Common use of Landlord’s Retention of Contractor Clause in Contracts

Landlord’s Retention of Contractor. Landlord shall submit to Tenant's Representative and Project Manager a copy of the Landlord's proposed construction contracts with the Contractor selected in accordance with Section 3.1 above (the "Construction Contract") for Tenant's review and prior written approval thereof, which shall not be unreasonably withheld, provided that the terms and conditions of such Construction Contract are in compliance with the terms and conditions of this Section 4.3.2, below, and if Tenant’s written approval or disapproval (accompanied by a written detailed description of changes required by Tenant to satisfy its concerns relating to the proposed Construction Contract) is not received within ten (10) business days after such contract is submitted to Tenant for Tenant’s approval, then such delay by Tenant in the delivery of such written approval or disapproval shall be a Tenant Delay. If Tenant timely disapproves the proposed Construction Contract in accordance with this Section 4.3.2, Landlord shall cause the proposed Construction Contract to be revised as reasonably required to address Tenant’s specified concerns, and shall submit the revised Construction Contract to Tenant for its review and approval as provided in this Section 4.3.2, and such procedure shall continue until Tenant has approved of the proposed Construction Contract for execution by Landlord and the Contractor (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to agree to any of Tenant's changes and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay), provided that such consent, or any objections or comments, provided by Tenant (or lack thereof) shall in no way imply that such Construction Contract is sufficient or meet the requirements for the related work under this Tenant Work Letter. The Construction Contract shall be in the AIA form of a guaranteed maximum price basis (A102-2007) or a Cost plus Fee with GMP construction agreement (A103-2007). Landlord shall use commercially reasonable efforts to cause the Construction Contract to provide that: (a) Tenant and Tenant's Representative will be named as additional insureds on each CGL policy to be carried by Contractor; (b) Tenant shall be an express third-party beneficiary of all of the Landlord contractual rights and all of the Contractor's obligations, including, but not limited to, (i) naming Tenant as an indemnified party for the Landlord's Agent's indemnification obligations, (ii) Tenant shall be a permitted assignee of Landlord's interest the Construction Contract with the right to enforce the covenants and obligations of the Contractor, and (iii) both Landlord and Tenant shall be named as the beneficiaries of all industry standard warranties, and (c) upon notice from Tenant that a "Construction Contract Assignment Condition" (as that term is defined below) has occurred, the "Owner" position in the Construction Contract shall be assigned by Landlord to Tenant and Contractor shall accept such assignment and recognize Tenant as the Owner under the Construction Contract. If following a Construction Contract Assignment Condition, Tenant reasonably elects to accelerate the then-effective Project Schedule in order to achieve Substantial Completion of the Tenant Improvements as soon as reasonably practical following Tenant's delivery of written notice that a Construction Contract Assignment Condition has occurred, then any costs reasonably incurred by Tenant in connection with such acceleration (and which would not have been incurred by Tenant or Landlord but for such acceleration) shall be paid by Landlord and excluded from Tenant Improvement Allowance Items payable from the Tenant Improvement Allowance or the Over-Allowance. As used herein, a "Construction Contract Assignment Condition" shall mean (y) with respect to the Tenant Improvements to Must-Take Space 1, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by July 30, 2018; and (z) with respect to the Tenant Improvements to Must-Take Space 3, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by August 30, 2019, in either case as the result of a Landlord Delay. In addition to the foregoing, the proposed Construction Contract shall include the following (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to include the following in the Construction Contract and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay):

Landlord’s Retention of Contractor. Landlord shall submit independently retain Contractor, on behalf of Tenant, to Tenant's Representative construct the Tenant Improvements in a good, and Project Manager a copy of the Landlord's proposed construction contracts with the Contractor selected workmanlike manner and otherwise in accordance with Section 3.1 above the Approved Working Drawings (subject to the following sentence) and the Cost Proposal and Landlord shall supervise the construction by Contractor, and FOUR EMBARCADERO CENTER 607152.05/WLA EXHIBIT B [Nighthawk Radiology Services, LLC] E2621-081/1-8-07/kt/kt -5- [AMLGMN] Tenant shall pay a construction supervision and management fee (the "“Landlord Supervision Fee”) to Landlord in an amount equal to five percent (5%) of the “hard” costs of constructing the Tenant Improvements (i.e., the cost of constructing the Tenant Improvements less the Landlord Supervision Fee and all architectural and engineering fees incurred in connection with the preparation of the Construction Contract") for Tenant's review Drawings, and prior written approval thereofall permit fees incurred in connection with the construction of the Tenant Improvements). In the event of a conflict between the Approved Working Drawings and Landlord’s construction rules and regulations, Landlord, in its sole and absolute discretion, shall determine which shall not be unreasonably withheldprevail; provided, provided that however, that, upon request by Xxxxxx at the terms and conditions time of such Construction Contract are in compliance with the terms and conditions of this Section 4.3.2, below, and if Tenant’s written request for Xxxxxxxx’s approval or disapproval (accompanied by a written detailed description of changes required by Tenant to satisfy its concerns relating to the proposed Construction Contract) is not received within ten (10) business days after such contract is submitted to Tenant for Tenant’s approval, then such delay by Tenant in the delivery of such written approval or disapproval shall be a Tenant Delay. If Tenant timely disapproves the proposed Construction Contract in accordance with this Section 4.3.2Final Working Drawings, Landlord shall cause notify Tenant whether there are any conflicts between the proposed Construction Contract to be revised as reasonably required to address Tenant’s specified concerns, and shall submit the revised Construction Contract to Tenant for its review and approval as provided in this Section 4.3.2, and such procedure shall continue until Tenant has approved of the proposed Construction Contract for execution by Landlord Approved Working Drawings and the Contractor (provided that Landlord’s construction rules and regulations to the extent Landlord shall not be liable to Tenant for knows of any such conflicts at the Contractortime of Xxxxxx’s refusal to agree to any of Tenant's changes and any delay request. Notwithstanding anything set forth in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay), provided that such consent, or any objections or comments, provided by Tenant (or lack thereof) shall in no way imply that such Construction Contract is sufficient or meet the requirements for the related work under this Tenant Work Letter. The Construction Contract Letter to the contrary, construction of the Tenant Improvements shall be in the AIA form of a guaranteed maximum price basis (A102-2007) or a Cost plus Fee with GMP construction agreement (A103-2007). Landlord shall use commercially reasonable efforts to cause the Construction Contract to provide that: not commence until (a) Landlord has a fully executed and delivered contract with Contractor for the construction of the Tenant and Tenant's Representative will be named as additional insureds on each CGL policy to be carried by Contractor; Improvements, (b) Tenant shall be an express third-party beneficiary has procured and delivered to Landlord a copy of all of the Landlord contractual rights and all of the Contractor's obligations, including, but not limited to, (i) naming Tenant as an indemnified party for the Landlord's Agent's indemnification obligations, (ii) Tenant shall be a permitted assignee of Landlord's interest the Construction Contract with the right to enforce the covenants and obligations of the Contractor, and (iii) both Landlord and Tenant shall be named as the beneficiaries of all industry standard warrantiesPermits, and (c) upon notice from Tenant that a "Construction Contract Assignment Condition" (as that term is defined below) has occurred, the "Owner" position in the Construction Contract shall be assigned by delivered to Landlord to Tenant and Contractor shall accept such assignment and recognize Tenant as the Owner under the Construction Contract. If following a Construction Contract Assignment Condition, Tenant reasonably elects to accelerate the then-effective Project Schedule in order to achieve Substantial Completion of the Tenant Improvements as soon as reasonably practical following Tenant's delivery of written notice that a Construction Contract Assignment Condition has occurred, then any costs reasonably incurred by Tenant in connection with such acceleration (and which would not have been incurred by Tenant or Landlord but for such acceleration) shall be paid by Landlord and excluded from Tenant Improvement Allowance Items payable from the Tenant Improvement Allowance or the Over-Allowance. As used herein, a "Construction Contract Assignment Condition" shall mean (y) with respect to the Tenant Improvements to Must-Take Space 1, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by July 30, 2018; and (z) with respect to the Tenant Improvements to Must-Take Space 3, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by August 30, 2019, in either case as the result of a Landlord Delay. In addition to the foregoing, the proposed Construction Contract shall include the following (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to include the following in the Construction Contract and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay):Allowance Amount.

Landlord’s Retention of Contractor. Landlord shall independently retain Contractor to construct the Tenant Improvements in accordance with the Approved Working Drawings (subject to the following sentence) and the Cost Proposal and Landlord shall supervise the construction by Contractor, and Tenant shall not be required pay a construction supervision and management fee to Landlord; provided, however, Tenant shall pay Landlord for the construction supervision and management fee (the “PMA Fee”) in an amount equal to the actual out-of-pocket management fee that Landlord pays to its project manager, Project Management Advisors (“PMA”); provided further that the PMA Fee shall not exceed an amount equal to two and 65/100 percent (2.65%) of the total -66- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] cost of all Tenant Improvement Allowance Items (based on the Cost Proposal submitted by the Bidding Contractor selected by Tenant, but including the cost of any Government Change Order or Tenant Change Orders). Prior to Landlord’s execution of the construction contract and general conditions with Contractor (the “Contract”), Landlord shall submit to Tenant's Representative and Project Manager a copy of the Landlord's proposed construction contracts with the Contractor selected in accordance with Section 3.1 above (the "Construction Contract") for Tenant's review and prior written approval thereof, which shall not be unreasonably withheld, provided that the terms and conditions of such Construction Contract are in compliance with the terms and conditions of this Section 4.3.2, below, and if Tenant’s written approval or disapproval (accompanied by a written detailed description of changes required by Tenant to satisfy its concerns relating to the proposed Construction Contract) is not received within ten (10) business days after such contract is submitted to Tenant for Tenant’s approval, then such delay by Tenant in the delivery of such written approval or disapproval shall be a Tenant Delay. If Tenant timely disapproves the proposed Construction Contract in accordance with this Section 4.3.2, Landlord shall cause the proposed Construction Contract to be revised as reasonably required to address Tenant’s specified concerns, and shall submit the revised Construction Contract to Tenant for its review and approval as comment, provided in this Section 4.3.2, and such procedure shall continue until Tenant has approved of the proposed Construction Contract for execution by Landlord and the Contractor (provided that Landlord shall not be liable required to Tenant for include in the Contractor’s refusal to agree to Contract any of Tenant's changes and any delay provision that Landlord in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay), provided that such consent, or any objections or comments, provided by Tenant (or lack thereof) shall good faith does not believe is commercially reasonable. Notwithstanding anything set forth in no way imply that such Construction Contract is sufficient or meet the requirements for the related work under this Tenant Work Letter. The Construction Contract Letter to the contrary, construction of the Tenant Improvements shall be in the AIA form of a guaranteed maximum price basis (A102-2007) or a Cost plus Fee with GMP construction agreement (A103-2007). Landlord shall use commercially reasonable efforts to cause the Construction Contract to provide that: not commence until (a) Landlord has a fully executed and delivered contract with Contractor for the construction of the Tenant Improvements, and Tenant's Representative will be named as additional insureds on each CGL policy to be carried by Contractor; (b) Tenant shall has delivered to Landlord the Over-Allowance Amount. The Tenant Improvements will be an express third-party beneficiary of all constructed in a good and workmanlike manner, and in compliance with Applicable Laws as of the Landlord contractual rights and all date of the Contractor's obligations, including, but not limited to, (i) naming Tenant as an indemnified party for the Landlord's Agent's indemnification obligations, (ii) Tenant shall be a permitted assignee of Landlord's interest the Construction Contract with the right to enforce the covenants and obligations of the Contractor, and (iii) both Landlord and Tenant shall be named as the beneficiaries of all industry standard warranties, and (c) upon notice from Tenant that a "Construction Contract Assignment Condition" (as that term is defined below) has occurred, the "Owner" position in the Construction Contract shall be assigned by Landlord to Tenant and Contractor shall accept such assignment and recognize Tenant as the Owner under the Construction Contract. If following a Construction Contract Assignment Condition, Tenant reasonably elects to accelerate the then-effective Project Schedule in order to achieve Substantial Completion of the Tenant Improvements as soon as reasonably practical following Tenant's delivery Improvements, including without limitation Title 24 and laws enacted under the ADA, to the extent required to allow Tenant to obtain a certificate of written notice occupancy or its legal equivalent allowing the legal occupancy of the Premises for the Permitted Use. Landlord shall ensure that a Construction Contract Assignment Condition has occurred, then any costs reasonably incurred by Tenant in connection with such acceleration (and which would not have been incurred by Tenant Landlord or Landlord but for such acceleration) shall be paid by Landlord and excluded from Tenant Improvement Allowance Items payable from the Tenant Improvement Allowance or the Over-Allowance. As used herein, a "Construction Contract Assignment Condition" shall mean (y) with respect to Contractor carry Builder’s All Risk insurance covering the Tenant Improvements prior to Must-Take Space 1, a failure by Landlord the Lease Commencement Date and Tenant shall not have any obligation to achieve Substantial Completion of insure the Tenant Improvements by July 30until the Lease Commencement Date. For clarity, 2018; and (z) with respect notwithstanding anything in the Lease or this Tenant Work Letter to the contrary, in no event shall Tenant be responsible for removing or restoring any Tenant Improvements to Must-Take Space 3, a failure by Landlord to achieve Substantial Completion or any work associated with the Final Condition of the Tenant Improvements by August 30, 2019, in either case as the result of a Landlord Delay. In addition to the foregoing, the proposed Construction Contract shall include the following (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to include the following in the Construction Contract and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay):Building.

Landlord’s Retention of Contractor. Landlord shall submit independently retain Contractor to Tenant's Representative and Project Manager a copy of construct the Landlord's proposed construction contracts with the Contractor selected Tenant Improvements in accordance with Section 3.1 above the Approved Working Drawings (subject to the following sentence) and the Cost Proposal and Landlord shall supervise the construction by Contractor, and Tenant shall pay a construction supervision and management fee (the "Construction “Landlord Supervision Fee”) to Landlord in an amount equal to One Dollar ($1.00) per rentable square foot of the Premises. Landlord shall execute a commercially reasonable construction contract (the “Contract"”) for Tenant's review and prior written approval thereof, with Contractor which shall not be unreasonably withheldguaranty, provided on commercially reasonable terms, that the terms Tenant Improvements shall be free from defects in workmanship and conditions materials for a period of such Construction not less than one (1) year from the date of Substantial Completion. In addition, the Contract are in compliance shall provide Landlord with the terms and conditions of this Section 4.3.2, belowright to pay premium rates for overtime labor in order to accelerate the construction schedule, and if upon request by Tenant’s written approval or disapproval (accompanied by a written detailed description of changes required by Tenant to satisfy its concerns relating to the proposed Construction Contract) is not received within ten (10) business days after such contract is submitted to Tenant for Tenant’s approval, then such delay by Tenant in the delivery of such written approval or disapproval shall be a Tenant Delay. If Tenant timely disapproves the proposed Construction Contract in accordance with this Section 4.3.2, Landlord shall cause the proposed Construction Contract to be revised as reasonably required to address Tenant’s specified concerns, and shall submit the revised Construction Contract to Tenant for its review and approval as provided authorize such overtime labor. Notwithstanding anything set forth in this Section 4.3.2, and such procedure shall continue until Tenant has approved of the proposed Construction Contract for execution by Landlord and the Contractor (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to agree to any of Tenant's changes and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay), provided that such consent, or any objections or comments, provided by Tenant (or lack thereof) shall in no way imply that such Construction Contract is sufficient or meet the requirements for the related work under this Tenant Work Letter. The Construction Contract Letter to the contrary, construction of the Tenant Improvements shall be in the AIA form of a guaranteed maximum price basis (A102-2007) or a Cost plus Fee with GMP construction agreement (A103-2007). Landlord shall use commercially reasonable efforts to cause the Construction Contract to provide that: not commence until (a) Landlord has a fully executed and delivered the Contract with Contractor for the construction of the Tenant and Tenant's Representative will be named as additional insureds on each CGL policy to be carried by Contractor; Improvements, (b) Tenant shall be an express third-party beneficiary has procured and delivered to Landlord a copy of all of the Landlord contractual rights and all of the Contractor's obligations, including, but not limited to, (i) naming Tenant as an indemnified party for the Landlord's Agent's indemnification obligations, (ii) Tenant shall be a permitted assignee of Landlord's interest the Construction Contract with the right to enforce the covenants and obligations of the Contractor, and (iii) both Landlord and Tenant shall be named as the beneficiaries of all industry standard warrantiesPermits, and (c) upon notice from Tenant that a "Construction Contract Assignment Condition" (as that term is defined below) has occurred, the "Owner" position in the Construction Contract shall be assigned by delivered to Landlord to Tenant and Contractor shall accept such assignment and recognize Tenant as the Owner under the Construction Contract. If following a Construction Contract Assignment Condition, Tenant reasonably elects to accelerate the then-effective Project Schedule in order to achieve Substantial Completion of the Tenant Improvements as soon as reasonably practical following Tenant's delivery of written notice that a Construction Contract Assignment Condition has occurred, then any costs reasonably incurred by Tenant in connection with such acceleration (and which would not have been incurred by Tenant or Landlord but for such acceleration) shall be paid by Landlord and excluded from Tenant Improvement Allowance Items payable from the Tenant Improvement Allowance or the Over-Allowance. As used herein, a "Construction Contract Assignment Condition" shall mean (y) with respect to the Tenant Improvements to Must-Take Space 1, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by July 30, 2018; and (z) with respect to the Tenant Improvements to Must-Take Space 3, a failure by Landlord to achieve Substantial Completion of the Tenant Improvements by August 30, 2019, in either case as the result of a Landlord Delay. In addition to the foregoing, the proposed Construction Contract shall include the following (provided that Landlord shall not be liable to Tenant for the Contractor’s refusal to include the following in the Construction Contract and any delay in negotiating the Construction Contract as a result thereof shall be deemed a Tenant Delay):Allowance Amount.