AMENDED AND RESTATED SECOND AMENDMENT TO OFFICE LEASE
This AMENDED AND RESTATED SECOND AMENDMENT TO OFFICE LEASE (“Second Amendment”)
is made and entered into as of October 16, 2013 (the "Effective Date"), by and
between KILROY REALTY, L.P., a Delaware limited partnership ("Landlord"), and
ENTROPIC COMMUNICATIONS, INC., a Delaware corporation (“Tenant").
R E C I T A L S :
A.Landlord and Tenant are parties to that certain Office Lease dated August 31,
2007 (the "Office Lease"), as amended by that certain First Amendment to Office
Lease dated July 24, 2012 (the "First Amendment") (the Office Lease and the
First Amendment shall collectively be referred to as the "Lease"), whereby
Landlord leases to Tenant and Tenant leases from Landlord 90,000 rentable square
feet of space (the "6290 Premises") comprising the entirety of that certain
building located at 6290 Sequence Drive, San Diego, California (the "6290
Building"). The 6290 Building, together with the parking facilities servicing
the 6290 Building, any outside plaza areas appurtenant thereto, the land upon
which the 6290 Building is located (which is improved with landscaping and other
improvements), and the "6350 Building" (as that term is defined in Recital D
below), together with the parking facilities serving the 6350 Building and the
land upon which such 6350 Building is located, and other improvements
surrounding either of the aforementioned buildings which are designated from
time to time by Landlord as common areas appurtenant to or servicing such
buildings, and the land upon which any of the foregoing are situated, are herein
sometimes collectively referred to as the "Project."
B.Landlord, and Tenant previously entered into that certain Second Amendment to
Office Lease dated February 21, 2013 (the "6260 Second Amendment"), whereby
Landlord and Tenant agreed to relocate and substitute the entirety of the
existing 6290 Premises with the entirety of that certain building located at
6260 Sequence Drive, San Diego, California (the "6260 Substitute Premises").
Landlord and Tenant desire to rescind the 6260 Second Amendment in its entirety,
as Tenant shall not be relocating to the 6260 Substitute Premises.
C.Subject to the foregoing, from and after the "Effective Date", this Second
Amendment shall amend, restate and supersede the terms of the 6260 Second
Amendment in its entirety.
D.Landlord and Tenant desire to amend the Lease to eliminate the 6290 Premises
and substitute in its place the entirety of that certain building comprising
132,600 rentable square feet of space (the "6350 Substitute Premises") located
at 6350 Sequence Drive, San Diego, California, as the space leased by Tenant
under the Lease (the “6350 Building”) (which 6350 Building is also located in,
and constitutes part of, the Project), as such 6350 Substitute Premises is more
particularly delineated on Exhibit A attached hereto and made a part hereof, and
to make other modifications to the Lease, and in connection therewith, Landlord
and Tenant desire to amend the Lease as hereinafter provided.

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1.Capitalized Terms. All capitalized terms when used herein shall have the same
meaning as is given such terms in the Lease unless expressly superseded by the
terms of this Second Amendment.
2.Substitution of 6350 Substitute Premises for the 6290 Premises. Subject to the
provisions of Section 13, below, effective as of the date (the “6350 Substitute
Premises Commencement Date”) which is the later of August 1, 2014 or the date
which is five (5) months following Landlord’s delivery of the 6350 Substitute
Premises to Tenant, (x) the Lease shall terminate and be of no further force or
effect with respect to the 6290 Premises, and (y) Tenant shall lease from
Landlord, and Landlord shall lease to Tenant, the 6350 Substitute Premises upon
the terms and conditions set forth in the Lease, as hereby amended.
Consequently, effective upon the 6350 Substitute Premises Commencement Date, the
6350 Substitute Premises shall be substituted for the 6290 Premises and all
references in the Lease (as hereby amended), to the “Premises” shall mean and
refer instead to the 6350 Substitute Premises. Additionally, as of the 6350
Substitute Premises Commencement Date, all references in the Lease to the
“Building” shall be deemed to refer the 6350 Building (rather than the 6290
Building). The required evidence of insurance coverage as set forth in Article
10 of the Office Lease pertaining to the 6350 Substitute Premises must be
delivered to Landlord on or before the date Tenant and/or its employees,
contractors and/or agents first enter the 6350 Substitute Premises for
occupancy, construction of improvements, alterations, or any other move-in
activities. For purposes of the Lease (as amended), the "rentable square feet"
of the Premises and Building are hereby stipulated to be, and shall therefore be
deemed, as set forth in Recital D of this Second Amendment, and no
re-measurement of the Premises or Building will occur at any time during the
Lease Term or any extensions thereof.
3.Surrender of 6290 Premises.
3.1In General. Subject to the provisions of Sections 3.2, below, Tenant hereby
agrees to vacate the 6290 Premises and surrender and deliver exclusive
possession of the 6290 Premises to Landlord on or before the 6350 Substitute
Premises Commencement Date in accordance with the provisions of the Lease as
herein amended and, thereafter, Tenant shall have no further obligations with
respect to the 6290 Premises except with respect to the period of Tenant’s
tenancy prior to the 6350 Substitute Premises Commencement Date, and those
obligations which expressly survive the expiration or earlier termination of the
Lease. In the event that Tenant fails to vacate the 6290 Premises and surrender
and deliver exclusive possession of the 6290 Premises to Landlord on or before
the 6350 Substitute Premises Commencement Date in accordance with the provisions
of the Lease as hereby amended, then Tenant shall be deemed to be in holdover of
the 6290 Premises and shall be subject to the terms of Section 3.2 of this
Second Amendment.

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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3.2Permitted Holdover/Holdover.
3.2.1Initial 60-Day Permitted Holdover Period. Notwithstanding any provision to
the contrary contained herein, Tenant shall have the right, pursuant to the
terms of this Section 3.2.1, to holdover in the 6290 Premises for no more than
sixty (60) days after the occurrence of the 6350 Substitute Premises
Commencement Date (such applicable period being referred to herein as the
"Initial 60-Day Permitted Holdover Period"). In connection therewith, (A) Tenant
shall endeavor to give Landlord prior written notice of its intent to holdover
in the 6290 Premises for the Initial 60-Day Permitted Holdover Period,
(B) Tenant shall have no obligation during such Initial 60-Day Permitted
Holdover Period to protect, defend, indemnify and hold Landlord harmless from
any loss, costs and liability resulting from Tenant's failure to surrender the
6290 Premises upon the 6350 Substitute Premises Commencement Date, (C) Tenant
shall not be liable to Landlord for the payment or reimbursement of any legal
fees incurred by Landlord in connection with Tenant's holdover in the 6290
Premises during the Initial 60-Day Permitted Holdover Period, and (D) no Base
Rent or Direct Expenses shall be payable by the Tenant to the Landlord during
such Initial 60-Day Permitted Holdover Period. Except as specifically set forth
in this Section 3.2 to the contrary (i.e., in the event Tenant duly delivers the
"Subsequent 60-Day Permitted Holdover Notice" (as that term is defined in
Section 3.2.2 below)), all of the obligations under Article 16 of the Office
Lease shall apply following the expiration or earlier termination of the Initial
60-Day Permitted Holdover Period including, but not limited to, Tenant's
obligation to protect, defend, indemnify and hold Landlord harmless from any
loss, costs (including reasonable attorneys' fees) and liability resulting from
Tenant's failure to surrender the 6290 Premises upon the termination or
expiration of the Lease.
3.2.2Subsequent 30-Day Permitted Holdover Period. Notwithstanding any provision
to the contrary contained herein, to the extent Tenant delivers, on or before
the date which is thirty (30) days prior to the expiration date of the Initial
60-Day Permitted Holdover Period, written notice to Landlord (the "Subsequent
30-Day Permitted Holdover Notice") setting forth Tenant's requirement for
another limited holdover in the 6290 Premises of no more than thirty (30) days
(such applicable period being referred to herein as the "Subsequent 30-Day
Permitted Holdover Period"), (A) Tenant shall have no obligation during such
Subsequent 30-Day Permitted Holdover Period to protect, defend, indemnify and
hold Landlord harmless from any loss, costs and liability resulting from
Tenant's failure to surrender the 6290 Premises upon the termination or
expiration of the Initial 60-Day Permitted Holdover Period, (B) Tenant shall not
be liable to Landlord for the payment or reimbursement of any legal fees
incurred by Landlord in connection with Tenant's holdover in the 6290 Premises
during the Subsequent 30-Day Permitted Holdover Period, and (C) Base Rent during
such Subsequent 30-Day Permitted Holdover Period shall be payable at a monthly
rate equal to that payable for the 6290 Premises during the last full calendar
month of the Lease Term (not including the Initial 60-Day Permitted Holdover
Period) (i.e., an amount equal to One Hundred Eighty-Seven Thousand Two Hundred
and 00/100 Dollars ($187,200.00)), and Tenant shall have no obligation to pay
Direct Expenses during the Subsequent 30-Day Permitted Holdover Period. All of
the obligations under Article 16 of the Office Lease shall apply following the
expiration or earlier termination of the Subsequent 30-Day Permitted Holdover
Period including, but not limited to, Tenant's obligation to protect, defend,
indemnify and hold Landlord harmless from any loss, costs (including reasonable
attorneys' fees) and liability resulting from Tenant's failure to surrender the
6290 Premises upon the termination or expiration of the Lease. Notwithstanding

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[Entropic Communications, Inc.]

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any provision to the contrary contained herein, Tenant expressly acknowledges
and agrees that the provisions of this Section 3.2.2 shall only apply to the
extent Tenant has previously exercised its rights under Section 3.2.1 above, and
has delivered the Initial 60-Day Permitted Holdover Notice.
3.2.3In General/Holdover 90 Days after the 6350 Substitute Premises Commencement
Date. If (a) Tenant has not exercised its right to holdover in the 6290 Premises
during the Initial 60-Day Permitted Holdover Period and holds over after the
occurrence of the 6350 Substitute Premises Commencement Date, (b) Tenant
exercises its right to hold over in the 6290 Premises during the Initial 60-Day
Permitted Holdover Period (but not the Subsequent 30-Day Permitted Holdover
Period) and Tenant holds over in the 6290 Premises after the expiration of the
Initial 60-Day Permitted Holdover Period, or (c) Tenant exercises its right to
hold over in the 6290 Premises during the Initial 60-Day Permitted Holdover
Period and the Subsequent 30-Day Permitted Holdover Period, and Tenant holds
over in the 6290 Premises after the expiration of the Subsequent 30-Day
Permitted Holdover Period, then in each of the above-referenced instances the
provisions of Article 16 of the Office Lease shall apply with full force and
effect and the Rent then-payable by Tenant to Landlord shall be as set forth in
Article 16 of the Office Lease. Notwithstanding any provision to the contrary
contained in the Lease (including, but not limited to, the last sentence of
Article 16 of the Office Lease), if Tenant is in holdover in the 6290 Premises
as contemplated by the foregoing items (a), (b) or (c), Landlord and Tenant
expressly acknowledge and agree that Landlord's requirement to deliver a New
Lease Notice in order for the provisions of the last sentence of Article 16 of
the Office Lease to apply shall be waived with respect to Tenant's holding over
in the 6290 Premises (i.e., following the occurrence of the events contemplated
by items (a), (b) or (c) above, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees)
and liability resulting from its failure to surrender the 6290 Premises,
including, without limiting the generality of the foregoing, any claims made by
any succeeding tenant founded upon such failure to surrender and any lost
profits to Landlord resulting therefrom).
3.3Representations of Tenant. Tenant represents and warrants to Landlord that
(a) Tenant has not heretofore assigned or sublet all or any portion of its
interest in the Lease or in the 6290 Premises; (b) no other person, firm or
entity has any right, title or interest in the Lease or in the 6290 Premises
through Tenant; (c) Tenant has the full right, legal power and actual authority
to enter into this Second Amendment and to terminate the Lease with respect to
the 6290 Premises without the consent of any person, firm or entity; and
(d) Tenant has the full right, legal power and actual authority to bind Tenant
to the terms and conditions hereof. Tenant further represents and warrants to
Landlord that as of the date hereof there are no, and as of the 6350 Substitute
Premises Commencement Date, there shall not be, any mechanic’s liens or other
liens encumbering all or any portion of the 6290 Premises, by virtue of any act
or omission on the part of Tenant, its predecessors, contractors, agents,
employees, successors or assigns for which Tenant has not made adequate
provisions for payment and provided Landlord reasonable evidence thereof.
Notwithstanding the termination of the Lease with respect to the 6290 Premises,
the representations and warranties set forth in this Section 3.3 shall survive
the 6350 Substitute Premises Commencement Date and Tenant shall be liable to
Landlord for any inaccuracy or any breach thereof.

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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4.Lease Term.
4.1Extension of Lease Term. Landlord and Tenant acknowledge that the Lease Term
is currently scheduled to expire on January 31, 2015, pursuant to the terms of
the Lease. Notwithstanding any provision to the contrary in the Lease, the Lease
Term is hereby extended for a period of seven (7) years commencing on February
1, 2015, and ending January 31, 2022 (the "Extended Term"), unless sooner
terminated as provided in the Lease, as hereby amended. For purposes hereof, the
term "Lease Expiration Date" shall mean and otherwise refer to January 31, 2022.
4.2Option to Extend Lease Term. Notwithstanding any provision to the contrary
contained in the Lease (as amended), Landlord and Tenant acknowledge and agree
that the Extended Term provided herein shall, although not entirely consistent
with the first (1st) Option Term identified in Section 2.2 of the Office Lease,
nevertheless be deemed to represent the first (1st) of Tenant's two (2) options
to extend the Lease Term as provided in Section 2.2 of the Office Lease, and
that effective as of the date of this Second Amendment, Tenant shall continue to
have only one (1) option to extend the Lease Term for a period of five (5) years
in accordance with, and pursuant to the terms of, Section 2.2 of the Office
Lease.
5.Base Rent. Notwithstanding any provision to the contrary contained in the
Lease, as hereby amended, prior to 6350 Substitute Premises Commencement Date,
Tenant shall continue to pay Base Rent for the 6290 Premises in accordance with
the terms of Article 3 of the Office Lease. Commencing on the 6350 Substitute
Premises Commencement Date, and continuing through the Lease Expiration Date,
Tenant shall pay to Landlord monthly installments of Base Rent for the 6350
Substitute Premises as follows:
Period During
Lease Term

Annualized
Base Rent
Monthly
Installment
of Base Rent
Monthly Base Rent
per Rentable
Square Foot
6350 Substitute Premises Commencement Date- January 31, 2015
$2,322,000.00
$193,500.00
$1.46
February 1, 2015 -
January 31, 2016
$2,864,160.00
$238,680.00
$1.80
February 1, 2016 -
January 31, 2017
$2,964,405.60
$247,033.80
$1.86
February 1, 2017 -
January 31, 2018
$3,068,159.80
$255,679.98
$1.93

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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February 1, 2018 -
January 31, 2019
$3,175,545.39
$264,628.78
$2.00
February 1, 2019 -
January 31, 2020
$3,286,689.48
$273,890.79
$2.07
February 1, 2020 -
January 31, 2021
$3,401,723.61
$283,476.97
$2.14
February 1, 2021 -
January 31, 2022
$3,520,783.94
$293,398.66
$2.21
* The amounts identified in the column entitled "Monthly Base Rent per Rentable
Square Foot" are rounded amounts provided for informational purposes only.

6.Tenant’s Share of Direct Expenses. Notwithstanding any provision to the
contrary contained in the Lease, as hereby amended, prior to the 6350 Substitute
Premises Commencement Date, Tenant shall continue to pay Direct Expenses for the
6290 Premises in accordance with the terms of Article 4 of the Office Lease.
Commencing on the 6350 Substitute Premises Commencement Date, and continuing
through the Lease Expiration Date, Tenant shall pay to Landlord Direct Expenses
for the 6350 Substitute Premises in accordance with the terms of Article 4 of
the Office Lease (i.e., on a "triple-net" basis); provided, however, Tenant's
Share shall be one hundred percent (100%) of the 6350 Building.
7.Improvements.
7.1In General. Except as specifically set forth in this Second Amendment and the
Work Letter attached hereto as Exhibit B (the "Work Letter"), Landlord shall not
be obligated to provide or pay for any improvement work or services related to
the improvement of the 6350 Substitute Premises, and Tenant shall accept the
6350 Substitute Premises in its presently existing, “as-is” condition. Tenant
also acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty regarding the condition of the 6350 Substitute
Premises, the 6350 Building or the Project or with respect to the suitability of
any of the foregoing for the conduct of Tenant's business, except as
specifically set forth in the Lease (as hereby amended) and the Work Letter.
Notwithstanding any provision to the contrary contained in the Lease (as hereby
amended), Landlord may, by written notice to Tenant given concurrently with
Landlord's approval of any "Improvements" (as that term is defined in
Section 2.1 of the Work Letter), require Tenant, at Tenant's expense, to remove
any Improvements prior to the expiration or earlier termination of the Lease
Term and to repair any damage to the 6350 Substitute Premises caused by such
removal. Notwithstanding any provision to the contrary contained herein,
Landlord and Tenant expressly acknowledge and agree that the provisions of the
Work Letter Agreement attached to the Office Lease as Exhibit B shall be
inapplicable with respect to the 6350 Substitute Premises, and that any and all
references to the Improvement Allowance set forth in the Office Lease shall be
inapplicable with respect to the 6350 Substitute Premises.

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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7.2Condition of 6350 Building. Notwithstanding any provision to the contrary set
forth in the Lease or this Second Amendment, Landlord shall, at Landlord's sole
cost and expense, deliver the 6350 Substitute Premises to Tenant with the roof,
and all Building Systems serving and within the 6350 Substitute Premises, in
good working condition, and Landlord covenants that (A) such Building Systems
located within the 6350 Building have recently been operated, (B) such Building
Systems located within the 6350 Building have been regularly serviced, and
(C) such Building Systems located within the 6350 Building and the 6350
Building's roof have a remaining useful life extending beyond the Extended Term
identified in this Second Amendment. If, within the first (1st) year following
Landlord's delivery of the 6350 Substitute Premises to Tenant, it is discovered
that Landlord failed to deliver the 6350 Substitute Premises in compliance with
the obligations listed in the immediately preceding sentence, then Landlord
shall, at its sole cost and expense and without reimbursement of any kind by
Tenant (but only to the extent it receives notice from Tenant within such one
(1) year period), make any repairs and/or replacements necessary to put the
Building Systems serving the 6350 Substitute Premises or the roof of the 6350
Building in the condition required by the immediately preceding sentence.
Without limiting any of the foregoing provisions, Landlord and Tenant
acknowledge and agree that Landlord shall be undertaking certain tests in the
6350 Substitute Premises to determine if any of the Building Systems located
within the 6350 Building are impacted by MIC (the "6350 Substitute Premises MIC
Tests"). Based on the results of the 6350 Substitute Premises MIC Tests,
Landlord shall perform any required corrective actions to remediate any MIC
found in the 6350 Substitute Premises prior to the 6350 Substitute Premises
Commencement Date; and further, in an effort to reduce the likelihood of any
future MIC issues, Landlord hereby agrees, at Landlord's sole cost and expense,
prior to its delivery of the 6350 Substitute Premises to the Tenant, to
(i) introduce a MIC inhibitor chemical into the Building Systems located in the
6350 Building, and (ii) establish a commercially reasonable testing mechanism
designed to detect future MIC issues in the Building Systems located in the 6350
Building; provided, however, the cost of any ongoing MIC prevention measures
undertaken by the Landlord (e.g., ongoing testing, monitoring and inspecting)
shall be chargeable to the Tenant as a component of the Operating Expenses
payable by the Tenant to the Landlord pursuant to the terms of the Lease. In
connection with Landlord's MIC prevention measures, Tenant hereby agrees to
notify Landlord prior to opening or modifying the sprinkler system located
within the Building. If Tenant opens or otherwise modifies such sprinkler
system, Tenant shall, at Tenant's sole cost and expense, be responsible for
re-filling the same with an acceptable MIC inhibitor chemical and restoring
Landlord's testing mechanism so that it functions as it did prior to Tenant
opening and/or modifying the sprinkler system.
7.36350 Building Applicable Laws.
7.3.1In General. Landlord covenants that as of the 6350 Substitute Premises
Commencement Date, the 6350 Substitute Premises and the parking areas serving
the 6350 Building, shall be in material compliance with all Applicable Laws in
effect as of the 6350 Substitute Premises Commencement Date (which Applicable
Laws shall include, without limitation, the Americans with Disabilities Act as
applied by local governmental entities to the Building). If, within the first
(1st) year following Landlord’s delivery of the 6350 Substitute Premises to
Tenant, it is discovered that Landlord failed to deliver the 6350 Substitute
Premises in material compliance with all Applicable Laws in effect as of the
6350 Substitute Premises Commencement Date as

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[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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required by the immediately preceding sentence, Landlord shall, at its sole cost
and expense and without reimbursement from Tenant of any kind, correct any
material deficiency in such condition promptly following receipt of written
notice thereof from Tenant within such one (1) year period if and to the extent
(A) each such compliance with Applicable Laws obligation is not required as a
result of the misconduct, breach, fault or negligence of Tenant or any of the
other Tenant Parties, (B) Landlord's failure to comply with such Applicable Laws
would prohibit Tenant from obtaining or maintaining a certificate of occupancy
for the 6350 Substitute Premises, or create a significant health hazard for
Tenant's employees, or would unreasonably and materially affect (x) the
operation of Tenant's business from the 6350 Substitute Premises, or (y) the
safety of Tenant's employees, and (C) is not the responsibility of Tenant under
the Lease (as amended); provided, however, to the extent compliance work is
undertaken by Landlord which is not required pursuant to the foregoing, the
costs incurred in connection therewith shall be subject to the Operating Expense
provisions of the Lease (i.e., such costs shall only be includable in Operating
Expenses and passed through to the Tenant to the extent permitted by the Lease).
Any such work by Landlord needed to bring the 6350 Substitute Premises and/or
the parking areas serving the 6350 Building into material compliance with all
Applicable Laws ("Landlord's Compliance Work") may be undertaken at the same
time Tenant constructs the Improvements in the 6350 Substitute Premises pursuant
to the provisions of the Work Letter, and Tenant shall promptly and diligently
cooperate and comply with Landlord’s construction schedule for such work.
7.3.2Landlord Compliance Work Delays. In the event that there are any actual
delays in the completion of the Improvements caused by the performance of the
Landlord's Compliance Work, then after (A) written notice to Landlord setting
forth with reasonable detail the existence and nature of such delay, and (B) the
expiration of a two (2) business day cure period following Landlord's receipt of
such notice without the remedy thereof, any such delay shall be deemed a
"Landlord Compliance Work Delay." Any actual Landlord Compliance Work Delay
under this Section 7.3.2 shall result in an extension of the 6350 Substitute
Premises Commencement Date by extending the outside 6350 Substitute Premises
Commencement Date of five (5) months from Landlord's delivery of the Premises to
Tenant by an equivalent number of days for such Landlord Compliance Work Delays.
Notwithstanding anything contained in this Section 7.3.2, in no event shall
Tenant be obligated to employ extraordinary efforts or incur extraordinary
expenses (e.g., overtime), to overcome any Landlord Compliance Work Delays.
8.Signage. Notwithstanding any provision to the contrary contained herein,
Section 23.4 of the Office Lease shall, as of the 6350 Substitute Premises
Commencement Date, be deleted and be of no further force or effect and shall be
replaced with the following:
"23.4    Tenant's Signage. Tenant shall, at Tenant's sole cost and expense, be
entitled to install the following signage in connection with Tenant's lease of
the 6350 Substitute Premises (collectively, the "Tenant's SignageTenant's
Signage"):
(i)
Exclusive 6350 Building-top signage consisting of one (1) building-top sign
(maximum size per building-top sign is 100 square feet pursuant to the signage
guidelines for the Project)

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6260 SEQUENCE DRIVE, SAN DIEGO
[Second Amendment/Substitute Premises Amendment]
[Entropic Communications, Inc.]

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identifying Tenant's name or logo located at the top of the 6350 Building (on
the east-facing elevation facing Sequence Drive) in one (1) location;
(ii)
Exclusive "eyebrow" signage located adjacent to the main entrance of the
Building located directly above either one or both of the entry points into the
6350 Building; and

(iii)
One (1) slot on the monument sign (which monument sign may be installed by
Tenant to serve the 6350 Building), in a design, and with materials and other
reasonable parameters to be approved by Landlord and Tenant in accordance with
the TCCs of Section 23.4.1, below (the "Tenant's Monument Signage"). Tenant
hereby acknowledges and agrees that Landlord may, at Landlord's sole cost and
expense, place a standard "owned and managed" sign on such 6350 Building
Monument Sign, provided that such "owned and managed" sign shall not be larger
than Tenant's signage."

The remaining provisions of Article 23 shall apply to Tenant's Signage as the
same has been defined in this Section 8. For clarification purposes, Landlord
and Tenant hereby expressly acknowledge and agree that Tenant shall, as of the
6350 Substitute Premises Commencement Date, have no signage rights with respect
to the 6290 Building.
9.Parking. Section 9 of the Summary attached to the Office Lease shall be
deleted as of the 6350 Substitute Premises Commencement Date. In addition,
Article 28 of the Office Lease shall, as of the 6350 Substitute Premises
Commencement Date, be deleted in its entirety and replaced with the following:
"28.1    In General. Tenant shall be entitled to utilize, without charge,
commencing on the "6350 Substitute Premises Commencement Date" (as that term is
defined in Section 2.1 of that certain Second Amendment dated October 16, 2013
(the "Second Amendment")), all of the parking spaces located in the area
identified on Exhibit A attached to the Second Amendment as the "6350 Building
Parking Area", which shall not be less than 3.6 spaces per rentable square foot
of the Substitute Premises. Notwithstanding the foregoing, Tenant shall be
responsible for the full amount of any taxes imposed by any governmental
authority in connection with the renting of such parking spaces by Tenant or the
use of the 6350 Building Parking Area by Tenant. Tenant's continued right to use
the 6350 Building Parking Area is conditioned upon (i) Tenant abiding by all
rules and regulations which are prescribed from time to time for the orderly
operation and use of the 6350 Building Parking Area, including any sticker or
other identification system established by Landlord, and (ii) Tenant's exercise
of commercially reasonable efforts to cause that

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Tenant's employees and visitors also comply with such rules and regulations. To
the extent reasonably necessary to ensure Tenant's parking rights hereunder are
readily available to Tenant and its employees, Landlord shall establish a
sticker or other identification system for the Project. Landlord specifically
reserves the right to change the size, configuration, design, layout and all
other aspects of the Project parking facility at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to
Tenant and without any abatement of Rent under this Lease, from time to time,
temporarily close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements; provided, however, Landlord will provide Tenant with reasonable
substitute parking in such event to the extent reasonably necessary.
Notwithstanding the foregoing, except as may be required in order to comply with
Applicable Laws or the requirements of a governmental authority (including, a
court having jurisdiction over the Project) or otherwise in connection with
construction, alterations or improvements pertaining to the 6350 Building
Parking Area (as more particularly contemplated by Article 28 of the Lease),
Landlord shall not reduce the 6350 Building Parking Area such that it is smaller
than that identified on Exhibit A attached to the Second Amendment or otherwise
relocate portions of the 6350 Building Parking Area to be used at an offsite
location. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control attributed hereby to the Landlord. The parking spaces rented by Tenant
in the 6350 Building Parking Area pursuant to this Section 28.1 are provided to
Tenant solely for use by Tenant's own personnel, employees, agents, contractors
or invitees and such spaces may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord's prior approval except in
connection with an assignment or sublease approved by Landlord or otherwise
permitted pursuant to the terms of the Lease."
For clarification purposes, Landlord and Tenant hereby expressly acknowledge and
agree that Tenant shall, as of the 6350 Substitute Premises Commencement Date,
have no parking rights with respect to the 6290 Building (including, but not
limited to, with respect to any or all of the 6290 Building parking facilities);
provided, however, to the extent Tenant continues to occupy the 6290 Building
during the Initial 60-Day Permitted Holdover Period (as more particularly
contemplated by Section 3.2.1 of this Second Amendment) and the Subsequent
30-Day Permitted Holdover Period (as more particularly contemplated by Section
3.2.2 of this Second Amendment), Tenant's parking rights with respect to the
6290 Building shall terminate and be of no further force or effect as of the
expiration of the Initial 60-Day Permitted Holdover Period or the Subsequent
30-Day Permitted Holdover Period (as the case may be).

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10.Security Deposit. Notwithstanding any provision to the contrary contained in
the Lease, the Security Deposit held by Landlord pursuant to the Lease, as
amended hereby, shall equal Two Hundred Ninety-Three Thousand Three Hundred
Ninety-Eight and 66/100 Dollars ($293,398.66). Landlord and Tenant acknowledge
that, in accordance with Article 21 of the Lease, Tenant has previously
delivered the sum of One Hundred Ninety-Three Thousand Five Hundred and 00/100
Dollars ($193,500.00) (the "Existing Security Deposit") to Landlord as security
for the faithful performance by Tenant of the terms, covenants and conditions of
the Lease. Concurrently with Tenant's execution of this Second Amendment, Tenant
shall deposit with Landlord an amount equal to Ninety-Nine Thousand Eight
Hundred Ninety-Eight and 66/100 Dollars ($99,898.66) to be held by Landlord as a
part of the Security Deposit. To the extent that the total amount held by
Landlord at any time as security for the Lease, as hereby amended, is less than
Two Hundred Ninety-Three Thousand Three Hundred Ninety-Eight and 66/100 Dollars
($293,398.66), Tenant shall pay the difference to Landlord within ten (10) days
following Tenant's receipt of notice thereof from Landlord.
11.Brokers. Landlord and Tenant hereby warrant to each other that they have had
no dealings with any real estate broker or agent in connection with the
negotiation of this Second Amendment other than Hughes Marino (the "Broker"),
and that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Second Amendment. Each party agrees to
indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments,
costs and expenses (including without limitation reasonable attorneys' fees)
with respect to any leasing commission or equivalent compensation alleged to be
owing on account of any dealings with any real estate broker or agent, other
than the Broker, occurring by, through, or under the indemnifying party. The
terms of this Section 11 shall survive the expiration or earlier termination of
the term of the Lease, as hereby amended.
12.Notices. Notwithstanding anything to the contrary contained in the Lease, as
of the date of this Second Amendment, any Notices to Landlord or Tenant must be
sent, transmitted, or delivered, as the case may be, to the following addresses:
If to Landlord:
Kilroy Realty, L.P.
c/o Kilroy Realty Corporation
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
 
 
Attention: Legal Department
 
 
 
 
 
with copies to:
 
 
 
 
 
Kilroy Realty Corporation
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
Attention: Mr. John Fucci
 
 
 
 
 
 
 
 
 
 

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and

 
 
Kilroy Realty Corporation
3611 Valley Centre Drive, Suite 550
San Diego, California 92130
Attention: Mr. Brian Galligan
 
 
 
 
 
and
 
 
 
 
 
Allen Matkins Leck Gamble Mallory & Natsis LLP
1901 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention: Anton N. Natsis, Esq.
 
 
 
 
if to Tenant:
Entropic Communications, Inc.
6290 Sequence Drive
San Diego, CA 92121
Attention: Mr. Trevor Renfield(Prior to 6350 Substitute Premises Commencement
Date)
with copies to:

Entropic Communications, Inc.
6290 Sequence Drive
San Diego, CA 92121
Attention: General Counsel(Prior to 6350 Substitute Premises Commencement Date)
 
 
 
 
 
Entropic Communications, Inc.
6350 Sequence Drive
San Diego, CA 92121
Attention: Mr. Trevor Renfield(After 6350 Substitute Premises Commencement Date)

with copies to:
Entropic Communications, Inc.
6350 Sequence Drive
San Diego, CA 92121
Attention: General Counsel(After 6350 Substitute Premises Commencement Date)
 

13.Effectiveness of this Second Amendment. Landlord and Tenant hereby
acknowledge that the 6350 Substitute Premises is currently occupied by a third
party tenant (the "Existing Tenant") pursuant to an existing lease (the
"Existing Lease") between Landlord and such Existing Tenant. Consequently,
Tenant expressly acknowledges and agrees that

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notwithstanding the full execution and delivery of this Second Amendment between
Landlord and Tenant, this Second Amendment is expressly conditioned upon the
termination of the Existing Lease. The termination of the Existing Lease is
scheduled to occur on February 28, 2014 (the "Scheduled Existing Lease
Expiration Date"). Once the Scheduled Existing Lease Expiration Date has
occurred, Landlord shall, to the extent the Existing Tenant has not vacated the
6350 Substitute Premises following such Scheduled Existing Lease Expiration
Date, use its best, commercially reasonable efforts (including promptly filing
an unlawful detainer action) to cause the Existing Tenant to vacate the 6350
Substitute Premises as soon as possible. Notwithstanding any provision to the
contrary contained herein, the parties hereto expressly acknowledge and agree
that the Landlord shall have no liability whatsoever to Tenant relating to or
arising from Landlord’s delay in delivering the 6350 Substitute Premises to
Tenant unless Landlord breaches its obligation to use its best, commercially
reasonable efforts (including promptly filing an unlawful detainer action) to
cause the Existing Tenant to vacate the 6350 Substitute Premises as soon as
possible following the Scheduled Existing Lease Expiration Date; provided that
if Landlord shall have failed to deliver the Substitute Premises to Tenant by
May 1, 2014, Tenant shall have the right to elect not to lease the Substitute
Premises, such election to be made by written notice to Landlord no later than
May 2, 2014 and if Tenant exercises such right, then this Second Amendment and
the 6260 Second Amendment shall be of no further force or effect, and the Lease,
as amended by the First Amendment, shall continue in full force and effect in
accordance with its terms.
14.Water Sensors. Effective as of the date of this Second Amendment and
pertaining to the 6350 Substitute Premises only (as opposed to the 6290
Premises), the following Section 29.35 is added at the end of Section 29.34 of
the Office Lease:
"29.35    Water Sensors. Tenant shall, at Tenant's sole cost and expense (except
as expressly described in Section 2.4 of the Work Letter attached as Exhibit B
to the Second Amendment), be responsible for promptly installing web-enabled
wireless water leak sensor devices designed to alert the Tenant on a twenty-four
(24) hour seven (7) day per week basis if a water leak is occurring in the
Premises (which water sensor device(s) located in the Premises shall be referred
to herein as "Water SensorsWater Sensors"). The Water Sensors shall be installed
in any areas in the Premises where water is utilized (such as sinks, pipes,
faucets, water heaters, coffee machines, ice machines, water dispensers and
water fountains), and in locations that may be designated from time to time by
Landlord (the "Sensor AreasSensor Areas"). In connection with any Alterations
affecting or relating to any Sensor Areas, Landlord may require Water Sensors to
be installed or updated in Landlord's sole and absolute discretion. With respect
to the installation of any such Water Sensors, Tenant shall obtain Landlord's
prior written consent, use an experienced and qualified contractor reasonably
designated by Landlord, and comply with all of the other provisions of Article 8
of this Lease. Tenant shall, at Tenant's sole cost and expense, pursuant to
Article 7 of this Lease keep any Water Sensors located in the Premises (whether
installed by Tenant or someone else) in good working order, repair and condition
at all times during the Lease Term and comply with all of the other provisions
of Article 7 of this Lease. Notwithstanding any provision to the contrary
contained herein, Landlord has neither an obligation to monitor, repair or
otherwise maintain the Water

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Sensors, nor an obligation to respond to any alerts it may receive from the
Water Sensors or which may be generated from the Water Sensors. Upon the
expiration of the Lease Term, or immediately following any earlier termination
of this Lease, Landlord reserves the right to require Tenant, at Tenant's sole
cost and expense, to remove all Water Sensors installed by Tenant, and repair
any damage caused by such removal; provided, however, if the Landlord does not
require the Tenant to remove the Water Sensors as contemplated by the foregoing,
then Tenant shall leave the Water Sensors in place together with all necessary
user information such that the same may be used by a future occupant of the
Premises (e.g., the water sensors shall be unblocked and ready for use by a
third-party). If Tenant is required to remove the Water Sensors pursuant to the
foregoing and Tenant fails to complete such removal and/or fails to repair any
damage caused by the removal of any Water Sensors, Landlord may do so and may
charge the reasonable cost thereof to Tenant."
15.No Further Modification. Except as set forth in this Second Amendment, all of
the terms and provisions of the Lease shall apply with respect to the 6350
Substitute Premises and shall remain unmodified and in full force and effect.
[Signatures follow on next page]

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IN WITNESS WHEREOF, this Second Amendment has been executed as of the day and
year first above written.
“LANDLORD”
“TENANT”
KILROY REALTY, L.P.,
a Delaware limited partnership
ENTROPIC COMMUNICATIONS, INC.
a Delaware corporation
By:

KILROY REALTY CORPORATION,
a Maryland corporation,
general partner
 
By:
/s/ Patrick C. Henry
 
By:
/s/ Brian Galligan
 
 
Name:
Patrick C. Henry
 
 
Name:
Brian Galligan
 
 
Its:
CEO
 
 
Its:
SVP
 
By:
/s/ David Lyle
 
By:
/s/ Jeffrey C. Hawken
 
 
Name:
David Lyle
 
 
Name:
Jeffrey C. Hawken
 
 
Its:
CFO
 
 
Its:
Executive Vice President
Chief Operating Officer
 
 
 
 

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EXHIBIT A
6350 SEQUENCE DRIVE, SAN DIEGO
OUTLINE OF 6350 SUBSTITUTE PREMISES AND 6350 BUILDING PARKING AREA
[leaseparking.jpg]

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EXHIBIT B
6350 SEQUENCE DRIVE, SAN DIEGO
WORK LETTER
This Work Letter shall set forth the terms and conditions relating to the
construction of the improvements in the 6350 Substitute Premises, which shall be
referred to in this Work Letter as the "Premises." This Work Letter is
essentially organized chronologically and addresses the issues of the
construction of the improvements in the Premises desired by Tenant, in sequence,
as such issues will arise during the actual construction thereof. All references
in this Work Letter to Articles or Sections of "this Amendment" shall mean the
relevant portion of Sections 1 through 15 of the Second Amendment to which this
Work Letter is attached as Exhibit B and of which this Work Letter forms a part,
all references in this Work Letter to Articles or Sections of "this Lease" shall
mean the relevant portions of Articles 1 through 29 of the Lease being amended
by this Amendment, and all references in this Work Letter to Sections of "this
Work Letter" shall mean the relevant portions of Sections 1 through 5 of this
Work Letter.
SECTION 1
DELIVERY OF THE PREMISES AND BASE BUILDING
Promptly following the termination of the Existing Lease and Existing Tenant's
surrender of the Premises to Landlord, Landlord shall deliver the 6350 Building
to Tenant, and Tenant shall, except as expressly set forth in this Amendment,
accept the 6350 Building from Landlord in its presently existing, "as-is"
condition.
SECTION 2
IMPROVEMENTS
2.1    Improvement Allowance. Tenant shall be entitled to a one-time improvement
allowance (the "Improvement Allowance") in the amount of Four Million Six
Hundred Thousand Forty-One and 00/100 Dollars ($4,641,000) (i.e., $35.00 per
rentable square foot of the Premises) for the costs relating to the initial
design and construction of the improvements desired by Tenant or otherwise
necessitated thereby, which are permanently affixed to the Premises (the
"Improvements"). In no event shall Landlord be obligated to make disbursements
pursuant to this Work Letter in the event that Tenant fails to timely pay any
portion of the "Over-Allowance Amount," as that term is defined in, and within
the time frames more particularly set forth in, Section 4.2.1, nor shall
Landlord be obligated to pay a total amount which exceeds the Improvement
Allowance. Notwithstanding the foregoing or any contrary provision of this
Lease, all Improvements shall be deemed Landlord's property under the terms of
this Lease. Any unused portion of the Improvement Allowance remaining as of July
1, 2015 (the "Improvement Allowance Sunset Date"), shall remain with Landlord
and Tenant shall have no further right thereto; provided, however, such
Improvement Allowance Sunset date shall be extended on a day -for-day basis for
each day of any "Landlord Delay" (as that term is defined in Section 5.5 below).

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2.2    Disbursement of the Improvement Allowance.
2.2.1    Improvement Allowance Items. Except as otherwise set forth in this Work
Letter, the Improvement Allowance shall be disbursed by Landlord (each of which
disbursements shall be made pursuant to Landlord's disbursement process,
including, without limitation, Landlord's receipt of invoices for all costs and
fees described herein) only for the following items and costs (collectively the
"Improvement Allowance Items"):
2.2.1.1      Payment of the fees of the "Architect" and the "Engineers," as
those terms are defined in Section 3.1 of this Work Letter, which fees shall,
notwithstanding anything to the contrary contained in this Work Letter, not
exceed an aggregate amount equal to Two and 50/100 Dollars ($2.50) per rentable
square foot of the Premises, and payment of the third-party fees actually and
reasonably incurred (the reasonableness of which shall be determined in light of
the nature of particular Construction Drawings being submitted by Landlord to
its consultants for review) by Landlord in connection with the preparation and
review of the "Construction Drawings," as that term is defined in Section 3.1 of
this Work Letter;
2.2.1.2      The payment of plan check, permit and license fees relating to
construction of the Improvements;
2.2.1.3      The cost of construction of the Improvements, including, without
limitation, testing and inspection costs and costs of utilities. In no event
shall Tenant or its contractor be charged for parking, access, freight elevator
use or similar items in connection with the Improvements;
2.2.1.4      The cost of any changes in the Base Building when such changes are
required by the Construction Drawings, such cost to include all direct
architectural and/or engineering fees and expenses incurred in connection
therewith;
2.2.1.5      The cost of any changes to the Construction Drawings or
Improvements required by all applicable building codes (the "Code");
2.2.1.6      The cost of the "Coordination Fee," as that term is defined in
Section 4.2.2.1 of this Work Letter;
2.2.1.7      Sales and use taxes;
2.2.1.8      The cost of space plans and constructions drawings for the 6260
Substitute Premises; and
2.2.1.9      The actual cost of installing telephone and data cabling, and
moving costs; provided, however, in no event shall more than a portion of the
Improvement Allowance equal to Five and 00/100 Dollar ($5.00) per rentable
square foot of the Premises be allocated to, and reimbursed against, the
Improvement Allowance Items set forth in this Section 2.2.1.8.

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2.2.2    Disbursement of Improvement Allowance. During the construction of the
Improvements, Landlord shall make monthly disbursements of the Improvement
Allowance for Improvement Allowance Items and shall authorize the release of
monies as follows.
2.2.2.1      Monthly Disbursements. On or before the twentieth (20th) day of
each calendar month during the construction of the Improvements (or such other
date as Landlord may designate), Tenant shall deliver to Landlord: (i) a request
for payment of the "Contractor," as that term is defined in Section 4.1.1 of
this Work Letter, approved by Tenant, in a form to be provided by Landlord,
showing the schedule, by trade, of percentage of completion of the Improvements
in the Premises, detailing the portion of the work completed and the portion not
completed; (ii) invoices from all of "Tenant's Agents," as that term is defined
in Section 4.1.2 of this Work Letter, for labor rendered and materials delivered
to the Premises; (iii) executed mechanic's lien releases from all of Tenant's
Agents which shall comply with the appropriate provisions, as reasonably
determined by Landlord, of California Civil Code Sections 8132, 8134, 8136 and
8138; and (iv) all other information reasonably requested by Landlord. Tenant's
request for payment shall constitute, to Tenant's then-existing actual
knowledge, Tenant's acceptance and approval of the work furnished and/or the
materials supplied as set forth in Tenant's payment request; provided, however,
the parties acknowledge that in no event shall the Contractor be a third-party
beneficiary with regard to any such acceptance and approval under this sentence.
Thereafter, Landlord shall deliver a check to Tenant made jointly payable to
Contractor and Tenant (or solely to Tenant to the extent Tenant has previously
paid in full to Contractor the amounts corresponding to such request for
payment) in payment of the lesser of: (A) "Landlord's Ratio," as that term is
set forth below, of the amounts so requested by Tenant, as set forth in this
Section 2.2.2.1, above, less a ten percent (10%) retention (the aggregate amount
of such retentions to be known as the "Final Retention"), and (B) the balance of
any remaining available portion of the Improvement Allowance (not including the
Final Retention), provided that Landlord does not dispute any request for
payment based on non-compliance of any work with the "Approved Working
Drawings," as that term is defined in Section 3.4 below, or due to any
substandard work, or for any other reasonably substantiated reason, it being
hereby acknowledged that Tenant shall pay "Tenant's Ratio," as that term is set
forth below, of the corresponding amounts so requested by Tenant, less a similar
ten (10%) retention. Landlord's payment of such amounts shall not be deemed
Landlord's approval or acceptance of the work furnished or materials supplied as
set forth in Tenant's payment request.
2.2.2.2      Final Retention. Subject to the provisions of this Work Letter, a
check for the Final Retention payable jointly to Tenant and Contractor shall be
delivered by Landlord to Tenant following the substantial completion of
construction of the Improvements, provided that (i) Tenant delivers to Landlord
properly executed mechanic's lien releases in compliance with both California
Civil Code Section 8134 and either Section 8136 or Section 8138 from all of
Tenant's Agents, (ii) Landlord has determined that no substandard work exists
which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the 6350
Building, the curtain wall of the 6350 Building, the structure or exterior
appearance of the 6350 Building, (iii) Architect delivers to Landlord a
certificate, in a form reasonably acceptable to Landlord, certifying that the
construction of the Improvements in the Premises has been substantially
completed, (iv) Tenant records a valid Notice of Completion in accordance with
the requirements of Section 4.3 of this Work Letter, (v) Tenant delivers to
Landlord

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a "close-out package" in both paper and electronic forms (including, as-built
drawings, and final record CADD files for the associated plans, warranties and
guarantees from all contractors, subcontractors and material suppliers, and an
independent air balance report), and (vi) a certificate of occupancy (or its
equivalent) has been issued for the Premises. Upon substantial completion of the
Improvements, and in conjunction with the Final Retention and disbursement
thereof, as set forth in this Section 2.2.2.2, above, Tenant shall perform a
final costs analysis to determine the actual "Final Costs" of the Improvements
so constructed. Thereafter, Tenant shall submit such analysis to Landlord for
Landlord's verification and approval. In the event it is determined that there
remains any unpaid portion of the Improvement Allowance (in addition to the
Final Retention), Tenant shall submit to Landlord an invoice for such amount
(which excess shall in no event exceed the amount paid by Tenant as an
Over-Allowance Amount or supplement thereto) and Landlord shall promptly pay
such unpaid portion of the Improvement Allowance to Tenant (but only to the
extent otherwise reimbursable hereunder for Improvement Allowance Items).
2.2.2.3      Other Terms. Landlord shall only be obligated to make disbursements
from the Improvement Allowance to the extent costs are incurred by Tenant for
Improvement Allowance Items. All Improvement Allowance Items for which the
Improvement Allowance has been made available shall be deemed Landlord's
property under the terms of this Lease, as amended.
2.3    Building Standards. Landlord has established or may establish
specifications for certain 6350 Building standard components to be used in the
construction of the Improvements in the Premises. The quality of Improvements
shall be equal to or of greater quality than the quality of such 6350 Building
standards. Removal requirements regarding the Improvements are addressed in
Article 8 of this Lease and Section 2.4 below.
2.4    Water Sensors. In connection with the construction of the Improvements
pursuant to the terms of this Work Letter, Tenant shall, at Tenant's sole cost
and expense (which may be deducted from the Improvement Allowance in accordance
with the provisions of Section 2.2 of this Work Letter), install Water Sensors
(as more particularly contemplated by the terms of Section 29.35 of this Lease).
The Water Sensors so installed by Tenant shall be subject to the terms and
conditions set forth in Section 29.35 of this Lease.
SECTION 3
CONSTRUCTION DRAWINGS
3.1    Selection of Architect/Construction Drawings. Subject to Landlord's
approval, which approval shall not be unreasonably withheld, delayed, or
conditioned, Tenant shall select and retain an architect/space planner (the
"Architect") to prepare the "Construction Drawings," as that term is defined in
this Section 3.1; provided, however, Landlord herby pre-approves idstudios, Inc.
as space planner. Tenant shall retain engineering consultants reasonably
approved by Landlord (the "Engineers") to prepare all plans and engineering
working drawings relating to the structural, mechanical, electrical, plumbing,
HVAC, lifesafety, and sprinkler work in the Premises. The plans and drawings to
be prepared by Architect and the Engineers hereunder shall be known collectively
as the "Construction Drawings." All Construction Drawings shall comply with the
drawing format

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and specifications determined by Landlord, and shall be subject to Landlord's
approval; provided, however, Landlord shall only disapprove any such
Construction Drawing to the extent of a "Design Problem," as that term is
defined below. Landlord expressed no objection to its former tenant's delivery
of a copy of certain "as-built" drawings of the 6350 Building to Tenant.
Landlord makes no representation as to the accuracy of any "as built" drawings
pertaining to the 6350 Building. Landlord's review of the Construction Drawings
as set forth in this Section 3, shall be for its sole purpose and shall not
imply Landlord's review of the same, or obligate Landlord to review the same,
for quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings. A "Design Problem" is defined as, and shall be deemed to
exist if there could be (i) an effect on the exterior appearance of the 6350
Building, (ii) a material, adverse affect on the Base Building portions of the
Premises or 6350 Building (including without limitation the Building Structure
located in the 6350 Building), (iii) a material adverse affect on the Building
Systems located in the 6350 Building or the operation and maintenance thereof,
or (iv) any failure to comply with Applicable Laws (other than pre-existing
failures to so comply to the extent the same are Landlord's obligations pursuant
to the express terms and conditions of the Second Amendment). Notwithstanding
anything to the contrary contained herein, Landlord acknowledges that Tenant’s
security systems are fundamental to its business operations in the Premises, and
Landlord shall reasonably cooperate with Tenant, at no material extra cost to
Landlord, to permit such security systems to be installed in the Premises in
accordance with Tenant’s reasonable security requirements.
3.2    Final Space Plan. Tenant shall supply Landlord with four (4) hard copies
signed by Tenant of its final space plan, along with other renderings or
illustrations reasonably required by Landlord, to allow Landlord to understand
Tenant's design intent, for the Premises before any architectural working
drawings or engineering drawings have been commenced, and concurrently with
Tenant's delivery of such hard copies, Tenant shall send to Landlord via
electronic mail one (1) .pdf electronic copy of such final space plan. The final
space plan (the "Final Space Plan") shall include a layout and designation of
all offices, rooms and other partitioning, their intended use, and equipment to
be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business days after Landlord's receipt of
the Final Space Plan for the Premises if the same is unsatisfactory or
incomplete in any respect; provided, however, Landlord shall only disapprove
such Final Space Plans to the extent of a Design Problem. Landlord shall set
forth with reasonable specificity in what respect the Final Space Plan is
unsatisfactory or incomplete (based upon a commercially reasonable standard). If
Tenant is so advised, Tenant shall promptly cause the Final Space Plan to be
revised to correct any deficiencies or other matters Landlord may reasonably
require, and immediately thereafter Architect shall promptly re-submit the Final
Space Plan to Landlord for its approval. Such procedure shall continue (except
that the time frame to consent to any revisions shall be shortened to three (3)
business days) until the Final Space Plan is approved by Landlord. If Landlord
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applicable time period set forth above, Tenant shall have the right to send a
"reminder notice" to Landlord, which conspicuously indicates that Landlord's
continued failure to respond may result in the deemed approval of the Final
Space Plan most recently delivered to Landlord (which notice shall be delivered
to Landlord pursuant to the terms of the Lease, shall clearly state the
following in bold: "LANDLORD'S FAILURE TO RESPOND WITHIN THREE (3) BUSINESS DAYS
SHALL RESULT IN THE DEEMED APPROVAL OF THE FINAL SPACE PLAN," and shall also be
sent via electronic mail to the Landlord's representative set forth in Section
5.2 below). If Landlord fails to respond to Tenant regarding the Final Space
Plan within three (3) business days after its receipt of the reminder notice
identified in the preceding sentence, then the Final Space Plan shall be deemed
to have been approved by Landlord; provided, however, in no event shall such
"deemed approval" occur to the extent the parties are in discussions regarding
the nature of the Final Space Plan, the details contained therein or the
specifications pertaining thereto.
3.3    Final Working Drawings. After the Final Space Plan has been approved by
Landlord, Tenant shall supply the Engineers with a complete listing of standard
and non-standard equipment and specifications, including, without limitation,
B.T.U. calculations, electrical requirements and special electrical receptacle
requirements for the Premises, to enable the Engineers and the Architect to
complete the "Final Working Drawings" (as that term is defined below) in the
manner as set forth below. Upon the approval of the Final Space Plan by Landlord
and Tenant, Tenant shall promptly cause the Architect and the Engineers to
complete the architectural and engineering drawings for the Premises, and
Architect shall compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is complete
to allow subcontractors to bid on the work and to obtain all applicable permits
(collectively, the "Final Working Drawings") and shall submit the same to
Landlord for Landlord's approval. Tenant shall supply Landlord with four (4)
hard copies signed by Tenant of the Final Working Drawings, and concurrently
with Tenant's delivery of such hard copies, Tenant shall send to Landlord via
electronic mail one (1) .pdf electronic copy of such Final Working Drawings.
Landlord shall advise Tenant within five (5) business days after Landlord's
receipt of all of the Final Working Drawings, either (i) approve the Final
Working Drawings, (ii) approve the Final Working Drawings subject to specified
conditions, which conditions must be stated in a reasonably clear and complete
manner, and shall only be conditions reasonably intended to address a potential
Design Problem, or (iii) disapprove and return the Construction Drawings to
Tenant with requested revisions; provided, however, Landlord shall only
disapprove such Final Working Drawings to the extent of a Design Problem. If
Landlord disapproves the Final Working Drawings, Tenant may resubmit the Final
Working Drawings to Landlord at any time, and Landlord shall approve or
disapprove the resubmitted Final Working Drawings, based upon the criteria set
forth in this Section 3.3, within three (3) business days after Landlord
receives such resubmitted Final Working Drawings. Such procedure shall be
repeated until the Final Working Drawings are approved. If Landlord has not
timely approved the Final Working Drawings within the applicable time period set
forth above, Tenant shall have the right to send a "reminder notice" to
Landlord, which conspicuously indicates that Landlord's continued failure to
respond may result in the deemed approval of the Final Working Drawings most
recently delivered to Landlord (which notice shall be delivered to Landlord
pursuant to the terms of the Lease, shall clearly state the following in bold:
"LANDLORD'S FAILURE TO RESPOND WITHIN THREE (3) BUSINESS DAYS SHALL RESULT IN
THE DEEMED APPROVAL OF THE FINAL WORKING DRAWINGS," and shall also be sent via
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mail to the Landlord's representative set forth in Section 5.2 below). If
Landlord fails to respond to Tenant regarding the Final Working Drawings within
three (3) business days after its receipt of the reminder notice identified in
the preceding sentence, then the Final Working Drawings shall be deemed to have
been approved by Landlord; provided, however, in no event shall such "deemed
approval" occur to the extent the parties are in discussions regarding the
nature of the Final Working Drawings, the details contained therein or the
specifications pertaining thereto.
3.4    Approved Working Drawings. The Final Working Drawings shall be approved
by Landlord (the "Approved Working Drawings") prior to the commencement of
construction of the Premises by Tenant. After approval by Landlord of the Final
Working Drawings, Tenant may submit the same to the appropriate municipal
authorities for all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord's consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld,
conditioned or delayed.
3.5    Electronic Approvals. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter, Landlord may, in Landlord's sole and
absolute discretion, transmit or otherwise deliver any of the approvals required
under this Work Letter via electronic mail to Tenant's representative identified
in Section 5.1 of this Work Letter, or by any of the other means identified in
Section 29.18 of this Lease.
SECTION 4
CONSTRUCTION OF THE IMPROVEMENTS
4.1    Tenant's Selection of Contractors.
4.1.1    The Contractor. A general contractor shall be retained by Tenant to
construct the Improvements. Such general contractor ("Contractor") shall be
selected by Tenant from a list of experienced and reputable general contractors
mutually and reasonably agreed upon by Landlord, and Tenant shall deliver to
Landlord notice of its selection of the Contractor upon such selection;
provided, however, the Contractor shall be qualified and experienced in
first-class office/electronic lab build-outs in San Diego County.
4.1.2    Tenant's Agents. All subcontractors, laborers, materialmen, and
suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed and which approval shall, if withheld or
conditioned with regard to any such Tenant's Agents, be made within two (2)
business days following Landlord's receipt of the corresponding request for such
approval from Tenant. If Landlord does not approve any of Tenant's proposed
subcontractors, laborers, materialmen or suppliers, Tenant shall submit other
proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written

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approval. If Landlord has not timely approved any of Tenant's Agents within the
applicable time period set forth above, Tenant shall have the right to send a
"reminder notice" to Landlord, which conspicuously indicates that Landlord's
continued failure to respond may result in the deemed approval of the particular
Tenant's Agents (which notice shall be delivered to Landlord pursuant to the
terms of the Lease, shall clearly state the following in bold: "LANDLORD'S
FAILURE TO RESPOND WITHIN THREE (3) BUSINESS DAYS SHALL RESULT IN THE DEEMED
APPROVAL OF THE TENANT'S AGENTS," and shall also be sent via electronic mail to
the Landlord's representative set forth in Section 5.2 below). If Landlord fails
to respond to Tenant regarding the particular Tenant's Agents within three (3)
business days after its receipt of the reminder notice identified in the
preceding sentence, then those Tenant's Agents expressly identified in the
reminder notice shall be deemed to have been approved by Landlord; provided,
however, in no event shall such "deemed approval" occur to the extent the
parties are in discussions regarding the Tenant's Agents or Landlord has
requested information regarding the Tenant's Agents which has not yet been
provided.
4.2    Construction of Improvements by Tenant's Agents.
4.2.1    Construction Contract; Cost Budget.
4.2.1.1    Construction Contract. Tenant shall engage the Contractor pursuant to
a mutually approved contract form (collectively, the "Contract"). Landlord shall
advise Tenant within five (5) business days after Landlord's receipt of the
final form of the Contract, that it is either (i) approving the Contract, (ii)
approving the Contract subject to specified conditions, which conditions must be
stated in a reasonably clear and complete manner, or (iii) disapproving and
returning the Contract to Tenant with requested revisions. If Landlord
disapproves the Contract, Tenant may resubmit the Contract to Landlord at any
time, and Landlord shall approve or disapprove the resubmitted Contract within
three (3) business days after Landlord receives such resubmitted Contract. Such
procedure shall be repeated until the Contract is approved. If Landlord has not
timely approved the Contract within the applicable time period set forth above,
Tenant shall have the right to send a "reminder notice" to Landlord, which
conspicuously indicates that Landlord's continued failure to respond may result
in the deemed approval of the Contract most recently delivered to Landlord
(which notice shall be delivered to Landlord pursuant to the terms of the Lease,
shall clearly state the following in bold: "LANDLORD'S FAILURE TO RESPOND WITHIN
THREE (3) BUSINESS DAYS SHALL RESULT IN THE DEEMED APPROVAL OF THE CONTRACT,"
and shall also be sent via electronic mail to the Landlord's representative set
forth in Section 5.2 below). If Landlord fails to respond to Tenant regarding
the Contract within three (3) business days after its receipt of the reminder
notice identified in the preceding sentence, then the Contract shall be deemed
to have been approved by Landlord; provided, however, in no event shall such
"deemed approval" occur to the extent the parties are in discussions regarding
the Contract, the provisions thereof or the details contained therein.
4.2.1.2    Cost Budget. Prior to the commencement of the construction of the
Improvements, and after Tenant has accepted all bids for the Improvements,
Tenant shall provide Landlord with a detailed breakdown, by trade, of the final
costs to be incurred or which have been incurred, as set forth more particularly
in Sections 2.2.1.1 through 2.2.1.8, above, in connection

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with the design and construction of the Improvements to be performed by or at
the direction of Tenant or the Contractor, which costs form a basis for the
amount of the Contract (the "Final Costs"). Prior to the commencement of
construction of the Improvements, Tenant shall determine the amount (the
"Over-Allowance Amount") by which the Final Costs exceed the Improvement
Allowance. Tenant will also determine the ratio of the Over-Allowance Amount to
the Final Costs (e.g., if the Over-Allowance Amount were to be One Million One
Hundred Seventy-Four Thousand Eight Hundred Twenty-Four and 00/100 Dollars
($1,174,824.00), the ratio would be sixteen point six percent (16.6%)
Over-Allowance Amount and eighty-three point four percent (83.4%) Improvement
Allowance). The ratio applicable to the Over-Allowance Amount may be referred to
herein as "Tenant's Ratio") and the ratio applicable to the Improvement
Allowance may be referred to herein as "Landlord's Ratio." Tenant's
determination of the Over-Allowance Amount, Tenant's Ratio and Landlord's Ratio
are subject to Landlord's reasonable approval. Tenant shall pay Tenant's Ratio
of the amounts due to the Contractor at the same time Landlord makes its monthly
disbursement of the Landlord's Ratio of the amounts due to the Contractor in
accordance with Section 2.2 above. In the event that, after the Final Costs have
been delivered by Tenant to Landlord, the costs relating to the design and
construction of the Improvements shall increase in a way that results in the
Final Costs being in excess of the Improvement Allowance (or otherwise further
increases the amount by which the Final Costs are in excess of the Improvement
Allowance), such excess shall be paid by Tenant out of its own funds, but Tenant
shall continue to provide Landlord with the documents described in Sections
2.2.2.1(i), (ii), (iii) and (iv) of this Work Letter, above, for Landlord's
approval, prior to Tenant paying such costs.
4.2.2    Tenant's Agents.
4.2.2.1      Landlord's General Conditions for Tenant's Agents and Improvement
Work. Tenant's and Tenant's Agent's construction of the Improvements shall
comply with the following: (i) the Improvements shall be constructed in strict
accordance with the Approved Working Drawings; (ii) Tenant's Agents shall submit
schedules of all work relating to the Improvements to Contractor and Contractor
shall, within five (5) business days of receipt thereof, inform Tenant's Agents
of any changes which are necessary thereto, and Tenant's Agents shall use
commercially reasonable efforts to adhere to such corrected schedule; and
(iii) Tenant shall abide by all reasonable rules made by Landlord's Building
manager with respect to the use of freight, loading dock and service elevators,
storage of materials and any other matter in connection with this Work Letter,
including, without limitation, the construction of the Improvements. Tenant
shall pay a logistical coordination fee (the "Coordination Fee") to Landlord in
an amount equal to Fifteen Thousand and 00/100 Dollars ($15,000.00), which
Coordination Fee shall be for services relating to the coordination of the
construction of the Improvements.
4.2.2.2      Indemnity. Tenant's indemnity of Landlord as set forth in this
Lease shall also apply with respect to any and all costs, losses, damages,
injuries and liabilities related in any way to any negligence or willful
misconduct of Tenant or Tenant's Agents, or anyone directly or indirectly
employed by any of them, or in connection with Tenant's non-payment of any
amount arising out of the Improvements and/or Tenant's disapproval of all or any
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4.2.2.3      Requirements of Tenant's Agents. Each of Tenant's Agents shall
guarantee to Tenant and for the benefit of Landlord that the portion of the
Improvements for which it is responsible shall be free from any defects in
workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Each of Tenant's Agents shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after the completion of the work performed by such contractor or subcontractors.
The correction of such work shall include, without additional charge, all
additional expenses and damages incurred in connection with such removal or
replacement of all or any part of the Improvements, and/or the 6350 Building
and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Improvements shall be contained in the Contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such right of direct
enforcement, provided that Tenant's rights are not diminished.
4.2.2.4      Insurance Requirements.
4.2.2.4.1  General Coverages. All of Tenant's Agents shall carry worker's
compensation insurance covering all of their respective employees, and shall
also carry public liability insurance, including property damage, all with
limits, in form and with companies as are reasonably required by Landlord.
4.2.2.4.2  Special Coverages. Tenant shall cause its Contractor to carry
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Improvements, and such other insurance as Landlord may
reasonably require, it being understood and agreed that the Improvements shall
be insured by Tenant pursuant to this Lease immediately upon completion thereof.
Such insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord, including, but not
limited to, the requirement that all of Tenant's Agents shall carry excess
liability and Products and Completed Operation Coverage insurance, each in
amounts not less than $5,000,000 per incident, $5,000,000 in aggregate, and in
form and with companies as are required to be carried by Tenant as set forth in
this Lease, as amended.
4.2.2.4.3  General Terms. Certificates for all insurance carried pursuant to
this Section 4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Improvements and before the Contractor's equipment is moved
onto the site. All such policies of insurance must contain a provision that the
company writing said policy will give Landlord thirty (30) days prior written
notice (ten (10) days for nonpayment of premiums) of any cancellation or lapse
of the effective date or any reduction in the amounts of such insurance. In the
event that the Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall cause the same to be repaired at no cost to
Landlord or by application of the Improvement Allowance. Tenant's Agents shall
maintain all of the foregoing insurance coverage in force until the Improvements
are fully completed and accepted by Landlord, except for any

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Products and Completed Operation Coverage insurance required by Landlord, which
is to be maintained for ten (10) years following completion of the work and
acceptance by Landlord and Tenant. All policies carried under this Section
4.2.2.4 shall name Landlord and Tenant as additional insureds, as their
interests may appear, as well as Contractor and Tenant's Agents. All insurance,
except Workers' Compensation, maintained by Tenant's Agents shall preclude
subrogation claims by the insurer against anyone insured thereunder. Such
insurance shall provide that it is primary insurance as respects the owner and
that any other insurance maintained by owner is excess and noncontributing with
the insurance required hereunder. The requirements for the foregoing insurance
shall not derogate from the provisions for indemnification of Landlord by Tenant
under Section 4.2.2.2 of this Work Letter.
4.2.3    Governmental Compliance. The Improvements shall comply in all respects
with the following: (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.
4.2.4    Inspection by Landlord. Landlord shall have the right to inspect the
Improvements at all times, provided however, that Landlord's failure to inspect
the Improvements shall in no event constitute a waiver of any of Landlord's
rights hereunder nor shall Landlord's inspection of the Improvements constitute
Landlord's approval of the same. Should Landlord disapprove any portion of the
Improvements, Landlord shall notify Tenant in writing of such disapproval and
shall specify the items disapproved. Any defects or deviations in, and/or
disapproval by Landlord of, the Improvements shall be rectified by Tenant at no
expense to Landlord.
4.2.5    Meetings. Commencing upon the execution of this Amendment, Tenant shall
hold weekly meetings at a reasonable time, with the Architect and the Contractor
regarding the progress of the preparation of Construction Drawings and the
construction of the Improvements, which meetings shall be held at a location
reasonably and mutually designated by Tenant and Landlord, and Landlord and/or
its agents shall receive prior notice of, and shall have the right to attend,
all such meetings, and, upon Landlord's request, certain of Tenant's Agents
shall attend such meetings. In addition, minutes shall be taken at all such
meetings, a copy of which minutes shall be promptly delivered to Landlord. One
such meeting each month shall include the review of Contractor's current request
for payment.
4.3    Notice of Completion; Copy of Record Set of Plans. Within twenty (20)
days after completion of construction of the Improvements, Tenant shall cause a
Notice of Completion to be recorded in the office of the Recorder of the county
in which the 6350 Building is located in accordance with Section 8182 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do
so, Landlord may execute and file the same as Tenant's agent for such purpose,
at Tenant's sole cost and expense. At the conclusion of construction, (i) Tenant
shall cause the Architect and Contractor (A) to update the Approved Working
Drawings as necessary to reflect all changes made to the Approved Working
Drawings during the course of construction, (B) to certify to the best of their
knowledge that the

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"record-set" of as-built drawings are true and correct, which certification
shall survive the expiration or termination of this Lease, and (C) to deliver to
Landlord two (2) sets of copies of such record set of drawings within one
hundred twenty (120) days following issuance of a certificate of occupancy for
the Premises, and (ii) Tenant shall deliver to Landlord a copy of all
warranties, guaranties, and operating manuals and information relating to the
improvements, equipment, and systems in the Premises.
SECTION 5
MISCELLANEOUS
5.1    Tenant's Representative. Tenant has designated Mr. Michael Rosen, Global
Facilities Manager, as its sole representative with respect to the matters set
forth in this Work Letter (whose e-mail address for the purposes of this Work
Letter is Michael.Rosen@entropic.com and phone number is (858) 768-3869), who
shall have full authority and responsibility to act on behalf of the Tenant as
required in this Work Letter.
5.2    Landlord's Representative. Landlord has designated Mr. Jake Brehm (whose
e-mail address for the purposes of this Work Letter is jbrehm@kilroyrealty.com
and phone number is (858) 523-0300) as its sole representative with respect to
the matters set forth in this Work Letter, who, until further notice to Tenant,
shall have full authority and responsibility to act on behalf of the Landlord as
required in this Work Letter.
5.3    Time of the Essence in This Work Letter. Unless otherwise indicated, all
references herein to a "number of days" shall mean and refer to calendar days.
If any item requiring approval is timely disapproved by Landlord, the procedure
for preparation of the document and approval thereof shall be repeated until the
document is approved by Landlord.
5.4    Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter, if any economic or material,
non-economic default (beyond any applicable notice and cure periods) by Tenant
under the Lease or this Work Letter (including, without limitation, any failure
by Tenant to fund any portion of the Over-Allowance Amount) occurs at any time
on or before the substantial completion of the Improvements, then (i) in
addition to all other rights and remedies granted to Landlord pursuant to the
Lease, Landlord shall have the right to withhold payment of all or any portion
of the Improvement Allowance, and (ii) all other obligations of Landlord under
the terms of the Lease and this Work Letter shall be forgiven until such time as
such default is cured pursuant to the terms of the Lease.
5.5    Landlord Delays. In the event that there are any actual delays in the
completion of the Improvements caused by Landlord or the Landlord Parties, then
after (A) written notice to Landlord setting forth with reasonable detail the
existence and nature of such delay, and (B) the expiration of a two (2) business
day cure period following Landlord's receipt of such notice without the remedy
thereof, any such delay shall thereafter be deemed a "Landlord Delay." In
addition, if Landlord fails to approve any matter during the time periods
expressly specified in this Work Letter Agreement therefor, such failure shall
immediately (following the outside date for Landlord's response) constitute a
Landlord Delay (to the extent actual delays in the completion of the

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Improvements ultimately result therefrom). Any actual Landlord Delays under this
Section 5.5 shall result in an extension of the 6350 Substitute Premises
Commencement Date, as defined in Section 2.1 of the Second Amendment, by
extending the outside 6350 Substitute Premises Commencement Date of five (5)
months from Landlord's delivery of the Premises to Tenant by an equivalent
number of days for such Landlord Delays. Notwithstanding anything contained in
this Section 5.5, in no event shall Tenant be obligated to employ extraordinary
efforts or incur extraordinary expenses (e.g., overtime), to overcome any
Landlord Delays.

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