(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY DISPUTE OR THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

(c) Each of the parties to this Agreement hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Operative Agreement brought in the courts referred to in subsection (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

(d) Notwithstanding anything to the contrary contained in this Agreement or any of the other Operative Agreements, if any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Operative Agreement and the foregoing waiver of a right to a trial by jury is for any reason not enforceable in such action or proceeding (including as a consequence of the application of California law), the parties to this Agreement hereby agree that (a) the court shall, and the parties shall advise and direct the court to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision; provided, that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) without limiting the generality of Section 7, the Lessee shall be solely responsible to pay, or cause to be paid, all fees and expenses of any referee appointed in such action or proceeding.


12.8	Severability.

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating 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.


12.9	Liability Limited.

Anything to the contrary contained in any Operative Agreement notwithstanding, except as stated in this Section 12.9 below or as expressly provided in any Operative Agreement, no Exculpated Person shall be personally liable in any respect for any liability or obligation arising hereunder or in any other Operative Agreement including the payment of the principal and interest regarding the Loans, or for monetary damages for the breach of performance of any of the covenants contained in the Operative Agreements. The Mortgage Lenders, the Credit Lenders, the Lessor and the Agent agree that, in the event any remedies under any Operative Agreement are pursued, none of the Lessor, the Mortgage Lenders, the Credit Lenders or the Agent

shall have any recourse against any Exculpated Person, for any deficiency, loss or Claim for monetary damages or otherwise resulting therefrom and recourse shall be had solely and exclusively against the Lessor’s interest in the Trust Property, and the assets of the Credit Parties (with respect to the Credit Parties’ obligations under the Operative Agreements); but nothing contained herein shall be taken to prevent recourse against or the enforcement of remedies against (a) the Lessor’s interest in the Trust Property in respect of any and all liabilities, obligations and undertakings contained herein and/or in any other Operative Agreement; (b) the Lessor for any of its obligations arising on a full recourse basis; or (c) the Lessor or any other Person for gross negligence or willful misconduct (other than any gross negligence or willful misconduct imputed to the Lessor from any Person other than the Lessor or any Affiliate of the Lessor (excepting the Agent)). Notwithstanding the provisions of this Section, nothing in any Operative Agreement shall: (w) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes arising under any Operative Agreement or secured by any Operative Agreement, but the same shall continue until paid or discharged; (x) relieve any Exculpated Person from liability and responsibility for (but only to the extent of the damages arising by reason of): active waste knowingly committed by any Exculpated Person with respect to the Property, any fraud, gross negligence or willful misconduct on the part of any Exculpated Person (other than any fraud, gross negligence or willful misconduct imputed to such Exculpated Person from any Person other than an Affiliate of such Exculpated Person (excepting the Agent)); (y) relieve any Exculpated Person from liability and responsibility for (but only to the extent of the moneys misappropriated, misapplied or not turned over) (i) except for Excepted Payments, misappropriation or misapplication by the Lessor (i.e., application in a manner contrary to any of the Operative Agreements) of any insurance proceeds or condemnation award paid or delivered to the Lessor by any Person other than the Agent, (ii) except for Excepted Payments, any rent or other income received by the Lessor from any Credit Party that is not turned over to the Agent, or (iii) except for Excepted Payments, any deposits or any escrows or amounts owed by the Construction Agent under the Agency Agreement held by the Lessor; or (z) affect or in any way limit the Agent’s rights and remedies under any Operative Agreement with respect to the Rents (other than Excepted Payments) and rights and powers of the Agent under the Operative Agreements or to obtain a judgment against the Lessee’s interest in the Property or the Agent’s rights and powers to obtain a judgment against the Lessor or any Credit Party (provided, that no deficiency judgment or other money judgment shall be enforced against any Exculpated Person except to the extent of the Lessor’s interest in the Trust Property or to the extent the Lessor may be liable as otherwise contemplated in clauses (b) and (c) of this Section 12.9).


12.10	Rights of the Credit Parties.

If at any time all obligations (i) of the Lessor under the Operative Agreements and (ii) of the Credit Parties under the Operative Agreements have in each case been satisfied or discharged in full, then the Credit Parties shall be entitled to (a) terminate the Lease and guaranty obligations under Section 6B and (b) receive all amounts then held under the Operative Agreements and all proceeds with respect to the Property. Upon the termination of the Lease and Section 6B pursuant to the foregoing clause (a), the Lessor shall transfer to the Lessee all of its right, title and interest free and clear of the Lien of the Lease, the Lien of the Operative Agreements and all Lessor Liens in and to the Property and any amounts or proceeds referred to in the foregoing clause (b) shall be paid over to the Lessee.


12.11	Further Assurances.

The parties hereto shall promptly cause to be taken, executed, acknowledged or delivered, at the sole expense of the Lessee, all such further acts, conveyances, documents and assurances as the other parties may from time to time reasonably request in order to carry out and effectuate the intent and purposes of this

Agreement, the other Operative Agreements and the transactions contemplated hereby and thereby (including the preparation, execution and filing of any and all Uniform Commercial Code financing statements, filings of Mortgage Instruments and other filings or registrations which the parties hereto may from time to time request to be filed or effected). The Lessee, at its own expense and without need of any prior request from any other party, shall take such action as may be necessary (including any action specified in the preceding sentence), or (if the Agent or the Lessor shall so request) as so requested, in order to maintain and protect all security interests provided for hereunder or under any other Operative Agreement. In addition, in connection with the sale or other disposition of the Property or any portion thereof, the Lessee agrees to execute such instruments of conveyance as may be reasonably required in connection therewith.


12.12	Calculations under Operative Agreements.

The parties hereto agree that all calculations and numerical determinations to be made under the Operative Agreements by the Lessor shall be made by the Agent (to the extent such calculations and numerical determinations relate to the Lessor, Lessor Advances or Lessor Yield with respect to the Lessor Advances) or by the Agent (to the extent such calculation and numerical determinations relate to the Lenders, the Loans or interest with respect to the Loans) and that such calculations and determinations shall be conclusive and binding on the parties hereto in the absence of manifest error.


12.13	Confidentiality.

Each Financing Party severally agrees to use reasonable efforts to keep confidential all non‑public information pertaining to any Credit Party or any of its Subsidiaries which is provided to it by any Credit Party or any of its Subsidiaries and which an officer of the Lessee or any of its Subsidiaries has requested in writing be kept confidential, and shall not intentionally disclose such information to any Person except:

(a) to the extent such information is public when received by such Person or becomes public thereafter due to the act or omission of any party other than such Person;

(b) to the extent such information is independently obtained from a source other than any Credit Party or any of its Subsidiaries and such information from such source is not, to such Person’s knowledge, subject to an obligation of confidentiality or, if such information is subject to an obligation of confidentiality, that disclosure of such information is permitted;

(c) to counsel, auditors or accountants retained by any such Person or any Affiliates of any such Person (if such Affiliates are permitted to receive such information pursuant to clause (f) or (g) below), provided they agree to keep such information confidential as if such Person or Affiliate were party to this Agreement and to financial institution regulators, including examiners of any Financing Party or any Affiliate thereof in the course of examinations of such Persons;

(d) in connection with any litigation or the enforcement or preservation of the rights of any Financing Party under the Operative Agreements or of any Hedge Bank under any Secured Hedge Agreement;

(e) to the extent required by any applicable statute, rule or regulation or court order (including, by way of subpoena) or pursuant to the request of any regulatory or Governmental Authority having jurisdiction over any such Person; provided, however, that such Person (i) shall have no obligation to notify the Lessee prior to any disclosure made pursuant to this clause (e) to

any regulatory or Governmental Authority and (ii) shall endeavor (if not otherwise prohibited by Law) to notify the Lessee prior to any disclosure made pursuant to this clause (e) with respect to any court proceeding, except, respecting each of the foregoing subsections (i) and (ii), that no such Person shall be subject to any liability whatsoever for any failure to so notify the Lessee;

(f) any Financing Party may disclose such information to another Financing Party or to any Affiliate of a Financing Party that is a direct or indirect owner of any Financing Party or to any Hedge Bank;

(g) any Financing Party may disclose such information to an Affiliate of any Financing Party or to any Hedge Bank to the extent required in connection with the transactions contemplated hereby or to the extent such Affiliate or Hedge Bank is involved in, or provides advice or assistance to such Person with respect to, such transactions (provided, in each case that such Affiliate has agreed in writing to maintain confidentiality as if it were such Financing Party (as the case may be)); or

(h) to the extent disclosure to any other financial institution or other Person is appropriate in connection with any proposed or actual (i) assignment or grant of a participation by any Lender of interests in the Loan Agreements or any Notes to such other financial institution (who will in turn be required by the Agent to agree in writing to maintain confidentiality as if it were a Mortgage Lender or Credit Lender originally party to this Agreement) or (ii) assignment by the Lessor of interests to another Person, as specified in Section 10.1 (who will in turn be required by the transferring Lessor to agree in writing to maintain confidentiality as if it were the Lessor originally party to this Agreement).


12.14	Financial Reporting/Tax Characterization.

The Credit Parties agree to obtain advice from their own accountants and tax counsel regarding the financial reporting treatment and the tax characterization of the transactions described in the Operative Agreements. Notwithstanding the foregoing, it is expressly agreed that for Federal, state and local income tax purposes, commercial purposes and bankruptcy purposes, the parties to this Agreement are entering into the transactions described in the Operative Agreements with the intention of such transactions being characterized as an integrated transaction constituting a financing arrangement and for the Lessee to be considered the owner of the Property for tax purposes, commercial purposes and bankruptcy purposes; provided, however, that no such party makes any representation or warranty as to the availability of such tax treatment and the Credit Parties agree that neither of them shall rely upon any statement of any Financing Party or any of their respective Affiliates and/or Subsidiaries regarding any such financial reporting treatment and/or tax characterization. The parties to this Agreement further agree not to voluntarily take a position inconsistent with the foregoing on their Federal, state or local income tax returns.


12.15	Set-off.

In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon and after the occurrence and continuance of any Lease Event of Default and during the continuance thereof (but only after obtaining the prior written consent of the Majority Credit Lenders, the Majority Mortgage Lenders and the Lessor) the Credit Lenders, the Mortgage Lenders, the Lessor and their respective Affiliates and any assignee or participant of any Mortgage Lender, any Credit Lender or the Lessor in accordance with the applicable provisions of the Operative Agreements are hereby authorized by

the Credit Parties at any time or from time to time, without notice to the Credit Parties or to any other Person (subject to the above requirement to obtain the prior written consent of the Majority Credit Lenders, the Majority Mortgage Lenders and the Lessor), any such notice being hereby expressly waived, to set‑off and to appropriate and to apply any and all deposits (general or special, time or demand, including indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by such Mortgage Lender, such Credit Lender, the Lessor, their respective Affiliates or any assignee or participant of such Credit Lender, such Mortgage Lender or the Lessor in accordance with the applicable provisions of the Operative Agreements to or for the credit or the account of any Credit Party against and on account of the obligations of any Credit Party under the Operative Agreements irrespective of whether or not (a) such Credit Lender, such Mortgage Lender or the Lessor shall have made any demand under any Operative Agreement or (b) the Agent shall have declared any or all of the obligations of any Credit Party under the Operative Agreements to be due and payable and although such obligations shall be contingent or unmatured. Notwithstanding the foregoing, no Credit Lender, Mortgage Lender or the Lessor shall exercise, or attempt to exercise, any right of set-off, banker’s lien, or the like, against any deposit account or property of any Credit Party held by any Credit Lender, any Mortgage Lender or the Lessor, without the prior written consent of the Majority Credit Lenders, the Majority Mortgage Lenders and the Lessor, and any Financing Party violating this provision shall indemnify the Agent and the other Financing Parties from any and all costs, expenses, liabilities and damages resulting therefrom. The contractual restriction on the exercise of set-off rights provided in the foregoing sentence is solely for the benefit of the Financing Parties and may not be enforced by any Credit Party. In addition to the foregoing, and not in limitation thereof, in the event that any Defaulting Credit Lender or any Defaulting Mortgage Lender shall exercise any such right of set-off, but only after obtaining the prior written consent of the Majority Credit Lenders, the Majority Mortgage Lenders and the Lessor, (a) all amounts so set off shall be paid over immediately to the Agent for further application in accordance with the provisions of Section 2.3(c) of the Credit Loan Agreement and Section 2.3(c) of the Mortgage Loan Agreement, respectively, and, pending such payment, shall be segregated by such Defaulting Credit Lender or Defaulting Mortgage Lender, respectively, from its other funds and deemed held in trust for the benefit of the Agent and the other Secured Parties and (b) the applicable Defaulting Credit Lender or Defaulting Mortgage Lender shall provide promptly to the Agent a statement describing in reasonable detail the secured obligations owing to such entity as to which it exercised such right of set-off.


12.16	Limited Obligation of the Lessee to Pay on behalf of the Lessor.

To the extent the Lessee undertakes to pay any amount on behalf of the Lessor pursuant to any Operative Agreement, such obligation of the Lessee shall be limited only to amounts payable by the Lessor, as the case may be, on a non-recourse basis.


12.17	USA Patriot Act Notice.

Each Financing Party that is subject to the USA Patriot Act hereby notifies each of the Credit Parties that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of Credit Parties and other information that will allow such Financing Party to identify the Credit Parties in accordance with the USA Patriot Act.

[signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

CONSTRUCTION AGENT AND LESSEE:

NVIDIA LAND DEVELOPMENT, LLC, as the Construction Agent and the Lessee

By: /s/ Karen Burns

Name: Karen Burns

Title: Manager

(signature pages continue)

PARTICIPATION AGREEMENT

GUARANTORS:

NVIDIA CORPORATION, as a Guarantor

By: /s/ Karen Burns

Name: Karen Burns

Title: VP Finance

NVIDIA INTERNATIONAL HOLDINGS INC., as a Guarantor

By: /s/ Karen Burns

Name: Karen Burns

Title: President, Chief Executive Officer and Secretary

NVIDIA LEASE HOLDINGS LLC, as a Guarantor

By: /s/ Karen Burns

Name: Karen Burns

Title: Manager

(signature pages continue)

PARTICIPATION AGREEMENT

LESSOR:

WACHOVIA SERVICE CORPORATION, as the Lessor

By: /s/ Weston Garrett

Name: Weston Garrett

Title: Managing Director

(signature pages continue)

PARTICIPATION AGREEMENT

THE AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Agent

By: /s/ Marisa Phan

Name: Marisa Phan

Title: Vice President & Senior Relationship Manager

(signature pages continue)

PARTICIPATION AGREEMENT

MORTGAGE LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Mortgage Lender

By: /s/ Marisa Phan

Name: Marisa Phan

Title: Vice President & Senior Relationship Manager

(signature pages continue)

PARTICIPATION AGREEMENT

SMBC LEASING AND FINANCE, INC.,

as a Mortgage Lender

By: /s/ David A. Ward

Name: David A. Ward

Title: President

(signature pages continue)

PARTICIPATION AGREEMENT

U.S. BANK, NATIONAL ASSOCIATION, as a Mortgage Lender

By: /s/ Cristi K. Shaw

Name: Christi K. Shaw

Title: Vice President

(signature pages continue)

PARTICIPATION AGREEMENT

HSBC BANK USA, NATIONAL ASSOCIATION, as a Mortgage Lender

By: /s/ Mark Gibbs

Name: Mark Gibbs

Title: Senior Vice President Large Corporate

(signature pages continue)

PARTICIPATION AGREEMENT

CREDIT LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Credit Lender

By: /s/ Marisa Phan

Name: Marisa Phan

Title: Vice President & Senior Relationship Manager

(signature pages continue)

PARTICIPATION AGREEMENT

SUNTRUST BANK,

as a Credit Lender

By: /s/ Min Park

Name: Min Park

Title: Vice President

(signature pages continue)

PARTICIPATION AGREEMENT

GOLDMAN SACHS BANK USA,

as a Credit Lender

By: /s/ Rebecca Kratz

Name: Rebecca Kratz

Title: Authorized Signatory

(signature pages continue)

PARTICIPATION AGREEMENT

U.S. BANK, NATIONAL ASSOCIATION,

as a Credit Lender

By: /s/ Christi K. Shaw

Name: Christi K. Shaw

Title: Vice President

(signature pages continue)

PARTICIPATION AGREEMENT

MORGAN STANLEY SENIOR FUNDING, INC.,

as a Credit Lender

By: /s/ Michael King

Name: Michael King

Title: Vice President

(signature pages continue)

PARTICIPATION AGREEMENT

SUMITOMO MITSUI BANKING CORPORATION,

as a Credit Lender

By: /s/ James Weinstein

Name: James Weinstein

Title: Managing Director

(signature pages continue)

PARTICIPATION AGREEMENT

THE BANK OF TOKYO-MISTUBISHI UFJ. LTD.,

as a Credit Lender

By: /s/ Aileen Supeña Throne

Name: Aileen Supeña Throne

Title: Director

(signature pages continue)

PARTICIPATION AGREEMENT

HSBC BANK USA, NATIONAL ASSOCIATION,

as a Credit Lender

By: /s/ Christopher L. Snider

Name: Christopher L. Snider

Title: Senior Relationship Manager

PARTICIPATION AGREEMENT

Appendix A

Rules of Usage and Definitions

I. Rules of Usage

The following rules of usage shall apply to this Appendix A and the Operative Agreements (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context or unless otherwise defined therein:

(a) Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined.

(b) Except as otherwise expressly provided, references in any document to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such document.

(c) The headings, subheadings and table of contents used in any document are solely for convenience of reference and shall not constitute a part of any such document nor shall they affect the meaning, construction or effect of any provision thereof.

(d) References to any Person shall include such Person, its successors, permitted assigns and permitted transferees.

(e) Except as otherwise expressly provided, reference to any agreement means such agreement as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof.

(f) Except as otherwise expressly provided, references to any law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor.

(g) When used in any document, words such as “hereunder”, “hereto”, “hereof” and “herein” and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof.

(h) References to “including” means including without limiting the generality of any description preceding such term and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned.

(i) References herein to “attorney’s fees”, “legal fees”, “costs of counsel” or other such references shall not include the allocated cost of in‑house counsel.

Appendix A - 1

(j) Each of the parties to the Operative Agreements and their counsel have reviewed and revised, or requested revisions to, the Operative Agreements, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of the Operative Agreements and any amendments or exhibits thereto.

(k) Capitalized terms used in any Operative Agreements which are not defined in this Appendix A but are defined in another Operative Agreement shall have the meaning so ascribed to such term in the applicable Operative Agreement.

(l) In computing any period of time for purposes of any Operative Agreement, the mechanics for counting the number of days set forth in Rule 6 of the Federal Rules of Civil Procedure shall be observed.

(m) Time is of the essence, including with regard to the performance of all obligations.

II. Definitions

“ABR” shall mean the Base Rate.

“ABR Credit Loans” shall mean Credit Loans the rate of interest applicable to which is based upon the Base Rate.

“ABR Lessor Advance” shall mean a Lessor Advance bearing a Lessor Yield based on the Base Rate.

“ABR Loans” shall mean the ABR Credit Loans and the ABR Mortgage Loans, as applicable.

“ABR Mortgage Loans” shall mean Mortgage Loans the rate of interest applicable to which is based upon the Base Rate.

“Accelerated Rent Amount” shall have the meaning given to such term in Section 5.11 of the Participation Agreement.

“Acceleration” shall have the meaning given to such term in Section 6 of the applicable Loan Agreement.

“Accrual Period” shall mean as to any Eurodollar Loan or Eurodollar Lessor Advance (i) with respect to the initial Accrual Period, the period beginning on the date of the first Eurodollar Loan and Eurodollar Lessor Advance and ending one (1) month thereafter, and (ii) thereafter, each period commencing on the last day of the next preceding Accrual Period applicable to such Eurodollar Loan or Eurodollar Lessor Advance and ending one (1) month thereafter; provided, however, that all of the foregoing provisions relating to Accrual Periods are subject to the following: (A) if any Accrual Period would end on a day which is not a Business Day, such Accrual Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (B) no Accrual Period shall extend beyond the Expiration Date, (C) where an Accrual Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Accrual Period is to end, such Accrual Period shall end on the last Business Day of such calendar month and (D) there shall not be more than six (6) Accrual Periods outstanding at any one (1) time.

Appendix A - 2

“Acquisition Advance” shall have the meaning given to such term in Section 5.3 of the Participation Agreement.

“Administrative Agency Fee” shall have the meaning given to such term in Section 7.6 of the Participation Agreement.

“Advance” shall mean the Closing Date Advance, the Acquisition Advance, a Construction Advance and each other Lessor Advance or Loan in accordance with the Operative Agreements.

“Affiliate”, as to any Person, shall mean any other Person which directly or indirectly controls, is controlled by, or is under common control with such Person. Control, as used in this definition, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

“After Tax Basis” shall mean, with respect to any payment to be received, actually or constructively, the amount of such payment increased so that, after reduction by the amount of all taxes required to be paid by the recipient calculated at the then maximum marginal rates generally applicable to Persons of the same type as the recipients with respect to the receipt by the recipient of such amounts (less any actual tax savings realized as a result of the payment of the indemnified amount), such increased payment (as so reduced) is equal to the payment otherwise required to be made.

“Agency Agreement” shall mean the Agency Agreement, dated on or about the Closing Date between the Construction Agent and the Lessor.

“Agency Agreement Default” shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute an Agency Agreement Event of Default.

“Agency Agreement Event of Default” shall mean an “Event of Default” as defined in Section 5.1 of the Agency Agreement.

“Agent” shall mean Wells Fargo Bank, National Association, a national banking association, as agent for the Mortgage Lenders and the Credit Lenders, or any successor agent appointed in accordance with the terms of the Mortgage Loan Agreement and the Credit Loan Agreement, as applicable, and respecting the Security Documents, for the Secured Parties, to the extent of their interests.

“Agent’s Account” shall mean a special account in the name of the Agent identified in writing by the Agent to the Lessor and the Lessee.

“All-Inclusive Permitted Liens” shall mean the Liens permitted pursuant to Section 8.3B(b) of the Participation Agreement.

“Anti‑Terrorism Laws” shall have the meaning given to such term in Section 6.1A(s) of the Participation Agreement.

“Applicable Law” shall mean, for any Person, all existing and future applicable laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority (including usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board

Appendix A - 3

of Governors of the Federal Reserve System), and applicable judgments, decrees, injunctions, writs or orders of any Court, arbitrator or other administrative, judicial, or quasi‑judicial Tribunal or agency of competent jurisdiction.

“Applicable Percentage” shall mean for Eurodollar Credit Loans, Eurodollar Mortgage Loans and/or Eurodollar Lessor Advances and for Credit Lender Unused Fees, Mortgage Lender Unused Fees and Lessor Unused Fees, the appropriate applicable percentages corresponding to the pricing level set forth below based on the Leverage Ratio:



Pricing Level	Leverage Ratio	Applicable Percentage for Eurodollar Credit Loans	Applicable Percentage for Eurodollar Mortgage Loans	Applicable Percentage for Eurodollar Lessor Advances	Credit Lender Unused Fees	Mortgage Lender Unused Fees	Lessor Unused Fees
I	< 1.00 to 1.00	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
II	> 1.00 to 1.00, but < 2.00 to 1.00	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
III	> 2.00 to 1.00	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%

From the Closing Date to the first reset date, the Applicable Percentage shall be based on Pricing Level II. Any increase or decrease in the Applicable Percentage resulting from a change in the Leverage Ratio shall become effective as of the fifth Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 8.3A(b)(i); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level III shall apply, in each case as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and in each case shall remain in effect until the first Business Day following the date on which such Compliance Certificate is delivered.

“Appraisal” shall mean an appraisal with respect to the Property to be delivered in connection with the Participation Agreement or in accordance with the terms of the Lease, in each case prepared by a reputable appraiser reasonably acceptable to the Agent, which in the judgment of counsel to the Agent, complies with all of the provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, the rules and regulations adopted pursuant thereto, and all other applicable Legal Requirements, or any other appraisal or valuation with respect to the Property reasonably acceptable to the Agent or ordered by Agent or Agent’s counsel.

“Appraisal Procedure” shall have the meaning given to such term in Section 21.4 of the Lease.

“Appurtenant Rights” shall mean (a) all agreements, easements, rights of way or use, rights of ingress or egress, privileges, appurtenances, tenements, hereditaments and other rights and benefits at any time belonging or pertaining to the Land underlying the Improvements or the Improvements, including the use of any streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land and (b) all permits, licenses and rights, whether or not of record, appurtenant to the Land or the Improvements.

“Architect Contract” shall mean any contract entered into between the Construction Agent or the Lessee with an architect for the design of the Improvements or any portion thereof on the Property, including the AIA B141 - 2004 (Standard Form of Agreement Between Owner and Architect) dated as of June 21,

Appendix A - 4

2012, as amended by that certain Closeout Agreement dated as of May 1, 2014 by and among the Lessee, as owner, and M. Arthur Gensler Jr. & Associates, Inc., as architect.

“Asset Disposition” shall mean the sale, transfer, license, lease or other disposition of the Property (including any disposition of Equity Interests) by any Credit Party or any Subsidiary thereof (or the granting of any option or other right to do any of the foregoing), and any issuance of Equity Interests by any Subsidiary of the Parent to any Person that is not a Credit Party or any Subsidiary thereof. The term “Asset Disposition” shall not include (a) the sale of inventory in the ordinary course of business, (b) the transfer of assets to the Parent or any Guarantor pursuant to any other transaction permitted pursuant to Section 8.3B(d) of the Participation Agreement, (c) the write-off, discount, sale or other disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction, (d) the disposition of any Hedge Agreement, (e) dispositions of Investments in cash and Cash Equivalents, (f) the transfer by any Credit Party of its assets to any other Credit Party, (g) the transfer by any Subsidiary that is not a Credit Party of its assets to any Credit Party (provided that in connection with any new transfer, such Credit Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith at the time of such transfer) and (h) the transfer by any Subsidiary that is not a Credit Party of its assets to any other Subsidiary that is not a Credit Party.

“Assignment of Construction Documents” shall mean each assignment and assumption agreement between the Lessee (or the Parent or another Subsidiary of the Parent) and the Lessor with regard to any Construction Document, in each case regarding the Property and as consented to by the applicable counterparty to any such contract as required by the terms of such contract, including (a) the Assignment and Assumption of Construction Contract dated as of or about the Closing Date by and between the Lessee and the Lessor; (b) the Assignment and Assumption of Development Agreement dated as of or about the Closing Date by and between the Lessee and the Lessor; (c) the Assignment and Assumption of Contracts dated as of or about the Closing Date by and between the Lessee and the Lessor; (d) the Assignment and Assumption of Consultant Contract (regarding the Kier & Wright Civil Engineers and Surveyors, Inc. consultant contract) dated as of or about the Closing Date by and between the Lessee and the Lessor; (e) the Assignment and Assumption of Consultant Contract (regarding the Langan Treadwell Rollo consultant contract) dated as of or about the Closing Date by and between the Lessee and the Lessor; (f) the Assignment and Assumption of Architectural Contract dated as of or about the Closing Date by and between the Lessee and the Lessor; and (g) the Assignment and Assumption of Title Contracts dated as of or about the Closing Date by and among the Lessee, the Parent and the Lessor.

“Assumed Characterization” shall have the meaning given to such term in Section 11.3(e) of the Participation Agreement.

“Attributable Indebtedness” shall mean, on any date of determination, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease Obligation.

“Available Credit Loan Commitment” shall mean an amount equal to the excess, if any, of (a) the aggregate amount of the Credit Loan Commitments over (b) the aggregate amount of the Credit Loans made since the Closing Date after giving effect to Section 5.2(d) of the Participation Agreement.

Appendix A - 5

“Available Lessor Commitment” shall mean an amount equal to the excess, if any, of (a) the amount of the Lessor Commitment over (b) the aggregate amount of the Lessor Advances made since the Closing Date after giving effect to Section 5.2(d) of the Participation Agreement.

“Available Mortgage Loan Commitment” shall mean an amount equal to the excess, if any, of (a) the aggregate amount of the Mortgage Loan Commitments over (b) the aggregate amount of the Mortgage Loans made since the Closing Date after giving effect to Section 5.2(d) of the Participation Agreement.

“Bankruptcy Code” shall mean the United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended from time to time.

“Base Rate” shall mean, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus [*]% and (c) except during any period of the unavailability of LIBOR (as determined by the Agent), LIBOR for an Accrual Period of one month plus [*]%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR.

“Basic Documents” shall mean the following: the Participation Agreement, the Mortgage Loan Agreement, the Mortgage Notes, the Credit Loan Agreement, the Credit Notes, the Agency Agreement, the Lease, the Security Agreement and the Mortgage Instruments.

“Basic Rent” shall mean, the sum of (a) the Mortgage Loan Basic Rent, (b) the Credit Loan Basic Rent, and (c) the Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is due.

“Basic Term” shall have the meaning given to such term in Section 2.2 of the Lease.

“Basic Term Expiration Date” shall have the meaning given to such term in Section 2.2 of the Lease.

“Benefitted Credit Lender” shall have the meaning given to such term in Section 9.10(a) of the Credit Loan Agreement.

“Benefitted Mortgage Lender” shall have the meaning given to such term in Section 9.10(a) of the Mortgage Loan Agreement.

“Borrower” shall mean Wachovia Service Corporation, a Delaware corporation.

“Borrowing” shall mean a funding by a Lender of a Loan to the Lessor pursuant to Article II of the applicable Loan Agreement.

“Borrowing Date” shall mean the Closing Date, and as to any incremental Borrowing, any Business Day three (3) Business Days (in regard to the Acquisition Advance except the Acquisition Advance permitted as of the Closing Date in accordance with the Operative Agreements) and any Business Day seven (7) days (in regard to any Construction Advance), in each case immediately following the receipt by the Agent of a written request on behalf of the Lessor to obtain Loans, such notice to be in the form of a Requisition; provided, in no event shall there be more than one such Borrowing Date during any calendar month.

“Breakage Costs” shall mean any amount or amounts as shall compensate any Financing Party for any loss, cost or expense incurred by such Financing Party (as determined by such Financing Party in its commercially reasonable discretion) as a result of a prepayment of Lessor Advances, Lessor Yield, Mortgage

Appendix A - 6

Loans, Credit Loans or Interest pursuant to the terms of the Operative Agreements on any date other than a Scheduled Interest Payment Date or any failure to borrow a Credit Loan or Mortgage Loan or to receive a Lessor Advance, in each case on the date specified therefor in the applicable Requisition.

“Budgeted Total Property Cost” shall mean the aggregate amount of Property Cost for the Property set forth in the Construction Budget, in each case necessary for Completion.

“Business Day” shall mean any day of the year other than a Saturday or a Sunday on which (a) banks are not required or authorized to be closed in New York, New York or Charlotte, North Carolina and (b) if the term “Business Day” is used in connection with the determination of the LIBOR Rate, dealings in United States dollar deposits are carried on in the London interbank market.

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

“Captive Insurance Entity” shall mean an insurance company created and owned by a Credit Party whose primary purpose is to provide coverage on the risk of the Parent or the Parent’s Subsidiaries.

“Cash Equivalents” shall mean, collectively, (a) marketable securities direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within three (3) years from the date of acquisition thereof, (b) commercial paper maturing no more than three hundred sixty-five (365) days from the date of creation thereof and currently having the S&P rating of “A-1” or Moody’s rating of “P-1”, (c) certificates of deposit maturing no more than three hundred sixty-five (365) days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency or a lesser rating acceptable to the Agent; provided that the aggregate amount invested in such certificates of deposit shall not at any time exceed two percent (2%) for any single issuer, (d) time deposits maturing no more than three hundred sixty-five (365) days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder or (e) other marketable securities consistent with the Parent’s Investment Policy Number FIN-TR-0001 dated September 24, 2014 as in effect on the Closing Date.

“Casualty” shall mean any damage or destruction of all or any portion of the Property as a result of a fire or other casualty.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986.

“Certifying Party” shall have the meaning given to such term in Section 26.3 of the Lease.

“Claims” shall mean any and all obligations, liabilities, losses, actions, suits, penalties, claims, demands, costs and expenses (including reasonable attorney’s fees and expenses) of any nature whatsoever.

Appendix A - 7

“Change in Control” shall mean an event or a series of events by which:

(a) at any time, the Parent shall fail to own one hundred percent (100%) of the Equity Interests of the Lessee; or

(b) (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d‑3 and 13d‑5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than thirty-five percent (35%) of the Equity Interests of the Parent entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Parent or (ii) a majority of the members of the board of directors (or other equivalent governing body) of the Parent shall not constitute Continuing Directors; or

(c) there shall have occurred under any indenture or other instrument evidencing any Indebtedness or Equity Interests in excess of the Threshold Amount any “change in control” or similar provision (as set forth in the indenture, agreement or other evidence of such Indebtedness) obligating the Parent or any of its Subsidiaries to repurchase, redeem or repay all or any part of the Indebtedness or Equity Interests provided for therein.

“Closing Date” shall mean June 19, 2015.

“Closing Date Advance” shall have the meaning given to such term in Section 5.3 of the Participation Agreement.

“Code” shall mean the Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder.

“Collateral” shall mean, excluding in all cases Excepted Payments, the assets and property upon which a Lien is created, exists or is purported to be created by one or more of the Security Documents.

“Commencement Date” shall have the meaning given to such term in Section 2.2 of the Lease.

“Commitments” shall mean the Credit Loan Commitments, the Mortgage Loan Commitments and the Lessor Commitments.

“Commitment Percentage” shall mean, (a) as to any Mortgage Lender at any time, the percentage which such Mortgage Lender’s Mortgage Loan Commitment then constitutes of the aggregate Mortgage Loan Commitments (or, at any time after the Mortgage Loan Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Mortgage Lender’s Mortgage Loans then outstanding constitutes of the aggregate principal amount of all of the Mortgage Loans then outstanding) and (b) as to any Credit Lender at any time, the percentage which such Credit Lender’s Credit Loan Commitment then constitutes of the aggregate Credit Loan Commitments (or, at any time after the Credit Loan Commitments shall have expired or terminated, the percentage which the aggregate principal amount

Appendix A - 8

of such Credit Lender’s Credit Loans then outstanding constitutes of the aggregate principal amount of all of the Credit Loans then outstanding).

“Commitment Period” shall mean the period from and including the Closing Date to the Construction Period Termination Date.

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“Company Materials” shall have the meaning given to such term in Section 8.3A(b) of this Agreement.

“Company Obligations” shall mean the Obligations of the Lessee and/or the Construction Agent, in any and all capacities.

“Completion” shall mean such time as the acquisition, installation, testing and final completion of the Improvements has been achieved in all material respects in accordance with the Plans and Specifications, the Agency Agreement and/or the Lease, and in compliance with all Legal Requirements and Insurance Requirements and a certificate of occupancy or its equivalent has been issued with respect to the Property by the appropriate governmental entity (except if noncompliance, individually or in the aggregate, shall not have and could not reasonably be expected to have a Material Adverse Effect).

“Completion Date” shall mean the date on which Completion has occurred.

“Compliance Certificate” shall mean a certificate of the chief financial officer or the treasurer of the Parent substantially in the form attached as Exhibit H.

“Condemnation” shall mean any taking or sale of the use, access, occupancy, easement rights or title to the Property or any part thereof, wholly or partially (temporarily or permanently), by or on account of any actual or threatened eminent domain proceeding or other taking of action by any Person having the power of eminent domain, including an action by a Governmental Authority to change the grade of, or widen the streets adjacent to, the Property or alter the pedestrian or vehicular traffic flow to the Property so as to result in a change in access to the Property, or by or on account of an eviction by paramount title or any transfer made in lieu of any such proceeding or action.

“Consolidated” shall mean, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“Consolidated EBITDA” shall mean, for any period, the sum of the following determined on a Consolidated basis, without duplication, for Parent and its Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) income and franchise taxes, (ii) Consolidated Interest Expense, (iii) amortization and depreciation, (iv) other non‑cash charges, including non‑cash stock based compensation charges (in each case, except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), and (v) extraordinary losses (excluding extraordinary losses from discontinued operations) less (c) the sum of the following, without duplication, to the extent included in determining Consolidated Net Income for such period: (i) interest income, (ii) any extraordinary

Appendix A - 9

gains and (iii) non-cash gains or non-cash items increasing Consolidated Net Income. For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis.

“Consolidated Interest Expense” shall mean, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Parent and its Subsidiaries in accordance with GAAP, interest expense (including, without limitation, interest expense attributable to Capital Lease Obligations and Synthetic Leases, and all net payment obligations pursuant to Hedge Agreements) for such period.

“Consolidated Net Income” shall mean, for any period, the net income (or loss) of the Parent and its Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided, that in calculating Consolidated Net Income of the Parent and its Subsidiaries for any period, there shall be excluded (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the Parent or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Parent or any of its Subsidiaries by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Parent or any of its Subsidiaries or is merged into or consolidated with the Parent or any of its Subsidiaries or that Person’s assets are acquired by the Parent or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a), (c) the net income (if positive), of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Parent or any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable on such dividends or distributions, but in each case only to the extent of such prohibition or taxes and (d) any gain or loss from Asset Dispositions during such period.

“Consolidated Total Indebtedness” shall mean, as of any date of determination with respect to the Parent and its Subsidiaries on a Consolidated basis without duplication, the sum of all Indebtedness of the Parent and its Subsidiaries.

“Construction Advance” shall mean an advance of funds to pay, or to reimburse the Lessee, the Construction Agent or a designee or designees of either for, Property Costs pursuant to Section 5.4 of the Participation Agreement from and after the Closing Date Advance and the Acquisition Advance.

“Construction Advisers” shall mean, collectively, the Construction Servicer and the Inspection Consultant.

“Construction Agency Person” shall mean the Construction Agent, the Lessee, the Guarantors, any contractor, subcontractor, adviser, architect, engineer, developer, employee, attorney‑in‑fact or agent with respect to any Property and any other Person that the Construction Agent directly or indirectly supervises, hires or otherwise permits to engage in any Work with respect to any Property, any portion thereof or any Improvements thereto.

“Construction Agent” shall mean NVIDIA Land Development, LLC, a Delaware limited liability company, as the construction agent under the Agency Agreement.

“Construction Agent Certificate” shall have the meaning given to such term in Section 5.17(b)(i)(A) of the Participation Agreement.

Appendix A - 10

“Construction Budget” shall mean the cost of acquisition, installation, testing, constructing and developing the Property as determined by the Construction Agent in its commercially reasonable discretion.

“Construction Contract” shall mean each contract entered into between the Construction Agent or the Lessee with a Contractor for the construction of the Improvements or any portion thereof on the Property, including any change orders, including: (a) the Design‑Build Agreement dated as of or about the Closing Date by and among the Lessee and Devcon Construction Incorporated; (b) the Development Agreement effective as of February 13, 2009 by and among the Lessee and The City of Santa Clara, a municipal corporation; (c) the Stormwater Treatment Measures Inspection and Maintenance Agreement dated of or about the Closing Date by and between the Lessee and The City of Santa Clara, California, a chartered California municipal corporation; (d) the Hold Harmless Agreement made and entered into as of or about the Closing Date by and between the Lessee and the City of Santa Clara, California, a chartered California municipal corporation; (e) the Corporate Consultant Agreement for Non‑Technical Services dated as of September 1, 2012 by and between the Lessee and SRGNC CRES, LLC, a Delaware limited liability company; (f) the Agreement Between Client and Consultant fully executed as of January 22, 2013 by and among the Lessee, as client, and Kier & Wright Civil Engineers and Surveyors, Inc., as consultant; (g) the Proposal dated as of October 2, 2012, as modified by that certain Proposal dated February 19, 2015 offered Langan Treadwell Rollo and accepted by the Lessee; (h) the Indemnity Agreement I from the Parent in favor of First American Title Insurance Company in regards to File No. NCS-732313D- PHX1; (i) Commercial Owner’s Affidavit from the Lessee in favor of First American Title Insurance Company, in regards to File No. NCS-732313B- PHX1; and (j) Commercial Owner’s Affidavit from the Lessee in favor of First American Title Insurance Company, in regards to File No. NCS-732313D- PHX1.

“Construction Document” shall mean each of the Construction Contracts, the Construction Budget, the Architect Contracts and the Plans and Specifications, in each case regarding the Property.

“Construction Period” shall mean the period commencing on the Closing Date and ending on the Construction Period Termination Date.

“Construction Period Guarantee Amount” shall have the meaning given to such term in Section 5.4 of the Agency Agreement.

“Construction Period Permitted Amount” shall mean all amounts, liabilities and obligations which the Lessee assumes or agrees to pay during the Construction Period to the Lessor under the Operative Agreements including (i) payments of the Termination Value in connection with the purchase of the Property by the Lessee (or its designee), (ii) amounts owing with respect to any Agency Agreement Event of Default (including the Termination Value in connection with any Full Recourse Event of Default and the Construction Period Guarantee Amount in connection with any Agency Agreement Event of Default that is not a Full Recourse Event of Default) and (iii) amounts owing with respect to indemnification matters (including pursuant to Section 11.6 of the Participation Agreement).

“Construction Period Termination Date” shall mean the Target Construction Period Termination Date or in the event that a Force Majeure Event occurs with respect to the Property prior to the Target Construction Period Termination Date, then such later date (if any) as may be determined in accordance with Section 5.18 of the Participation Agreement, or such earlier date as the Mortgage Loan Commitments shall terminate as provided in the Mortgage Loan Agreement, the Credit Loan Commitments shall terminate as provided in the Credit Loan Agreement or the Lessor Commitment shall terminate as provided in the Participation Agreement.

Appendix A - 11

“Construction Servicer” shall mean the Real Estate Technical Services / Construction and Financing Group of Wells Fargo Bank, National Association, a national banking association.

“Contamination” shall mean the presence or release or threat of release of Regulated Substances in, on, under or emanating to or from the Property or any other real property owned or leased by the Parent or any of its Subsidiaries which pursuant to Environmental Laws requires notification or reporting to an Official Body, or which pursuant to Environmental Laws requires the investigation, cleanup, removal, remediation, containment, abatement of or other response action or which otherwise constitutes a violation of Environmental Laws.

“Continuing Directors” shall mean the directors of the Parent on the Closing Date and each other director of the Parent, if, in each case, such other director’s nomination for election to the board of directors (or equivalent governing body) of the Parent is recommended by at least fifty‑one percent (51%) of the then Continuing Directors.

“Contractor” shall mean each entity with whom the Construction Agent or the Lessee contracts to construct the Improvements or any portion thereof on the Property.

“Controlled Group” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Lessee, are treated as a single employer under Section 414 of the Code.

“Convertible Senior Notes” shall mean the 1% Convertible Senior Notes due 2018 issued by NVIDIA Corporation on December 2, 2013, in the principal amount of $1,500,000,000.

“Credit Lender” shall mean each bank or other financial institution which is from time to time party to any of the Operative Agreements in its capacity as a “Credit Lender”.

“Credit Lender Overdue Rate” shall have the meaning given to such term in Section 2.8(c) of the Credit Loan Agreement.

“Credit Lender Unused Fee” shall have the meaning given to such term in Section 7.4 of the Participation Agreement.

“Credit Lender Upfront Fee” shall have the meaning given to such term in Section 7.5 of the Participation Agreement.

“Credit Loan Agreement” shall mean the Credit Agreement (Credit Loans) dated as of the Closing Date among the Lessor, the several Credit Lenders from time to time party thereto and the Agent.

“Credit Loan Basic Rent” shall mean the scheduled interest due on the Credit Loans on any Scheduled Interest Payment Date (but not including interest on overdue amounts).

“Credit Loan Commitments” shall mean the obligation of the Credit Lenders to make the Credit Loans to the Lessor in an aggregate principal amount at any one time outstanding not to exceed the aggregate of the amounts set forth opposite each Credit Lender’s name on Schedule 2.1 to the Credit Loan Agreement, as such amount may be increased or reduced from time to time in accordance with the provisions of the Operative Agreements; provided, no Credit Lender shall be obligated to make Credit Loans in excess of

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such Credit Lender’s share of the Credit Loan Commitments as set forth adjacent to such Credit Lender’s name on Schedule 2.1 to the Credit Loan Agreement.

“Credit Loan Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute a Credit Loan Event of Default.

“Credit Loan Event of Default” shall have the meaning given to such term in Section 6 of the Credit Loan Agreement.

“Credit Loan Property Cost” shall mean, at any date of determination, an amount equal to (a) the aggregate principal amount of all Credit Loans made on or prior to such date minus (b) the aggregate amount of prepayments or repayments as the case may be of the Credit Loans allocated to reduce the Credit Loan Property Cost pursuant to Section 2.6(c) of the Credit Loan Agreement.

“Credit Loans” shall mean the loans made by the Credit Lenders pursuant to the Credit Loan Agreement.

“Credit Note” shall have the meaning given to such term in Section 2.2 of the Credit Loan Agreement.

“Credit Parties” shall mean the Construction Agent, the Lessee and the Guarantors.

“Cumulative Basic Rent Adjustment” or “Cumulative Lessor Basic Rent Adjustment” shall mean, as of a particular measurement date, the sum of the Lessor Basic Rent Adjustments which have actually occurred as of such measurement date.

“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Deemed Insolvency” shall mean with respect to any Person, such Person is insolvent pursuant to the Uniform Fraudulent Transfers Act or any similar, equivalent or replacement thereof.

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

“Defaulting Credit Lender” shall mean, subject to Section 2.3(c)(ii) of the Credit Loan Agreement, any Credit Lender that (a) has failed to (i) fund all or any portion of its Credit Loans within two (2) Business Days of the date such Credit Loans were required to be funded under the Operative Agreement unless such Credit Lender notifies the Agent and the Borrower in writing that such failure is the result of such Credit Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Credit Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Credit Lender’s obligation to fund a Credit Loan hereunder and states that such position is based on such Credit Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business

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Days after written request by the Agent or the Borrower, to confirm in writing to the Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided, that such Credit Lender shall cease to be a Defaulting Credit Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided, that a Credit Lender shall not be a Defaulting Credit Lender solely by virtue of the ownership or acquisition of any equity interest in that Credit Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Credit Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Credit Lender is a Defaulting Credit Lender under any one or more of clauses (a) through (d) above, and the effective date of such status, shall be conclusive and binding absent manifest error, and such Credit Lender shall be deemed to be a Defaulting Credit Lender (subject to Section 2.3(c)(ii) of the Credit Loan Agreement) as of the date established therefor by the Agent in a written notice of such determination, which shall be delivered by the Agent to the Borrower and each other Credit Lender promptly following such determination.

“Defaulting Lender” shall mean any Defaulting Credit Lender or Defaulting Mortgage Lender, as applicable.

“Defaulting Mortgage Lender” shall mean, subject to Section 2.3(c)(ii) of the Mortgage Loan Agreement, any Mortgage Lender that (a) has failed to (i) fund all or any portion of its Mortgage Loans within two (2) Business Days of the date such Mortgage Loans were required to be funded under the Operative Agreement unless such Mortgage Lender notifies the Agent and the Borrower in writing that such failure is the result of such Mortgage Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Mortgage Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Mortgage Lender’s obligation to fund a Mortgage Loan hereunder and states that such position is based on such Mortgage Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Agent or the Borrower, to confirm in writing to the Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided, that such Mortgage Lender shall cease to be a Defaulting Mortgage Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided, that a Mortgage Lender shall not be a Defaulting Mortgage Lender solely by virtue of the ownership or acquisition of any equity interest in that Mortgage Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Mortgage Lender with immunity from the jurisdiction of courts within the United States or

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from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Mortgage Lender is a Defaulting Mortgage Lender under any one or more of clauses (a) through (d) above, and the effective date of such status, shall be conclusive and binding absent manifest error, and such Mortgage Lender shall be deemed to be a Defaulting Mortgage Lender (subject to Section 2.3(c)(ii) of the Mortgage Loan Agreement) as of the date established therefor by the Agent in a written notice of such determination, which shall be delivered by the Agent to the Borrower and each other Mortgage Lender promptly following such determination.

“Deficiency Balance” shall have the meaning given to such term in Section 21.1(b) of the Lease.

“Disqualified Equity Interests” shall mean any Equity Interests that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Company Obligations and all other Company Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Company Obligations and all other Company Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety‑one (91) days after the Maturity Date; provided, that if such Equity Interests is issued pursuant to a plan for the benefit of the Parent or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Parent or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

“Domestic Subsidiary” shall mean any Subsidiary of the Parent organized under the laws of any political subdivision of the United States.

“Election Date” shall have the meaning given to such term in Section 20.1 of the Lease.

“Election Notice” shall have the meaning given to such term in Section 20.1 of the Lease.

“Eligible Assignee” shall mean respecting any assignee of any Lender, any “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act or an Affiliate of a qualified institutional buyer, except in all cases any Defaulting Lender, any Credit Party or any Affiliate of any Credit Party.

“Eligible Lessor” shall mean a Person, (a) with respect to which another Person has voting control of such first Person, represented by a majority of the outstanding voting equity interests of such first Person (the “Majority Equity Interests”) and (b) that: (i) has a legal form that allows holders of the Majority Equity Interests therein to make decisions and manage such Person’s activities; (ii) has a level of net worth sufficient to allow it to finance its activities; (iii) has the Majority Equity Interests therein which are the first interest

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subject to loss if such Person’s assets are not sufficient to meet its obligations; (iv) has not received assets that are beneficial interests in a special purpose entity in exchange for the issuance of the Majority Equity Interests therein; (v) has not received funds in exchange for the Majority Equity Interests therein from any of the Financing Parties, other than its parent entity or its Affiliates; and (vi) holds title to real estate, equipment assets or other assets with a fair market value equal to or in excess of two (2) times the then current Termination Value.

“Employee Benefit Plan” shall mean (a) any employee benefit plan within the meaning of Section 3(3) of ERISA that is maintained for employees of any Credit Party or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding seven (7) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliate.

“Enforcement Notice” shall have the meaning given to such term in Section 5.14 of the Participation Agreement.

“Engagement Letter” shall mean that certain engagement letter agreement, dated as of April 30, 2015, from Wells Fargo Securities, LLC and Wells Fargo Bank, National Association to Ms. Colette Kress, Chief Financial Officer of the Parent, and accepted and agreed to by the Parent, as such letter may be amended, modified, supplemented, restated or replaced from time to time.

“Environmental Claims” shall mean any investigation (other than internal reports prepared by any Person in the ordinary course of business), notices of non-compliance or violation, demand letter, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding, or other Claim (whether administrative, judicial, or private in nature) arising (a) pursuant to, or in connection with, an actual or alleged violation of, or noncompliance with, any Environmental Law, (b) in connection with any Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or other response action in connection with a Hazardous Substance, Environmental Law, or other order of a Tribunal or (d) from any actual or alleged damage, injury, threat, or harm to health, safety, natural resources, or the environment.

“Environmental Condition” shall mean any action, omission, event, condition or circumstance, including the presence of any Hazardous Substance, which does or reasonably would (i) require assessment, investigation, abatement, correction, removal or remediation, (ii) give rise to any obligation or liability of any nature (whether civil or criminal, arising under a theory of negligence or strict liability, or otherwise under any Environmental Law), (iii) create or constitute a public or private nuisance or trespass, or (iv) constitute a violation of or noncompliance with any Environmental Law.

“Environmental Laws” shall mean all federal, state, provincial, local and foreign Laws (including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq., the Federal Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j, the Federal Air Pollution Control Act, 42 U.S.C. § 7401 et seq., the Oil Pollution Act, 33 U.S.C. § 2701 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 to 136y) each as amended, and any regulations promulgated thereunder or any equivalent state, provincial or local Law, each as amended, and any regulations promulgated thereunder and any consent decrees, settlement agreements, judgments, orders, directives or any binding policies having the force and effect of law issued by or entered into with an Official Body pertaining or relating to: (a) pollution or pollution control; (b) protection of human health from exposure to Regulated Substances; (c) protection of the environment

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and/or natural resources; (d) the presence, use, management, generation, manufacture, processing, extraction, treatment, recycling, refining, reclamation, labeling, sale, transport, storage, collection, distribution, disposal or release or threat of release of Regulated Substances; (e) the presence of Contamination; (f) the protection of endangered or threatened species; and (g) the protection of Environmentally Sensitive Areas.

“Environmental Violation” shall mean any activity, omission, occurrence or condition that violates or threatens (if the threat requires remediation under any Environmental Law and is not remediated during any grace period allowed under such Environmental Law) to violate or results in or threatens (if the threat requires remediation under any Environmental Law and is not remediated during any grace period allowed under such Environmental Law) to result in noncompliance with any Environmental Law.

“Environmentally Sensitive Area” shall mean (a) any wetland as defined by or designated by Applicable Laws, including applicable Environmental Laws; (b) any area designated as a coastal zone pursuant to Applicable Laws, including Environmental Laws; (c) any area of historic or archeological significance or scenic area as defined or designated by Applicable Laws, including Environmental Laws; (d) habitats of endangered species or threatened species as designated by Applicable Laws, including Environmental Laws; (e) wilderness or refuge areas as defined or designated by Applicable Laws, including Environmental Laws; or (f) a floodplain or other flood hazard area as defined pursuant to any Applicable Laws.

“Equipment” shall mean equipment, apparatus, furnishings, fittings and personal property of every kind and nature whatsoever that is purchased, leased or otherwise acquired using the proceeds of the Loans or Lessor Advances, together with all replacements, modifications, attachments and additions thereto.

“Equipment Schedule” shall mean each Equipment Schedule attached to the applicable Requisition.

“Equity Interests” shall mean (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (f) any and all warrants, rights or options to purchase any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

“ERISA Affiliate” shall mean any Person who together with any Credit Party or any of its Subsidiaries is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

“Eurocurrency Liabilities” shall have the meaning given to such term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar Credit Loan” shall mean the Credit Loans with respect to which interest is calculated based on the LIBOR Rate.

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“Eurodollar Disruption Event” shall mean the occurrence of any of the following: (a) any Lender shall have notified the Agent of a determination by such Lender or any of its assignees or participants that it would be contrary to law or to the directive of any central bank or other governmental authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to fund any Eurodollar Loan, (b) any Lender shall have notified the Agent of the inability, for any reason, of such Lender or any of its assignees or participants to determine the LIBOR Rate, (c) any Lender shall have notified the Agent of a determination by such Lender or any of its assignees or participants that the rate at which deposits of United States dollars are being offered to such Lender or any of its assignees or participants in the London interbank market does not accurately reflect the cost to such Lender, such assignee or such participant of making, funding or maintaining any Eurodollar Loan or (d) any Lender shall have notified the Agent of the inability of such Lender or any of its assignees or participants to obtain United States dollars in the London interbank market to make, fund or maintain any Eurodollar Loan.

“Eurodollar Lessor Advance” shall mean a Lessor Advance bearing a Lessor Yield based on the LIBOR Rate.

“Eurodollar Loans” shall mean the Eurodollar Credit Loans and the Eurodollar Mortgage Loans, as applicable.

“Eurodollar Mortgage Loans” shall mean the Mortgage Loans with respect to which interest is calculated based on the LIBOR Rate.

“Eurodollar Reserve Percentage” shall mean for any Eurodollar Loan or Eurodollar Lessor Advance, the percentage applicable during such period (or, if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term of one month.

“Event of Default” shall mean a Lease Event of Default, an Agency Agreement Event of Default, a Credit Loan Event of Default or a Mortgage Loan Event of Default.

“Excepted Payments” shall mean:

(a) all indemnity payments (including indemnity payments made pursuant to Section 11 of the Participation Agreement), whether made by adjustment to Basic Rent or otherwise, to which the Lessor or any of its Affiliates, agents, officers, directors or employees is entitled;

(b) any amounts (other than Basic Rent or Termination Value) payable under any Operative Agreement to reimburse the Lessor or any of its respective Affiliates (including the reasonable expenses of the Lessor incurred in connection with any such payment) for performing or complying with any of the obligations of any Credit Party under and as permitted by any Operative Agreement;

(c) any amount payable to the Lessor by any transferee of such interest of the Lessor as the purchase price of the Lessor’s interest in the Trust Property (or a portion thereof);

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(d) any insurance proceeds (or payments with respect to risks self‑insured or policy deductibles) under liability policies other than such proceeds or payments payable to the Agent or any Lender;

(e) any insurance proceeds under policies maintained by the Lessor;

(f) Transaction Expenses or other amounts, fees, disbursements or expenses paid or payable to or for the benefit of the Lessor;

(g) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (f) above;

(h) any rights of the Lessor to demand, collect, sue for or otherwise receive and enforce payment of any of the foregoing amounts, provided that such rights shall not include the right to terminate the Lease; and

(i) any Overfunded Amount.

“Excess Proceeds” shall mean the excess, if any, of the aggregate of all awards, compensation or insurance proceeds payable in connection with a Casualty or Condemnation over the Termination Value paid by the Lessee pursuant to the Lease with respect to such Casualty or Condemnation.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“Excluded Swap Obligation” shall mean, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party, including under Section 6B.11 of the Participation Agreement). If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

“Exculpated Persons” shall mean the Lessor (except with respect to the representations and warranties and the other obligations of the Lessor pursuant to the Operative Agreements expressly undertaken in its individual capacity, including the representations and warranties of the Lessor pursuant to Section 6.2 of the Participation Agreement and the obligations of the Lessor under Section 8.2 of the Participation Agreement) and its officers, directors, shareholders and partners.

“Exempt Payments” shall have the meaning given to such term in Section 11.2(e) of the Participation Agreement.

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“Expiration Date” shall mean the last day of the Term; provided, in no event shall the Expiration Date be later than the ninety (90) month anniversary of the Closing Date, unless such later date has been expressly agreed to in writing by each of the Financing Parties in accordance with Section 2.2 of the Lease, in which case the Expiration Date shall in no event be later than the two hundred and seventy (270) month anniversary of the Closing Date.

“Facility Termination Date” shall mean the Expiration Date or such later date as the Lenders shall notify the Lessee, the Agent and the Lessor of in writing.

“Fair Market Sales Value” shall mean the amount, which in any event, shall not be less than zero (0), that would be paid in cash in an arms‑length transaction between an informed and willing purchaser and an informed and willing seller, neither of whom is under any compulsion to purchase or sell, respectively, the Property. Fair Market Sales Value of the Property shall be determined based on the assumption that, except for purposes of Section 17 of the Lease, the Property is in the condition and state of repair required under Section 10.1 of the Lease and each Credit Party is in compliance with the other requirements of the Operative Agreements.

“Federal Funds Effective Rate” shall mean the Federal Funds Rate.

“Federal Funds Rate” shall mean, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Agent (or, if such day is not a Business Day, for the next preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate determined, in the good faith opinion of the Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. Charlotte, North Carolina time, absent demonstrable error; provided, notwithstanding the foregoing, if such interest rate determined as provided above would be less than 0.0% per annum for any applicable time period, then such interest rate for such time period shall be deemed to be 0.0% per annum.

“Fees” shall mean the Credit Lender Unused Fee, the Mortgage Lender Unused Fee, the Lessor Unused Fee, the Credit Lender Upfront Fee, the Mortgage Lender Upfront Fee, the Lessor Upfront Fee, the Administrative Agency Fee, the Structuring Fee and any and all additional fees referenced pursuant to the Engagement Letter.

“Financing Parties” shall mean the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders.

“Fiscal Quarter” shall mean any quarter of a Fiscal Year.

“Fiscal Year” shall mean any period of twelve consecutive calendar months ending on the last Sunday in January of any calendar year; references to a Fiscal Year with a number corresponding to any calendar year (e.g., the “2004 Fiscal Year”) refer to the Fiscal Year ending on the last Sunday in January of such calendar year.

“Fixtures” shall mean all fixtures relating to the Improvements, including all components thereof, located in or on the Improvements, together with all replacements, modifications, alterations and additions thereto.

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“Force Majeure Event” shall mean, with respect to the Property during the Construction Period, any acts of God, severe wind-driven rains or windstorms, hurricane, named storms, flood, earthquake, earth movement or subsidence when caused by natural forces only, explosion, war, terrorism, embargoes, civil disturbance or riot, industry-wide (and not Property-specific) labor strikes, unusually severe weather events, government activities directly interfering with the work of construction of the Improvements, any general inability to obtain labor or materials, civil commotion and enemy action on the premises of or directly impacting the Property; but excluding in all cases any event, cause or condition that results from a breach by any Credit Party of its obligations, representations or warranties under the Operative Agreements or any other agreements to which it is a party, from any Credit Party’s financial condition or failure to pay or any event, cause or condition which could have been avoided or which could be remedied or mitigated through the exercise of commercially reasonable efforts or the commercially reasonable expenditure of funds or other commercially reasonably action, election or arrangement which would correct or resolve the impact of such event on the construction.

“Force Majeure Loss” shall mean the actual construction costs, determined by the applicable insurance company in assessing a claim for such costs under any policy of insurance, or if such loss is not fully insured in whole or in part under any policy of insurance, then as determined by a nationally recognized independent appraiser selected by the Agent, expended to repair and restore damage caused by a Force Majeure Event with respect to the Property (or portion thereof) to the condition of the Property immediately prior to such Force Majeure Event (but excluding all capitalized costs and other collateral costs and carrying costs whenever accrued).

“Full Recourse Event of Default” shall mean (a) an Agency Agreement Event of Default arising in whole or in part as a consequence of any fraudulent act or omission of Construction Agent or Lessee in connection with the negotiation, execution, delivery, consummation and/or performance of any Operative Agreement or any other contractual agreement relating to the Property or the construction or work thereon; (b) an Agency Agreement Event of Default arising in whole or in part as a consequence of the misapplication of any Advance or any portion thereof or any other funds made available to, or on behalf of, Construction Agent or Lessee under any Operative Agreement; (c) an Agency Agreement Event of Default arising in whole or in part as a consequence of an Insolvency Event; (d) an occurrence pursuant to willful misconduct on behalf of Construction Agent or Lessee; or (e) an occurrence pursuant to which Construction Agent or Lessee shall commit any illegal act regarding the Property.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the accounting principles board of the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination.

“GAAP Project Cost” shall mean the Property Cost less any Uninsured Force Majeure Loss and Transaction Expenses that are not allowed under GAAP.

“Governmental Action” shall mean all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, written interpretations, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Legal Requirement, and shall include, without limitation, all environmental and operating permits and licenses that are required for the full use, occupancy, zoning and operating of the Property.

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“Governmental Authority” shall mean the government of the United States or any other nation, or of 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 (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or the European Central Bank).

“Ground Lease” shall mean that certain Ground Lease Agreement dated as of the Closing Date pursuant to which Lessee ground leases the Land to Lessor.

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) 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 Indebtedness or other obligation, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation or (e) for the purpose of assuming in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (whether in whole or in part).

“Guaranteed Obligations” shall mean (a) the Company Obligations and (b) any existing or future payment and other obligations owing by any Credit Party under any Secured Hedge Agreements, excluding in all cases with respect to the foregoing subsections (a) and (b), all Excluded Swap Obligations.

“Guarantor” shall mean, collectively, each Person executing the Participation Agreement as of the Closing Date or otherwise executing a Guaranty Joinder from time to time after the Closing Date, in each case, to evidence the guarantee of the Guaranteed Obligations.

“Guarantor Joinder” shall mean each Guarantor Joinder and Assumption Agreement executed by a newly added Guarantor pursuant to the provisions of Sections 6B.9 and 8.3A(n) of the Participation Agreement, in the form of EXHIBIT G to the Participation Agreement or in such other form as is satisfactory to the Agent, in its commercially reasonable discretion.

“Guaranty” of any Person shall mean any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any other Person in any manner, whether directly or indirectly, including any agreement to indemnify or hold harmless any other Person, any performance bond or other suretyship arrangement and any other form of assurance against loss, except endorsement of negotiable or other instruments for deposit or collection in the ordinary course of business.

“Guaranty Obligations” of any Person shall mean its obligations pursuant to any Guarantee.

“H.15” shall mean Federal Reserve Statistical Release H.15.

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“Hard Costs” shall mean all costs and expenses payable for supplies, materials, labor and development fees with respect to the Improvements under any Construction Contract.

“Hazardous Substance” shall mean any of the following: (a) any petroleum or petroleum product, explosives, radioactive materials, asbestos, formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance, material, product, derivative, compound or mixture, mineral, chemical, waste, gas, medical waste, or pollutant, in each case whether naturally occurring, man‑made or the by‑product of any process, that is toxic, harmful or hazardous to the environment or health or safety of human beings; or (c) any substance, material, product, derivative, compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would support the assertion of any claim under any Environmental Law or is the subject of regulatory action by any Governmental Authority under any Environmental Law, whether or not defined as hazardous as such under any Environmental Law.

“Hedge Agreements” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement.

“Hedge Bank” shall mean any Person that, (a) at the time it enters into a Hedge Agreement with a Credit Party permitted under Section 8.3B of the Participation Agreement, is a Lender, an Affiliate of a Lender, the Agent or an Affiliate of the Agent or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Hedge Agreement with a Credit Party, in each case in its capacity as a party to such Hedge Agreement.

“Hedge Termination Value” shall mean, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

“Impositions” shall mean any and all liabilities, losses, expenses, costs, charges and Liens of any kind whatsoever for fees, taxes, levies, imposts, duties, charges, assessments or withholdings (“Taxes”) including but not limited to (i) real and personal property taxes, including personal property taxes on any property covered by the Lease that is classified by Governmental Authorities as personal property, and real estate or ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes and other similar taxes (including rent taxes and intangibles taxes); (iii) excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and documentary recording taxes and fees; (v) taxes that are or are in the nature of franchise, income, value added, privilege and doing business taxes, license and registration fees; (vi) assessments on the Property, including all assessments for public Improvements or benefits, whether or not such improvements are commenced or completed within the Term; and (vii) taxes, Liens, assessments or charges asserted, imposed or assessed by the PBGC or any governmental authority succeeding to or performing functions similar to, the PBGC; and in each case all interest, additions to tax and penalties thereon, which at any time prior to, during or with respect to the Term or in respect of any period for which the Lessee shall be obligated to pay Supplemental Rent, may be levied, assessed or imposed by any Governmental Authority upon or with respect to (a) the Property or any part thereof or interest therein; (b) the leasing, financing, refinancing, demolition, construction, substitution, subleasing, assignment, control, condition, occupancy, servicing, maintenance, repair, ownership, possession, activity conducted on, delivery, insuring, use,

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operation, improvement, sale, transfer of title, return or other disposition of the Property or any part thereof or interest therein; (c) the Notes, other indebtedness with respect to the Property, or the Lessor Advances, or any part thereof or interest therein; (d) the rentals, receipts or earnings arising from the Property or any part thereof or interest therein; (e) the Operative Agreements, the performance thereof, or any payment made or accrued pursuant thereto; (f) the income or other proceeds received with respect to the Property or any part thereof or interest therein upon the sale or disposition thereof; (g) any contract (including the Agency Agreement) relating to the construction, acquisition or delivery of the Improvements or any part thereof or interest therein; (h) the issuance of the Notes or the obtaining of Lessor Advances; (i) the Lessor or the Trust Property; or (j) otherwise in connection with the transactions contemplated by the Operative Agreements.

“Improvements” shall mean, with respect to the Land, all buildings, structures, Fixtures, and other improvements of every kind (in each case constructed or acquired with proceeds from the Advances) thereon existing at any time and from time to time, together with any and all appurtenances to such buildings, structures or improvements, including sidewalks, utility pipes, conduits and lines, parking areas and roadways, and including all Modifications and other additions to or changes in the Improvements at any time, including (a) any Improvements existing on the Land as of the Closing Date and (b) any Improvements made on the Land subsequent to the Closing Date, excluding the improvements subject to the Remainder Property Ground Lease.

“Indebtedness” shall mean, with respect to any Person at any date and without duplication, the sum of the following:

(a) all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b) all obligations to pay the deferred purchase price of property or services of any such Person (including, without limitation, all obligations under non-competition, earn-out or similar agreements), except trade payables arising in the ordinary course of business not more than ninety (90) days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person;

(c) the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

(e) all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

Appendix A - 24

(f) all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including, without limitation, any reimbursement obligations, and banker’s acceptances issued for the account of any such Person;

(g) all obligations of any such Person in respect of Disqualified Equity Interests;

(h) all net obligations of such Person under any Hedge Agreements; and

(i) all Guaranty Obligations of any such Person with respect to any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.

“Indemnified Person” shall mean without duplication each Financing Party and its Affiliates and their respective successors, assigns, directors, shareholders, members, managers, partners, officers, employees and agents.

“Indemnity Provider” shall mean NVIDIA Land Development, LLC, a Delaware limited liability company.

“Insolvency Event” shall mean one or more of (a) the liquidation or dissolution of the Construction Agent or the Lessee, or the suspension of the business of the Construction Agent or the Lessee, or the filing by the Construction Agent or the Lessee of a voluntary petition or an answer seeking reorganization, arrangement, readjustment of its debts or for any other relief under the Bankruptcy Code or under any other insolvency act or law, state or federal, now or hereafter existing, or any other action of the Construction Agent or the Lessee indicating its consent to, approval of or acquiescence in, any such petition or proceeding; the application by the Construction Agent or the Lessee for, or the appointment by, consent or acquiescence of the Construction Agent or the Lessee of a receiver, a trustee or a custodian of the Construction Agent or the Lessee for all or a substantial part of its property; the making by the Construction Agent or the Lessee of any assignment for the benefit of creditors; the inability of the Construction Agent or the Lessee, or the admission by the Construction Agent or the Lessee in writing of its inability, to pay its debts as they mature; or the Construction Agent or the Lessee taking any corporate action to authorize any of the foregoing; (b) the filing of an involuntary petition against the Construction Agent or the Lessee in bankruptcy or seeking reorganization, arrangement, readjustment of its debts or for any other relief under the Bankruptcy Code, as amended, or under any other insolvency act or law, state or federal, now or hereafter existing; or the involuntary appointment of a receiver, a trustee or a custodian of the Construction Agent or the Lessee for all or a substantial part of its property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of the Construction Agent or the Lessee, and the continuance of any of such events for ninety (90) days undismissed or undischarged; (c) the adjudication of the Construction Agent or the Lessee as bankrupt or insolvent or the occurrence of a Deemed Insolvency with respect to the Construction Agent or the Lessee; (d) the entering of any order in any proceedings against the Construction Agent or the Lessee or any Subsidiary of the foregoing decreeing the dissolution, divestiture or split‑up of the Construction Agent or the Lessee or any Subsidiary of the Construction Agent or the Lessee, and such order remains in effect for more than sixty (60) days; (e) the occurrence of any Agency Agreement Event of Default under Section 5.1(c) of the Agency Agreement, to the extent such Agency Agreement Event of

Appendix A - 25

Default is attributable to a Lease Event of Default under Section 17.1(h) or (i) of the Lease; or (f) the occurrence of any Lease Event of Default under Section 17.1(h) or (i) of the Lease.

“Inspection Consultant” shall mean CBRE Inc., a Delaware corporation, d/b/a Inspection & Valuation International.

“Insurance and Condemnation Event” shall mean the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective properties.

“Insurance Requirements” shall mean all terms and conditions of any insurance policy required by the Lease to be maintained by the Lessee or required by the Agency Agreement to be maintained by the Construction Agent, all requirements of the issuer of any such policy and from and after the Completion Date, regarding self‑insurance, any other insurance requirements of the Lessee.

“Interest” shall mean, for each Loan for any Accrual Period, the sum of the products (for each day during such Accrual Period) of:

IR x LB x 1

where:

LB = the outstanding balance of such Loan;

IR = the Interest Rate applicable on such day; and

D = 360 or, to the extent the Interest Rate is based on the Base Rate, 365 (or 366, as applicable)

provided, however, that (i) no provision of any Operative Agreement shall require the payment or permit the collection of Interest in excess of the maximum permitted by Applicable Law and (ii) Interest shall not be considered paid by any distribution if at any time such distribution is rescinded or must otherwise be returned for any reason.

“Interest Coverage Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date to (b) Consolidated Interest Expense for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date.

“Interest Period” shall mean the Accrual Period.

“Interest Rate” shall mean with respect to Loans the LIBOR Rate plus the Applicable Percentage with respect to such Loans; provided, however, (a) in the event the Agent is unable to determine such LIBOR Rate, the outstanding Loans shall bear interest at the ABR applicable from time to time from and after the dates and during the periods specified in Section 2.8(b) of the applicable Loan Agreement, and (b) upon the delivery by the Lender of the notice described in Section 11.3(d) of the Participation Agreement, the Loans

Appendix A - 26

of such Lender shall bear interest at the ABR applicable from time to time after the dates and during the periods specified in Section 11.3(d) of the Participation Agreement.

“Investment Company Act” shall mean the Investment Company Act of 1940, as amended, together with the rules and regulations promulgated thereunder.

“Investments” shall have the meaning given to such term in Section 8.3B(c) of the Participation Agreement.

“Land” shall mean that parcel of real property described on Exhibit A to the Ground Lease.

“Land Cost” shall have the meaning given to such term in Section 5.4 of the Agency Agreement.

“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award of or settlement agreement with any Official Body.

“Lease” or “Lease Agreement” the Real Property Lease Agreement dated on or about the Closing Date, between the Lessor and the Lessee.

“Lease Default” shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Lease Event of Default.

“Lease Event of Default” shall have the meaning given to such term in Section 17.1 of the Lease.

“Legal Requirements” shall mean all foreign, federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting the Lessor, any Credit Party, the Agent, the Mortgage Lenders, the Credit Lenders or the Property, Land, Improvements, Equipment or the taxation, demolition, construction, use or alteration of such Improvements, whether now or hereafter enacted and in force, including any that require repairs, modifications or alterations in or to the Property or in any way limit the use and enjoyment thereof (including all building, zoning and fire codes and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et. seq., and any other similar federal, state or local laws or ordinances and the regulations promulgated thereunder) and any that may relate to environmental requirements (including all Environmental Laws), and all permits, Credit Notes of occupancy, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments which are either of record or known to any Credit Party affecting the Property or the Appurtenant Rights.

“Lender” shall mean each Credit Lender and each Mortgage Lender.

“Lender Financing Statements” shall mean UCC financing statements and fixture filings appropriately completed for filing in the applicable jurisdiction in order to procure a security interest against the Lessor, as debtor, in favor of the Agent, as secured party, in the Collateral subject to the Security Documents.

“Lessee” shall have the meaning given to such term in the Lease.

“Lessor” shall mean Wachovia Service Corporation, a Delaware corporation.

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“Lessor Advance” shall mean, as the context may require,

(a) any single advance made by the Lessor pursuant to the terms of the Participation Agreement or

(b) the aggregate amount of all advances made by the Lessor pursuant to the terms of the Participation Agreement (i) as reduced from time to time by (A) the Accelerated Rent Amount pursuant to Section 5.11 of the Participation Agreement or (B) any prepayment of such advances pursuant to Section 5A.4 of the Participation Agreement or otherwise in accordance with the Operative Agreements and (ii) as increased from time to time by the accretion of the Cumulative Lessor Basic Rent Adjustment pursuant to Section 5.11 of the Participation Agreement.

“Lessor Basic Rent” shall mean the scheduled Lessor Yield due on the Lessor Advances (as Lessor Advances may be adjusted from time to time by the Cumulative Lessor Basic Rent Adjustment) on any Scheduled Interest Payment Date (but not including interest on overdue amounts).

“Lessor Basic Rent Adjustment” shall have the meaning given to such term in Section 5.11 of the Participation Agreement.

“Lessor Commitment” shall mean the Lessor Commitment of the Lessor as set forth in Schedule I to the Participation Agreement as such Schedule I may be amended and replaced from time to time.

“Lessor Confirmation Letter” shall mean the confirmation letter issued by the Lessor from time to time to the Lessee pursuant to Section 8.2(d) of the Participation Agreement, in a form substantially similar to the form of confirmation letter provided to the Lessee on or prior to the Closing Date.

“Lessor Financing Statements” shall mean UCC financing statements and fixture filings appropriately completed for filing in the applicable jurisdictions in order to procure a security interest in the Property against the Lessee, as debtor, in favor of the Lessor, as secured party, and thereafter assigned to the Agent, respecting the Lease to the extent the Lease is a security agreement or a mortgage.

“Lessor Lien” shall mean any Lien, lease or disposition of title in respect of the Property or any other Collateral arising as a result of (a) any claim against the Lessor or any Affiliate of the Lessor not resulting from the transactions contemplated by the Operative Agreements, (b) any act or omission of the Lessor or any Affiliate of the Lessor which is not required by the Operative Agreements or is in violation of any of the terms of the Operative Agreements, (c) any claim against the Lessor or any Affiliate of the Lessor with respect to Taxes or Transaction Expenses against which the Lessee is not required to indemnify the Lessor pursuant to Section 11 of the Participation Agreement or (d) any claim against the Lessor or any Affiliate of the Lessor arising out of any transfer by the Lessor of all or any portion of the interest of the Lessor in the Property or the Operative Agreements other than the transfer of title to or possession of the Property by the Lessor pursuant to and in accordance with the Operative Agreements, including pursuant to the exercise of the remedies set forth in Article XVII of the Lease.

“Lessor Overdue Rate” shall mean the lesser of (a) the then current rate of Lessor Yield respecting the particular amount in question plus two percent (2%) and (b) the highest rate permitted by Applicable Law.

Appendix A - 28

“Lessor Property Cost” shall mean an amount equal to the outstanding Lessor Advances with respect to the Property.

“Lessor Unused Fee” shall have the meaning given to such term in Section 7.4 of the Participation Agreement.

“Lessor Upfront Fee” shall have the meaning given to such term in Section 7.5 of the Participation Agreement.

“Lessor Yield” shall mean with respect to Lessor Advances the LIBOR Rate plus the Applicable Percentage; provided, however, (a) in the event the Agent is unable to determine such LIBOR Rate as provided in Section 5A.5(c) of the Participation Agreement, the outstanding Lessor Advances shall bear a yield at the ABR applicable from time to time from and after the dates and during the periods specified in Section 5A.5(c) of the Participation Agreement, and (b) upon the delivery by the Lessor of the notice described in Section 11.3(d) of the Participation Agreement, the Lessor Advances of the Lessor shall bear a yield at the ABR applicable from time to time after the dates and during the periods specified in Section 11.3(d) of the Participation Agreement.

“Leverage Ratio” shall mean , as of any date of determination, the ratio of (a) Consolidated Total Indebtedness on such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date.

“LIBOR” shall mean, for any day during any Accrual Period and any Eurodollar Loan or Eurodollar Lessor Advance, an interest rate per annum equal to:

(a) for any interest rate or yield calculation with respect to a Eurodollar Loan or Eurodollar Lessor Advance, the rate of interest or yield, as applicable, per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Accrual Period which appears on the applicable Reuters screen (or such other commercially available source providing such quotations as may be designated by the Agent from time to time) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Accrual Period (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear on the applicable Reuters screen (or such other commercially available source as referenced above), then “LIBOR Rate” shall be determined by the Agent to be the arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts of at least $5,000,000 would be offered by first class banks in the London interbank market to the Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Accrual Period for a period equal to such Accrual Period; provided, notwithstanding the foregoing, if any such interest rate for any Accrual Period determined as provided above would be less than 0.0% per annum, then such interest rate for such Accrual Period shall be deemed to be 0.0% per annum.

(b) for any interest rate or yield calculation with respect to an ABR Loan or ABR Lessor Advance, the rate of interest or yield, as applicable, per annum determined on the basis of the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a period equal to one month (commencing on the date of determination of such interest rate) which appears on the applicable Reuters screen (or such other commercially available source providing such quotations as may be designated by the Agent from time to time) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business

Appendix A - 29

Day (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear on the applicable Reuters screen (or such other commercially available source as referenced above), then “LIBOR Rate” for such ABR Loan or ABR Lessor Advance shall be determined by the Agent to be the arithmetic average of the rate per annum at which deposits in Dollars in minimum amounts of at least $5,000,000 would be offered by first class banks in the London interbank market to the Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination; provided, notwithstanding the foregoing, if any such interest rate for any applicable time period determined as provided above would be less than 0.0% per annum, then such interest rate for such time period shall be deemed to be 0.0% per annum.

“LIBOR Rate” shall mean a rate per annum determined by the Agent pursuant to the following formula:



LIBOR Rate =	LIBOR
	1.00 - Eurodollar Reserve Percentage

“License” shall have the meaning given to such term in Section 8.3A(e)(ii) of the Participation Agreement.

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien, option, attachment, levy, encroachment, title defect or charge of any kind.

“Limited Recourse Amount” shall mean in the case of the Lease, an amount equal to the Termination Value less the Maximum Residual Guarantee Amount.

“Limited Recourse Event of Default” shall have the meaning given to such term in Section 17.12 of the Lease.

“Liquidity” shall mean unrestricted cash and Cash Equivalents of the Parent and its Subsidiaries.

“Loan Agreement” shall mean the Mortgage Loan Agreement or the Credit Loan Agreement, as applicable.

“Loans” shall mean the Mortgage Loans and the Credit Loans.

“Majority Credit Lenders” shall mean at any time, Credit Lenders (other than any Defaulting Credit Lender) whose Credit Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Credit Loans outstanding or (b) to the extent there are no Credit Loans outstanding, the aggregate of the Credit Loan Commitments.

“Majority Lenders” shall mean at any time the Mortgage Lenders (other than any Defaulting Mortgage Lender) whose Mortgage Loans and the Credit Lenders (other than any Defaulting Credit Lender) whose Credit Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Loans outstanding or (b) to the extent there are no Loans outstanding, the sum of the aggregate Mortgage Loan Commitments plus the aggregate Credit Loan Commitments.

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“Majority Mortgage Lenders” shall mean at any time, Mortgage Lenders (other than any Defaulting Mortgage Lender) whose Mortgage Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Mortgage Loans outstanding or (b) to the extent there are no Mortgage Loans outstanding, the aggregate of the Mortgage Loan Commitments.

“Majority Secured Parties” shall mean at any time the Financing Parties (other than any Defaulting Lender) whose Mortgage Loans, Credit Loans and/or Lessor Advances outstanding represent at least fifty-one percent (51%) of (a) the aggregate Advances outstanding or (b) to the extent there are no Advances outstanding, the sum of the aggregate Lessor Commitment, plus the aggregate Credit Loan Commitments plus the aggregate Mortgage Loan Commitments.

“Marketing Period” shall mean, if the Lessee has given a Sale Notice in accordance with Section 20.1 of the Lease, the period commencing on the date such Sale Notice is given and ending on the Expiration Date.

“Material Adverse Effect” shall mean, with respect to the Parent and its Subsidiaries, (a) a material adverse effect on the operations, business, assets, properties, prospects, liabilities (actual or contingent) or condition (financial or otherwise) of (x) the Credit Parties or (y) the Parent and its Subsidiaries on a consolidated basis; (b) a material impairment of the ability of any such Person to perform its obligations under the Operative Agreements to which it is a party; (c) a material impairment of the rights and remedies of any Financing Party under any Operative Agreement; (d) an impairment of the legality, validity, binding effect or enforceability against any Credit Party of any Operative Agreement to which it is a party; (e) an impairment of the validity, binding effect or enforceability of any Lien on the Property created by any of the Operative Agreements; or (f) an impairment of the value, utility or useful life of the Property, which has caused or could reasonably be expected to cause a diminution of the fair market value of the Property of ten percent (10%) or more from the then‑current fair market value of the Property, or the use, or ability of the Lessee to use, the Property for the purpose for which it was intended.

“Material Contract” shall mean any contract or agreement, written or oral, of any Credit Party or any of its Subsidiaries that has been disclosed in public filings with the SEC.

“Material Domestic Subsidiary” shall mean any Subsidiary, direct or indirect, of the Parent organized under the laws of any political subdivision of the United States that (a) directly or indirectly owns any other Material Domestic Subsidiary and (b) other than as described in subsection (a), any other such Subsidiary, direct or indirect, of the Parent (i) the revenues of which for the most recent period of four fiscal quarters of the Parent were greater than 1% of the revenues for the Parent and its consolidated Subsidiaries for such period of four fiscal quarters or (ii) the book value of assets of which as of the end of any fiscal quarter for the Parent were greater than 1% of the book value of the assets for the Parent and its consolidated Subsidiaries as of such date; provided, that if at any time (x) the aggregate amount of the revenues of all such Subsidiaries that are not Material Domestic Subsidiaries exceeds 5% of the revenues for the Parent and its consolidated Subsidiaries for the most recent period of four fiscal quarters of the Parent or (y) the aggregate book value of the assets of all such Subsidiaries that are not Material Domestic Subsidiaries exceeds 5% of the book value of the assets for the Parent and its consolidated Subsidiaries as of the end of any fiscal quarter for the Parent, then, in either such case, each such Subsidiary as designated by the Parent so that aggregate thresholds described in the foregoing subsections (x) and (y) are not exceeded.

“Material Indebtedness” shall mean Indebtedness of the Parent and/or any of its Subsidiaries in excess of the Threshold Amount.

Appendix A - 31

“Maturity Date” shall mean the Expiration Date.

“Maximum Residual Guarantee Amount” shall mean an amount equal to the product of the GAAP Project Cost times eighty-seven and one half percent (87.5%).

“Modifications” shall have the meaning given to such term in Section 11.1 of the Lease.

“Monthly Notice Date” shall mean the tenth (10th) day of each calendar month unless such is not a Business Day and in such case on the next preceding Business Day.

“Moody’s” shall mean Moody’s Investors Services, Inc., and any successor thereto.

“Mortgage Instrument” shall mean that certain Leasehold Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing executed by the Lessor and the Lessee in favor of the Agent (for the benefit of the Secured Parties) and evidencing a Lien on the Property, in form and substance reasonably acceptable to the Agent.

“Mortgage Lender” shall mean each bank or other financial institution which is from time to time party to any of the Operative Agreements in its capacity as a “Mortgage Lender”.

“Mortgage Lender Overdue Rate” shall have the meaning given to such term in Section 2.8(c) of the Mortgage Loan Agreement.

“Mortgage Lender Unused Fee” shall have the meaning given to such term in Section 7.4 of the Participation Agreement.

“Mortgage Lender Upfront Fee” shall have the meaning given to such term in Section 7.5 of the Participation Agreement.

“Mortgage Loan Agreement” shall mean the Credit Agreement (Mortgage Loans) dated as of the Closing Date among the Lessor, the several Mortgage Lenders from time to time party thereto and the Agent.

“Mortgage Loan Basic Rent” shall mean the scheduled interest due on the Mortgage Loans on any Scheduled Interest Payment Date (but not including interest on overdue amounts).

“Mortgage Loan Commitments” shall mean the obligation of the Mortgage Lenders to make the Mortgage Loans to the Lessor in an aggregate principal amount at any one time outstanding not to exceed the aggregate of the amounts set forth opposite each Mortgage Lender’s name on Schedule 2.1 to the Mortgage Loan Agreement, as such amount may be increased or reduced from time to time in accordance with the provisions of the Operative Agreements; provided, no Mortgage Lender shall be obligated to make Mortgage Loans in excess of such Mortgage Lender’s share of the Mortgage Loan Commitments as set forth adjacent to such Mortgage Lender’s name on Schedule 2.1 to the Mortgage Loan Agreement.

“Mortgage Loan Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute a Mortgage Loan Event of Default.

“Mortgage Loan Event of Default” shall have the meaning given to such term in Section 6 of the Mortgage Loan Agreement.

Appendix A - 32

“Mortgage Loan Property Cost” shall mean, with respect to the Property at any date of determination, an amount equal to (a) the aggregate principal amount of all Mortgage Loans made on or prior to such date minus (b) the aggregate amount of prepayments or repayments as the case may be of the Mortgage Loans allocated to reduce the Mortgage Loan Property Cost of the Property pursuant to Section 2.6(c) of the Mortgage Loan Agreement.

“Mortgage Loans” shall mean the loans made by the Mortgage Lenders pursuant to the Mortgage Loan Agreement.

“Mortgage Note” shall have the meaning given to such term in Section 2.2 of the Mortgage Loan Agreement.

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Credit Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding seven (7) years.

“Non‑Consenting Lender” shall mean any Lender that does not approve any proposed termination, amendment, supplement, waiver, modification or consent with respect to any Operative Agreement that (a) requires the approval of all Lenders, or all affected Lenders, in accordance with the terms of Section 12.4 and (b) has been approved by the Majority Credit Lenders, the Majority Mortgage Lenders, the Majority Lenders or the Majority Secured Parties, as applicable.

“Non‑Defaulting Credit Lender” shall mean, at any time, each Credit Lender that is not a Defaulting Credit Lender at such time.

“Non‑Defaulting Mortgage Lender” shall mean, at any time, each Mortgage Lender that is not a Defaulting Mortgage Lender at such time.

“Notes” shall mean the Mortgage Notes and the Credit Notes.

“Obligations” shall mean the collective reference to all obligations (including without limitation all payment and performance obligations), now existing or hereafter arising, owing by the Lessor and/or the Credit Parties, as applicable, to the Secured Parties under or pursuant to the Operative Agreements and Secured Hedge Agreements, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, which may arise under, out of, or in connection with the Participation Agreement, the Lease, the Agency Agreement, the Credit Loan Agreement, the Mortgage Loan Agreement, the Notes, any of the other Operative Agreements or the Secured Hedge Agreements, whether on account of principal, advanced amounts, interest, yield, reimbursement obligations, fees, indemnities, costs, expenses, termination payments or otherwise (including without limitation all reasonable fees and disbursements of counsel to any of the Secured Parties) that are required to be paid by the Lessor, the Lessee and/or the Construction Agent, as applicable, pursuant to the terms of the Operative Agreements or the Secured Hedge Agreements for any purpose, including in connection with the exercise of remedies.

“Officer’s Certificate” with respect to any Person shall mean a certificate executed on behalf of such Person by a Responsible Officer who has made or caused to be made such examination or investigation as is necessary to enable such Responsible Officer to express an informed opinion with respect to the subject matter of such Officer’s Certificate.

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“Official Body” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state, provincial, local or otherwise, 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 (including any supra-national bodies such as the European Union or the European Central Bank).

“Operating Lease” shall mean, as to any Person as determined in accordance with GAAP, any lease of any property or asset (whether real, personal or mixed) by such Person as lessee which is not a Capital Lease Obligation.

“Operative Agreements” shall mean the following: the Participation Agreement, the Mortgage Loan Agreement, the Mortgage Notes, the Credit Loan Agreement, the Credit Notes, the Agency Agreement, the Engagement Letter, the Lessor Confirmation Letter, the Lease (and memoranda of the Lease in a form reasonably acceptable to the Agent), each Requisition, each Assignment of Construction Document, the Security Documents, the Ground Lease and any and all other agreements, documents and instruments executed in connection with any of the foregoing (excluding any Secured Hedge Agreements).

“Original Executed Counterpart” shall have the meaning given to such term in Section 5 of Exhibit A to the Lease.

“Other Indemnified Person” shall have the meaning given to such term in Section 11.6(a)(i) of the Participation Agreement.

“Overdue Rate” shall mean (a) with respect to the Credit Loan Basic Rent and any other amount owed under or with respect to the Credit Loan Agreement or the Security Documents (except as otherwise specified in the following subsection (b), (c) or (d)), the Credit Lender Overdue Rate, (b) with respect to the Mortgage Loan Basic Rent and any other amount owed under or with respect to the Mortgage Loan Agreement or the Security Documents (except as otherwise specified in the following subsection (b), (c) or (d)), the Mortgage Lender Overdue Rate, (c) with respect to the Lessor Basic Rent, the Lessor Yield and any other amount owed to the Lessor pursuant to the Operative Agreements, the Lessor Overdue Rate, and (d) with respect to any other amount, the highest interest rate(or with respect to amounts owed to the Lessor, expressed as yield) permitted by Applicable Law, in each case from the date of such non‑payment until such amount is paid in full (whether after or before judgment).

“Overfunded Amount” shall have the meaning given to such term in Section 5.2(c)(ii) of the Participation Agreement.

“Overnight Federal Funds Rate” shall mean for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of one percent (1%)) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Overnight Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Overnight Federal Funds Rate for such day shall be the average rate charged to Wells Fargo Bank, National Association on such day on such transactions as determined by Wells Fargo Bank, National Association.

“Parent” shall mean NVIDIA Corporation, a Delaware corporation.

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“Participant” shall have the meaning given to such term in Section 9.7 of the Mortgage Loan Agreement.

“Participation Agreement” shall mean the Participation Agreement dated on or about the Closing Date, among the Lessor, the Lessee, the Construction Agent, the Guarantors, the Mortgage Lenders, the Credit Lenders and the Agent.

“Payment Date” shall mean (a) as to any Eurodollar Loan or Eurodollar Lessor Advance, the last day of the Accrual Period applicable to such Eurodollar Loan or Eurodollar Lessor Advance, (b) as to any ABR Loan or ABR Lessor Advance, the twentieth day of each month, unless such day is not a Business Day and in such case on the next occurring Business Day and (c) as to all Loans and Lessor Advances, the date of any voluntary or involuntary payment, prepayment, return or redemption, and the Expiration Date.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

“Pension Plan” shall mean any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate or (b) has at any time within the preceding seven (7) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliates.

“Permitted Acquisition” shall mean any acquisition by the Parent or any Subsidiary in the form of the acquisition of all or substantially all of the assets, business or a line of business, or at least a majority of the outstanding Equity Interests which have the ordinary voting power for the election of directors of the board of directors (or equivalent governing body) (whether through purchase, merger or otherwise), of any other Person, that is permitted pursuant to Section 8.3B(c) of the Participation Agreement.

“Permitted Facility” shall mean a first class office building to be constructed on the Land, it being agreed that the Agent shall be entitled to require an appraisal of the Property.

“Permitted Liens” shall mean:

(a) the respective rights and interests of (i) the parties to the Operative Agreements as provided in the Operative Agreements and (ii) the Hedge Banks as provided in the Operative Agreements;

(b) the rights of any sublessee or assignee under a sublease or an assignment expressly permitted by the terms of the Lease for no longer than the duration of the Lease;

(c) Liens for Taxes that either are not yet due or as to which the period of grace, if any, related thereto has not expired or which are being contested in accordance with the provisions of Section 13.1 of the Lease;

(d) Liens arising by operation of law, materialmen’s, mechanics’, workmen’s, repairmen’s, employees’, carriers’, warehousemen’s and other like Liens relating to the construction of the Improvements (including without limitation relating to labor, supplies, materials and rentals in connection therewith) or in connection with any Modifications or arising in the ordinary course of business for amounts that (i) are not more than sixty (60) days past due, (ii) are being diligently

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contested in good faith by appropriate proceedings, so long as such proceedings satisfy the conditions for the continuation of proceedings to contest Taxes set forth in Section 13.1 of the Lease or (iii) have been bonded for not less than the full amount in dispute (or as to which other security arrangements satisfactory to the Lessor and the Agent, in their commercially reasonable discretion, have been made), which bonding (or arrangements) shall comply with applicable Legal Requirements and shall have effectively stayed any execution or enforcement of such Liens;

(e) Liens arising out of judgments or awards with respect to which appeals or other proceedings for review are being prosecuted in good faith and for the payment of which adequate reserves have been provided to the extent required by GAAP or other appropriate provisions have been made, so long as such proceedings have the effect of staying the execution of such judgment or awards and satisfy the conditions for the continuation of proceedings to contest Taxes set forth in Section 13.1 of the Lease;

(f) Liens in favor of municipalities to the extent agreed to by the Lessor in its commercially reasonable discretion;

(g) Liens and other encumbrances that are expressly set forth as title exceptions on the title commitment issued under Section 5.3(g) of the Participation Agreement and accepted by the Agent;

(h) Liens on the Property approved by the Secured Parties and the Lessor or otherwise permitted under Section 8.5 of the Participation Agreement; and

(i) Lessor Liens.

“Person” shall mean an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

“Plans and Specifications” shall mean the plans and specifications for the Improvements to be constructed, as such Plans and Specifications may be amended, modified or supplemented from time to time in accordance with the terms of the Operative Agreements.

“Platform” shall have the meaning given to such term in Section 8.3A(b) of the Participation Agreement.

“Pledge Agreement” shall mean the Pledge and Security Agreement dated on or about the Closing Date between the Parent and the Agent, for the benefit of the Secured Parties.

“PML” shall mean the Scenario Expected Loss (SEL) based on the 2010 USGS database, 475‑year probabilistic ground motion (ten percent (10%) in 50‑year chance of exceedance). As set forth in the Seismic Risk Assessment for the Property prepared by Partner Engineering and Science dated June 3, 2015, the SEL is sixteen percent (16%) of the Property Cost.

“Prime Lending Rate” shall mean Prime Rate.

“Prime Rate” shall mean the rate announced by Wells Fargo Bank,, National Association from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes;

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provided, notwithstanding the foregoing, if any such interest rate for any period of time determined as provided above would be less than 0.0% per annum, then such interest rate for such period of time shall be deemed to be 0.0% per annum. The Prime Rate is not intended to be the lowest rate of interest charged by Wells Fargo Bank, National Association in connection with extensions of credit to debtors.

“Pro Forma Basis” shall mean, for purposes of calculating Consolidated EBITDA for any period during which one or more Specified Transactions occurs, that such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement and all income statement items (whether positive or negative) attributable to the property, assets or Person disposed of in a Specified Disposition shall be excluded and all income statement items (whether positive or negative) attributable to the property, assets or Person acquired in a Permitted Acquisition shall be included (provided that such income statement items to be included are reflected in financial statements or other financial data reasonably acceptable to the Agent and based upon reasonable assumptions and calculations which are expected to have a continuous impact).

“Pro Rata Share” shall mean with respect to (a) a Credit Lender, a percentage equal to such Credit Lender’s pro rata share of the aggregate Credit Loan Commitments, in each case, as set forth next to such Credit Lender’s name on Schedule 2.1 of the Credit Loan Agreement or on any assignment pursuant to which such Credit Lender becomes a party hereto and (b) a Mortgage Lender, a percentage equal to such Mortgage Lender’s pro rata share of the aggregate Mortgage Loan Commitments, in each case, as set forth next to such Mortgage Lender’s name on Schedule 2.1 of the Mortgage Loan Agreement or on any assignment pursuant to which such Mortgage Lender becomes a party hereto.

“Property” shall mean the Land and each item of Equipment and the various Improvements located on the Land, excluding the property subject to the Remainder Property Ground Lease.

“Property Acquisition Cost” shall mean the cost to the Lessor to ground lease the Land on the Closing Date (including Transaction Expenses).

“Property Cost” shall mean (a) the aggregate amount of the Mortgage Loan Property Cost plus the Credit Loan Property Cost plus the Lessor Property Cost (in each case, as such amounts shall be increased pro rata according to the Property Cost of the Property respecting the Mortgage Loans, the Credit Loans and the Lessor Advances, in each case advanced or extended from time to time including to pay for the Transaction Expenses and any Uninsured Force Majeure Losses) and (b) respecting the various amounts described in the foregoing subsection (a), all the occurrences and items giving rise to all such amounts.

“Public Lenders” shall have the meaning given to such term in Section 8.3A(b) of the Participation Agreement.

“Purchase Money Security Interest” shall mean Liens upon real or tangible personal property securing loans to any Credit Party or Subsidiary of a Credit Party or deferred payments by such Credit Party or Subsidiary for the purchase of such real or tangible personal property.

“Purchase Option” shall have the meaning given to such term in Section 20.1 of the Lease.

“Purchasing Credit Lender” shall have the meaning given to such term in Section 9.8(a) of the Credit Loan Agreement.

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“Purchasing Mortgage Lender” shall have the meaning given to such term in Section 9.8(a) of the Mortgage Loan Agreement.

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each Credit Party that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Equity Interests” shall mean any Equity Interests that are not Disqualified Equity Interests.

“Real Property” shall mean the Property.

“Real Property Lease” or “Real Property Lease Agreement” shall mean the Lease.

“Register” shall have the meaning given to such term in Section 9.9 of the applicable Loan Agreement.

“Regulated Substances” shall mean, without limitation, any substance, material or waste, regardless of its form or nature, defined under Environmental Laws as a “hazardous substance,” “pollutant,” “pollution,” “contaminant,” “hazardous or toxic substance,” “extremely hazardous substance,” “toxic chemical,” “toxic substance,” “toxic waste,” “hazardous waste,” “special handling waste,” “industrial waste,” “residual waste,” “solid waste,” “municipal waste,” “mixed waste,” “infectious waste,” “chemotherapeutic waste,” “medical waste,” “pesticide” or “regulated substance” or any other substance, material or waste, regardless of its form or nature, which is regulated, controlled or governed by Environmental Laws due to its radioactive, ignitable, corrosive, reactive, explosive, toxic, carcinogenic or infectious properties or nature or any other material, substance or waste, regardless of its form or nature, which otherwise is regulated, controlled or governed by Environmental Laws, including petroleum and petroleum products (including crude oil and any fractions thereof), natural gas, synthetic gas and any mixtures thereof, asbestos, urea formaldehyde, polychlorinated biphenyls, mercury, radon and radioactive materials.

“Regulation B” shall mean Regulation B of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

“Regulation Z” shall mean Regulation Z of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

“Regulatory Change” shall mean the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines

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

“Release” shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or emission of a Hazardous Substance.

“Remainder Property Ground Lease” shall mean that certain Ground Lease Agreement dated as of June 12, 2015 between the Lessee and NVIDIA Lease Holdings LLC, with respect to which a Memorandum of Lease dated Jun 12, 2015 between the Lessee and NVIDIA Lease Holdings LLC was recorded in the offices of the Santa Clara County Recorder on June 16, 2015, Document No. 22986845.

“Renewal Term” shall have the meaning given to such term in Section 2.2 of the Lease.

“Rent” shall mean, collectively, the Basic Rent and the Supplemental Rent, in each case payable under the Lease.

“Rent Commencement Date” shall mean the Completion Date.

“Requested Funds” shall mean any funds requested by the Lessee or the Construction Agent, as applicable, in accordance with Section 5 of the Participation Agreement.

“Requesting Party” shall have the meaning given to such term in Section 26.3 of the Lease.

“Requisition” shall have the meaning given to such term in Section 4.2 of the Participation Agreement.

“Responsible Officer” shall mean, as to any Person, the chief executive officer, president, executive vice president and chief financial officer, vice president and chief accounting officer, vice president, finance, controller, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by such Lessee and reasonably acceptable to the Agent. Any document delivered hereunder or under any other Operative Agreements that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

“Restricted Payments” shall have the meaning given to such term in Section 8.3B(f) of the Participation Agreement.

“RVI Policy” shall mean, with respect to the Property, a residual value insurance policy in form and substance reasonably acceptable to the Lessor in an amount sufficient to enable the Lessor to achieve its desired accounting treatment.

“S&P” shall mean Standard & Poor’s, a division of The McGraw Hill Companies Inc., and any successor thereto.

“Sale Date” shall have the meaning given to such term in Section 20.3(a) of the Lease.

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“Sale Notice” shall mean a notice given to the Lessor in connection with the election by the Lessee of its Sale Option.

“Sale Option” shall have the meaning given to such term in Section 20.1 of each Lease.

“Sale Proceeds Shortfall” shall mean the amount by which the proceeds of a sale described in Section 21.1 of the Lease are less than the Limited Recourse Amount with respect to the Property if it has been determined that the Fair Market Sales Value of the Property at the expiration of the term of the Lease has been impaired by greater than ordinary wear and tear during such term.

“Sanctioned Country” shall mean a country or territory that is, or whose government is, the subject of Sanctions.

“Sanctioned Person” shall mean a Person that is, or is owned or controlled by Persons that are: (a) the subject or target of any Sanctions, or (b) located, organized or resident in a Sanctioned Country.

“Sanctions” shall mean any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.

“Scheduled Interest Payment Date” shall mean a Payment Date.

“Scheduled Payment Date” shall mean a Payment Date.

“Secured Hedge Agreement” shall mean any Hedge Agreement between or among any Credit Party and any Hedge Bank with regard to the transactions evidenced by the Operative Agreements.

“Secured Obligations” shall mean, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Credit Party under any Secured Hedge Agreement, excluding in all cases with respect to the foregoing subsections (a) and (b), all Excluded Swap Obligations.

“Secured Parties” shall have the meaning given to such term in the Security Agreement.

“Securities Act” shall mean the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

“Security Agreement” shall mean the Security Agreement dated on or about the Closing Date between the Lessor and the Agent, for the benefit of the Secured Parties, and accepted and agreed to by the Lessee.

“Security Documents” shall mean the collective reference to the Security Agreement, the Pledge Agreement, the Mortgage Instrument (to the extent the Lease is construed as a security instrument), the Lease, the UCC Financing Statements, the stock powers or other similar powers provided in connection with the Pledge Agreement and all other security documents hereafter delivered to the Agent granting a lien on any asset or assets of any Person to secure the obligations and liabilities of the Lessor under the Loan Agreements and/or under any of the other Operative Agreements or to secure any guarantee of any such obligations and liabilities.

“Shortfall Amount” shall have the meaning given to such term in Section 5.11 of the Participation Agreement.

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“Soft Costs” shall mean all costs which are ordinarily and reasonably incurred in relation to the acquisition, development, leasing, financing, installation, construction, improvement and testing of the Property other than Hard Costs, including Fees, architecture fees, design work fees, legal fees, broker fees, upfront fees, fees of the Construction Advisers, fees and expenses related to appraisals, title examinations, title insurance, document recordation, documentary stamp taxes, intangible taxes, surveys, environmental site assessments, geotechnical soil investigations and similar costs and professional fees customarily associated with a real estate purchase and closing.

“Solvent” and “Solvency” shall mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Specified Disposition” shall mean any disposition of all or substantially all of the assets or Equity Interests of any Subsidiary of the Parent or any division, business unit, product line or line of business.

“Specified Event” shall mean (i) any Lease Event of Default described in Sections 17.1(h) or (i) of the Lease or any Agency Agreement Event of Default described in Section 5.1(c) of the Agency Agreement constituting a cross‑default to any Lease Event of Default described in Sections 17.1(h) or (i) of the Lease; (ii) any fraud, misapplication of funds, illegal acts or willful misconduct of the Construction Agent or any Construction Agency Person, (iii) with respect to Environmental Claims, any acts, events, conditions, or circumstances existing or occurring with respect to the Property prior to the Closing Date, or (iv) third party claims caused by or arising out of any act or failure to act of the Construction Agent or any Construction Agency Person while the Construction Agent or any Construction Agency Person is in possession or control of the Property, other than Claims to the extent arising directly or indirectly out of the Construction Agent’s failure to effect Completion by the Construction Period Termination Date.

“Specified Transactions” shall mean (a) any Specified Disposition and (b) any Permitted Acquisition.

“Structuring Fee” shall have the meaning given to such term in Section 7.7 of the Participation Agreement.

“Subordinated Indebtedness” shall mean the collective reference to any Indebtedness incurred by the Parent or any of its Subsidiaries that is subordinated in right and time of payment to the Obligations on terms and conditions satisfactory to the Agent.

“Subsidiary” of any Person at any time shall mean (a) any corporation or trust of which fifty percent (50%) or more (by number of shares or number of votes) of the outstanding capital stock or shares of beneficial interest normally entitled to vote for the election of one or more directors or trustees (regardless of any

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contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, (b) any partnership of which such Person is a general partner or of which fifty percent (50%) or more of the partnership interests are at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries, (c) any limited liability company of which such Person is a member or of which fifty percent (50%) or more of the limited liability company interests are at the time directly or indirectly owned by such Person or one or more of such Person’s Subsidiaries or (d) any corporation, trust, partnership, limited liability company or other entity which is controlled or capable of being controlled by such Person or one or more of such Person’s Subsidiaries. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Parent.

“Supplemental Rent” shall mean all amounts, liabilities and obligations (other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor, the Agent, any Mortgage Lender, any Credit Lender or any other Person under the Lease or under any of the other Operative Agreements including payments of the Termination Value and the Maximum Residual Guarantee Amount and all indemnification amounts, liabilities and obligations.

“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Synthetic Leases” shall mean any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

“Target Construction Period Termination Date” shall mean the date that is thirty (30) months after the commencement of construction of Improvements (but in no event shall such commencement be deemed to occur later than July 30, 2015) or in the event that a Force Majeure Event occurs with respect to the Property during such thirty (30) month period, then the date that is up to one hundred eighty (180) days after such thirty (30) month period, or such earlier date as the Mortgage Loan Commitments shall terminate as provided in the Mortgage Loan Agreement, the Credit Loan Commitments shall terminate as provided in the Credit Loan Agreement or the Lessor Commitment shall terminate as provided in the Participation Agreement.

“Taxes” shall have the meaning given to such term in the definition of “Impositions”.

“Tax Loss” shall have the meaning given to such term in Section 11.3(e) of the Participation Agreement.

“Term” shall mean the Basic Term and each Renewal Term, if any.

“Termination Date” shall have the meaning given to such term in Section 16.2(a) of the Lease.

“Termination Event” shall mean the occurrence of any of the following which, individually or in the aggregate, has resulted or could reasonably be expected to result in liability of the Parent or any of its Subsidiaries in an aggregate amount in excess of the Threshold Amount: (a) a “Reportable Event” described in Section 4043 of ERISA for which the thirty (30) day notice requirement has not been waived by the PBGC, or (b) the withdrawal of any Credit Party or any ERISA Affiliate from a Pension Plan during a plan year in

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which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien pursuant to Section 430(k) of the Code or Section 303 of ERISA, or (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or plan in endangered or critical status with the meaning of Sections 430, 431 or 432 of the Code or Sections 303, 304 or 305 of ERISA or (h) the partial or complete withdrawal of any Credit Party or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by such plan, or (i) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (j) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA, or (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party or any ERISA Affiliate.

“Termination Notice” shall have the meaning given to such term in Section 16.1 of the Lease.

“Termination Value” shall mean the sum of (a) an amount equal to the Property Cost, plus (b) respecting the amount described in the foregoing subclause (a), any and all accrued but unpaid interest on the Loans and any and all accrued but unpaid Lessor Yield on the Lessor Advances, plus (c) to the extent the same is not duplicative of the amounts payable under clause (b) above, all other Rent and other amounts then due and payable or accrued under the Agency Agreement, the Lease and/or under any other Operative Agreement (including amounts under Sections 11.1 through 11.8 of the Participation Agreement and all costs and expenses incurred by Lessor and/or Agent in connection with the transfer or sale of the Property to any Person (regardless of whether any such transfer or sale actually occurs)).

“Threshold Amount” shall mean $50,000,000.00.

“Transaction Expenses” shall mean all Soft Costs and all other costs and expenses incurred or expended by the Construction Agent, the Lessee or any Financing Party in connection with the preparation, execution and delivery of the Operative Agreements and the transactions contemplated by the Operative Agreements including all costs, fees, expenses and other amounts described in Section 7 of the Participation Agreement, all reasonable costs and expenses incurred by any Lender in connection with any designation of a new lending office or assignment by a Lender to another of its offices, branches or affiliates, in each case, pursuant to Section 2.7(a) of the Credit Loan Agreement or Section 2.7(a) of the Mortgage Loan Agreement, as applicable, the assignment fee payable to the Agent and any other fees or amounts (excluding principal, interest and Fees) incurred by a Lender pursuant to Section 2.7(b) of the Credit Loan Agreement or Section 2.7(b) of the Mortgage Loan Agreement, as applicable, and (except to the extent payable and actually paid by the Construction Agent or the Lessee pursuant to Section 11.6 of the Participation Agreement) all indemnity amounts, breakage amounts, costs, fees, expenses and other amounts arising pursuant to Section 11 of the Participation Agreement and the following:

(a) the reasonable fees, out‑of‑pocket expenses and disbursements of counsel in negotiating the terms of the Operative Agreements and the other transaction documents, preparing for the closings under, and rendering opinions in connection with, such transactions and in rendering

Appendix A - 43

other services customary for counsel representing parties to transactions of the types involved in the transactions contemplated by the Operative Agreements;

(b) the reasonable fees, out‑of‑pocket expenses and disbursements of accountants for any Credit Party in connection with the transactions contemplated by the Operative Agreements;

(c) any and all other reasonable fees, charges or other amounts payable to the Agent or any broker which arises under any of the Operative Agreements;

(d) any other reasonable fee, out‑of‑pocket expenses, disbursement or cost of any party to the Operative Agreements or any of the other transaction documents; and

(e) any and all Taxes and fees incurred in recording or filing any Operative Agreement or any other transaction document, any deed, declaration, mortgage, security agreement, notice or financing statement with any public office, registry or governmental agency in connection with the transactions contemplated by the Operative Agreement.

Notwithstanding the foregoing or any provision in Section 7.1 of the Participation Agreement or in any other Operative Agreement to the contrary, “Transaction Expenses” shall not include legal fees and other professional fees or similar costs and expenses expended by any transferee or assignee of any Credit Lender or Mortgage Lender as of the Closing Date.

“Tribunal” shall mean any state, commonwealth, federal, foreign, territorial, or other court or government body, subdivision agency, department, commission, board, bureau or instrumentality of a governmental body.

“Trust Property” shall have the meaning given to such term in Section 2 of the Security Agreement.

“Type” shall mean whether any Loan is an ABR Loan or a Eurodollar Loan.

“UCC Financing Statements” shall mean collectively the Lender Financing Statements and the Lessor Financing Statements.

“Unanimous Vote Matters” shall have the meaning given to such term in Section 12.4 of the Participation Agreement.

“Uniform Commercial Code” and “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the applicable jurisdiction or jurisdictions.

“Uninsured Force Majeure Loss” shall mean an amount equal to the Force Majeure Loss less any and all insurance proceeds paid in connection with the Force Majeure Event giving rise to such Force Majeure Loss.

“United States” shall mean the United States of America.

“United States Bankruptcy Code” shall mean the Bankruptcy Code.

“Unused Fee Payment Date” shall mean, respecting the Mortgage Lender Unused Fees and the Credit Lender Unused Fees, as applicable, on the last Business Day of each calendar month or such other date as

Appendix A - 44

determined by the Agent during the Commitment Period and the last Business Day of the Commitment Period, or such earlier date as the Mortgage Loan Commitments or the Credit Loan Commitments, as applicable, shall terminate as provided in the applicable Loan Agreement.

“U.S. Person” shall have the meaning given to such term in Section 11.2(e) of the Participation Agreement.

“U.S. Taxes” shall have the meaning given to such term in Section 11.2(e) of the Participation Agreement.

“Wholly-Owned Entity” shall mean a Person all of the shares of capital stock or other ownership interest of which are owned by the Parent and/or one of its wholly-owned Subsidiaries or other wholly-owned entities.

“Wholly-Owned Subsidiary” shall mean any Subsidiary that is a Wholly-Owned Entity with respect to the Parent.

“Withholdings” shall have the meaning given to such term in Section 11.2(e) of the Participation Agreement.

“Work” shall mean the furnishing of labor, materials, components, furniture, furnishings, fixtures, appliances, machinery, equipment, tools, power, water, fuel, lubricants, supplies, goods and/or services with respect to the Property pursuant to the Construction Documents.

“Yield Protection Amount” shall have the meaning given to such term in Section 11.3 of the Participation Agreement.

Appendix A - 45

AGENCY AGREEMENT

Dated as of June 19, 2015

between

NVIDIA LAND DEVELOPMENT, LLC,

as the Construction Agent

and

WACHOVIA SERVICE CORPORATION,

as the Lessor

TABLE OF CONTENTS



		Page
ARTICLE I DEFINITIONS; RULES OF USAGE		3
1.1	Definitions.	3
1.2	Interpretation.	3
ARTICLE II APPOINTMENT OF THE CONSTRUCTION AGENT		4
2.1	Appointment.	4
2.2	Acceptance and Undertaking.	4
2.3	Term.	4
2.4	Scope of Authority.	4
2.5	Delegation of Duties	6
2.6	Covenants of the Construction Agent.	6
ARTICLE III THE PROPERTY		8
3.1	Construction.	8
3.2	Amendments; Modifications.	8
3.3	Force Majeure Events.	8
3.4	Casualty Occurrences.	9
3.5	Condemnation Occurrences.	10
ARTICLE IV PAYMENT OF FUNDS		11
4.1	Right to Receive Construction Cost.	11
ARTICLE V EVENTS OF DEFAULT		11
5.1	Events of Default.	11
5.2	Damages.	12
5.3	Remedies; Remedies Cumulative.	12
5.4	Limitation on Recourse.	15
ARTICLE VI THE LESSOR’S RIGHTS		16
6.1	Exercise of the Lessor’s Rights.	16
6.2	The Lessor’s Right to Cure the Construction Agent’s Defaults.	16
ARTICLE VII MISCELLANEOUS		16
7.1	Notices.	16
7.2	Successors and Assigns.	16
7.3	GOVERNING LAW.	16
7.4	SUBMISSION TO JURISDICTION; VENUE; WAIVERS.	16
7.5	Amendments and Waivers.	17
7.6	Counterparts.	17
7.7	Severability.	17
7.8	Headings and Table of Contents.	17
7.9	WAIVER OF JURY TRIAL.	17
7.1	No Construction Agency Fee.	17

AGENCY AGREEMENT

THIS AGENCY AGREEMENT, dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the “Agreement”), between WACHOVIA SERVICE CORPORATION, a Delaware corporation (the “Lessor”) and NVIDIA LAND DEVELOPMENT, LLC, a Delaware limited liability company (the “Construction Agent”).

PRELIMINARY STATEMENT

A. The Lessor and the Construction Agent are parties to (i) that certain Ground Lease Agreement dated of the date hereof (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the “Ground Lease”) pursuant to which the Construction Agent ground leases the Land to the Lessor, and (ii) that certain Real Property Lease Agreement dated as of even date herewith (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the “Lease”), pursuant to which the Construction Agent, as lessee (in such capacity, the “Lessee”) has agreed to lease the Property from the Lessor.

B. In connection with the execution and delivery of the Participation Agreement, the Lease and the other Operative Agreements, and subject to the terms and conditions hereof, (i) the Lessor desires to appoint the Construction Agent as its sole and exclusive agent in connection with the identification and the development, acquisition, installation, construction and testing of the Improvements and the Equipment in accordance with the Plans and Specifications and (ii) the Construction Agent desires, for the benefit of the Lessor, to identify and ground lease the Land and to cause the development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Plans and Specifications and to undertake such other liabilities and obligations as are herein set forth.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS; RULES OF USAGE

1.1 Definitions.

For purposes of this Agreement, capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Participation Agreement dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof, the “Participation Agreement”) among the Construction Agent, the various entities party thereto from time to time, as the Guarantors, the Lessor, the various banks and other lending institutions parties thereto from time to time, as Mortgage Lenders, the various banks and other lending institutions parties thereto from time to time, as Credit Lenders, and Wells Fargo Bank, National Association, as agent for the Credit Lenders and the Mortgage Lenders, and respecting the Security Documents, as agent for the Secured Parties. Unless otherwise indicated, references in this Agreement to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Agreement.

1.2 Interpretation.

The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Agreement.

ARTICLE II

APPOINTMENT OF THE CONSTRUCTION AGENT

2.1 Appointment.

Subject to the terms and conditions hereof, the Lessor hereby irrevocably designates and appoints the Construction Agent as its exclusive agent, in connection with the identification and vesting in favor of the Lessor a ground leasehold interest in the Land and the design, development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Plans and Specifications on the Land, and pursuant to the terms of the Operative Agreements. Subject to the terms and conditions of this Agreement and the other Operative Agreements, during the Construction Period, the Construction Agent shall have sole management and control for the benefit of the Lessor over, and responsibility for, the construction, means, methods, sequences and procedures with respect to the Property. As between the Lessor, any other Indemnified Person and the Construction Agent, the Construction Agent shall be responsible for the acts and omissions of each Construction Agency Person. Notwithstanding any provisions hereof or in any other Operative Agreement to the contrary, the Construction Agent acknowledges and agrees that the Lessor shall advance no more than the sum of the aggregate Mortgage Loan Commitments, plus the aggregate Credit Loan Commitments, plus the aggregate Lessor Commitment in regard to the Property (including for any and all Advances).

2.2 Acceptance and Undertaking.

The Construction Agent hereby unconditionally accepts the agency appointment and undertakes, for the benefit of the Lessor, in connection with the identification and the design, development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Plans and Specifications and the Operative Agreements.

2.3 Term.

This Agreement shall commence on the date hereof. The Property shall be subject to this Agreement from the date Lessor obtains a ground leasehold interest therein pursuant to the Ground Lease until the Completion Date.

2.4 Scope of Authority.

(a) The Lessor hereby expressly authorizes the Construction Agent, or any agent or contractor of the Construction Agent, and the Construction Agent unconditionally agrees for the benefit of the Lessor, subject to Section 2.4(b), to take all action necessary or desirable for the performance and satisfaction of any and all of the Lessor’s obligations under any construction agreement, ground lease, purchase and sale contract, option contract or other contract relating to the Work and to fulfill all of the obligations of the Construction Agent including:

(i) the identification and assistance with the vesting of a ground leasehold interest in the Land in accordance with the terms and conditions of the Participation Agreement;

(ii) all due diligence review and analysis, design and supervisory functions relating to the design, development, acquisition, installation, construction and testing of the related Improvements, Equipment and other components of the applicable Property and performing all engineering work related thereto;

(iii) negotiating, executing, performing and enforcing all contracts and arrangements to design, develop, acquire, install, construct and test the Improvements, the Equipment and the other components of the Property on such terms and conditions as are customary and reasonable in light of local and national standards and practices and the businesses in which the Lessee is engaged;

(iv) obtaining all necessary permits, licenses, consents, approvals, development rights, clearing title and survey exceptions, entitlements and other authorizations, including all of the foregoing required for the Property and the use and occupancy thereof and those required under Applicable Law (including Environmental Laws), from all Governmental Authorities in connection with the design, development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Plans and Specifications;

(v) maintaining all books and records with respect to the Property and the construction, operation and management thereof; and

(vi) performing any other acts necessary in connection with the identification and vesting of a ground leasehold interest in the Land and the design, development, acquisition, installation, construction and testing of the related Improvements, Equipment and all other additional components of the Property in accordance with the Plans and Specifications.

(b) Neither the Construction Agent nor any of its Affiliates or agents shall enter into any contract or consent to any contract in the name of the Lessor without the Lessor’s prior written consent, such consent to be given or withheld in the exercise of the Lessor’s commercially reasonable discretion; provided, however, that no such contract will increase the obligations of the Lessor beyond the obligations of the Lessor as are expressly set forth in the Operative Agreements.

(c) Subject to the terms and conditions of this Agreement and the other Operative Agreements, the Construction Agent shall have sole management and control over the installation, construction and testing means, methods, sequences and procedures with respect to the Property.

(d) Subject to the terms, conditions, restrictions and limitations set forth in the Operative Agreements, the Lessor hereby expressly authorizes the Construction Agent, or any agent or contractor of the Construction Agent, and the Construction Agent agrees, for the benefit of the Lessor, to take all action necessary or desirable for the performance and satisfaction of all obligations in connection with the identification and the design, development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Plans and Specifications and the Operative Agreements. In furtherance thereof, the Construction Agent is hereby granted the authority on behalf of the Lessor to, and shall: pay when due and payable or cause to be paid when due and payable (subject to reimbursement or direct payment by the Lessor through Advances or directly as provided for under, and subject to the terms and conditions relating to Advances as set forth in, the Operative Agreements) all Property Costs to be paid during the Commitment Period (including costs associated with the Construction Agent’s actions pursuant to and in accordance with the Construction Contracts which are due and payable under any Construction Contract, in each case pursuant to and subject to the Construction Documents); provided, in no event, shall the Construction Agent have the authority to pay or incur any Property Cost (i) if on the date of such payment or incurrence (A) any Agency Agreement Default, Lease Default, Agency Agreement Event of Default or Lease Event of Default has occurred or (B) any of the conditions set forth in Section 5.4A of the Participation Agreement have not been satisfied

as of such date of payment or incurrence or (ii) in an amount in excess of $40,000,000 during any monthly advance period, in each case, before being reimbursed or paid directly by Advances; provided, further, in the event the last paragraph of Section 5.4 of the Participation Agreement is applicable and the Credit Lenders, the Mortgage Lenders and the Lessor were required to make Advances thereunder regarding a particular Requisition even though the conditions precedent set forth in Section 5.4A were not satisfied or waived in accordance with such Section 5.4A as of the date such Advances were made, then (w) the Construction Agent shall have no further authority to incur or pay any Property Costs from and after the date such Advances were made, (x) neither the Lenders nor the Lessor shall have any obligation to make any additional Advances and (y) such occurrence shall constitute a breach of covenant with no cure period and an immediate Agency Agreement Event of Default and Lease Agreement Event of Default shall exist.

2.5 Delegation of Duties

The Construction Agent may execute any of its duties under this Agreement by or through agents, contractors, employees or attorneys-in-fact; provided, however, that no such delegation shall limit or reduce in any way the Construction Agent’s duties and obligations under this Agreement.

2.6 Covenants of the Construction Agent.

The Construction Agent hereby covenants and agrees that it will:

(a) following the Closing Date, cause the design, development, acquisition, installation, construction and testing of the Property to be prosecuted in a good and workmanlike manner, and substantially in accordance with the Plans and Specifications, the applicable construction contracts, the applicable construction schedule, prevalent industry practices and otherwise in accordance with Section 3.1 hereof, all with such changes, subject to Section 3.2, as the Construction Agent may deem necessary or advisable;

(b) cause the date on which Completion occurs to be on or before the Construction Period Termination Date, in each case free and clear (by removal or bonding) of Liens (excepting any Permitted Liens) or claims for materials supplied or labor or services performed in connection with the development, acquisition, installation, construction or testing thereof;

(c) cause all outstanding punch list items with respect to the Improvements to be completed promptly following Completion thereof;

(d) at all times subsequent to the initial Advance (i) cause a ground leasehold interest in the Land to vest in the Lessor, (ii)(A) promptly, and in any event within five (5) Business Days execute and deliver to the Agent all additional documents reasonably requested by the Agent under the applicable real property law and/or Article 9 of the Uniform Commercial Code to perfect the Liens granted by the Construction Agent pursuant to the Security Documents and (B) promptly, and in any event within five (5) Business Day consent to the execution and delivery by the Lessor to the Agent of all additional documents reasonably requested by the Agent under the applicable real property law and/or Article 9 of the Uniform Commercial Code to perfect the Liens granted by the Lessor pursuant to Security Documents and (iii) not permit Liens (other than Permitted Liens) to be filed or maintained respecting the Property;

(e) procure insurance for the Property during the Construction Period in compliance with Article XIV of the Lease as though the provisions of Article XIV of the Lease were stated herein;

(f) commence construction of the Improvements no later than July 30, 2015 and thereafter effect construction and development of the Property with diligence and continuity and ensure that at no point in time shall construction of the Property cease for a period in excess of sixty (60) days or more, subject to any delay arising due to a Force Majeure Event;

(g) cause all Improvements to be constructed (x) substantially in accordance with the Plans and Specifications (as amended or modified from time to time in accordance with the Operative Agreements), except to the extent that failure to do so does not have, and could not reasonably be expected to have, a Material Adverse Effect, (y) in compliance with all Applicable Laws unless the failure to do so does not have, and could not reasonably be expected to have, a Material Adverse Effect or give rise to a Claim against the Lessor for which the Construction Agent has no obligation to indemnify the Lessor pursuant to the Operative Agreements and (z) in compliance with all Insurance Requirements;

(h) ensure that all Land ground leased pursuant to the Operative Agreements and all Improvements constructed on the Land shall be in compliance with all Applicable Laws unless the failure to do so does not have, and could not reasonably be expected to have, a Material Adverse Effect or give rise to a Claim against the Lessor for which the Construction Agent has no obligation to indemnify the Lessor pursuant to the Operative Agreements, and fit for use as a property of the type specified in the Appraisal of the Property delivered on the Closing Date and other purposes attendant thereto;

(i) with respect to the Property, ensure that on or prior to the Construction Period Termination Date, all water, sewer, electric, gas, telephone and drainage facilities, all other utilities required to adequately service the Improvements for the intended use and means of access between such Improvements and public highways for pedestrians and motor vehicles will be available pursuant to adequate permits (including any that may be required under applicable Environmental Laws), and all utilities serving the Property, or proposed to serve the Property in accordance with the Plans and Specifications, are or will be located in, and vehicular access to the Improvements on the Property will be provided by, either public rights-of-way abutting the Property or appurtenant rights;

(j) ensure that all necessary licenses, approvals, authorizations, consents, permits (including building, demolition and environmental permits, licenses, approvals, authorizations and consents), easements and rights of way, including dedication required for (i) the use, treatment, storage, transport, disposal or disposition of any Hazardous Substances on, at, under, or from each Property during the construction of the Improvements thereon, and (ii) construction of the Improvements in accordance with the Plans and Specifications and this Agreement will be obtained from the appropriate Governmental Authorities having jurisdiction or from private parties, as the case may be, prior to the time required by such Governmental Authority or private party, except where the failure to obtain such licenses, approvals, authorization, consents, permits, easements, rights of way or dedication could not reasonably be expected to have a Material Adverse Effect or give rise to a Claim against the Lessor for which the Construction Agent has no obligation to indemnify the Lessor pursuant to the Operative Agreements;

(k) notify the Lessor in writing not less than ten (10) Business Days after the occurrence of each Force Majeure Event with respect to the Property that Construction Agent reasonably believes will cause disruption or delay in construction of the Property of at least one (1) month; and

(l) ensure at all times that the total Property Costs remaining to be expended for Completion does not exceed in the aggregate the sum of the Available Mortgage Loan Commitments, the Available Credit Loan Commitments and the Available Lessor Commitment.

ARTICLE III
THE PROPERTY

3.1 Construction.

The Construction Agent shall cause the Improvements, the Equipment and all other components of the Property to be designed, developed, acquired, installed, constructed and tested in compliance with all Legal Requirements, all Insurance Requirements, all manufacturer’s specifications and standards and the standards maintained by the Construction Agent or any Guarantor for similar properties owned or operated by the Construction Agent or any Guarantor, and all specifications and standards applicable to properties of the Lessee or any Guarantor which are similar to the Permitted Facilities, unless non-compliance, individually or in the aggregate, does not have, and could not reasonably be expected to have, a Material Adverse Effect.

3.2 Amendments; Modifications.

(a) The Construction Agent may at any time revise, amend or modify the Plans and Specifications without the consent of the Lessor; provided, that any such amendment to the Plans and Specifications does not (i) result in Completion occurring on or after the Construction Period Termination Date or (ii) result in the unfunded cost for Completion (including such costs which are Transaction Expenses to be funded by the Financing Parties pursuant to the Operative Agreements) exceeding an amount equal to the sum of the then Available Mortgage Loan Commitments plus the then Available Credit Loan Commitments plus the then Available Lessor Commitment.

(b) The Construction Agent agrees that it will not implement any revision, amendment or modification to the Plans and Specifications if the aggregate effect of such revision, amendment or modification, when taken together with any previous or contemporaneous revision, amendment or modification to the Plans and Specifications, would cause a material reduction in value in excess of the cost reduction of such revision, amendment or modification of the Property when completed, unless such revision, amendment or modification is required by Legal Requirements.

3.3 Force Majeure Events.

If at any time prior to Completion there occurs a Force Majeure Event and the Construction Agent reasonably determines that such Force Majeure Event will cause Completion to occur later than the thirty (30) months after the Closing Date, then (as referenced in the definition of “Target Construction Period Termination Date”) the aforementioned thirty (30) month period may be extended for up to one hundred eighty (180) additional days as is reasonably necessary to achieve Completion in light of the event or circumstances giving rise to such Force Majeure Event. The Construction Agent shall deliver to the Agent and the Lessor a notice in writing of the date to which the originally contemplated Target Construction Period Termination Date (that is, the last day of the aforementioned thirty (30) month period) is to be extended, which newly extended date shall constitute the revised Target Construction Period Termination Date, which notice shall contain a certification by the Construction Agent describing the facts and circumstances giving rise to such Force Majeure Event, the expected duration of such delay resulting in such Force Majeure Event and the date the Construction Agent reasonably believes Completion will be achieved. Notwithstanding the foregoing, if due to the severity of such Force Majeure Event, Completion cannot be achieved within such additional one hundred eighty (180) days despite the maximum best efforts of the Construction Agent to perform its obligations pursuant to this Agreement and to the extent the Construction Period Termination Date is not further extended in accordance with Section 5.18 of the Participation Agreement, then Lessor may exercise the remedy rights described in Sections 5.3(c), (d) or (e) as if an Agency Agreement Event of Default shall have occurred; provided, the parties expressly agree that (x) the occurrence of any such Force Majeure Event solely by itself shall not constitute an Agency Agreement Event of Default and

(y) to the extent the Lessor elects its rights under Section 5.3(e), the Construction Agent shall use all available means and its maximum best efforts to effect Completion as expeditiously as is reasonably possible, with any failure to do so constituting a breach of the Construction Agent’s obligations pursuant to this Agreement.

3.4 Casualty Occurrences.

(a) In the event of a Casualty with respect to the Property during the Construction Period, insurance awards for losses under any builder’s risk insurance or, to the extent required hereby, insurance for earthquake or flood, required to be carried hereunder, shall be adjusted with the insurance companies, including the filing of appropriate proceedings, as follows: (i) so long as no Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, such insurance awards for losses shall be adjusted by the Construction Agent (or, if such insurance awards relate to a Force Majeure Event, adjusted jointly by the Construction Agent and the Lessor) for payment to the Agent and shall be available to reimburse the Construction Agent for the continued construction in accordance with the Operative Agreements, and (ii) if any Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, such losses shall be adjusted by the Agent. The party which shall be entitled to adjust losses may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any claim for any award, compensation or insurance payment on account of any Casualty; provided, that the Construction Agent shall pay all reasonable expenses thereof, subject to Section 5.4 hereof and Section 11.6 of the Participation Agreement. At the request of the party entitled to adjust any such losses, and at the Construction Agent’s sole cost and expense (subject to Section 5.4 hereof and Section 11.6 of the Participation Agreement), the other party shall participate in any such proceeding, action, negotiation, prosecution or adjustment. The parties hereto agree that this Agreement shall control the rights of the parties hereto in and to such award, compensation or insurance payment relating to any Casualty affecting the Property during the Construction Period.

(b) Subject to the last sentence of this paragraph, all proceeds of insurance maintained pursuant to the requirements hereof on account of any damage to or destruction of the Property during the Construction Period or any part thereof shall be paid over to the Agent and distributed as follows: (i) if no Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, then such proceeds shall be held by the Agent and, so long as the Construction Agent is diligently repairing the damage to the Property caused by the applicable Casualty, shall be disbursed from time to time to the Construction Agent to effect the repair and, upon completion of such repair (as evidenced by an Officer’s Certificate of Construction Agent delivered to the Agent) distribute any funds then remaining in such account to the Construction Agent, or (ii) if a Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, such proceeds shall be distributed in accordance with Section 8.7(b)(ii) of the Participation Agreement. If a Casualty occurs during the Construction Period with respect to all, or substantially all, the Property and the Lessor has determined, in its commercially reasonable discretion, that there is no reasonable means by which Completion may be achieved on or prior to the Construction Period Termination Date and that no additional Advances will be made to restore the Property, then all such proceeds of insurance referenced in the preceding sentence shall be distributed as set forth in Section 8.7(b)(i) of the Participation Agreement.

3.5 Condemnation Occurrences.

(a) The Construction Agent hereby agrees that it shall, within five (5) Business Days after the date on which the Construction Agent shall have notice thereof, give notice to the Lessor and the Agent of each action or proceeding by any Governmental Authority with respect to any actual, pending or threatened in writing Condemnation affecting the Property during the Construction Period. All awards, compensation or insurance proceeds to be paid on account of such Condemnation shall (i) so long as no Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, be negotiated, prosecuted, adjusted or appealed by the Construction Agent (or, if such awards, compensation or insurance proceeds relate to a Force Majeure Event, negotiated, prosecuted, adjusted or appealed jointly by the Construction Agent and the Lessor) for payment to the Agent and shall be available to reimburse the Construction Agent for the continued construction of the Property in accordance with the Operative Agreements, and (ii) if any Lease Event of Default or Agency Agreement Event of Default shall have occurred and be continuing, be negotiated, prosecuted, adjusted or appealed by the Agent. The party which shall be entitled to adjust losses may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any claim for any award, compensation or insurance payment on account of any such Condemnation; provided, that the Construction Agent shall pay all reasonable expenses thereof, subject to Section 5.4 hereof and Section 11.6 of the Participation Agreement. At the request of the party entitled to adjust any such losses, and at the Construction Agent’s sole cost and expense (subject to Section 5.4 hereof and Section 11.6 of the Participation Agreement), the other party shall participate in any such proceeding, action, negotiation, prosecution or adjustment. The parties hereto agree that this Agreement shall control the rights of the parties hereto in and to such award, compensation or insurance payment relating to any Condemnation affecting the Property during the Construction Period.

(b) During the Construction Period, all awards, compensation and insurance payments on account of any Condemnation affecting the Property shall be paid directly to the Agent or, if received by the Construction Agent, shall be held in trust for the Agent and shall promptly be paid over by the Construction Agent to the Agent. All amounts held by the Agent on account of any award, compensation or insurance payment described in this Section 3.5(b) shall be held by the Agent and, so long as the Construction Agent is diligently restoring or replacing the Property, shall be disbursed from time to time to the Construction Agent to effect the repair or replacement and, upon completion of such restoration or replacement (as evidenced by an Officer’s Certificate of the Construction Agent) distribute any funds then remaining in such account to the Construction Agent; provided, however, that if a Condemnation occurs during the Construction Period and (i) a Lease Event of Default or an Agency Agreement Event of Default shall have occurred and be continuing or (ii) the Construction Agent shall have elected not to restore or replace the portion of the Property so affected by such Condemnation, then all such awards, compensation and insurance payments referenced in this Section 3.5(b) shall be distributed as set forth in Section 8.7(b)(ii) of the Participation Agreement. If a Condemnation occurs during the Construction Period with respect to all, or substantially all, the Property and the Lessor has determined, in its commercially reasonable discretion, that there is no reasonable means by which Completion may be achieved on or prior to the Construction Period Termination Date and that no additional Advances will be made to restore the Property, then all such awards, compensation and insurance payments referenced in this Section 3.5(b) shall be distributed as set forth in Section 8.7(b)(i) of the Participation Agreement.

ARTICLE IV
PAYMENT OF FUNDS

4.1 Right to Receive Construction Cost.

(a) In connection with the design, development, acquisition, installation, construction and testing of the Property and during the course of the construction of the Improvements, the Construction Agent may request that the Lessor advance funds for the payment of Property Acquisition Costs or other Property Costs, and the Lessor will comply with such request to the extent provided for under the Participation Agreement. The Construction Agent and the Lessor acknowledge and agree that the Construction Agent’s right to request such funds and the Lessor’s obligation to advance such funds for the payment of Property Acquisition Costs or other Property Costs is subject in all respects to the terms and conditions of the Participation Agreement and each of the other Operative Agreements. Without limiting the generality of the foregoing it is specifically understood and agreed that in no event shall the aggregate amounts advanced by the Mortgage Lenders, the Credit Lenders and the Lessor for Property Acquisition Costs or other Property Costs and any other amounts due and owing hereunder or under any of the other Operative Agreements exceed the sum of the aggregate Mortgage Loan Commitments plus the aggregate Credit Loan Commitments plus the aggregate Lessor Commitment, including such amounts owing for (i) design, development, acquisition, installation, construction and testing of the Property, (ii) additional amounts which accrue or become due and owing regarding the Loans and the Lessor Advance prior to any Completion Date or (iii) any other purpose.

(b) The proceeds of any funds made available to the Lessor to pay Property Acquisition Costs or other Property Costs shall be made available to the Construction Agent in accordance with the Requisition relating thereto and the terms of the Participation Agreement. The Construction Agent will use such proceeds only to pay the Property Acquisition Costs or other Property Costs set forth in the Requisition relating to such funds.

ARTICLE V
EVENTS OF DEFAULT

5.1 Events of Default.

If any one (1) or more of the following events (each an “Agency Agreement Event of Default”) shall occur:

(a) the Construction Agent fails to apply any funds paid by the Lessor to the Construction Agent in a manner consistent with the requirements of the Operative Agreements and as specified in the applicable Requisition for the design, development, acquisition, installation, construction and testing of the Property and related Improvements and Equipment or otherwise respecting the Property to the payment of Property Acquisition Costs or other Property Costs;

(b) Completion shall fail to occur for any reason on or prior to the Construction Period Termination Date or the Construction Agent shall abandon or permanently discontinue the construction and development of the Property (which abandonment or permanent discontinuance shall be deemed to have occurred if no work at the Property is undertaken or completed during a continuous period of sixty (60) days or more without the delivery of a notice pursuant to Section 3.3);

(c) any Lease Event of Default shall have occurred and not be cured within any cure period expressly permitted under the Lease;

(d) (i) any of the representations or warranties of any of the Credit Parties under any Operative Agreement that is subject to a materiality or Material Adverse Effect qualification shall be incorrect or misleading in any respect when made or deemed made and any representations or warranties of any of the Credit Parties under any Operative Agreement that is not subject to a materiality or Material Adverse Effect qualification shall be materially incorrect or misleading when made or deemed made; and (ii) any Credit Party shall fail to observe or perform any term, covenant or condition of any Operative Agreement other than as set forth in paragraphs (a), (b), (c), (d)(i) or (e) of this Section 5.1 and such failure to observe or perform any such term, covenant or condition is of a type that is subject to being cured and shall continue for a period of thirty (30) days after such Credit Party either has gained knowledge thereof or has received notice thereof; provided, however, if the nature of such failure to observe or perform is such that it cannot with the exercise of reasonable diligence be cured within said thirty (30) day period, then the Construction Agent shall not be in default hereunder if such Credit Party shall promptly commence with such cure within said thirty (30) day period and thereafter pursue the same to completion with diligence and continuity; provided, further, in no event shall such extended period beyond such period of thirty (30) days extend more than an additional period of thirty (30) days; or

(e) except as permitted in accordance with Section 3.2, the Construction Agent shall cause or permit the Improvements to be constructed and equipped in a manner which deviates from the Plans and Specifications, except to the extent that such deviation does not have, and could not reasonably be expected to have, a material adverse effect on the value, utility or useful life of the Improvements or the Property; then, in any such event, the obligations of the Lessor or any other Financing Party to make Construction Advances for obligations, amounts or expenses incurred or expended by the Construction Agent after the date of such Agency Agreement Event of Default shall terminate (unless the Lessor and the Financing Parties elect to continue making Construction Advances) and the Lessor may, in addition to the other rights and remedies provided for in this Agreement or otherwise available at law and/or in equity, terminate this Agreement by giving the Construction Agent written notice of such termination and upon the expiration of the time fixed in such notice and the payment of all amounts owing by the Construction Agent hereunder (including any amounts specified under Section 5.3 hereof), this Agreement shall terminate. The Construction Agent shall pay all reasonable costs and expenses incurred by or on behalf of the Lessor, including reasonable fees and expenses of counsel, as a result of any Agency Agreement Event of Default hereunder.

5.2 Damages.

Notwithstanding the termination of the Financing Parties’ obligations to make Construction Advances after an Agency Agreement Event of Default, the Lessor shall continue to have the right to enforce its rights and remedies pursuant to this Agreement regarding matters arising prior to such termination.

5.3 Remedies; Remedies Cumulative.

(a) If an Agency Agreement Event of Default shall have occurred and be continuing, the Lessor shall have all rights available to the Lessor under the Lease and the other Operative Agreements and all other rights otherwise available at law, equity or otherwise. No failure to exercise and no delay in exercising, on the part of Lessor, any right, remedy, power or privilege under this Agreement or under any other Operative Agreement shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power of privilege under this Agreement or under any other Operative Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The remedies described in Sections 5.3(a) through 5.3(g) with respect to Agency Agreement Events of Default are subject to the provisions of Section 5.4; provided, as described in Section 5.4, regarding any

Full Recourse Event of Default or if the Construction Agent elects to cure any Agency Agreement Event of Default pursuant to Section 5.3(f) or in any other manner pursuant to which the Construction Agent (or its designee) shall purchase the Property, then in any such case the limitations contained in Section 5.4 shall not apply and the Construction Agent shall be liable for Termination Value. Notwithstanding the foregoing or the other provisions of this Section 5.3, the Lessor shall not exercise remedies for a period of five (5) Business Days after the Lessor shall have provided notice to the Construction Agent of the occurrence of any Agency Agreement Event of Default, in order to allow the Construction Agent time to exercise its purchase right regarding the Property pursuant to Section 5.3(f), subject to the Construction Agent effecting its purchase of the Property, within a period of fifteen (15) Business Days after the Lessor shall have provided such notice.

(b) Lessor may elect (and shall be deemed automatically, and without any further action, to have exercised such option upon the occurrence of any Lease Event of Default arising under Sections 17.1(h) or (i) of the Lease) to terminate this Agreement and the Lease (or not to terminate the Lease, except with respect to any Lease Event of Default arising under Sections 17.1(h) or (i) of the Lease) and at such time to require Construction Agent to pay (i) in the case of any Agency Agreement Event of Default that is a Full Recourse Event of Default, the Termination Value and (ii) in the case of any Agency Agreement Event of Default that is not a Full Recourse Event of Default, the Construction Period Guarantee Amount.

In any case that Lessor does not receive the Termination Value, Lessor shall use diligent and commercially reasonable efforts in good faith to sell its interest in the Property to an unaffiliated third party for a period of two (2) years from and after the date Lessor receives notice of, or otherwise has knowledge of, the Agency Agreement Event of Default. Lessor and/or Construction Agent may solicit offers for the purchase of Lessor’s rights, title, claims and interest in and to the Property. Lessor shall accept (or match) any purchase offer for a cash purchase price (net of all normal and customary sale and closing costs and the reasonable net cost of owning, operating and maintaining the Property) equal to the Termination Value.

The proceeds from the sale of its interest in the Property (net of all normal and customary sales and closing costs and the reasonable costs of holding, owning, operating, and maintaining the Property, including amounts described in Section 8.7(c)(i) and (ii) of the Participation Agreement which shall be paid to the Agent to be allocated pursuant to Section 8.7(b) of the Participation Agreement) shall be distributed (x) if the relevant Agency Agreement Event of Default is a Full Recourse Event of Default and the sale of the Lessor’s interest in the Property occurs on or prior to the second annual anniversary of the date Lessor receives notice of, or otherwise, has knowledge of, the Agency Agreement Event of Default, to the Agent to be allocated pursuant to Section 8.7(b)(iii) of the Participation Agreement and (y) if the relevant Agency Agreement Event of Default is not a Full Recourse Event of Default and the sale of Lessor’s interest in the Property occurs on or prior to the second annual anniversary of the date Lessor receives notice of, or otherwise, has knowledge of, the Agency Agreement Event of Default, then prior to the allocation pursuant to Section 8.7(b)(iii) of the Participation Agreement, first, to Lessor, in the amount of the positive difference (if any) between the Termination Value (less any portion thereof that cannot be capitalized under GAAP, including any amount of Uninsured Force Majeure Loss) and the Construction Period Guarantee Amount, second, to Lessor, the unpaid portion of the Construction Period Guarantee Amount, third, to the Construction Agent, any remaining proceeds up to the amount of the Construction Period Guarantee Amount previously paid by Construction Agent, and fourth, to the Agent to be distributed by the Agent in accordance with Section 8.7(b)(iii) of the Participation Agreement.

Agency Agreement Event of Default, then (x) Construction Agent shall have no right, title or interest whatsoever in the Property (except as the landlord under the Ground Lease), (y) Lessor shall be the sole owner of its interest in the Property without any obligation to share with Construction Agent or Lessee any proceeds from the sale, conveyance, other transfer or otherwise regarding the Property and (z) if and to the extent Lessor realizes any proceeds with regard to the Property, such proceeds shall be distributed in accordance with Section 8.7(b)(iii) of the Participation Agreement but substituting Lessor in place of Lessee pursuant to subsection “sixth” thereof as Lessee shall have no interest thereunder and no right to any such proceeds.

(c) Lessor may elect to terminate this Agreement and the Lease, in which case the Construction Agent shall have no continuing obligation (i) to function as either a construction agent under this Agreement or a lessee under the Lease, (ii) to purchase the Property or (iii) to pay the Construction Period Guarantee Amount in connection with a remarketing of the Property. In such event, the Construction Agent shall continue to lease the Land to the Lessor pursuant to the Ground Lease, and the Lessor (without the need for further action at such time by any Person) shall be the owner of the Improvements and a holder of a leasehold pursuant to the Ground Lease, all of which shall constitute the property of the Lessor. In the sole discretion of the Lessor and the other Financing Parties, the Lessor may assign, sell, convey or otherwise transfer it interest in the Property (including its interest in the Ground Lease) for its own account, and in such case, the Construction Agent shall have no right to share in the proceeds of any such assignment, sale, conveyance or other transfer and no continuing interest in the Property except solely as the landlord pursuant to the terms of the Ground Lease.

(d) Lessor may elect to terminate this Agreement (upon which event Construction Agent shall have no further obligations under this Agreement), but not the Lease, and in that event shall notify the Construction Agent and the other Financing Parties of Lessor’s intention to continue construction activities in order to effect Completion substantially in accordance with the Plans and Specifications (subject to alterations to the extent otherwise permitted under Applicable Law) and pay all related Property Costs, and in such event, upon Completion by Lessor (as confirmed by Lessor and without any requirement for the delivery of a Completion Certificate by the Construction Agent), the Rent Commencement Date of the Lease shall occur in the same manner as if the Construction Agent had pursued construction through Completion. In such a case, all amounts so expended by the Lessor for Completion (whether or not in excess of the Lessor Commitment) shall constitute Lessor Property Costs.

(e) Lessor may elect, without terminating this Agreement or the Lease, to extend the Construction Period by the amount of time necessary to effect Completion and/or to provide and obtain additional Lessor Commitment, Credit Loan Commitment and Mortgage Loan Commitment, in which event Lessor shall commit, on behalf of itself and the Lenders (subject to the agreement of all the Lenders), to pay all costs (whether or not in excess of the Lessor Commitment, the Mortgage Loan Commitment and the Credit Loan Commitment) necessary for the Construction Agent to effect Completion substantially in accordance with the Plans and Specifications (subject to alterations to the extent otherwise permitted under Applicable Law) and pay all related Property Costs, and in such event, upon Completion, the Rent Commencement Date of the Lease shall occur in the same manner as if the Construction Agent had pursued construction through Completion. In such a case, all amounts so expended by the Lessor and the Lenders for Completion (whether or not in excess of the Lessor Commitment, the Credit Loan Commitment and the Mortgage Loan Commitment) shall constitute Lessor Property Cost, Credit Loan Property Cost and Mortgage Loan Property Cost, respectively.

(f) The Construction Agent shall have the right to cure an Agency Agreement Event of Default hereunder during the Construction Period by purchasing or causing the Lessee to purchase the Property

from the Lessor for an aggregate amount equal to the Termination Value, such payment to be without any abatement, reduction, diminution, set-off, defense, counterclaim or recoupment whatsoever and not subject to Section 5.4.

(g) No failure to exercise and no delay in exercising, on the part of the Lessor, any right, remedy, power or privilege under this Agreement or under the other Operative Agreements shall operate as a waiver thereof; nor shall any single or partial exercise of any right remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided in this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

5.4 Limitation on Recourse.

Notwithstanding anything contained herein or in any other Operative Agreement to the contrary, upon the occurrence and during the continuance of an Agency Agreement Event of Default during the Construction Period that is not a Full Recourse Event of Default, the maximum aggregate amount that the Lessor (or any person or entity acting by or through the Lessor, including the Agent, the Mortgage Lenders and the Credit Lenders) shall be entitled to recover from the Construction Agent or any of the other Credit Parties on account of such Agency Agreement Event of Default shall be an amount (collectively, the “Construction Period Guarantee Amount”) equal to the sum of:

(a) eighty-nine and nine tenths percent (89.9%) of the aggregate Property Cost, exclusive of (i) the portion (if any) of the aggregate Property Cost expended for the purchase of the Land (the “Land Cost”) and (ii) any portion of the aggregate Property Cost attributable to costs or expenses that cannot be capitalized under GAAP (including any amount of Uninsured Force Majeure Loss), plus

(b) one hundred percent (100.0%) of the Land Cost (if any), minus

(c) the sum of (i) any payments previously paid by the Construction Agent in connection with the Property which have been future valued at two and fifteen hundredths percent (2.15%) to such point in time, plus (ii) the present value of any known and quantified future payments required to be paid in connection with the Property that the Construction Agent is obligated to make in connection with the Property during the Construction Period which payments have been present valued at two and fifteen hundredths percent (2.15%) to such point in time, but in each case regarding the foregoing subsections (i) and (ii) excluding payments that are not required to be included in the calculation of the Construction Agent’s maximum guaranty amount under ASC 840-40-55 (EITF 97-10).

The Construction Agent nonetheless acknowledges and agrees that

(x) even though the maximum aggregate recovery from the Credit Parties is limited as aforesaid, the Lessor’s right of recovery from the Property (as opposed to any recovery from the Construction Agent and/or the Lessee) is not so limited and the Lessor shall be entitled to recover one hundred percent (100.0%) of the amounts owed to the Lessor in accordance with the Operative Agreements from its interest in the Property; and

(y) the provisions of this Section 5.4 shall in no way limit or otherwise affect the obligations of the Construction Agent and/or the Lessee (or the recourse of the Lessor, the Agent, the Mortgage Lenders and the Credit Lenders against the Construction Agent and/or the Lessee) with respect to the Property after the Construction Period (whether such obligations or recourse arise under the Operative Agreements or otherwise).

Notwithstanding the foregoing, if a Full Recourse Event of Default has occurred or if the Construction Agent elects to cure any Agency Agreement Event of Default pursuant to Section 5.3(f) or in any other manner pursuant to which the Construction Agent (or its designee) shall acquire the Property, then in any such case the limitations contained in this Section 5.4 shall not apply and the Construction Agent shall be liable for one hundred percent (100.0%) of the Termination Value.

ARTICLE VI
THE LESSOR’S RIGHTS

6.1 Exercise of the Lessor’s Rights.

Subject to the Excepted Payments, the Construction Agent and the Lessor hereby acknowledge and agree that, subject to and in accordance with the terms of the Security Documents, the rights and powers of the Lessor under this Agreement have been assigned to the Agent.

6.2 The Lessor’s Right to Cure the Construction Agent’s Defaults.

The Lessor, without waiving or releasing any obligation or Agency Agreement Event of Default, may (but shall be under no obligation to) remedy any Agency Agreement Event of Default for the account of and at the sole cost and expense of the Construction Agent. All out-of-pocket costs and expenses so incurred (including reasonable fees and expenses of counsel), together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid by the Lessor, shall be paid by the Construction Agent to the Lessor on demand.

ARTICLE VII
MISCELLANEOUS

7.1 Notices.

All notices required or permitted to be given under this Agreement shall be in writing and delivered as provided in Section 12.2 of the Participation Agreement.

7.2 Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the Lessor, the Construction Agent and their respective successors and the assigns of the Lessor. The Construction Agent may not assign this Agreement or any of its rights or obligations hereunder or with respect to the Property in whole or in part to any Person without the prior written consent of the Financing Parties.

7.3 GOVERNING LAW.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS.

THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

7.5 Amendments and Waivers.

This Agreement may not be terminated, amended, supplemented, waived or modified except in accordance with the provisions of Section 12.4 of the Participation Agreement.

7.6 Counterparts.

This Agreement may be executed in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one (1) and the same instrument.

7.7 Severability.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating 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.

7.8 Headings and Table of Contents.

The headings and table of contents contained in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

7.9 WAIVER OF JURY TRIAL.

TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, THE LESSOR AND THE CONSTRUCTION AGENT IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND ANY COUNTERCLAIM THEREUNDER.

7.10 No Construction Agency Fee.

The Construction Agent shall not be entitled to any compensation from the Lessor or any other Person in connection with the performance of the Construction Agent’s obligations under this Agreement.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

NVIDIA LAND DEVELOPMENT, LLC, as the Construction Agent

By: /s/ Karen Burns

Name: Karen Burns

Title: Manager

WACHOVIA SERVICE CORPORATION, as the Lessor

By: /s/ Weston Garrett

Name: Weston Garrett

Title: Managing Director

REAL PROPERTY LEASE AGREEMENT

Dated as of June 19, 2015

between

WACHOVIA SERVICE CORPORATION,
as Lessor

and

NVIDIA LAND DEVELOPMENT, LLC,
as Lessee

This Real Property Lease Agreement is subject to a security interest in favor of Wells Fargo Bank, National Association, as the agent for the Secured Parties (the “Agent”), under a Security Agreement dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, the “Security Agreement”) between Wachovia Service Corporation (as “Debtor”) and the Agent and NVIDIA Land Development, LLC, as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof. This Real Property Lease Agreement has been executed in several counterparts. To the extent, if any, that this Real Property Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Real Property Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart containing the receipt therefor executed by the Agent on the signature page hereof.

TABLE OF CONTENTS



ARTICLE I.		6
1.1	Definitions.	6
1.2	Interpretation.	6
ARTICLE II.		6
2.1	Property.	6
2.2	Lease Term.	7
2.3	Title.	8
ARTICLE III.		8
3.1	Rent.	8
3.2	Payment of Rent.	8
3.3	Supplemental Rent.	8
3.4	Performance on a Non-Business Day.	9
3.5	Rent Payment Provisions.	9
3.6	Hedge Agreements.	9
ARTICLE IV.		9
4.1	Taxes; Utility Charges.	9
ARTICLE V.		10
5.1	Quiet Enjoyment.	10
ARTICLE VI.		10
6.1	Net Lease.	10
6.2	No Termination or Abatement.	11
ARTICLE VII.		11
7.1	Ownership of the Property.	11
ARTICLE VIII.		12
8.1	Condition of the Property.	12
8.2	Possession and Use of the Property.	13
8.3	Integrated Property.	14
ARTICLE IX.		14
9.1	Compliance With Legal Requirements, Insurance Requirements and Manufacturer’s Specifications and Standards.	14
ARTICLE X.		14
10.1	Maintenance and Repair; Return.	14
10.2	Environmental Inspection.	16
ARTICLE XI.		16
11.1	Modifications.	16
ARTICLE XII.		17
12.1	Warranty of Title.	17
ARTICLE XIII.		17



13.1	Permitted Contests Other Than in Respect of Indemnities.	17
13.2	Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements.	18
ARTICLE XIV.		18
14.1	Commercial General Liability and Workers’ Compensation Insurance.	18
14.2	Permanent Hazard and Other Insurance.	19
14.3	Coverage.	19
14.4	Deductibles and Co-Payment Amounts.	20
ARTICLE XV.		21
15.1	Casualty and Condemnation.	21
15.2	Environmental Matters.	23
15.3	Notice of Environmental Matters.	23
ARTICLE XVI.		24
16.1	Termination Upon Certain Events.	24
16.2	Procedures.	24
ARTICLE XVII.		24
17.1	Lease Events of Default.	24
17.2	Surrender of Possession.	27
17.3	Reletting.	27
17.4	Damages.	28
17.5	[Reserved].	28
17.6	Final Liquidated Damages.	28
17.7	Environmental Costs.	30
17.8	Waiver of Certain Rights.	30
17.9	Assignment of Rights Under Contracts.	30
17.1	Lessee Purchase to Cure Lease Event of Default.	30
17.11	Remedies Cumulative.	31
17.12	Limitation Regarding Certain Lease Events of Default.	31
17.13	Continuation of Lease.	32
ARTICLE XVIII.		32
18.1	Lessor’s Right to Cure Lessee’s Lease Defaults.	32
ARTICLE XIX.		32
19.1	Provisions Relating to Lessee’s Exercise of its Purchase Option.	32
19.2	No Purchase or Termination With Respect to Less than All of the Property.	33
ARTICLE XX.		33
20.1	Purchase Option or Sale Option-General Provisions.	33
20.2	Lessee Purchase Option.	33
20.3	Third Party Sale Option.	34
ARTICLE XXI.		34
21.1	Sale Procedure.	34



21.2	Application of Proceeds of Sale.	37
21.3	Indemnity for Excessive Wear.	37
21.4	Appraisal Procedure.	37
21.5	Certain Obligations Continue.	37
ARTICLE XXII.		38
22.1	Holding Over.	38
ARTICLE XXIII.		38
23.1	Risk of Loss.	38
ARTICLE XXIV.		38
24.1	Assignment.	38
24.2	Subleases.	38
ARTICLE XXV.		39
25.1	No Waiver.	39
ARTICLE XXVI.		39
26.1	Acceptance of Surrender.	39
26.2	No Merger of Title.	40
26.3	Estoppel Certificates.	40
ARTICLE XXVII.		40
27.1	Notices.	40
ARTICLE XXVIII.		40
28.1	Miscellaneous.	40
28.2	Amendments and Modifications.	40
28.3	Successors and Assigns.	40
28.4	Headings and Table of Contents.	41
28.5	Counterparts.	41
28.6	GOVERNING LAW.	41
28.7	Calculation of Rent.	41
28.8	Memorandum of Lease.	41
28.9	Allocations Among the Financing Parties.	41
28.1	Limitations on Recourse.	41
28.11	WAIVERS OF JURY TRIAL.	41
28.12	Exercise of Lessor Rights.	42
28.13	SUBMISSION TO JURISDICTION AND VENUE.	42
28.14	USURY SAVINGS PROVISION.	42

EXHIBITS

EXHIBIT A [Intentionally Omitted]

EXHIBIT B Memorandum of Real Property Lease Agreement

EXHIBIT C Legal Description of the Property

REAL PROPERTY LEASE AGREEMENT

THIS REAL PROPERTY LEASE AGREEMENT dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time, this “Lease”) is between WACHOVIA SERVICE CORPORATION, a Delaware corporation, having its principal place of business at 550 South Tryon Street, Charlotte, NC 28202, as lessor (the “Lessor”), and NVIDIA LAND DEVELOPMENT, LLC, a Delaware limited liability company, having its principal place of business at 2701 San Tomas Expressway, Santa Clara, CA 95050, as lessee (the “Lessee”).

WITNESSETH:

A. WHEREAS, subject to the terms and conditions of the Participation Agreement (hereinafter defined) and the Agency Agreement, Lessor shall (i) ground lease the Land pursuant to the Ground Lease and (ii) fund the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property by the Construction Agent; and

B. WHEREAS, the Term shall commence with respect to the Property upon the Closing Date; and

C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the Property pursuant to this Lease.

NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.


1.1	Definitions.

For purposes of this Lease, capitalized terms used in this Lease and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Participation Agreement dated as of June 19, 2015 (as amended, modified, extended, supplemented, restated and/or replaced from time to time in accordance with the applicable provisions thereof, the “Participation Agreement”) among Lessee, the various entities parties thereto from time to time, as the Guarantors, Lessor, the various banks and other lending institutions parties thereto from time to time, as Mortgage Lenders, the various banks and other lending institutions parties thereto from time to time, as Credit Lenders, and Wells Fargo Bank, National Association, as agent for the Credit Lenders and the Mortgage Lenders, and respecting the Security Documents, as agent for the Secured Parties. Unless otherwise indicated, references in this Lease to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Lease.


1.2	Interpretation.

The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Lease.

ARTICLE II.


2.1	Property.

Subject to the terms and conditions hereinafter set forth relating to the Property, Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, the Property.


2.2	Lease Term.

The basic term of this Lease (the “Basic Term”) shall begin upon the Closing Date (the “Commencement Date”) and shall end on the ninety (90) month anniversary of the Closing Date (the “Basic Term Expiration Date”), unless the Basic Term is earlier terminated (including pursuant to the final paragraph of this Section 2.2) or renewed in accordance with the provisions of this Lease and the other Operative Agreements. Notwithstanding the foregoing, Lessee shall not be obligated to pay Basic Rent until the Rent Commencement Date.

Subject to the consents required pursuant to this Section 2.2 and the other applicable terms and conditions of the Operative Agreements and provided the prior paragraph has not resulted in a termination of the Lease (including pursuant to the final paragraph of this Section 2.2), Lessee may request that the Lease be extended for up to three (3) successive five-year terms (each a “Renewal Term”) for all, but not less than all of the Property. Each Renewal Term shall end on the fifth (5th) annual anniversary of the commencement of such Renewal Term, unless such Renewal Term is earlier terminated pursuant to the terms of this Lease and the other Operative Agreements.

If no Lease Default or Lease Event of Default has then occurred and is continuing, Lessee may, not more than four hundred fifty (450) days prior to the Expiration Date and not less than two hundred (200) days prior to the ninety (90) month anniversary of the Closing Date or the five (5) year anniversary of the last day of the first or second (but not the third) Renewal Term, if any, by irrevocable notice to the Financing Parties make written request to extend the Expiration Date for an additional period of five (5) years. Each of the Financing Parties shall make a determination, in the absolute and sole discretion of each such party, within thirty (30) days of receiving a request from Lessee to extend the Term as to whether or not such party will agree to extend the Expiration Date as requested; provided, however, that failure by any such party to make a timely response to Lessee’s request for extension of the Expiration Date shall be deemed to constitute a refusal by such party to the requested extension of the Expiration Date. In response to a request for an extension of the Expiration Date, if (a) all Financing Parties shall each agree to the requested extension by delivering written confirmation of such acceptance of the extension to the Agent, Lessee and Lessor, then, provided no Lease Default or Lease Event of Default has occurred and is continuing as of the Basic Term Expiration Date or the last day of the first or second Renewal Term only, as applicable, the Term shall be extended and shall expire on the date five (5) years after the then current Expiration Date or (b) any Financing Party shall refuse (or be deemed to have refused) to agree to the requested extension, then the Term shall not be extended and shall expire on the then current Expiration Date and unless Lessee properly makes an election of an end of Term option pursuant to Section 20.1, Lessee shall be deemed to have elected the Purchase Option which shall be exercised on the then current Expiration Date. Each Renewal Term, if any, shall commence on the day immediately following the Basic Term Expiration Date or the last day of the first or second Renewal Term, as applicable.

Notwithstanding the above provisions regarding the duration of the Term, the Term shall terminate and all Rent shall be due and payable in full on the date that is ninety‑one (91) days prior to the earlier of the maturity of (a) the Convertible Senior Notes or (b) any Material Indebtedness unless (x) prior to such date the Convertible Senior Notes and all such Material Indebtedness, as applicable, have been repaid, converted or refinanced in full to a maturity that is at least nine‑one (91) days later than the then applicable

Expiration Date or (y) as of such date, the Leverage Ratio is less than 3.00 to 1.00 and the Liquidity is at least 1.50 times the aggregate outstanding principal balance of the Convertible Senior Notes and the Material Indebtedness.


2.3	Title.

Subject to the provisions of Section 5.1 hereof, the Property is leased to Lessee without any representation or warranty, express or implied, by Lessor and subject to the rights of parties in possession (if any), the existing state of title (including the Permitted Liens) and all applicable Legal Requirements. Lessee shall in no event have any recourse against Lessor for any defect in Lessor’s title to the Property or any interest of Lessee therein other than for Lessor Liens.

ARTICLE III.


3.1	Rent.

(a) Lessee shall pay Basic Rent in arrears on each Payment Date and all outstanding or accrued Basic Rent on any date on which this Lease shall terminate with respect to the Property during the Term, and Lessee shall pay Supplemental Rent in accordance with Section 3.3; provided, however, Lessee shall have no obligation to pay Basic Rent until the Rent Commencement Date. Basic Rent (if any) due and payable prior to the Rent Commencement Date shall be paid in accordance with Section 5.1(b) of the Participation Agreement. Similarly, Lessee shall have no obligation to pay Supplemental Rent prior to the Rent Commencement Date, and instead any amounts of Supplemental Rent that are due and payable prior to the Rent Commencement Date shall be funded with Advances made in accordance with the Operative Agreements; provided, however, if any amount of Supplemental Rent is also a Construction Period Permitted Amount, then (i) Lessee shall be obligated to pay such amount prior to and after the Rent Commencement Date and (ii) Advances will not be available to pay such amount.

(b) Rent shall be due and payable in lawful money of the United States and shall be paid by wire transfer of immediately available funds on the due date therefor (or within the applicable grace period) to such account or accounts at such bank or banks as Lessor shall from time to time direct, provided notice of any change of such account or accounts shall be provided to Lessee at least thirty (30) days prior to any amount being paid to such newly designated account.

(c) Lessee’s inability or failure to take possession of the Property when delivered by Lessor, whether or not attributable to any act or omission of Lessor, the Construction Agent, Lessee or any other Person or for any other reason whatsoever, shall not delay or otherwise affect Lessee’s obligation to pay Rent in accordance with the terms of this Lease.

(d) Lessee shall make all payments of Rent prior to 12:00 Noon, New York City time, on the applicable date for payment of such amount.


3.2	Payment of Rent.

Rent shall be paid absolutely net to Lessor or its designee, so that this Lease shall yield to Lessor the full amount thereof, without set-off, deduction or reduction.


3.3	Supplemental Rent.

Lessee shall pay to the Person entitled thereto any and all Supplemental Rent when and as the same shall become due and payable, and if Lessee fails to pay any Supplemental Rent within five (5) Business Days after the same is due, Lessor shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Basic Rent. All such payments of Supplemental Rent shall be in the full amount thereof, without set-off, deduction or reduction. Lessee shall pay to the appropriate Person, as Supplemental Rent due and owing to such Person, among other things, on demand, (a) any and all payment obligations (except for amounts payable as Basic Rent) owing from time to time under the Operative Agreements by any Person to any Financing Party or any other Person, (b) interest at the Overdue Rate on any installment of Basic Rent not paid when due (subject to the grace period for payments of Basic Rent) for the period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due or demanded by the appropriate Person (subject to any applicable grace period) for the period from the due date or the date such payment becomes due and owing following any such demand, as the case may be, until the same shall be paid and (c) amounts referenced as Supplemental Rent obligations pursuant to Section 8.3 of the Participation Agreement. It shall be an additional Supplemental Rent obligation of Lessee to pay to the appropriate Person all rent and other amounts when such become due and owing from time to time under the Ground Lease and without the necessity of any notice from Lessor with regard thereto. The expiration or other termination of Lessee’s obligations to pay Basic Rent hereunder shall not limit or modify the obligations of Lessee with respect to Supplemental Rent. Unless expressly provided otherwise in this Lease, in the event of any failure on the part of Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall also promptly pay and discharge any fine, penalty, interest or cost which may be assessed or added for nonpayment or late payment of such Supplemental Rent, all of which shall also constitute Supplemental Rent. Lessee shall pay all outstanding or accrued Supplemental Rent on any date on which this Lease shall terminate with respect to the Property during the Term.


3.4	Performance on a Non-Business Day.

If any Basic Rent is required hereunder on a day that is not a Business Day, then such Basic Rent shall be due on the next succeeding Business Day (except to the extent Basic Rent is then being calculated based on the LIBOR Rate and such next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day). If any Supplemental Rent is required hereunder on a day that is not a Business Day, then such Supplemental Rent shall be due on the next succeeding Business Day.


3.5	Rent Payment Provisions.

To the extent permitted by Applicable Laws, Lessee shall make payment of all Basic Rent and Supplemental Rent when due regardless of whether any of the Operative Agreements pursuant to which same is calculated and is owing shall have been rejected, avoided or disavowed in any bankruptcy or insolvency proceeding involving any of the parties to any of the Operative Agreements. Such provisions of such Operative Agreements and their related definitions are incorporated herein by reference and shall survive any termination, amendment or rejection of any such Operative Agreements.


3.6	Hedge Agreements.

No payment of Basic Rent or Supplemental Rent shall affect any obligations of Lessee or any other Credit Party under any Hedge Agreements entered into with respect to the Operative Agreements.

ARTICLE IV.


4.1	Taxes; Utility Charges.

Lessee shall pay or cause to be paid all Impositions with respect to the Property and/or the use, occupancy, operation, repair, access, maintenance or operation thereof and all charges for electricity, power, gas, oil, water, telephone, sanitary sewer service and all other rents, utilities and operating expenses of any kind or type used in or on the Property during the Term. Upon Lessor’s reasonable request, Lessee shall provide from time to time Lessor with evidence of all such payments referenced in the foregoing sentence. Lessee shall be entitled to receive any credit or refund with respect to any Imposition or utility charge paid by Lessee. Unless a Lease Event of Default shall have occurred and be continuing, the amount of any credit or refund received by Lessor on account of any Imposition or utility charge paid by Lessee, net of the costs and expenses incurred by Lessor in obtaining such credit or refund, shall be promptly paid over to Lessee. All charges for Impositions or utilities imposed with respect to the Property for a period during which this Lease expires or terminates shall be adjusted and prorated on a daily basis between Lessor (to the extent Lessor has retained control of the Property) and Lessee or other purchaser of the Property, and each party shall pay or reimburse the other for such party’s pro rata share thereof.

ARTICLE V.


5.1	Quiet Enjoyment.

Subject to the rights of Lessor contained in Sections 10.1(d), 18.1 and 20.3, Article XVII and the other terms of this Lease and the other Operative Agreements and so long as no Lease Event of Default shall have occurred and be continuing, Lessee shall peaceably and quietly have, hold and enjoy the Property for the Term including any renewals or extensions thereof, free of any claim or other action by Lessor or anyone rightfully claiming by, through or under Lessor (other than Lessee), and neither Lessor nor anyone claiming by or through Lessor shall take any action that would disturb Lessee’s right to quiet and peaceful enjoyment of the Property.

ARTICLE VI.


6.1	Net Lease.

This Lease shall constitute a net lease, and the obligations of Lessee hereunder are absolute and unconditional. Lessee shall pay all costs and expenses arising out of the use, operation and/or occupancy of the Property. Except pursuant to the Operative Agreements and any present or future law to the contrary notwithstanding, this Lease shall not terminate, nor shall Lessee be entitled to any abatement, suspension, deferment, reduction, set-off, counterclaim, or defense with respect to the Rent, nor shall the obligations of Lessee hereunder be affected (except as expressly herein permitted and by performance of the obligations in connection therewith) for any reason whatsoever, including by reason of: (a) any damage to or destruction of the Property or any part thereof; (b) any taking of the Property or any part thereof or interest therein by Condemnation or otherwise; (c) any prohibition, limitation, restriction or prevention of Lessee’s use, occupancy or enjoyment of the Property or any part thereof, or any interference with such use, occupancy or enjoyment by any Person or for any other reason; (d) any Lien or any matter affecting title to the Property; (e) any eviction by paramount title or otherwise; (f) any default by Lessor hereunder; (g) any action for bankruptcy, insolvency, reorganization, liquidation, dissolution or other proceeding relating to or affecting any Financing Party, any Credit Party or any Governmental Authority; (h) the impossibility or illegality of performance by Lessor, Lessee or both; (i) any action of any Governmental Authority or any other Person; (j) Lessee’s acquisition of ownership of the Property except pursuant to the Operative Agreements; (k) breach of any warranty or representation with respect to the Property or any Operative Agreement; (l) any defect in the condition, quality or fitness for use of the Property or any part thereof; or (m) any other cause or circumstance whether similar or dissimilar to the foregoing and whether or not Lessee shall have notice or

knowledge of any of the foregoing. The parties intend that the obligations of Lessee hereunder shall be covenants, agreements and obligations that are separate and independent from any obligations of Lessor hereunder and shall continue unaffected unless such covenants, agreements and obligations shall have been modified or terminated in accordance with an express provision of this Lease. Lessor and Lessee acknowledge and agree that the provisions of this Section 6.1 have been specifically reviewed and subject to negotiation. The provisions of this Section 6.1 shall not preclude Lessee from pursuing lawsuits against any other party to the Operative Agreements regarding such party’s failure to perform its obligations pursuant to the Operative Agreements.


6.2	No Termination or Abatement.

Lessee shall remain obligated under this Lease in accordance with its terms and shall not take any action to terminate, rescind or avoid this Lease, notwithstanding any action for bankruptcy, insolvency, reorganization, liquidation, dissolution, or other proceeding affecting Lessee or any other Person, or any action with respect to this Lease or any Operative Agreement which may be taken by any trustee, receiver or liquidator of Lessee or any other Person or by any court with respect to Lessee or any other Person. Lessee hereby waives all right (a) to terminate or surrender this Lease (except as permitted under the terms of the Operative Agreements) or (b) to avail itself of any abatement, suspension, deferment, reduction, set-off, counterclaim or defense with respect to any Rent. Lessee shall remain obligated under this Lease in accordance with its terms.

LESSEE HEREBY WAIVES TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL RIGHT (I) TO TERMINATE OR SURRENDER THIS LEASE (EXCEPT AS PROVIDED HEREIN OR IN THE OTHER OPERATIVE AGREEMENTS) OR (II) TO AVAIL ITSELF OF ANY ABATEMENT, SUSPENSION, DEFERMENT, REDUCTION, SET-OFF, COUNTERCLAIM OR DEFENSE WITH RESPECT TO ANY RENT. LESSEE SHALL REMAIN OBLIGATED UNDER THIS LEASE IN ACCORDANCE WITH ITS TERMS AND TO THE EXTENT WAIVABLE UNDER APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE TO MODIFY OR TO AVOID STRICT COMPLIANCE WITH ITS OBLIGATIONS UNDER THIS LEASE. NOTWITHSTANDING ANY SUCH STATUTE OR OTHERWISE, LESSEE SHALL BE BOUND BY ALL OF THE TERMS AND CONDITIONS CONTAINED IN THIS LEASE.

ARTICLE VII.


7.1	Ownership of the Property.

(a) Lessor and Lessee intend that (i) this Lease will be treated as an “operating lease” pursuant to Accounting Standards Codification No. 840, as amended, for Lessee’s financial accounting purposes and (ii) for federal and all state and local income tax purposes, commercial purposes, bankruptcy purposes and (other than as stated in the foregoing subsection (a)(i)) all other purposes (A) this Lease together with all other Operative Agreements will be treated as a financing arrangement and (B) Lessee will be treated as the owner of the Property and will be entitled to all tax benefits ordinarily available to owners of property similar to the Property for such tax purposes. Notwithstanding the foregoing, neither party hereto has made, or shall be deemed to have made, any representation or warranty as to the availability of any of the foregoing treatments under applicable accounting rules, tax, bankruptcy, regulatory, commercial or real estate law or under any other set of rules. Lessee shall claim the cost recovery deductions associated with the Property, and

Lessor shall not, unless required by Law, take on its tax return a position inconsistent with Lessee’s claim of such deductions.

(b) In order to secure the Company Obligations, Lessee hereby irrevocably conveys, grants, assigns, transfers, conveys and sets over to Lessor, for the benefit of all Financing Parties, a security interest (but subject to the security interest in the assets granted by Lessee in favor of the Agent in accordance with the Security Agreement) in and lien on all right, title and interest of Lessee (now owned or hereafter acquired) in and to the Property, to the extent such is personal property and all proceeds thereof (including insurance proceeds). For purposes of the creation and enforcement of this Lease as a security agreement and a fixture filing with respect to the Property and all proceeds thereof (including insurance proceeds), Lessee is the debtor and Lessor is the secured party. The mailing addresses of the debtor (Lessee herein) and of the secured party (Lessor herein) from which information concerning security interests pursuant to this Lease may be obtained are as set forth on the signature pages of this Lease. A carbon, photographic or other reproduction of this Lease or of any financing statement related to this Lease shall be sufficient as a financing statement for any of the purposes referenced in this Lease. Lessee authorizes Lessor and Agent, to file UCC financing statements, amendment financing statements and renewal financing statements without Lessee’s signature, as Lessor or Agent may determine to be necessary or appropriate to perfect and maintain the security interests granted herein, such security interests in favor of Lessor having been assigned by Lessor to Agent in connection with the Security Agreement. This lien grant is subject to the lien granted pursuant to the Security Agreement.

In order to secure the Company Obligations and for purposes of the creation and enforcement of this Lease as a deed of trust with respect to the Property and all proceeds thereof (including insurance proceeds), LESSEE, as deed of trust grantor, hereby grants, assigns, transfers, conveys and sets over a lien on all right, title and interest of Lessee (now owned or hereafter acquired) in the Property and all proceeds thereof (including insurance proceeds), to the extent such is real property, to First American Title Insurance Company (or any other Person appropriately designated from time to time by Lessor), as trustee, IN TRUST AND WITH POWER OF SALE, for the benefit of LESSOR, as beneficiary. The Lien on the Property and all proceeds thereof (including insurance proceeds) granted and conveyed by Lessee to First American Title Insurance Company (or any other Person appropriately designated from time to time by Lessor), as trustee, pursuant to this Lease and each memorandum of this Lease is and shall be a perfected Lien. This lien grant is subject to the lien granted pursuant to the Mortgage Instrument.

ARTICLE VIII.


8.1	Condition of the Property.

FOR PURPOSES OF SECTION 1938 OF THE CALIFORNIA CIVIL CODE, LESSOR HEREBY DISCLOSES TO LESSEE, AND LESSEE HEREBY ACKNOWLEDGES, THAT THE PREMISES HAVE NOT UNDERGONE INSPECTION BY A CERTIFIED ACCESS SPECIALIST (CASP). LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY “AS-IS WHERE-IS” WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR LIENS AND SHALL COMPLY WITH SECTION 5.1) AND SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL

REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF. NO FINANCING PARTY HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR LIENS AND SHALL COMPLY WITH SECTION 5.1) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF), AND NO FINANCING PARTY SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS ANY FINANCING PARTY IS CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN THE FINANCING PARTIES, ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.


8.2	Possession and Use of the Property.

(a) At all times during the Term, the Property shall be a Permitted Facility and shall be used by Lessee in the ordinary course of its business. Lessee shall pay, prior to delinquency, or cause to be paid, all charges and costs required in connection with the use of the Property as contemplated by this Lease. Lessee shall not commit or permit any waste of the Property.

(b) Lessee will provide Lessor with prior written notice of any change of its name, its principal place of business or chief executive office or of its location for purposes of the UCC. The Equipment and Improvements respecting the Property will be located only at the Land or a location otherwise identified in the Lease.

(c) Lessee will not attach or incorporate any item of Equipment to or in any other item of equipment or personal property or to or in any real property in a manner that could give rise to the assertion of any Lien on such item of Equipment by reason of such attachment or the assertion of a claim that such item of Equipment has become a fixture and is subject to a Lien in favor of a third party that is prior to the Liens thereon created by the Operative Agreements or is not a Permitted Lien.

(d) [Intentionally Omitted].

(e) Lessee hereunder covenants and agrees to perform and to observe, during the Term, all of the terms, covenants, provisions, conditions and agreements of the Ground Lease on Lessor’s part as lessee thereunder to be performed and observed (including payment of all rents, additional rents, and other amounts payable by Lessor as lessee under the Ground Lease) to the end that all things shall be done which are necessary to keep in full force and effect (and otherwise unimpaired) the rights of Lessor as lessee under the Ground Lease. The Ground Lease or a separate non-disturbance agreement, in form and substance reasonably satisfactory to Lessor, shall expressly provide that, during the Term, (i) the rights of Lessor as lessee under the Ground Lease shall remain in full force and effect (and otherwise unimpaired) notwithstanding any failure by Lessee to perform

and observe such terms, covenants, provisions, conditions and agreements as referenced in the first sentence of this Section 8.2(e) and (ii) if Lessor or its designee remains a party in interest under the Ground Lease after the Term, then Lessor or such designee shall only be responsible for performing such terms, covenants, provisions, conditions and agreements as referenced in the first sentence of this Section 8.2(e) from and after the last day of the Term; provided, if any such performance is not reasonably practicable given the past non-performance by Lessee, then Lessor or such designee shall be fully excused from any such particular performance obligation and such particular performance obligation shall be considered null and void thereafter with respect to the Ground Lease.

(f) At all times during the Term, Lessee will comply with all obligations under and (to the extent no Lease Event of Default exists and provided that such exercise will not impair the value, utility or remaining useful life of the Property) shall be permitted to exercise all rights and remedies under, all operation and easement agreements and related or similar agreements applicable to the Property.


8.3	Integrated Property.

On the Rent Commencement Date, Lessee shall, at its sole cost and expense, cause the Property to constitute (and for the duration of the Term shall continue to constitute) all of the equipment, facilities, rights, other personal property and other real property necessary or appropriate to operate, utilize, maintain and control a Permitted Facility in a commercially reasonable manner. The provisions of this Section 8.3 shall not limit the rights of Lessee to assign and/or sublet the Property pursuant to Article XXIV.

ARTICLE IX.


9.1	Compliance With Legal Requirements, Insurance Requirements and Manufacturer’s Specifications and Standards.

Subject to the terms of Article XIII relating to permitted contests, Lessee, at its sole cost and expense, shall (a) comply with (i) all applicable Legal Requirements (including all Environmental Laws) and (ii) all Insurance Requirements relating to the Property, (b) procure, maintain and comply with all licenses, permits, orders, approvals, consents and other authorizations required for the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property, and (c) comply with all manufacturer’s specifications and standards, including the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property, whether or not compliance therewith shall require structural or extraordinary changes in the Property or interfere with the use and enjoyment of the Property unless the failure to procure, maintain and comply with such items identified in subparagraphs (a) (i), (b) and (c), individually or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect. Lessor agrees to take such actions at the sole cost and expense of Lessee as may be reasonably requested by Lessee in connection with the compliance by Lessee of its obligations under this Section 9.1.

ARTICLE X.


10.1	Maintenance and Repair; Return.

(a) Lessee, at its sole cost and expense, shall maintain the Property in good condition, repair and working order and in the same condition as on the Rent Commencement Date, and make all necessary repairs thereto and replacements thereof, of every kind and nature whatsoever, whether interior or exterior, ordinary or extraordinary, structural or nonstructural or foreseen or unforeseen,

as required by Section 9.1 and on a basis consistent with the operation and maintenance of other properties or equipment owned or leased by Lessee or any Guarantor comparable in type and function to the Property, such that the Property is capable of being utilized within a reasonable time by a third party and in compliance with standard industry practice subject, however, to the provisions of Article XV with respect to Casualty and Condemnation and ordinary wear and tear.

(b) Lessee shall not use, move or relocate any component of the Property beyond the boundaries of the Land described in this Lease, except for the temporary removal of Equipment and other personal property for repair or replacement.

(c) If any component of the Property becomes worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, Lessee, at its own expense, will within a reasonable time replace such component with a replacement component which is free and clear of all Liens (other than Permitted Liens) and has a value, utility and useful life at least equal to the component replaced (assuming the component replaced had been maintained and repaired in accordance with the requirements of this Lease). All components which are added to the Property shall immediately become the property of (and title thereto shall vest in) Lessor and shall be deemed incorporated in the Property and subject to the terms of this Lease as if originally leased hereunder.

(d) Upon reasonable advance notice, and in any event not less than twenty-four (24) hours prior notice Lessor and its agents shall have the right to inspect the Property and maintenance records (to the extent available) with respect thereto at any reasonable time during normal business hours but shall not, in the absence of the occurrence and continuance of a Lease Event of Default, materially disrupt the business of Lessee. If a Lease Event of Default has occurred and is continuing, any such inspection shall be at the sole cost and expense of Lessee.

(e) At Lessee’s sole expense, Lessee shall reimburse Lessor for one (1) or more additional Appraisals (or reappraisals of Property) as Lessor may request if any Financing Party is required pursuant to any applicable Legal Requirement to obtain such Appraisals (or reappraisals) and during the continuance of any Lease Event of Default not cured in accordance with the terms of the Operative Agreements.

(f) Lessor shall under no circumstances be required to build any improvements or install any equipment on the Property, make any repairs, replacements, alterations or renewals of any nature or description to the Property, make any expenditure whatsoever in connection with this Lease or maintain the Property in any way. Lessor shall not be required to maintain, repair or rebuild all or any part of the Property, and Lessee waives the right to (i) require Lessor to maintain, repair, or rebuild all or any part of the Property or (ii) make repairs at the expense of Lessor pursuant to any Legal Requirement, Insurance Requirement, contract, agreement, covenant, condition or restriction at any time in effect.

(g) Lessee shall, upon the expiration or earlier termination of this Lease, if Lessee shall not have exercised (or been deemed to have exercised) its Purchase Option and purchased the Property, surrender the Property (i) to Lessor pursuant to the exercise of the remedies upon the occurrence and continuance of a Lease Event of Default or (ii) pursuant to the second paragraph of Section 21.1(a) hereof, to Lessor or the third party purchaser, as the case may be, free and clear of Liens (other than as described in Section 5.6 of the Participation Agreement) and otherwise subject to Lessee’s obligations under this Lease (including the obligations of Lessee at the time of such

surrender in the condition required by and otherwise in accordance with Sections 9.1, 10.1(a) through (f), 10.2, 11.1, 12.1, 21.1 and 22.1).


10.2	Environmental Inspection.

If Lessee has not given notice of exercise of its Purchase Option as required pursuant to Section 20.1, Lessee elects the Sale Option pursuant to Section 20.1 or for whatever reason Lessee does not purchase the Property in accordance with the terms of this Lease, then not more than one hundred fifty (150) days nor less than ninety (90) days prior to the Expiration Date, Lessee at its expense shall cause to be delivered to Lessor a Phase I environmental site assessment and (if determined necessary by Lessor in the exercise of its commercially reasonable judgment based on the results of such Phase I environmental site assessment) a Phase II environmental site assessment, in each case recently prepared (no more than thirty (30) days prior to the date of delivery) by an independent recognized professional reasonably acceptable to Lessor, and in form, scope and content reasonably satisfactory to Lessor.

ARTICLE XI.


11.1	Modifications.

Lessee, at its sole cost and expense, at any time and from time to time after the Rent Commencement Date without the consent of Lessor, may make modifications, alterations, renovations, improvements and additions to the Property and substitutions and replacements therefor (collectively, “Modifications”), and Lessee, at its sole cost and expense, shall make any and all Modifications required to be made pursuant to all Legal Requirements, Insurance Requirements and manufacturer’s specifications and standards unless the failure to comply with Legal Requirements or manufacturer’s specifications and standards, individually, or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect; provided, that with respect to the Property only: (i) no completed Modification shall materially impair the value, utility or useful life of the Property from that which existed immediately prior to such Modification (assuming the Property was in the condition required by this Lease); (ii) each Modification shall be done expeditiously and in a good and workmanlike manner; (iii) no Modification shall adversely affect the structural integrity of the Improvements on the Property; (iv) to the extent required by Section 14.2(a), Lessee shall maintain builders’ risk insurance at all times when a Modification is in progress; (v) subject to the terms of Article XIII relating to permitted contests, Lessee shall pay all costs and expenses and discharge any Liens arising with respect to any Modification; (vi) each Modification shall comply with the requirements of this Lease (including Sections 8.2 and 10.1); and (vii) no Improvement shall be demolished or otherwise rendered unfit for use unless Lessee shall finance or cause to be financed the proposed replacement Modification outside of this lease facility and on an unsecured basis; provided, further, Lessee shall not make any Modification to the Property (unless required by any Legal Requirement) to the extent any such Modification, individually or in the aggregate, shall or could reasonably be expected to have a Material Adverse Effect on the Property. Subject to the last paragraph of this Section 11.1, all Modifications shall immediately and without further action upon their incorporation into the Property (1) become property of Lessor and (2) be subject to this Lease. Lessee shall not remove or attempt to remove any Modification from the Property. The Ground Lease shall expressly provide for the provisions of this Section 11.1 regarding ownership of Modifications.

At its sole cost, Lessee may remove Modifications from the Property, to the extent (subject to the confirmation of Lessor in its reasonable discretion) (v) the Modification is not required pursuant to any Legal Requirement, Insurance Requirement or manufacturer’s specification or standard, (w) the Modification is not financed by any of the Financing Parties and (x) the Modification may be removed from the Property without materially impairing the value, utility or useful life of the Property from that which existed

immediately prior to such Modification. Any such Modification so removed prior to the Expiration Date or earlier termination of this Lease, shall become the property of Lessee after such removal, subject to the last sentence of this Section 11.1; provided, any such Modification not removed prior to the Expiration Date or earlier termination of this Lease and any Modification that does not otherwise meet the requirements of the foregoing subsections (v) through (x) or the requirements of the last sentence of this Section 11.1 shall (1) become property of Lessor, (2) be subject to this Lease and (3) be titled in the name of Lessor. In any event, Lessee shall repair, at its expense, all damage to the Property caused by any removal or attempted removal of any Modification, and any Modification removed from the Property shall remain the property of Lessor (and shall not become the property of Lessee) until all such damage has been so repaired.

ARTICLE XII.


12.1	Warranty of Title.

(a) Lessee hereby acknowledges and shall cause title in the Property (including all Equipment, all Improvements, all replacement components to the Property and all Modifications) immediately and without further action to vest in and become the property of Lessor and to be subject to the terms of this Lease (provided, Lessor’s interest in the Land is acknowledged to be a leasehold interest pursuant to the Ground Lease) from and after the Closing Date or such date of incorporation into the Property. Lessee agrees that, subject to the terms of Article XIII relating to permitted contests, Lessee shall not directly or indirectly create or allow to remain, and shall promptly discharge at its sole cost and expense, any Lien, defect, title retention agreement or claim upon the Property, any component thereof or any Modifications or any Lien or claim with respect to the Rent or with respect to any amounts held by any Financing Party pursuant to any Operative Agreement, other than Permitted Liens. Lessee shall promptly notify Lessor in the event it receives actual knowledge that a Lien other than a Permitted Lien has occurred, and Lessee represents and warrants to, and covenants with, Lessor that the Liens in favor of Lessor and/or the Agent created by the Operative Agreements are (and until the Financing Parties under the Operative Agreements have been paid in full shall remain) first priority perfected Liens subject only to Permitted Liens.

(b) Nothing contained in this Lease shall be construed as constituting the consent or request of Lessor, expressed or implied, to or for the performance by any contractor, mechanic, laborer, materialman, supplier or vendor of any labor or services or for the furnishing of any materials for any construction, alteration, addition, repair or demolition of or to the Property or any part thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR IN AND TO THE PROPERTY.

ARTICLE XIII.


13.1	Permitted Contests Other Than in Respect of Indemnities.

Except to the extent otherwise provided for in Section 11 of the Participation Agreement, Lessee, on its own or on Lessor’s behalf but at Lessee’s sole cost and expense, may contest, by appropriate administrative or judicial proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Legal Requirement, Imposition imposed on or against Lessee or the Property or utility charge payable pursuant to Section 4.1 or any Lien, and Lessor agrees not to pay, settle

or otherwise compromise any such item, provided that (a) the commencement and continuation of such proceedings shall suspend the collection of any such contested amount from, and suspend the enforcement thereof against, the Property and the Financing Parties; (b) there shall not be imposed a Lien (other than Permitted Liens) on the Property and no part of the Property nor any Rent would be in any danger of being sold, forfeited, lost or deferred; (c) at no time during the permitted contest shall there be a risk of the imposition of criminal liability or material civil liability on any Financing Party for failure to comply therewith; and (d) in the event that, at any time, there shall be a material risk of extending the application of such item beyond the end of the Term, then Lessee shall deliver to Lessor an Officer’s Certificate certifying as to the matters set forth in clauses (a), (b) and (c) of this Section 13.1 and confirm Lessee’s obligation to satisfy the same. Lessor, at Lessee’s sole cost and expense, shall execute and deliver to Lessee such authorizations and other documents as may reasonably be required in connection with any such contest. Lessor will not be required to join in any proceedings pursuant to this Section 13.1 unless a provision of any Applicable Law requires that such proceedings be brought by or in the name of Lessor or it is customary in the applicable jurisdiction for the title holder to join in such proceedings; in which case (A) if the contest relates to an Imposition, the provisions of Section 11.2 of the Participation Agreement will control, or (B) otherwise, Lessor will join in the proceedings or permit them or any part thereof to be brought in its name if and so long as (1) no Event of Default shall have occurred and be continuing and (2) Lessee pays all related expenses and indemnifies the Financing Parties with respect to such proceedings.


13.2	Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements.

Except with respect to Impositions, Legal Requirements, utility charges and such other matters referenced in Section 13.1 which are the subject of ongoing proceedings contesting the same in a manner consistent with the requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility charges and such other matters to be timely paid, settled or compromised, as appropriate, with respect to the Property and (b) the Property to comply with all applicable Legal Requirements, unless the failure to comply with Legal Requirements, individually or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect.

ARTICLE XIV.


14.1	Commercial General Liability and Workers’ Compensation Insurance.

During the Term, Lessee shall procure and carry, at Lessee’s sole cost and expense, commercial general liability and umbrella liability insurance for claims for injuries or death sustained by persons or damage to property while on the Property or respecting the Equipment. Such insurance shall be in amounts and against such risks that are no less favorable than insurance maintained by Lessee or any Guarantor with respect to similar properties and equipment that it owns and are then customarily carried by similarly situated companies conducting business similar to that conducted by Lessee or any Guarantor, and at all times shall have a minimum combined single limit per occurrence coverage (i) for commercial general liability (including completed operations coverage), of no less than $1,000,000 combined single limit with an aggregate of $2,000,000, (ii) auto liability with a combined single limit of no less than $1,000,000, (iii) workers compensation insurance in accordance with statutory requirements, including coverage for employers liability with a limit of no less than $1,000,000 per occurrence, $1,000,000 per employee, $1,000,000 per accident/disease, and (iv) umbrella liability of no less than $50,000,000; provided, however, that during the period prior to the Completion Date respecting any Property, such umbrella liability amount shall not be less than $75,000,000. The policies shall name Parent as the insured (but shall also cover Lessee as an insured thereunder) and shall be endorsed to name the Financing Parties and their officers, agents, employees and their Affiliates and the Affiliates’ officers, agents and employees, as additional insureds with respect to the

Property. The policies shall also specifically provide that such policies shall be considered primary insurance which shall apply to any loss or claim before any contribution by any insurance which any Financing Party or Affiliate of any Financing Party may have in force. In the operation of the Property, Lessee shall comply with applicable workers’ compensation laws and protect the Financing Parties against any liability under such laws.


14.2	Permanent Hazard and Other Insurance.

(a) During the Term, Lessee shall keep the Property insured against all risk of physical loss or damage by fire, flood and other risks and shall maintain builders’ all risk insurance during the Construction Period in amounts no less than the replacement cost of the Property (as increased from time to time for change orders or use of contingency amounts under the Construction Budget) from time to time, and regarding any earthquake during the Construction Period, in an amount no less than three (3) times the Probable Maximum Loss of the Property (subject to a cap of $150,000,000) and on terms that (i) are no less favorable than insurance covering other similar properties owned by Lessee or any Guarantor and (ii) are then carried by similarly situated companies conducting business similar to that conducted by Lessee or any Guarantor. After the Construction Period, Lessee shall keep the Property insured, or may self-insure provided the Leverage Ratio of the Parent and its Subsidiaries would not exceed 2.50 to 1.0 and the global unrestricted gross cash and Cash Equivalents of the Parent and its Subsidiaries shall not be less than $1,500,000,000, against all risks of physical loss or damage by fire, earthquake, flood and other risks in amounts no less than replacement cost of the Property from time to time The policies shall name Parent as the insured (but shall also cover Lessee as an insured thereunder) and shall be endorsed to name the Agent (on behalf of the Secured Parties) as a loss payee, to the extent of its interests; provided, so long as no Lease Default or Lease Event of Default exists, any loss payable after the Rent Commencement Date respecting the Property under the insurance policies required by this Section for losses up to $1,000,000 will be paid to Lessee.

(b) If during the Term the area in which the Property is located is designated a “flood-prone” area pursuant to the Flood Disaster Protection Act of 1973, or any amendments or supplements thereto or is in a zone designated A or V, then Lessee shall comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973. In addition, Lessee will fully comply with the requirements of the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as each may be amended from time to time, and with any other Legal Requirement, concerning flood insurance to the extent that it applies to the Property. During the Term, Lessee shall maintain workers’ compensation insurance consistent with that carried by similarly situated companies conducting business similar to that conducted by Lessee and containing minimum liability limits of no less than $1,000,000. Lessee shall comply with workers’ compensation laws applicable to Lessee, and protect the Financing Parties against any liability under such laws.


14.3	Coverage.

(a) As of the date of this Lease and annually thereafter during the Term, Lessee shall furnish the Agent (on behalf of the Financing Parties) with certificates prepared by the insurers or insurance broker of Lessee showing the insurance required under Sections 14.1 and 14.2 to be in effect, naming (to the extent of their respective interests) each of the Financing Parties and their officers, agents, employees and their Affiliates and their Affiliates’ officers, agents and employees, as additional insureds and naming the Agent (on behalf of the Secured Parties) as a loss payee and provide a waiver of subrogation in their favor, to the extent of their respective interests, and

evidencing the other requirements of this Article XIV. All such insurance shall be at the cost and expense of Lessee and provided by nationally recognized, financially sound insurance companies having (i) an A.M. Best’s Key Rating Guide rating of A- or better and a financial size category of VII or higher, unless otherwise approved by the Agent, and (ii) an S&P or Moody’s financial strength rating of A or A2, respectively, or higher, unless otherwise approved by the Agent, or (b) other companies acceptable to the Agent, in all cases with regard to subsection (i) or (ii) above with limits and coverage provisions sufficient to satisfy the requirements set forth in this Lease. Lessee shall provide no less than thirty (30) days’ advance written notice to the Agent (on behalf of Lessor and the other beneficiaries of such insurance coverage) in the event of cancellation or material alteration of such insurance. Upon the reasonable request of the Agent (on behalf of the Financing Parties), Lessee shall deliver to the Agent (on behalf of the Financing Parties) copies of all insurance policies required by Sections 14.1 and 14.2.

(b) Lessee agrees that the insurance policy or policies required by Sections 14.1 and 14.2 shall include an appropriate clause pursuant to which any such policy shall provide that it will not be invalidated should Lessee or any contractor, as the case may be, waive, at any time, any or all rights of recovery against any party for losses covered by such policy or due to any breach of warranty, fraud, action, inaction or misrepresentation by Lessee or any Person acting on behalf of Lessee. Lessee hereby waives any and all such rights against the Financing Parties to the extent of payments made to any such Person under any such policy.

(c) Lessor may carry separate insurance at Lessor’s sole cost so long as (i) Lessee’s insurance is designated as primary and in no event excess or contributory to any insurance Lessor may have in force which would apply to a loss covered under Lessee’s policy and (ii) each such insurance policy will not cause Lessee’s insurance required under this Article XIV to be subject to a coinsurance exception of any kind.

(d) Lessee shall pay as they become due all premiums for the insurance required by Section 14.1 and Section 14.2, shall renew or replace each policy prior to the expiration date thereof or otherwise maintain the coverage required by such Sections without any lapse in coverage.

(e) Lessee hereby agrees to pay all deductibles and co-payment amounts in connection with any loss or claim covered by any insurance policy required to be maintained by Lessee pursuant to this Article XIV.

(f) Any exclusion to any insurance policy maintained in accordance with this Article XIV that causes Lessee to fail to comply with the insurance requirements of this Article XIV shall only be applicable if accepted, in writing, by each additional insured and loss payee.

(g) During the Basic Term and any Renewal Term, losses, if any, with respect to the Property under any property damage policies required to be carried under Section 14.2(a) shall be adjusted with the insurance companies, including the filing of appropriate proceedings, by Lessee (after consultation with Lessor), unless a Lease Event of Default under Section 17.1(a), (h) or (i) shall have occurred and be continuing, in which case such losses shall be adjusted by Lessor.


14.4	Deductibles and Co-Payment Amounts.

Lessee shall have the option to utilize deductibles and co-payment amounts, in each case only to the extent such are reasonably acceptable to the Majority Lenders and Lessor, with respect to the insurance required pursuant to the Operative Agreements; provided, however, that during the period prior to the

Completion Date, (a) the deductible for the builder’s risk insurance policy shall be $25,000 and (b) the deductible for the earthquake insurance shall not exceed two percent (2%) of the total project values at risk at the time of loss (subject to a minimum of $250,000).

ARTICLE XV.


15.1	Casualty and Condemnation.

(a) Subject to the provisions of this Article XV and Article XVI (in the event Lessee delivers, or is obligated to deliver or is deemed to have delivered, a Termination Notice), and prior to the occurrence and continuation of a Lease Default or a Lease Event of Default, Lessee shall be entitled to receive (and Lessor hereby irrevocably assigns to Lessee all of Lessor’s right, title and interest in) any condemnation proceeds, award, compensation or insurance proceeds under Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may become entitled by reason of their respective interests in the Property (i) if all or a portion of the Property is damaged or destroyed in whole or in part by a Casualty or (ii) if the use, access, occupancy, easement rights or title to the Property or any part thereof is the subject of a Condemnation; provided, however, (x) if a Lease Default or a Lease Event of Default shall have occurred and be continuing or if such condemnation proceeds, award, compensation or insurance proceeds shall exceed $1,000,000, then such condemnation proceeds, award, compensation or insurance proceeds shall be paid directly to Lessor or, if received by Lessee, shall be held in trust for Lessor and be promptly paid over by Lessee to Lessor, and (y) if the conditions of the foregoing subsection (x) do not apply, then any such award, compensation and/or insurance proceeds shall be paid to Lessee. All amounts held by Lessor hereunder on account of any award, compensation or insurance proceeds either paid directly to Lessor or turned over to Lessor shall be in the case of a Lease Default or a Lease Event of Default held as security for the performance of Lessee’s obligations hereunder and under the other Operative Agreements until such time as such Lease Default or Lease Event of Default shall have been cured in accordance with the Operative Agreements or applied to the applicable obligations upon the exercise of remedies in connection with the occurrence of any such Lease Event of Default and when all such obligations of Lessee with respect to such matters (and all other obligations of Lessee which should have been satisfied pursuant to the Operative Agreements as of such date) have been satisfied, all amounts so held by Lessor shall be paid over to Lessee.

(b) Lessee may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any claim for any condemnation proceeds, award, compensation or insurance proceeds on account of any such Casualty or Condemnation and shall pay all expenses thereof. At Lessee’s reasonable request, and at Lessee’s sole cost and expense, Lessor and the Agent shall participate in any such proceeding, action, negotiation, prosecution, adjustment or appeal. Lessor and Lessee agree that this Lease shall control the rights of Lessor and Lessee in and to any such condemnation proceeds, award, compensation or insurance proceeds.

(c) If a Casualty or a Condemnation of the Property or any interest therein occurs and no Lease Default or Lease Event of Default shall have occurred and be continuing, Lessee may at its option, and at its sole cost and expense, reconstruct or restore the Property in conformity with the requirements of Sections 10.1 and 11.1, so as to restore the Property to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty or Condemnation (assuming all maintenance and repair standards have been satisfied); provided, that the reconstruction or restoration of the Property shall be complete at least one hundred eighty (180) days prior to the Expiration Date. Upon Lessee’s election to

reconstruct or restore the Property, a Responsible Officer of Lessee shall deliver to the Agent a certificate that such reconstruction or restoration is reasonably expected to be complete at least one hundred eighty (180) days prior to the Expiration Date. Upon completion of such reconstruction or restoration of the Property, a Responsible Officer of Lessee shall deliver a certificate confirming that such reconstruction or restoration of the Property has been completed so as to have restored the Property to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty or Condemnation (assuming all maintenance and repair standards have been satisfied). In such event, title to the Property shall remain with Lessor. To the extent no Lease Default or Lease Event of Default shall have occurred and be continuing at such time, Lessor shall then remit to Lessee all related condemnation proceeds, awards, compensation or insurance proceeds previously paid to Lessor as referenced in Section 15.1(a). In the event such a Casualty or Condemnation occurs and Lessee elects not to reconstruct or restore the Property, or if such reconstruction or restoration is not complete at least one hundred eighty (180) days prior to the Expiration Date, then Lessee shall be deemed to have delivered a Termination Notice to Lessor and the provisions of Sections 16.1 and 16.2 shall apply.

(d) In the event of a Casualty or a Condemnation, this Lease shall terminate in accordance with Section 16.1 if Lessee, within thirty (30) days after such occurrence, delivers to Lessor a notice to such effect.

(e) In no event shall a Casualty or Condemnation affect Lessee’s obligations to pay Rent pursuant to Article III, except to the extent Lessee has paid the Termination Value.

(f) Notwithstanding anything to the contrary set forth in Section 15.1(a) or Section 15.1(c), if during the Term a Casualty occurs with respect to the Property or Lessee receives notice of a Condemnation with respect to the Property, and following such Casualty or Condemnation, the Property cannot reasonably be restored, repaired or replaced on or before the day one hundred eighty (180) days prior to the Expiration Date to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty or Condemnation (assuming all maintenance and repair standards have been satisfied) or on or before such day the Property is not in fact so restored, repaired or replaced, then Lessee shall be deemed to have exercised its Purchase Option, such purchase to be effective on the next Payment Date occurring within thirty (30) days or more thereafter (notwithstanding the limits on such exercise contained in Section 20.2) and pay Lessor the Termination Value; provided, that if no Lease Default or Lease Event of Default has occurred and is continuing, any Excess Proceeds shall be paid to Lessee. If a Lease Default or a Lease Event of Default has occurred and is continuing and any Loans or Lessor Advances or other amounts are owing with respect thereto, then any Excess Proceeds (to the extent of any such Loans or Lessor Advances or other amounts owing with respect thereto) shall be paid to Lessor, held as security for the performance of Lessee’s obligations hereunder and under the other Operative Agreements and applied to such obligations upon the exercise of remedies in connection with the occurrence of a Lease Event of Default, with the remainder of such Excess Proceeds in excess of such Loans or Lessor Advances and other amounts owing with respect thereto being distributed to Lessee.

(g) The foregoing provisions of Section 15.1(a) – 15.1(f) shall not apply to the Property prior to the Rent Commencement Date, it being acknowledged and agreed that the provisions of the Agency Agreement shall apply instead.

(h) Lessee shall promptly give Lessor written notice of any Condemnation, regardless of the monetary value involved, or any material Casualty, together with such other information in connection therewith as may be reasonably requested by Lessor.


115.2	Environmental Matters.

Promptly upon Lessee’s actual knowledge of any Environmental Condition for which, in the reasonable opinion of Lessee, the cost to undertake any legally required response, clean up, remedial or other action will or might result in a cost to Lessee of more than $100,000, Lessee shall notify Lessor in writing of such condition. In the event of any Environmental Condition (regardless of whether notice thereof must be given), Lessee shall, not later than forty-five (45) days after Lessee has actual knowledge of such Environmental Condition, either deliver to Lessor a Termination Notice pursuant to Section 16.1, if applicable, or, at Lessee’s sole cost and expense, promptly and thereafter diligently undertake and diligently complete any investigation, response, clean up, remedial or other action (including the pursuit by Lessee of appropriate action against any off-site or third party source for contamination) necessary to investigate, remove, cleanup or remediate the Environmental Condition in accordance with all Environmental Laws. Any such undertaking shall be timely completed in accordance with prudent industry standards and applicable Environmental Laws and in any event prior to the Expiration Date. If Lessee does not deliver a Termination Notice pursuant to Section 16.1, Lessee shall, upon completion of remedial action by Lessee, cause to be prepared by a reputable environmental consultant acceptable to Lessor a report describing the Environmental Condition and the actions taken by Lessee (or its agents) in response to such Environmental Condition, and a statement by either the consultant or the Governmental Authority with jurisdiction over such matter that the Environmental Condition has been remedied in full compliance with applicable Environmental Law or that no further action with respect to such Environmental Condition is required. Not more than one hundred fifty (150) days and no less than ninety (90) days prior to any time that Lessee elects to cease operations with respect to the Property, Lessee at its expense shall cause to be delivered to Lessor a Phase I environmental site assessment recently prepared and (if determined necessary by Lessor in the exercise of its commercially reasonable judgment based on the results of such Phase I environmental site assessment) a Phase II environmental site assessment, in each case recently prepared (no more than thirty (30) days prior to the date of delivery) by an independent recognized professional reasonably acceptable to Lessor, and in form, scope and content reasonably satisfactory to Lessor. If such environmental site assessment reveals any Environmental Condition at any Property, Lessee shall, within thirty (30) days of Lessor having received such assessment, provide Lessor with a plan designed to remedy the Environmental Condition on or prior to the Expiration Date. Notwithstanding any other provision of any Operative Agreement, if Lessee fails to comply with the foregoing obligation regarding the Phase I environmental site assessment and remedy plan or fails to complete such remediation prior to the Expiration Date, Lessee shall be obligated to purchase the Property for its Termination Value and shall not be permitted to exercise (and Lessor shall have no obligation to honor any such exercise) any rights under any Operative Agreement regarding a sale of the Property to a Person other than Lessee or any Affiliate of Lessee.


15.3	Notice of Environmental Matters.

Promptly, but in any event within thirty (30) Business Days from the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written notice of any pending or threatened material claim, action or proceeding involving any Environmental Law or any Release on or in connection with the Property. All such notices shall describe in reasonable detail the nature of the claim, action or proceeding and Lessee’s proposed response thereto. In addition, Lessee shall provide to Lessor, within five (5) Business Days of receipt, copies of all material written communications with any Governmental Authority relating to any pending or threatened material claim, action or proceeding referenced in the first sentence of this Section 15.3.

Lessee shall also provide such detailed reports of any such material environmental claims as may reasonably be requested by Lessor within a reasonable amount of time following receipt of the request therefore.

ARTICLE XVI.


16.1	Termination Upon Certain Events.

If, after the Rent Commencement Date, Lessee has delivered, or is deemed to have delivered, written notice of a termination of this Lease to Lessor in the form described in Section 16.2(a) (a “Termination Notice”) pursuant to the provisions of this Lease, then following the applicable Casualty, Condemnation or Environmental Violation, this Lease shall terminate on the Termination Date.


16.2	Procedures.

(a) A Termination Notice shall contain: (i) notice of termination of this Lease on a Payment Date not more than sixty (60) days after Lessor’s receipt of the Termination Notice (the “Termination Date”); and (ii) a binding and irrevocable agreement of Lessee to pay the Termination Value and purchase the Property on such Termination Date. To the extent no Lease Default or Lease Event of Default shall have occurred and be continuing, any Termination Notice delivered by Lessee to Lessor may be revoked within fifteen (15) days of delivery hereof.

(b) On the Termination Date, Lessee shall pay to Lessor the Termination Value, and Lessor shall convey the Property, to Lessee (or Lessee’s designee), all in accordance with Section 20.2.

ARTICLE XVII.


17.1	Lease Events of Default.

If any one (1) or more of the following events (each, a “Lease Event of Default”) shall occur:

(a) (i) Except as otherwise provided in this Section 17.1(a), any payment of Basic Rent payable by Lessee shall not be paid when due, and, such payment shall be overdue for a period of three (3) Business Days, (ii) any payment payable by Lessee on the Expiration Date, including any payment described in Article XX, shall not be paid when due, (iii) any payment of Termination Value or any payment of Basic Rent or Supplemental Rent due on the date of any such payment of Termination Value shall not be paid when due, or (iv) Lessee shall fail to make payment of any Supplemental Rent (other than Supplemental Rent referred to in clause (ii) or (iii) of this Section 17.1(a)) due and payable within five (5) Business Days after receipt by Lessee of notice from Agent demanding payment thereof (as any of the amounts pursuant to this Section 17.1(a) are due and payable, whether at maturity, by acceleration or otherwise);

(b) Any representation, warranty, certification or statement of fact made or expressly deemed made by any Credit Party in this Lease, in any other Operative Agreement, or in any statement or certificate delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any respect when made or expressly deemed made or any representation, warranty, certification or statement of fact made or expressly deemed made by any Credit Party in this Lease, any other Operative Agreement, or in any statement or certificate delivered in connection herewith or therewith that is not subject to materiality or

Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or expressly deemed made;

(c) Any Credit Party shall default in the performance or observance of any covenant or agreement contained in Article XIV of this Lease (other than the requirement to deliver annual certificates and any requirement to deliver insurance policies), Sections 8.3A(a), 8.3A(b), 8.3A(c), 8.3A(d) or 8.3B of the Participation Agreement or Section 2.4(d) of the Agency Agreement;

(d) Any Credit Party shall default in the performance or observance of any term, covenant, condition or agreement contained in this Lease (other than as specifically provided for in this Section) or any other Operative Agreement and such default is of a type that is subject to being cured and shall continue for a period of thirty (30) days after the earlier of (i) the Agent’s delivery of written notice thereof to Lessee and (ii) a Responsible Officer of any Credit Party having obtained knowledge thereof; provided, however, if the nature of the default is such that it cannot with the exercise of reasonable diligence be cured within said thirty (30) day period, then the Lessee shall not be in default hereunder if such Credit Party shall promptly commence with such cure within said thirty (30) day period and thereafter pursue the same to completion with diligence and continuity; provided, further, in no event shall such extended period beyond such period of thirty (30) days extend more than an additional period of thirty (30) days;

(e) Any Credit Party shall or, to the extent it could reasonably be expected to result in a Material Adverse Effect, any Subsidiary of any Credit Party shall (i) default in the payment of any Indebtedness the aggregate principal amount (including undrawn committed or available amounts), or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount beyond the period of grace if any, provided in the instrument or agreement under which such Indebtedness was created, or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness the aggregate principal amount (including undrawn committed or available amounts), or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, any such Indebtedness to become due prior to its stated maturity (any applicable grace period having expired);

(f) Any Credit Party shall or, to the extent it could reasonably be expected to result in a Material Adverse Effect, any Subsidiary of any Credit Party shall default in the payment when due, or in the performance or observance, of any obligation or condition of any Material Contract beyond any applicable notice and cure period, if any, unless, but only as long as, the existence of any such default is being contested by such Credit Party or any such Subsidiary in good faith by appropriate proceedings and adequate reserves in respect thereof have been established on the books of Lessee or such Credit Party to the extent required by GAAP;

(g) Any Change in Control shall occur;

(h) Any Credit Party shall or, to the extent it could reasonably be expected to result in a Material Adverse Effect, any Subsidiary of any Credit Party shall (i) commence a voluntary case under any Debtor Relief Laws, (ii) file a petition seeking to take advantage of any Debtor Relief Laws, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against

it in an involuntary case under any Debtor Relief Laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing any of the foregoing;

(i) A case or other proceeding shall be commenced against any Credit Party or, to the extent it could reasonably be expected to result in a Material Adverse Effect, any Subsidiary of any Credit Party in any court of competent jurisdiction seeking (i) relief under any Debtor Relief Laws, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any Credit Party or any Subsidiary thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a period of ninety (90) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered;

(j) Any provision of this Lease or any provision of any other Operative Agreement shall for any reason cease to be valid and binding on any Credit Party thereto or any such Person shall so state in writing, or any Operative Agreement shall for any reason cease to create a valid and perfected first priority Lien (subject to Permitted Liens) on, or security interest in, any of the Collateral purported to be covered thereby, in each case other than in accordance with the express terms hereof or thereof;

(l) The occurrence of any of the following events: (i) any Credit Party or any ERISA Affiliate fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Sections 412 or 430 of the Code, any Credit Party or any ERISA Affiliate is required to pay as contributions thereto and such unpaid amounts are in excess of the Threshold Amount, (ii) a Termination Event or (iii) any Credit Party or any ERISA Affiliate as employers under one or more Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding the Threshold Amount;

(m) A judgment or order for the payment of money which causes the aggregate amount of all such judgments or orders (net of any amounts paid or fully covered by independent third party insurance as to which the relevant insurance company does not dispute coverage) to exceed the Threshold Amount shall be entered against any Credit Party or, to the extent it could reasonably be expected to result in a Material Adverse Effect, any Subsidiary of any Credit Party by any court and such judgment or order shall continue without having been discharged, vacated or stayed for a period of ninety (90) consecutive days after the entry thereof;

(n) Lessee shall fail to deliver a certificate when required pursuant to Section 14.3(a) within ten (10) Business Days after receipt of notice from Lessor that such certificate is due under the terms hereof or to maintain insurance to the extent required by Article XIV;

(o) Lessee shall elect the Sale Option and shall not have complied with each of its obligations pursuant to the Operative Agreements by the Expiration Date; or

(p) An Agency Agreement Event of Default shall have occurred and be continuing.

then, in any such event, Lessor, in addition to the other rights and remedies provided for in this Article XVII and in Section 18.1, shall have all rights and remedies available at law and/or in equity, including, without limitation, selling the Property at public sale or as otherwise permitted under Applicable Law free and clear of rights of Lessee and may terminate this Lease by giving Lessee five (5) days’ notice of such termination (provided, notwithstanding the foregoing, this Lease shall be deemed to be automatically terminated without the giving of notice upon the occurrence of a Lease Event of Default under Sections 17.1(h) or (i)), and this Lease shall terminate, and all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest extent permitted by law, pay as Supplemental Rent all costs and expenses incurred by or on behalf of Lessor or any other Financing Party, including reasonable fees and expenses of counsel, as a result of any Lease Event of Default hereunder. Notwithstanding the foregoing, with regard to any Lease Event of Default during the Construction Period, the recovery of amounts shall be limited in accordance with Section 5.4 of the Agency Agreement.


17.2	Surrender of Possession.

If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, but subject to Lessee’s rights pursuant to Section 17.10, Lessee shall, upon ten (10) Business Days written notice, surrender to Lessor possession of the Property. Lessor may enter upon and repossess the Property by such means as are available at law or in equity, and may remove Lessee and all other Persons and any and all personal property and Lessee’s equipment and personalty and severable Modifications from the Property. Lessor shall have no liability by reason of any such entry, repossession or removal performed in accordance with Applicable Law. Upon the written demand of Lessor, Lessee shall return the Property promptly to Lessor, in the manner and condition required by, and otherwise in accordance with the provisions of Section 10.1(g).


17.3	Reletting.

If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessor may, but shall be under no obligation to, relet the Property, for the account of Lessee or otherwise, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and on such conditions (which may include concessions or free rent) and for such purposes as Lessor may determine, and Lessor may collect, receive and retain the rents resulting from such reletting. Lessor shall not be liable to Lessee for any failure to relet the Property or for any failure to collect any rent due upon such reletting.


17.4	Damages.

Neither (a) the termination of this Lease as to the Property pursuant to Section 17.1; (b) the repossession of the Property; nor (c) the failure of Lessor to relet the Property, the reletting of all or any portion thereof, nor the failure of Lessor to collect or receive any rentals due upon any such reletting, shall relieve Lessee of its liabilities and obligations hereunder, all of which shall survive any such termination, repossession or reletting. If any Lease Event of Default shall have occurred and be continuing and notwithstanding any termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay to Lessor all Rent and other sums due and payable hereunder to and including the date of such termination. Thereafter, on the days on which the Basic Rent or Supplemental Rent, as applicable, are payable under this Lease or would have been payable under this Lease if the same had not been terminated pursuant to Section 17.1 and until the end of the Term hereof or what would have been the Term in the absence of such termination, Lessee shall pay Lessor, as current liquidated damages (it being agreed that it would be impossible accurately to

determine actual damages) an amount equal to the Basic Rent and Supplemental Rent that are payable under this Lease or would have been payable by Lessee hereunder if this Lease had not been terminated pursuant to Section 17.1, less the net proceeds, if any, which are actually received by Lessor with respect to the period in question of any reletting of the Property or any portion thereof; provided, that Lessee’s obligation to make payments of Basic Rent and Supplemental Rent under this Section 17.4 shall continue only so long as Lessor shall not have received the amounts specified in Section 17.6. In calculating the amount of such net proceeds from reletting, there shall be deducted all of the Financing Parties’ reasonable expenses in connection therewith, including repossession costs, customary brokerage or sales commissions, fees and expenses for counsel and any necessary repair or alteration costs and expenses incurred in preparation for such reletting. To the extent Lessor receives any damages pursuant to this Section 17.4, such amounts shall be regarded as amounts paid on account of Rent. Lessee specifically acknowledges and agrees that its obligations under this Section 17.4 shall be absolute and unconditional under any and all circumstances and shall be paid and/or performed, as the case may be, without notice or demand and without any abatement, reduction, diminution, set-off, defense, counterclaim or recoupment whatsoever.


17.5	[Reserved].


17.6	Final Liquidated Damages.

(a) If a Lease Event of Default other than a Limited Recourse Event of Default shall have occurred and be continuing, whether or not this Lease shall have been terminated pursuant to Section 17.1 and whether or not Lessor shall have collected any current liquidated damages pursuant to Section 17.4, Lessor shall have the right to recover, by demand to Lessee and at Lessor’s election in its sole discretion, and Lessee shall pay to Lessor, as and for final liquidated damages, the Termination Value, exclusive of the indemnities payable under Section 11 of the Participation Agreement (which, if requested, shall be paid concurrently), and in lieu of all current liquidated damages beyond the date of such demand (it being agreed that it would be impossible accurately to determine actual damages). Upon payment of the amount specified pursuant to the first sentence of this Section 17.6(a), Lessee shall be entitled to receive from Lessor, either at Lessee’s request or upon Lessor’s election, in either case at Lessee’s cost, a termination of ground lease or such other assignment document reasonably acceptable to Lessor as elected by Lessee conveying Lessor’s entire interest in the Property in recordable form and otherwise in conformity with local custom and free and clear of the Lien of this Lease, the Lien of the Security Documents and any Lessor Liens (but otherwise without representation or warranty of any kind). The Property shall be conveyed to Lessee “AS-IS, WHERE-IS” and in its then present physical condition. If any statute or rule of law shall limit the amount of such final liquidated damages to less than the amount agreed upon, Lessor shall be entitled to the maximum amount allowable under such statute or rule of law; provided, however, Lessee shall not be entitled to receive a termination of ground lease or any other assignment of Lessor’s interest in the Property, the Improvements, Fixtures, Modifications, Equipment or the components thereof unless Lessee shall have paid in full the Termination Value. Lessee specifically acknowledges and agrees that its obligations under this Section 17.6(a) shall be absolute and unconditional under any and all circumstances and shall be paid and/or performed, as the case may be, without notice or demand and without any abatement, reduction, diminution, set-off, defense or recoupment whatsoever.

(b) Regarding the occurrence and continuation of a Lease Event of Default that is a Limited Recourse Event of Default, whether or not this Lease shall have been terminated pursuant to Section 17.1 and whether or not Lessor shall have collected any current liquidated damages pursuant to Section 17.4, Lessor shall have the right to recover, by demand to Lessee and at Lessor’s

election in its sole but reasonable discretion, and Lessee shall pay to Lessor, as and for final liquidated damages, and in addition thereto all indemnities payable under Section 11 of the Participation Agreement excepting any such indemnities with regard to such Limited Recourse Event of Default (which amounts for damages and indemnities, if requested by Lessor, shall be paid concurrently), and in lieu of all current liquidated damages beyond the date of such demand (it being agreed that it would be impossible accurately to determine actual damages) the Maximum Residual Guarantee Amount. Lessor shall also have its other remedies at law, including, without limitation, selling the Property at public sale or as other permitted under Applicable Law free and clear of rights of Lessee.

Notwithstanding the following proviso, upon the occurrence of a Limited Recourse Event of Default, Lessor shall be under a continuing obligation, at Lessor’s cost, to actively market (regardless of market conditions) and to use its commercially reasonable efforts to sell the Property to one or more unrelated third parties for a period of two (2) years from and after the date Lessor receives notice of, or otherwise has knowledge of, the Lease Event of Default; provided, however, that Lessor shall not be required to sell the Property (i) in a manner, or under circumstances, that could materially impair Lessor’s ability to enforce any of its rights or remedies (other than collection of costs incurred as a result of Force Majeure Events occurring during the Construction Period) under this Lease (as determined by Lessor in good faith) or (ii) at a time when market conditions render it inadvisable to sell or attempt to sell the Property (as reasonably determined by Lessor in good faith). Lessor and/or Lessee may solicit offers for the purchase of Lessor’s rights, title, claims and interest in and to the Property. Lessor shall accept (or match) any purchase offer for a cash purchase price (net of all normal and customary sales and closing costs and the reasonable costs of holding, owning, operating, and maintaining the Property), equal to the Termination Value.

(c) The proceeds derived from any such sale pursuant to Section 17.6(a) or (b), as applicable, (net of all normal and customary sales and closing costs and the reasonable costs of holding, owning, operating, and maintaining the Property) shall be distributed (x) if the relevant Lease Event of Default is not a Limited Recourse Event of Default and the sale of the Lessor’s interest in the Property occurs on or prior to the second annual anniversary of the date Lessor receives notice of, or otherwise, has knowledge of, the Lease Event of Default, to the Agent to be allocated pursuant to Section 8.7(b)(iii) of the Participation Agreement and (y) if the relevant Lease Event of Default is a Limited Recourse Event of Default and the sale of the Lessor’s interest in the Property occurs on or prior to the second annual anniversary of the date Lessor receives notice of, or otherwise, has knowledge of, the Lease Event of Default, then prior to the allocation pursuant to Section 8.7(b)(iii) of the Participation Agreement, first, to Lessor in the amount of the positive difference (if any) between the Termination Value (less any portion thereof that cannot be capitalized under GAAP, including any amount of Uninsured Force Majeure Loss) and the Maximum Residual Guarantee Amount; second, to Lessor, the unpaid portion of the Maximum Residual Guarantee Amount, third, to the Lessee, any remaining proceeds up to the amount of the Maximum Residual Guarantee Amount previously paid by Lessee, and fourth, to the Agent to be distributed by the Agent in accordance with Section 8.7(b)(iii) of the Participation Agreement.

If, and to the extent that, there is no sale of Lessor’s interest in the Property on or prior to the second annual anniversary of the date Lessor receives notice of, or otherwise, has knowledge of, the Lease Event of Default, then (x) Lessee shall have no right, title or interest whatsoever in the Property (except as the landlord under the Ground Lease), (y) Lessor shall be the sole owner of its interest in the Property without any obligation to share with Construction Agent or Lessee any proceeds from the sale, conveyance, other transfer or otherwise regarding the Property and (z) if and to the extent Lessor realizes any proceeds with regard to the Property, such proceeds shall be

distributed in accordance with Section 8.7(b)(iii) of the Participation Agreement but substituting Lessor in place of Lessee pursuant to subsection “sixth” thereof as Lessee shall have no interest thereunder and no right to any such proceeds. All proceeds in favor of Lessor derived from any such sale shall be distributed to the Agent for allocation in accordance with Section 8.7 of the Participation Agreement. Lessee specifically acknowledges and agrees that its obligations under this Section 17.6(b) shall be absolute and unconditional under any and all circumstances and shall be paid and/or performed, as the case may be, without notice or demand and without any abatement, reduction, diminution, set-off, defense, counterclaim or recoupment whatsoever.

For purposes of this section, the amount realized by Lessor upon the sale of the Property shall be net of all normal and customary sales and closing costs and the reasonable and actual costs of holding, owning, operating, and maintaining the Property (which shall include amounts described in Section 8.7(c)(i) and (ii) of the Participation Agreement) until such time as the Property is sold, which amounts shall be retained by Lessor; provided, however, upon request from Lessee, Lessor shall provide Lessee with its record of such costs paid by Lessor. Lessor’s obligation to make payments to Lessee and Lessee’s obligation to make payments to Lessor, all as set forth above, shall survive any termination of this Lease.


17.7	Environmental Costs.

If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessee shall pay directly to any third party (or at Lessor’s election, reimburse Lessor) the cost of any environmental investigation, response, corrective action or remediation required under any Environmental Law, and shall indemnify and hold harmless Lessor and each other Indemnified Person therefrom. Lessee shall pay all amounts referenced in the immediately preceding sentence within ten (10) Business Days of any written request by Lessor for such payment. The provisions of this Section 17.7 shall not limit the obligations of Lessee under any Operative Agreement regarding indemnification obligations, environmental testing, remediation and/or work.


17.8	Waiver of Certain Rights.

If this Lease shall be terminated pursuant to Section 17.1, Lessee waives, to the fullest extent permitted by Law, (a) any notice of re-entry or the institution of legal proceedings to obtain re-entry or possession; (b) any right of redemption, re-entry or possession; (c) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt; and (d) any other rights which might otherwise limit or modify any of Lessor’s rights or remedies under this Article XVII.


17.9	Assignment of Rights Under Contracts.

If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessee shall upon Lessor’s written demand promptly assign, transfer and set over to Lessor all of Lessee’s right, title and interest in and to each agreement executed by Lessee in connection with the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property (including all right, title and interest of Lessee with respect to all warranty, performance, service and indemnity provisions and any sublease of the Property), to the extent assignable and as and to the extent that the same relate to the acquisition, testing, use, operation, maintenance, repair, refurbishment and restoration of the Property.


17.10	Lessee Purchase to Cure Lease Event of Default.

Except in all cases with regard to a Lease Event of Default pursuant to Sections 17.1(h) or (i) and subject in all cases to Section 5.13 of the Participation Agreement, Lessee shall have the right to cure a Lease Event of Default hereunder by purchasing the Property from, or causing the Property to be purchased by its designee from, Lessor for an amount equal to the Termination Value. After the occurrence of any Lease Event of Default (other than a Lease Event of Default pursuant to Sections 17.1(h) or (i), with respect to which such notice shall be deemed given), Lessor shall notify Lessee in writing of Lessor’s intent to exercise its remedies with respect to such Lease Event of Default and thereafter refrain from exercising any remedy for a period of ten (10) Business Days. During such period of ten (10) Business Days, Lessee may exercise the above-stated purchase option by giving written notice thereof to the Agent. Any such purchase shall close on the date specified therefor in writing by the Agent to Lessee (which date shall be a Business Day after the Agent’s receipt of such notice from Lessee). Any such conveyance to Lessee or its designee shall be conducted in accordance with the mechanics described in Section 20.2 as if the date specified for such conveyance by the Agent under this Section 17.10 were the Election Date specified under Section 20.2.


17.11	Remedies Cumulative.

The remedies herein provided shall be cumulative and in addition to (and not in limitation of) any other remedies available at law, equity or otherwise, including any mortgage foreclosure remedies. After all amounts due and owing to all Financing Parties pursuant to the Operative Agreements have been paid, any excess funds held by any Financing Party following the exercise of remedies hereunder shall be immediately paid to Lessee.


17.12	Limitation Regarding Certain Lease Events of Default.

Notwithstanding anything contained herein or in any other Operative Agreement to the contrary, upon the occurrence and during the continuance of a Lease Event of Default attributable solely to a Lease Event of Default under:

(a) Section 17.1(b), but only to the extent arising under, regarding or pursuant to any representation, warranty, certificate or statement of fact, in each case as referenced in such Section 17.1(b), that is subject to materiality or Material Adverse Effect qualifications;

(b) Section 17.1(c), but only to the extent arising under, regarding or pursuant to Section 8.3A(c)(viii) of the Participation Agreement;

(c) Section 17.1(d), but only to the extent any such actions subject to the limitations of Section 8.3B(d) of the Participation Agreement constitute a Change of Control; or

(d) Sections 17.1(e), 17.1(f), 17.1(g) or 17.1(o) (collectively, with the other items described in the foregoing subsections (a), (b) and (c), the “Limited Recourse Events of Default”),

then the maximum aggregate amount of Lessee’s obligations attributable solely to a Limited Recourse Event of Default shall be an amount equal to the Maximum Residual Guarantee Amount; provided, this Section 17.12 shall not in any way limit the liability of Lessee in the event of any other Lease Event of Default (other than a Limited Recourse Event of Default) or any indemnity payment to any Indemnified Person with regard to any matter other than such Limited Recourse Event of Default, including the indemnities set forth in Sections 11.1 through 11.8 of the Participation Agreement and such indemnity payment shall not be included in the calculation set forth above.

Lessee nonetheless acknowledges and agrees that even though the maximum aggregate recovery from Lessee is limited as aforesaid, neither Lessor’s nor any other Financing Party’s right of recovery from the Property (as opposed to any recovery from Lessee) is so limited and Lessor or any other applicable Financing Party shall be entitled to recover one hundred percent (100%) of the amounts owed to Lessor or such other Financing Party in accordance with the Operative Agreements from its interest in the Property, including, to the extent not duplicative, one hundred percent (100%) of the aggregate Termination Value.


17.13	Continuation of Lease.

Lessor has the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has right to sublet or assign, subject only to reasonable limitations). Accordingly, Lessor may, at its option, elect not to terminate this Lease with respect to the Property and continue to collect all Basic Rent, Supplemental Rent and all other amounts due to Lessor (together with all costs of collection) and enforce Lessee’s obligations under this Lease as and when the same become due, or are to be performed. At the option of Lessor, upon any abandonment of the Property by Lessee, Lessor may, in its sole and absolute discretion, enforce, by suit or otherwise, all covenants and conditions hereof to be performed and complied with by Lessee hereunder and to exercise all other remedies permitted by Section 1951.4 of the California Civil Code (or any amendments thereof or any successor laws which replace Section 1951.4), or elect not to terminate this Lease and may make any necessary repairs (and Lessee shall pay the reasonable costs of such repairs) in order to relet the Property, and relet the Property or any part thereof (in place, if so elected by Lessor) for such term or terms (which may be for a term extending beyond the Term of this Lease) and at such rental or rentals and upon such other terms and conditions as Lessor in its reasonable discretion may deem advisable; and upon each such reletting, all rentals actually received by Lessor from such reletting shall be applied to Lessee’s obligations hereunder and the other Operative Agreement in such order, proportion and priority as Lessor may elect in Lessor’s sole and absolute discretion (but in all events subject to the requirements of and applications set forth in the Participation Agreement). If such rentals received from such reletting during any period are less than the Rent with respect to the Property to be paid during that period by Lessee hereunder, Lessee shall pay any deficiency, as calculated by Lessor, to Lessor on the next Scheduled Payment Date.

ARTICLE XVIII.


18.1	Lessor’s Right to Cure Lessee’s Lease Defaults.

Lessor, without waiving or releasing any obligation or Lease Event of Default, may (but shall be under no obligation to) remedy any Lease Event of Default for the account and at the sole cost and expense of Lessee, including the failure by Lessee to maintain the insurance required by Article XIV, and may, to the fullest extent permitted by law, and notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon the Property, and take all such action thereon as may be reasonably necessary or appropriate therefor. No such entry shall be deemed an eviction of Lessee. All reasonable and actual out-of-pocket costs and expenses so incurred (including reasonable fees and expenses of counsel), together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.

ARTICLE XIX.


19.1	Provisions Relating to Lessee’s Exercise of its Purchase Option.

Lease is to terminate, and upon tender by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable, Lessor shall transfer, at Lessee’s expense, the Property to Lessee (or to Lessee’s designee) by execution and delivery of the documentation referenced in the second paragraph of Section 20.2 and subject to the provisions of Section 20.2.


19.2	No Purchase or Termination With Respect to Less than All of the Property.

Lessee shall not be entitled to exercise its Purchase Option or the Sale Option separately with respect to a portion of the Property and/or any interest pursuant to the Ground Lease.

ARTICLE XX.


20.1	Purchase Option or Sale Option-General Provisions.

Not more than four hundred fifty (450) days prior to the Expiration Date and not less than one hundred eighty (180) days prior to the Expiration Date (or, respecting the Purchase Option only with respect to a purchase by Lessee (or its designee) prior to the Expiration Date, not more than one hundred twenty (120) days and not less than ninety (90) days prior to the applicable Payment Date (such Expiration Date or, respecting the Purchase Option only, any such applicable Payment Date being hereinafter referred to as the “Election Date”), Lessee may give Lessor irrevocable written notice (the “Election Notice”) that Lessee is electing to exercise either (a) (i) in the case of the Expiration Date, the option for Lessee (or any designee of Lessee) to purchase the Property on the Expiration Date or (ii) in the case of any Payment Date, the option for Lessee (or any designee of Lessee), subject to Section 5.13 of the Participation Agreement, to purchase the Property on the applicable Payment Date (the “Purchase Option”) or (b) with respect to an Election Notice given in connection with the Expiration Date only, the option to remarket the Property to a Person other than Lessee or any Affiliate of Lessee and cause a sale of the Property to occur on the Expiration Date pursuant to the terms of Section 21.1 (the “Sale Option”). If Lessee does not give an Election Notice indicating the Purchase Option or the Sale Option at least one hundred eighty (180) days prior to the Expiration Date, then Lessee shall be deemed to have elected for the Purchase Option to apply on the Expiration Date. If Lessee shall elect (or be deemed to have elected) to exercise the Purchase Option then Lessee shall pay, or cause to be paid, to Lessor on the date on which such purchase is scheduled to occur an amount equal to the Termination Value, upon receipt of such amounts and satisfaction of such obligations, Lessor shall transfer to Lessee (or any designee of Lessee) all of Lessor’s right, title and interest in and to the Property in accordance with Section 20.2.

The designation of another Person to purchase the Property on behalf of Lessee pursuant to the Purchase Option shall be subject to the provisions of the second sentence of the first paragraph of Section 20.2.

Notwithstanding the terms of this Section 20.1, Lessee may request a renewal of this Lease from and after the Expiration Date in accordance with Section 2.2.


20.2	Lessee Purchase Option.

Provided that the Election Notice has been appropriately given specifying the Purchase Option for any Payment Date prior to the Expiration Date and if Lessee otherwise elects as of the Expiration Date, Lessee (or any designee of Lessee) shall purchase the Property on the applicable Election Date (i.e., Lessee (or any designee of Lessee) may purchase the Property on any Payment Date and Lessee (or any designee of Lessee) may purchase the Property on the Expiration Date) at a price equal to the Termination Value. Notwithstanding the designation by Lessee of another Person to purchase the Property pursuant to the Purchase Option, Lessee shall remain fully liable for all its obligations pursuant to the Operative Agreements

including any and all obligations which such designated Person might otherwise be expected to perform until Lessee or such designee has purchased the Property and paid the Termination Value therefor. Thereafter, only such provisions which by their express terms survive the expiration or earlier termination of this Lease shall continue to be in force and effect.

Subject to Section 19.2, in connection with any termination of this Lease pursuant to the terms of Section 16.2, or in connection with Lessee’s exercise of its Purchase Option, upon the date on which this Lease is to terminate, and upon tender by Lessee (or any designee of Lessee) of the amounts set forth in Section 16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge (where required) and deliver to Lessee, (or any designee of Lessee), at the cost and expense of Lessee (or any designee of Lessee), each of the following: (a) a termination or assignment (as requested by Lessee) of the Ground Lease to Lessee (or any designee of Lessee) free and clear of the Lien of this Lease, the Lien of the Security Documents and any Lessor Liens (but otherwise without representation or warranty of any kind); (b) any real estate tax affidavit or other document required by law to be executed and filed in order to record the Ground Lease termination or assignment and such other documents that are customarily obtained in the State where the Property is located; (c) FIRPTA affidavits; and (d) any other documents reasonably required to effectuate such sale or transfer. All of the foregoing documentation must be in form and substance reasonably satisfactory to Lessor and Lessee; provided, no Financing Party shall be responsible for any representation or warranty other than the representations and warranties referenced in the foregoing subsection (a). The Property shall be conveyed to Lessee “AS-IS, WHERE-IS” and in then present physical condition.

On the Election Date on which Lessee has elected to exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor, the Agent and all other parties, as appropriate, the sum of all costs and expenses incurred by any such party in connection with the election by Lessee to exercise its Purchase Option and all Rent and all other amounts then due and payable or accrued under this Lease and/or any other Operative Agreement.


20.3	Third Party Sale Option.

(a) Provided that (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Election Notice has been appropriately given specifying the Sale Option, Lessee shall undertake to cause a sale of, the Property on the Election Date (all as specified in the Election Notice), in accordance with the provisions of Section 21.1 hereof. The Expiration Date may be hereafter referred to as the “Sale Date”.

(b) In the event Lessee exercises the Sale Option then Lessee shall deliver the requisite environmental site assessments as required pursuant to Section 10.2. In the event such environmental assessments shall reveal a recommendation for remediation of any material Hazardous Substances, any material violation of Environmental Laws, other material Environmental Violation or potential material Environmental Violation (with materiality determined in each case by Lessor in its reasonable discretion), then Lessee on the Sale Date at the election of Lessor shall pay to Lessor an amount equal to the Termination Value and any and all other amounts due and owing hereunder. Upon receipt of such payment and all other amounts due under the Operative Agreements, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Property in accordance with Section 20.2.

ARTICLE XXI.


21.1	Sale Procedure.

(a) During the Marketing Period, Lessee, on behalf of Lessor, shall market using all commercially reasonable efforts to obtain bids for the cash purchase of the Property in connection with a sale to one (1) or more third party purchasers to be consummated on the Sale Date for the highest price available, shall notify Lessor promptly of the name and address of each prospective purchaser and the cash price which each prospective purchaser shall have offered to pay for the Property and shall provide Lessor with such additional information about the bids and the bid solicitation procedure as Lessor may reasonably request from time to time. All such prospective purchasers must be Persons other than Lessee or any Affiliate of Lessee. On the Sale Date, Lessee shall pay (or cause to be paid) to Lessor and all other parties, as appropriate, the sum of all costs and expenses incurred by Lessor and/or the Agent (as the case may be) in connection with such sale of the Property (regardless of whether such sale actually occurs) and all other amounts payable pursuant to Section 21.1(b).

Lessor (at the discretion of the Mortgage Lenders and if Lessor also determines) may reject any and all bids and may solicit and obtain bids by giving Lessee written notice to that effect; provided, however, that notwithstanding the foregoing, Lessor may not reject any bid for the Property submitted by Lessee if such bid is greater than or equal to the Limited Recourse Amount for the Property, and represents a bona fide offer from a third party purchaser. If the highest price which a prospective purchaser or the prospective purchasers shall have offered to pay for a Property on the Sale Date is less than the Limited Recourse Amount for the Property or if such bid does not represent a bona fide offer from a third party or if there are no bids, Lessor may elect to retain the Property by giving Lessee prior written notice of Lessor’s election to retain the same, and promptly upon receipt of such notice, Lessee shall surrender, or cause to be surrendered, the Property in the condition required by and otherwise in accordance with the terms and conditions of Section 10.1. Upon acceptance of any bid, Lessor agrees, at Lessee’s request and expense, to execute a contract of sale with respect to such sale, so long as the same is consistent with the terms of this Article XXI provides by its terms that it is nonrecourse to Lessor.

Unless Lessor shall have elected to retain the Property pursuant to the provisions of the preceding paragraph, Lessee shall arrange for Lessor to sell the Property free and clear of the Lien of this Lease, the Lien of the Security Documents and any Lessor Liens (but otherwise without representation or warranty of any kind), for cash on the Sale Date to the purchaser or purchasers offering the highest cash sales price, as identified by Lessee or Lessor, as the case may be. To effect such transfer and assignment, Lessor shall execute, acknowledge (where required) and deliver to the appropriate purchaser each of the following: (a) an assignment of the Ground Lease conveying the leasehold interest of Lessor in the Property to the appropriate purchaser free and clear of the Lien of this Lease, the Lien of the Security Documents and any Lessor Liens (but otherwise without representation or warranty of any kind); (b) any real estate tax affidavit or other document required by law or customary in the State where the Property is located to be executed and filed in order to record the Ground Lease assignment; (c) FIRPTA affidavits, as appropriate; and (d) any other documents reasonably required to effectuate such transfer and assignment. All of the foregoing documentation must be in form and substance reasonably satisfactory to Lessor and Lessee. Lessee shall surrender the Property so sold or subject to such documents to each purchaser in the condition required by and otherwise in accordance with Section 10.1, or in such other condition as may be agreed between Lessee and such purchaser. Lessee shall not take or fail to take any action which would have the effect of unreasonably discouraging bona fide third party bids for the Property. If the Property is not sold on the Sale Date in accordance with the terms of this Section 21.1, then Lessee shall be obligated to pay Lessor on the Sale Date an amount equal to the Maximum Residual

Guarantee Amount, and Lessee shall transfer all of its right, title and interest in and to the Property to Lessor.

(b) If the Property is sold on the Sale Date to a third party purchaser in accordance with the terms of Section 21.1(a) and the purchase price paid is less than the GAAP Project Cost (hereinafter such difference shall be referred to as the “Deficiency Balance”), then Lessee hereby unconditionally promises to pay to Lessor on the Sale Date all Rent and all other amounts then due and owing pursuant to the Operative Agreements and the lesser of (i) the Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount. On the Sale Date if (x) Lessor receives the Termination Value from a third party purchaser, (y) Lessor and such other parties receive all other amounts specified in the last sentence of the first paragraph of Section 21.1(a) and (z) there remains any excess proceeds from the sale of the Property, then Lessee may retain such excess. If the Property is retained by Lessor pursuant to an affirmative election made by Lessor pursuant to the provisions of Section 21.1(a) or for whatever other reason (other than a sale to Lessee (or its designee) pursuant to the Purchase Option) there is no sale to a third party purchaser, then Lessee hereby unconditionally promises to pay to Lessor on the Sale Date all Rent and all other amounts then due and owing pursuant to the Operative Agreements and an amount equal to the Maximum Residual Guarantee Amount for the Property so retained. Any payment of any of the foregoing amounts described in this Section 21.1(b) shall be made together with a payment of all other amounts referenced in the last sentence of the first paragraph of Section 21.1(a).

(c) In the event that the Property is either sold to a third party purchaser on the Sale Date or retained by Lessor in connection with an affirmative election made by Lessor pursuant to the provisions of Section 21.1(a), then in either case on the Sale Date Lessee shall provide Lessor or such third party purchaser with (i) all permits, certificates of occupancy, governmental licenses and authorizations necessary to use, operate, repair, access and maintain the Property for the purpose it is being used by Lessee to the extent transferable, and (ii) such manuals, permits, easements, licenses, know-how, rights-of-way and other rights and privileges in the nature of an easement as are reasonably necessary or desirable in connection with the use, operation, repair, access to or maintenance of the Property, excluding any trade secrets or information subject to confidentiality agreements. All assignments, licenses, easements, agreements and other deliveries required by clauses (i) and (ii) of this paragraph (c) shall be in form reasonably satisfactory to Lessor or such third party purchaser(s), as applicable, and shall be fully assignable (including both primary assignments and assignments given in the nature of security) without payment of any fee, cost or other charge. Lessee shall also execute any documentation requested by Lessor or such third party purchaser(s), as applicable, evidencing the continuation or assignment of the Ground Lease.

(d) In the event the Property is sold on the Sale Date to a third party purchaser in accordance with the terms of Section 21.1(a), then the proceeds from the sale of its interest in the Property (net of all normal and customary sales and closing costs and the reasonable costs of holding, owning, operating, and maintaining the Property (unless such costs are separately paid by Lessee in accordance with Section 21.1(a)), including amounts described in Section 8.7(c)(i) and (ii) of the Participation Agreement which shall be paid to the Agent to be allocated pursuant to Section 8.7(b) of the Participation Agreement) shall be distributed, prior to the allocation pursuant to Section 8.7(b)(iii) of the Participation Agreement, first, to Lessor, in the amount of the positive difference (if any) between the Termination Value (less any portion thereof that cannot be capitalized under GAAP, including any amount of Uninsured Force Majeure Loss) and the Maximum Residual Guarantee Amount or the Deficiency Balance (depending on which amount Lessee was obligated to pay), second, to Lessor, the unpaid portion of the Maximum Residual Guarantee Amount or the Deficiency

Balance, as applicable, third, to Lessee, any remaining proceeds up to the amount of the Maximum Residual Guarantee Amount or the Deficiency Balance, as applicable, previously paid by Lessee, and fourth, to the Agent to be distributed by the Agent in accordance with Section 8.7(b)(iii) of the Participation Agreement.


21.2	Application of Proceeds of Sale.

Lessor shall apply the proceeds of sale of the Property as set forth in Section 8.7 of the Participation Agreement (or as otherwise agreed among the Financing Parties from time to time).


21.3	Indemnity for Excessive Wear.

If the proceeds of the sale described in Section 21.1 with respect to the Property shall be less than the Limited Recourse Amount with respect to the Property, and at the time of such sale it shall have been reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market Sales Value of the Property shall have been impaired by greater than expected wear and tear during the term of the Lease, Lessee shall pay to Lessor within ten (10) Business Days after receipt of Lessor’s written statement (i) the amount of such excess wear and tear determined by the Appraisal Procedure or (ii) the amount of the Sale Proceeds Shortfall, whichever amount is less.


21.4	Appraisal Procedure.

For determining the Fair Market Sales Value of the Property or any other amount which may, pursuant to any provision of any Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use the following procedure (the “Appraisal Procedure”). Lessor and Lessee shall endeavor to reach a mutual agreement as to such amount for a period of ten (10) days from commencement of the Appraisal Procedure under the applicable Section of the Lease, and if they cannot agree within ten (10) days, then two (2) qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor, shall mutually agree thereupon, but if either party shall fail to choose an appraiser within twenty (20) days after notice from the other party of the selection of its appraiser, then the appraisal by such appointed appraiser shall be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within twenty (20) days after both shall have been appointed, then a third appraiser shall be selected by the two (2) appraisers or, failing agreement as to such third appraiser within thirty (30) days after both shall have been appointed, by the American Arbitration Association. The decisions of the three (3) appraisers shall be given within twenty (20) days of the appointment of the third appraiser and the decision of the appraiser most different from the average of the other two (2) shall be discarded and such average shall be binding on Lessor and Lessee; provided, that if the highest appraisal and the lowest appraisal are equidistant from the third appraisal, the third appraisal shall be binding on Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee shall be paid by Lessee; the fees and expenses of the appraiser appointed by Lessor shall be paid by Lessor (such fees and expenses not being indemnified pursuant to Section 11 of the Participation Agreement or otherwise by Lessee pursuant to the Operative Agreements); and the fees and expenses of the third appraiser shall be divided equally between Lessee and Lessor.


21.5	Certain Obligations Continue.

During the Marketing Period, the obligation of Lessee to pay Rent with respect to the Property (including the installment of Basic Rent due on the Sale Date), pay indemnities, maintain the Property and maintain insurance shall continue undiminished until payment in full to Lessor of the sale proceeds, if any, the Maximum Residual Guarantee Amount or the Deficiency Balance (as applicable), the amount due under Section 21.3, if any, and all other amounts due to Lessor or any other Person with respect to all Property or

any Operative Agreement. Lessor shall have the right, but shall be under no duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or otherwise to take action in connection with any such sale, other than as expressly provided in this Article XXI.

ARTICLE XXII.


22.1	Holding Over.

If Lessee shall for any reason remain in possession of the Property after the expiration or earlier termination of this Lease (unless the Property is conveyed to Lessee or Lessee is otherwise lawfully in possession of the Property pursuant to the terms of the Operative Agreements), such possession shall be as a tenancy at sufferance during which time Lessee shall continue to pay Supplemental Rent that would be payable by Lessee hereunder were the Lease then in full force and effect and Lessee shall continue to pay Basic Rent at the lesser of the highest lawful rate and one hundred ten percent (110%) of the payment of Basic Rent that would otherwise be due had this Lease not expired or been earlier terminated, and Lessee shall also pay Supplemental Rent during such period. Such Basic Rent shall be payable from time to time upon demand by Lessor and such additional amount of Basic Rent shall be applied by Lessor ratably to the Credit Lenders, the Mortgage Lenders and Lessor based on their relative amounts of the then outstanding aggregate Property Cost. During any period of tenancy at sufferance, Lessee shall, subject to the second preceding sentence, be obligated to perform and observe all of the terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by law to tenants at sufferance, to continue their occupancy and use of the Property. Nothing contained in this Article XXII shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease (unless the Property is conveyed to Lessee) and nothing contained herein shall be read or construed as preventing Lessor from maintaining a suit for possession of the Property or exercising any other remedy available to Lessor at law or in equity.

ARTICLE XXIII.


23.1	Risk of Loss.

During the Term, unless Lessee shall not be in actual possession of the Property solely by reason of Lessor’s exercise of its remedies of dispossession under Article XVII, the risk of loss or decrease in the enjoyment and beneficial use of the Property as a result of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is assumed by Lessee, and Lessor shall in no event be answerable or accountable therefor.

ARTICLE XXIV.


24.1	Assignment.

Lessee may not assign this Lease or any of its rights or obligations hereunder or with respect to the Property in whole or in part to any Person without the prior written consent of the Financing Parties.


24.2	Subleases.

(a) Promptly, but in any event within five (5) Business Days, following the execution and delivery of any sublease permitted by this Article XXIV, Lessee shall notify Lessor of the execution of such sublease. As of the Closing Date, Lessee shall lease the Property from Lessor,

and any existing tenant respecting the Property shall automatically be deemed to be a subtenant of Lessee and not a tenant of Lessor.

(b) Provided no Lease Default or Lease Event of Default has occurred and is continuing, Lessee may, without the prior written consent of any Financing Party or any other Person and subject to the other provisions of this Section 24.2, sublet the Property or a portion thereof to Parent or any Subsidiary of the Parent. Lessee may otherwise sublet the Property or portion thereof to any Person (other than to Parent or a Subsidiary of the Parent) only with the consent of Lessor and the Majority Lenders (such consent not to be unreasonably withheld or delayed).

(c) No sublease (referenced in this Section 24.2 or otherwise) or other relinquishment of possession to the Property shall in any way discharge or diminish any obligation of any Credit Party to Lessor hereunder or under any of the other Operative Agreements and Lessee shall remain directly and primarily liable under this Lease as to the Property, or portion thereof, so sublet.

(d) No sublease (referenced in this Section 24.2 or otherwise) shall extend beyond the Term of this Lease except with the consent of Lessor and the Majority Lenders (such consent not to be unreasonably withheld, conditioned or delayed) and each such sublease shall be expressly subject and subordinate to this Lease.

(e) No sublease hereunder, whether or not to an Affiliate of Lessee, shall subject any Financing Party to regulation by any Governmental Authority to which any Financing Party would not have been subject but for such sublease, nor shall any sublessee be subject to a proceeding under bankruptcy, insolvency or similar laws at the time of such sublease, nor shall such sublease create a Lease Default or Lease Event of Default hereunder.

ARTICLE XXV.


25.1	No Waiver.

No failure by Lessor or Lessee to insist upon the strict performance of any term hereof or to exercise any right, power or remedy upon a Lease Default or Lease Event of Default, and no acceptance of full or partial payment of Rent during the continuance of any such Lease Default or Lease Event of Default, shall constitute a waiver of any such Lease Default or Lease Event of Default or of any such term. To the fullest extent permitted by law, no waiver of any Lease Default or Lease Event of Default shall affect or alter this Lease, and this Lease shall continue in full force and effect with respect to any other then existing or subsequent Lease Default or Lease Event of Default.

ARTICLE XXVI.


26.1	Acceptance of Surrender.

No surrender to Lessor of this Lease or of all or any portion of the Property or of any part thereof or of any interest therein shall be valid or effective unless agreed to and accepted in writing by Lessor and no act by Lessor or the Agent or any representative or agent of Lessor or the Agent, other than a written acceptance, shall constitute an acceptance of any such surrender.


26.2	No Merger of Title.

There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same Person may acquire, own or hold, directly or indirectly, in whole or in part, (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate, (b) any right, title or interest in the Property or (c) any Note.


26.3	Estoppel Certificates.

At any time and from time to time, but not more than once in any three hundred and sixty-five (365) day period, upon not less than fifteen (15) Business Days’ prior request by Lessor or Lessee (the “Requesting Party”), the other party (whichever party shall have received such request, the “Certifying Party”) shall furnish to the Requesting Party a certificate signed by an authorized officer of the Certifying Party (or, in the case of Lessee, a Responsible Officer) certifying that this Lease is in full force and effect (or that this Lease is in full force and effect as modified and setting forth the modifications); the dates to which the Basic Rent and Supplemental Rent have been paid; to the best knowledge of the signer of such certificate, whether or not the Requesting Party is then in default under any of its obligations hereunder (and, if so, the nature of such alleged default); and such other matters under this Lease as the Requesting Party may reasonably request. Any such certificate furnished pursuant to this Section 26.3 may be relied upon by the Requesting Party, and any existing or prospective mortgagee, purchaser, Credit Lender or Mortgage Lender, and any accountant or auditor, of, from or to the Requesting Party (or any Affiliate thereof).

ARTICLE XXVII.


27.1	Notices.

All notices required or permitted to be given under this Lease shall be in writing and delivered as provided in the Participation Agreement.

ARTICLE XXVIII.


28.1	Miscellaneous.

Anything contained in this Lease to the contrary notwithstanding, all claims against and liabilities of Lessee or Lessor arising from events occurring prior to the expiration or earlier termination of this Lease shall survive such expiration or earlier termination. If any provision of this Lease shall be held to be unenforceable in any jurisdiction, such unenforceability shall not affect the enforceability of any other provision of this Lease and such jurisdiction or of such provision or of any other provision hereof in any other jurisdiction.


28.2	Amendments and Modifications.

This Lease may not be amended, waived, discharged or terminated except in accordance with the provisions of Section 12.4 of the Participation Agreement.


28.3	Successors and Assigns.

All the terms and provisions of this Lease shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.


28.4	Headings and Table of Contents.

The headings and table of contents in this Lease are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.


28.5	Counterparts.

This Lease may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one (1) and the same instrument.


28.6	GOVERNING LAW.

THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO APPLY.


28.7	Calculation of Rent.

All calculation of Rent payable hereunder shall be computed based on the actual number of days elapsed over a year of three hundred sixty (360) days or, to the extent such Rent is based on the Prime Lending Rate, three hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.


28.8	Memorandum of Lease.

This Lease shall not be recorded; provided, Lessor and Lessee shall promptly after the Commencement Date record (a) a memorandum of this Lease (in substantially the form of Exhibit B attached hereto) or a short form lease (in form and substance reasonably satisfactory to Lessor and Lessee) regarding the Property in the local filing office at Lessee’s cost and expense, and as required under Applicable Law to sufficiently evidence this Lease in the real estate filing records.


28.9	Allocations Among the Financing Parties.

Notwithstanding any other term or provision of this Lease to the contrary, the allocations of the proceeds of the Property and any and all other Rent and other amounts received hereunder shall be subject to the intercreditor provisions among the Financing Parties set forth in Section 8.7 of the Participation Agreement (or as otherwise agreed among the Financing Parties from time to time).


28.10	Limitations on Recourse.

The limitations on recourse set forth in Section 12.9 of the Participation Agreement shall apply regarding this Lease.


28.11	WAIVERS OF JURY TRIAL.

EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.


28.12	Exercise of Lessor Rights.

Lessee hereby acknowledges and agrees that the rights and powers of Lessor under this Lease have been assigned to the Agent pursuant to the terms of the Security Agreement and the other Operative Agreements. Lessor and Lessee hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(c) and 8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall be given to the Agent and (c) all notices to be given by Lessor may be given by the Agent, at its election.


28.13	SUBMISSION TO JURISDICTION AND VENUE.

THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.


28.14	USURY SAVINGS PROVISION.

IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST THEREON, THIS SECTION 28.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS “INTEREST.” ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED,

PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING ANY RENEWAL OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.

[signature pages follow]

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and delivered as of the date first above written.

WACHOVIA SERVICE CORPORATION,

as Lessor

By: /s/ Weston Garrett

Name: Weston Garrett

Title: Managing Director

Wachovia Service Corporation

c/o Wells Fargo Securities, LLC

MAC D1086-051

550 South Tryon Street

Charlotte, NC 28202

Attention: Jack Altmeyer

Telephone: (704) 410-2405

[signature pages continue]

REAL PROPERTY LEASE AGREEMENT

NVIDIA LAND DEVELOPMENT, LLC, as Lessee

By: /s/ Karen Burns

Name: Karen Burns

Title: Manager

NVIDIA Land Development, LLC

c/o NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: Colette M. Kress

Executive Vice President and Chief Financial Officer

Telephone: (408) 486-3442

with a copy to:

NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: David M. Shannon

Executive Vice President, Chief Administrative Officer and Secretary

Telephone: (408) 486-8116

and with a copy to:

Cooley LLP
4401 Eastgate Mall
San Diego, CA 92121
Attention: Samantha M. LaPine
Telephone: (858) 550-6005

REAL PROPERTY LEASE AGREEMENT

EXHIBIT A TO THE REAL PROPERTY LEASE AGREEMENT

[Intentionally Omitted]

A-1

EXHIBIT B TO THE REAL PROPERTY LEASE AGREEMENT

[CONFORM TO STATE LAW REQUIREMENTS]

Recordation requested by:

Moore & Van Allen, PLLC

After recordation return to:

Moore & Van Allen, PLLC (LSJ)

100 North Tryon Street, Floor 47

Charlotte, NC 28202-4003

Space above this line for Recorder’s use

MEMORANDUM OF REAL PROPERTY LEASE AGREEMENT

THIS MEMORANDUM OF REAL PROPERTY LEASE AGREEMENT, dated as of _____, 20__ (this “Memorandum”), is by and between WACHOVIA SERVICE CORPORATION, a Delaware corporation, with an office at 550 South Tryon Street, Charlotte, NC 28202 (hereinafter referred to as “Lessor”), and NVIDIA LAND DEVELOPMENT, LLC, a Delaware limited liability company, with an office at _____ (hereinafter referred to as “Lessee”).

WITNESSETH:

That for value received, Lessor and Lessee do hereby covenant, promise and agree as follows:

1. Demised Premises and Date of Lease. Lessor has leased to Lessee, and Lessee has leased from Lessor, for the Term (as hereinafter defined), certain real property and other property located in Santa Clara County, California, which is described in the attached Schedule 1 (the “Property”), pursuant to the terms of a Real Property Lease Agreement between Lessor and Lessee dated as of _____, 2015 (as such may be amended, modified, extended, supplemented, restated and/or replaced from time to time, “Lease”).

The Lease shall constitute a mortgage, deed of trust and security agreement and financing statement under the laws of the state in which the Property is situated. The maturity date of the obligations secured thereby shall be _____, unless extended to not later than _____.

B-1

For purposes of provisions of the Lease related to the creation and enforcement of the Lease as a security agreement and a fixture filing, Lessee is the debtor and Lessor is the secured party. The mailing addresses of the debtor (Lessee herein) and of the secured party (Lessor herein) from which information concerning security interests hereunder may be obtained are as set forth on the signature pages hereof. A carbon, photographic or other reproduction of this Memorandum or of any financing statement related to the Lease shall be sufficient as a financing statement for any of the purposes referenced herein.

2. Term, Renewal, Extension and Purchase Option. The term of the Lease (“Term”) commenced as of _____, 20__ and shall end as of _____, 20__, unless the Term is extended or earlier terminated in accordance with the provisions of the Lease. The Lease contains provisions for renewal and extension. The tenant has a purchase option under the Lease.

3. Effect of Memorandum. The purpose of this instrument is to give notice of the Lease and its terms, covenants and conditions to the same extent as if the Lease was fully set forth herein. This Memorandum shall not modify in any manner the terms, conditions or intent of the Lease and the parties agree that this Memorandum is not intended nor shall it be used to interpret the Lease or determine the intent of the parties under the Lease.

4. Counterpart Execution. This Memorandum may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, all such counterparts together constituting but one (1) and the same instrument.

[the remainder of this page has been intentionally left blank]

B-2

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

LESSOR:

WACHOVIA SERVICE CORPORATION,

as Lessor

By:

Name:

Title:

Wachovia Service Corporation

c/o Wells Fargo Securities, LLC

MAC D1086-051

550 South Tryon Street

Charlotte, NC 28202

Attention: Jack Altmeyer

Telephone: (704) 410-2405

[signature pages continue]

B-3

LESSEE:

NVIDIA LAND DEVELOPMENT, LLC, as Lessee

By:

Name:

Title:

NVIDIA Land Development, LLC

c/o NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: Colette M. Kress

Executive Vice President and Chief Financial Officer

Telephone: (408) 486-3442

with a copy to:

NVIDIA Corporation

2701 San Tomas Expressway

Santa Clara, CA 95050

Attention: David M. Shannon

Executive Vice President, Chief Administrative Officer and Secretary

Telephone: (408) 486-8116

and with a copy to:

Cooley LLP
4401 Eastgate Mall
San Diego, CA 92121
Attention: Samantha M. LaPine
Telephone: (858) 550-6005

B-4

SCHEDULE 1

(Description of Property)

B-5

[CONFORM TO STATE LAW REQUIREMENTS]

On ____________________, 2015, before me, ____________________, Notary Public, personally appeared ____________________, as ____________________, of WACHOVIA SERVICE CORPORATION, a Delaware corporation, on behalf of the corporation, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ____________________ [SEAL]

On ____________________, 2015, before me, ____________________, Notary Public, personally appeared ____________________, as ____________________, of NVIDIA LAND DEVELOPMENT, LLC, a Delaware limited liability company, on behalf of the corporation, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ____________________ [SEAL]

B-6

B-7

EXHIBIT C TO THE REAL PROPERTY LEASE AGREEMENT

Legal Description of the Property

C-1

EXHIBIT 31.1

CERTIFICATION

I, Jen-Hsun Huang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NVIDIA Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2015

/s/JEN-HSUN HUANG

Jen-Hsun Huang

President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, Colette M. Kress, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NVIDIA Corporation;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2015

/s/ COLETTE M. KRESS

Colette M. Kress

Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Jen-Hsun Huang, the President and Chief Executive Officer of NVIDIA Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended July 26, 2015, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.

Date: August 19, 2015

/s/JEN-HSUN HUANG

Jen-Hsun Huang

President and Chief Executive Officer

A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to NVIDIA Corporation and will be retained by NVIDIA Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EXHIBIT 32.2

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Colette M. Kress, the Executive Vice President and Chief Financial Officer of NVIDIA Corporation (the “Company”), hereby certifies that, to the best of her knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended July 26, 2015, to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

Date: August 19, 2015

/s/ COLETTE M. KRESS

Colette M. Kress

Executive Vice President and Chief Financial Officer

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