Exhibit 10.29
FOURTH AMENDMENT TO LEASE
I. PARTIES AND DATE.
     This Fourth Amendment to Lease (the “Amendment”) dated July 29, 2009, is by
and between THE IRVINE COMPANY LLC, a Delaware limited liability company
(“Landlord”), and SPECTRUM PHARMACEUTICALS, INC., a Delaware corporation
(“Tenant”).
II. RECITALS.
     On January 16, 1997, Landlord and Tenant entered into a lease for space in
a building located at 157 Technology Drive, Irvine, California (“Premises”),
which lease was amended by a First Amendment to Lease dated March 25, 2004 (the
“First Amendment”), by a Second Amendment to Lease dated March 7, 2006 (the
“Second Amendment”), and by a Third Amendment to Lease Dated February 12, 2006
(the “Third Amendment”). The foregoing lease, as so amended, is hereinafter
referred to as the “Lease”.
     Landlord and Tenant each desire to modify the Lease to extend the Lease
Term, to adjust the Basic Rent, and to make such other modifications as are set
forth in “III. MODIFICATIONS” next below.
III. MODIFICATIONS.
     A. Basic Lease Provisions. The Basic Lease Provisions are hereby amended as
follows:
1. Item 3 is hereby deleted in its entirety and substituted therefor shall be
the following:
“3. Use of Premises: General office and research and development for a
pharmaceutical company”
2. Item 5 is hereby deleted in its entirety and substituted therefor shall be
the following:
“5. Lease Term: The Term of this Lease shall expire at midnight on June 30,
2016.”
3. Item 6 is hereby amended by adding the following:
“Commencing July 1, 2009, the Basic Rent shall be Thirty Four Thousand Three
Hundred Twenty Dollars ($34,320.00) per month, based on $1.00 per rentable
square foot.
Commencing July 1, 2010, the Basic Rent shall be Thirty Six Thousand Seven
Hundred Twenty-Two Dollars ($36,722.00) per month, based on $1.07 per rentable
square foot.
Commencing July 1, 2011, the Basic Rent shall be Thirty Nine Thousand One
Hundred Twenty-Five Dollars ($39,125.00) per month, based on $1.14 per rentable
square foot.
Commencing July 1, 2012, the Basic Rent shall be Forty One Thousand Five Hundred
Twenty-Seven Dollars ($41,527.00) per month, based on $1.21 per rentable square
foot.

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Commencing July 1, 2013, the Basic Rent shall be Forty Three Thousand Nine
Hundred Thirty Dollars ($43,930.00) per month, based on $1.28 per rentable
square foot.
Commencing July 1, 2014, the Basic Rent shall be Forty Six Thousand Three
Hundred Thirty-Two Dollars ($46,332.00) per month, based on $1.35 per rentable
square foot.
Commencing July 1, 2015, the Basic Rent shall be Forty Eight Thousand Seven
Hundred Thirty-Four Dollars ($48,734.00) per month, based on $1.42 per rentable
square foot.”
Basic Rent payable under the provisions of this Item 6 shall be subject to
adjustment as provided in Article II.E of the attached Work Letter.
Building Costs payable under the provisions of the Lease shall be subject to
adjustment as provided in Article II.F of the attached Workletter.
4. Item 9 is hereby deleted in its entirety and substituted therefor shall be
the following:
“9. Security Deposit: $134,020.00”
5. Item 11 is hereby deleted in its entirety and substituted therefor shall be
the following:
“11. Additional Insureds: None”
6. Item 12 is hereby amended by deleting Landlord’s address for payments and
notices and substituted therefor shall be the following:
“LANDLORD
THE IRVINE COMPANY LLC
Department #6520
Los Angeles, CA 90084-6520
Attn: Senior Vice President, Property Operations
Irvine Office Properties
notice address:
THE IRVINE COMPANY LLC
550 Newport Center Drive
Newport Beach, CA 92660
Attn: Senior Vice President, Property Operations
with a copy of notices to:
THE IRVINE COMPANY LLC
550 Newport Center Drive
Newport Beach, CA 92660
Attn: Vice President, Operations
Irvine Office Properties, Technology Portfolio”
     B. Right to Extend the Lease. The provisions of Section 3.1(b) of the Lease
entitled “Right to Extend this Lease,” as amended by Section III.B in the First
Amendment, shall remain in full force and effect and exercisable by Tenant
during the Term of the Lease as extended by this Amendment; provided that the
first sentence of the last paragraph of said Section 3.1(b) is hereby

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deleted in its entirety and substituted therefore shall be the following: “If
Tenant fails to timely exercise the extension rights created by this
Section 3.1(b) within the time period set forth in the initial paragraph of this
Section 3.1(b), then Tenant’s right to extend the Term shall be extinguished and
the Lease shall automatically terminate as of the expiration date of the Term,
without any extension and without any liability to Landlord.”
     C. Security Deposit.
          (i) Concurrently with Tenant’s delivery of this Amendment, Tenant
shall deliver the sum of Eighty Three Thousand Eight Hundred Ten Dollars
($83,910.00) to Landlord, which sum shall be added to the Security Deposit
presently being held by Landlord in accordance with Section 4.3 of the Lease.
          (ii) Provided that: (a) Tenant has not been in default under any of
its monetary obligations of this Lease at any time during the Term of this
Lease, (b) Tenant has not at any time been more than ten (10) days late with
respect to any payments of Basic Rent due under this Lease more than once during
the prior twelve (12) month period, and (c) Tenant shall demonstrate by the
delivery to Landlord of its audited financial statements for the most recent
fiscal year end that Tenant has achieved a cash or marketable securities of not
less than Thirty Million Dollars ($30,000,000.00) (all as determined by
generally accepted accounting principles, consistently applied, and as
demonstrated by Tenant’s audited financial statements prepared by an independent
accounting firm), then, upon written request of Tenant given at any time
subsequent to July 1, 2012, Landlord shall Landlord shall return to Tenant a
portion of the Security Deposit in the form of credits against the Basic Rent in
the amount of Eighty Three Thousand Eight Hundred Ten Dollars ($83,810.00) next
coming due against the Lease.
     D. Letter of Credit/Enhanced Financial Condition.
     (i) Tenant shall deliver to Landlord, prior to the commencement of
construction of the Tenant Improvements as described in Exhibit X attached
hereto, an irrevocable stand-by letter of credit (the “Letter of Credit”) in the
amount of the estimated amount of the “Landlord’s Amortizing Contribution” to be
expended towards the “Completion Cost” of the Tenant Improvements (as those
terms are defined in the Work Letter attached as Exhibit X). Said Letter of
Credit shall be in substantially the form and substance of Exhibit I attached
hereto (or in other form and substance acceptable to Landlord), and issued by a
financial institution which is acceptable to Landlord. Upon the default by
Tenant under any of its monetary obligations under the Lease, Landlord shall be
entitled to draw upon said Letter of Credit by the issuance of Landlord’s sole
written demand to the issuing financial institution, which draw shall be in an
amount necessary to cure the monetary default in question and to compensate
Landlord for all damages incurred thereby, as determined by Landlord in its
reasonable discretion. Notwithstanding the foregoing, if the amount of any such
draw(s) shall ultimately exceed the amount of damages actually incurred by
Landlord as the result of Tenant’s monetary default (as determined pursuant to
the applicable provisions of Article XIV of this Lease), then Landlord shall
promptly refund any such excess to Tenant. Any such draw shall be without waiver
or any rights Landlord may have under this Lease or at law or in equity as a
result of the monetary default, as a setoff for full or partial compensation for
the monetary default. If any portion of the Letter of Credit is drawn after a
monetary default by Tenant, Tenant shall within ten (10) business days after
written demand by Landlord restore the Letter of Credit. Failure to so restore
said Letter of Credit within said ten (10) business days shall be a default by
Tenant under this Lease. Partial drawings upon said Letter of Credit shall be
permitted. Except as otherwise provided herein (including, without limitation,
in Section D(iii) below), the Letter of Credit shall provide for automatic
annual renewals through that date which is thirty (30) days after the Expiration
Date of the Term of this Lease (including any extensions of the Term as provided
in this Lease). In the event the Letter of Credit is not renewed by the issuing
financial institution on or before thirty (30) days prior to the then-scheduled
expiration date of the Letter of Credit, then Landlord shall have the right to
draw the full amount of such Letter of Credit and to hold such amount as cash
security pursuant to Section 4.3 of the Lease. In the event Tenant restores the
entire Letter of Credit, then Landlord shall promptly refund the amount(s) drawn
down pursuant to the preceding sentence to Tenant. With Landlord’s prior written
approval and subject to the terms and conditions of this Section D.(i), Tenant
shall have the opportunity to provide a substituted letter of credit.

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     (ii) Landlord’s obligation to proceed with any portion of the Tenant
Improvements to be funded by the Landlord’s Amortizing Contribution is subject
to and conditioned upon Tenant’s obligation to provide the Letter of Credit to
Landlord prior to the commencement of the construction of the Tenant
Improvements.
     (iii) Provided that Tenant has not been in default under any monetary
provision of this Lease at any time during the Term of the Lease, at the written
request of Tenant, Landlord shall authorize six (6) reductions to the principal
amount of the Letter of Credit, with each such reduction to be in the amount of
one-sixth (1/6) of the original principal amount of the Letter of Credit, upon
the expiration of the twelfth, (12th), twenty-fourth (24th), thirty-sixth
(36th), forty-eighth (48th), sixtieth (60th) and seventy-second (72nd) months of
the Term.
     E. Building Costs. The parties confirm and agree that the “Building Costs”
payable by Tenant under Section 4.2 of the Lease shall include the amortized
costs of Alternate B, Alternate C and Alternate D, as more particularly provided
in Article II.F of the attached Work Letter.
     F. Signage. The first and second sentences of Section 5.2 of the Lease, as
amended by the Second Amendment and Third Amendment, are hereby deleted in their
entirety, and substituted therefor with the following:
“Provided Tenant continues to lease at least 70% of the rentable square footage
of the Building, Tenant shall have the right to two (2) exterior “building top”
signs and one (1) exterior “eye-brow” sign on the Building for Tenant’s name and
graphics in locations designated by Landlord, subject to Landlord’s right of
prior approval that such exterior signage is in compliance with the Signage
Criteria (defined below). Such exterior signage shall be exclusive to Tenant
provided Tenant continues to lease 100% of the rentable square footage of the
Building. Except for the exterior signage rights provided in the foregoing,
Tenant shall have no right to maintain signs in any location in, on or about the
Building or the Project and shall not place or erect any signs, displays or
other advertising materials that are visible from the exterior of the Building
(provided that any signs wholly within the Premises which are not intended to be
visible from the exterior of the Building shall not be a violation of the
foregoing provisions).”
G. EMS. The following provisions are hereby added as Section 7.7 of the Lease:
“7.7. EMS. Landlord shall control the operation of the energy management system
serving the Building (“EMS”) from its remote location. Tenant shall have the
right to request reasonable EMS information on an “as required” basis in order
to assist Tenant’s contracted HVAC technicians with repair and efficient
operation of the HVAC system. Upon Tenant’s request, Landlord shall provide
contact information to Tenant in order for EMS communications to take place
between Landlord personnel in charge of said system and the Tenant facilities
manager.”
     H. Rights of Parties. The reference in subsection 9.1(b)(6) of the Lease to
“the proposed transfer will not impose additional burdens or adverse tax effects
on Landlord” is hereby revised to “the proposed transfer will not impose
additional material burdens or adverse tax effects on Landlord.”
     I. Certain Transfers. Section 9.4 of the Lease entitled “Certain Transfers”
is hereby amended to provide that notwithstanding any other provision in the
Lease to the contrary, (A) Landlord’s consent shall not be required for the
subletting of all or any portion of the Premises to any entity controlling,
under common control with, or controlled by Tenant (a “Tenant Affiliate”), and
(B) Landlord’s consent shall not be required for the assignment of this Lease to
a Tenant Affiliate, or as a result of a sale of all or substantially all of
Tenant’s assets, the sale of the capital stock of Tenant, or as the result of a
merger by Tenant with or into another entity or a reorganization of Tenant (a
“Permitted Transfer”), so long as (i) the net worth of the successor or
reorganized entity after such Permitted Transfer is at least equal to the net
worth of Tenant immediately prior to the date of such Permitted Transfer,
evidence of which, satisfactory to Landlord, shall be presented

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to Landlord prior to such Permitted Transfer, (ii) Tenant shall provide to
Landlord, prior to such Permitted Transfer, written notice of such Permitted
Transfer and such assignment documentation and other information as Landlord may
reasonably require in connection therewith, and (iii) all of the terms and
requirements of Section 9.2 and 9.3 (but not of Section 9.1) shall apply with
respect to such assignment.
     J. Holding Over. Section 15.1 of the Lease is amended to provide that in
the event of a holdover by Tenant in the Premises, any holdover “premium” Basic
Rent payable by Tenant as provided in said Section 15.1 shall be prorated, on a
30-day basis, based on Tenant’s actual holdover possession of the Premises.
     K. Broker’s Commission. Article XVIII of the Lease is amended to provide
that the parties recognize the following parties as the brokers who negotiated
this Amendment, and agree that Landlord shall be responsible for payment of
brokerage commissions to such brokers pursuant to its separate agreements with
such brokers: Irvine Realty Company (“Landlord’s Broker”) and Grubb &
Ellis/Newport Beach (“Tenant’s Broker”). It is understood and agreed that
Landlord’s Broker represents only Landlord in connection with the execution of
this Amendment and that Tenant’s Broker represents only Tenant. The warranty and
indemnity provisions of Article XVIII of the Lease, as amended hereby, shall be
binding and enforceable in connection with the negotiation of this Amendment.
     L. Tenant Improvements. Landlord hereby agrees to complete the Tenant
Improvements for the Premises in accordance with the provisions of Exhibit X,
Work Letter, attached hereto.
IV. GENERAL.
     A. Effect of Amendments. The Lease shall remain in full force and effect
except to the extent that it is modified by this Amendment.
     B. Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to the modifications set forth in “III.
MODIFICATIONS” above and can be changed only by a writing signed by Landlord and
Tenant.
     C. Counterparts. If this Amendment is executed in counterparts, each is
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic, photostatic,
or other copy of this Amendment may be introduced into evidence without
foundation.
     D. Defined Terms. All words commencing with initial capital letters in this
Amendment and defined in the Lease shall have the same meaning in this Amendment
as in the Lease, unless they are otherwise defined in this Amendment.
     E. Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.
     F. SDN List. Tenant hereby represents and warrants that neither Tenant nor
any officer, director, or employee of Tenant (collectively, “Tenant Parties”) is
listed as a Specially Designated National and Blocked Person (“SDN”) on the list
of such persons and entities issued by the U.S. Treasury Office of Foreign
Assets Control (OFAC). In the event Tenant or any Tenant Party is or becomes
listed as an SDN, Tenant shall be deemed in breach of this Lease and Landlord
shall have the right to terminate this Lease immediately upon written notice to
Tenant.

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V. EXECUTION.
     Landlord and Tenant executed this Amendment on the date as set forth in “I.
PARTIES AND DATE.” above.

                  LANDLORD:   TENANT:    
 
                THE IRVINE COMPANY LLC   SPECTRUM PHARMACEUTICALS, INC.,     a
Delaware limited liability company   a Delaware corporation    
 
               
By
  /S/ E. Valjean Wheeler   By   /S/ Rajesh C. Shrotriya    
 
               
 
  E. Valjean Wheeler, President       Rajesh C. Shrotriya    
 
  Office Properties       CEO & President    
 
               
By
  /S/ Jeanne M. Gettemy   By   /S/ Shyam Kumaria    
 
               
 
  Jeanne M. Gettemy, Senior Vice President       Shyam Kumaria    
 
  Finance, Office Properties       V.P., Finance & Corporate Secretary  

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EXHIBIT I
IRREVOCABLE STANDBY LETTER OF CREDIT

         
Number:
 
 
   
Date:
 
 
   
Amount:
 
 
   
Expiration:
 
 
   

     
BENEFICIARY
  ACCOUNT PARTY
 
   
The Irvine Company
  Spectrum Pharmaceuticals Inc.
550 Newport Center Drive
  157 Technology Drive
Newport Beach, CA 92660
  Irvine, CA 92618
Attn: Senior Vice President, Finance
   
         Office Properties
   

We hereby issue our Irrevocable Letter of Credit No.                      in
favor of The Irvine Company, and its successors and assigns for the account of
Spectrum Pharmaceuticals Inc. We undertake to honor your draft or drafts,
delivered to us from time to time, for any sum or sums not to exceed a total of
                    ($                    ) in favor of said beneficiary when
accompanied by the draft described below and a letter from an officer of The
Irvine Company or such successor or assign that states as follows: “The
“Landlord” under the Lease pursuant to which this letter of credit was issued is
authorized to draw upon this Letter of Credit in the amount of the accompanying
draft according to the terms of its lease agreement with the Account Party as
“Tenant”.”
This irrevocable letter of credit shall be automatically extended without
amendment for one (1) year from the expiration date, or any future expiration
date, unless at least thirty (30) days prior to any expiration date we notify
you by registered mail, authenticated swift or courier service that we elect not
to renew this irrevocable letter of credit for any such additional period. In
the event we decline to renew this irrevocable letter of credit, you may draw
hereunder on or prior to the then relevant expiration date, up to the full
amount then available hereunder, against your sight draft(s) on us, bearing the
number of this irrevocable letter of credit.
The draft must be marked “Drawn under                      Letter of Credit No.
                     dated                     .”
There are no other conditions of this letter of credit. Except so far as
otherwise stated, this credit is subject to the Uniform Customs and Practice for
Documentary Credits (2007 Revision, International Chamber of Commerce,
Publication No. 600).

 

 

         
By:
 
 
   

         
By:
 
 
   

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EXHIBIT X
WORK LETTER
BUILD TO SUIT
(Landlord’s Contribution)
     The tenant improvement work (the “Tenant Improvements” and the “Tenant
Improvement Work”) shall consist of the work, including work in place as of the
date hereof, required to complete the improvements to the Premises as shown in
the space plan (the “Plan”) prepared by LPA, dated July 9, 2009, and the cost
estimate (the “Cost Estimate”) prepared by Roel, dated July 9, 2009. A copy of
the Cost Estimate is attached hereto as Exhibit X-1. The Tenant Improvement Work
shall also include the work described in “Capital Alternate A”, “Capital
Alternate B”, “Capital Alternate C”, and “Capital Alternate D” in the Plan and
the Cost Estimate. The Tenant Improvement Work shall be performed by a
contractor selected by Landlord and in accordance with the requirements and
procedures set forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES.
     A. Landlord shall pay up to the amount of the “Landlord’s Maximum
Contribution” (as defined below) towards the cost of the Tenant Improvement
Work. Any additional cost of the Tenant Improvement Work, including additional
costs resulting from “Changes” (as hereinafter defined) requested by Tenant
shall be borne solely by Tenant and paid to Landlord as hereinafter provided.
Unless otherwise specified in the Plan or Cost Estimate, all materials,
specifications and finishes utilized in constructing the Tenant Improvements
shall be Landlord’s building standard tenant improvements, materials and
specifications for the Project as set forth in Schedule I attached hereto
(“Standard Improvements”). Should Landlord submit any additional plans,
equipment specification sheets, or other matters to Tenant for approval or
completion in connection with the Tenant Improvement Work, Tenant shall respond
in writing, as appropriate, within 5 business days unless a shorter period is
provided herein. Tenant shall not unreasonably withhold its approval of any
matter, and any disapproval shall be limited to items not previously approved by
Tenant in the Plan or otherwise.
     B. In the event that Tenant requests in writing a revision to the Plan
(“Change”), and Landlord so approves such Change as provided in Section I.C
below, Landlord shall advise Tenant by written change order as soon as is
practical of any increase in the cost to complete the Tenant Improvement Work
that such Change would cause. Tenant shall approve or disapprove such change
order in writing within 5 business days following Tenant’s receipt of such
change order. If Tenant approves any such change order, Tenant shall pay the
cost of any attributable increase in the cost to complete the Tenant
Improvements over the Landlord’s Maximum Contribution within 30 days after
delivery of invoices for same. If Tenant disapproves any such change order,
Tenant shall nonetheless be responsible for the reasonable architectural and/or
planning fees incurred in preparing such change order. Landlord shall have no
obligation to interrupt or modify the Tenant Improvement Work pending Tenant’s
approval of a change order, but if Tenant fails to timely approve a change
order, Landlord may (but shall not be required to) suspend the applicable Tenant
Improvement Work.
     C. Landlord agrees that it shall not unreasonably withhold its consent to
Tenant’s requested Changes, including without limitation, any modification of a
Standard Improvement in the Plan to a non-standard improvement (“Non-Standard
Improvement”), unless Landlord determines, in its reasonable discretion, that
such requested Change (i) is of a lesser quality than the Tenant Improvements
previously approved by Landlord, (ii) fails to conform to applicable
governmental requirements, (iii) would result in the Premises requiring building
services beyond the level normally provided to other tenants, (iv) interferes in
any manner with the proper functioning of, or Landlord’s access to, any
mechanical, electrical, plumbing or HVAC systems, facilities or equipment in or
serving the Building, or (v) would have an adverse aesthetic impact to the
Premises or cause additional expenses to Landlord in reletting the Premises. The
cost to complete any Non-Standard Improvements shall be borne by

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Tenant. All Standard Improvements and Non-Standard Improvements shall become the
property of Landlord and shall be surrendered with the Premises at the end of
the Term; except that Landlord may, by notice to Tenant given at the time of
Landlord’s approval by any Change(s), require Tenant either to remove all or any
of the Tenant Improvements approved by way of such Change, to repair any damage
to the Premises or the Common Area arising from such removal, and to replace any
Non-Standard Improvements approved by way of such Change with the applicable
Standard Improvement, or to reimburse Landlord for the reasonable cost of such
removal, repair and replacement upon demand. Any such removals, repairs and
replacements by Tenant shall be completed by the Expiration Date or sooner
termination of this Lease. Landlord confirms and agrees that no
restoration/removal of any of the Tenant Improvements shown in the approved Plan
shall be required.
     D. Tenant hereby designates                      (“Tenant’s Construction
Representative”), Telephone No. (___) ___-___, as its representative, agent and
attorney-in-fact for all matters related to the Tenant Improvement Work,
including but not by way of limitation, for purposes of receiving notices,
approving submittals and issuing requests for Changes, and Landlord shall be
entitled to rely upon authorizations and directives of such person(s) as if
given directly by Tenant. The foregoing authorization is intended to provide
assurance to Landlord that it may rely upon the directives and decision making
of the Tenant’s Construction Representative with respect to the Tenant
Improvement Work and is not intended to limit or reduce Landlord’s right to
reasonably rely upon any decisions or directives given by other officers or
representatives of Tenant. Tenant may amend the designation of its Tenant’s
Construction Representative(s) at any time upon delivery of written notice to
Landlord.
     E. It is understood that all or a portion of the Tenant Improvements may be
done during Tenant’s occupancy of the Premises. In this regard, Tenant agrees to
assume any risk of injury, loss or damage to Tenant to the extent not the result
of Landlord’s or its contractor’s negligence or willful misconduct. While
Landlord agrees to employ construction practices reasonably intended to minimize
disruptions to the operation of Tenant’s business in the Premises, Tenant
acknowledges and agrees that some minor disruptions may occur during the course
of construction of the Tenant Improvements, and in no event shall rent abate as
the result of the construction of the Tenant Improvements. Tenant shall pay for
and cause Tenant’s files and other equipment (including computers) to be moved
as necessary so as to facilitate the Tenant Improvements Work. Any loud and
major disruptive work shall be done outside of normal business hours.
II. COST OF THE TENANT IMPROVEMENTS WORK
     A. Subject to the provisions of Articles II.E and II.F below, Landlord
shall pay up to One Million Four Hundred Seventy-Five Thousand Seven Hundred
Sixty Dollars ($1,475,760.00), based on $43.00 per rentable square foot of the
Premises (“Landlord’s Maximum Contribution”), of the final “Completion Cost” (as
defined below). Tenant acknowledges that the Landlord’s Maximum Contribution is
intended only as the maximum amount Landlord will pay toward this Completion
Cost of the approved Tenant Improvements, and not by way of limitation, any
partitions, modular office stations, fixtures, cabling, furniture and equipment
requested by Tenant are in no event subject to payment as part of Landlord’s
Contribution. In the event the sum of the Completion Cost for the Tenant
Improvements is less than the Landlord’s Maximum Contribution, Landlord’s actual
contribution toward the Completion Cost (“Landlord’s Contribution”) shall equal
such lesser amount, and Tenant shall have no right to receive any credit, refund
or allowance of any kind for any unused portion of the Landlord’s Maximum
Contribution nor shall Tenant be allowed to make revisions to an approved Plan
or Cost Estimate or request a Change in an effort to apply any unused portion of
Landlord’s Maximum Contribution.
     B. Tenant shall pay the amount, if any, by which aggregate Completion Cost
of the Tenant Improvements Work exceeds the Landlord’s Maximum Contribution. The
amounts to be paid by Tenant for the Tenant Improvements pursuant to this
Section II.C. is sometimes cumulatively referred to herein as the “Tenant’s
Contribution”.

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     C. The “Completion Cost” shall mean all costs of Landlord in completing the
Tenant Improvements Work, including but not limited to the following:
(i) payments made to architects, engineers, contractors, subcontractors and
other third party consultants in the performance of the Work, (ii) permit fees
and other sums paid to governmental agencies, and (iii) costs of all materials
incorporated into the Work or used in connection with the Work. The Completion
Cost shall also include an administrative/supervision fee to be paid to Landlord
or to Landlord’s management agent in the amount of 3% of the Completion Cost.
Unless expressly authorized in writing by Landlord, the Completion Cost shall
not include (and no portion of the Landlord Contribution shall be paid for) any
costs incurred by Tenant, including without limitation, any costs for space
planners, managers, advisors or consultants retained by Tenant in connection
with the Tenant Improvements.
     D. Tenant shall pay to Landlord the amount of the Tenant’s Contribution set
forth in the approved Cost Estimate as follows: (i) fifty percent (50%) of the
Tenant’s Contribution prior to the commencement of construction of the Tenant
Improvements or any Changes, (ii) forty percent (40%) of the Tenant’s
Contribution not later than thirty (30) days following the commencement of the
construction of the Tenant Improvements, and (iii) ten percent (10%) of the
Tenant’s Contribution upon substantial completion of the Tenant Improvements.
Following completion of the Tenant Improvements Work, Tenant shall pay (or be
refunded) any difference between the estimated and the actual amount of the
Tenant’s Contribution towards the Completion Cost, which difference shall be
calculated by first applying Landlord’s Contribution, in full, to the actual
amount of the final Completion Cost. If Tenant defaults in the payment of any
sums due under this Work Letter, Landlord shall (in addition to all other
remedies) have the same rights as in the case of Tenant’s failure to pay rent
under the Lease, including, without limitation, the right to terminate this
Lease and recover damages from Tenant and/or to charge a late payment fee and to
collect interest on delinquent payments, and Landlord may (but shall not be
required to) suspend the Tenant Improvement Work following such default.
     E. Any portion of the “Landlord’s Amortizing Contribution” (as hereinafter
defined) funded by Landlord towards the Completion Cost shall be amortized over
the 84-month Term of the Lease as extended by this Amendment, using an interest
factor of eight percent (8%) per annum, and the Basic Rent payable during said
84 months of this Lease by Tenant shall be increased by said amortized payments,
retroactive July 1, 2009. Upon request by Landlord, the amount of such rental
adjustment shall be memorialized on a form provided by Landlord. In the event
that the amount of the rental adjustment is finally determined subsequent to the
substantial completion of the Tenant Improvements. Tenant shall promptly pay to
Landlord a lump sum amount equal to the total accrued sums owing due to the
retroactive adjustment. As used herein, the “Landlord’s Amortizing Contribution”
shall mean that portion of the Landlord’s Contribution actually funded by
Landlord towards the Completion Cost which portion is in excess of the amount of
Nine Hundred Ninety-Five Thousand Two Hundred Eighty Dollars ($995,280.00),
based on $29.00 per rentable square foot of the Premises.
     F. Capital Alternates. The Completion Cost of Capital Alternate B shall be
amortized, using an interest factor of 5% per annum, over the useful life of
said Capital Alternate B of fifteen (15) years and the Completion Cost of
Capital Alternate C and Capital Alternate D shall be amortized, using an
interest factor of 5% per annum, over the useful life of said Capital Alternates
C and D of seven (7) years, and said amortized costs shall be paid by Tenant as
part of the Building Costs as and when provided in Section 4.2 of the Lease. The
amortization of these costs shall not commence until such time as all
improvements are installed and fully operational.
III. DISPUTE RESOLUTION
     A. All claims or disputes between Landlord and Tenant arising out of, or
relating to, this Work Letter shall be decided by the JAMS/ENDISPUTE (“JAMS”),
or its successor, with such arbitration to be held in Orange County, California,
unless the parties mutually agree otherwise. Within 10 business days following
submission to JAMS, JAMS shall designate three arbitrators and each party may,
within 5 business days thereafter, veto one of the three persons so designated.
If two different designated arbitrators have been vetoed, the third arbitrator
shall hear and decide the matter. If less than 2 arbitrators are timely vetoed,

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JAMS shall select a single arbitrator from the non-vetoed arbitrators originally
designated by JAMS, who shall hear and decide the matter. Any arbitration
pursuant to this section shall be decided within 30 days of submission to JAMS.
The decision of the arbitrator shall be final and binding on the parties. All
costs associated with the arbitration shall be awarded to the prevailing party
as determined by the arbitrator.
     B. Notice of the demand for arbitration by either party to the Work Letter
shall be filed in writing with the other party to the Work Letter and with JAMS
and shall be made within a reasonable time after the dispute has arisen. The
award rendered by the arbitrator shall be final, and judgment may be entered
upon it in accordance with applicable law in any court having jurisdiction
thereof. Except by written consent of the person or entity sought to be joined,
no arbitration arising out of or relating to this Work Letter shall include, by
consolidation, joinder or in any other manner, any person or entity not a party
to the Work Letter unless (1) such person or entity is substantially involved in
a common question of fact or law, (2) the presence of such person or entity is
required if complete relief is to be accorded in the arbitration, or (3) the
interest or responsibility of such person or entity in the matter is not
insubstantial.
     C. The agreement herein among the parties to arbitrate shall be
specifically enforceable under prevailing law. The agreement to arbitrate
hereunder shall apply only to disputes arising out of, or relating to, this Work
Letter, and shall not apply to other matters of dispute under the Lease except
as may be expressly provided in the Lease.

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