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  Exhibit 10.17    
    


 
 

  STANDARD FORM
  MODIFIED GROSS OFFICE LEASE    
    


        This Standard Form Modified Gross Office Lease ("Lease") is entered into effective as of October 22, 2008 ("Effective Date"),
between Sunroad Centrum Office I, L.P., a California limited partnership ("Landlord"), and Bridgepoint Education, Inc., a Delaware corporation ("Tenant"), who agree as follows: 


        1.    Agreement to Let.    Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, upon all of the
terms, provisions, and conditions contained in this Lease, (i) those certain premises described in the Principal Lease Provisions, below (the "Premises"), consisting of a portion of that
certain building described in the Principal Lease Provisions, below (the "Building"), which is in turn a part of the Project (as described in the Principal Lease Provisions, below), along with
(ii) the non-exclusive right to use, in common with Landlord, Landlord's invitees and licensees, and the other tenants and users of space within the Project, those portions of the
Project intended for use by, or benefiting, tenants of the Project in common including, without limitation, the landscaped areas, passageways, walkways, hallways, elevators, parking areas, and
driveways of the Building and the Project, but excluding all interior areas of the other buildings in the Project other than the Building (collectively, the "Common Areas"). This Lease confers no
rights, however, to the roof, exterior walls, or utility raceways of the Building nor rights to any other building in the Project, nor with regard to either the subsurface of the land below the ground
level of the Project or with regard to the air space above the ceiling of the Premises; provided, however, that Tenant shall have the limited right to access systems and equipment exclusively serving
the Premises (for which Tenant has maintenance and repair responsibilities pursuant to Paragraph 10.1, below) that may be located on the roof, in exterior or demising walls, in utility
raceways, in the airspaces above the ceiling of the Premises, or in any other
portion of the Building or the Common Areas for the sole purpose of maintaining, repairing, and replacing such systems and equipment. 


        2.    Principal Lease Provisions.    The following are the "Principal Lease Provisions" of this Lease. Other portions
of this Lease explain and describe these Principal Lease Provisions in more detail and should be read in conjunction with this Paragraph 2. In the event of any conflict between the Principal
Lease Provisions and the other portions of this Lease, the Principal Lease Provisions will control. (Terms shown in quotations are defined terms used elsewhere in this Lease) 



        2.1.  "Project":
That certain office project, located within the larger mixed-use project sometimes referred to as Sunroad Centrum, currently under construction
in the Kearny Mesa area of San Diego, California, as more particularly described on attached Exhibit "A."    



        2.2.  "Building":
That certain 11 story building within the Project, sometimes referred to as Building I, whose mailing address is 8620 Spectrum Center Lane, San Diego,
California 92111. 


        2.3.  "Premises":
Suites 100, 200. 300, 400, 500, 600, 700, 800, 1000, and 1100 consisting of the entire 1st through 8th floors, and
the entire 10th and 11th floors of the Building (with the shell plans of such Building floors more particularly described on attached  Exhibit "B"). 



        2.4.  Rentable
Area of the Premises: Approximately 248,051 Rentable Square Feet of space of which approximately 149,660 Rentable Square Feet will be in Phase I (as
defined below) of the Premises, and of which approximately 98,391 Rentable Square Feet will be in Phase II (as defined below) of the Premises. The terms "Rentable Square Footage," "Usable
Square Footage," and similar terms dealing with Rentable or Usable means of describing measurements of square footages, will have the meanings of such terms adopted by the Building Owners and Managers
Association International relative to multi-tenant floors as to the partial floor portion of the Premises and relative to single-tenant floors as to the full floor portions of the Premises (ANSI/BOMA
Z65.1-1996) ("BOMA Standards"). If requested in writing by Tenant within 30 days after the Lease Commencement Date, Landlord's architect shall calculate and certify in writing to 












Landlord
and Tenant the rentable square footage within the Premises and the Building in accordance with the BOMA Standards. Tenant's architect or space planner may consult with Landlord's architect
regarding its verification of the rentable square footage within the Premises. If Tenant disagrees with the determination of the rentable square footage within the Premises or Building as calculated
by Landlord's architect, then Tenant shall provide Landlord with written notice of Tenant's disapproval ("Tenant's Notice of Disapproval") within 30 days after the date on which Tenant receives
the calculation by Landlord's architect. If there is a dispute of the rentable square footage of the Premises and/or the Building then Landlord and Tenant shall, in good faith, attempt to resolve the
disagreement. If Landlord and Tenant are unable to resolve the disagreement within ten days following the date
Landlord receives Tenant's Notice of Disapproval, then the parties shall promptly appoint a mutually acceptable architect to remeasure the Premises and/or the Building in accordance with the BOMA
Standards, and the determination of such architect shall be binding upon Landlord and Tenant. The cost of such architect shall be borne by Tenant unless such architect determines that Landlord's
measurement was in error by more then two percent, in which event Landlord shall pay for the cost of such architect. In the event that the foregoing measurement process results in a determination that
the actual Rentable Square Footage and/or Usable Square Footage of the Premises are different from those set forth in this Lease, Landlord shall modify all amounts, percentages, and figures appearing
or referred to in this Lease to conform to such corrected Rentable Square Footage and/or Usable Square Footage amounts (including, without limitation, the amount of the "Basic Monthly Rent," as that
term is defined in Paragraph 2.6 of this Lease). If such modification is made, it will be confirmed in writing by Landlord to Tenant in an amendment to this Lease. 


        2.5.  "Initial
Lease Term": 11 years plus any additional days required for the Initial Expiration Date to occur on the last day of a month as set forth in
Paragraph 2.5.2, below, beginning as of the Lease Commencement Date and ending as of the Initial Expiration Date. 



        2.5.1.  "Lease
Commencement Date": The date upon which possession of Phase I of the Premises is tendered to Tenant with Landlord's Work (as defined below in
Paragraph 4.2) in such Phase I Substantially Completed, pursuant to attached Exhibit "C," as more particularly provided in
Paragraph 4, below; it being anticipated that Phase I will be Substantially Completed first, and Phase II will be Substantially Completed at a later time (as provided below), but
that the Lease Commencement Date will be the date upon which possession of the Premises is tendered to Tenant with Landlord's Work Substantial Completed relative to Phase I of the Premises, as
provided above. [Estimated to occur on March 15, 2009] 


        2.5.2.  "Initial
Expiration Date": The final day of the 132nd calendar month of the Initial Lease Term (for example, if the Lease Commencement Date is
March 15, 2009, then the Initial Expiration Date would be March 31, 2020). 


        2.5.3.  Extension
Rights: Yes ý No o; two five-year options to extend
(See Paragraph 3.2). 




        2.6.  "Basic
Monthly Rent": $[***] per month as to Phase I of the Premises ($[***] per Rentable Square Foot),
$[***] per month as to Phase II of the Premises ($[***] per Rentable Square Foot),and (subject to three percent annual increases pursuant to
Paragraph 7.2, below), net of electricity and other utilities. Basic Monthly Rent will always be due and payable on or before the first day of the applicable month, except that the first
month's Basic Monthly Rent will be due and payable upon the date of Landlord's execution of this Lease (provided, Tenant has executed the Lease). 


        2.7.  "Rent
Commencement Date": The Rent Commencement Date for Phase I of the Premises, and the Rent Commencement Date for Phase II of the Premises, will be
determined as follows: 




          (i)  As
to Phase I of the Premises, the Rent Commencement Date will be the earlier to occur of (a) 30 days following the Delivery Date (as defined
below) for Phase I, or 






[***] Confidential portions of this document have been redacted and filed separately with the Commission. 










(b) 30 days
following the date that the Delivery Date for Phase I would occurred but for the occurrence of Tenant Delays (as defined in  Exhibit "C"); and Tenant's rental obligations relative to
Phase I are subject to Tenant's right to 11.25 months of rent relief
relative to Phase I, as more particularly described in Paragraph 2.1 of the Addendum to this Lease being executed concurrently herewith. However, Landlord acknowledges that
notwithstanding anything to the contrary in this Lease, in no event shall the Rent Commencement Date relative to Phase I occur earlier than March 1, 2009. 


         (ii)  As
to Phase II of the Premises, the Rent Commencement Date will be 30 days following the earlier to occur of (a) the Delivery Date for
Phase II, or (b) the date that the Delivery Date for Phase II would have occurred but for the occurrence of Tenant Delays; provided, however, Tenant's rental obligations relative
to Phase II are subject to Tenant's right to up to four months of rent relief relative to Phase II, as more particularly described in Paragraph 2.2 of the Addendum to this Lease
being executed concurrently herewith. However, Landlord acknowledges that notwithstanding anything to the contrary in this Lease, in no event shall the Rent Commencement Date relative to
Phase II occur earlier than January 1, 2010. 


        (iii)  In
as much as the parties recognize that the Rent Commencement Date will occur as to Phase I before it occurs as to Phase II, Landlord and Tenant
acknowledge that until the Rent Commencement Date occurs as to Phase II of the Premises, the Basic Monthly Rent payable relative to Phase I of the Premises shall be calculated based upon
the Rentable Square Footage of such Phase, multiplied times the applicable per-Rentable-Square-Foot Basic Monthly Rent rental rate, as specified in Paragraph 7.2, below;
except that as to Phase II, the initial Basic Monthly Rent rental rate shall be as provided in Paragraph 2.6, above (and will not increase until the Third Lease Year specified in such
Paragraph 7.2, at which point the Basic Monthly Rent rental rate shall increase to $[***] for the entire Premises). 





        2.8.  "Security
Deposit": $[***]. Tenant's Security Deposit—which is due and payable on the date of Tenant's execution of this
Lease—does not constitute last month's rent. Last month's rent must be separately paid by Tenant on or before the first day of the last
month of the Lease Term. 


        2.9.  "Base
Year" Calendar year 2009. 


        2.10.  Guarantor:
NONE. 


        2.11.  Address
for Landlord: 





c/o
Sunroad Enterprises

4445 Eastgate Mall

Suite 400

San Diego, CA 92121

Attn: Mr. Dan Feldman 






        2.12.  Addresses
for Tenant. 





Legal
Notice Addresses 


Bridgepoint
Education, Inc.

13500 Evening Creek Drive North, Suite 600

San Diego, CA 92128

Attn: Mr. Rocky Sheng 






        2.13.  "Permitted
Use": General office use and uses incidental thereto (including use of the applicable portions of the first floor of the Premises built-out
therefor as a cafeteria and as an audio-visual room), including, without limitation, support for online services, to the extent the 




[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 








same
comply with applicable laws and zoning, in accordance with all applicable laws, statutes, ordinances, and regulations and the provisions of this Lease. 


        2.14.  Building
Standard Operating Hours: 





Monday
through Friday: 7:00 a.m.-7:00 p.m.

Saturday: 8:00 a.m.-1:00 p.m. (excluding local, state, and federal holidays upon which Banks are generally closed for business in San Diego, California) 






        2.15.  Participating
Brokers: 





Landlord:
Cushman & Wakefield (Wolf/Wayne/Vann)

Tenant:                        Grubb & Ellis/BRE Commercial (Hobson) 






        2.16.  Initial
Payment Amounts: $[***], representing the Security Deposit, and $[***], representing the first month's Basic
Monthly Rent for the entire Premises (both Phase I and Phase II), both of which amounts are payable on the date Tenant executes this Lease. 




        3.    Term.    



        3.1.  Description of Term.    The term of this Lease ("Term") shall commence on the "Lease Commencement Date," as
defined in the Principal Lease Provisions, and shall expire on the "Initial Expiration Date", as defined in the Principal Lease Provisions, subject to (i) any extension rights
described in Paragraph 3.2, below, and (ii) earlier termination, as provided in this Lease. The term "Expiration Date", as used in this Lease shall mean the Initial Expiration Date, any
earlier date upon which this Lease is terminated, as provided below, or if the Term is extended pursuant to Paragraph 3.2, below, then the expiration date of any exercised Extension Term (as
defined below). 


        3.2.  Extension Rights.    Tenant shall, subject to all of the provisions of this Paragraph 3.2 (including
all subparagraphs hereof), have the option to extend the Lease Term (each an "Option to Extend") for two additional terms of five years each (each, an "Extension Term"), provided Tenant is in
occupancy of not less than 50% of the Premises at the time of exercise of each such Option to Extend and Tenant gives Landlord written notice of its election to exercise the Option to Extend no less
than ten months prior to the then-applicable Expiration Date of the Term. Such notice will constitute Tenant's irrevocable election to extend the Term and may not subsequently be revoked
by Tenant. Time is of the essence with respect to the timing of such requirement to give notice to Landlord. 



        3.2.1.  Restrictions on Transferability of Option.    The Options to Extend are personal to the Tenant originally
named in this Lease or any Permitted Transferee (as defined below) and may not be exercised by anyone other than such originally named Tenant or a Permitted Transferee. 



        3.2.2.  Conditions Terminating Tenant's Rights to Exercise Option.    Tenant shall not have the right to exercise an
Option to Extend, notwithstanding anything set forth above to the contrary, during any period of time that Tenant is in default under any provision of this Lease and continuing until the default
alleged in said notice is cured. The period of time within which an Option to Extend may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise the Option to Extend
because of the foregoing provisions of this Paragraph, even if the effect thereof is to eliminate Tenant's right to exercise the Option to Extend. Additionally, Tenant's right to exercise its second
Option to Extend is further conditioned upon Tenant having exercised its first Option to Extend. 



        3.2.3.  Conditions Terminating Tenant's Option Rights.    All rights with respect to an Option to Extend (and, in
the case of the first Option to Extend, all rights with respect to the second Option to Extend as well) shall terminate and be of no further force or effect even after Tenant's due and timely exercise
of such Option to Extend, if, after such exercise, but prior to the commencement of the applicable Extension Term, an Event of Default occurs. 





[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 









        3.2.4.  Terms and Conditions of Extension of Term.    If Tenant duly and timely exercises an Option to Extend, then
this Lease shall remain in full force and effect for such additional five-year period, except that the Basic Monthly Rent rental rate will adjust as of the first day of the Extension Term
such that for the first year of the Extension Term the Basic Monthly Rent rental rate shall be equal to the then prevailing rental rate for renewal leases of comparable Class A office space in
the central San Diego rental market (which shall mean the areas from, and including, the I-15 corridor on the east to, and including, the I-5 corridor on the west, and from,
and including, the Mission Valley submarket on the south to, and including, the Sorrento Mesa submarket/Highway 56 corridor on the north), as projected for the first day of the applicable Extension
Term and determined pursuant to Paragraph 3.2.5, below and in determining the rental rate of renewal leases of comparable Class A office space in the central San Diego rental market, the
parties shall take into account (if, but only if, they are then applicable in renewal lease negotiations) rental abatement concessions, parking charges, tenant improvements or allowances, adjustments
to base years, the value of existing improvements in the Premises as compared to the value of improvements in such comparable space, based on the age, quality, and layout of the improvements, and all
other monetary and nonmonetary concessions, if any, being granted to tenants in connection with renewal leases for comparable space (the "Then-Prevailing Rate"). The Basic Monthly Rent
will thereafter increase annually during such Extension Term by the prevailing rental increase rate for new leases of comparable Class A office space in the central San Diego rental market, if
any, at the time determined pursuant to Paragraph 3.2.5, below (the "Then-Prevailing Increase Rate"). 


        3.2.5.  Determination of Then-Prevailing Rate.    If Tenant exercises the Option to Extend, then
Landlord shall, within 15 business days of Tenant's written notice of exercise, provide Tenant with written notice of the Then-Prevailing Increase Rate and the Then-Prevailing
Rate (as described in Paragraph 3.2.4, above) and the calculation of the new Basic Monthly Rent to be effective during the first year of the Extension Term. Tenant shall have 20 business days
from the date of Landlord's notice in which to (a) accept the Landlord's determination of the Then-Prevailing Rate and/or the Then-Prevailing Increase, or
(b) dispute Landlord's determination of the Then-Prevailing Rate and/or the Then-Prevailing Increase Rate. If Tenant fails to notify Landlord, in writing, of its
disagreement with Landlord's determination of the Then-Prevailing Rate and/or the Then-Prevailing Increase Rate within such 20-business day period, then Tenant will
be deemed to have accepted Landlord's determination and Landlord's determination shall be binding on both parties. If Tenant disputes such determination, then its notice to Landlord disputing such
determination must set forth Tenant's determination of the Then-Prevailing Rate and/or the Then-Prevailing Increase Rate. Upon receipt of Tenant's notice, Landlord and Tenant
shall promptly meet and, in good faith, attempt to agree upon the Then-Prevailing Rate and the Then-Prevailing Increase Rate. If Landlord and Tenant are unable to reach
agreement upon the Then-Prevailing Rate or the Then-Prevailing Increase Rate within 30 days of the date of Landlord's receipt of Tenant's notice, then the parties shall
promptly submit such dispute to the San Diego office of the American Arbitration Association (the "AAA"), or its successor, for resolution before a single arbitrator (who must have at least ten years
experience in the San Diego County commercial real estate market as a real estate broker or MAI appraiser appointed pursuant to the AAA procedures) in accordance with Commercial Arbitration Rules of
the AAA. The arbitrator's sole authority will be to select between the Landlord's and the Tenant's respective written determinations of the Then-Prevailing Rate and/or the
Then-Prevailing Increase Rate (whichever is in dispute), as set forth in the notices described above. In no event may such arbitrator select any other amount as the
Then-Prevailing Rate or the Then-Prevailing Increase Rate. The decision of the arbitrator shall be binding upon all parties and the cost of the arbitration shall be split
equally between Landlord and Tenant. 















        4.    Delivery of Possession.    



        4.1.  Delivery Requirements.    Landlord and Tenant hereby acknowledge that the Premises will be
built-out by Landlord is two phases (each a "Phase"). The first phase ("Phase I"), will consist of those portions of the Premises located on the 1st through the
6th floors of the Building. The balance of the Premises, consisting of the portions of the Premises located on the 7th, 8th, 10th, and
11th floors of the Building ("Phase II"), will be built-out subsequent to (or pursuant to a less accelerated build-out schedule than)
Phase I. Prior to tendering possession of Phase I of the Premises to Tenant, and prior to tendering possession of Phase II to Tenant, Landlord, at its cost, shall have
Substantially Completed (as defined in Paragraph 4.2, below) the work required to be completed by Landlord prior to the delivery of the relevant Phase thereof to Tenant, as described in  Exhibit "C" to this Lease (the "Landlord's Work"), subject to Landlord's reserved rights hereunder and Landlord's right to continue the
completion of Landlord's Work without material interference by Tenant—which rights are subject to Landlord's obligation under the definition of "Substantially Complete." The date upon
which possession of the Premises—or the relevant Phase thereof—is tendered to Tenant with the Landlord's Work, or the Landlord's Work relative to the relevant Phase thereof,
Substantially Completed, is referred to herein as the "Delivery Date" as to the subject Phase. 



        4.1.1.  Landlord
and Tenant acknowledge that, as a result of the staggered nature of Landlord's Substantial Completion of the Landlord's Work relative to Phase I
versus Phase II, as referenced above, each Phase will have its own Delivery Date. Landlord and Tenant further acknowledge that, as provided below, the dates upon which such Delivery Dates occur
are subject to three delaying factors: (i) Tenant Delays, (ii) delays due to Force Majeure Events (as defined below), and (iii) delays due to Extraordinary Events (as defined
below). For purposes of this Lease, the term "Force Majeure Events" shall mean and refer to any prevention, delay, or stoppage of work due to strikes, lockouts, labor disputes, acts of God, inability
to obtain labor or materials or reasonable substitutes therefor, governmental restrictions, regulations, or controls, enemy or hostile government action, civil commotion, fire or other casualty, and
other causes (other than financial) beyond the reasonable control of Landlord. Notwithstanding the foregoing, in no event shall a lack of funds or inability to obtain financing constitute a Force
Majeure Event. For purposes of this Lease, the term "Extraordinary Events" shall mean and refer to any moratorium or similar act by any governmental entity which prevents or delays the issuance of any
permit required relative to the Landlord's Work or otherwise prevents or delays Landlord from proceeding with the Landlord's Work, but only to the extent such moratorium or similar act is beyond the
reasonable control of Landlord to prevent (provided, however, if Landlord reasonably could have limited the duration of the moratorium or similar act but failed to do so, then the period of actual
delay with respect to such moratorium or similar act shall be reduced by the number of days by which Landlord reasonably could have reduced such delay), as well as any material casualty or similar
unforeseeable major event which (a) is beyond the reasonable control of Landlord, and (b) can reasonably be expected to affect the date by which Landlord can Substantially
Complete the Landlord's Work by more than ten business days. Notwithstanding the foregoing, in no event shall a lack of funds or inability to obtain financing constitute an Extraordinary Event. 



        4.1.2.  Landlord
shall use its commercially reasonable efforts to Substantially Complete the Landlord's Work relative to Phase I within 150 days (subject to
delays due to Force Majeure Events, Extraordinary Events, and/or Tenant Delays) of issuance of mutual approval of the TI Plans (as defined in attached  Exhibit "C") for Phase I by Landlord and
Tenant. If the Delivery Date for Phase I does not occur for any reason other than as a
result of a Force Majeure Event, Extraordinary Event, or Tenant Delay on or before that date which is six months following the date that the TI Plans for Phase I are mutually approved by
Landlord and Tenant pursuant to attached Exhibit "C," (such outside date being referred to herein as the "Outside Phase I Delivery Date"), then
Tenant shall have the right to deliver a notice to 














Landlord
(the "Phase I Outside Date Non-Delivery Notice"), at any time prior to the date that the Delivery Date occurs relative to the Phase I. Notwithstanding the foregoing,
the Outside Phase I Delivery Date shall be delayed one day for each day of Tenant Delay. If Tenant delivers the Phase I Outside Date Non-Delivery Notice to Landlord and if
Landlord does not cause the Delivery Date relative to Phase I to occur within 30 days thereafter (such 30 day period being referred to herein as the "Phase I Delivery Cure
Period"), then the following provisions shall apply: 



        4.1.2.1.  For
each day between the expiration of the Phase I Delivery Cure Period and the date that the Delivery Date relative to Phase I occurs, Tenant shall
be entitled to have the Phase I Rent Relief Period referenced in Paragraph 2.1 of the Addendum to this Lease increased by one day, up to a maximum of 90 days, relative to the
Basic Monthly Rent and all other Rent obligations otherwise payable by Tenant relative to the Premises. 



        4.1.2.2.  If
the Delivery Date relative to Phase I has not occurred within 60 days of the expiration of the Phase I Delivery Cure Period, then Tenant
shall have the right at any time thereafter (but prior to the Delivery Date relative to Phase I) to terminate this Lease upon three business days' written notice, and upon the expiration of
such three business day period, if the Delivery Date relative to Phase I has still not occurred, then this Lease shall terminate, Landlord shall refund the Security Deposit and any prepaid
rental to Tenant, and neither party shall have any further obligation to the other (except for obligations which pursuant to this Lease are to survive termination of this Lease). If, however, Landlord
causes the Delivery Date to occur within said three business day period, this Lease shall remain in full force and effect and Tenant's termination notice shall be null and void. 


        4.1.2.3.  Notwithstanding
the foregoing, the Outside Phase I Delivery Date shall be tolled for purposes of the remedy described in Paragraph 4.1.2.1 (but not
for purposes of the remedy described in Paragraph 4.1.2.2, above, or Paragraph 4.1.2.4, below) for each day that completion of Landlord's Work is delayed due to any Extraordinary Event. 


        4.1.2.4.  Notwithstanding
anything to the contrary contained in this Lease, if Phase I has not been Substantially Completed and tendered to Tenant on or before
August 30, 2009 (subject only to Tenant Delay, which shall delay such termination date on a day for day basis, and not subject to Force Majeure Events or Extraordinary Events), then Tenant, in
its sole and absolute discretion, may terminate this Lease at any time prior to the date Phase I is Substantially Completed and tendered to Tenant, whereupon neither Landlord or Tenant shall
have any further rights or obligations under this Lease (except for obligations which pursuant to this Lease are to survive termination of this Lease) and Landlord shall immediately return to Tenant
all amounts delivered by Tenant to Landlord pursuant to the terms of this Lease. 




        4.1.3.  Landlord
shall use its commercially reasonable efforts to Substantially Complete the Landlord's Work relative to Phase II by January 1, 2010 (subject to
Force Majeure Events, Extraordinary Events, and/or Tenant Delays). If the Delivery Date for Phase II does not occur for any reason other than as a result of a Force Majeure Events,
Extraordinary Events, and/or Tenant Delays on or before February 15, 2010 (such outside date being referred to herein as the "Outside Phase II Delivery Date"), then Tenant shall have the
right to deliver a notice to Landlord (the "Phase II Outside Date Non-Delivery Notice"), at any time prior to the date that the Delivery Date occurs relative to Phase II.
Notwithstanding the foregoing, the Outside Phase II Delivery Date shall be delayed one day for each day of Tenant Delay. If Tenant delivers the Phase II Outside Date
Non-Delivery Notice to Landlord and if Landlord does not cause the Delivery Date relative to Phase II to occur within 30 days thereafter (such 30 day 











period
being referred to herein as the "Phase II Delivery Cure Period"), then the following provisions shall apply: 



        4.1.3.1.  For
each day between the expiration of the Phase II Delivery Cure Period and the date that the Delivery Date relative to Phase II occurs, Tenant shall
be entitled to have the Phase II Rent Relief Period referenced in Paragraph 2.2 of the Addendum to this Lease increased by one day, up to a maximum of 90 days, relative to the
Basic Monthly Rent and all other Rent obligations otherwise payable by Tenant relative to Phase II. 


        4.1.3.2.  If
the Delivery Date relative to Phase II has not occurred within 60 days of the expiration of the Phase II Delivery Cure Period, then Tenant
shall have the right at any time thereafter (but prior to the Delivery Date relative to Phase II) to terminate this Lease upon three business days' written notice, and upon the expiration of
such three business day period, if the Delivery Date relative to Phase II has still not occurred, this Lease shall terminate, whereupon neither Landlord or Tenant shall have any further rights
or obligations under this Lease (except for obligations which pursuant to this Lease are to survive termination of this Lease) and Landlord shall immediately return to Tenant all amounts (including,
without limitation, Basic Monthly Rent and Additional Rent) delivered by Tenant to Landlord pursuant to the terms of this Lease other than Basic Monthly Rent and Rent paid by Tenant with respect to
Phase I for the period prior to the date this Lease is terminated pursuant to the terms of this Lease, with such rental amounts prorated based on the number of days in the month that such
termination occurs applied. If, however, Landlord causes the applicable Delivery Date to occur within
said three business day period, this Lease shall remain in full force and effect and Tenant's termination notice shall be null and void. 



        4.1.3.3.  Notwithstanding
the foregoing, the Outside Phase II Delivery Date shall be tolled for purposes of the remedy described in Paragraph 4.1.3.1 (but not
for purposes of the remedy described in Paragraph 4.1.3.2, above, or Paragraph 4.1.3.4, below) for each day that completion of Landlord's Work is delayed due to any Extraordinary Event. 


        4.1.3.4.  Notwithstanding
anything to the contrary contained in this Lease, but subject to Paragraph 4.1.3.5, below, if (i) Phase II has not been
Substantially Completed and tendered to Tenant (i.e., the Delivery Date of Phase II) and (ii) a parking ratio of 6.0:1,000 USF has not been provided for the entire Premises
(i.e., both Phase I and Phase II) pursuant to the terms of Paragraph 9 of the Addendum to this Lease (such event referred to herein as, the "Complete Delivery of the
Premises and Parking"), on or before March 30, 2010 (subject only to Tenant Delay, which shall delay such termination date on a day for day basis, and not subject to Force Majeure Events or
Extraordinary Events) ("Phase II Termination Date"), then Tenant, in its sole and absolute discretion, may thereafter terminate this Lease (including with respect to Phase I) at any time
prior to the date Complete Delivery of the Premises and Parking has occurred, whereupon neither Landlord or Tenant shall have any further rights or obligations under this Lease (except for obligations
which pursuant to this Lease are to survive termination of this Lease) and Landlord shall immediately return to Tenant all amounts (including, without limitation, Basic Monthly Rent and Rent)
delivered by Tenant to Landlord pursuant to the terms of this Lease other than Basic Monthly Rent and Rent paid by Tenant with respect to Phase I for the period prior to the date this Lease is
terminated pursuant to the terms of this Lease, with such rental amounts prorated based on the number of days in the month that such termination occurs applied. Notwithstanding anything to the
contrary contained herein, upon termination of this Lease pursuant to the terms of this Paragraph 4.1.3.4, Landlord shall pay to Tenant as Tenant's sole and exclusive remedy, upon demand,
liquidated damages in the sum of $100,000. Landlord and Tenant agree that it would be impractical and extremely difficult to estimate the damages which Tenant may suffer in the event Landlord fails to
cause Complete Delivery of the Premises and 
















Parking
to occur on or before the Phase II Termination Date. Landlord and Tenant therefore agree that such $100,000 amount is a reasonable present estimate of the net detriment that Tenant
would suffer in the event Tenant terminates this Lease due to Landlord's failure to cause Complete Delivery of the Premises and Parking to occur on or before the Phase II Termination Date, and
such amount shall be the full, agreed, and liquidated damages collectible by Tenant. Landlord and Tenant acknowledge that the payment of such liquidated damages is not intended as a forfeiture or
penalty [within the meaning of California Civil Code Sections 3275 or 3369], but is intended to constitute liquidated damages to Tenant [pursuant to
California Civil Code Sections 1671, 1676 and 1677]. 


        4.1.3.5  Notwithstanding
anything to the contrary contained in this Lease, if Landlord fails to provide a parking ratio of 6.0:1,000 USF for the entire Premises pursuant to
the terms of Paragraph 9 of the Addendum to this Lease on or before Phase II Termination Date, but has Substantially Completed Phase II and has tendered it to Tenant on or before
the Phase II Termination Date, then, at any time
prior to the date a parking ratio of 6.0:1,000 USF has been provided for the entire Premises pursuant to the terms of Paragraph 9 of the Addendum to this Lease, Tenant, in its sole and absolute
discretion, may, by written notice to Landlord, and in lieu of its right to terminate this Lease under Paragraph 4.1.3.4, above, elect to reduce the Basic Monthly Rent payable by Tenant after
such date by an equitable and commercially reasonable amount to reflect the reduced value of the Premises to Tenant as a result of Landlord being unable to increase Tenant's parking ratio to 6.0:1,000
USF. If Tenant delivers the written notice pursuant to the foregoing sentence, then Landlord and Tenant shall promptly meet and, in good faith, attempt to agree upon the amount by which the Basic
Monthly Rent will be decreased, which decrease shall be effective as of the date Phase II has been Substantially Completed and tendered to Tenant. If Landlord and Tenant are unable to reach
agreement upon the amount of such decrease within 30 days of the date of Landlord's receipt of Tenant's notice, then the parties shall promptly submit such dispute to AAA or its successor, for
resolution before a single arbitrator (who must have at least ten years experience in the San Diego County commercial real estate market as a real estate broker or MAI appraiser appointed pursuant to
the AAA procedures) in accordance with Commercial Arbitration Rules of the AAA. The arbitrator's sole authority will be to select between the Landlord's and the Tenant's respective written
determinations of the amount by which the Basic Monthly Rent will be decreased to reflect the reduced value of the Premises to Tenant as a result of Landlord being unable to increase Tenant's parking
ratio to 6.0:1,000 USF. In no event may such arbitrator select any other amount as the amount by which the Basic Monthly Rent will be decreased; provided, however, the amount of liquidated damages
agreed to by the parties in 4.1.3.4, above, shall not have any bearing whatsoever on the arbitrator's decision, which decision shall take into account only those factors which the arbitrator
determines are equitable and commercially reasonable factors at the time Landlord receives Tenant's notice. The decision of the arbitrator shall be binding upon all parties and the cost of the
arbitration shall be split equally between Landlord and Tenant. 





        4.2.  Definition of Substantial Completion.    For purposes of this Lease, the term "Substantially Complete" (and
its grammatical variations, such as Substantial Completion) when used with reference to Landlord's Work (or with reference to Landlord's Work in a particular Phase of the Premises), will mean that
Landlord's Work has been completed to such an extent that Tenant can lawfully commence its occupancy of the Premises, and that the Landlord's Work (or Landlord's Work in the particular Phase of the
Premises) can be finally completed within 45 days and without material interference to Tenant's occupancy and use of the Premises (or the particular Phase of the Premises). 









        4.3.  Final Completion.    Except for any items set forth on a written, detailed "punch-list" of
excepted items delivered to Landlord upon the Delivery Date of a particular Phase, or any latent defects in Landlord's Work which Tenant, despite reasonable inspection of the Premises fails to
discover as of the applicable Delivery Date (which "punch-list" Tenant will be entitled to supplement during the ten business day period following the subject Delivery Date to add items
which Tenant could not reasonably discovery during its initial inspection, but which neither Tenant, nor any of its employees, contractors, or invitees, has damaged), Tenant shall, as of the Delivery
Date of a particular Phase, except as otherwise expressly provided in this Lease or the Work Letter attached hereto as Exhibit "C," be deemed to have
thoroughly inspected the applicable Phase in a commercially reasonable manner, and (i) determined that, to the best of Tenant's knowledge, after inspecting the
applicable phase in a commercially reasonable manner (and subject to Tenant's right to supplement the punch-list, as provided above) the applicable Phase complies with all applicable laws
and ordinances, and that the applicable Phase is in first-class condition and repair, (ii) acknowledged that Landlord's Work relative to the applicable Phase has been Substantially Completed,
(iii) accepted the applicable Phase in its then as-is condition with no right to require Landlord to perform any additional work therein (subject to Landlord's Obligations under the
definition of Substantially Completed), except as set forth on the punch list and subject to Tenant's right to supplement the punch-list, as provided above, and any latent defects in
Landlord's Work and Landlord's ongoing obligations set forth in Paragraph 10.2 of this Lease, and (iv) waived any express or implied warranties regarding the condition of the applicable
Phase, including any implied warranties of fitness for a particular purpose or merchantability. Notwithstanding the foregoing or anything to the contrary contained herein, Landlord shall, at its sole
cost and expense (and as not part of Operating Expenses) and throughout the Initial Lease Term and any option term (if applicable), repair any latent design or construction defects in the original
construction of the Project of which Landlord has notice or that Landlord discovers. 




        5.    Use of Premises and Common Areas.    



        5.1.  Permitted Use of Premises.    Tenant may use the Premises for the Permitted Use specified in the Principal
Lease Provisions and for no other use without Landlord's consent. Any change in the Permitted Use will require Landlord's prior written consent, which consent may be granted or withheld in Landlord's
reasonable discretion. 


        5.2.  Compliance with Laws.    Landlord covenants that the Premises and the Project will comply with all applicable
laws as of the Lease Commencement Date. Thereafter, assuming that Landlord has, in fact, caused the Premises and the Project to comply with all applicable laws as of the Lease Commencement Date,
Tenant shall comply with all laws concerning the Premises and/or Tenant's use of the Premises, including without limitation the obligation at Tenant's sole cost to alter, maintain, or restore the
Premises in compliance with all applicable laws, even if such laws are enacted after the date of this Lease, and even if compliance entails costs to Tenant of a substantial nature. Such obligation to
comply with laws shall include, without limitation (again, assuming that Landlord has, in fact, caused the Premises and the Project to comply with all applicable laws as of the Lease Commencement
Date), compliance with Title III of the Americans With Disabilities Act of 1990 (42 U.S.C. 12181 et seq.) (the "ADA"). In addition to the foregoing
obligations of Tenant's relative to the Premises, if Tenant's particular use of the Premises (including the commencement of any Alterations, as defined below) results in the need for modifications or
alterations to any other portion of the Project in order to comply with the ADA or other applicable laws, then Tenant shall additionally be responsible, upon demand, for the cost of such modifications
and alterations plus a supervisory fee of five percent of such cost payable to Landlord. Tenant shall indemnify, defend (with counsel reasonably satisfactory to Landlord), and hold Landlord (and its
partners, members, shareholders, directors, officers, employees, agents, assigns, and any successors to Landlord's interest in the Project) harmless from and against any and all losses, costs,
demands, damages, expenses (including reasonable attorneys' fees), claims, causes of action, judgments, penalties, fines, or liabilities, arising from Tenant's failure to satisfy its obligations under
this Paragraph including, without limitation, (i) any costs, expenses, and liabilities 












incurred
by Landlord in connection with responding to any demand by any governmental authority that Landlord undertake any modifications or alterations which are Tenant's responsibility pursuant to
this Paragraph 5.2 or for which Tenant is obligated to reimburse Landlord hereunder, as well as (ii) any reasonable attorneys' fees, costs, expenses, and liabilities incurred by Landlord
in responding to, defending, pursuing, or otherwise being involved with any action, suit, or proceeding arising out of any claim relating to the non-compliance of the Premises or the
Project with the ADA or any similar law where such action, suit, or proceeding relates to, or arises from, Tenant's particular use of the Premises or any Alterations. 



        5.3.  Condition During Periods of Non-Use.    During any period of time in which Tenant is not
continuously using and occupying the Premises for the operation of its business, Tenant shall take such measures as may be necessary or desirable, in Landlord's reasonable opinion, to secure the
Premises from break-ins and use by unauthorized persons, to minimize the appearance of non-use, and to otherwise maintain the interior and exterior portions of Tenant's
Premises, including all windows and doors, in first class condition. 














































 



        5.4   Use of Common Areas.    Tenant's use of the Common Areas shall at all times comply with the provisions of all
Rules (as defined below) regarding such use as Landlord may from time to time adopt. In no event shall the rights granted to Tenant to use the Common Areas include the right to store any property in
the Common Areas, whether temporarily or permanently. Any property stored in the Common Areas may be removed by Landlord and disposed of, and the cost of such removal and disposal shall be payable by
Tenant to Landlord upon demand. Additionally, in no event may Tenant use any portion of the Common Areas for loading, unloading, or parking, except in those areas specifically designated by Landlord
for such purposes, nor for any group social event, sidewalk sale, employment fair, or similar unauthorized purpose. Notwithstanding anything to the contrary contained in this Lease, Tenant shall be
permitted upon reasonable notice (but not less than ten days) to Landlord to have social events from time to time in a portion of the Common Areas reasonably acceptable to Landlord and Tenant, which
social events may extend beyond the normal business hours of the Project and Building and include entertainment (including live entertainment such as bands and disk jockeys), food and beverages
(including alcoholic beverages), cooking areas (including grills), tents, tables and chairs, and may be catered. Any such event shall be subject to Tenant's compliance with all applicable laws and
ordinances, Tenant obtaining any required permits and approvals from governmental entities/agencies, and Landlord's reasonable rules and requirements. Tenant shall be responsible for all costs
incurred in connection with any such event (including clean up and damage to the Project) and will indemnify, defend, and hold Landlord harmless from and against any and all actions, claims, demands,
expenses, and liabilities arising out of or relating to any such activities. 


        5.5.  General Covenants and Limitations on Use.    In addition to the Rules, Tenant and Tenant's Invitees (as
defined below) use of the Premises and the Project, will be subject to the following additional general covenants and limitations on use, which shall be applied in a non-discriminatory
fashion. 



        5.5.1.  Tenant
shall not do, bring, or keep anything in or about the Premises that will cause a cancellation of any insurance covering the Premises. If the rate of any
insurance carried by Landlord is increased as a result of Tenant's use or Tenant's failure to continuously use and occupy the Premises, Tenant shall pay the amount of such increase to Landlord, within
ten days after Landlord delivers to Tenant a written notice of such increase; provided, however, if by ceasing such activity such increase can be avoided, and Tenant does so with the ten day notice
period provided above, then such discontinuance of the activity causing the increase will be deemed to satisfy Tenant's obligation hereunder. 



        5.5.2.  No
noxious or unreasonably offensive activity shall be carried on, in or upon the Premises by Tenant or Tenant's Invitees, nor shall anything be done or kept in the
Premises which may be or become a public nuisance or which may cause unreasonable embarrassment, disturbance, or annoyance
to others in the Project, or on adjacent or nearby property. To that end, Tenant additionally covenants and agrees that no light shall be emitted from the Premises which is unreasonably bright or
causes unreasonable glare; no sounds shall be emitted from the Premises which are unreasonably loud or annoying; and no odor shall be emitted from the Premises which is or might be unreasonably
noxious or offensive to others in the Building, on the Project, or on adjacent or near-by property. 



        5.5.3.  No
unsightliness (as reasonably determined by Landlord) shall be permitted in the Premises which is visible from the Common Areas. Without limiting the generality of
the foregoing, all equipment, objects, and materials shall be kept enclosed within the Premises and screened from view; no refuse, scraps, debris, garbage, trash, bulk materials, or waste shall be
kept, stored, or allowed to accumulate except as may be properly enclosed within appropriate containers in the Premises and promptly and properly disposed of. 


        5.5.4.  The
Premises shall not be used for sleeping or washing clothes, nor shall the Premises be used for cooking or the preparation, manufacture, or mixing of anything that
might emit any offensive odor or objectionable noises or lights onto the Project or nearby 














properties;
however, the foregoing will not restrict Tenant from having typical office "break rooms" in the Premises with a microwave oven, coffee machine, and similar appliances provided such use is
limited to use by Tenant's employees and no odors emanate from such break room which can be smelled outside the Premises. Notwithstanding the foregoing, Tenant shall be permitted to use the first
floor portion of the Premises for dispensing prepared food for Tenant's employees provided no odors emanate from such dining area which can be smelled outside the Premises. 



        5.5.5.  All
pipes, wires, conduit, cabling, poles, antennas, and other equipment/facilities for or relating to utilities, telecommunications, computer equipment, or the
transmission or reception of audio or visual signals must be kept and maintained enclosed within the Premises (except to the extent included as part of Landlord's Work, Tenant's Work—as
defined in attached Exhibit "C"—or otherwise approved by Landlord) 


        5.5.6.  Tenant
shall not keep or permit to be kept any bicycle, motorcycle, or other vehicle, nor any animal (excluding seeing-eye dogs and other assistance
animals), bird, reptile, or other exotic creature in the Premises. 


        5.5.7.  Neither
Tenant nor Tenant's Invitees shall do anything that will cause damage or waste to the Project. Additionally, Tenant shall not have water delivery service
within the Premises; and Tenant shall be responsible for damage to the Project caused by any other deliverymen at the Premises to deliver goods to Tenant. 


        5.5.8.  Neither
the floor nor any other portion of the Premises shall be overloaded. No machinery, equipment, apparatus, or other appliance shall be used or operated in or on
the Premises that will in any manner injure, vibrate, or shake all or any part of the Project or be allowed to interfere with the equipment of any other tenant within the Project (or other property
owned by Landlord or its affiliates), including, without limitation, interference with transmission and reception of telephone, telecommunications, television, radio, or similar signals. Tenant shall
be responsible for all structural engineering required to determine structural load for items placed in the Premises by Tenant. Tenant shall fasten all files, bookcases, and like furnishings to walls
in a manner to prevent tipping over in the event of earth movements. Landlord shall not be responsible for any damage or liability for such events. 




        5.6.  Access Rights.    Tenant will have 24 hour-a-day, seven
day-a-week access to the Building and the Premises. Notwithstanding the foregoing, and except as otherwise specifically provided in this Lease, no failure of such access rights
will constitute an eviction or a disturbance of Tenant's use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease; except that Tenant
shall be entitled to equitable abatement of its Rent (as defined below) obligations hereunder to the extent such lack of access is due to Landlord's negligence or intentional misconduct and continues
for a period in excess of three business days. Landlord will not be liable, under any circumstances, for a loss of or injury to property or for injury to or interference with Tenant's business,
including loss of profits through, in connection with, or incidental to a failure to furnish access under this Paragraph. Notwithstanding the foregoing, Landlord agrees to use reasonable efforts to
promptly correct any such interruption of access. 


        5.7.  Remedies for Breach.    In the event of any breach of this Paragraph 5 by Tenant or Tenant's Invitees,
Landlord, at its election and in addition to its other rights and remedies under this Lease, may pay the reasonable third party out-of-pocket costs of Landlord of correcting
such breach and Tenant shall immediately, upon demand, pay Landlord the cost thereof, plus a supervisory fee in the amount of five percent of such cost. 




        6.    Security Deposit.    Upon Tenant's execution of this Lease, Tenant shall deposit with Landlord, cash in the
amount of the Security Deposit (if any) set forth in the Principal Lease Provisions, to secure the performance by Tenant of its obligations under this Lease, including without limitation 








Tenant's
obligations (i) to pay Basic Monthly Rent and Additional Rent (as defined below), (ii) to repair damages to the Premises and/or the Project caused by Tenant or Tenant's agents,
employees, contractors, licensees, and invitees (collectively, "Tenant's Invitees"), (iii) to surrender the Premises in the condition required by Paragraph 24, below, and (iv) to
remedy any other defaults by Tenant in the performance of any of its obligations under this Lease. Upon the first day of the Extension Term (if Tenant exercises its Option to Extend), Tenant shall
increase the Security Deposit to an amount equal to the Basic Monthly Rent during the final year of the Lease. If Tenant commits any default under this Lease beyond any applicable notice and cure
periods, Landlord may, at its election, use the Security Deposit to cure such default, and to compensate Landlord for all damage actually suffered by Landlord
which are directly attributable to such default, including, without limitation, reasonable attorneys' fees and costs incurred by Landlord. Upon demand by Landlord, Tenant shall promptly pay to
Landlord a sum equal to any portion of the Security Deposit so used by Landlord, in order to maintain the Security Deposit in the amount set forth in the Principal Lease Provisions. Following the
Expiration Date, and within the earlier of 30 days or the time frame otherwise required by applicable law, Landlord shall deliver to Tenant, at Tenant's last known address, any portion of the
Security Deposit not used by Landlord, as provided in this Paragraph. Landlord may commingle the Security Deposit with Landlord's other funds and Landlord will not pay interest on such Security
Deposit to Tenant. 


        7.    Rent and Rent Adjustments.    



        7.1.  Initial Monthly Rent.    Tenant shall pay to Landlord as minimum monthly rent, without deduction, setoff,
prior notice, or demand (except as otherwise specifically provided in this Lease), the Basic Monthly Rent described in the Principal Lease Provisions (subject to adjustment as provided in
Paragraph 3.2, above), in advance, on or before the first day of each calendar month, beginning on the Rent Commencement Date (broken down by Phase, as provided in Paragraph 2.7, above)
and thereafter throughout the Term. If the Rent Commencement Date is other than the first day of a calendar month, then, except as otherwise provided in this Lease, the Basic Monthly Rent payable by
Tenant for the second month of the Term following the Rent Commencement Date (acknowledging that the first month's rent is payable upon Lease execution) shall be prorated on the basis of the actual
number of days during the Term occurring during the first partial calendar month thereof. Notwithstanding the foregoing, if Landlord is delayed in completion of Landlord's Work due to any Tenant
Delays, then in addition to the Basic Monthly Rent payable for the first month of the Term following the Rent Commencement Date, Tenant shall additionally pay to Landlord, upon the Rent Commencement
Date, additional rent, at the rate of one-thirtieth of the Basic Monthly Rent per day, for the number of days of such delay. Notwithstanding the foregoing, Tenant shall be granted rent
relief pursuant to the Addendum to this Lease and, subject to the provisions of such Addendum, Tenant shall only be obligated to pay for all electricity and other utilities used in the Premises during
such rent relief period. 


        7.2.  Rental Adjustments.    The per-Rentable-Square-Foot Basic Monthly Rent rental rate
shall increase by [***]% each year on the anniversary of the Lease Commencement Date (with each 12 month period from and after the Lease Commencement Date being referred
to herein as a "Lease Year") in accordance with the following schedule: 



						
	First Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Second Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Third Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Fourth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Fifth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Sixth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Seventh Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Eighth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Ninth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Tenth Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]
	Eleventh Lease Year:	 	 	—	 	$[***] per Rentable Square Foot plus $[***]






[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 








        If
Tenant exercises its right to extend the Term of this Lease pursuant to Paragraph 3.2, above, then on each anniversary of the first day of the Extension Term, the Basic Monthly
Rent shall be increased by multiplying the then-existing Basic Monthly Rent amount by a percentage equal to the sum of one hundred percent plus the Then-Prevailing Increase
Rate (stated as a percentage), if any, determined pursuant to Paragraph 3.2.5, above [for example, if the Then-Prevailing Increase Rate is five percent, then the Basic
Monthly Rent would increase by 105%]. 



        7.3.  Additional Rent.    In addition to paying the Basic Monthly Rent pursuant to this Paragraph 7,
commencing January 1, 2010 (but subject to the rent relief provisions of the Addendum to this Lease), Tenant shall pay to Landlord (in accordance with Paragraph 8, below), Tenant's Share
(as defined below) of the annual Direct Expenses that are in excess of the amount of Direct Expenses applicable to the Base Year. The amounts payable pursuant to this Paragraph, together with other
amounts of any kind (other than Basic Monthly Rent) payable by Tenant to Landlord under the terms of this Lease, constitute additional rent for the Premises and are collectively and individually
referred to in this Lease as "Additional Rent." 


        7.4.  General Rental Provisions.    All "Rent" (which includes Basic Monthly Rent, and any "Additional Rent"
hereunder) shall be paid to Landlord at the same address as notices are to be delivered to Landlord pursuant to the Principal Lease Provisions, as Landlord may change such address from time to time
pursuant to the terms of this Lease. The Rentable Area of the Premises and the Buildings are,
at Landlord's or Tenant's election, subject to verification by Landlord's space planner or architect; provided, however, any such remeasurement of the Premises shall only occur if the Premises are
expanded or decreased in size, and such remeasurement shall only be of the added or subtracted portion, which Rentable Square Footage shall be added to or subtracted from the Rentable Area of the
Premises (as determined in accordance with Paragraph 2.4, above), as applicable. That verification shall be made in accordance with this Paragraph. Tenant's space planner or architect may
consult with Landlord's space planner or architect regarding that verification. Any such verification under this paragraph shall be undertaken in accordance with the BOMA Standards. If Landlord's
space planner or architect determines that the Rentable Area of the Premises or the Buildings is different from that stated in this Lease, all Rent and other calculations under this Lease that are
based on that incorrect amount shall be modified in accordance with that determination. If that determination is made, it shall be confirmed in writing by Landlord to Tenant. In the event Tenant
disputes Landlord's redetermination, and the parties are unable to agree upon the actual size of the Premises (as so re-measured) within 30 days of Landlord's notice to Tenant, such
issue will be arbitrated in the same manner as matters are to be arbitrated pursuant to Paragraph 3.2.5, above, except that the arbitrator will be a licensed architect or appraiser and not a
real estate broker. 




        8.    Additional Rent.    



        8.1.  Definitions.    The following definitions apply in this Paragraph 8 (and elsewhere in this Lease): 



        8.1.1.  Building Operating Costs.    Subject to the Excluded Costs (as defined below) relating to the Building, the
term "Building Operating Costs" means all expenses, costs, and amounts of every kind or nature that Landlord pays or incurs because of or in connection with the ownership, operation, management,
maintenance, or repair of the Building (which includes the land and any parking areas located under the Building). Building Operating Costs include, without limitation, the following amounts paid or
incurred relative to the Building (a) the cost of supplying utilities to the Building, including without limitation, water, electricity, heating, ventilation, and air conditioning,
(b) Tax Expenses relating to the Building, to the extent the Building is separately assessed by the taxing authority, (c) the cost of providing janitorial services for the Building and
of operating, managing, maintaining, and repairing all building systems, including without limitation utility, mechanical, sanitary, storm drainage, and elevator systems, and the cost of supplies,
tools, and equipment, as well as maintenance and service contracts in connection with those systems, (d) the cost of licenses, 











certificates,
permits, and inspections relating to the operation of the Building, (e) the cost of contesting the validity or applicability of any government enactments that may affect the
Building Operating Costs, (f) the cost of maintenance and repair of any parking areas located under the Building (if any), including, without limitation, repainting, restriping, and cleaning
costs, (g) fees, charges, and other costs, including administrative, management fees, and accounting costs (or amounts in lieu of such fees), whether paid to Landlord, an affiliate of
Landlord's (provided, that any such administrative or management fees shall be included in the Base Year and in no event shall exceed three percent of the rent receipts for the Building), or a third
party, consulting fees, legal fees, and accounting fees of all persons engaged by Landlord or otherwise reasonably incurred by Landlord in connection with the operation, management, maintenance, and
repair of the Building, (h) wages, salaries, and other
compensation and benefits of all persons engaged in the operation, maintenance, repair, or security of the Building at or below the level of Project Manager plus employer's Social Security taxes,
unemployment taxes, insurance, and any other taxes imposed on Landlord that may be levied on those wages, salaries, and other compensation and benefits. If any of Landlord's employees provide services
for more than one project of Landlord, only the prorated portion of those employees' wages, salaries, other compensation and benefits, and taxes reflecting the percentage of their working time devoted
to the Building will be included in the Building Operating Costs, (i) payments under any easement, CC&R's, license, operating agreement, declaration, restrictive covenant, or other instrument
relating to the sharing of costs, but only to the extent that such shared costs are of a type and nature that they would be included as Building Operating Costs if incurred directly by Landlord,
(j) amortization (including interest on the unamortized cost at a rate equal to the floating commercial loan rate announced from time to time by Bank of America as its "reference rate" (or a
comparable rate selected by Landlord if such reference rate ceases to be published) plus two percentage points per annum) of the cost of acquiring or renting personal property not affixed to the
Building used in the maintenance, repair, and operation of the Building, (k) [Intentionally Deleted], and (l) capital expenditures, capital improvements, and
capital replacements that (1) are intended as a labor saving or cost saving device or to effect other economies in the maintenance or operation of the Building, but only to the extent of the
actual cost savings resulting therefrom, or (2) are required under any government law or regulation which becomes effective after the Lease Commencement Date. All capital expenditures shall be
amortized (including interest on the unamortized cost at the rate stated in subparagraph (j) of this Paragraph), on a straight line basis, over their useful life, as reasonably determined by
Landlord's certified public accountant in accordance with sound real estate management and accounting practices. 


        8.1.2.  Building's Pro Rata Share.    "Building's Pro Rata Share" means a fraction, the numerator of which is the
total aggregate Rentable Square Feet in the Building, and the denominator of which is the sum of (i) total aggregate Rentable Square Feet in the Building, plus (ii) the total aggregate
Rentable Square Feet in all of the buildings in the Project for which certificates of occupancy have been issued and in which at least 80% of the Rentable Square Footage is occupied by
rent-paying tenants ("Occupancy Threshold"), plus (iii) as to any buildings in the Project other than the Building do not meet the Occupancy Threshold during any calendar year, then
during each year following the date such building is first occupied by a rent-paying tenant prior to the year such building reaches the Occupancy Threshold, the Rentable Square Footage
portion of such building which is occupied by rent-paying tenants during any portion of such calendar year will be included in the denominator of the above-referenced fraction for purposes
of calculating the Building's Pro Rata Share [by way of example, if Landlord were to hereafter construct a 100,000 Rentable Square Foot building, and in a particular year—prior
to the year in which the Occupancy Threshold is achieved for such building—the highest occupancy level of such building is 25,000 Rentable Square Feet, then the denominator of the fraction
for purposes of calculating the Building's Pro Rata Share applicable to such calendar year would be increased by 25,000, from 














273,468
to 298,468]. The Building's Pro Rata Share will be calculated as of January 1 of each calendar year; which calculation will remain in effect (regardless of changes to the
Project) until the following January 1. As of the date of this Lease, the Building is the only building in the Project, so the Building Pro Rata Share is 100%. 


        8.1.3.  Direct Expenses.    "Direct Expenses" means the sum of Operating Expenses plus Insurance Expenses (as such
terms are defined below). 


        8.1.4.  Excluded Costs.    "Excluded Costs" means the following expenses, as they relate to the Building Operating
Costs and the Project Operating Costs (as defined below): (i) depreciation, principal, interest, and fees on mortgages or ground lease payments, except as otherwise provided herein,
(ii) legal fees incurred in negotiating and enforcing tenant leases, disputes with other tenants, (iii) real estate brokers' leasing commissions and advertising costs in connection with
leasing space in the Project, (iv) initial improvements or alterations to tenant spaces in the Project, (v) the cost of providing any service directly to and paid directly by a single
individual tenant, or costs incurred for the benefit of a single tenant, (vi) costs of any items to the extent Landlord actually receives reimbursement therefor from insurance proceeds, under
warranties, or from a tenant or other third party (such costs shall be excluded or deducted—as appropriate—from Operating Expenses in the year in which the reimbursement is
received), or which are paid out of reserves previously included in Operating Expenses, (vii) costs incurred due to Landlord's breach of a law or ordinance, (viii) repairs necessitated
by the gross negligence or willful misconduct of Landlord or Landlord's employees, agents, or contractors, (ix) capital expenditures, capital improvements, and capital replacements other than
those included in the definitions of Building Operating Costs or Project Operating Costs, (x) charitable or political contributions and membership fees or other payments to trade organizations,
(xi) costs of Landlord's Work which are to be borne by Landlord pursuant to attached Exhibit "C", (xii) rent and similar charges
for Landlord's on-site management office and/or leasing office or any other offices of Landlord or its affiliates; however only to the extent such rent is attributable to a portion of such
office(s) in excess of 2,500 Rentable Square Feet (in the aggregate), it being acknowledged that Landlord may include such rent and similar charges to the extent they relate to any such office (or
portion thereof) which is less than 2,500 Rentable Square Feet), (xiii) Landlord's general overhead expenses not related to the Project, (xiv) any costs incurred in connection with the
original design, construction, landscaping and clean-up of the Building/Project, correction of defects in design and/or construction of the Building/Project including defective equipment;
(xv) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment, the cost of which if purchased would be excluded from Operating Costs as a
capital expenditure, excepting from this exclusion equipment not affixed to the Building/Project which is used in providing janitorial or similar services and, further excepting from this exclusion
such equipment rented or leased to remedy or ameliorate an emergency or temporary condition in the Building/Project; (xvi) art costs, other than those incurred in ordinary maintenance and
repair, for sculptures, paintings, fountains or other objects of art or the display of such items, (xvii) any compensation or benefits paid to or provided to clerks, attendants or other persons
in commercial concessions operated by or on behalf of the Landlord, (xviii) any fines, costs, late charges, liquidated damages, penalties, tax penalties or related interest charges, imposed on
Landlord or Landlord's managing agent; (xix) any reserves of any kind; (xx) any amount paid by Landlord or Landlord's managing agent to a subsidiary or affiliate of Landlord or
Landlord's managing agent, for management or other services to the Building, or for supplies or other materials, to the extent the cost of such services, supplies, or materials exceed the cost that
would have been paid had the services, supplies or materials been provided by comparably qualified parties unaffiliated with the Landlord or Landlord's managing agent on a competitive basis;
(xxi) deductibles paid by Landlord relative to any particular insurance claim in excess of $50,000.00; and (xxii) any cost or expense related to monitoring, testing, removal, cleaning,
abatement, or remediation of any Hazardous Material, including toxic mold, in or about the Building or the Project, and 














including,
without limitation, any Hazardous Material in the ground water or soil, except as otherwise provided under Paragraph 38.3, below. 


        8.1.5.  Expense Year.    "Expense Year" means the Base Year, and each calendar year after the Base Year, in which
any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires. 


        8.1.6.  Operating Expenses.    "Operating Expenses" means the sum of (i) all Building Operating Costs, and
(ii) the Building's Pro Rata Share of the Project Operating Costs. 


        8.1.7.  Project Operating Costs.    Subject to the Excluded Costs relating to the Project, the term "Project
Operating Costs" means all expenses, costs, and amounts of every kind or nature that Landlord pays or incurs because of or in connection with the ownership, operation, management, maintenance, or
repair of the Project, including the "Project Common Areas," which for purposes hereof will include all portions of the Project other than the Building and any other similar office building(s) within
the Project from time to time. Project Operating Costs include, without limitation, the following amounts paid or incurred relative to the Project Common Area: (a) the cost of supplying
utilities to all portions of the Project Common Area, including without limitation water, electricity, heating, ventilation, and air conditioning, (b) janitorial/cleaning costs and the cost of
operating, managing, maintaining, and repairing the Project Common Area and all related systems, including without limitation utility, mechanical, sanitary, storm drainage, and elevator systems,
(c) the cost of supplies and tools and of equipment, maintenance, and service contracts in connection with the systems referenced in clause (b), above, (d) the cost of licenses,
certificates, permits, and inspections relating to the Project, (e) the cost of contesting the validity or applicability of any government enactments that may affect the Project Operating
Costs, (f) costs incurred in connection with the implementation and operation of a parking or transportation management program or similar program, (g) all Tax Expenses, except to the
extent such Tax Expenses relate to a separately assessed building in the Project and are separately paid by the tenants of such building (such as pursuant to Paragraph 8.1.1, clause (b),
above), (h) reasonable fees, charges, and other costs, including administrative, management fees, and accounting costs (or amounts in lieu of such fees), whether paid to Landlord, an affiliate
of Landlord's (provided, that any such administrative or management fees shall be included in the Base Year and in no event shall exceed three percent of the rent receipts for the Project), or a third
party, consulting fees, legal fees, and accounting fees of all persons engaged by Landlord or otherwise reasonably incurred by Landlord in connection with the operation, management, maintenance, and
repair of the Project, (i) the cost of parking area and parking structure maintenance, repair and, including, without limitation, resurfacing, repainting, restriping, and cleaning (excluding
costs which are already included as part of the Building Operating Costs relative to any parking areas located under a building, if any), (j) wages, salaries, and other compensation and
benefits of all persons engaged in the operation, maintenance, or security of the Project at or below the level of Project Manager plus employer's Social Security taxes, unemployment taxes, insurance,
and any other taxes imposed on Landlord that may be levied on those wages, salaries, and other compensation and benefits. If any of Landlord's employees provide services for more than one project of
Landlord, only the prorated portion of those employees' wages, salaries, other compensation and benefits, and taxes reflecting the percentage of their working time devoted to the Project shall be
included in Project Operating Costs, (k) any costs or expenses payable pursuant to the provisions of any reciprocal easement and maintenance agreement (or similar instrument or agreement)
recorded against the Project either now or in the future including any owner's association or similar fees, assessments or dues presently or hereafter established for the Project, including payments
under any easement, CC&R's, license, operating agreement, declaration, restrictive covenant, or other instrument relating to the sharing of costs, but only to the extent that such shared costs are of
a type and nature that they would be included as Project Operating Costs if incurred directly by Landlord, (l) amortization (including interest on the unamortized cost at a rate equal to 














the
floating commercial loan rate announced from time to time by Bank of America as its reference rate plus three percentage points per annum) of the cost of acquiring or renting personal property not
affixed to any building or other improvement in the Project used in the maintenance, repair, and operation of the Project, and (m) [intentionally deleted],
(n) rent and similar charges for Landlord's on-site management office and/or leasing office or any other offices of Landlord or its affiliates; however only to the extent such rent
is attributable to a portion of such office(s) which is less than 2,500 Rentable Square Feet), (o) capital expenditures that (1) are intended as a labor saving or cost saving device or
to effect other economies in the maintenance
or operation of the Project, but only to the extent of the actual cost savings resulting therefrom, or (2) are required under any government law or regulation which becomes effective after the
later of the Lease Commencement Date or the date of first occupancy with respect to any improvement constructed after the Lease Commencement Date. All capital expenditures shall be amortized
(including interest on the unamortized cost at the rate stated in subparagraph (l), above) over their useful life, as reasonably determined by Landlord's certified public accountant in
accordance with sound real estate management and accounting practices; (p) any amount paid by Landlord or Landlord's managing agent to a subsidiary or affiliate of Landlord or Landlord's
managing agent, for management or other services to the Project, or for supplies or other materials, to the extent the cost of such services, supplies, or materials exceed the cost that would have
been paid had the services, supplies or materials been provided by comparably qualified parties unaffiliated with the Landlord or Landlord's managing agent on a competitive basis; and
(q) deductibles paid by Landlord relative to any particular insurance claim which are not in excess of $50,000.00. Notwithstanding the foregoing, the Project Operating Costs will exclude any
Excluded Costs relating to the Project. 


        8.1.8.  Tenant's Share.    "Tenant's Share" means a fraction, the numerator of which is the total aggregate Rentable
Square Feet in the Premises, and the denominator of which is the total aggregate Rentable Square Feet in the Building. As of the Lease Commencement Date, the Tenant's Share will be 54.85%; subject to
adjustment as a result of the verification of the Rentable Square Footages of the Premises and the Building pursuant to Paragraph 2.7 and Paragraph 7.4, above. If either the Premises or
the Building are expanded or reduced (including the expansion of the Premises to include Phase II), Tenant's Share shall be appropriately adjusted. Tenant's Share for the Expense Year in which
that change occurs shall be determined on the basis of the number of days during the Expense Year in which each such Tenant's Share was in effect. 




        8.2.  Adjustment of Operating Expenses.    Operating Expenses shall be adjusted as follows: 



        8.2.1.  Gross Up Adjustment When a Project Is Less Than Fully Occupied.    If the occupancy of the total Rentable
Square Footage of completed, partially occupied buildings within the Project (whose square footage is included in the calculation of the Project's Rentable Square Footage pursuant to
Paragraph 8.1.2, above) during any part of any Expense Year (including the Base Year) is less than 95%, Landlord shall make an appropriate adjustment to the variable components of the Operating
Expenses for that Expense Year, as estimated by Landlord in its sole discretion using sound accounting and real estate management principles, to determine the amount of Operating Expenses that would
have been incurred had such buildings been 95% occupied. This amount shall be considered to have been the amount of Operating Expenses for that Expense Year. For purposes of this Paragraph 8.2,
"variable components" include only those component expenses that are affected by variations in occupancy levels, such as water usage. Notwithstanding any other provision of this Lease to the contrary,
(i) Landlord will not charge Operating Expenses to all of its tenants in an amount which is in excess of 100% of the Operating Expenses paid by Landlord in connection with the operation of the
Project; and (ii) Landlord shall make no profit from Landlord's gross-up and collection procedures. 











        8.2.2.  Adjustment When Landlord Adds Additional Buildings to the Project.    If Landlord constructs additional
buildings within the Project following the Base Year, Landlord shall make an appropriate adjustment to the Operating Expenses for the Base Year (as of the date the square footage of such buildings is
included in the calculation of the Project's Rentable Square Footage pursuant to Paragraph 8.1.2, above), as determined by Landlord in its reasonable discretion using sound accounting and real
estate management principles, to estimate the amount of Operating Expenses that would have been incurred for the Base Year if such building had been complete and fully occupied during the Base Year. 


        8.2.3.  Adjustment When Landlord Does Not Furnish a Service to All Tenants.    If, during any part of any Expense
Year (including the Base Year), Landlord is not furnishing a particular service or work (the cost of which, if furnished by Landlord, would be included in Operating Expenses) to a tenant (other than
Tenant) that has undertaken to perform such service or work in lieu of receiving it from Landlord, Operating Expenses for that Expense Year shall be considered to be increased by an amount equal to
the additional Operating Expenses that Landlord would reasonably have incurred during such period if Landlord had furnished such service or work to that tenant. 


        8.2.4.  Additional Costs.    If due to a change in the types of costs being incurred by Landlord as Direct Expenses
(such as, for example, the cessation of previously contracted for security services the cost of which were included in the Base Year Direct Expenses), the Base Year Direct Expenses need to be adjusted
to eliminate the effect thereof, or if there is any change in annual premiums resulting from any new form of insurance or any cancellation of a previously carried type of coverage, any change in
insurance limits or coverage, or any change in deductibles in any year after the Base Year, Landlord shall adjust the Base Year Direct Expenses to eliminate the effect thereof in accordance with sound
real estate management and accounting principles and notify Tenant of such change in writing. Furthermore, Landlord shall have the right to reasonably decrease the amount of the Base Year Direct
Expenses in accordance with sound real estate management and accounting principles for purposes of calculating Increased Direct Expenses (as defined below) to eliminate the effect of abnormally high
costs, or unusual costs, of a particular type or types (such as, by way of example, abnormally high energy costs associated with the "energy crisis" of 2001) occurring during the Base Year. 



        8.2.5.  Common Areas.    Landlord may elect to partition/separate portions of the Common Areas of the Project in a
reasonable manner such that the Operating Costs associated with such partitioned Common Areas are equitably allocated to particular buildings or parcels within the Project. 




        8.3.  Tax Expenses. 



        8.3.1.  Definition of Taxes and Tax Expenses.    "Taxes" means and refers to all federal, state, county, or local
government or municipal taxes, fees, charges, or other impositions of every kind or nature, whether general, special, ordinary, or extraordinary. Taxes include taxes, fees, and charges such as real
property taxes, general and special assessments, transit taxes, leasehold taxes, and taxes based on the receipt of rent (including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant), and personal property taxes imposed on Landlord's fixtures, machinery, equipment, apparatus, systems, appurtenances, and other personal property used in
connection with the Project or the Building, as the case may be along with reasonable legal and other professional fees, costs and disbursements incurred in connection with proceedings to contest,
determine or reduce real property taxes. Notwithstanding the foregoing, the following shall be excluded from Taxes: (a) all excess profits taxes, franchise taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, estate taxes, federal, state, and local income taxes, and other taxes applied or measured by Landlord's general or net income (as opposed to rents, receipts,
or income attributable to operations at the Building), (b) personal property taxes attributable to property 











owned
or installed by or for other tenants of the Project, (c) penalties incurred as a result of Landlord's negligence, inability or unwillingness to make payments of, and/or to file any tax or
informational returns with respect to, any real property taxes, when due, or (d) special assessments or special taxes initiated after the Lease Commencement Date as a means of financing future
improvements to the Building or the Project. In the event Landlord receives a refund or other return of Taxes (including any award received as a result of Landlord's successful protest of the amount
of Taxes) for which Tenant previously paid, then such refunded amount (less Landlord's costs incurred in procuring such refund) shall be applied proportionately to reduce the amount of Taxes for the
Expense Year in which such refunded amount is received prior to calculating the actual Taxes for such Expense Year. "Tax Expenses" means the sum of all Taxes that are paid or incurred by Landlord
because of or in connection with the ownership, leasing, and/or operation of the Project from time to time, except to the extent payable by Tenant or any other individual tenant of the Project
pursuant to the provisions of such tenant's lease. 


        8.3.2.  Adjustment of Taxes.    For purposes of this Lease, Tax Expenses for the Base Year shall be adjusted upon a
reassessment of the Project resulting from the construction of a new building within the Project to increase the Base Year Tax Expenses amount by the amount of Tax Expenses attributable to such new
building's assessed value. Accordingly, during the portion of any Expense Year occurring after the Base Year, Tax Expenses shall be considered to be increased appropriately. 




        8.4.  Calculation and Payment of Direct Expenses.    Tenant's Share of the increased Direct Expenses for any Expense
Year shall be calculated and paid as follows: 



        8.4.1.  Calculation of Excess.    If Direct Expenses for any Expense Year (other than the Base Year) ending or
beginning within the Lease Term exceeds the amount of Direct Expenses applicable to the Base Year, Tenant shall pay as Additional Rent to Landlord an amount equal to Tenant's Share of that excess, in
the manner stated below. 


        8.4.2.  Statement/Payment of Direct Expenses.    Subject to the rent relief provisions of the Addendum to this
Lease, Tenant shall pay to Landlord, on the first day of each calendar month during the Lease Term, commencing January 1, 2010, as Additional Rent, without notice, demand, offset, or deduction
(except as provided below), an amount ("Tenant's Monthly Payment") equal to one-twelfth of Tenant's Share of the amount by which the Direct Expenses for each Expense Year following the
Base Year exceed the Base Year Direct Expenses (such excess being referred to herein as the "Increased Direct Expenses"), as estimated (and subsequently reconciled) by Landlord in the most recently
delivered Estimated Statement (as defined below). Landlord intends to deliver to Tenant, prior to the commencement of each Expense Year following the Base Year during the Lease Term, a written
statement ("Estimated Statement") setting forth Landlord's estimate of the Direct Expenses and Increased Direct Expenses allocable to the ensuing Expense Year, and Tenant's Share of such Increased
Direct Expenses. Landlord may, at its option, during any Expense Year, deliver to Tenant a revised Estimated Statement, revising Landlord's estimate of the Direct Expenses and Increased Direct
Expenses, in accordance with Landlord's most current estimate. Within 90 days after the end of each Expense Year during the Lease Term, Landlord shall deliver to Tenant a written statement
("Actual Statement") setting forth the actual Direct Expenses allocable to the preceding Expense Year. Tenant's failure to object to Landlord regarding the contents of an Actual Statement, in writing,
within 180 days after delivery to Tenant of such Actual Statement, shall constitute Tenant's absolute and final acceptance and approval of the Actual Statement, absent fraud. If the sum of
Tenant's Monthly Payments actually paid by Tenant during any Expense Year exceeds Tenant's Share of the actual Increased Direct Expenses allocable to such Expense Year, then such excess will be
credited against future Tenant's Monthly Payments, unless such Expense Year was the Expense Year during which the Lease Expiration Date occurs (the "Last Calendar Year"), in which event either
(i) such excess shall be credited against any monetary default of Tenant under this 














Lease,
or (ii) if Tenant is not in default under this Lease, then Landlord shall (within the time frame for returning Tenant's Security Deposit) pay to Tenant such excess. If the sum of
Tenant's Monthly Payments actually paid by Tenant during any Expense Year is less than Tenant's Share of the actual Increased Direct Expenses allocable to such Expense Year, then Tenant shall, within
ten days of delivery of the Actual Statement, pay to Landlord the amount of such deficiency. Landlord's delay in delivering any Estimated Statement or Actual Statement will not release Tenant from its
obligation to pay any Tenant's Monthly Payment or any such excess upon receipt of the Estimated Statement or the Actual Statement, as the case may be. Notwithstanding the foregoing sentence, Tenant
shall have no obligation to pay any excess amounts it may owe with respect to Direct Expenses for any Expense Year unless Landlord delivers an Actual Statement or other notice to Tenant regarding such
excess amounts within 12 months after such applicable Expense Year. The references in this Paragraph to the actual Increased Direct Expenses allocable to an Expense Year, shall include, if such
Expense Year is the Last Calendar Year, the actual Increased Direct Expenses allocable to the portion of such year prior to the Lease Expiration Date, calculated on a pro rata basis, without regard to
the date of a particular expenditure. The provisions of this Paragraph 8.4 shall survive the termination of this Lease, and even though the Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's Share of Direct Expenses for the year in which this Lease terminates, Tenant shall immediately pay any increase due over the estimated expenses paid by
Tenant pursuant hereto and conversely any overpayment made in Tenant's estimated payments shall be immediately rebated by Landlord to Tenant. 


        8.4.3.  Cap on Increases in Controllable Expenses.    Notwithstanding anything to the contrary contained herein,
increases in Controllable Expenses (as defined below), will be subject to a five percent annual cap. For purposes hereof, the term "Controllable Expenses" will mean and refer to expenses which
Landlord can reasonably control; but specifically excluding utility costs, Tax Expenses, Insurance Expenses, and similar expenses whose rates are determined by, or subject to approval by, any
governmental body or utility company, all of which are not Controllable Expenses. Such five percent annual cap will be calculated on a cumulative basis, such that if in a particular year there is less
than a five percent increase in Controllable Expenses, the difference shall be carried forward; provided, however, in no event will any such difference be carried over for longer than one year, and in
no event will such cumulative cap exceed seven percent in any one year. 




        8.5.  Landlord's Books and Records.    If Tenant disputes the amount of Additional Rent stated in an Actual
Statement within 180 days of Tenant's receipt thereof, Tenant may, upon at least five business days notice to Landlord, inspect and audit Landlord's records and supporting documentation
regarding such Actual Statement. Such inspection and audit must be conducted by an independent, nationally recognized, certified public accountant selected by Tenant and reasonably approved by
Landlord, and who has not previously been engaged by Tenant or Tenant's affiliates and who has been engaged to provide such services on a fee basis which is not related to the results of such
inspection and audit (i.e. with no contingency fee factor); and such inspection and audit must be conducted within 180 days of the date
Tenant received the Actual Statement, shall be at Tenant's sole cost and expense (except as provided below), and Landlord shall, at its election, either provide copies of such records and supporting
documentation to Tenant or make such records and supporting documentation available to Tenant for its inspection at Landlord's business office in San Diego, California during normal business hours.
Landlord shall cooperate in good faith with Tenant and the accountant during any such inspection. If Tenant fails to dispute the amount of Additional Rent stated in an Actual Statement within
180 days of Tenant's receipt thereof, or Tenant's audit fails to disclose a discrepancy in such Actual Statement within 180 days after Tenant's receipt of the Actual Statement in
question, then the Actual Statement will be deemed binding on Tenant, absent fraud. If it is determined as a result of such accountant's timely audit of Landlord's records that Tenant was overcharged
relative to the Direct Expenses, such overcharge shall entitle Tenant to a credit against its next payment of Direct Expenses in the amount of the overcharge plus, in the case of an overcharge
exceeding three percent of the Direct Expenses, the reasonable third party costs of such audit (and if such credit occurs following the expiration of the Term, Landlord shall promptly pay the amount
of such credit to Tenant). If it is determined as a result of such accountant's timely audit of Landlord's records, or otherwise, that Tenant was undercharged relative to the Direct Expenses, Tenant
shall, within ten days of written demand, pay such undercharge to Landlord. 















































 
        9.    Utilities and Services.    



        9.1.  Utility Costs.    Tenant shall pay when due all bills for gas, water, electricity, and other utilities used at
the Premises on and after the Lease Commencement Date and through and including the date of expiration of this Lease. 


        9.2.  Utility Systems.    Landlord shall construct the Building with wiring, outlets, and systems sufficient to
provide electrical current to the Premises for Project-standard ordinary and customary office uses. In addition to the forgoing, Landlord shall replace lamps, starters, and ballasts for
Project-standard lighting fixtures within the Premises upon Tenant's request; the expense of which will be an Operating Expense. Tenant shall replace lamps, starters, ballasts for
non-Project-standard lighting fixtures within the Premises at Tenant's sole expense. 


        9.3.  Janitorial Service.    Landlord shall provide five day per week (excluding holidays) ordinary and customary,
basic janitorial services in and about the Premises consistent with other first class office buildings in the vicinity of the Building. Landlord shall not be required to provide janitorial services to
above-Project-standard improvements installed in the Premises including but not limited to metallic trim, wood floor covering, glass panels, interior windows, kitchen/break room/dining areas,
executive washrooms, or shower facilities, nor will Landlord be obligated to provide janitorial services relative to Tenant's cafeteria beyond floor cleaning (in the dining area only) and trash
removal comparable to the janitorial service that would be provided if the cafeteria were used for office purposes. Any janitorial services required by Tenant and provided by Landlord in excess of
such ordinary and customary, basic janitorial services shall be separately paid for by Tenant, as Additional Rent, within ten days of written demand. 


        9.4.  Over-Standard Tenant Use.    Tenant shall not exceed the rated capacity of the Building's
electrical and other utility systems, which systems will be consistent in capacity with other first class office buildings built at or about the same time as the Building. In the event of any damage
to any of the Project's systems caused by Tenant's use thereof in excess of ordinary and customary usage for a professional office, Tenant shall be responsible for all costs and expenses incurred by
Landlord as a result of such over-use. In addition, if Tenant requires any utilities or services described in this Paragraph 9, which are to be provided by Landlord, in excess of
the standard levels being provided by Landlord, or during hours other than Building Standard Operating Hours, Landlord shall have the right to impose reasonable restrictions on such usage and/or
commercially
reasonable charges therefor. The charge to Tenant for heating and air conditioning during hours other than Building Standard Operating Hours will be based upon Landlord's reasonable estimate of the
Landlord's actual cost therefor including amortization, additional wear and tear, and other then-standard expenses typically included by Landlords of other Class A office buildings
in the central San Diego rental market in calculating after-hours HVAC expenses. Such charges are Additional Rent relative to the provision of such services and are not an offset to any Direct
Expenses. 


        9.5.  Conduit and Wiring.    Installation of all types of conduit and wiring exclusively serving the Premises (other
than as part of Landlord's Work), including but not limited to Tenant's Work, is subject to the requirements of Paragraph 23, below,  Exhibit "C", and the Landlord's reasonable approval of the
location, manner of installation, and qualifications of the installing contractor. All
such conduit and wiring will, at Landlord's option, become Landlord's property upon the expiration of the Term. Upon expiration of the Term, Landlord may elect to require Tenant to remove such conduit
and wiring at Tenant's expense and return the Premises and the Common Areas to their pre-existing condition (unless Landlord has agreed in writing prior to the installation of such items
not to require Tenant to remove such items). If Landlord constructs new or additional utility facilities, including without limitation wiring, plumbing, conduits, and/or mains, resulting from Tenant's
changed or increased utility requirements, Tenant shall on demand promptly pay (or advance) to Landlord the cost of such items as Additional Rent. 


        9.6.  Utilities Generally.    Tenant agrees that, except as provided below, Landlord will not be liable for damages,
by abatement of Rent or otherwise, for failure to furnish or delay in furnishing 












any
service (including telephone and telecommunication services) or for diminution in the quality or quantity of any service, including when the failure, delay, or diminution is entirely or partially
caused by: (a) repairs, replacements or improvements; (b) strike lockout, or other labor trouble, (c) inability to secure electricity, gas, water or other fuel at the Building
after commercially reasonable effort to do so; (d) accident or casualty; (e) act or default of Tenant or other parties; or (f) any other cause beyond Landlord's reasonable
control. Such failure, delay, or diminution will not constitute an eviction or a disturbance of Tenant's use and possession of the Premises or relieve Tenant from paying Rent or performing any of its
obligations under this Lease, except that Tenant will be entitled to an equitable abatement of Rent for the period of such failure, delay, or diminution to the extent such failure, delay, or
diminution is (i) is directly attributable to Landlord's negligence or intentional misconduct, (ii) prevents Tenant from using, and Tenant does not use, the Premises or the affected
portion thereof for the conduct of Tenant's business operations therein, (iii) Tenant was using the Premises or such affected portion for the conduct of Tenant's business operations immediately
prior to the failure, and (iv) such failure, delay, or diminution continues for more than two consecutive business days (or five business days in any twelve month period) after delivery of
written notice of such failure, delay, or diminution from Tenant to Landlord; and if the foregoing failure continues for 90 consecutive days, Tenant shall additionally have the right, upon written
notice to Landlord, at any time prior to the restoration of such utilities/services, to terminate this Lease. Landlord will not be liable, under any circumstances, for a loss of or injury to property
or for injury to or interference with Tenant's business, including loss of profits through, in connection with, or incidental to a failure to furnish any of the utilities or services under this
Paragraph. Notwithstanding the foregoing, Landlord agrees to use reasonable efforts to promptly correct any such interruption of utilities or services. Tenant hereby waives the provisions of
California Civil Code Section 1932(1) or any other applicable existing or future
law, ordinance or governmental regulation permitting the termination of this Lease due to the interruption or failure of or inability to provide any services required to be provided by Landlord
hereunder. If any governmental authority having jurisdiction over the Project imposes mandatory controls, or suggests voluntary guidelines applicable to the Project, relating to the use or
conservation of water, gas, electricity, power, or the reduction of automobile emissions, Landlord, at its sole discretion, may comply with such mandatory controls or voluntary guidelines and,
accordingly, require Tenant to so comply, so long as, in the case of voluntary guidelines, compliance does not materially or unreasonably interfere with Tenant's use of the Premises. Landlord shall
not be liable for damages to persons or property for any such reduction, nor shall such reduction in any way be construed as a partial eviction of Tenant, cause an abatement of Rent, or operate to
release Tenant from any of Tenant's obligations under this Lease, except as specifically provided in this Paragraph 9.6. 




        10.    Maintenance.    



        10.1.  Tenant's Duties.    Tenant shall, at its sole cost, maintain and repair, all in good condition, the
non-structural portions of the interior of the Premises, all building systems exclusively serving the Premises and located within the Premises or the walls of the Premises, and any damage
to the Premises or the Project resulting from the acts or omissions of Tenant or Tenant's Invitees. Tenant shall maintain all communications conduit, equipment, and wiring serving the Premises,
whether in the Premises or not (and specifically including all of Tenant's Work and all wiring, equipment, and conduit located on the roof of the Building), regardless of the ownership of said conduit
or wiring, subject to Landlord's reasonable approval of Tenant's maintenance/repair contractor and manner of maintenance/repair. If Tenant fails to maintain or repair any portion of the Premises or
the Project as provided above then following ten days' written notice thereof to Tenant (or such longer period if reasonably necessary given the nature of the repair and provided Tenant began such
work within three business days of Landlord's written notice), Landlord may, at its election, maintain or repair any such portion of the Premises or the Project and Tenant shall promptly reimburse
Landlord, as Additional Rent, for Landlord's actual cost thereof plus a supervisory fee in the amount of five percent of Landlord's actual cost. Notwithstanding the foregoing, if following Tenant's
payment (or performance) of its obligations under this Paragraph, Landlord receives 









payment
from an insurer for such work, Tenant will be entitled to receive such proceeds (after Landlord has first been fully reimbursed for its reasonable third party costs and expenses relative
thereto including Landlord's reasonable costs and expenses in obtaining such proceeds, subject to Landlord providing paid invoices with respect to such costs and expenses for Tenant's review) to the
extent Tenant previously paid or incurred third party costs relative thereto. 


        10.2.  Landlord's Duties.    Landlord shall, as a part of the Operating Expenses (to the extent permitted by
Paragraph 8), maintain, repair, replace, and repaint, all in good order and condition, consistent with other first-class office buildings in the vicinity of the Building, the Common Areas and
all portions of the interior and exterior of the Building, the structural portions of the Premises and any other buildings in the Project (including, without limitation, all electrical, mechanical,
plumbing, fire/life safety, and other building systems), except to the extent of Tenant's obligations as set forth in Paragraph 10.1, above. Except as otherwise specifically provided in this
Lease, Landlord's failure to perform its obligations set forth above will not release Tenant of its obligations under this Lease, including without limitation Tenant's obligation to pay Rent. Tenant
waives the provisions of California Civil Code Section 1942 (or any successor statute), and any similar principles of law with respect to Landlord's obligations for tenantability of the
Premises and Tenant's right to make repairs and deduct the expense of such repairs from rent. If Landlord fails to perform any of its repair and maintenance obligations under this
Paragraph 10.2 and such failure materially and adversely impairs Tenant's ability to use and occupy the Premises for the Permitted Use, Tenant will have the right, to perform such repairs
and/or maintenance to the extent necessary to enable Tenant to resume its use and occupancy of the Premises. Notwithstanding the foregoing, prior to exercising such right, Tenant must, except as
provided below in connection with an emergency, have given Landlord at least 30 days' prior written notice of the nature of the problem and Tenant's intention to exercise its rights under this
Paragraph if such matter is not resolved within such 30-day period; provided, however, if the nature of the matter giving rise to such repair or maintenance obligation will reasonably
require more than 30 days to remedy and Landlord is proceeding with due diligence to remedy such matter, then such 30 day period will be extended for such additional time as may be
necessary for Landlord to complete such repairs or maintenance. Notwithstanding the preceding sentence, in the case of an emergency which poses an imminent threat of death, injury, or severe damage to
persons or property, the required notice from Tenant may be provided orally rather than in writing and for such shorter period of time (i.e. less
than 30 days) as Tenant, in the exercise of its reasonable judgment deems appropriate under the exigent circumstances (however, at a minimum, Tenant shall at least contact Landlord
telephonically prior to commencing such work so that Landlord may, at its election, make arrangements to handle such emergency itself). If Landlord fails to fulfill its repair and maintenance
obligations under this Paragraph, and as a result thereof Tenant exercises the foregoing right to correct such matter, then Landlord shall reimburse Tenant for the reasonable third-party costs
incurred by Tenant to complete such repairs and/or maintenance within 30 days after receipt of Tenant's written demand therefor, together with copies of the paid invoices evidencing the costs
so incurred. Any such repairs or maintenance performed by Tenant, as permitted herein, must be performed in a good and workmanlike manner by licensed contractors. Except as otherwise expressly and
specifically provided in this Lease, under no circumstances may Tenant offset any amount it is owed by Landlord pursuant to this Paragraph (or otherwise) against any Rent obligation under this Lease.
If, within 30 days after receipt of Tenant's written demand for payment of Tenant's costs incurred in taking pursuant to this Paragraph (including the required invoices), Landlord has not paid
the invoice or delivered Tenant a detailed written objection to it, Tenant may deduct from the Rent payable by Tenant under this Lease the amount set forth in the invoice plus interest at the Default
Rate from the date these costs are incurred to the date of Tenant's Rent setoff. Tenant shall not be entitled to this deduction from Rent, however, if, within 30 days after receipt of Tenant's
invoice, Landlord delivers to Tenant a written objection to its payment setting forth with reasonable particularity Landlord's reasons for its claim that Landlord did not under the terms of this Lease
have to take the action with respect to which Tenant exercised its repair rights or that the charges are excessive (in which case 












Landlord
shall pay the amount it contends would not have been excessive). If Landlord and Tenant are not able to resolve this disagreement, Tenant's sole remedy shall be to institute legal proceedings
against Landlord to collect the amount set forth in Tenant's invoice. Landlord's obligation to reimburse Tenant shall survive expiration or earlier termination of this Lease. 




        11.    Parking.    



        11.1.  General Parking Rights.    Subject to the remaining provisions of this Paragraph 11, Landlord grants
to Tenant (for the benefit of Tenant and Tenant's Invitees) the right to the non-exclusive use of the parking area within the boundaries of and serving the Project (the "Parking Area").
Subject to the remaining provisions of this Paragraph 11, Tenant's use of the Parking Area shall be subject to such reasonable, non-discriminatory rules as Landlord may, in its
reasonable discretion, adopt from time to time with respect to the Parking Area, including without limitation (i) rules providing for the payment of charges or fees by users of the Parking
Area, and in such event the charges or fees shall be deemed Additional Rent, (ii) rules limiting tenants of the Project (including, without limitation, Tenant) to the use of, or excluding the
use of, certain parking spaces or certain portions of the Parking Area, in order to maintain the availability of accessible parking spaces for clients, guests, and invitees of tenants of the Project,
and (iii) rules limiting tenants of the Project (including without limitation Tenant) to the use of a restricted number of parking spaces or a restricted area. Notwithstanding anything to the
contrary in this Paragraph, Landlord may, at its election, construct improvements upon or otherwise alter in any manner the Parking Area, provided that Landlord makes parking available to Tenant
elsewhere within the Project (or within a reasonable distance from the Premises) that is equal to or greater than the applicable ratio described in Paragraph 11.2, below. Landlord reserves the
right to grant certain tenants in the Project the exclusive right to park in specified areas of the Parking Area, to the exclusion of all other tenants (provided such exclusive rights to specific
spaces shall not exceed such tenant's pro rata share of the number of such exclusive spaces granted to Tenant). Tenant acknowledges that the exercise of the rights reserved to Landlord under this
Paragraph may result in a decrease in the number of parking spaces available to Tenant and Tenant's Invitees, and no such decrease shall affect Tenant's obligations under this Paragraph or entitle
Tenant to any abatement of Rent, provided the applicable parking ratio described in Paragraph 11.2, below (as such ratio may be adjusted pursuant to the Addendum to this Lease), is maintained
or exceeded. 


        11.2.  Parking Ratios.    As of the Rent Commencement Date and thereafter throughout the Term of this Lease (and
subject to temporary interruptions in connection with Landlord's continued development of the Project, as provided below), the parking ratio within the Project applicable to Tenant will be 4.5 spaces
per 1,000 Usable Square Feet ("USF") of space within the Premises. The foregoing (4.5:1,000 USF) parking ratio includes all spaces within the Project, including covered, uncovered, reserved,
unreserved, handicap, and visitor parking spaces. Tenant shall be allotted the right to use 4.5 parking spaces per thousand USF of space within the Premises (with such allocation or rights being
broken down by, and tied to, each Phase—i.e. such ratio will apply just to Phase I until the Delivery Date for
Phase II, and shall then include all of the USF of the Premises), of which a portion of such spaces (in a location mutually agreed to by Landlord and Tenant which is nearest—other
than handicap spaces—to the/a main entrance to the Building elevator lobby) will be covered, reserved parking spaces and the balance will be unreserved spaces. The number of covered,
reserved parking spaces allotted to Tenant shall be determined by taking the percentage of the total USF of the Building which is occupied by Tenant and multiplying such percentage by the total number
of covered, reserved parking spaces under the Building (which currently equals 47 reserved spaces). In no event shall the number of covered parking spaces that are reserved parking spaces for the
Building be less than 86. The balance of the number of spaces that are allotted to Tenant will be unreserved spaces, which Tenant shall have the right to use during the Initial Term of this Lease free
of any charges or fees, whether assessed directly or as Rent—the determination of whether Tenant is to be charged for unreserved parking spaces during any Extension Term and the amount
thereof in the event Tenant is to be charged, shall be 












determined
as part of the determination of the Then-Prevailing Rate pursuant to Paragraph 3.2.4, above. Tenant's parking ratio is subject to increase pursuant to the Addendum to
this Lease. 


        11.3.  Parking Charges.    On the first day of each calendar month during the Initial Term, Tenant shall pay, as
Additional Rent, $[***] for each of the reserved parking spaces allotted to Tenant. On the first day of each calendar month during any Extension Term, Tenant shall pay, as
Additional Rent, the charge for the reserved parking spaces allotted to Tenant shall be determined pursuant to the calculation of the Then-Prevailing Rate under Paragraph 3.2 of
this Lease. Such parking charges are Additional Rent relative to the granting of such parking rights and are not an offset to any Direct Expenses, nor may such charges be waived through
non-use (or otherwise). 




        12.    Signs.    



        12.1.  General Signage Conditions.    Subject to Paragraph 12.2 below, Landlord may at any time change the
name of either or both of the Building and/or the Project and install, affix, and maintain all signs on the exterior and interior of the Building and other buildings within the Project as Landlord
may, in Landlord's sole discretion, desire; provided, that Landlord (i) provide Tenant with reasonably sufficient prior written notice prior to any such change in order to permit Tenant to
obtain updated stationary and similar such items and (ii) promptly reimburse Tenant for Tenant's third party out-of-pocket costs therefor (not to exceed $5,000). Tenant
shall not have
or acquire any property right or interest in the name of the Building or the Project. Subject to Tenant's signage rights under Paragraph 12.2, below, Tenant may not place, construct, or
maintain any sign, advertisement, awning, banner, or other exterior decoration (collectively, "sign") inside or outside the Premises which is visible from the exterior of the Premises, or on the
Building or any other portion of the Project, without Landlord's prior written consent. Any sign that Tenant is permitted by Landlord to place, construct, or maintain in the Premises or on the
Building or the Project (including pursuant to Paragraph 12.2, below) must be approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, comply with
Landlord's sign criteria applicable to the Project, including, without limitation, criteria relating to size, color, shape, graphics, and location (collectively, the "Sign Criteria"), which Sign
Criteria is attached hereto as Exhibit "F", and shall comply with all applicable laws, ordinances, CC&R's (or similar recorded instruments), and
Tenant shall obtain any approvals required by such laws, ordinances, and CC&R's (or similar recorded instruments). Landlord makes no representation or warranty with respect to Tenant's ability to
obtain any such approval. Tenant shall, at Tenant's sole cost, make any changes to any sign, whether in the Premises or on the Building, as required by any new or revised applicable laws and
ordinances. Tenant shall, additionally, maintain, repair, and replace all of Tenant's signs (including, specifically, those installed pursuant to Paragraph 12.2, below) in first class
condition. Nothing contained in this Paragraph 12 will limit the Landlord's right to grant signage rights to other tenants of the Building, or to affect the signage rights of any tenant of the
Building; provided, that any such signage rights are not in conflict with the signage rights of Tenant under Paragraph 12.2, below. 


        12.2.  Tenant's Individual Signage Rights.    Subject to compliance with the requirements of Paragraph 12.1,
above, Tenant is hereby granted the following signage rights in/on the Building and at the Project. 



        12.2.1.  Directory/Suite Signage.    Throughout the Term, the Building will be provided, at Landlord's expense, with
a Project-standard lobby directory sign. Tenant shall be entitled to be listed on such sign. 


        12.2.2.  Suite Signage.    Throughout the Term, at Landlord's expense, Tenant shall be provided with Project-
standard identification signage outside Tenant's suite. 


        12.2.3.  Exterior Signage.    Throughout any period of time during the Term that Tenant is occupying at least 50% of
the Premises, Tenant shall have the right, at its sole expense, to fabricate and install and relocate in such location as Tenant may elect from time to time in its sole discretion, subject only to the
Signage Criteria, applicable laws and ordinances, and the 





[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 









CC&Rs
(or similar recorded instruments), two building-top signs and two "eyebrow" signs, as well as to have Tenant's sign panel on any monument signage for the Building. Further, other
than Project identification signage (e.g. Sunroad Centrum) located on monument signage for the Building, throughout any period of time during the Term that Tenant is occupying at least 60% of
the Premises, Landlord will not allow any other entity or person, including, without limitation, any tenant or occupant of the Building, to place or maintain any sign on the Building (excluding
interior signs). Tenant shall be solely responsible for all costs associated with such signs, including all costs of design, fabrication, and installation of such signs; which installation must be
performed by licensed experienced professionals reasonably approved by Landlord and in accordance with such requirements as Landlord may reasonably impose. Once installed, Tenant shall thereafter (for
so long as such signs remain on the Building) maintain such signs in first class condition and repair and shall, upon termination of the Term (or such earlier time as such signs must be removed
pursuant to this Lease) cause such signs to be professionally removed and cause all damage to the Building and the applicable monument sign(s) caused by such signs/sign panels, their existence on the
Building and the applicable monument sign(s), and their removal, to be repaired. In addition to the cost of designing, fabricating, installing, maintaining, and removing such signs, Tenant shall be
solely responsible for the costs of illuminating such building-top signs and Tenant's pro rata share (based on the portion of the monument sign(s) displaying Tenant's sign panel) of
illuminating such monument sign(s), including utility costs. Any such signs will be subject to the requirements of Paragraph 12.1, above. If Tenant ceases to occupy at least 50% of the Rentable
Square Footage of the Premises, Tenant shall, upon Landlord's request, remove its exterior signs and sign panels and repair all damage to the Building caused by such signs/sign panels and their
installation, maintenance, and removal. Nothing contained herein will limit the Landlord's right to grant signage right to other tenants of the Building. Any such signs/sign panels may contain only
Tenant's name or the name of its Permitted Transferee occupying more than 50% of the Rentable Square Footage of the Premises in the event Tenant's rights under this Lease are assigned in accordance
with the terms of the Lease. The foregoing building-top/monument sign signage rights are personal to the originally-named Tenant under this Lease and may not be assigned or otherwise
transferred except in connection with an assignment to a Permitted Transferee in accordance with the terms of the Lease. Landlord hereby approves Tenant's sign designs to the extent they conform to
attached Exhibit "D;" however, Tenant will still have to comply with the balance of Paragraph 12.1, above, including obtaining any required
governmental permits and approvals. 


        12.2.4.  Temporary Signage.    In addition to the signage described above, from the Effective Date until the date
Tenant installs its exterior signage (as described in Paragraph 12.2.3, above), Tenant shall have the right to install temporary banner signs in the locations it is permitted to install the
to-be-installed Building-top signs; provided, however, any such temporary banner signs (i) must be professionally prepared and installed, (ii) must be
approved by Landlord (which approval will not be unreasonably withheld or delayed), and (iii) must be approved by all applicable governmental authorities. Tenant shall be solely responsible for
all costs associated with any such temporary banner signs, including all costs of design, fabrication, and installation of any such temporary banner signs; which installation must be performed by
licensed experienced professionals reasonably approved by Landlord and in accordance with such requirements as Landlord may reasonably impose with respect to the installation of such temporary signage
by the licensed professional. Once installed, Tenant shall thereafter (for so long as any such temporary banner signs remain on the Building) maintain such temporary banner signs in first class
condition and repair and shall, upon installation of Tenant's first Building-top sign, cause such temporary banner signs to be professionally removed and cause any damage to the Building
caused by such temporary banner signs, their existence on the Building, and their removal, to be repaired. In addition to the cost of designing, fabricating, installing, maintaining, and removing any
such temporary 














banner
signs, Tenant shall be solely responsible for the costs of illuminating such temporary banner signs, including utility costs. 


        12.2.5.  Signage Exclusivity.    Throughout any period of time during the Term that Tenant is occupying more space
in the Building than any other individual tenant, Landlord shall not permit any direct competitor of Tenant's to have any Building-monument signage or exterior signage on the Building. For purposes
hereof, the term "direct competitor"' shall mean and refer to University of Phoenix, Ashworth University, National University, Capella University, Grand Canyon University, Strayer University, AIU
Online, Walden University, Western Governor's University, Devry University, Colorado Technical University, Argosy University, Baker Online, South University, American Military University, American
Public Southern University, California Southern University (Cal Southern), and all purchasers of all or substantially all of the assets of a direct competitor, or any entity resulting by operation of
law or otherwise, from the merger, consolidation or other reorganization of a direct competitor, successors, and, any other educational company or holding company, including without limitation, any
other online and or on-ground education provider. 





        13.    Rules, Regulations, and Covenants.    Tenant shall observe (and shall cause Tenant's Invitees to observe)
faithfully and comply strictly with any reasonable rules and regulations which Landlord may from time to time adopt for the Project applying to all tenants (and provide Tenant with a copy of), as well
as any recorded easement agreements, maintenance agreements, CC&R's, or like instruments affecting the Building and/or the Project, whether now existing or hereafter adopted or amended from time to
time (all of the foregoing, collectively, "Rules"). Landlord has no duty or obligation to enforce any Rule against any other tenant, and Landlord will not be liable to Tenant for violation of any Rule
by any other tenant, or any other tenant's agents, employees, officers, independent contractors, customers, invitees, visitors, or licensees; provided, however, that Landlord shall enforce the rules
and regulations in a non-discriminatory manner. Tenant acknowledges that Landlord reserves the right, from time to time, to enter into leases or other agreements by which Landlord agrees
to restrict the use of all or any portion of the Project (including the Premises) from certain uses. All such leases and
other agreements, whether now existing or entered into in the future, shall be binding upon Tenant and in no event shall Tenant utilize the Premises for any use so prohibited; provided, however, no
such restriction may prevent Tenant from using the Premises for the Permitted Use. 


        14.    Early Access/Insurance.    Landlord shall use reasonable efforts to provide Tenant with four weeks advance
notice of the date that the Landlord's Work will be Substantially Completed such that Tenant may enter the Premises for purposes of commencing Tenant's Work; provided, however, Landlord shall not be
obligated to allow such early entry if such early entry will interfere with or delay the completion of the Landlord's Work. If, pursuant to the foregoing sentence, prior to the Lease Commencement Date
Tenant is planning to perform any of the Tenant's Work, or install any of Tenant's personalty, then in addition to complying with the provisions of attached  Exhibit "C", (i) Tenant shall, at
Tenant's sole cost, prior to first entering onto the Project, obtain and thereafter at all times
maintain (a) "Builder's Risk" or "Course of Construction" insurance with respect to any actual construction work, and (b) all of the insurance to be maintained by Tenant during the Term,
and (ii) all obligations of Tenant under the provisions of this Lease other than those relating to the obligation to pay Rent, shall be operative. Any work pursuant to this Paragraph shall be
subject to all of the provisions of Paragraph 23, below. 


        15.    [INTENTIONALLY DELETED].    


        16.    Public Liability and Property Damage Insurance.    Throughout the Lease Term, Tenant shall, at Tenant's sole
cost, maintain commercial general liability and property damage insurance and contractual liability insurance relative to Tenant's indemnity obligations hereunder (written on ISO occurrence
form CG 00 01 10 07 or substitute forms providing equivalent coverage) (i) with a combined single limit of liability of not less than $2,000,000.00 (above and beyond defense costs),
(ii) insuring against liability of Tenant and Tenant's Invitees arising out of or in connection with Tenant's use or occupancy of the Premises; provided, Tenant shall not be required to
maintain insurance in excess of the required 










amount
in connection therewith, (iii) naming Landlord, its agent, and any Lender as additional insureds, (iv) containing cross liability endorsements, and (v) which includes
products liability insurance (if Tenant is to sell merchandise or other products derived, assembled, or produced from the Premises). Not more frequently than once every two years, if in the
commercially reasonable opinion of Landlord, the amount of such insurance at that time is not adequate, Tenant shall increase such insurance as reasonably required by Landlord. In addition to the
foregoing, throughout the Lease Term, Tenant shall maintain (and provide Landlord with proof of) workers' compensation insurance in at least the statutorily required amount. 


        17.    Fire and Extended Coverage Insurance.    Tenant shall, at Tenant's sole cost, maintain on Tenant's Alterations
and Tenant's Personal Property (as defined below), and also on systems and equipment either contained within the Premises or in air spaces, walls, roof areas, or other portions of the Building or the
Project and which exclusively serve the Premises, a policy of standard fire and extended coverage and special form insurance, with "inflation guard," vandalism, and malicious mischief
endorsements, coverage with respect to increased costs due to building ordinances, demolition coverage, boiler and machinery insurance, and sprinkler leakage coverage, in each case to the extent of at
least 100% of full replacement value, and issued in the name of Tenant—with Landlord, Landlord's Lender, and Landlord's designated agent as additional insureds. Such "full replacement
value" shall be determined by the company issuing such policy at the time the policy is initially obtained. Not more frequently than once every two years, either Landlord or Tenant may, at its
election, notify the other that it elects to have the replacement value redetermined by an insurance company or a qualified appraisal company, such cost of which, if any, to be borne by the electing
party. Such redetermination shall be made promptly and in accordance with the rules and practices of the Board of Fire Underwriters, or a like board recognized and generally accepted by the insurance
company, and Landlord and Tenant shall be promptly notified of the results by the insurance company. Such policy shall be promptly adjusted according to such redetermination. The foregoing casualty
insurance may be maintained under blanket policies so long as there is no diminution in the quality or availability of the required coverage. 


        18.    Business Interruption Insurance.    Tenant shall obtain and maintain, throughout the Term, business
interruption insurance in amounts sufficient to reimburse Tenant for direct or indirect costs and loss of income attributable to all events/perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Project as a result of such events/perils or otherwise. 



        19.    Insurance Generally.    If Tenant fails during the Term to maintain any insurance required to be maintained by
Tenant under this Lease (or is within 48 hours of such a failure), then Landlord may, at its election, arrange for any such insurance, and Tenant shall reimburse Landlord, as Additional Rent,
for any premiums for any such insurance within ten business days after Tenant receives a copy of the premium notice. Insurance required to be maintained by Tenant under this Lease shall be in form and
content reasonably satisfactory to Landlord and its Lender and (i) shall be issued as a primary policy, by insurance companies authorized to do business in the state in which the Project is
located with a Best's Rating of at least "A-" and a Best's Financial Size Category rating of at least "X," as set forth in the most current edition of "Best's Insurance Reports" (unless
otherwise approved by Landlord), or such higher rating as may be required by any Lender, (ii) shall name Landlord, Landlord's agent(s), and any Lender as additional insureds (using ISO Form
CG2026 (7/04 Ed.)—Designated Person or Organization or equivalent), (iii) shall consist of "occurrence" based coverage, without provision for subsequent conversion to "claims" based
coverage, (iv) shall not be cancelable or subject to reduction of coverage except after 30 days' prior written notice to Landlord and any Lender (Note: the words "endeavor to" and
"failure to mail such notice shall impose no obligation for liability . . ." or any words of similar meaning contained in any insurance certificate regarding the obligation set forth in this
clause (iv), are unacceptable and these two phrases must be crossed out if they appear in the printed certificate form), and (v) shall not provide for a deductible or
co-insurance provision in excess of $50,000.00. Tenant shall, at least 10 days prior to the expiration of each such policy, furnish Landlord with a renewal of or "binder" extending
such policy. Tenant shall promptly, upon request, 










deliver
to Landlord copies of such policy or policies or (if acceptable to Landlord's Lender) certificates evidencing the existence and amounts of such insurance together with evidence of payment of
premiums. Nothing contained in this Lease (nor any subsequent act or inaction by Landlord) shall be
construed as a representation that the scope of coverage or limits of liability specified to be carried by the Tenant are adequate to protect the Tenant or its interests. 


        20.    Waiver of Subrogation.    Notwithstanding any provision to the contrary in this Lease, Tenant releases Landlord
and Landlord's guests, invitees, customers and licensees (collectively, "Landlord's Invitees") from all claims for damage, loss, or injury to Tenant's Personal Property and to the systems, equipment,
fixtures, personalty, and Alterations of Tenant in or on the Premises and the Project to the extent such damage, loss, or injury is covered by any insurance policies carried by Tenant that are in
force at the time of such damage or that are required to be carried by Tenant under the terms of this Lease. Tenant shall cause all insurance policies obtained by it pursuant to this Lease to provide
(if such provision is generally commercially available) that the insurance company waives all right of recovery by way of subrogation against Landlord in connection with any damage, loss, or injury
covered by such policy. Notwithstanding any provision to the contrary in this Lease, Landlord releases Tenant and Tenant's Invitees from all claims for damage, loss, or injury to the Premises and the
Project, Tenant's Personal Property and to the systems, equipment, fixtures, and Alterations of Tenant in or on the Premises and the Project to the extent such damage, loss, or injury is covered by
any insurance policies carried by Landlord that are in force at the time of such damage or that are required to be carried by Landlord under the terms of this Lease. Landlord shall cause all insurance
policies obtained by it pursuant to this Lease to provide (if such provision is generally commercially available) that the insurance company waives all rights of recovery by way of subrogation against
Tenant in connection with any damage, loss, or injury covered by such policy. 


        21.    Landlord's Insurance.    Landlord shall maintain (in addition to such other coverages which Landlord elects to
maintain or which its Lender might require) the following insurance, in such amounts and with such limits as Landlord shall determine in its reasonable discretion (except as otherwise specifically
provided herein): (i) public liability insurance; (ii) fire and extended coverage (all risk or special form) insurance for full replacement costs (excluding footings and foundations)
without deduction for depreciation, with (at Landlord's election) rental loss coverage; and (iii) boiler and machinery insurance, if applicable. The premiums, costs, expenses,
co-insurance payments, and deductibles (or similar costs or charges) of and/or with respect to any insurance maintained from time to time by Landlord (all of the preceding, collectively,
"Insurance Expenses") shall constitute Direct Expenses. Any such coverage may be part of an umbrella or blanket policy, whereupon the premiums, costs, and expenses hereof will be reasonably
apportioned between the Project and the other properties so included under such policy(ies). 


        22.    Personal Property Taxes.    Tenant shall pay before delinquency all taxes, assessments, license fees, and other
charges that are levied or assessed against, or based upon the value of, Tenant's personal property installed or located in or on the Premises including without limitation trade fixtures, furnishings,
equipment, Alterations, and inventory (collectively, "Tenant's Personal Property"). On written demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of such payments. If any
such taxes, assessments, license fees, and/or other charges are levied against Landlord or Landlord's property, or if the assessed value of the Premises is increased by the inclusion of a value placed
on Tenant's Personal Property, and if Landlord pays such taxes, assessments, license fees, and/or other charges or any taxes based on the increased assessments caused by Tenant's Personal Property,
then Tenant, on written demand, shall within ten days reimburse Landlord, as Additional Rent, for the sum of such taxes, assessments, license fees, and/or other charges so levied against Landlord, or
the proportion of taxes resulting from such increase in Landlord's assessment. Landlord may, at its
election, pay such taxes, assessments, license fees, and/or other charges or such proportion, and receive such reimbursement, regardless of the validity of the levy. 


        23.    Alterations.    Tenant shall not make any alterations, improvements, additions, installations, or changes of
any nature in or to the Premises (any of the preceding, "Alterations") unless Tenant first obtains Landlord's written consent to such Alteration and otherwise complies with the provisions of this 










Paragraph 23;
provided, however, no such consent will be required in connection with any Minor Alterations (as defined below). 



        23.1.  Request for Consent.    At least 15 days prior to making any Alterations, Tenant shall submit to
Landlord, in written form, proposed detailed plans of such Alterations, which plans must (i) in the case of a Minor Alterations, be in sufficient detail to, among other things, provide Landlord
with reasonable evidence that such Alterations are of a nature that Landlord's consent is not required, and (ii) in the case of any other Alterations, in sufficient detail to allow Landlord and
its consultants to fully evaluate the proposed Alterations and their affect upon the Premises and the Project. Landlord will not unreasonably withhold, condition, or delay its consent to any
Alterations for which consent is required; except that, in the case of exterior Alterations or Alterations which will be visible from outside the Premises or which will affect any structural
components of the Project, Landlord shall have the right to grant or withhold its consent in the exercise of its sole discretion. In addition to the foregoing requirements, if the proposed Alteration
requires approval by or notice to the lessor of a superior lease or the holder of a deed of trust encumbering the Project, no Alteration shall be commenced until such approval has been received, or
such notice has been given, as the case may be, and all applicable conditions and provisions of said superior lease or deed of trust with respect to the proposed Alteration or alteration have been met
or complied with at Tenant's expense; and Landlord, if it approves the Alteration, will request such approval or give such notice expeditiously, as the case may be, and thereafter diligently pursue
obtaining such approval. 


        23.2.  Minor Alterations.    Notwithstanding anything to the contrary contain herein, minor, interior cosmetic
Alterations such as painting, wall papering, carpeting or hanging pictures or moving furniture and temporary partitions or cubicles (the aggregate cost of which will not exceed $25,000.00, and which
Alterations will not be visible from outside the Premises or affect any structural components of the Project) will not require Landlord's prior consent so long as (i) Tenant notifies Landlord
in writing of the nature and extent of such Alterations at least 15 days before commencing such Alterations (which information must have sufficient detail to, among other things, provide
Landlord with reasonable evidence that such Alterations are of a nature that Landlord's consent is not required), and (ii) Tenant complies with all reasonable conditions which may be imposed by
Landlord including, but not limited to, the requirements of Paragraph 23.3, below, Landlord's selection of specific contractors or construction techniques and the requirements of the attached  Exhibit "C." Any Alterations meeting the foregoing requirements to avoid the necessity of obtaining Landlord's consent are referred to herein as a
"Minor Alterations"). 


        23.3.  Additional Requirements.    Tenant shall, prior to the commencement of any Alterations, and at Tenant's sole
cost, (i) acquire (and deliver to Landlord a copy of) any required permit from the appropriate governmental agencies to make such Alterations (any conditions of which permit Tenant shall comply
with, at Tenant's sole cost, in a prompt and expeditious manner), (ii) provide Landlord with ten business days' prior written notice of the date the installation of the such Alterations is to
commence, so that Landlord can post and record an appropriate notice of non-responsibility, (iii) pay Landlord the reasonable costs and expenses of Landlord for architectural,
engineering, or other consultants which reasonably may be incurred by Landlord in determining whether to approve any such Alterations (excluding Minor Alterations), and (iv) if applicable,
obtain (and deliver to Landlord proof of) reasonably adequate workers compensation insurance with respect to any of Tenant's employees installing or involved with such Alterations (which insurance
Tenant shall maintain on an occurrence basis in force until completion of the Alterations). In addition, Tenant shall comply with all reasonable conditions which may be imposed by Landlord relative to
such Alterations including, but not limited to, Landlord's selection, in the case of any such Alterations affecting any structural elements of the Building or any building systems (including utility
systems, HVAC systems, or life safety systems), of specific contractors (and for all other Alterations, Tenant shall be permitted to select its own contractor, subject to Landlord's reasonable
approval) or construction techniques and, in all cases, compliance with the requirements of the attached Exhibit "C." Notwithstanding anything to the
contrary contained in 












this
Paragraph 23, in no event may Tenant remove any ceiling tiles or ceiling gridwork or lighting without Landlord's prior consent, and any such consent may be conditioned upon requiring
Tenant to post a deposit to cover the cost of restoring the Premises to their prior condition upon termination of the Term and to secure Tenant's obligation to so restore the Premises. 



        23.4.  Ownership of Alterations.    All Alterations shall, upon the Expiration Date of this Lease, become the
property of Landlord and shall remain on and be surrendered with the Premises on the Expiration Date; except that, Landlord may, at its election, require Tenant to remove any or all of the
Alterations, provided that Landlord notifies Tenant in writing prior to commencement of the Alterations. If Landlord so elects to have the Alterations removed, Tenant shall, at its sole cost, on or
before the Expiration Date, repair and restore the Premises to the condition of the Premises prior to the installation of the Alterations which are to be removed. Tenant shall pay all costs for
Alterations and other construction done or caused to be done by Tenant and Tenant shall keep the Premises free and clear of all mechanics' and materialmen's liens resulting from or relating to any
Alterations or other construction. Tenant may, at its election, contest the correctness or validity of any such lien provided that (a) within 20 days after written demand by Landlord,
Tenant procures and records a lien release bond, issued by a corporation satisfactory to Landlord and authorized to issue surety bonds in California, in an amount equal to 150% of the amount of the
claim of lien, which bond meets the requirements of California Civil Code Section 3143 or any successor statute, and (b) Landlord may, at its election, require Tenant to pay Landlord's
reasonable attorneys' fees and costs incurred in participating in such an action. 




        24.    Surrender of Premises and Holding Over.    



        24.1.  Surrender.    On the Expiration Date, Tenant shall surrender to Landlord the Premises and all Alterations
(except for Alterations that Tenant is obligated to remove as expressly set forth above) in a good condition, less any normal wear and tear, free of trash and debris including cleaning of all
flooring; all walls shall be patched and painted, subject to normal wear and tear; all signage installed by Tenant on any portion of the Buildings or Project shall be removed and the surfaces
repaired, including restoration of the signage mounting surfaces to their pre-existing condition; all sign circuits, electrical circuits, and lighting fixtures shall be in good operating
condition; all roof penetrations arising from Tenant's occupancy of the Premises shall be in a watertight condition; and all doors, windows, locks, and hardware shall be in operable condition upon the
termination of this Lease. Tenant shall additionally, as of the Expiration Date, remove all of Tenant's Personal Property and perform all repairs and restoration required by the removal of any
Alterations or Tenant's Personal Property, and Tenant shall surrender to Landlord all keys to the Premises (including without limitation any keys to any exterior or interior doors). Landlord may elect
to retain or dispose of in any manner any Alterations or Tenant's Personal Property that Tenant does not remove from the Premises on the Expiration Date as required by this Lease by giving written
notice to Tenant. Any such Alterations or Tenant's Personal Property that Landlord elects to retain or dispose of shall immediately upon notice to Tenant vest in Landlord. Tenant waives all claims
against Landlord for any damage to Tenant resulting from Landlord's retention or disposition of any such Alterations or Tenant's Personal Property. Tenant will be liable to Landlord for Landlord's
costs for storing, removing (including related restoration work), or disposing of any such Alterations or Tenant's Personal Property. Subject to the provisions of Paragraph 24.2, below, if
Tenant fails to surrender the Premises to Landlord on the Expiration Date in the condition required by this Paragraph, Tenant shall indemnify, defend, and hold Landlord harmless from and against all
liabilities, damages, losses, costs, expenses, attorneys' fees, and claims resulting from such failure, including without limitation any claim for damages made by a succeeding tenant. 



        24.2.  Holding Over.    If Tenant remains in possession of the Premises after the Expiration Date with Landlord's
express written consent, Tenant's occupancy shall be a month-to-month tenancy at a rental rate equal to 125% of the Basic Monthly Rent and Additional Rent payable under this
Lease during the last full month before the Expiration Date. The month-to-month tenancy shall be on the terms, provisions, and conditions of this Lease except as provided in
the preceding sentence. If Tenant holds over after the Expiration Date without the express written 












consent
of Landlord, Tenant shall become a tenant at sufferance only, at a rental rate equal to 150% of the Basic Monthly Rent and Additional Rent in effect immediately prior to expiration of the Term
(prorated on a daily basis), and otherwise subject to the terms, provisions, and conditions herein specified, so far as applicable. Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute consent to a holdover tenancy hereunder or result in a renewal. The foregoing provisions this Paragraph 24.2 are in addition to, and do not affect, Landlord's
right of re-entry or any rights of Landlord hereunder or as otherwise provided by law. Landlord expressly reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in this Lease upon expiration or other termination of this Lease. The provisions of this Paragraph 24.2 shall not be considered to limit or constitute a waiver of any other
rights or remedies of Landlord provided in this Lease or at law. Notwithstanding anything to the contrary contained in this Lease, Tenant shall not be liable to Landlord for any lost profits or any
other form of consequential damages suffered by Landlord as a result of a Tenant holdover unless Landlord has delivered at least 30 days prior written notice to Tenant that Landlord, has a
tenant for the Premises upon the expiration of the Term and Tenant thereafter holds over, then Tenant shall be liable to Landlord for any lost rents
and any other damages suffered Landlord on account of such holdover (collectively, "Holdover Lost Rents and Successor Damages"). Subject to the provisions of this Paragraph 24.2, and provided
Landlord has provided Tenant with reasonable back-up documentation evidencing such losses and damages, Tenant shall indemnify, defend and hold Landlord harmless from and against any
Holdover Lost Rents and Successor Damages resulting from any holdover by Tenant beyond the Expiration Date. 




        25.    Default.    The occurrence of any of the following shall constitute a material default and breach of this Lease
by Tenant (each an "Event of Default"): 



        25.1.  The
abandonment (as defined in the California Civil Code 1951.3) of the Premises by Tenant. 



        25.2.  Tenant's
failure to make any payment of Rent (including late charges) as and when due; provided, however, that Landlord agrees that in connection with the first two
such failures during any calendar year, no Event of Default shall exist under this paragraph unless such failure continues for a period of three business days after written notice from Landlord to
Tenant; provided further, however, that in no event shall Landlord be required to provide such a notice more than five times during the Term. No grace period prior to the imposition of a late charge
pursuant to Paragraph 27, below, shall extend the date when such Rent is due and payable, and Tenant shall be in default under this Lease if such payment is not timely made (subject to the
provisions of this Paragraph). In the case of Basic Monthly Rent, payments must be received on or before the first day of each calendar month, and Tenant shall be in default if such Rent is not paid
by such date (subject to the provisions of this Paragraph). Any notices to be provided by Landlord under this Paragraph shall be in lieu of, and not in addition to, any statutory notice requirements
of applicable unlawful detainer statutes (currently—Section 1161 et seq. of the California Code of Civil Procedure). Tenant acknowledges that Landlord only agreed to the inclusion
of such notice requirement on the condition that such notice would constitute the legally required notice following a default and Tenant waives any claim, counterclaim, or defense to any action
relating to an unlawful detainer on the basis that such notice, was insufficient to meet such statutory notice requirement or was in any other manner defective, and Tenant agrees that it will be
estopped from raising any such argument in any action by Landlord. 














































 



        25.3.  Tenant's
failure to observe or perform any of the provisions of this Lease to be observed or performed by Tenant, other than described in the preceding two paragraphs
or the next succeeding paragraph, where such failure shall continue for a period of 30 days after written notice of such failure from Landlord to Tenant; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under applicable unlawful detainer statutes; and provided further, that if the nature of Tenant's default is such that more than
30 days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commenced such cure within the first ten days of such 30-day period and
thereafter diligently prosecutes such cure to completion within 60 days after Landlord's written notice. Such written notice will be deemed to satisfy the statutory notice requirements of
applicable unlawful detainer statutes and will be in lieu thereof (and not in addition thereto). Tenant acknowledges that Landlord only agreed to the inclusion of such notice requirement on the
condition that such notice would constitute the legally required notice following a default and Tenant waives any claim, counterclaim, or defense to any action relating to an unlawful detainer on the
basis that such notice, was insufficient to meet such statutory notice requirement or was in any other manner defective, and Tenant agrees that it will be estopped from raising any such argument in
any action by Landlord. Notwithstanding the foregoing, if (i) Tenant commits three similar defaults during any 12-month period or less, (ii) Tenant receives notices of
default on each separate occasion, and (iii) each such default reasonably could have been cured within a 24-hour period from the date Tenant received notice of such default but was
not so cured, then, as to any further, similar default that thereafter occurs during the same 12-month period, Landlord may treat such default as an Event of Default and exercise its
remedies under Paragraph 26, below, without giving Tenant any further notice of default or opportunity to cure. 


        25.4.  Tenant's
failure to timely deliver an estoppel certificate to Landlord in accordance with the provisions of Paragraph 42, below, where such failure continues
for a period of three business days following written notice (which three-day written notice is in addition to the notice provided for under such Paragraph 42), or a subordination,
non-disturbance, and attornment agreement in accordance with Paragraph 41, below. 


        25.5.  The
making by Tenant of any general arrangement or assignment for the benefit of creditors; Tenant's becoming bankrupt, insolvent or a "debtor" as defined in 11 U.S.C.
Section 101, or any successor statute (unless, in the case of a petition filed against Tenant, such petition is dismissed within 60 days after its original filing); the institution of
proceedings under the bankruptcy or similar laws in which Tenant is the debtor or bankrupt; the appointing of a trustee or receiver to take possession of substantially all of Tenant's assets located
at the Premises or of Tenant's interest in this Lease (unless possession is restored to Tenant within 60 days after such taking); the attachment, execution, or judicial seizure of substantially
all of Tenant's assets located at the Premises or Tenant's interest in this Lease
(unless such attachment, execution, or judicial seizure is discharged within 60 days after such attachment, execution, or judicial seizure); or, if Tenant is a partnership or consists of more
than one person or entity, any partners of the partnership or any such other person or entity becoming bankrupt or insolvent or making a general arrangement or assignment for the benefit of creditors. 




        26.    Landlord's Remedies.    Landlord shall have the following remedies if Tenant commits an Event of Default under
this Lease. These remedies are not exclusive, but are cumulative and in addition to any remedies provided elsewhere in this Lease or now or later allowed by law. 



        26.1.  Continuation of Lease.    No act by Landlord shall terminate Tenant's right to possession unless Landlord
notifies Tenant in writing that Landlord elects to terminate Tenant's right to possession. As long as Landlord does not terminate Tenant's right to possession, Landlord may (i) continue this
Lease in effect, (ii) continue to collect Rent when due and enforce all the other provisions of this Lease, and (iii) enter the Premises and relet them, or any part of them, to third
parties for Tenant's account, for a period shorter or longer than the remaining Term of this Lease. Tenant shall immediately pay to Landlord all costs Landlord incurs in such reletting, including,
without limitation, brokers' commissions, attorneys' fees, advertising costs, and expenses of 









remodeling
the Premises for such reletting. The parties agree that Landlord is to have the remedy described in California Civil Code Section 1951.4 (which effectively provides that a lessor may
continue a lease in effect after the lessee's breach and recover rent as it becomes due), and the Tenant hereby acknowledges that this Lease meets the requirements of such statutory provision and that
Tenant's rights to sublet or assign hereunder are subject only to reasonable limitations. 



        26.2.  Rent from Reletting.    If Landlord elects to relet all or any portion of the Premises as permitted above,
rent that Landlord receives from such reletting shall be applied to the payment of, in the following order and priority, (i) any indebtedness from Tenant to Landlord other than Rent due from
Tenant, (ii) all costs incurred by Landlord in such reletting, and (iii) Rent due and unpaid under this Lease. After applying such payments as referred to above, any sum remaining from
the rent Landlord receives from such reletting shall be held by Landlord and applied in payment of future Rent as it becomes due under this Lease. In no event shall Tenant be entitled to any excess
rent received by Landlord unless and until all obligations of Tenant under this Lease, including all future obligations, are satisfied in full. 


        26.3.  Termination of Tenant's Right to Possession.    Landlord may terminate Tenant's right to possession of the
Premises at any time, by notifying Tenant in writing that Landlord elects to terminate Tenant's right to possession. Such written notice will result in the immediate termination of this Lease upon the
date such right of possession is terminated. Upon termination of this Lease, Landlord has the right to recover from Tenant (i) the worth at the time of the award of the unpaid Rent which had
been earned at the time of such termination, (ii) the worth at the time of the award of the amount by which the unpaid Rent which would have been earned after such termination until the time of
award exceeds the amount of such loss of Rent that Tenant proves could have been reasonably avoided, (iii) the worth at
the time of the award of the amount by which the unpaid Rent for the balance of the Term after the time of award (had there been no such termination) exceeds the amount of such loss of Rent that
Tenant proves could be reasonably avoided, and (iv) any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or in the ordinary course of things would be likely to result therefrom. The "worth at the time of the award" of the amounts referred to in clauses (i) and (ii) above is
to be computed by allowing interest at the Default Rate. The "worth at the time of the award" of the amount referred to in clause (iii) above is to be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent. 


        26.4.  Landlord's Right to Cure Default.    Landlord, at any time after Tenant commits an Event of Default, may cure
such Event of Default at Tenant's sole cost. If Landlord at any time, by reason of Tenant's default or breach, pays any sum or does any act that requires the payment of any sum, such sum shall be due
immediately from Tenant to Landlord at the time such sum is paid, along with a supervisory fee in the amount of five percent of such amount so expended by Landlord, and shall be deemed Additional Rent
under this Lease. If Tenant fails to timely pay any amount due under this Paragraph within ten business days of receipt of Landlord's invoice for such costs, then (without curing such default)
interest at the Default Rate shall accrue (and be immediately payable) on such overdue amount until it is paid. 


        26.5.  Enforcement Costs.    All costs and expenses incurred by Landlord in connection with collecting any amounts
and damages owing by Tenant pursuant to the provisions of this Lease, or to enforce any provision of this Lease, including reasonable attorneys' fees, whether or not any action is commenced by
Landlord, shall be paid by Tenant to Landlord upon demand. If Tenant fails to timely pay any amount due under this Paragraph, then (without curing such default) interest at the Default Rate shall
accrue (and be immediately payable) on such overdue amounts until it is paid. 




        27.    Interest and Late Charges.    Late payment by Tenant to Landlord of Rent will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which would be impracticable or extremely difficult to fix. Such costs include, without limitation, processing, collection and accounting 









charges,
and late charges that may be imposed on Landlord by the terms of any deed of trust covering the Premises. Therefore, if any Rent (in the form of good funds) is not received by Landlord within
ten days of its due date, then, without any requirement for notice to Tenant, Tenant shall pay to Landlord an additional sum of five percent of such overdue amount as a late charge. Such late charge
represents a fair and reasonable estimate of the costs that Landlord will incur by reason of any late payment by Tenant, and therefore this Paragraph is reasonable under the circumstances existing at
the time this Lease is made. Acceptance of such late charge by Landlord shall not constitute a waiver or cure of Tenant's default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this Lease. In addition to the late charge payable by Tenant, as provided above, if any such Rent is not paid within
30 days of the date such Rent was due, then Tenant shall pay to Landlord interest on such overdue Rent (from such 30th day until all amounts, including interest, are paid
in full) at the rate of seven percent above the "reference rate"
announced from time to time by Bank of America, NT&SA (the "Default Rate"). If such reference rate ceases to be announced, then a comparable "prime rate" shall be utilized, as selected by Landlord. 


        28.    Landlord Default—Tenant's Remedies.    If Landlord fails to cure a default by Landlord within any
applicable cure period (or if no cure period is specified, then within 30 days of written notice from Tenant setting forth the nature of the claimed default; provided, however, if the nature of
the cure of such default will reasonably require more than 30 days to complete and Landlord is proceeding with due diligence to remedy such matter, then such 30 day period will be
extended for such additional time as may be necessary for Landlord to complete such cure) (any such failure being a "Landlord Default"), Tenant may remedy such default, whereupon Landlord shall
reimburse Tenant for the reasonable third-party costs incurred by Tenant to remedy such default within 30 days after receipt of Tenant's written demand therefor, together with copies of the
paid invoices evidencing the costs so incurred. In no event will Tenant have any right to offset any amount owed by Landlord (regardless of whether Landlord is in default hereunder) against Tenant's
monetary obligations under this Lease; provided, however, Tenant may recover all actual damages (but not consequential or exemplary damages) reasonably resulting from any Landlord Default.
Notwithstanding the foregoing, if a Landlord Default (i) adversely and substantially affects Tenant's rights under this Lease relating to use and/or occupancy of the Premises and as a result of
such Landlord Default there is a material interference in the operation of Tenant's business conducted in the Premises, (ii) Landlord intentionally fails to cure such Landlord Default even
though Landlord has adequate monetary resources to cure same, and (iii) such Landlord Default cannot be reasonably cured by Tenant in accordance with this Paragraph within reasonable time and
at a reasonable cost, then—subject to the rights of Landlord's Lender under any Subordination, Attornment, and Non-Disturbance Agreement in the form of attached  Exhibit "E" or otherwise
entered into in connection herewith—Tenant may terminate this Lease if Landlord fails to cure such Landlord
Default within 15 days after a second written notice thereof from Tenant delivered following the expiration of Landlord's original cure period provided for above. 


        29.    Payment of Rent by Cashier's Check.    If a late charge is payable under this Lease, whether or not collected,
for three or more installments of Basic Monthly Rent or other Rent due under this Lease, or if any three payments made by Tenant in the form of a personal or business check is returned by the bank it
was drawn upon for whatever reason, including but not limited to insufficient funds, then Landlord, at Landlord's option, may require Tenant to submit future payments to Landlord in the form of a
certified cashier's check, money order, or by wire transfer. Tenant's obligation to provide payment in the aforementioned manner shall continue in full force and effect until Landlord, in its sole
discretion, determines otherwise. Tenant further agrees to reimburse Landlord, as Additional Rent, Landlord's actual costs imposed by Landlord's bank or financial institution arising from Tenant's
returned check(s). These costs shall be in addition to any late charges payable by Tenant pursuant to this Lease. 


        30.    Destruction.    If the Building is totally or partially destroyed during the Term, rendering the Premises
totally or partially inaccessible or unusable, then, subject to the remainder of this Paragraph, (i) Landlord shall promptly commence work necessary to restore the Building (including the
initial tenant improvements constructed pursuant to the terms of Exhibit "C" attached hereto) to substantially 










the
same condition as it was in immediately before such destruction and shall diligently prosecute such restoration work until completed, (ii) Landlord shall not be required to restore Tenant's
Alterations or Tenant's Personal Property, unless they are specifically covered by insurance proceeds received by Landlord, such excluded items being the sole responsibility of Tenant to restore,
(iii) such destruction shall not terminate this Lease (except as provided below), and (iv) all obligations of Tenant under this Lease shall remain in effect, except that the Basic
Monthly Rent and Additional Rent shall be abated or reduced, between the date of such destruction and the date of Substantial Completion of restoration, by the ratio of (a) the Rentable Square
Footage of the Premises rendered unusable or inaccessible by the destruction or in which Tenant is unable to operate its business as of result of the destruction, as reasonably determined by Landlord,
to (b) the Rentable Square Footage of the Premises prior to such destruction. Notwithstanding anything to the contrary in this Paragraph, either party shall have ten business days from the date
of Landlord's determination that this sentence applies to the subject destruction/reconstruction, in which to terminate this Lease if Landlord reasonably determines that (1) it will likely take
more than either (A) 270 days following the date of such casualty, or (B) 210 days from obtaining all required permits for such reconstruction, in which to complete such
work, (2) such destruction (which is not de minimus in nature) occurs during the last year of the Term, or (3) then-existing laws do not permit such restoration.
Additionally, Landlord may, at its election, terminate this Lease by so notifying Tenant in writing on or before the later of 60 days after such destruction or 30 days after Landlord's
receipt of the proceeds (or written notice of the amount of proceeds) from insurance maintained by Landlord, if (I) such destruction exceeds 20% of the then-replacement value of the
Premises, the Building, or the Project, or (II) Landlord reasonably determines that the cost of such restoration will exceed the amount of insurance proceeds relating to such destruction
actually received by Landlord from insurance maintained by Landlord, excluding deductibles, by more than five percent of such cost of restoration. If Landlord or Tenant so terminates this Lease, then
(x) Landlord shall have no obligation to restore the Project, (y) Landlord shall retain all insurance proceeds relating to such destruction, and (z) this Lease shall terminate as
of 30 days after such notice of termination from Landlord to Tenant. Landlord's right to terminate this Lease as set forth in the immediately preceding sentence shall be conditioned upon
Landlord also terminating the leases of all similarly affected tenants in the Project. Tenant hereby waives the provisions of California Civil Code Sections 1932(2) and 1933(4) or any successor
statute with respect to any destruction of the Premises.. Additionally, if Landlord fails to Substantially Complete such restoration work within 270 days of such damage or destruction, Tenant
may, by 30 days' written notice to Landlord delivered after such period (during which period of time such restoration is not Substantially Completed), terminate this Lease. 



        31.    Condemnation.    If during the Term, or during the period of time between the execution of this Lease and the
Lease Commencement Date, there is any taking of all or any part of the Premises or any interest in this Lease by the exercise of any governmental power, whether by legal proceedings or otherwise, by
any public or quasi-public authority, or private corporation or individual, having the power of condemnation (any of the preceding a "Condemnor"), or a voluntary sale or transfer by Landlord to any
Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending (any of the preceding, a "Condemnation"), the rights and obligations of Landlord and Tenant shall
be determined pursuant to this Paragraph. If such Condemnation is of the entire Premises, then this Lease shall terminate on the date the Condemnor takes possession of the Premises (the "Date of
Condemnation"). If such Condemnation is of any portion, but not all, of the Premises, then this Lease shall remain in effect, except that, if the remaining portion of the Premises is rendered
unsuitable for Tenant's continued use of the Premises, then Tenant may elect to terminate this Lease, by so notifying Landlord in writing (the "Termination Notice") within 30 days after the
date that the nature and extent of the Condemnation have been determined by Landlord and Landlord has delivered written notice thereof to Tenant. Such termination shall be effective on the earlier of
(i) the date that is 30 days after the giving of the Termination Notice, or (ii) the Date of Condemnation. If Tenant does not give to Landlord the Termination Notice within such
30-day period, then all obligations of Tenant under this Lease shall remain in effect, except that (i) (unless the Premises are restored as set forth below) Basic Monthly Rent shall
be reduced by the ratio of (a) the Rentable 










Square
Footage of the Premises taken to (b) the Rentable Square Footage of the Premises immediately prior to the Date of Condemnation and (ii) all other amounts, percentages, and figures
appearing or referred to in this Lease shall be modified to conform to such reduced Rentable Square Footage. Notwithstanding anything to the contrary in this Paragraph, if, within 30 days after
Landlord's receipt of the Termination Notice, Landlord notifies Tenant that Landlord at its cost will add to the remaining Premises (or substitute for the Premises other comparable space in the
Project) so that the Rentable Square Footage of the Premises will be substantially the same after the Condemnation as they were before the Condemnation, and Landlord commences the restoration promptly
and completes it within 150 days after Landlord so notifies Tenant, then all obligations of Tenant under this Lease shall remain in effect, except that Basic Monthly Rent and Additional Rent
shall be abated or reduced during the period from the Date of Condemnation until the completion of such restoration by the ratio of (A) the Rentable Square Footage of the Premises taken to
(B) the Rentable Square Footage of the Premises immediately prior to the Date of Condemnation. Unless Landlord restores the Premises pursuant to the preceding sentence, or unless Tenant gives
to Landlord the Termination Notice within the relevant 30-day period, Tenant at its sole cost shall accomplish any restoration required by Tenant to use the Premises. A temporary
Condemnation of the Premises, or any part of the Premises, for less than 180 days, shall not constitute a Condemnation under this Paragraph; but the Basic Monthly Rent shall abate as to the
portion of the Premises affected during such temporary Condemnation. All compensation, sums, or anything of value awarded, paid, or received on a total or partial Condemnation (the "Award") shall
belong to and be paid to Landlord. Tenant shall have no right to any part of the Award, and Tenant hereby assigns to Landlord all of Tenant's right, title, and interest in and to any part of the
Award, except that Tenant shall receive from the Award any sum paid expressly to Tenant from the Condemnor for Tenant's Personal Property, interruption or damage to Tenant's business, moving expenses,
or for severance damages. Landlord and Tenant waive the provisions of any statute (including without limitation California Code of Civil Procedure Section 1265.130 or any successor statute)
that allows Landlord or Tenant to petition the superior court (or any other court) to terminate this Lease in the event of a partial Condemnation of the Premises. 


        32.    Assignment and Other Transfers.    



        32.1.  Restriction on Transfer.    Without Landlord's prior written consent, which shall not be unreasonably
withheld, conditioned, or delayed, and except as permitted by Paragraph 32.4, below, none of the following shall occur (nor be permitted by Tenant to occur), voluntarily, involuntarily, by
operation of law, or otherwise (any of the following, a "Transfer"): (i) any assignment, sublease, disposition, sale, concession, license, license agreement for the use of any portion of the
Premises, mortgage, encumbrance, hypothecation, pledge, collateral assignment, or other transfer, by Tenant of this Lease, any interest in this Lease, or all or any portion of the Premises; or
(ii) any assignment, disposition, sale, transfer, acquisition, or issuance of equitable interests (whether stock, partnership or otherwise) in Tenant, to or by any person, entity, or group of
related persons or affiliated entities, whether in a single transaction or in a series of related or unrelated transactions, which results in such person, entity, or group holding (or assigning,
transferring, disposing of, or selling) 50% or more of the aggregate issued and outstanding equitable interests in Tenant. 



        32.2.  Transfer Provisions Generally.    Landlord shall not be liable in damages to Tenant or to any proposed
subtenant, assignee or other transferee (any of the preceding a "Proposed Transferee") if such consent is adjudicated to have been unreasonably withheld, and, in such event, Tenant's sole remedy shall
be to have the proposed Transfer declared as valid as if Landlord's consent had been given, although Tenant shall be entitled to reasonable attorney's fees if Tenant is the prevailing party in such
litigation. At least 20 days prior to entering into any proposed Transfer, Tenant shall submit to Landlord the sum of $400.00 (as payment toward Landlord's and Landlord's attorneys' cost of
reviewing, consenting to, rejecting and/or consummating any proposed Transfer), and a written notice ("Tenant's Notice") which includes (i) a fully executed copy of the instrument of transfer
(i.e. the sublease or assignment) relating to the proposed Transfer, along with all related agreements, documents, instruments, exhibits, and
escrow instructions, (ii) the name and address of the Proposed Transferee, (iii) an abstract of the terms and conditions of the 












proposed
Transfer, including without limitation the economics of such Proposed Transfer and the commencement or effective date of the proposed Transfer, which shall be at least 20 days after
Tenant's Notice is given, and (iv) the nature, character, and current financial information and references with respect to the Proposed Transferee and the business of the Proposed Transferee,
in reasonably sufficient detail to enable Landlord to determine the Proposed Transferee's financial responsibility. Within 15 days after Landlord's receipt from Tenant of such sum and Tenant's
Notice, and all documentation requested of Tenant by Landlord, Landlord shall notify Tenant whether Landlord has consented to the proposed Transfer. Any consent by Landlord to any proposed Transfer
shall not constitute a consent with respect to any other Transfer. If Landlord consents to any proposed Transfer, and Tenant fails to consummate such Transfer within 90 days of the commencement
or effective date of the proposed Transfer (as set forth in Tenant's Notice) or, if Tenant's Notice fails to identify such a date, then within 150 days of the Tenant's Notice, then such consent
shall be deemed withdrawn and Tenant shall be required again to comply with this Paragraph before making a Transfer. Landlord shall not have unreasonably withheld its consent with respect to any
Transfer if (among other things) Landlord shall not have received such sum or Tenant's Notice, if (in Landlord's reasonable determination) the nature or character of the Proposed Transferee is not in
keeping with the dignity and character of the Building and the surrounding area, if the Proposed Transferee's proposed use is
materially and adversely different than the Permitted Use or Tenant's prior use, if the proposed Transfer will result in the diminution of the value or marketability of the Building or the Project, if
Landlord is not reasonably satisfied that the Proposed Transferee is creditworthy, or if the proposed Transfer will conflict with or result in a breach of any of the provisions of, or constitute a
default under, any agreement, instrument, or document to which Landlord is a party or by which the Project may be bound. No Transfer shall release or discharge Tenant from any liability, whether past,
present, or future, under this Lease and Tenant shall continue to remain directly liable under this Lease (and not as a mere surety). Tenant irrevocably assigns to Landlord, as security for Tenant's
obligations under this Lease, all rent and other amounts generated from any Transfer, and Landlord, as assignee, may collect such rent and other amounts and apply them toward Tenant's obligations
under this Lease; except that, unless an Event of Default occurs under this Lease, Tenant shall have the right to collect such rent and other amounts. Unless otherwise agreed to by all parties, the
Tenant's Security Deposit (if any) shall be retained by Landlord and returned to the lawful tenant in possession of the Premises at the time of the Lease termination, subject to the terms and
conditions of Paragraph 6 of this Lease. Any Transfer documentation shall contain the following provisions, which provisions whether contained in such Transfer documentation or not, shall apply
to such Transfer: (a) Such Transfer shall be subject and subordinate to, and bound by, all provisions of this Lease; (b) No Proposed Transferee shall be permitted to enter into any
Transfer without Landlord's prior written consent; and (c) At Landlord's option, in the event of cancellation or termination of this Lease for any reason or the surrender of this Lease, whether
voluntarily, involuntarily, by operation of law or otherwise, prior to the expiration of such Transfer, the Proposed Transferee shall make full and complete attornment to Landlord for the balance of
the term of such Transfer. Such attornment shall be evidenced by an agreement in form and substance reasonably satisfactory to Landlord that the Proposed Transferee shall execute and deliver to
Landlord within five days after request by Landlord. Tenant shall promptly reimburse Landlord for Landlord's reasonable cost (less the $400.00 previously paid) of reviewing, consenting to, rejecting,
and/or consummating any proposed Transfer, including without limitation reasonable attorneys' fees and costs/fees of Landlord's Lender in connection therewith. If Tenant fails to pay such amount
within ten business days of written demand, Tenant shall be in default hereunder and Landlord shall have the right, in addition to its other rights and remedies under this Lease, to revoke its prior
approval of the proposed Transfer if such Proposed Transferee has not yet taken over possession of the Premises. 


        32.3.  Excess Rent and Recapture.    Tenant shall promptly pay to Landlord, as and when received, 50% of all rents
and other consideration after all of Tenant's reasonable third-party expenses incurred in connection with such Transfer are deducted, of whatever nature (including without limitation, (a) any
changes, alterations, and improvements to the Premises paid for by 












Tenant
in connection with the Transfer, (b) any other out-of-pocket monetary concessions provided by Tenant to the Transferee, and (c) any brokerage commissions
and legal fees actually paid for by Tenant in connection with the Transfer), payable by the Proposed Transferee (or receivable by Tenant) pursuant to or as a result of any Transfer, which exceed
(i) in the case of a sublease of a portion of the Premises, the portion of the Rent that is allocable to the portion of the Premises subleased (such allocation based on the Rentable Square
Footage of the portion subleased), or (ii) in the case of any other Transfer, the Rent. Landlord additionally has the right, in the event Tenant indicates in the Tenant's Notice that it desires
to assign this Lease or sublet greater than 50% of the Premises, at its election, by giving written notice (the "Recapture Notice") to Tenant within 15 days after receipt of Tenant's Notice, to
recapture the Premises and terminate this Lease. If Landlord elects to exercise such right and delivers a Recapture Notice to Tenant, this Lease shall automatically be deemed terminated as of the
commencement or effective date stated in Tenant's Notice for the
proposed Transfer, and Tenant shall surrender possession of the Premises as of such date (and any failure to do so shall constitute a default hereunder). Landlord's giving of a Recapture Notice shall
not constitute Landlord's consent to Tenant's proposed Transfer. Notwithstanding the foregoing provisions of this Paragraph 32.3, if Landlord delivers the Recapture Notice to Tenant, Tenant
may, within ten days after Tenant's receipt of the Recapture Notice, deliver written notice to Landlord indicating that Tenant is rescinding its request for consent to the proposed Transfer, in which
case such Transfer shall not be consummated and this Lease shall remain in full force and effect. Tenant's failure to so notify Landlord in writing within said ten-day period shall be
deemed to constitute Tenant's irrevocable agreement that the Recapture Notice shall be effective. 


        32.4.  Permitted Transferee.    Notwithstanding anything to the contrary contained in Paragraphs 32.1 or
32.3, above, no consent of Landlord will be required for, and no amounts will be payable to Landlord in connection with, any assignment or subletting to any of the following (any of which will
constitute a "Permitted Transferee"): 



        32.4.1.  Any
parent, wholly-owned subsidiary, or other company of which Tenant owns all or a majority all of the voting and beneficial interests, or which company owns all or
substantially all of the voting and beneficial interests in Tenant, and which parent, subsidiary, or other company has a net worth (determined in accordance with GAAP) equal to or greater than
Tenant's net worth as of the day before such transaction or as of the Lease Commencement Date, whichever is less; 



        32.4.2.  Any
surviving or successor entity resulting from a merger, consolidation, or sale of majority all of the assets of Tenant, where the net worth of the resulting or
acquiring company exceeds (as determined in accordance with GAAP) the net worth of the Tenant as of the day prior to such transaction or as of the Lease Commencement Date, whichever is less; or 


        32.4.3.  Any
sale of stock as part of a "public offering" on one of the nationally recognized securities exchanges (such as, without limitation, NYSE or NASDAQ). 





        Notwithstanding
the foregoing, and as a condition to the effectiveness of any such Transfer to a Permitted Transferee, at least ten days prior to any proposed Transfer to a Permitted
Transferee, Tenant shall notify Landlord in writing of its intention to undertake such a Transfer and provide Landlord with sufficient information to confirm that such entity will in fact be a
Permitted Transferee; provided, however, no such notice shall be required in connection with a Permitted Transfer pursuant to Paragraph 32.4.3 of this Lease. Landlord shall keep all such
information confidential except as may be required by any court or authority of competent jurisdiction or which information is already in the public domain, or except for the disclosure of such
information to prospective buyers and lenders or the advisers and professionals of the parties or such prospective buyers and lenders. Other than the right to engage in such a Transfer to a Permitted
Transferee without Landlord's consent, all other provisions of Paragraph 32.2 shall apply to such a Transfer. In addition to the foregoing Permitted Transferees, Tenant may also sublet up to
1,000 Rentable Square Feet of the Premises in the aggregate at any one time (a "Special Subletting(s)") for all or any portion of the Term of this Lease (including, 








any
applicable Extension Term relative to an Option to Extend which is exercised by Tenant in accordance with the requirements of this Lease) upon notice to Landlord, provided that no demising wall is
created to separate the office spaces occupied by such subtenant(s) from the remainder of the Premises, no separate reception area is created for any such subtenant(s) and the business operated by
such subtenant(s) is consistent with the quality of the Project as a first class office project. In addition, Landlord agrees that such Special Subletting by Tenant will be viewed in the same manner
as a Transfer to a Permitted Transferee and, as such, will be exempt from the consent by Landlord requirements, the payment of any Transfer premium requirements, and the other restrictions of this
Paragraph 32 which do not apply to a Transfer to a Permitted Transferee; but shall require the same notice as is required in connection with a Transfer to a Permitted Transferee. 


        33.    Landlord's Reserved Rights.    



        33.1.  General Rights Reserved.    In addition to the specific reserved rights identified in Paragraph 33.2,
below and subject to the terms of this Lease, Landlord, as owner of the Project, in addition to Landlord's other rights, reserves the right from time to time: (i) to temporarily utilize
portions of the Common Areas for, among other things, entertainment, outdoor shows, displays, automobile and other product shows, the leasing of kiosks, or such other uses which, in Landlord's
reasonable judgment, are appropriate; (ii) to utilize the lighting standards and other areas or improvements in the Common Areas for advertising, notice purposes, or other reasonable purposes;
(iii) to close any of the Common Areas to the extent required in the opinion of Landlord's legal counsel to prevent a dedication of any of the Common Areas or the accrual of any rights to any
person or to the public in and to any portion of the Common Areas; (iv) to close, temporarily, any of the Common Areas for maintenance purposes; (v) to designate other property outside
the boundaries of the Project to become part of the Common Areas; (vi) to close off or otherwise utilize portions of the Common Areas while constructing improvements or making repairs or
alterations to any portion of the Project; (vii) to utilize portions of the Common Areas, on a temporary basis, as a staging area for any construction work by Landlord or its affiliates,
agents, tenants, or contractors; and (viii) to make any changes to the Common Areas, or any part of the Project, including without limitation changes to buildings or other improvements, the
addition of new buildings or other improvements, and/or changes in (among other things) the location of driveways, entrances, exits, vehicular parking spaces, or the direction of the flow of traffic.
In exercising such
rights, Landlord agrees to use commercially reasonable efforts to minimize any interference with Tenant's use of the Premises. 














































 



        33.2.  Future Construction.    Tenant acknowledges that, as more particularly provided below, the development of the
Project is continuing and may, at Landlord's election, include the construction of additional buildings and improvements within the Project, including in areas which currently constitute Common Areas.
Tenant is entering into this Lease with a full understanding of the possible ramifications/effects of such future development work on its tenancy and the rental charged hereunder takes such factors
into account. Tenant further acknowledges and agrees that Landlord may, from time to time, at its sole election, construct (including, without limitation, additional buildings), reconstruct (including
without limitation the replacement of certain improvements with other improvements), improve (including tenant improvements), modify, expand, or otherwise alter the Project (collectively,
"Construction Work"), or portions thereof (in no event however will Landlord have any obligation to do so). Tenant acknowledges that any such Construction Work will necessarily involve, among other
things, the generation of noise, dust, and vibrations, barricading portions of the Project and the placement of scaffolding within the Project, demolition, structural alterations, storage of materials
and equipment within the Project, and the presence of workmen within the Project, all of which may require the rearrangement of the Common Areas, including, without limitation, landscaping, parking
areas (which may include the provision of temporary parking areas during periods of construction), roadways, lighting facilities, and the re-direction of vehicular and pedestrian traffic.
Additionally, it is anticipated that the parking structure serving the Premises may be closed during the construction of further improvements above such parking structure. The results of such closure
will include, among other things, the temporary relocation of Tenant's parking from the parking structure to other portions of the Project or to nearby property. Further, Landlord hereby reserves such
licenses and easements in, on, above or below the Premises as may be reasonably required (i) for the installation, inspection, surveying, maintenance, or construction of mains, conduits,
shafts, columns, footings, piers, pipes or other facilities to serve any building within the Project, or (ii) for any Construction Work; provided, however, Landlord will use its good faith
efforts to minimize any unreasonable interference with Tenant's use, occupancy, or enjoyment of the Premises as contemplated by this Lease. Except as provided below, Tenant waives any and all claims,
defenses, rights of offset, or deductions based upon any inconvenience suffered by Tenant or any interruption of or interference with Tenant's business including, without limitation, any loss of
business, damage to property, loss of electronic information, or inconvenience to Tenant or Tenant's Invitees as a result of or relating to such Construction Work. Landlord hereby reserves for itself
and its agents, employees, licensees and contractors, the right to enter the Premises to the extent reasonably necessary to pursue such Construction Work upon 24 hours' prior notice to Tenant.
The exercise of any of Landlord's rights pursuant to this Paragraph will not entitle Tenant to any abatement of Rent or other claim, right of offset, or defense against Landlord, except that if such
Construction Work results in Tenant being unable to access the Premises, or portions thereof, for the Permitted Use during any business day, Tenant shall be entitled to equitable abatement of the Rent
(based upon the portion of the Premises that Tenant is unable to access) for such period of time during which it is unable to access the Premises. Subject to the terms of Paragraph 8 of this
Lease, Tenant further acknowledges that expansion of the Project may affect the amount of the Lease Expenses and the portion thereof payable by Tenant. 




        34.    Easements.    Landlord may, at its election, from time to time, grant such easements, rights and dedications,
and cause the recordation of parcel maps, easement and operating agreements, and restrictions affecting the Premises and the Project, provided that no such acts materially and adversely affect
Tenant's rights of ingress or egress to the Building and the Premises or Tenants right to use the Premises or Tenant's business conducted in the Premises. Tenant shall promptly sign any documents or
instruments to reasonably accomplish the foregoing upon request by Landlord. 


        35.    Access by Landlord.    Landlord and any of Landlord's Invitees shall have the right to enter the Premises at
all reasonable times, during normal business hours if feasible under the circumstances, and upon 24 hours' notice, if feasible under the circumstances, (i) to determine whether the
Premises are in good condition and whether Tenant is complying with its obligations under this Lease, (ii) to do any necessary maintenance or make any restoration to the Premises that Landlord
has the right or 










obligation
to perform, (iii) to serve, post, or keep posted any notices required or allowed under this Lease, (v) to post "for sale" or "for rent" or "for lease" signs during the final
nine months of the Term, (vi) to show the Premises to brokers, lenders, agents, prospective buyers, prospective tenants, or other persons interested in a listing of, financing, purchasing, or
occupying the Project, the Premises or any portion of the Project or the Premises, and (vii) to shore the foundations, footings, and walls of the Project, and to erect scaffolding and
protective barricades around and about the Premises, but not so as to prevent entry to the Premises, and to do any other act or thing necessary for the safety or preservation of the Premises if any
excavation or other construction is undertaken or is about to be undertaken on any adjacent property or nearby street. In the event of an emergency Landlord shall have the right to enter the Premises
at any time, without prior notice to Tenant. Landlord's rights under this Paragraph extend, with Landlord's consent, to the owner of adjacent property on which excavation or construction is to take
place and the adjacent property owner's agents, employees, officers, and contractors. Landlord shall not be liable for any inconvenience, disturbance, loss of business, nuisance, or other damage
arising out of any entry on the Premises as provided in this Paragraph except damage resulting directly from the grossly negligent acts or willful misconduct of Landlord or Landlord's Invitees. Tenant
shall not be entitled to any abatement or reduction of Basic Monthly Rent or other Rent because of the exercise by Landlord of any rights under this Paragraph. Landlord shall use commercially
reasonable efforts (and shall cause any Landlord Invitees to use commercially reasonable efforts) during any entry to not unreasonably interfere with Tenant's use of the Premises or Tenant's business
conducted therein. 


        36.    Indemnity.    Tenant hereby agrees to indemnify, defend, protect, and hold harmless Landlord and its
shareholders, officers, directors, agents, property managers, employees, contractors, and the partners comprising Landlord (if any) from and against all Claims (as defined below) and all costs,
expenses, and reasonable attorneys' fees incurred in the defense or handling of any such Claims or any action or proceeding brought on any of such Claims. For purposes of this Lease, the term "Claims"
shall mean all liabilities, damages, losses, costs, expenses, attorneys' fees, and claims (except to the extent they result from Landlord's or Landlord's agent's, property manager's, employee's or
contractor's negligent acts or willful misconduct) arising from or which seek to impose liability under or because of (i) Tenant's or Tenant's Invitees' use of the Premises, (ii) the
conduct of Tenant's business, (iii) any activity, work, or things done, permitted, or suffered by Tenant or any of Tenant's Invitees in or about the Premises or elsewhere, (iv) any
breach or default in the performance of any obligation to be
performed by Tenant under this Lease, and/or (v) any negligence of Tenant or any of Tenant's Invitees. If any action or proceeding is brought against Landlord or its shareholders, officers,
directors, agents, property managers, employees, contractors, or the partners comprising Landlord (if any) by reason of any such Claims, Tenant upon notice from Landlord shall defend such action or
proceeding at Tenant's sole cost by legal counsel satisfactory to Landlord. 


        37.    Exemption of Landlord From Liability.    Except as otherwise specifically provided in this Lease and/or to the
extent caused by Landlord's, or Landlord's agents', property manager's, or employees', negligent acts or willful misconduct, Tenant assumes all risk of, Tenant waives all claims against Landlord in
respect of, and Landlord shall not be liable for, any of the matters set forth in the preceding Paragraph or any of the following, except to the extent caused by Landlord's, or Landlord's property
manager's, agents' or employees', grossly negligent acts or willful misconduct: injury to Tenant's business, loss of income from such business, or damage or injury to the goods, wares, merchandise, or
other property or the person of Tenant, Tenant's Invitees, or any other persons in, upon, or about the Premises, whether such damage, loss, or injury is caused by or results from criminal acts, fire,
steam, electricity, gas, water, rain, the breakage, leakage, obstruction or other defects of pipes, sewer lines, sprinklers, wires, appliances, plumbing, air-conditioning or lighting
fixtures, or any other cause, conditions arising upon the Premises, or other sources or places, and regardless of whether the cause of such damage, loss, or injury or the means of repairing such
damage, loss, or injury is inaccessible to Tenant. In connection with the foregoing, Tenant hereby waives any defense would otherwise be provided by Section 1542 of the California Civil Code
(which states "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her
must have materially affected his or 










her
settlement with the debtor"), or laws of a similar nature, which would limit any such release to matters known or suspected to exist by Tenant. Except as otherwise provided in this Lease, this
Lease shall not be affected or impaired by any change to any part of the Project or any sidewalks, streets, or improvements nearby the Project. 



        38.    Hazardous Substances.    



        38.1.  Landlord's Covenants.    Landlord hereby notifies Tenant, and Tenant hereby acknowledges that, prior to the
leasing of the Premises pursuant to this Lease, Tenant has been notified, pursuant to California Health and Safety Code Section 25359.7 (or any successor statue), that Landlord knows, or has
reasonable cause to believe, that certain hazardous substances (as such term is used in such Section 25359.7), such as common cleaning supplies, office supplies, spillage of petroleum products
from motor vehicles, and other consumer products, may have come (and may in the future come) to be located on or beneath the Premises and/or the Project. Notwithstanding the foregoing, Landlord shall
not cause any unlawful accumulations of Hazardous Material (as defined below) to be generated, brought onto, used, stored, or disposed of in or about the Premises, the Building, or the Project by
Landlord or its agents, employees, or contractors, except for limited quantities of standard office and janitorial supplies and petroleum and petroleum-related products commonly used on or at similar
office projects. Furthermore, Landlord shall: (a) use, store, and dispose of all such permitted Hazardous Material in strict compliance with all applicable statutes, ordinances, and regulations
in effect during
the Lease Term that govern and/or relate to Hazardous Material, public health and safety and protection of the environment, and (b) comply at all times during the Lease Term with all
environmental laws (as defined in Paragraph 38.2, below). Except as to those matters which are Tenant's responsibility pursuant to Paragraph 38.2, below, Landlord shall be responsible,
at its expense (or the expense of others; but not as an Operating Expense) to cause any unlawful accumulations of Hazardous Materials to be remediated in accordance with the requirements of all
applicable environmental laws. Except as to those matters which are Tenant's responsibility pursuant to Paragraph 38.2, below, Landlord hereby agrees to indemnify, defend, and hold Tenant
harmless from and against all actions, liabilities, damages, losses, costs, expenses, attorneys' fees, and claims arising from or relating to any unlawful accumulations of Hazardous Materials into
ambient air, water, or land of the Project. Landlord's obligations and liability under this Paragraph shall survive the termination of Tenant's tenancy and the Term of this Lease. 



        38.2.  Tenant's Covenants.    Prior to or following its execution of this Lease, Tenant shall, upon request from
Landlord, complete and deliver to Landlord an Environmental Questionnaire in the form provided by Landlord. Tenant covenants, represents, and warrants that all of the information contained therein
will be true, complete, and correct, and Tenant shall immediately notify Landlord of any fact or circumstance thereafter occurring which would change the information on such Environmental
Questionnaire if such Environmental Questionnaire were completed as of the date of such changed fact or circumstance. Tenant covenants, represents, and warrants to the Landlord that its use of the
Premises, the Building, and the Project will be in full compliance with all environmental laws. Tenant hereby agrees to indemnify, defend, and hold Landlord harmless from and against all actions,
liabilities, damages, losses, costs, expenses, attorneys' fees, and claims (except to the extent they arise as a result of Landlord's negligent acts or willful misconduct), arising from or relating
to: (i) any discharges, releases, or threatened releases of any Hazardous Material into ambient air, water, or land by Tenant or Tenant's Invitee's from, on, under, or above the Premises in
violation of any environmental law, (ii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, or hazardous or toxic
wastes, substances, or materials by Tenant or Tenant's Invitees, or otherwise from, on, or under, the Premises in violation of any environmental law, or (iii) a violation of any environmental
law on, under, or above the Premises (for purposes of this Lease, "environmental laws" shall mean any Federal, State, or local law, statute, regulation, ordinance, guideline, or common law principle
relating to public health or safety or the use or control of the environment, including without limitation the Federal Comprehensive Environmental Response, Compensation and Liability Act of 












1980,
the Carpenter-Presley-Tanner Hazardous Substance Account Act, the California Hazardous Waste Control Law, the Federal Clean Air Act, the California Air Resources Act, the Federal Clean Water
Act, the California Porter-Cologne Water Quality Control Act, the Federal Resource Conservation and Recovery Act, the California Nejedly-Z'berg-Dills Solid Waste Management and Recovery Act, and
California Health and Safety Code Section 25359.7). If Landlord reasonably suspects Tenant has violated the provisions of this Paragraph 38.2, then Tenant agrees to promptly reimburse
Landlord for all of Landlord's costs arising from periodic monitoring of Tenant's use, handling, or storage of Hazardous Materials at or surrounding the Premises. Tenant shall not cause or permit any
Hazardous Material to be generated, brought onto, used, stored, or disposed of in or about the Premises, the Building, or the Project by Tenant or its agents, employees, contractors, subtenants, or
invitees, except for limited quantities of standard office and janitorial supplies. Tenant shall: (a) use, store, and dispose of all such permitted Hazardous Material in strict compliance with
all applicable environmental laws in effect during the Lease Term that govern and/or relate to Hazardous Material, public health and safety and
protection of the environment, and (b) comply at all times during the Lease Term with all environmental laws. If the Premises are contaminated due to the acts or omissions of Tenant or Tenant's
Invitees (or, due to the acts or omissions of Tenant or Tenant's Invitees, the Project is contaminated) by any Hazardous Material in violation of any environmental law during the Term, then
(1) Tenant shall promptly notify Landlord in writing of such contamination, and (2) Landlord may elect to either (A) to the extent that such contamination is the result of acts or
omissions of Tenant or Tenant's Invitees, demand that Tenant perform all remediation required by Landlord (to Landlord's satisfaction and at Tenant's sole cost, necessary to return the Premises
(and/or the Project) to at least as good a condition as the Premises (or the Project) are in as of the date of this Lease, which Tenant shall immediately do upon receipt of notice from Landlord, or
(B) proceed to cause such investigation, clean-up, and remediation work which Landlord deems necessary or desirable to be undertaken, whereupon the portion of the cost thereof
attributable to the acts or omissions of Tenant or Tenant's Invitees (plus a supervisory fee equal to five percent of such cost) will be payable by Tenant to Landlord upon demand as Additional Rent.
If, after demand by Landlord, as provided in this Paragraph, Tenant does not promptly commence and diligently pursue such remediation, then Landlord may, at Landlord's election, perform or cause to be
performed such remediation and Tenant shall immediately, upon demand, pay the reasonable cost thereof to Landlord, plus a supervisory fee in the amount of five percent of such cost. Tenant's
obligations and liability under this Paragraph shall survive the termination of Tenant's tenancy and the Term of this Lease, except that nothing contained in this Paragraph shall be deemed to impose
liability on Tenant for any problem arising after the Term of this Lease provided neither Tenant nor Tenant's Invitees contributed to such problem during the Term of the Lease. 


        38.3.  Definition of Hazardous Materials.    As used in this Lease, the term "Hazardous Material" shall mean any
hazardous or toxic substance, material, or waste that is or becomes regulated by the United States, the State of California, or any local government authority having jurisdiction over the Building.
Hazardous Material includes, without limitation: (a) any "hazardous substance", as that term is defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(CERCLA) (42 United States Code Sections 9601-9675); (b) "hazardous waste", as that term is defined in the Resource Conservation and Recovery Act of 1976 (RCRA) (42 United
States Code Sections 6901-6992k); (c) any pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material, or substance, within the meaning of any other
applicable federal, state, or local law, regulation, ordinance, or requirement (including consent decrees and administrative orders imposing liability or standards of conduct concerning any hazardous,
dangerous, or toxic waste, substance, or material, now or hereafter in effect); (d) petroleum products; (e) radioactive material, including any source, special nuclear, or byproduct
material as defined in 42 United States Code Sections 2011-2297; (f) asbestos in any form or condition; and (g) polychlorinated biphenyls (PCBs) and substances or
compounds containing PCBs. 




        39.    Prohibition Against Mold, Lead-Based Paint, and Asbestos-Containing Materials.    Tenant shall not
allow or permit any lead based paint to be used in the Premises, nor shall Tenant allow or permit 









any
condition to occur which could result in the growth of mold within the Premises. Additionally, Tenant shall not allow or permit any materials which contain asbestos in any form or concentration
("Asbestos-Containing Materials") to be used or stored in the Premises or used in the construction of
any improvements or alterations to the Premises, including, without limitation, building or construction materials and supplies. Such prohibition against Asbestos-Containing Materials shall apply
regardless of whether the Asbestos-Containing Materials may be considered safe or approved for use by a manufacturer, supplier, or governmental authority, or by common use or practice. Landlord shall
have the right, upon 24-hours' notice, to enter upon and conduct inspections of the Premises to determine Tenant's compliance with this Paragraph. If Tenant violates the foregoing
covenants relating to lead-based paint, mold, and Asbestos-Containing Materials (collectively "Prohibited Substances"), then (a) Tenant shall, upon notice from Landlord, immediately
remove and remediate any damage from such Prohibited Substances at Tenant's sole cost, (b) such removal and remediation shall comply with all applicable laws, regulations, and requirements,
(c) Tenant shall reimburse Landlord for all expenses incurred in connection with any inspection and testing of the Premises conducted by Landlord, and (d) unless Tenant completes such
removal within 30 days after notice from Landlord, Landlord may, at its election, do either or both of the following: (i) declare an Event of Default (without the requirement of any
notice under Paragraph 25.3) and exercise Landlord's remedies hereunder, including, without limitation, terminate this Lease upon ten days prior written notice to Tenant, and/or
(ii) remove and remediate such Prohibited Substances and obtain reimbursement from Tenant for the cost of such removal and remediation, including a supervisory fee payable to Landlord in the
amount of five percent of the removal and disposal cost. Tenant shall indemnify Landlord and Landlord's directors, officers, employees, and agents against all costs, liabilities, expenses, penalties,
and claims for damages, including, without limitation, litigation costs and attorneys' fees, arising from (A) the presence of Prohibited Substances upon the Premises, to the extent that such
Prohibited Substances are used, stored, or otherwise permitted in the Premises or used in the construction of any Alterations by Tenant or Tenant's agents, employees, representatives, or independent
contractors, (b) any lawsuit, settlement, governmental order, or decree relating to the presence, handling, removal, or disposal of Prohibited Substances upon or from the Premises, to the
extent that such Prohibited Substances are used, stored, or otherwise permitted in the Premises or used in the construction of any improvements or Alterations to the Premises by Tenant or Tenant's
agents, employees, representatives, or independent contractors, or (C) Tenant's failure to perform its obligations to remove such Prohibited Substances under this Paragraph. The provisions of
this Paragraph shall not apply to any Prohibited Substances brought onto the Premises by Landlord or Landlord's Invitees or resulting from the acts of Landlord or Landlord's Invitees. 


        40.    Security Measures.    Tenant acknowledges that, although the Building may contain a restricted access entry
system (if provided for as part of Landlord's Work), (i) the Basic Monthly Rent does not include the cost of any security measures for any portion of the Project (ii) Landlord shall have
no obligation to provide any such security measures, (iii) Landlord has made no representation to Tenant regarding the safety or security of the Project, and (iv) Tenant will be solely
responsible for providing any security it deems necessary to protect itself, its property, and Tenant's Invitees in, on, or about the Project. If Landlord provides any security measures at any time,
then the cost thereof shall be included as part of the Operating Expenses, but Landlord will not be obligated to continue providing such security measures for any period of time, Landlord may
discontinue such security measures without notice and without liability to Tenant, and Landlord will not be obligated to provide such security measures with any particular standard of care. Tenant
assumes all responsibility for the security and safety of Tenant, Tenant's property, and Tenant's Invitees. Except with respect to the gross negligence or willful misconduct of Landlord or Landlord's
property manager, consultants, agents or employees, Tenant releases Landlord from all claims for damage, loss, or injury to Tenant, Tenant's Invitees, and/or to the personal property of Tenant and/or
of Tenant's Invitees, even if such damage, loss, or injury is caused by or results from the criminal, reckless, or negligent acts of third parties. In connection with the foregoing, Tenant hereby
waives any defense would otherwise be provided by Section 1542 of the California Civil Code (which states "A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if 










known
by him or her must have materially affected his or her settlement with the debtor"), or laws of a similar nature, which would limit any such release to matters known or suspected to exist by
Tenant. Landlord shall have no duty to warn Tenant of any criminal acts or dangerous conduct that has occurred in or near the Project, regardless of Landlord's knowledge of such crimes or conduct, and
Tenant hereby undertakes to remain informed regarding such issues. 


        41.    Subordination and Attornment.    



        41.1.  Priority of Title.    This Lease and Tenant's rights under this Lease are subject and subordinate to any
mortgage, deed of trust, ground lease, or underlying lease (and to all renewals, modifications, consolidations, replacements, or extensions thereof), now or hereafter affecting the Premises. The
provisions of this Paragraph shall be self-operative, and no further instrument of subordination shall be required. In confirmation of such subordination, however, Tenant shall promptly
execute and deliver any commercially reasonable instruments that Landlord, any Lender, or the lessor under any ground or underlying lease, may request to evidence such subordination, provided such
instrument contains customary non-disturbance language in favor of Tenant and is consistent with the provisions of the next sentence including, without limitation, a Subordination,
Attornment, and Non-Disturbance Agreement in the form of attached Exhibit "E"; which form is hereby acknowledged by Tenant to be
commercially reasonable and acceptable to Tenant. If any Lender, or the lessor of any ground or underlying lease affecting the Premises, shall hereafter succeed to the rights of Landlord under this
Lease, whether by foreclosure, deed in lieu of foreclosure, or otherwise, then (i) such successor landlord shall not be subject to any offsets or defenses which Tenant might have against
Landlord, (ii) such successor landlord shall not be bound by any prepayment by Tenant of more than one month's installment of Basic Monthly Rent or any other Rent, (iii) such successor
landlord shall not be subject to any liability or obligation of Landlord except those arising after such succession, (iv) Tenant shall attorn to and recognize such successor landlord as
Tenant's
landlord under this Lease, (v) Tenant shall promptly execute and deliver any commercially reasonable instruments that may be necessary to evidence such attornment, (vi) upon such
attornment, this Lease shall continue in effect as a direct lease (whether separately documented or not) between such successor landlord and Tenant upon and subject to all of the provisions of this
Lease, and (v) Tenant shall be entitled to quiet enjoyment of the Premises for so long as Tenant is not in default under the terms of this Lease or any substitute lease referenced above beyond
any applicable notice and cure periods. Notwithstanding the preceding provisions of this Paragraph, if any ground lessor or Lender elects to have this Lease prior to the lien of its ground lease, deed
of trust, or mortgage, and gives written notice thereof to Tenant that this Lease shall be deemed prior to such ground lease, deed of trust, or mortgage, whether this Lease is dated prior or
subsequent to the date of such ground lease, deed of trust, or mortgage, then this Lease shall be deemed to be prior to the lien of such ground lease or mortgage and such ground lease, deed of trust,
or mortgage shall be deemed to be subordinate to this Lease. 


        41.2.  Initial SNDA.    If the Project is currently encumbered by a mortgage or deed of trust, then as a condition
precedent to the effectiveness of this Lease in favor of Tenant (provided Tenant timely executes such instrument, as provided below), Landlord shall obtain a subordination,
non-disturbance, and attornment agreement from Landlord's lender in a commercially reasonable form satisfactory to Landlord, Tenant, and such lender, and Landlord, Landlord's lender, and
Tenant shall execute and record such instrument. Tenant hereby approves of the form of Subordination, Attornment, and Non-Disturbance Agreement attached hereto as attached  Exhibit "E." Tenant shall
execute such Subordination, Attornment, and Non-Disturbance Agreement within five business days of written demand. 




        42.    Estoppel Certificate.    Within 15 business days after written request from Landlord, Tenant shall execute and
deliver to Landlord, in recordable form, a certificate stating (to the extent factually accurate) (i) that this Lease is unmodified and in full force and effect, or in full force and effect as
modified, and stating all modifications, (ii) the then-current Basic Monthly Rent, (iii) the dates to which Basic Monthly Rent has been paid in advance, (iv) the
amount of any security deposit, prepaid 








rent,
or other payment constituting Rent which has been paid, (v) whether or not Tenant or, to Tenant's actual knowledge, Landlord is in default under this Lease and whether there currently
exist any defenses or rights of offset under the Lease in favor of Tenant, (vi) that any Landlord's Work required by this Lease is complete (or stating any exceptions) and (vii) such
other matters as Landlord may reasonably request. Tenant's failure to deliver such certificate within such 15 business day period shall be conclusive upon Tenant for the benefit of Landlord, and any
successor in interest to Landlord, any lender or proposed lender, and any purchaser or proposed purchaser of the Project that, except as may be represented by Landlord, this Lease is unmodified and in
full force and effect, no Rent has been paid more than 30 days in advance, neither Tenant nor Landlord is in default under this Lease, no defenses or rights of offset under the Lease exist in
favor of Tenant, and that all Landlord's Work required by this Lease is complete. Landlord will similarly, in connection with any lending or Transfer transaction, upon 15 business days written request
from Tenant, execute an estoppel certificate in favor of Tenant's proposed lender or Transferee confirming (i) that this Lease is unmodified and in full force and effect, or in full force and
effect as modified, and stating all modifications, (ii) the then-current Basic Monthly Rent, (iii) the dates to which Basic Monthly Rent has been paid in advance,
(iv) the amount of any security deposit, prepaid rent, or other payment constituting
Rent which has been paid, and (v) whether or not to the best of Landlord's knowledge Tenant is in default under this Lease. 


        43.    Waiver.    No delay or omission in the exercise of any right or remedy of Landlord in the event of any default
or Event of Default by Tenant shall impair such right or remedy or be construed as a waiver. No delay or omission in the exercise of any right or remedy of Tenant in the event of any default or
Landlord Default by Landlord shall impair such right or remedy or be construed as a waiver. The receipt and acceptance by Landlord of delinquent Rent shall not constitute a waiver of any default other
than the particular Rent payment accepted. Landlord's receipt and acceptance from Tenant, on any date (the "Receipt Date"), of an amount less than the Rent actually due on such Receipt Date, or to
become due at a later date but applicable to a period prior to such Receipt Date, shall not release Tenant of its obligation (i) to pay the full amount of such Rent due on such Receipt Date or
(ii) to pay when due the full amount of such Rent to become due at a later date but applicable to a period prior to such Receipt Date. No act or conduct of Landlord, including without
limitation, the acceptance of the keys to the Premises, shall constitute an acceptance by Landlord of the surrender of the Premises by Tenant before the Expiration Date. Only a written notice from
Landlord to Tenant stating Landlord's election to terminate Tenant's right to possession of the Premises shall constitute acceptance of the surrender of the Premises and accomplish a termination of
this Lease. Landlord's consent to or approval of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent to or approval of any
other or subsequent act by Tenant. Any waiver by Landlord of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Lease.
Tenant hereby waives any rights granted to Tenant under California Code of Civil Procedure Section 1179, California Civil Code Section 3275, and/or any successor statute(s). Tenant
represents and warrants that if Tenant breaches this Lease and, as a result, this Lease is terminated, Tenant will not suffer any undue hardship as a result of such termination and, during the Term,
will make such alternative or other contingency plans to provide for its vacation of the Premises and relocation in the event of such termination. Tenant acknowledges that Tenant's waivers set forth
in this Paragraph are a material part of the consideration for Landlord's entering into this Lease and that Landlord would not have entered into this Lease in the absence of such waivers. 


        44.    Brokers.    Tenant represents that no real estate broker, agent, finder, or other person is responsible for
bringing about or negotiating this Lease other than the Tenant's broker, if any, listed in the Principal Lease Provisions, and Tenant has not dealt with any other real estate broker, agent, finder, or
other person, relative to this Lease in any manner. Tenant hereby agrees to indemnify, defend, and hold Landlord harmless from and against all liabilities, damages, losses, costs, expenses, attorneys'
fees and claims arising from any claims that may be made against Landlord by any real estate broker, agent, finder, or other person (other than as set forth above), alleging to have acted on behalf of
or to have dealt with Tenant. Landlord hereby agrees to indemnify, defend, and hold Tenant harmless from and against all liabilities, damages, losses, costs, expenses, attorneys' fees and claims 










arising
from any claims that may be made against Tenant by any real estate broker, agent, finder, or other person (other than as set forth above), alleging to have acted on behalf of or to have dealt
with Landlord. Landlord shall be responsible, upon satisfaction of the requirements of a separate written listing agreement between Landlord and Landlord's broker, for the payment of the commission
due and owing to Landlord's brokers identified in the Principal Lease Provisions (or any other brokers
engaged by Landlord), and Landlord shall also be responsible, upon satisfaction of the requirements of a separate written listing agreement between Landlord and Tenant's broker, for the payment of the
commission due and owing to Tenant's brokers identified in the Principal Lease Provisions. 


        45.    Limitations on Landlord's Liability.    If Landlord is in default of this Lease, and as a consequence Tenant
recovers a money judgment against Landlord, such judgment shall be satisfied only out of (i) the proceeds of sale received upon execution of such judgment and levy against the right, title, and
interest of Landlord in the Project, (ii) rent or other income from the Project receivable by Landlord and/or (iii) the consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title, and interest in the Project. Subject to the preceding sentence, neither Landlord nor Landlord's shareholders, members, officers, directors,
agents, property managers, employees, contractors, or the partners comprising Landlord (if any) shall not be personally liable for any deficiency. 


        46.    Sale or Transfer of Premises.    If Landlord sells or transfers the Project (whether voluntarily or
involuntarily), Landlord, on consummation of the sale or transfer, shall be released from any liability thereafter accruing under this Lease, but only upon the transferee becoming liable for any such
liability hereunder as Landlord. If any security deposit or prepaid rent has been paid by Tenant, Landlord may transfer the security deposit and/or prepaid rent to Landlord's
successor-in-interest and on such transfer Landlord shall be discharged from any further liability arising from the security deposit or prepaid rent. 


        47.    Quitclaim Deed.    Tenant shall execute and deliver to Landlord on the Expiration Date, promptly on Landlord's
request, a quitclaim deed to the Premises, in recordable form, designating Landlord as transferee. 



        48.    No Merger.    The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation of this Lease,
or a termination by Landlord, shall not work a merger, and shall, at the option of Landlord, terminate any existing subleases or may, at the option of Landlord, operate as an assignment to Landlord of
any such subleases. 


        49.    Confidentiality.    Except as essential to the consummation of the transaction contemplated by this Lease
(together with all amendments and addenda hereto), or in connection with a legitimate business purpose (such as in connection with a sale or loan transaction), Tenant shall keep and maintain the terms
of this Lease and the transactions contemplated by this Lease in strict confidence. Nothing provided herein, however, shall prevent Tenant from disclosing to its legal counsel and/or certified public
accountants, prospective purchasers, or lenders the existence and terms of this Lease or any transaction under this Lease, or any aspect of this lease, or from complying with any governmental or court
order or similar legal requirement which requires Tenant to disclose this Lease, the terms of this Lease, the transaction contemplated by this Lease and/or any aspect of this Lease; provided that
Tenant and its agents, representatives, and professional advisors use reasonable and diligent good faith efforts to disclose no more than is absolutely required to be disclosed by such legal
requirement. Notwithstanding anything to the contrary contained herein, during any period that Tenant is a public
company on one of the nationally recognized securities exchanges (such as, without limitation, NYSE or NASDAQ), the provisions of this Paragraph 49 shall not be applicable. 


        50.    Miscellaneous.    



        50.1.  This
Lease may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one document. 



        50.2.  Tenant,
within 15 days after request, shall provide Landlord with the most recently audited financial statements of Tenant (or if Tenant does not have audited
financial statements, 












then
financial statements certified by Tenant to be true and correct), reflecting Tenant's then current financial condition. Landlord, however, shall not require Tenant to provide such information
unless (i) an Event of Default exists or (ii) Landlord is requested to produce the information in connection with a proposed financing or sale of the Building or (iii) Tenant has
not otherwise provided Landlord with Tenant's most recently audited financial statements. Upon written request by Tenant, Landlord shall enter into a commercially reasonable confidentiality agreement
covering any confidential information that is disclosed by Tenant. Notwithstanding anything to the contrary in this Paragraph 50.2, with respect to financial statements required to be delivered
hereunder with respect to any entity whose shares are publicly-traded on a nationally recognized securities exchange (such as, without limitation, NYSE or NASDAQ), such financial statements shall be
deemed to have been delivered on the date on which such financial statement is timely posted on the Securities and Exchange Commission's website on the internet at the website address www.sec.gov or
the Free Edgar website on the internet at the website www.freeedgar.com, or such other alternative publicly accessible website as may then exist. 



        50.3.  Notwithstanding
any other provision in this Lease to the contrary, Tenant shall refrain from selling or otherwise distributing any alcoholic beverages and such sales
are expressly forbidden under this Lease notwithstanding the fact that Tenant may hold the appropriate license as issued and/or approved by the California Alcoholic Beverage Control Agency. 


        50.4.  This
Lease shall be governed by and construed in accordance with the laws of the state in which the Premises are located. If the Premises are located outside of
California, then the references in this Lease to California statutes shall be deemed to include any relevant statute of the jurisdiction in which the Premises are located that is comparable to such
California statutes. 


        50.5.  For
purposes of venue and jurisdiction, this Lease shall be deemed made and to be performed in the City of San Diego, California (whether or not the Premises are
located in San Diego, California) and Landlord and Tenant hereby consent to the jurisdiction of the Courts of the County of San Diego. 


        50.6.  Tenant
covenants and agrees not to protest or in any way oppose any application for a license to serve or sell liquor filed by tenants or other users of space within
the Project. 


        50.7.  Whenever
the context so requires, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to
include any other genders, and the word "person" shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a limited liability company, a trust, an estate,
or any other entity. 


        50.8.  Each
provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Lease or the application of such provision
to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability, unless such provision or such application of such provision is essential to this Lease. 



        50.9.  In
the event any litigation, arbitration, mediation, or other proceeding ("Proceeding") is initiated by any party against any other party to enforce, interpret or
otherwise obtain judicial or quasi-judicial relief in connection with this Lease the prevailing party in such Proceeding shall be entitled to recover from the unsuccessful party all costs, expenses,
and reasonable attorney's fees and expert witness fees relating to or arising out of such Proceeding (whether or not such Proceeding proceeds to judgment), and any post-judgment or
post-award proceeding including without limitation one to enforce any judgment or award resulting from any such Proceeding. Any such judgment or award shall contain a specific provision
for the recovery of all such subsequently incurred costs, expenses, and actual attorney's fees and expert witness fees. 



        50.10.  This
Lease shall become effective and binding upon the parties when it has been executed by each of Landlord and Tenant; notwithstanding the fact that the Term of
this Lease 












(i.e. Tenant's rights of full occupancy hereunder) will not commence until the Lease Commencement Date. 


        50.11.  Subject
to any restriction on transferability contained in this Lease, this Lease shall be binding upon and shall inure to the benefit of the
successors-in-interest and assigns of each party to this Lease. Nothing in this Paragraph shall create any rights enforceable by any person not a party to this Lease, except
for the rights of the successors-in-interest and assigns of each party to this Lease, unless such rights are expressly granted in this Lease to other specifically identified
persons. 


        50.12.  The
headings of the Paragraphs of this Lease have been included only for convenience, and shall not be deemed in any manner to modify or limit any of the provisions
of this Lease, or be used in any manner in the interpretation of this Lease. 


        50.13.  Time
and strict and punctual performance are of the essence with respect to each provision of this Lease. All references to "days" in this Lease will refer to
calendar days, unless such reference specifically indicates that "business days" are intended. Business days will mean and refer to all calendar days other than Saturdays, Sundays, and national or
California state holidays. 


        50.14.  Each
party to this Lease and its legal counsel have had an opportunity to review and revise this Lease. The rule of construction that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of this Lease or any Addendum or Exhibit to this Lease, and such rule of construction is hereby waived by Tenant. 


        50.15.  All
notices required or permitted to be given by Tenant to Landlord shall be in writing and shall be personally delivered, sent by certified mail, postage prepaid,
return receipt requested, or sent by a nationally recognized overnight express courier service that provides written confirmation of delivery to Landlord at the address set forth in the Principal
Lease Provisions of this Lease. Each such notice or other communication shall be deemed given, delivered and received upon its actual receipt, except that if it is sent by mail in accordance with this
Paragraph, then it shall be deemed given, delivered and received three days after the date such notice or other communication is deposited with the United States Postal Service in accordance with this
Paragraph. Landlord or Tenant must give a notice of a change of its address to the other, if such address changes. All notices required or permitted to be given to Tenant by Landlord shall, except as
otherwise expressly provided in this Lease, be in writing, and such notice shall either (i) be personally delivered, (ii) sent by certified mail, postage prepaid, return receipt
requested, addressed to the Chief Executive Officer or Chief Financial Officer of the Tenant at the address set forth in the Principal Lease Provisions of this Lease, or (iii) sent by a
nationally or regionally recognized overnight courier service (such as California Overnight, FedEx, or DHL), that provides written confirmation of delivery, at the address set forth in the Principal
Lease Provisions of this Lease. Each such notice or other communication shall be deemed given, delivered, and received upon its actual receipt, except that if it is sent by mail in accordance with
this Paragraph, then it shall be deemed given, delivered and received three days (excluding Sunday or any other holiday on which mail is not delivered) after the date such notice or other
communication is deposited with the United States Postal Service in accordance with this Paragraph and if it is sent by overnight courier service in accordance with this Paragraph, then it shall be
deemed given, delivered and received one day (excluding Sunday or any other holiday on which mail is not delivered) after the date such notice or other communication is deposited with the overnight
courier. Notwithstanding the foregoing, routine correspondence (i.e., correspondence relating to matters which cannot result in an Event of Default with the giving of notice, the passage of
time or both) between Landlord and Tenant shall be deliverable by regular U.S. mail, by fax, or by other such means of delivery as may become customary. 


        50.16.  If
more than one person is Tenant, then the obligations of Tenant under this Lease shall be the joint and several obligations of each of such persons; provided,
however, that any act or signature of one or more of any of such persons and any notice or refund given to or served on any one of such persons shall be fully binding on each of such persons. 














































 




        50.17.  All
provisions, whether covenants or conditions, to be performed or observed by Tenant or Landlord shall be deemed to be both covenants and conditions. All indemnity,
defense, and hold harmless obligations of Tenant and Landlord hereunder shall survive the termination of this Lease. 


        50.18.  All
payments to be made by Tenant to Landlord under this Lease shall be in United States currency. 


        50.19.  Any
claim, demand, rights, or defense by Tenant that arises out of this Lease or the negotiations that preceded this Lease shall be barred unless Tenant commences an
action thereon, or interposes a defense by reason thereof, within 12 months after the date of the inaction, omission, event, or action that gave rise to such claim, demand, right, or defense.
Tenant acknowledges and understands, after having consulted with its legal counsel, that the purpose of this Paragraph is to shorten the period within which Tenant would otherwise have to raise such
claims, demands, rights, or defenses under applicable laws. 


        50.20.  This
Lease, the Exhibits and Addenda, if any, attached hereto (which are incorporated herein by this reference), constitute all of the covenants, promises,
assurances, representations, warranties, statements, agreements, conditions and understandings between Landlord and Tenant concerning the Premises and the Project, and there are no other covenants,
promises, assurances, representations, warranties, statements, conditions, or understandings, either oral or written, between them. Except as herein otherwise provided, no subsequent alteration,
change, modification, or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by each of them. Notwithstanding the foregoing, the Landlord may, from
time to time, establish and amend such Rules, regulations, and signage criteria, in a written form, for the benefit of the Project and Building, as it deems appropriate, subject to the limitations set
forth in this Lease. Violations of such Rules, regulations, and signage criteria by Tenant or Tenant's Invitees shall constitute a material default of this Lease, subject to the provisions of
Paragraph 25.3, which provides certain notice and cure rights for the benefit of Tenant. 


        50.21.  Landlord
and Tenant waive their respective rights to trial by jury of any contract or tort claim, counterclaim, cross complaint, or cause of action in any action,
proceeding, or hearing brought by either party against the other on any matter arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, or Tenant's use or
occupancy of the Premises, including any claim
of injury or damage or the enforcement of any remedy under any current or future law, statute, regulation, code, or ordinance. 



			
	 






  Landlord's Initials	 	  






  Tenant's Initials






        50.22.  This
Lease, upon full execution, supersedes and revokes any and all previous leases governing the Premises, lease negotiations, arrangements, letters of intents,
offers to lease, lease proposals or drafts, brochures, representations, and information conveyed, whether oral or written, between parties hereto or their respective representations or any other
person purported to represent Landlord or Tenant. The Tenant acknowledges it has not been induced to enter into this Lease by any representations not set
forth in the Leases, nor has it relied on any such representations. No such representations should be used in the interpretation or construction of this Lease and the Landlord shall have no liability
for any consequences arising as a result of any such representations. 


        50.23.  Each
party to this Lease hereby represents and warrants that: 



        a.     The
Office of Foreign Assets Control of the United States Department of the Treasury ("OFAC") has not listed such party of any of such party's affiliates, or any person
that controls, is controlled by, or is under common control with such party, on its list of Specially Designated Nations and Blocked Persons; and 











        b.     It
is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by any Executive Order, the United States Treasury Department, or
United States Office of Homeland Security as a terrorist, Specially Designated National and Blocked Person, or other banned or blocked person, entity, nation or pursuant to any law, order, rule or
regulation that is enforced or administered by the OFAC. 




        50.24.  All
indemnity, defense, and hold harmless obligations in this Lease shall survive termination hereof. Further, in connection with all releases contained in this Lease
Tenant and Landlord each hereby waives any defense would otherwise be provided by Section 1542 of the California Civil Code (which states "A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor"),
or laws of a similar nature, which would limit any such release to matters known or suspected to exist by such releasor. 



[signature page attached]









					
	 LANDLORD:
	 	Sunroad Centrum Office I, L.P.,

a California limited partnership
	     
	 	 	 	 
	 
	 	By:	 	Sunroad Asset Management, Inc.,

a California corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Richard Vann






  Richard Vann
	 
	 	Its:	 	Executive Vice President
	     
	 	 	 	 
	     
	 	 	 	 
	     
	 	 	 	 
	 TENANT:
	 	Bridgepoint Education, Inc.,

a Delaware corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Andrew Clark






  Andrew Clark
	 
	 	Its:	 	Chief Executive Officer
	     
	 	 	 	 
	 
	 	By:	 	/s/ Daniel J. Devine






  Daniel J. Devine
	 
	 	Its:	 	Chief Financial Officer










 
 

  EXHIBIT "A"    
    


 
 

  LEGAL DESCRIPTION OF PROJECT    
    


THE
LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, CITY OF SAN DIEGO, AND DESCRIBED AS FOLLOWS: 


PARCELS
1 THROUGH 7 OF PARCEL MAP NO. 18972, ACCORDING TO MAP THEREOF FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON MAY 24, 2002 AS INSTRUMENT NO. 2002-0444396. 







 
 

  EXHIBIT "B"    
    


 
 

  DEPICTION OF BUILDING FLOOR SHELLS COMPRISING PREMISES    
    


(attached
hereto) 







 
 

  EXHIBIT "C"    
    


 
 

  WORK LETTER    
    


        This Exhibit "C" Work Letter ("Work Letter") sets forth the respective rights, duties, and obligations of Landlord and Tenant in
connection with the build-out of the Premises under that certain Standard Form Modified Gross Office Lease for space in the Sunroad Centrum project to which this Work Letter is attached.
Landlord's responsibilities under this Work Letter generally consist of the design (including, without limitation, the preliminary tenant improvement plans for the Premises (the "Preliminary TI
Plans", as further defined below), the TI Plans, but excluding AV and furniture selection and coordination) and build-out, in "turnkey" condition using Landlord's Building-standard
materials and finishes, of the that portion of the Premises commonly referred to as Suites 100, 200, 300, 400, 500, 600, 700, 800, 1000, and 1100 (the "Landlord's Work") in accordance with the
approved tenant improvement plans and specifications (the "TI Plans," as further defined below) relating thereto, subject to the terms, provisions, and conditions of this Work Letter. Tenant's
responsibilities under this Work Letter generally consist of the installation
of all premises-specific security features, computer cabling and telecommunications wiring, and all furniture, fixtures, and equipment, necessary to ready the Premises for Tenant's Permitted Use
("Tenant's Work"), subject to the terms, provisions, and conditions of this Work Letter. 


        1.     Definitions.    All terms used in this Work Letter which are not specifically defined herein shall have the
meanings ascribed to them in the Lease to which this Work Letter is attached. This Work Letter is incorporated within such Lease and references in this Work Letter to "this Lease" or "the Lease" will
mean the Lease to which this Work Letter is attached as an Exhibit. 


        2.     Construction Representatives.    Landlord appoints Landlord's Representative (identified below) to act for
Landlord and Tenant appoints Tenant's Representative (identified below) to act for Tenant in all matters covered by this Work Letter. All inquiries, requests, instructions, authorizations, and other
communications with respect to the matters covered by this Work Letter will be made to Landlord's Representative or Tenant's Representative, as the case may be. Tenant will not make any inquiries of
or requests to, and will not give any instructions or authorizations to, any other employee or agent of Landlord, including Landlord's architect, engineers, and contractors or any of their agents or
employees, with regard to matters covered by this Work Letter and any such instruction or authorization will, at Landlord's election, be of no force or effect. Either party may change its designated
Representative under this Work Letter at any time upon three-business days' prior written notice to the other party. 



        2.1.  Tenant's
Representative: 





Pattie
Jensen 






        2.2.  Landlord's
Representative: 





Dan
Feldman 






        2.3.  Tenant
Improvement Planner: 





Brian
Paul & Associates 






        2.4.  Landlord's
Contractor: 





Any
such qualified and experienced general contractor selected by Landlord pursuant to Paragraph 3.3, below 






        2.5.  Tenant's
Contractor: 





TBD
by Tenant (provided such contractor must be licensed as a general contractor in California and must be bondable by companies and on terms reasonably acceptable to Landlord) 




















        3.     Landlord's Work.    Following execution of this Lease by Landlord and Tenant, Landlord shall cause the
Landlord's Work to be completed in accordance with (i) the TI Plans, and (ii) Landlord's standard tenant finishes for the Building as modified by the TI Plans. Tenant acknowledges that,
as provided in Paragraph 4 of this Lease, the Premises will be built out in two Phases. The TI Plans will be developed as follows: 



        3.1.  Promptly
following the execution of this Lease, Tenant shall meet with the Tenant Improvement Planner and cause the Tenant Improvement Planner to prepare (and deliver
to Landlord and Tenant) detailed design development plans and specifications for the Landlord's Work acceptable to Tenant which (i) utilize Landlord's Building-standard materials and finishes
(which for purposes hereof will mean the materials and finishes as described on attached Attachment No. 1, including the Memo modifying
Landlord's Building-standard materials and finishes included in such Attachment No. 1) and (ii) as to floors two through eight of the Building (as well as the
9th Floor if such floor is added to the Premises pursuant to the Addendum to Lease being executed concurrently herewith), substantially conforming to an "open floor plan" design
with eight to ten offices. The Preliminary TI Plans shall not include any of Tenant's furniture, fixtures, or equipment or any other elements of the Tenant's Work, and must reflect all of the
Landlord's Work to be performed as part of Landlord's Work. Any work not so included (or reasonably inferable therefrom—such as, by way of example, if windows are shown in the TI Plans,
but no frames for the windows were shown, such frames would be inferable) will not constitute part of Landlord's Work. Landlord shall, within five business days following its receipt of the
Preliminary TI Plans, either provide written approval of such Preliminary TI Plans or provide in writing to Tenant with the reasons that Landlord is withholding such approval—which reasons
must be reasonable; except that Landlord shall have the right in its sole and absolute discretion, to approve or disapprove of the cost of the work reflected in such Preliminary TI Plans and shall be
entitled to disapprove the Preliminary TI Plans on the sole basis of the estimated cost thereof, except to the extent such costs are incurred with respect to Landlord's Building-standard materials and
finishes or reasonably comparable substitutes thereof which do not increase Landlord's costs or delay the availability of such materials or finishes. If Landlord does not approve the Preliminary TI
Plans pursuant to the preceding sentence, Landlord shall immediately cause the Tenant Improvement Planner to again meet with Tenant to have the Preliminary TI Plans revised,
in a manner acceptable to Tenant and consistent with Landlord's comments, and then resubmitted to Landlord for approval (with such subsequent approvals/disapprovals being provided by Landlord within
five business days of the complete submittal of the revised Preliminary TI Plans). Subject to Paragraph 3.2, below, the foregoing process will continue until Landlord has approved the
Preliminary TI Plans. Once Landlord has approved the Preliminary TI Plans, Landlord shall cause the Tenant Improvement Planner to prepare complete, detailed working plans and specifications (which
conform to and are consistent with the approved Preliminary TI Plans) sufficient to obtain the necessary building permits and to then fully complete the TI Work (the "TI Plans"); which TI Plans will
then serve as the basis for Landlord to undertake and to complete the Landlord's Work. 


        3.2.  Notwithstanding
anything to the contrary contained in the Lease or this Work Letter, if Landlord and Tenant, in each of their reasonable discretion, are unable to agree
upon the Preliminary TI Plans within 30 days of the date of this Lease, or agree upon the TI Plans within 60 days of the date that the Preliminary TI Plans are mutually agreed to, then
Landlord or Tenant may, upon ten business days written notice to the other party (during which time such TI Plans remain unapproved), terminate this Lease, whereupon neither Landlord or Tenant shall
have any further rights or obligations under this Lease (except for obligations which pursuant to this Lease are to survive termination of this Lease) and Landlord shall immediately return to Tenant
all amounts delivered by Tenant to Landlord pursuant to the terms of this Lease. Notwithstanding anything to the contrary contained in this Lease, if a permit required for construction of Landlord's
Work has not been issued on or before that date which is 90 days (as such date may be extended due to Tenant Delays) following the date that the TI Plans for Phase I are mutually
approved by Landlord and Tenant pursuant to this Work Letter, then Tenant, in its sole and absolute discretion, may terminate this Lease, whereupon neither Landlord or Tenant shall have 












any
further rights or obligations under this Lease (except for obligations which pursuant to this Lease are to survive termination of this Lease) and Landlord shall immediately return to Tenant all
amounts delivered by Tenant to Landlord pursuant to the terms of this Lease. 


        3.3.  Landlord
shall select the Landlord's Contractor in accordance with the procedure set forth in this Paragraph 3.3. Landlord will competitively bid the Landlord's
Work with several qualified tenant finish contractors—and Tenant shall have the right to provide Landlord with the names of up to two potential contractors from whom Landlord will request
bids if reasonably satisfactory to Landlord. Any delay by Tenant in responding within three business days to a written notice delivered to Tenant requesting the names of any such proposed contractors,
will constitute a waiver of Tenant's right hereunder. Landlord agrees to respond within five business days of written request from Tenant, to any request that Landlord include a potential general
contractor proposed by Tenant in the bidding process. Following such bidding process, Landlord will enter into a contract with the chosen bidder to construct the Landlord's Work (such selected
contractor being the "Landlord's Contractor" for purposes hereof). Landlord reserves the right to bid Phase I and Phase II together or separately. 



        3.4.  The
Landlord's Work shall be completed by Landlord's Contractor in a diligent and good and workmanlike manner (recognizing Landlord's right to accelerate the progress
of Phase I ahead of Phase II) in accordance with the approved TI Plans and in compliance with all applicable laws, codes,
ordinances, and other governmental requirements then applicable to the Premises and the Building. At the time of tender of possession of the Premises to Tenant, the Building and the building systems
serving the Building will be in compliance with laws and in good working order, and the Building will include a watertight roof. Notwithstanding anything to the contrary in this Lease, Tenant's
acceptance of possession of Landlord's Work shall not waive the foregoing obligation of Landlord to deliver the Premises with the Building and the building systems serving the Building in compliance
with laws and in good working order, and with the Building having a watertight roof and Landlord shall promptly remedy all violations of such covenant at its sole cost and expense. 


        3.5.  The
cost of Landlord's Work, including both hard and soft costs, will be Landlord's sole responsibility, except as provided below. 




        4.     Modifications/Approvals. 



        4.1.  Tenant
may request changes in the Landlord's Work following approval of the TI Plans or during construction only by written request from Tenant's Representative to
Landlord's Representative on a form reasonably approved by Landlord. All such changes shall be subject to Landlord's prior written approval in accordance with this Paragraph 4. Prior to
commencing any such change, and in each case within three business days after Tenant's written request (or, if the nature of such proposed change is such that Landlord will reasonably require more
than three business days to respond to such request, then during such three business day period Landlord will so notify Tenant in writing along with Landlord's estimate of the time that will be
required to respond to such request and whether, and to the extent, such time required will result in a Tenant Delay if such request is not rescinded within 24 hours of Landlord's written
notice), Landlord shall prepare and deliver to Tenant, for Tenant's approval, a change order (the "Change Order") setting forth Landlord's good faith estimate of the additional time required to
perform the change and Landlord's good faith estimate of the total cost of such change, which will include associated architectural, engineering, and construction contractor's fees, delay costs
(including rent which would be payable, but for such delay), additional coordination costs, and Landlord's estimated internal overhead/supervisory costs in implementing the Change Order (such
overhead/supervisory costs not to exceed five percent of the amount of the Change Order). If Tenant fails to approve such Change Order within three business days after delivery by Landlord, Tenant
shall be deemed to have withdrawn the proposed Change Order and Landlord shall not proceed to perform the subject change. Upon Landlord's receipt of Tenant's approval of a Change Order, Landlord's
Contractor shall proceed to perform the change. If such change is estimated to increase the cost of 









Landlord's
Work, Tenant must pay for such excess cost (as reflected in the Change Order or the back-up documents therefor which Landlord shall deliver to Tenant upon receipt) within five
business days of Tenant's written approval of the subject Change Order or, alternatively, if such Change Order relates to work or materials which would qualify under Paragraph 5, below, for
application of the Upgrade Allowance, Tenant may instead notify Landlord concurrently with Tenant's approval of the Change Order that Tenant elects to have such additional cost paid for by Landlord as
an application of the Upgrade Allowance. Landlord may, without any requirement for further notice, treat each day from the date such funds are due from Tenant through the date such increased cost is
actually paid by Tenant as a day of Tenant Delay. The actual cost of preparing any such Change Order,
whether or not such change is ultimately approved, and whether or not withdrawn by Tenant, will be a Tenant expense, payable within ten business days after Tenant receives written demand therefor
along with reasonable evidence of such costs. 


        4.2.  Landlord
may, among other reasons, withhold its approval of any Tenant-requested revision or change pursuant to Paragraph 4.1, above, if such revision or change
would require work which: (i) exceeds or affects the structural integrity of the Building or any part of the utility installations or HVAC systems serving the Building; (ii) is not
approved (if such approval is required) by the holder of any deed of trust encumbering the Building at the time the work is proposed or is to be undertaken, despite Landlord's commercially reasonable
efforts to obtain such approval; (iii) violates any agreement which affects the Building or which binds Landlord; (iv) Landlord reasonably believes will increase the cost of operation or
maintenance of any of the systems serving the Building or the Project; (v) Landlord reasonably believes will reduce the market value of the Building or the Project; (vi) does not conform
to applicable building codes or is not approved by any governmental authority with jurisdiction over the Premises and/or the Building; or (vii) does not conform to (or exceed in quality)
Landlord's Project-standard tenant finish (as modified by the approved TI Plans) or improvement specifications. 



        4.3.  In
addition to the foregoing provisions addressing changes to Landlord's Work, Landlord may initiate changes Landlord deems reasonably necessary following approval of
the TI Plans or during construction in accordance with the following procedure. 



        4.3.1.  In
the case of changes to the TI Plans which do not affect the aesthetics of the build-out of the Premises, Landlord shall have the right to make such
changes without Tenant's consent provided they result in de minimus alterations to the design or functionality of the Premises. 



        4.3.2.  In
the case of changes to the TI Plans which affect the aesthetics of the build-out of the Premises or which do not affect the aesthetics of the
build-out of the Premises, but result in de minimus alterations to the design or functionality of the Premises, Landlord shall have the
right to make such changes only with Tenant's consent (or deemed consent, as provided in Paragraph 4.3.3, below), which consent shall not unreasonably be withheld, conditioned, or delayed. 


        4.3.3.  Tenant
acknowledges that timing is critical to the process of addressing changes to the TI Plans, accordingly, Tenant agrees that if Tenant's consent is required
hereunder (or sought where not technically required), Tenant shall provide a written response to Landlord's written request for consent within one business day from receipt thereof (provided that such
written request from Landlord is accompanied by sufficient information or materials to enable Tenant to reasonably evaluate the change in question); provided, however, in lieu of granting or
withholding its consent within such one business day period, Tenant may provide Landlord with written notice (prior to the expiration of such business day) indicating that Tenant needs up to two
additional business days to evaluate Landlord's request for consent. If Tenant fails to reasonably withhold its consent within such one business day period (or up to three business days if Tenant
exercises the foregoing extension option), Tenant shall be irrevocably deemed to have consented to such change. 














        5.     Cost of Landlord's Work.    The Landlord's Work shall be completed by Landlord's Contractor in a diligent and
good and workmanlike manner in accordance with the approved TI Plans and in compliance with all applicable laws, codes, ordinances, and other governmental requirements then applicable to the Premises
and the Building. The cost of Landlord's Work, including both hard and soft costs, will be Landlord's sole responsibility, except as provided herein. The cost of Landlord's Work does not include the
cost of the Tenant's Work, any Tenant-incurred construction management fees, or the cost of Tenant's furniture, fixtures, and/or equipment, or other items of personal property, all of which will be
treated as a part of Tenant's Work and will be Tenant's sole responsibility and expense. Notwithstanding the foregoing, and notwithstanding anything to the contrary in Paragraph 4.1, above,
Tenant shall have the right upon delivery of written notice to Landlord to require Landlord to pay the cost of up to $[***] per Rentable Square Foot of space in the Premises in
additional tenant improvements or upgrades to Landlord's Work (the "Upgrade Allowance") upon the following terms, provisions, and conditions: 



        5.1.  The
Upgrade Allowance may only be utilized to pay the cost of permanent improvements to the Premises, including upgrades to Landlord's Work (such as, by way of example,
upgrading to a higher quality, more expensive type of toilet than the toilets reflected in the Landlord's Building-standard materials and finishes (as described on attached  Attachment No. 1). In no
event may the Upgrade Allowance be used to pay the cost of any furniture, fixtures, or equipment or other personal
property, or for non-improvement items such as moving expenses, stationary, etc. 


        5.2.  If
Tenant elects to exercise its right to receive any portion of the Upgrade Allowance, the Basic Monthly Rent shall be increased by an amount sufficient to amortize
the entire amount of such utilized Upgrade Allowance, along with interest at the rates of (i) seven and one half percent per annum as to the first $[***] per Rentable
Square Foot of space in the Premises of Upgrade Allowance, and (ii) eight and one half percent per annum as to the portion of the Upgrade Allowance in excess of the first
$[***] per Rentable Square Foot of space in the Premises of Upgrade Allowance, on a straight-line basis, over the Initial Lease Term. 


        5.3.  Notwithstanding
anything to the contrary contained herein, if Tenant fails to pay any amount owing by Tenant pursuant to this Work Letter in a timely manner, Landlord
may, in its sole discretion, treat such failure by Tenant as an election to utilize the Upgrade Allowance to pay such amount. Any such election shall be in writing and once made, shall be irrevocable
(i.e. Tenant may not then pay such amount and cause such election by Landlord to be withdrawn) and shall, additionally, cause any Tenant Delay
that existed as a result of Tenant's non-payment, to cease being a Tenant Delay. 


        5.4.  If
pursuant to this Work Letter Tenant pays Landlord any amount in payment of the cost of any portion of Landlord's Work, then within 30 days of completion of
Landlord's Work, Landlord shall reconcile the amounts paid by Tenant against the actual amounts incurred by Landlord for the portion of the Landlord's Work which was to be paid by Tenant and shall
deliver such reconciliation, along with back-up documents substantiating such reconciliation to Tenant. Within ten business days of Tenant's receipt of such reconciliation, either
(i) Tenant shall pay Landlord any shortfall between the actual cost of such portion of Landlord's Work which was to be paid by Tenant and the amount previously paid by Tenant, or
(ii) Landlord shall pay Tenant any excess between the actual cost of such portion of Landlord's Work which was to be paid by Tenant and the amount previously paid by
Tenant—whichever is applicable. 




        6.     Early Entry.    Subject to the provisions of Paragraph 14 of the Lease, Landlord will use good faith
commercially reasonable efforts to allow Tenant to have early access to (i) Phase I of the Premises during the four week period prior to the Delivery Date of such Phase, and
(ii) Phase II of the Premises during the four week period prior to the Delivery Date of such phase, in each case for the limited purpose of coordinating Tenant's installation of its
computer cabling and telecommunications wiring, and all furniture, fixtures, and equipment, necessary to ready the Premises for Tenant's Permitted Use. Any such work will be subject to all of the
provisions of this Work Letter including, specifically, and without limitation, Paragraph 11 (and the subparagraphs thereof) and Paragraph 12, below. Such early 


[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 









entry
must be accomplished without delay to, or interference with, Landlord or Landlord's Work. Tenant shall have no obligation to pay any Rent for the Premises during such four week period other than
the Tenant's share of utilities used in connection with such installation work. 


        7.     Effect of Delay on Lease Term.    Subject to the provisions of Paragraph 4.1 of the Lease, any delay in
the completion of Landlord's Work will not, except as otherwise specifically provided in this Work Letter, cause the Lease to be affected or modified and the Lease shall remain in full force and
effect. Landlord shall not be liable for any damage suffered or incurred on account of any delay in completion. 



        8.     Initial Commencement of Lease Term.    Once the Lease Commencement Date has been determined, Landlord shall
provide Tenant with a Confirmation of Lease Terms memorandum reflecting such date. Tenant shall execute and return to Landlord the Confirmation of Lease Terms memorandum within ten business days of
its submittal by Landlord to Tenant. Failure by Tenant to timely execute and return the Confirmation of Lease Terms memorandum shall not amend the terms thereof, but shall be deemed as Tenant's final
and conclusive acceptance of the terms thereof. 


        9.     Tenant Delays.    Each of the following events shall constitute a "Tenant Delay": (a) delays actually
resulting from any direction by Tenant that Landlord suspend work or otherwise hold up construction of any portion of the Landlord's Work because of a possible change to be initiated by Tenant or for
any other reason directed by Tenant; (b) delays by Tenant in paying when due any amount payable pursuant to this Lease or this Work Letter; (c) delays which actually result directly from
Tenant's requested changes in the approved TI Plans or Landlord's Work as reflected in a Change Order; or (d) any other willful or negligent action or inaction of Tenant (or its agents or
employees) that directly or indirectly delays Landlord in completing Landlord's Work. Tenant shall pay any actual and documented third party costs or expenses incurred by Landlord as a result of any
Tenant Delays, including without limitation, any increases in costs or expenses for labor or materials. 



        10.   Improvements by Tenant to the Premises; Plan Approval.    In the event that Tenant shall desire (or is
required) to perform the Tenant's Work, and in the event Tenant subsequently desires to undertake any Alterations, Tenant shall, unless such improvements do not require Landlord's consent pursuant to
Paragraph 23 of the Lease, cause reasonably detailed plans and specifications (the "Plans") to be prepared and delivered to Landlord. Landlord shall, within a reasonable period of time (not to
exceed ten business days) following its receipt of the Plans, either approve such Plans in writing or provide Tenant with written notice setting forth the reasons that Landlord is withholding such
consent, which reasons must be reasonable; and if such Plans are not approved by Landlord the parties shall follow a re-submittal and re-review procedure relative to obtaining
Landlord's approval until such Plans are approved, with Landlord's subsequent review periods being five business days. Performance of the Tenant's Work (and any subsequent Alterations for which Plans
are required hereunder) shall strictly conform to the approved Plans and any deviation will require Landlord's prior approval, which approval shall not be unreasonably withheld, conditioned, or
delayed; however, in the case of de minimus changes to the Plans which do not affect the aesthetics, design, or functionality of the Premises,
Landlord's consent shall not be required. Landlord acknowledges that timing is critical to the process of addressing changes to the Plans, accordingly, Landlord agrees that if Landlord's consent is
required hereunder (or sought where not technically required), Landlord shall provide a written response to Tenant's written request for consent within three business days from receipt thereof
(provided that such written request from Tenant is accompanied by sufficient information or materials to enable Landlord to reasonably evaluate the change in question and indicates in bold, capital
letters that Landlord's failure to respond within three business days will constitute Landlord's deemed approval thereof); provided, however, in lieu of granting or withholding its consent within such
three business day period, Landlord may provide Tenant with written notice (prior to the expiration of the second business day) indicating that Landlord needs up to two additional business days to
evaluate Tenant's request for consent. If Landlord fails to reasonably withhold its consent within such three business day period (or up to five business days if Landlord exercises the foregoing
extension option), Landlord shall be irrevocably deemed to have consented to such change. All costs arising from any such work by Tenant shall be the sole and exclusive responsibility of Tenant, and
Tenant shall pay all 










such
amounts in a prompt and timely fashion as said costs become due and in a manner which avoids the filing of any liens against the Project or the Premises. 


        11.   Construction of Tenant's Work.    After the Plans for the Tenant's Work have been approved by Landlord, Tenant,
and the local governing agencies, Tenant shall enter into a construction contract with Tenant's Contractor (or another contractor approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed)—which contract must include a provision for compliance with Landlord's rules and regulations as set forth herein—and Tenant shall provide
Landlord with a copy of such contract prior to the commencement of Tenant's Work. Tenant shall perform no Alterations or Tenant's Work except through Tenant's Contractor and in strict accordance with
this Work Letter. In no event shall Tenant be permitted to perform Tenant's Work or Alterations prior to providing all information reasonably requested by Landlord in writing relating to Tenant's Work
or the Alterations. Failure by Tenant to provide any such information reasonably requested by Landlord in writing, including but not limited to evidence of Tenant's and Tenant's Contractor's
compliance with all of the insurance requirements hereof, shall constitute a default under this Lease in the event Tenant proceeds with Tenant's Work or such Alterations, and if such default remains
uncured for a period of three business days following delivery to Tenant of written notice from Landlord (whether by ceasing Tenant's Work, as applicable, providing such requested information or
otherwise), then such default will constitute an Event of Default under the Lease which will not require any further notice or cure period. Violations of Landlord's reasonable rules, regulations, and
requirements as set forth herein or as otherwise established by Landlord shall constitute a default under this Lease if not corrected by Tenant and/or Tenant's Contractor within 48 hours of
written notice by Landlord to Tenant, and if such default is not cured within such 48 hour period and thereafter continues uncured for a period of three business days following delivery to
Tenant of an additional written notice from Landlord, then such failure will constitute an Event of Default under the Lease which will not require any further notice or cure period; provided, however,
if the nature of such default is such that more than three business days are reasonably required for its cure, then an Event of Default shall not exist under the Lease if Tenant commences to cure such
default within such three business day period and thereafter diligently prosecutes such cure to completion within 60 days after Landlord's written notice. Landlord shall have the right to post
a notice of non-responsibility at a prominent location within Tenant's Premises. Notwithstanding anything to the contrary contained herein, provided Tenant has complied with all of the
provisions of this Paragraph, Landlord agrees to allow Tenant's Contractor (and subcontractors) early access to the Premises for purposes of coordinating Tenant's Work and commencing long lead time
items or items which must be installed prior to completion of Landlord's Work in order to avoid unnecessary cost or expense. Any such work will be subject to all of the provisions of this Work Letter
including, specifically, and without limitation, this Paragraph (and the subparagraphs hereof) and Paragraph 12, below. It shall be the responsibility of Tenant to enforce the following
requirements of Tenant's Contractor, and all subcontractors of Tenant's Contractor, at every level: 



        11.1.  Tenant's
Contractor shall perform Tenant's Work in a manner and at times that do not impede or delay Landlord's Contractor. Any damage to any work caused by Tenant's
Contractor shall be repaired at the sole cost and expense of Tenant. 


        11.2.  Tenant's
Contractor shall be responsible for the repair, replacement, and clean-up of any damage by him to other contractor's work that specifically
includes access ways to the Premises that may be concurrently used by others. Fire lanes, sidewalks, hallways, and access to other tenants' suites may not be blocked or obstructed at any time. 


        11.3.  Tenant's
Contractor shall contain his storage of materials and its operations within the Premises and such other space as he may be assigned by Landlord. Should he be
assigned space outside of the
Premises, he shall move to such other space as Landlord shall reasonably direct from time to time to avoid interference or delays with other work. Tenant's Contractor shall park construction vehicles
in areas reasonably designated by Landlord. 









        11.4.  All
trash and surplus construction materials shall be stored within the Premises and shall be promptly removed from the Premises. Tenant's Contractor shall not use
common area trash enclosures or waste bins for disposal of trash or surplus construction material. 



        11.5.  Tenant's
Contractor shall use only the utilities, toilet facilities, and drinking water within the Premises or shall provide temporary utilities, portable toilet
facilities, and portable drinking water as required for its work within the Premises. 


        11.6.  Noise
shall be kept to a minimum at all times, and shall not be permitted to materially or unreasonably interfere with the conduct of other tenant's business, or the
general operation of the Project. Tenant's Contractor shall notify, and obtain approval from, Landlord's Representative of any planned work to be done on weekends or other than normal job hours. 



        11.7.  Tenant
and Tenant's Contractor are responsible for compliance with all applicable codes and regulations of duly constituted authorities having jurisdiction as far as
the performance of the Tenant's Work is concerned and for all applicable safety regulations established by the Landlord, OSHA, Cal-OSHA or other regulatory agencies, and Tenant further
agrees to indemnify, defend, and save and hold Landlord harmless for claims arising from Tenant's Work. Prior to commencement of construction, Tenant shall submit to Landlord evidence of insurance as
required by this Lease (including, if applicable, course of construction coverage) and evidence of insurance for Tenant's Contractor and their sub-contractors as may be reasonably required
and reasonably satisfactory to Landlord. The insurance certificate shall list Landlord as additionally insured. 



        11.8.  Tenant's
Contractor shall not post signs on any part of the Project nor on the Premises, without Landlord's prior written approval. 


        11.9.  Tenant
shall be responsible for and shall obtain and record a Notice of Completion promptly following completion of Tenant's work. 


        11.10.  Landlord
may require that, prior to the commencement of construction which is estimated to cost in excess of $450,000.00, Tenant shall obtain or cause Tenant's
Contractor to obtain (at Tenant's expense) payment and performance bonds covering the faithful performance of the contract for the construction of the Tenant's Work and the payment of all obligations
arising thereunder. Such bonds shall be for the mutual benefit of both Landlord and Tenant. 


        11.11.  Tenant
shall provide to Landlord a copy of the fully executed construction contract, including all addenda, and a line item breakdown by trade thereto, between Tenant
and Tenant's Contractor for the Tenant's Work. 


        11.12.  All
required permits and approvals, including but not limited to Planning, Building, Fire, and Health department permits, must be obtained and all necessary
calculations, including, but not limited to, those required under Title 24, must be submitted to the local governing agencies for all work to be performed by Tenant or Tenant's Contractor in the
Premises. 


        11.13.  No
modifications to the exterior of the Building shall be permitted unless otherwise provided under the Landlord-approved TI Plans and permitted under all applicable
governmental laws, rules, regulations, codes, and ordinances. No romex wiring or asbestos containing materials shall be allowed, nor shall water lines be placed in slabs, unless approved by Landlord
prior to installation. All equipment placed upon the roof as a result of the Tenant's Work, and all roof and/or floor penetrations shall be approved by Landlord prior to the commencement of work, and
will require x-raying prior to making penetration to ensure no in-slab electrical conducting conduits with perforation location. 


        11.14.  Landlord,
in Landlord's reasonable discretion, may from time to time establish such other reasonable non-discriminatory rules and regulations for
protection of property and the general safety of occupants and invitees of the Project. Such rules and regulations shall apply to Tenant and Tenant's Contractor as though established upon the
execution of this Work Letter. 










        12.   Coordination of Construction.    Tenant covenants and agrees that Tenant and Tenant's Contractor shall not
destroy or in any way damage any portion of the Building or the Project. Further, Tenant covenants and agrees that Tenant and Tenant's Contractor shall coordinate the Tenant's Work with any
construction schedule for any work being performed by or on behalf of Landlord or any other tenant, and that the performance of the Tenant's Work shall not interfere with Landlord's or any other
tenant's construction activities. If there be such interference or conflict, written notice thereof shall be given to Tenant, and immediately after receipt of such written notice the Tenant agrees to
cease or cause to be terminated such interference or conflict. Further, should Tenant delay Landlord's work at the Premises or any other area of the Building or Project due to the construction of
Tenant's Work, and if Tenant fails to correct such condition within one business day of receipt of written notice from Landlord specifying the circumstances causing such delay, Tenant shall be
responsible to Landlord for any lost rents (up to the number of days of delay caused by Tenant) due to the delay of the commencement of any lease for premises within the Project. Tenant further
covenants and agrees that Tenant and Tenant's Contractor shall comply with all reasonable rules and regulations promulgated by Landlord, or its agent, and all reasonable directives of Landlord
governing construction or installation activities, including but not limited to, permissible hours for construction or installation activities, storage of equipment and responsibility for cleaning of
work areas. If Tenant or Tenant's Contractor shall fail to comply with the provisions of this Paragraph any actual third party costs incurred by Landlord as a result of such failure shall be at
Tenant's sole and exclusive expense, payable within ten business days after Tenant receives written demand therefor along with reasonable evidence of such costs. 


        13.   Limitation on Landlord's Liability.    Landlord shall not be liable for any loss, cost, damage, or expense
incurred or claimed by Tenant or any other person or party on account of the construction or installation of the Tenant's Work or any other improvements to the Premises made by Tenant. Tenant hereby
acknowledges and agrees that the compliance of the Tenant's Work, or other Alterations made to the Premises by the Tenant and any plans therefore, with all applicable governmental laws, codes, and
regulations shall be solely Tenant's responsibility. Landlord assumes no liability or responsibility resulting from the failure of the Tenant to comply with all applicable governmental laws, codes,
and regulations or for any defect in any of the Tenant's Work or other Alteration to the Premises made by Tenant. Tenant further agrees to indemnify, defend, and hold harmless Landlord from any loss,
cost, damage or expense incurred, claimed, asserted, or arising in connection with any of the foregoing. 


        14.   Miscellaneous.    This Work Letter (like the Lease to which it is attached and incorporated into) may be
executed in counterparts, each of which shall be deemed an original and all of which 










together
shall constitute one document. It constitutes both a part of the Lease and a separate binding contract between Landlord and Tenant. 



					
	 LANDLORD:
	 	Sunroad Centrum Office I, L.P.,

a California limited partnership
	     
	 	 	 	 
	 
	 	By:	 	Sunroad Asset Management, Inc.,

a California corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Richard Vann






  Richard Vann
	 
	 	Its:	 	Executive Vice President
	     
	 	 	 	 
	     
	 	 	 	 
	     
	 	 	 	 
	 TENANT:
	 	Bridgepoint Education, Inc.,

a Delaware corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Andrew Clark






  Andrew Clark
	 
	 	Its:	 	Chief Executive Officer
	     
	 	 	 	 
	 
	 	By:	 	/s/ Daniel J. Devine






  Daniel J. Devine
	 
	 	Its:	 	Chief Financial Officer















































 



 ATTACHMENT No. 1  


 
 

  Description of Landlord's Building-Standard Materials and Finishes
  Part One    
    


(attached
hereto) 







 ATTACHMENT No. 1  


 
 

  Description of Landlord's Building-Standard Materials and Finishes
  Part Two    
    



October 10,
2008 


 MEMO  


Project:
Bridgepoint Education, Bldg 1 


Topic:
Sunroad Centrum Turnkey Building Design Elements 


The
following is a list of design and/or construction elements which will be included in design documents and that will be considered to be consistent with Building Standards as outlined in
Exhibit B of the work letter for this project. This list is not meant to be a comprehensive list, but is intended to represent the majority of items known at this time: 



 GENERAL  



	1.
	All
full height walls or walls penetrating ceilings



	2.
	Two
"biz hubs" per floor with two kitchens with dishwashers and sinks per floor



	3.
	Projection
units in every conference room. Tenant to provide Unit and installation labor, LL to provide the wiring, enclosure, etc.



	4.
	Need
other options than Wilsonart laminate top/splash



	5.
	Vinyl
wood planks in business hub areas



	6.
	Carpet-
Lees modular 34oz or 28 oz carpet squares



	7.
	31/2
"stud walls



	8.
	Insulation
in interior partitions (R-11 Batt type fiberglass insulation between studs in partition cavity Thermal or sound)



	9.
	Butt
glazed Clerestory windows (vs. sidelights)—at 10th/11th floors only.



	10.
	Upgraded
flooring materials (wood, stone, vinyl)—10th/11th floor lobby areas.



	11.
	No
sheet vinyl—replace with porcelain or ceramic tile



	12.
	Soffit
around core on all floors from 3' to 5' depth



	13.
	Floating
soffit detail in all hard lid conference rooms with LED lighting above soffit



	14.
	Approximately
23 core drills (saw cuts) for electrical on floors 2-8



	15.
	Mud
ring to pull phone and data lines



	16.
	IDFs
must have separate HVAC



	17.
	2,000
SF MDF room



	18.
	No
VCT in breakroom, lunch room or wet areas. Ceramic/ Porcelain Tile or laminate flooring. If laminate, Tenant has the option of Nevamar or Formica
laminate.



	19.
	No
rubber base in elevator/lobby areas



	20.
	Mecho
are preferable to mini blinds



	21.
	Tenant
to approve zoning plan of HVAC system per Section 9 of standards 














 FLOOR ONE  



	22.
	Specialty
lighting



	23.
	Sinks
and cabinetry in wellness room. Some offices to have interior partition walls built to under side of upper deck



	24.
	Pre-manufactured
clouds



	25.
	Coffee
bar with grab and go food



	26.
	Extra
training rooms 




 FLOOR ONE—LEADERSHIP ROOM  



	27.
	Kitchen
in leadership room



	28.
	Floating
Feature Wall at front of room (not required for occupancy) (similar to Sabre Springs project drawing sheet A6.1.2, detail L)



	29.
	Specialty
Ceiling treatment (Higher NRC rated acoustical tile ceiling system w/lighting)



	30.
	Specialty
Lighting, inclusive of theatrical lighting and lighting controls (indirect lighting with recessed can lighting in combination. Theatrical lighting
fixtures and installation labor by tenant. Basic Line Voltage wiring to standard electrical boxes by LL.) 




 FLOOR 10  



	31.
	Wood
or stone clad columns East and West of elevator lobby



	32.
	Upgraded
lobby finishes—Herculite glass entry door, automated shades in conference room, and several feature walls ("canyon walls" are
non-glazed).



	33.
	Millwork
panels at elevator lobby



	34.
	Custom
Stone flooring at elevator lobby (if not readily available)



	35.
	15'
upper and lower cabinets in the storage area (locksets on interior doors) (no curved casework on level 10 or 11). 




 FLOOR 11  



	36.
	Upgraded
lobby finishes



	37.
	Millwork
panels at elevator lobby with wall washers



	38.
	Stone/wood
flooring at elevator lobby and RR's



	39.
	Drywall
display niches ("canyon walls" are non-glazed).



	40.
	Specialty
ceiling element at elevator lobby



	41.
	Lower
cabinets with granite tops along two walls in each conference room (no curved casework).



	42.
	Mens
and Womens upgraded executive showers and executive washrooms w/lockers.



	43.
	Herculite
glass doors in executive lounge



	44.
	15'
of upper and lower cabinets in storage area



	45.
	Several
feature walls



	46.
	Herculite
glass entry door



	47.
	Locksets
on interior doors w/conduit stubbs into ceiling space at access controlled doors. Access control system by tenant. 











	48.
	Automated
shades in conference room and CEO office



	49.
	Executive
lounge with kitchen



	50.
	At
tenant's option, may substitute wood base on 11th floor instead of rubber base 












 
 

  EXHIBIT "D"    
    


 
 

  TENANT'S PRE-APPROVED SIGNAGE    
    


 
 

  [BRIDGEPOINT LOGO]    
    



The
lettering and the logo of such pre-approved signage can be in combinations of black, white and "Bridgepoint blue" (also known as Pantone 2945U). 







 
 

  EXHIBIT "E"    
    


 
 

  FORM OF SUBORDINATION, ATTORNMENT, AND
  NON-DISTURBANCE AGREEMENT    
    







 


					
	RECORDING REQUESTED BY	 	)	 	 
	AND WHEN RECORDED MAIL TO:	 	)	 	 
	 	 	)	 	 
	Bank of America, National Association	 	)	 	 
	Real Estate Banking Group	 	)	 	 
	Mail Code CA6-503-05-35	 	)	 	 
	5 Park Plaza, Suite 500	 	)	 	 
	Irvine, CA 92614-8525	 	)	 	 
	Attn.: Prudence Daley	 	)	 	 
	





  
	 	 	 	 	Space above for Recorder's Use







 
 

SUBORDINATION NONDISTURBANCE AND ATTORNMENT AGREEMENT    
    


         NOTICE:    THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN
THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. 


        This
Subordination, Nondisturbance and Attornment Agreement (this "Agreement") dated as of October     , 2008, is made
among Bridgepoint Education, Inc., a Delaware corporation ("Tenant"), Sunroad Centrum Office I, L.P., a California limited partnership
("Landlord"), and Bank of America, N.A., a national banking association, in its capacity as Administrative Agent
("Administrative Agent") for itself and other "Lenders" that are party, from time to time to the Loan Agreement (defined below). 



        WHEREAS,
pursuant to that certain Construction Loan Agreement dated as of February 10, 2006, as modified from time to time (collectively, the "Loan
Agreement"), the Lenders agreed to make a construction loan to Landlord in the amount of Eighty-One Million Dollars ($81,000,000) (the
"Loan"). Lenders are the owners of certain promissory notes (herein, as they may have been or may be from time to time renewed, extended, amended,
supplemented, or restated, collectively, called the "Note"), executed by Landlord and payable to the order of Lenders, in the aggregate principal amount
of the Loan, bearing interest and payable as therein provided, secured by, among other things, a Construction Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing dated
as of February 10, 2006 recorded in the real property records of San Diego County, California ("Official Records") on February 17, 2006 as
Instrument No. 2006-0115267, as modified by that certain Modification and Additional Advance Agreement (Short Form) dated as of December 21, 2007 and recorded in the Official
Records on December 26, 2007 as Instrument No. 2007-0793556, covering, among other property, the land (the "Land") described
in Exhibit A which is attached hereto and incorporated herein by reference, and the improvements
("Improvements") thereon (such Land and Improvements being herein together
called the "Property") (herein, as it may have been or may be from time to time renewed, extended, amended or supplemented, called the
"Deed of Trust"); 


        WHEREAS,
Tenant is the tenant under that certain Standard Form Modified Gross Office Lease between Landlord and Tenant dated as of October     , 2008 (herein, as it may
from time to time be renewed, extended, amended or supplemented, called the "Lease"), covering a portion of the Property (said portion being herein
referred to as the "Premises"); and 



        WHEREAS,
the term "Landlord" as used herein means the present landlord under the Lease or, if the landlord's interest is transferred in
any manner, the successor(s) or assign(s) occupying the position of landlord under the Lease at the time in question. 


1







 

        NOW,
THEREFORE, in consideration of the mutual agreements herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows: 


        1.     Subordination.    Tenant agrees and covenants that the Lease and the rights of Tenant thereunder, all of
Tenant's right, title and interest in and to the property covered by the Lease, and any lease thereafter executed by Tenant covering any part of the Property, are and shall be subject, subordinate and
inferior to (a) the Deed of Trust and the rights of Administrative Agent and Lenders thereunder, and all right, title and interest of Administrative Agent and Lenders in the Property, and
(b) all other security documents now or hereafter securing payment of any indebtedness of Landlord (or any prior landlord) to Administrative Agent and Lenders which cover or affect the Property
(the "Security Documents"); provided, however, that the lien of the Deed of Trust shall not encumber or have any effect on Tenant's trade fixtures,
equipment or personal property placed on or within the Premises. This Agreement is not intended and shall not be construed to subordinate the Lease to any mortgage, deed of trust or other security
document other than those referred to in the preceding sentence, securing the indebtedness to Administrative Agent or the Lenders. 


        2.     Nondisturbance.    Administrative Agent agrees that so long as the Lease is in full force and effect and Tenant
is not in default in the payment of rent, additional rent or other payments or in the performance of any of the other terms, covenants or conditions of the Lease on Tenant's part to be performed
(beyond the period, if any, specified in the Lease within which Tenant may cure such default), 



        (a)   Administrative
Agent shall recognize the validity of the Lease and the terms thereof, and Tenant's possession of the Premises under the Lease shall not be disturbed or
interfered with by Administrative Agent in the exercise of any of its foreclosure rights under the Deed of Trust, or in connection with any conveyance in lieu of foreclosure, and 



        (b)   Administrative
Agent will not join Tenant as a party defendant for the purpose of terminating Tenant's interest and estate under the Lease in any proceeding for
foreclosure of the Deed of Trust. 




        3.     Attornment. 



        (a)   Tenant
covenants and agrees that in the event of foreclosure of the Deed of Trust, whether by power of sale or by court action, or upon a transfer of the Property by
conveyance in lieu of foreclosure (the purchaser at foreclosure or the transferee in lieu of foreclosure, including Administrative Agent or any Lender if they are such purchaser or transferee, being
herein called "New Owner"), Tenant shall attorn to New Owner as Tenant's new landlord, and agrees that the Lease shall continue in full force and effect
as a direct lease between Tenant and New Owner upon all of the terms, covenants, conditions and agreements set forth in the Lease and this Agreement, except for provisions which are impossible for New
Owner to perform; provided, however, that in no event shall New Owner be: 



          (i)  liable
for any act, omission, default, misrepresentation or breach of warranty of any previous landlord (including Landlord) or obligations accruing prior to New
Owner's actual ownership of the Property; 


         (ii)  subject
to any offset, defense, claim or counterclaim which Tenant might be entitled to assert against any previous landlord (including Landlord) (notwithstanding the
foregoing, however, New Owner agrees to be bound by the terms of Sections 2.1 and 2.2 of the Addendum attached to the Lease regarding Phase I Rent Relief and Phase II Rent Relief,
as Administrative Agent does not view such rights to rent relief as an offset right); 




2







 


        (iii)  bound
by any payment of rent, additional rent or other payments made by Tenant to any previous landlord (including Landlord) for more than one (1) month in
advance, unless actually received by New Owner; 


        (iv)  bound
by any amendment or modification of the Lease hereafter made which could materially affect any right of Landlord or which alters the economics of the Lease
(including, without limitation, modifications that reduce rent, shorten the term, reduce the rentable area of the Premises or reduce the operating expense reimbursement obligations under the Lease, or
which reduce any other charges paid by Tenant to landlord under the Lease, or any which transfer to the landlord any costs previously paid by Tenant), without the written consent of Administrative
Agent; 


         (v)  bound
by any consent or acquiescence by any previous landlord (including Landlord) under the Lease to any assignment or sublease hereafter granted (to the extent that
the approval of landlord is required for such assignment or sublease under the terms of the Lease), without the written consent of Administrative Agent; or 


        (vi)  liable
for any deposit that Tenant may have given to any previous landlord (including Landlord) which has not, as such, been transferred to New Owner. 




        (b)   The
provisions of this Agreement regarding attornment by Tenant shall be self-operative and effective without the necessity of execution of any new lease or
other document on the part of any party hereto or the respective heirs, legal representatives, successors or assigns of any such parry. Tenant agrees, however, to execute and deliver upon the request
of New Owner, any instrument or certificate which in the reasonable judgment of New Owner may be necessary or appropriate to evidence such attornment, including a new lease of the Premises on the same
terms and conditions as the Lease for the unexpired term of the Lease. 




        4.     Estoppel Certificate.    Tenant agrees to execute and deliver from time to time, within ten (10) business
days following the request of Landlord or of any holder(s) of any of the indebtedness or obligations secured by the Deed of Trust, a certificate regarding the status of the Lease, certifying
(a) that the Lease is in full force and effect, (b) the date through which rentals have been paid, (c) the date of the commencement of the term of the Lease, (d) the nature
of any amendments or modifications of the Lease, (e) that to the best of Tenant's knowledge no default, or state of facts which with the passage of time or notice (or both) would constitute a
default, exists under the Lease, (f) that to the best of Tenant's knowledge, no setoffs, recoupments, estoppels, claims or counterclaims exist against Landlord, and (g) such other
matters regarding the factual status of the Lease as may be reasonably requested. If any of the foregoing statements are untrue, Tenant's certificate shall state the reasons therefor. 


        5.     Acknowledgment and Agreement by Tenant.    Tenant acknowledges and agrees as follows: 



        (a)   Tenant
acknowledges that in connection with the financing of the Property, Landlord has executed and delivered to Administrative Agent the Deed of Trust which contains
an assignment of leases and rents. Tenant hereby expressly consents to such assignment and agrees that such assignment shall, in all respects, be superior to any interest Tenant has in the Lease or
the Property, subject to the provisions of this Agreement. Tenant will not amend, alter or waive any provision of, or consent to the amendment, alteration or waiver of, any provision of the Lease
without the prior written consent of Administrative Agent, except as permitted in this Agreement. Tenant and Landlord agree to deliver an executed copy of any Lease amendment to Administrative Agent
within ten (10) business days after its execution, regardless of whether approval is required under the terms of this Agreement. Tenant shall not prepay any rents or other sums due under the
Lease for more than one (1) month in advance of the due date therefor. Tenant acknowledges that 



3







 

Administrative
Agent and the Lenders will rely upon this instrument in connection with such financing. 


        (b)   Administrative
Agent and the Lenders, in making any disbursements to Landlord, are under no obligation or duty to oversee or direct the application of the proceeds of
such disbursements, and such proceeds may be used by Landlord for purposes other than improvement of the Property. 



        (c)   From
and after the date hereof, in the event of any act or omission by Landlord which would give Tenant the right, either immediately or after the lapse of time, to
terminate the Lease or to claim a partial or total eviction, Tenant will not exercise any such right (i) until it has given written notice of such act or omission to Administrative Agent; and
(ii) until the same period of time as is given to Landlord under the Lease to cure such act or omission shall have elapsed following such giving of notice to Administrative Agent and following
the time when Administrative Agent shall have become entitled under the Deed of Trust to remedy the same. In no event will Tenant exercise any such right less than 30 days after receipt of such
notice or prior to the passage of such longer period of time as may be necessary to cure or remedy such default, act or omission including such period of time necessary to obtain possession of the
Property and thereafter cure such default, act or omission, during which period of time Administrative Agent shall be permitted to cure or remedy such default, act or omission. Notwithstanding the
foregoing, if the act or omission for which Administrative Agent is receiving notice relates to the construction and delivery obligations under Section 4.1 of the Lease, then Administrative
Agent shall have the right to cure the same within a period equal to thirty (30) days (or sixty (60) days if Administrative Agent has commenced foreclosure proceedings or is seeking the
appointment of a receiver) after the later of the following: (i) receipt of such notice or (ii) following the expiration of Landlord's cure periods under the Lease. Notwithstanding the
foregoing, Administrative Agent shall have no duty or obligation to cure or remedy any breach or default. It is specifically agreed that Tenant shall not, as to Administrative Agent, require cure of
any such default which is personal to Landlord, and therefore not susceptible to cure by Administrative Agent. 


        (d)   In
the event that Administrative Agent notifies Tenant of a default under the Deed of Trust, Note or Security Documents and demands that Tenant pay its rent and all
other sums due under the Lease directly to Administrative Agent, Tenant shall honor such demand and pay the full amount of its rent and all other sums due under the Lease directly to Administrative
Agent, without offset, or as otherwise required pursuant to such notice beginning with the payment next due after such notice of
default, without inquiry as to whether a default actually exists under the Deed of Trust, Security Documents or otherwise in connection with the Note, and notwithstanding any contrary instructions of
or demands from Landlord. 


        (e)   Tenant
shall send a copy of any notice or statement under the Lease to Administrative Agent at the same time such notice or statement is sent to Landlord if such notice
or statement has a material impact on the economic terms, operating covenants or duration of the Lease. 


        (f)    Tenant
has no right or option of any nature whatsoever, whether pursuant to the Lease or otherwise, to purchase the Premises or the Property, or any portion thereof or
any interest therein, and to the extent that Tenant has had, or hereafter acquires, any such right or option, the same is hereby acknowledged to be subject and subordinate to the Deed of Trust and is
hereby waived and released as against Administrative Agent and New Owner. 


        (g)   This
Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement with respect to any deed of trust recorded as
of the effective date of the Lease and Tenant waives any requirement to the contrary in the Lease. 



4







 

        (h)   Administrative
Agent's and Lenders' obligation and liability with respect to the erection or completion of the improvements in which the Premises are located or for
completion of the Premises or any improvements for Tenant's use and occupancy, either at the commencement of the term of the Lease, upon any renewal or extension thereof, or upon the addition of
additional space pursuant to any expansion rights contained in the Lease shall be limited to the amount of the undisbursed Loan proceeds which are designated in the Budget (as defined in the Loan
Agreement) for construction of tenant improvements within the Premises and any undisbursed funds deposited by Borrower with Administrative Agent for the purpose of constructing the "Landlord Work" (as
defined in the Lease). Tenant acknowledges and agrees that Tenant's sole remedy with respect to Administrative Agent's, Lenders' or New Owner's failure to complete the Landlord Work shall be to
terminate the Lease in accordance with the terms of Section 4.1 of the Lease, provided however that Tenant shall not be entitled to the $100,000 liquidated damages provided for in
Section 4.1.3.4 of the lease. 


        (i)    Administrative
Agent, Lenders and any New Owner shall have no obligation nor shall they incur any liability with respect to any warranties of any nature whatsoever,
whether pursuant to the Lease or otherwise, including any warranties respecting use, compliance with zoning, Landlord's title, Landlord's authority, habitability, fitness for purpose or possession. 



        (j)    In
the event that Administrative Agent, any Lender or any New Owner shall acquire title to the Premises or the Property, Administrative Agent, such Lender or such New
Owner shall have no obligation, nor shall it incur any liability, beyond Administrative Agent's, such Lender's or New Owner's then equity interest, if any, in the Property or the Premises, and Tenant
shall look exclusively to such equity interest of Administrative Agent, Lenders or New Owner, if any, for the payment and discharge of any obligations imposed upon Administrative Agent, Lenders or New
Owner hereunder or under the Lease or for recovery of any judgment from Administrative Agent, Lenders or New Owner, and in no event shall Administrative Agent, Lenders, New Owner, or any of their
respective officers, directors, shareholders, agents, representatives, servants, employees or partners ever be personally liable for such judgment. 




        6.     Acknowledgment and Agreement by Landlord.    Landlord, as landlord under the Lease and trustor under the Deed of
Trust, acknowledges and agrees for itself and its heirs, representatives, successors and assigns, that: (a) this Agreement does not constitute a waiver by Administrative Agent of any of its
rights under the Deed of Trust, Note or Security Documents, nor does this Agreement in any way release Landlord from its obligations to comply with the terms, provisions, conditions, covenants,
agreements and clauses of the Deed of Trust, Note and Security Documents; (b) the provisions of the Deed of Trust, Note and Security Documents remain in full force and effect and must be
complied with by Landlord; and (c) Tenant is hereby authorized to pay its rent and all other sums due under the Lease directly to Administrative Agent upon receipt of a notice as set forth in
Section 5(d) above from Administrative Agent and that Tenant is not obligated to inquire as to whether a default actually exists under the Deed of Trust or the Security Documents or otherwise
in connection with the Note. Landlord hereby releases and discharges Tenant of and from any liability to Landlord resulting from Tenant's payment to Administrative Agent in accordance with this
Agreement. Landlord represents and warrants to Administrative Agent that a true and complete copy of the Lease has been delivered by Landlord to Administrative Agent. 



        7.     Lease Status.    Landlord and Tenant certify to Administrative Agent that neither Landlord nor Tenant has
knowledge of any default on the part of the other under the Lease, that the Lease is bona fide and contains all of the agreements of the parties thereto with respect to the letting of the Premises and
that all of the agreements and provisions therein contained are in full force and effect. 


        8.     Notices.    All notices, requests, consents, demands and other communications required or which any party
desires to give hereunder shall be in writing and shall be deemed sufficiently given or 


5







 



furnished
if delivered by personal delivery, by telegram, telex, or facsimile, by expedited delivery service with proof of delivery, or by registered or certified United States mail, postage prepaid,
at the addresses specified at the end of this Agreement (unless changed by similar notice in writing given by the particular party whose address is to be changed). Any such notice or communication
shall be deemed to have been given either at the time of personal delivery or, in the case of delivery service or mail, as of the date of first attempted delivery at the address and in the manner
provided herein, or, in the case of telegram, telex or facsimile, upon receipt. Notwithstanding the foregoing, no notice of change of address shall be effective except upon receipt. This
Section 8 shall not be construed in any
way to affect or impair any waiver of notice or demand provided in this Agreement or in the Lease or in any document evidencing, securing or pertaining to the loan evidenced by the Note or to require
giving of notice or demand to or upon any person in any situation or for any reason. 



        9.     Miscellaneous. 



        (a)   This
Agreement supersedes any inconsistent provision of the Lease. 


        (b)   Nothing
contained in this Agreement shall be construed to derogate from or in any way impair or affect the lien, security interest or provisions of the Deed of Trust,
Note or Security Documents. 


        (c)   This
Agreement shall inure to the benefit of the parties hereto, their respective successors and permitted assigns, and any New Owner, and its heirs, personal
representatives, successors and assigns; provided, however, that in the event of the assignment or transfer of the interest of Administrative Agent, all obligations and liabilities of the assigning
Administrative Agents under this Agreement shall terminate, and thereupon all such obligations and liabilities shall be the responsibility of the party to whom Administrative Agent's interest is
assigned or transferred; and provided further that the interest of Tenant under this Agreement shall be assigned or transferred, without the prior written consent of Administrative Agent, only to such
entities to which the Lease is assigned or transferred in accordance with the terms of the Lease. 


        (d)   THIS
AGREEMENT AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA AND APPLICABLE UNITED STATES FEDERAL LAW EXCEPT
ONLY TO THE EXTENT, IF ANY, THAT THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED NECESSARILY CONTROL. 


        (e)   The
words "herein," "hereof," "hereunder" and other similar compounds of the word "here" as used in this Agreement refer to this entire Agreement and not to any
particular section or provision. The terms "include" and "including" shall be interpreted as if followed by the words "without limitation." 


        (f)    This
Agreement may not be modified orally or in any manner other than by an agreement in writing signed by the parties hereto or their respective successors in interest. 



        (g)   If
any provision of this Agreement shall be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not apply
to or affect any other provision hereof, but this Agreement shall be construed as if such invalidity, illegality, or unenforceability did not exist. 


        (h)   This
Agreement will be recorded in the real property records of San Diego County, California. 



        (i)    This
Agreement may be executed in counterparts, all of which, taken together, shall constitute the same agreement. 



[Signatures appear on the following page]


6







 

         NOTICE:    THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE
EXPENDED FOR
PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY. 


        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. 



							
	ADDRESS OF ADMINISTRATIVE AGENT:	 	ADMINISTRATIVE AGENT:
	 	 	 	 	 	 	 
	Bank of America, N.A.	 	BANK OF AMERICA, N.A., a national
	Real Estate Banking Group	 	banking association, as Administrative Agent
	Mail Code CA6-503-05-35	 	 	 	 	 	 
	5 Park Plaza, Suite 500

Irvine, CA 92614-8525	 	By:	 	







 
	Attn.: Prudence Daley	 	Name:	 	







 
	 	 	Title:	 	







 
	 	 	 	 	 	 	 
	ADDRESS OF TENANT:	 	TENANT:
	 	 	 	 	 	 	 
	Bridgepoint Education, Inc.	 	BRIDGEPOINT EDUCATION, INC.,
	13500 Evening Creek Drive, Suite 600	 	a Delaware corporation
	San Diego, CA 92128	 	 	 	 	 	 
	Attn: Mr. Rocky Sheng	 	By:	 	







 
	 	 	Name:	 	







 
	 	 	Title:	 	







 
	 	 	 	 	 	 	 
	 	 	By:	 	







 
	 	 	Name:	 	







 
	 	 	Title:	 	







 
	 	 	 	 	 	 	 
	ADDRESS OF LANDLORD:	 	LANDLORD:
	 	 	 	 	 	 	 
	Sunroad Centrum Office I, L.P.	 	SUNROAD CENTRUM OFFICE I, L.P.
	c/o Sunroad Enterprises	 	a California limited partnership
	4445 Eastgate Mall, Suite 400	 	 	 	 	 	 
	San Diego, CA 92121	 	By:	 	Sunroad Asset Management, Inc.
	Attention: Dan Feldman	 	 	 	a California corporation
	 	 	Its:	 	General partner
	
 	
 	

 	
 	

 	
 	

 
	 	 	 	 	By:	 	







 
	 	 	 	 	Name:	 	







 
	 	 	 	 	Title:	 	







 





7







 
 
 

  EXHIBIT "A"
  
    LEGAL DESCRIPTION OF THE LAND    
    


        All that parcel or parcels of real property located in the City of San Diego, County of San Diego, State of California, and more
particularly described as follows: 


Parcels
1 through 5 inclusive of Parcel Map No. 18972, in the City of San Diego, County of San Diego, State of California, according to Map thereof filed in the Office of the County Recorder of
San Diego County May 24, 2002, as File No. 2002-0444396 of Official Records 


APN:
369-220-51 through 55 


8







 
 
 

ACKNOWLEDGMENT    
    



					
	STATE OF CALIFORNIA	 	)	 	 
	 	 	)	 	SS
	COUNTY OF	 	)	 	 





On                                    ,
before me,                                    , Notary Public,
personally appeared                                     who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 


I
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 


Witness
my hand and official seal. 



			
	 	 	[Seal]
	





  (Signature)	 	 




 
 

ACKNOWLEDGMENT    
    



					
	STATE OF CALIFORNIA	 	)	 	 
	 	 	)	 	SS
	COUNTY OF	 	)	 	 





On                                    ,
before me,                                    , Notary Public,
personally appeared                                     who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 


I
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 


Witness
my hand and official seal. 



			
	 	 	[Seal]
	





  (Signature)	 	 




9







 
 
 

ACKNOWLEDGMENT    
    



					
	STATE OF CALIFORNIA	 	)	 	 
	 	 	)	 	SS
	COUNTY OF	 	)	 	 





On                                    ,
before me,                                    , Notary Public,
personally appeared                                     who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 


I
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 


Witness
my hand and official seal. 



			
	 	 	[Seal]
	





  (Signature)	 	 




 
 

ACKNOWLEDGMENT    
    



					
	STATE OF CALIFORNIA	 	)	 	 
	 	 	)	 	SS
	COUNTY OF	 	)	 	 





On                                    ,
before me,                                    , Notary Public,
personally appeared                                     who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 


I
certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. 


Witness
my hand and official seal. 



			
	 	 	[Seal]
	





  (Signature)	 	 




10







 
 

  EXHIBIT "F"    
    


 
 

  SIGN CRITERIA    
    








 








































 
 

  ADDENDUM
  
    TO
  
    STANDARD FORM
  
    MODIFIED GROSS OFFICE LEASE    
    


This
Addendum to Standard Form Modified Gross Office Lease ("Addendum") is attached to and incorporated into that certain Standard Form Modified Gross Office Lease (the "Lease") between Sunroad
Centrum Office I, L.P., a California limited partnership ("Landlord"), and Bridgepoint Education, Inc., a Delaware corporation ("Tenant"), who agree as follows: 


        1      Defined Terms.    All capitalized terms used in this Addendum which are not otherwise
specifically defined herein shall have the meanings ascribed to them in the Lease.


        2      [***]



        3.     Long Term Expansion.    Landlord acknowledges that Tenant envisions future Premises-expansion needs beyond the
capacity of the Building. Accordingly, without obligating Landlord to construct additional buildings in the Project within any particular timeframe—and in recognition that any additional
office buildings in the Project will require available financing upon terms satisfactory to Landlord in its sole discretion and the obtaining of certain governmental permits and approvals (including,
among other things, a so-called "substantial conformance" review and approval and building permits), the obtaining of which is beyond Landlord's control—and with the
understanding that the rights granted herein will arise only if the Landlord constructs an additional building during the Term, and provided no Event of Default then exists and no more than one Event
of Default has theretofore occurred under the Lease (it being acknowledged that Landlord may waive—in writing only—such Event of Default provision relative to
non-monetary Events of Default), Landlord hereby grants Tenant a one-time (subject to the right of revival described in Paragraph 3.9, below) first right to lease (the
"Future Expansion Right"), senior in priority to any other person or entity, during the Potential Exercise Period (as defined below), to lease any available space (exceeding 50% of the total Rentable
Square Footage thereof) in the next building ("Building II") constructed by Landlord in the Project ("Future Expansion Space"), upon the following terms, provisions, and conditions: 



        3.1.  At
least 60 days prior to but no earlier than 9 months prior to commencement of construction of Building II (as evidenced by pouring of footings or
foundations) with the good faith intention of diligently construction Building II to completion, Landlord shall provide written notice to Tenant (hereinafter referred to as the
"Pre-Construction Notice") of the proposed size (which in no event will be less than 200,000 Rentable Square Feet of space, or if the 9th Floor—as defined
below—becomes part of the Premises, then in no event less than 175,000 Rentable Square Feet of space) and configuration of Building II and shall make available to Tenant for Tenant's
review at Landlord's offices any preliminary drawings or approved plans and specifications in Landlord's possession. 



        3.2.  Tenant
shall have 30 calendar days from receipt of a Pre-Construction Notice to elect whether to exercise its Future Expansion Right relative to the subject
Future Expansion Space—which election must be set forth in an irrevocable (except as to Tenant's revocation rights under Paragraph 3.7, below) written notice delivered to Landlord
within such timeframe, which written notice must set forth Tenant's election to exercise its Future Expansion Right and identify the subject Future Expansion Space (which in all events must be greater
than 50% of the total Rentable 




[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 


1







 

Square
Footage of Building II; it being acknowledged that Tenant's Future Expansion Right may only be exercised relative to a portion that is greater than 50% of the total Rentable Square Footage of
Building II) as to which Tenant is exercising such Future Expansion Right. If Tenant timely exercises Tenant's Future Expansion Right as to more than 50% of the total Rentable Square Footage in
Building II, then: (a) Tenant and Landlord shall promptly execute a new lease for such Future Expansion Space (an "Expansion Space Lease") in accordance with Paragraph 3.3, below, and
(b) Landlord shall promptly complete the Future Expansion Space Build-Out (as defined below) and deliver possession of the Future Expansion Space to Tenant. 



        3.3.  The
terms of the Expansion Space Lease to be executed by Landlord and Tenant will be based upon the form of this Lease (excluding the provisions of this Addendum except
where expressly made applicable to an Expansion Space Lease—i.e. the base Lease and Work Letter format will be used, and the terms of
this Addendum which recite provisions to be included in such Expansion Space Lease shall be included in such Expansion Space Lease and the corresponding Work Letter, but this Addendum shall otherwise
be inapplicable and shall not be used except as otherwise specified in this Paragraph 3.3) and shall provide for the following, except as otherwise then agreed to by Landlord and Tenant:
(i) any terms, provisions, and conditions of this Lease which are based upon the size of the Premises or the Building will be adjusted to reflect the size of the Future Expansion Space and of
Building II, (ii) subject to Paragraph 3.7, below, the Rent Commencement Date for such Future Expansion Space will be the date possession thereof is tendered to Tenant with the subject
Future Expansion Space Build-Out Substantially Completed or such earlier date upon which such Substantial Completion would have been achieved but for the occurrence of any Tenant Delays,
(iii) the initial Basic Monthly Rent for such Future Expansion Space will be calculated in accordance with the procedure in Paragraph 3.7, below, (iv) the Basic Monthly Rent shall
increase annually on the anniversary of the Rent Commencement Date under such Expansion Space Lease at the then-applicable Future Increase Rate (as defined below), (v) the Expansion
Space Lease will either incorporate Landlord's then-standard rates for parking and for after hours HVAC and similar Additional Rent provisions which are then customarily included by
Landlord in its leases or such amounts will be excluded, with the effect of such exclusion being taken into account in the determination of the Basic Monthly Rent pursuant to Paragraph 3.7,
below; but in all events, such Expansion Space will be entitled to the same six-spaces-per-1,000-Usable-
Square-Feet-of-space-ratio of parking to which the Premises are entitled under Paragraph 9, below, (vi) the Expansion Space Lease shall provide for an
appropriate and reasonable security deposit, (vii) Landlord will pay the cost of the Future Expansion Space Build-Out (including, without limitation, all hard and soft costs),
(viii) the initial term of such Expansion Space Lease will be no less than 12 years and there will be two, five-year extension terms relative to such Future Expansion Space
similar to (but not co-terminus with) the Initial Lease Term and Extension Terms under the Lease, (ix) provided Tenant is in occupancy of at least 50% of the total Rentable Square
Footage of Building II, Tenant will have the right to two exterior building-top signs (the location of which shall be identified in the Expansion Space Lease in the event Tenant will
occupy less than 70% of the total Rentable Square Footage of Building II under the terms of such lease) and the top slot on any monument sign of Building II, and (A) no "direct competitor" (as
defined in Paragraph 12.2.5 of the Lease) of Tenant shall have the right to any exterior building signage on Building II; (B) subject to item (A) of this Paragraph 3.3,
only other tenants or occupants of Building II occupying at least one full floor of Building II shall have the right to any building top signage on Building II, and (C) subject to
item (A) of this Paragraph 3.3, the tenant or occupant of all of Suite "A" of Building II shall have the right to "eyebrow" signage (but not building top signage, unless such tenant or
occupant is permitted to receive building top signage per the terms of item (B) of this Paragraph 3.3), (x) so long as Tenant is in occupancy of at least 70% of the total Rentable
Square Footage of Building II, Tenant shall have the same exclusive exterior signage rights as are provided to Tenant in Paragraph 12.2.3 of the Lease with 



2







 

respect
to Tenant occupying at least 60% of the Premises contained in Building I, (xi) such Expansion Space Lease will provide Tenant with a right of first refusal as described in
Paragraph 5, below; which right of first refusal will be senior to the rights of all other tenants, (xii) such Expansion Space Lease shall be cross-defaulted with this Lease (and this
Lease shall be amended to provide for a similar cross-default—i.e. an Event of Default under either the Lease or such Expansion Space
Lease
will be an Event of Default under the other) and (xiii) such Expansion Space Lease will provide Tenant with the rights described in Paragraphs 7, 8, 9, 10 and 11 of this Addendum. 



        3.4.  Tenant's
right to exercise its Future Expansion Right shall only apply during any period of time (the "Potential Exercise Period") during which there is at least five
years remaining in the Term of the Lease (which Tenant may cause to be the case by exercising an Option to Extend, if any such Option to Extend is then exercisable). 



        3.4.1  Notwithstanding
the foregoing, if Tenant waives its right to have Landlord perform any improvement work in the Future Expansion Space and without any obligation on the
part of Landlord to pay any tenant improvement allowance, and there is an adjustment to the other monetary provisions of the Expansion Space Lease relating to such Future Expansion Space to reflect
Tenant's waiver thereof (i.e. the Expansion Space Lease shall not contain any obligation on the part of Landlord to perform improvement work or
to pay a tenant improvement allowance, but the Basic Monthly Rent will be calculated as if Landlord still had such obligation to pay for such work or provide such allowance) then Tenant may exercise
its Future Expansion Right with no five year minimum term requirement. 


        3.4.2  Furthermore,
if there are less than five years remaining in the Term (calculated from the Rent Commencement Date under the relevant Expansion Space Lease), but Tenant
has one or more unexercised Options to Extend under this Lease, then Tenant shall have the following alternative rights (based upon whether Tenant has one or both of its Options to Extend yet to be
exercised): 



        3.4.2.1.  If
Tenant has two remaining Options to Extend, Tenant may exercise its initial Option to Extend but reduce the five year Extension Term relative to such first
Option to Extend and merely extend the Term through that date which is at least five years after the Rent Commencement Date under the relevant Expansion Space Lease, and in such case, the balance of
such partially utilized five year Extension Term will be added to the potential Extension Term for the second Option to Extend. [By way of example of the operation of this paragraph: if
there would otherwise be three years remaining in the Term from the Rent Commencement Date under the relevant Expansion Space Lease at the time the Future Expansion Right is exercised, Tenant may
still proceed to exercise its Future Expansion Right—notwithstanding the first sentence of this Paragraph 3.4—by exercising its first Option to Extend, but such exercise
would be for only a two year Extension Term at a minimum. For purposes of this example, in the event such exercise was for only a two-year Extension Term (as opposed to a three, four or
five year Extension Term, which Tenant would have the right to exercise in the alternative), Tenant's second Option to Extend would then be adjusted to provide that the Extension Term relative to such
second Option to Extend would be for eight, rather than five, years. Tenant must notify Landlord of such election at the time it delivers its written notice to exercise the Future Expansion Right. 



        3.4.2.2.  If
Tenant has only one remaining Option to Extend, Tenant may exercise its remaining Option to Extend but reduce the five year Extension Term to merely extend the
Term through that date which is at least five years after the Rent Commencement Date under the relevant Expansion Space Lease, and in such case, the balance of such 





3







 






partially
utilized five year Extension Term will be lost and no longer be capable of utilization by Tenant. [By way of example of the operation of this paragraph: if there would otherwise
be three years remaining in the Term from the Rent Commencement Date under the relevant Expansion Space Lease at the time the Future Expansion Right is exercised, Tenant may still proceed to exercise
its Future Expansion Right—notwithstanding the first sentence of this Paragraph 3.4—by exercising its final Option to Extend, but such exercise would be for only a two
year Extension Term at a minimum. For purposes of this example, in the event such exercise was only for a two year Extension Term (as opposed to a three, four or five year Extension Term, which Tenant
would have the right to exercise in the alternative), Tenant would have no further Option to Extend relative to such unused three year period.] Tenant must notify Landlord of such election
at the time it delivers its written notice to exercise the Future Expansion Right. 





        3.5.  If
Tenant fails to timely exercise its Future Expansion Right, as provided in Paragraph 3.2, above, Landlord shall have the unrestricted right to lease the
Future Expansion Space subject to Tenant's continuing rights under Paragraphs 3.9 and 6, below. 


        3.6.  The
rights granted to Tenant in this Addendum under this Paragraph 3 are personal to the Tenant originally named in this Lease and may not be exercised by any
other person or entity, except a Permitted Transferee, nor while an Event of Default exists. Furthermore, Tenant shall not have the right to exercise the Future Expansion Right (and such Future
Expansion Right shall terminate), notwithstanding anything set forth herein to the contrary, if Tenant commits two or more Events of Default under the Lease regardless of whether such Events of
Default are subsequently cured (it being acknowledged, however, that Landlord may waive—in writing only—such Event of Default provision relative to non-monetary
Events of Default). 


        3.7.  If
Tenant duly exercises its Future Expansion Right relative to any Future Expansion Space, then the initial Basic Monthly Rent for such Future Expansion Space, and the
Future Increase Rate, shall be established in accordance with the following procedure. 



        3.7.1.  Following
Tenant's timely exercise its Future Expansion Right relative to any Future Expansion Space, Landlord and Tenant shall meet to discuss the initial Basic
Monthly Rent and the appropriate annual rental increase percentage ("Future Increase Rate") under the subject Expansion Space Lease within 15 business days of written notice from Landlord that
Landlord has determined the estimated cost of constructing Building II and completing the Future Expansion Space Build-Out based upon a bid from a qualified, licensed general contractor. 


        3.7.2.  During
the meeting between Landlord and Tenant referenced in Paragraph 3.7.1, above, Landlord in good faith shall provide Tenant on an "open book" basis, with
all information necessary to identify all of Landlord's costs relative to Building II and the Future Expansion Space Build-Out, including financing costs, as well as Landlord's required
return (based upon factors such as risk and total project investment). On the basis of such information, Landlord shall identify for Tenant the initial Basic Monthly Rent and the Future Increase Rate
applicable to the subject Future Expansion Space. If Tenant accepts Landlord's identification of the initial Basic Monthly Rent and Future Increase Rate relative to the Expansion Space Lease, Tenant
shall have ten business days from the date of such meeting to deliver written notice to Landlord indicating Tenant's acceptance and approval of Landlord's determination of the initial Basic Monthly
Rent and Future Increase Rate and Tenant's irrevocable exercise of its Future Expansion Right, whereupon the Basic Monthly Rent and Future Increase Rate identified by Landlord shall be utilized in the
Expansion Space Lease as the initial Basic Monthly Rent and Future Increase Rate thereunder. If Tenant fails to deliver such acceptance and approval notice within such ten business day period, then
such failure 




4







 


shall
constitute Tenant's irrevocable election to withdraw Tenant's prior exercise of its Future Expansion Right and such Future Expansion Right shall terminate and be of no further force or effect. 




        3.8.  Landlord
reserves the right (unless Tenant exercises Tenant's Future Expansion Right as to the entirety of Building II) to exclude a portion of the first floor
of Building II from the Future Expansion Space to accommodate leasing of space to traditional first floor tenants such as banks, etc. Such excluded space ("Suite A") will not exceed 50% of the first
floor of Building II. Notwithstanding anything to the contrary contained herein, any such excluded space will not be subject to Tenant's Future Expansion Right unless Tenant exercises Tenant's Future
Expansion Right as to the entirety of Building II. However, if Landlord exercises such right to exclude Suite A from Tenant's Future Expansion Right and the original lease for Suite A entered into by
Landlord is subsequently terminated or expires, and such lease is not replaced with a new lease with the same tenant who was then occupying Suite A as of the termination or expiration of such lease,
then Landlord agrees that Tenant shall be entitled to a five business day right of first refusal ("Tenant's Suite A Refusal Right") on any subsequent lease which Landlord is prepared to enter into. In
such instance, prior to entering into such new third party lease, Landlord shall provide Tenant with a written notice ("Landlord's Suite A Notice") setting forth the basic terms of such proposed third
party lease. Tenant shall have five business days from receipt of the Landlord's Suite A Notice to elect whether to exercise Tenant's Suite A Refusal Right—which election must be set forth
in an irrevocable written notice delivered to Landlord within such five business day period. If Tenant timely exercises Tenant's Suite A Refusal Right then Tenant and Landlord shall promptly execute a
lease for Suite A (or an amendment to the Expansion Space Lease) upon the terms, provisions, and conditions set forth in the Landlord's Suite A Notice. If Tenant fails to timely exercise Tenant's
Suite A Refusal Right, as provided above, Landlord shall have the unrestricted right to lease Suite A; provided, however, if a lease for Suite A has not been entered into within 90 days of
Tenant's failure to exercise Tenant's Suite A Refusal Right, or if the Adjusted Rental Rate (as defined below) for such proposed lease is less than 97% of the Adjusted Rental Rate represented by the
Basic Monthly Rent rate identified by Landlord in Landlord's Suite A Notice, then Landlord may not lease such Suite A without again honoring Tenant's Suite A Refusal Right hereunder. 


        3.9.  Notwithstanding
the provisions of Paragraph 3.5, above, if Tenant fails to timely exercise its Future Expansion Right, as provided in Paragraph 3.2,
above, and Landlord has not commenced construction of Building II (as evidenced by pouring of footings or foundations) with the good faith intention of diligently construction Building II to
completion within one year of Tenant's failure to exercise such Future Expansion Right, then Tenant's Future Expansion Right shall be revived as if Landlord had never delivered its
Pre-Construction Notice to Tenant, and Landlord shall be required to deliver a new Pre-Construction Notice to Tenant and recognize Tenant's Future Expansion Right again prior
to proceeding with construction of Building II. Furthermore (and notwithstanding the provisions of Paragraph 3.5, above), if Tenant fails to timely exercise its Future Expansion Right, as
provided in Paragraph 3.2, above, and Landlord subsequently seeks to enter into a lease with another tenant in Building II during the one-year period following the date of Tenant's
failure to exercise Tenant's Future Expansion Right, which lease provides for an Adjusted Rental Rate that is less than 97% of the Adjusted Rental Rate represented by the Basic Monthly Rent rate
identified by Landlord in its notice to Tenant pursuant to Paragraph 3.7.2, above, then before consummating such lease Landlord shall deliver to Tenant a Landlord's Notice (as defined below)
pursuant to the procedure set forth in Paragraph 5.3, below, relative to such proposed lease and Tenant shall have a right of first refusal relative thereto upon the same terms, provisions, and
conditions as Tenant's Additional Building II Expansion Right under such Paragraph 5.3 and Paragraphs 5.4 through 5.7, inclusive, below. For purposes of this Addendum, the term "Adjusted
Rental Rate" shall mean and refer to (i) the applicable 



5







 




per-Rentable-Square-Foot
Basic Monthly Rent payable over the entire initial lease term of the lease in question (if rental increases cannot be exactly established because they
are based upon unknown factors, then Landlord shall reasonably estimate same), (ii) as adjusted to take into account the economic effect over the initial lease term of (a) any free rent
or similar financial inducements and (b) any differences in Landlord's tenant improvement obligations (whether in the form of construction obligations or payment of a tenant improvement
allowance) as amortized over such initial lease term, and (iii) as then divided by the number of months during which Basic Monthly Rent is payable during such initial lease term. 




        4.     Build-Out of Future Expansion Space.    The following terms, provisions, and conditions shall
control the build-out of any Future Expansion Space relative to which an Expansion Space Lease is executed (the "Future Expansion Space Build-Out"). 



        4.1.  The
Future Expansion Space Build-Out will consist of the "turnkey" delivery of the subject Future Expansion Space in a manner which is consistent (in
finishes and specifications) with the building-standard tenant finishes used in "Landlord's Work" for Building I pursuant to the terms of Exhibit "C" of this Lease and which is, additionally,
consistent in design/use as the Premises as initially built-out by Landlord; provided, however, Building II shall contain on one floor, a full service first class cafeteria (which full
service cafeteria shall provide, without limitation, for first class food preparation and storage areas) and an AV room (substantially similar to the AV room in Building I), seven to eight floors of
call center (based upon an 11-story building), and no more than 20% of the Rentable Square Footage built out as executive space; provided, however, Tenant may elect to modify such
breakdown as to the Future Expansion Space provided such modification does not increase Landlord's costs or Tenant pays such increase in the same manner as increased cost associated with Change Orders
are payable under Exhibit "C" to this Lease). 


        4.2.  The
process of the design and construction of the Future Expansion Space Build-Out of the Future Expansion Space shall follow the process described in  Exhibit "C" to the Lease, including with respect
to Tenant Delay. 


        4.3.  Subject
to the provisions of Paragraph 4.1 of Exhibit "C" to the Lease (which will, except as modified
through the process described in Paragraph 3, above, by which Landlord and Tenant agree upon the Expansion Space Lease terms, also apply to the Expansion Space Lease), Landlord shall pay the
cost of the Future Expansion Space Build-Out (including both design and construction costs, as well as all other hard and soft costs). 




        5.     Tenant's Ongoing Expansion Rights in Building II if Future Expansion Right is Exercised.    If Tenant timely
exercises Tenant's Future Expansion Right pursuant to Paragraph 3, above, as to more than 50%, but less than 100%, of Building II, then the Expansion Space Lease shall provide that Tenant shall
have a right of first refusal as to the balance of Building II as to which Tenant did not exercise such Future Expansion Right (excluding Suite A—as to which Tenant's rights are described
in Paragraph 3.8, above), upon the following terms, provisions, and conditions: 



        5.1.  The
right of first refusal to be granted to Tenant pursuant to this Paragraph 5 is referred to herein as the "Building II Expansion Right" and the space in
Building II which is the subject of the Building II Expansion Right is referred to herein as the "Building II Expansion Space." The documentation by which such Building II Expansion Space is leased by
Tenant shall be a new lease reflecting the terms, provisions, and conditions of the relevant Landlord's Notice, which new lease is referred to herein as the "Building II Expansion Space Lease." 


        5.2   If
Tenant wishes to initiate its rights under this Paragraph 5 during the Building II Exercise Period (as defined below), Tenant may request in writing that
Landlord issue a written "Landlord's Notice" identifying any then-available Building II Expansion Space and the terms, provisions, and conditions upon which Landlord is willing to lease
such Building II Expansion 



6







 




Space.
Within ten days of receipt of such a request, Landlord shall provide Tenant with a Landlord's Notice as to all then-available Building II Expansion Space; provided, however, in no
event will Landlord be required to issue more than one Landlord's Notice pursuant to this Paragraph 5.2 in any three month period. 



        5.3   Additionally,
if Landlord is prepared to enter into a lease with a third party for any of the Building II Expansion Space during the Building II Exercise Period,
Landlord shall provide Tenant with a Landlord's Notice as to the portion of the Building II Expansion Space Landlord intends to so lease; which Landlord's Notice shall set forth the basic terms of
such proposed third party lease. In no event
may Tenant exercise its Building II Expansion Right relative to less than all of the Building II Expansion Space which is identified in a Landlord's Notice issued pursuant to this
Paragraph 5.3. 


        5.4   Tenant
shall have five business days from receipt of the Landlord's Notice referenced in Paragraph 5.2, above, or ten calendar days from receipt of the Landlord's
Notice referenced in Paragraph 5.3, above, to elect whether to exercise its Building II Expansion Right relative to the subject Building II Expansion Space—which election must be
set forth in an irrevocable written notice delivered to Landlord within such timeframe—and which written notice must set forth Tenant's election to exercise and identify the subject
Building II Expansion Space as to which Tenant is exercising such Building II Expansion Right (in the case of a Landlord's Notice issued pursuant to Paragraph 5.2, above). If Tenant timely
exercises Tenant's Building II Expansion Right, then Tenant and Landlord shall promptly execute an Building II Expansion Space Lease pursuant to the terms, provisions, and conditions of the relevant
Landlord's Notice. 


        5.5.  Tenant's
right to exercise its Building II Expansion Right shall not arise until one year following the date of Tenant's exercise of the Future Expansion Right and,
except as provided in this Paragraph 5.5, shall only apply during any period of time during which there are at least five years remaining in the Term of this original Lease (which Tenant may
cause to be the case by exercising an Option to Extend, if any such Option to Extend is then exercisable)—i.e. five years from the
Rent Commencement Date under the Building II Expansion Space Lease. Furthermore, the Building II Expansion Right may not be exercised during any period of time that an Event of Default exists under
this Lease or at any time following the occurrence of two or more Events of Default under this Lease. Such period of time during which the Building II Expansion Right is in effect and capable of being
exercised, is referred to herein as the "Building II Exercise Period." 



        5.5.1  Notwithstanding
the foregoing, if Tenant waives its right to have Landlord perform any improvement work in the Building II Expansion Space and without any obligation
on the part of Landlord to pay any tenant improvement allowance, and there is an adjustment to the other monetary provisions of the Building II Expansion Space Lease relating to such Building II
Expansion Space to reflect Tenant's waiver thereof (i.e. if the Landlord's Notice reflects Landlord's obligation to perform improvement work or
to pay a tenant improvement allowance, such items shall be deleted with no adjustment to the Basic Monthly Rent or other economic terms, or if the Landlord's Notice reflects no obligation for Landlord
to perform improvement work or pay a tenant improvement allowance, then the Basic Monthly Rent would be increased to reflect the reduced nature of the Basic Monthly Rent reflected in such Landlord's
Notice by virtue of Landlord's economic savings by not having to pay for such work or provide such allowance) then Tenant may exercise its Building II Expansion Right with no five year minimum term
requirement. 


        5.5.2  Furthermore,
if there are less than five years remaining in the Term (calculated from the Rent Commencement Date under the Building II Expansion Space Lease), but
Tenant has one or more unexercised Options to Extend under this Lease, then Tenant shall 




7







 





have
the following alternative rights (based upon whether Tenant has one or both of its Options to Extend yet to be exercised): 



        5.5.2.1  If
Tenant has two remaining Options to Extend, Tenant may exercise its initial Option to Extend but reduce the five year Extension Term relative to such first Option
to Extend and merely extend the Term through that date which is at least five years after the Rent Commencement Date under the Building II Expansion Space Lease, and in such case, the balance of such
partially utilized five year Extension Term will be added to the potential Extension Term for the second Option to Extend. [By way of example of the operation of this paragraph: if there
would otherwise be three years remaining in the Term from the Rent Commencement Date relative to the Building II Expansion Space at the time the Building II Expansion Right is exercised, Tenant may
still proceed to exercise its Building II Expansion Right—notwithstanding the first sentence of this Paragraph 5.5—by exercising its first Option to Extend, but such
exercise would be for only a two year Extension Term at a minimum. For purposes of this example, in the event such exercise was for only a two-year Extension Term (as opposed to a three,
four or five year Extension Term, which Tenant would have the right to exercise in the alternative), Tenant's second Option to Extend would then be adjusted to provide that the Extension Term relative
to such second Option to Extend would be for eight, rather than five, years.] Tenant must notify Landlord of such election at the time it delivers its written notice to exercise the
Building II Expansion Right. 


        5.5.2.2  If
Tenant has only one remaining Option to Extend, Tenant may exercise its remaining Option to Extend but reduce the five year Extension Term to merely extend the
Term through that date which is at least five years after the Rent Commencement Date under the Building II Expansion Space Lease, and in such case, the balance of such partially utilized five year
Extension Term will be lost and no longer be capable of utilization by Tenant. [By way of example of the operation of this paragraph: if there would otherwise be three years remaining in
the Term from the Rent Commencement Date relative to the Building II Expansion Space at the time the Building II Expansion Right is exercised, Tenant may still proceed to exercise its Building II
Expansion Right—notwithstanding the first sentence of this Paragraph 5.5—by exercising its final Option to Extend, but such exercise would be for only a two year
Extension Term at a minimum. For purposes of this example, in the event such exercise was only for a two year Extension Term (as opposed to a three, four or five year Extension Term, which Tenant
would have the right to exercise in the alternative), Tenant would have no further Option to Extend relative to such unused three year period. Tenant must notify Landlord of such election at the time
it delivers its written notice to exercise the Building II Expansion Right. 





        5.6   If
Tenant fails to timely exercise its Building II Expansion Right, as provided in Paragraph 5.4, above, Landlord shall have the unrestricted right to lease the
Building II Expansion Space which was identified in the subject Landlord's Notice; provided, however, (i) if a lease for Building II Expansion Space identified in a Landlord's Notice issued
pursuant to Paragraph 5.3, above, has not been entered into within 90 days of Tenant's failure to exercise such Building II Expansion Right, then Landlord may not lease such space
without again honoring Tenant's Building II Expansion Rights hereunder, and (ii) if the Adjusted Rental Rate represented by the Basic Monthly Rent rate of the Lease Landlord ultimately seeks to
enter into is less than 97% of the Adjusted Rental Rate reflected in the original Landlord's Notice provided to Tenant pursuant to Paragraph 5.2, above, then Landlord shall deliver to Tenant a
Landlord's Notice pursuant to Paragraph 5.3, above, relative to such proposed lease and honor Tenant's Building II Expansion Rights relative thereto prior to consummating such lease.
Furthermore, if any such Building II 



8







 

Expansion
Space should be so leased by Landlord and then subsequently become available again during the Building II Exercise Period, then such Building II Expansion Space would again be subject to the
provisions of this Paragraph 5. 


        5.7   The
rights granted to Tenant in this Paragraph 5 are personal to the Tenant originally named in this Lease and may not be exercised by any other person or entity
except a Permitted Transferee. 




        6.     Tenant's Ongoing Expansion Rights in Building II if Future Expansion Right is Not Exercised.    Notwithstanding
Tenant's failure to timely exercise Tenant's Future Expansion Right pursuant to Paragraph 3, above, Tenant is hereby granted a right of refusal (subject to the provisions of
Paragraph 6.9, below) as to all available space in Building II, upon the following terms, provisions, and conditions: 



        6.1.  The
right of refusal to be granted to Tenant pursuant to this Paragraph 6 is referred to herein as the "Secondary Expansion Right" and the space in Building II
which is the subject of the Secondary Expansion Right is referred to herein as the "Secondary Expansion Space." The documentation by which such Secondary Expansion Space is leased by Tenant shall be a
new lease reflecting the terms, provisions, and conditions of the relevant Landlord's Secondary Expansion Space Notice, which new lease is referred to herein as the "Secondary Expansion Space Lease." 


        6.2   If
Tenant wishes to initiate its rights under this Paragraph 6 during the Secondary Expansion Space Exercise Period, Tenant may request in writing that Landlord
issue a written "Landlord's Secondary Expansion Space Notice" identifying any then-available Secondary Expansion Space and the terms, provisions, and conditions upon which Landlord is
willing to lease such Secondary Expansion Space. Within ten days of receipt of such a request, Landlord shall provide Tenant with a Landlord's Secondary Expansion Space Notice as to all
then-available (or potentially available, subject to the prior rights of other tenants as provided for in Paragraph 6.9, below) Secondary Expansion Space; provided, however, in no
event will Landlord be required to issue more than one
Landlord's Secondary Expansion Space Notice pursuant to this Paragraph 6.2 in any three month period. 



9









 



































 



        6.3.  In
addition to the procedure for a Landlord's Secondary Expansion Space Notice pursuant to Paragraph 6.2, above, if Landlord is prepared to enter into a lease
with a third party for any of the Secondary Expansion Space during the Secondary Expansion Space Exercise Period, Landlord shall provide Tenant with a Landlord's Secondary Expansion Space Notice as to
the portion of the Secondary Expansion Space Landlord intends to so lease; which Landlord's Secondary Expansion Space Notice shall set forth the basic terms of such proposed third party lease. In no
event may Tenant exercise its Secondary Expansion Right relative to less than all of the Secondary Expansion Space which is identified in a Landlord's Secondary Expansion Space Notice issued pursuant
to this Paragraph 6.3. 


        6.4.  Tenant
shall have five business days from receipt of a Landlord's Secondary Expansion Space Notice to elect whether to exercise its Secondary Expansion Right relative
to the subject Secondary Expansion Space—which election must be set forth in an irrevocable written notice delivered to Landlord within such timeframe—and which written notice
must set forth Tenant's election to exercise and, in the case of a Landlord's Secondary Expansion Space Notice issued pursuant to Paragraph 6.2, above, identify the subject Secondary Expansion
Space as to which Tenant is exercising such Secondary Expansion Right. If Tenant timely exercises Tenant's Secondary Expansion Right, then Tenant and Landlord shall promptly execute a Secondary
Expansion Space Lease pursuant to the terms, provisions, and conditions of the relevant Landlord's Secondary Expansion Space Notice. 


        6.5.  Tenant's
right to exercise its Secondary Expansion Right shall not arise until one year following the date of Tenant's failure to exercise Tenant's Future Expansion
Right and, except as provided in this Paragraph 6.5, shall only apply during any period of time during which there are at least five years remaining in the Term of this original Lease (which
Tenant may cause to be the case by exercising an Option to Extend, if any such Option to Extend is then exercisable)—i.e. five years
from the Rent Commencement Date under the Secondary Expansion Space Lease. Furthermore, the Secondary Expansion Right may not be exercised during any period of time that an Event of Default exists
under this Lease or at any time following the occurrence of two or more Events of Default under this Lease. Such period of time during which the Secondary Expansion Right is in effect and capable of
being exercised, is referred to herein as the "Secondary Expansion Space Exercise Period." 



        6.5.1.  Notwithstanding
the foregoing, if Tenant waives its right to have Landlord perform any improvement work in the Secondary Expansion Space and without any obligation on
the part of Landlord to pay any tenant improvement allowance, and there is an adjustment to the other monetary provisions of the Secondary Expansion Space Lease relating to such Secondary Expansion
Space to reflect Tenant's waiver thereof (i.e. if the Landlord's Secondary Expansion Space Notice reflects Landlord's obligation to perform
improvement work or to pay a tenant improvement allowance, such items shall be deleted with no adjustment to the Basic Monthly Rent or other economic terms, or if the Landlord's Secondary Expansion
Space Notice reflects no obligation for Landlord to perform improvement work or pay a tenant improvement allowance, then the Basic Monthly Rent would be increased to reflect the reduced nature of the
Basic Monthly Rent reflected in such Landlord's Secondary Expansion Space Notice by virtue of Landlord's economic savings by not having to pay for such work or provide such allowance) then Tenant may
exercise its Secondary Expansion Right with no five year minimum term requirement. 


        6.5.2.  In
addition to the foregoing exception under Paragraph 6.5.1, if there are less than five years remaining in the Term (calculated from the Rent Commencement
Date under the Secondary Expansion Space Lease), but Tenant has one or more unexercised Options to 




10







 





Extend
under this Lease, then Tenant shall have the following alternative rights (based upon whether Tenant has one or both of its Options to Extend yet to be exercised): 



        6.5.2.1.  If
Tenant has two remaining Options to Extend, Tenant may exercise its initial Option to Extend but reduce the five year Extension Term relative to such first
Option to Extend and merely extend the Term through that date which is at least five years after the Rent Commencement Date under the Secondary Expansion Space Lease, and in such case, the balance of
such partially utilized five year Extension Term will be added to the potential Extension Term for the second Option to Extend. [By way of example of the operation of this paragraph: if
there would otherwise be three years remaining in the Term from the Rent Commencement Date relative to the Secondary Expansion Space at the time the Secondary Expansion Right is exercised, Tenant may
still proceed to exercise its Secondary Expansion Right—notwithstanding the first sentence of this Paragraph 6.5—by exercising its first Option to Extend, but such
exercise would be for only a two year Extension Term at a minimum. For purposes of this example, in the event such exercise was for only a two-year Extension Term (as opposed to a three,
four or five year Extension Term, which Tenant would have the right to exercise in the alternative), Tenant's second Option to Extend would then be adjusted to provide that the Extension Term relative
to such second Option to Extend would be for eight, rather than five, years.] Tenant must notify Landlord of such election at the time it delivers its written notice to exercise the
Secondary Expansion Right. 


        6.5.2.2.  If
Tenant has only one remaining Option to Extend, Tenant may exercise its remaining Option to Extend but reduce the five year Extension Term to merely extend the
Term through that date which is at least five years after the Rent Commencement Date under the Secondary Expansion Space Lease, and in such case, the balance of such partially utilized five year
Extension Term will be lost and no
longer be capable of utilization by Tenant. [By way of example of the operation of this paragraph: if there would otherwise be three years remaining in the Term from the Rent Commencement
Date relative to the Secondary Expansion Space at the time the Secondary Expansion Right is exercised, Tenant may still proceed to exercise its Secondary Expansion Right—notwithstanding
the first sentence of this Paragraph 6.5—by exercising its final Option to Extend, but such exercise would be for only a two year Extension Term at a minimum. For purposes of this
example, in the event such exercise was only for a two year Extension Term (as opposed to a three, four or five year Extension Term, which Tenant would have the right to exercise in the alternative),
Tenant would have no further Option to Extend relative to such unused three year period. Tenant must notify Landlord of such election at the time it delivers its written notice to exercise the
Secondary Expansion Right. 





        6.6.  In
addition to the foregoing, Landlord reserves the right at any time during the Secondary Expansion Space Exercise Period to provide a written notice to Tenant
indicating the terms, provisions, and conditions upon which Landlord is willing to lease any then-available Secondary Expansion Space (an "Initiating Notice"). Tenant shall have five
business days from receipt of such Initiating Notice from Landlord, to elect whether to exercise its Secondary Expansion Right relative to all or any individual suite included in such Initiating
Notice from Landlord—which election must be set forth in an irrevocable written notice delivered to Landlord within such timeframe—and which written notice must set forth
Tenant's election to exercise and identify the subject Secondary Expansion Space as to which Tenant is exercising its Secondary Expansion Right pursuant to this Paragraph. If Tenant timely exercises
Tenant's Secondary Expansion Right pursuant to this Paragraph 6.6, then Tenant and Landlord shall promptly execute an Secondary Expansion Space Lease pursuant to the relevant terms, provisions,
and conditions of 



11







 

the
Landlord's Initiating Notice and the provisions of this Paragraph 6. If Tenant does not timely exercise its Secondary Expansion Right pursuant to this Paragraph 6.6, then
notwithstanding anything to the contrary contained herein, the Secondary Expansion Space Exercise Period shall be tolled for a period of six months following Tenant's failure to exercise its Secondary
Expansion Right following receipt of Landlord's Initiating Notice and shall not be applicable or exercisable during such six-month tolling period; except that if during such
six-month tolling period Landlord intends to enter into a lease providing an Adjusted Rental Rate that is less than 97% of the Adjusted Rental Rate reflected in the subject Initiating
Notice provided to Tenant, then such Secondary Expansion Right shall apply to such proposed lease (notwithstanding such tolling provision) and Landlord shall deliver to Tenant a Landlord's Secondary
Expansion Space Notice pursuant to Paragraph 6.3, above, relative to such proposed lease and honor Tenant's Secondary Expansion Rights relative thereto prior to consummating such lease. 


        6.7.  If
Tenant fails to timely exercise its Secondary Expansion Right, as provided in Paragraph 6.4, above, Landlord shall have the unrestricted right to lease the
Secondary Expansion Space which was identified in the subject Landlord's Secondary Expansion Space Notice; provided, however, (i) if a lease for Secondary Expansion Space identified in a
Landlord's Secondary Expansion Space Notice issued pursuant to Paragraph 6.3, above, has not been entered into within 90 days of Tenant's failure to exercise such Secondary Expansion
Right, then Landlord may not lease such space without again honoring Tenant's Secondary Expansion Rights hereunder, and (ii) if the Adjusted Rental Rate represented by the Basic Monthly Rent
rate of the lease Landlord ultimately seeks to enter into is less than 97% of the
Adjusted Rental Rate reflected in the original Landlord's Secondary Expansion Space Notice provided to Tenant pursuant to Paragraph 6.2, above, then Landlord shall deliver to Tenant a
Landlord's Secondary Expansion Space Notice pursuant to Paragraph 6.3, above, relative to such proposed lease and honor Tenant's Secondary Expansion Rights relative thereto prior to
consummating such lease. Furthermore, if any such Secondary Expansion Space should be so leased by Landlord and then subsequently become available again during the Secondary Exercise Period, then such
Secondary Expansion Space would again be subject to the provisions of this Paragraph 6. 



        6.8.  The
rights granted to Tenant in this Paragraph 5 are personal to the Tenant originally named in this Lease and may not be exercised by any other person or entity
except a Permitted Transferee. 


        6.9.  Tenant
acknowledges that if Tenant does not timely exercise its Future Expansion Right, that Landlord hereby reserves the right to grant rights of refusal/expansion
rights as to Building II to (i) the tenants who lease space in Building II prior to Tenant, and (ii) tenants who lease premises in Building II having more Rentable Square Footage than
the space leased by Tenant in Building II as of the date such other tenant enters into its lease (collectively, tenants meeting the criteria in either clause (i) or clause (ii) hereof
are referred to as "Senior Tenants"), and that such rights of refusal/expansion rights which Landlord grants to the Senior Tenants will be senior in priority to the Secondary Expansion Right granted
to Tenant under this Paragraph 6 (but not senior to Tenant's Future Expansion Right or Building II Expansion Right), notwithstanding the fact that Tenant's rights under this Paragraph 6
were granted previously; and Tenant's Secondary Expansion Right shall be automatically subordinated to any such rights granted to the Senior Tenants (such senior rights are referred to herein as the
"Senior Rights"). Accordingly, notwithstanding anything to the contrary contained herein: (i) in the case of Tenant's attempted exercise of Tenant's Secondary Expansion Right, such exercise
shall be subject to the prior rights of any Senior Tenant having a Senior Right affecting the subject Secondary Expansion Space, and Tenant recognizes that Landlord may be obligated to grant such
Senior Tenant(s) a right of refusal or similar expansion right pursuant to such Senior Tenant(s)'s Senior Right that would invalidate Tenant's purported exercise of its Secondary Expansion Right; and
(ii) Landlord shall have no 



12







 




obligation
to provide Tenant with any prior notice, or to provide Tenant its Secondary Expansion Right, in connection with any exercise by a Senior Tenant having a Senior Right of such Senior Tenant's
Senior Right. 




        7.     Building Exterior Lights.    Landlord agrees that so long as Tenant is actively occupying at least 50% of the
Premises, Landlord shall cause the exterior neon lighting on the fascia of the Building (which lighting is currently green) to be "Bridgepoint blue" (also known as Pantone 2945U). 


        8.     Refurbishment. 



        8.1.  In
the sixth Lease Year Landlord, at its sole cost and expense, shall, upon written request from Tenant, provide new paint and Building-standard carpet in all portions
of the original Premises being actively occupied by Tenant where such new paint and carpet is reasonably required; which paint and carpet will be consistent with the Building-standard paint and carpet
described in Exhibit "C" of this Lease, unless otherwise agreed to by Landlord and Tenant. Tenant, at its sole cost and expense, shall be responsible for removing all of Tenant's property as is
reasonably necessary to allow for such painting and re-carpeting. Alternatively, Landlord may provide Tenant with an allowance to cover the cost of such painting and carpeting and allow
Tenant to perform such work; in which event, such allowance and the subject work will be in addition to the refurbishment allowance provisions of Paragraph 8.2, below and shall be deemed to
constitute a part of such refurbishment allowance. 


        8.2.  In
addition to the new carpet and paint referenced in Paragraph 8.1, above, in the sixth Lease Year Landlord shall provide Tenant with a refurbishment allowance
of up to $[***] per Rentable Square Foot of space in the original Premises to pay for improvements to or refurbishment of the Premises. The refurbishment allowance shall be
payable upon completion of the Alterations undertaken by Tenant during such Lease Year and within ten business days of presentation to Landlord of (a) evidence reasonably satisfactory to
Landlord that such monies have been expended by Tenant (or that Tenant has invoices therefor reasonably acceptable to Landlord) for a purpose relative to which Tenant may claim its refurbishment
allowance (as provided below), and (b) final lien releases (or final lien releases conditional upon payment where such payment amount is equal to or less than the refurbishment allowance amount
being requested by Tenant from Landlord) as to such Alterations. The foregoing refurbishment allowance may be used solely for refurbishment of the Premises; however, subject to the provisions of
Paragraph 23 of the Lease and Landlord's approval rights contained therein, the nature of the refurbishment so undertaken shall be at Tenant's sole discretion
(i.e. although Landlord shall maintain its approval rights under such Paragraph 23, Tenant shall have the sole discretion to decide what
type of refurbishment—drapes, cubicles, etc.—Tenant wishes to undertake). 



        8.3.  The
refurbishment allowance provisions of Paragraph 8.2, above, shall also apply to any Expansion Space during the sixth Lease Year following the execution of
the applicable Expansion Space Amendment. 




        9.     Expanded Parking Rights. 



        9.1.  Additional Parking.    In addition to the 4.5:1,000 USF parking ratio provided for under the Lease, Landlord
hereby agrees to provide Tenant with additional parking to increase such parking ratio to 6.0:1,000 USF (i.e. an additional 1.5:1,000 USF) (the
"Additional Parking") to Tenant, free of any charges or fees (other than the increased Basic Monthly Rent provided for below per the terms of Paragraph 9.2.3), during the initial Term of the
Lease; provided, however, Landlord shall not be obligated to provide such Additional Parking as to the portion of the Premises represented by Phase II until Phase II has been
Substantially Completed and Tenant has commenced occupancy thereof; provided, further, however, the Phase II Delivery Date shall not be deemed to have occurred until a parking ratio of
6.0:1,000 USF has been provided for the entire 




[***]
Confidential portions of this document have been redacted and filed separately with the Commission. 


13







 

Premises
(i.e., both Phase I and Phase II), unless Tenant has exercised its rights under Section 4.1.3.5 of the Lease. Such Additional Parking shall be located within the
boundaries of Parcels 1 through 7 as depicted on Parcel Map No. 18972 filed in the Office of the County Recorder of San Diego County on May 24, 2002 as File
Number 2002-0444396 ("Parking Parcels") and may be provided through either (or a combination of either) permanent structure parking constructed in accordance with the City of San
Diego's requirements with respect to permanent structure parking and generally consistent with the existing Structure Parking located adjacent to the Building ("Structure Parking") or paved surface
parking constructed in accordance with the City of San Diego's requirements regarding paved surface parking ("Surface Parking"). In no event shall the Additional Parking be provided through adding
parking efficiencies such as valet parking or tandem parking unless Tenant consents in writing thereto, which consent may be withheld in Tenant's sole and absolute discretion. In the event Landlord
initially constructs the Additional Parking in the form of Surface Parking, Landlord may replace such Surface Parking with other Surface Parking and/or Structure Parking, subject to the terms of this
Paragraph 9. 



        9.2.  Allocation of Cost of Additional Parking. 



        9.2.1.  Landlord
shall be responsible for bearing the cost of constructing the Additional Parking; provided, however, Landlord's Cost (as defined below), shall be used as the
basis for calculating the Parking Increase (as defined in 9.2.3, below). In order to calculate the Parking Increase associated with the construction of the Additional Parking, prior to commencing
construction of the Additional Parking (or any replacement of such Additional Parking), Landlord, in good faith, shall estimate the projected Landlord's Cost and provide Tenant on an "open book"
basis, with all information Tenant may reasonably require to identify and evaluate the individual cost components comprising Landlord's Cost, and confirm that the proposed Additional Parking complies
with the terms of this Paragraph 9. Such information shall include, without limitation, design, architectural and construction plans and specifications, a construction budget detailing
Landlord's good faith estimate of the Landlord's Cost, a construction schedule, any permits required in connection with the construction of the Additional Parking, any general contractor's and all
major subcontractor's contracts, and any appraisals of the Additional Parking in Landlord's possession or reasonably obtainable by Landlord (collectively, "Landlord's Cost Materials"). Landlord shall
cause the Additional Parking to be constructed substantially in accordance with the Landlord's Cost Materials. 


        9.2.2.  The
term "Landlord's Cost" shall include only the prorata portion of the following costs to Landlord to construct the parking facilities in which the Additional
Parking will be located as are necessary to increase Tenant's parking ratio to 6.0:1,000 USF: (i) soft costs, including without limitation,
design costs (which soft costs shall included only those soft costs that are customary in the construction industry for the construction of parking in the San Diego market and incurred pursuant to
contracts entered into on commercially reasonable terms as though competitively bid to a third party in an arm's length transaction), (ii) construction costs (provided, that the contract with
the general contractor shall be on commercially reasonable terms as though competitively bid to a third party in an arm's length transaction and the contracts with each of the major subcontracts have
been competitively bid in an arm's length transaction with at least 3 qualified, licensed subcontractors, and any such contracts shall include only those hard and soft costs that are customary in the
construction industry for the construction of parking in the San Diego market), and (iii) financing costs (which financing costs shall be pursuant to the terms of a commercially reasonable
construction loan on competitive terms). 


        9.2.3.  On
the basis of such information, Landlord shall calculate the increase in the Basic Monthly Rent associated with the construction of the Additional Parking pursuant
to the following procedure, with the result constituting the amount by which the Basic Monthly Rent will be increased ("Parking Increase"): (i) the sum of Landlord's Costs shall be reduced by 




14







 





40%
to reflect the residual value of the Additional Parking as of the end of the amortization period provided below, and (ii) the amount remaining following the calculation described in the
foregoing clause (i) shall be amortized, along with interest, at 10% per annum, on a straight-line basis, over the remainder of the Term (ignoring any unexercised Options to Extend
unless such Options to Extend are then exercised by Tenant); provided, however, if less than eight years one month remain in the Term, then such amortization shall occur over a eight year
one-month period, and the annual result of such amortization calculation will constitute the amount by which the Basic Monthly Rent will be increased during the portion of such eight year
one-month period that the this Lease remains in effect (including as the Term may be extended pursuant to Tenant's exercise of an Option to Extend). The Parking Increase (a) shall
be effective upon the date the Additional Parking is completed in accordance with the Landlord's Cost Materials and tendered to Tenant such that Tenant may lawfully use such Additional Parking for its
intended purpose, (b) shall not extend beyond the amortization term provided in this Paragraph 9.2.3, and (c) subject to Paragraph 9.3, below, shall not be subject to
increase or decrease due to the actual amount of Landlord's Cost being higher or lower than calculated pursuant to the terms of this Paragraph 9.2.3. After the expiration of the amortization
term provided for in this Paragraph 9.2.3, the determination of whether Tenant is to be charged for such parking spaces during any Extension Term and the amount thereof in the event Tenant is
to be charged, shall be determined as part of the calculation of the Then-Prevailing Rate under Paragraph 3.2.4 of the Lease (taking into account that there shall be no additional
charge to Tenant for such parking spaces during the period that the amortization period extends beyond the Extension Term pursuant to the terms of this Paragraph 9.2.3). 





        Notwithstanding
the provisions of this Paragraph 9.2.3, if Landlord constructs Additional Parking, and then subsequently constructs replacement Additional Parking per its right
under Paragraph 9.2.1, above, then the costs incurred for the replaced Additional Parking, to the extent passed through to Tenant as a Parking Increase, shall be deducted from the costs of the
replacement Additional Parking in calculating the Parking Increase associated with such replacement Additional Parking. 



        9.3.  Additional Parking Arbitration.    Tenant shall have 20 business days from the date by which Landlord has
provided Tenant with a good faith estimate of the projected Landlord's Cost and all of the information reasonably required to identify and evaluate Landlord's Cost in which to (a) accept the
Landlord's determination of Landlord's Cost, or (b) dispute Landlord's determination of Landlord's Cost. If Tenant fails to notify Landlord, in writing, of its disagreement with Landlord's
determination of Landlord's Cost within such 20-business day period, then Tenant will be deemed to have accepted Landlord's determination and Landlord's determination shall be binding on
both parties. If Tenant disputes such determination, then its notice to Landlord disputing such determination must set forth Tenant's determination of Landlord's Cost, along with any supporting
materials Tenant desires to provide. Upon receipt of Tenant's notice, Landlord and Tenant shall promptly meet and, in good faith, attempt to agree upon Landlord's Cost. If Landlord and Tenant are
unable to reach agreement upon Landlord's Cost within 15 days of the date of Landlord's receipt of Tenant's notice, then the parties shall promptly submit such dispute to the San Diego office
of the American Arbitration Association (the "AAA"), or its successor, for resolution before a single arbitrator (who must have at least ten years experience in the San Diego County commercial real
estate market as a real estate broker or MAI appraiser appointed pursuant to the AAA procedures) in accordance with Commercial Arbitration Rules of the AAA. The arbitrator's sole authority will be to
select between the Landlord's and the Tenant's respective written determinations of Landlord's Cost, as set forth by Landlord pursuant to the "open book" process under Paragraph 9.2.1, above,
and as set forth by Tenant in Tenant's notice provided under this Paragraph 9.3. The Phase II Termination Date shall be tolled by a period of time equal to the time between the date the
dispute is submitted to the arbitrator and the date on which the 



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arbitrator
makes its binding determination of the amount of Landlord's Cost. In no event may such arbitrator select any other amount as the Landlord's Cost. The decision of the arbitrator shall be
binding upon all parties and the cost of the arbitration shall be split equally between Landlord and Tenant. Landlord and Tenant agree that in no event shall Landlord's Cost include any of the
following costs and amounts: (a) land acquisition cost, (b) fines, late charges, delinquency payments, liquidated damages, penalties or interest charges related to such fines, late
charges, delinquency payments, liquidated damages and penalties, (c) cost overruns or costs incurred due to breach of law or ordinance, (d) hard and soft costs that are not customary in
the construction industry in connection with the construction of parking in the San Diego market, (e) any amount paid to Landlord or Landlord's affiliates for services, supplies or materials to
the extent such amount exceeds the amount that would have been paid had the services, supplies or materials been provided by a comparable qualified third party provider on a competitive arm's-length
basis, (f) costs incurred in connection with change orders, and (g) any profit, compensation, interest component, fee or payment to Landlord, including, without limitation, any return
for general overhead or any construction management fee payable to Landlord in connection with the construction of the Additional Parking. 




        10.   Early Entry.    Tenant shall have the right to occupy and use the Premises during the period from the Lease
Commencement Date through the Rent Commencement Date without any obligation to pay Basic Monthly Rent or Tenant's Share of Operating Expenses (other than Tenant's Share of Common Area utilities used
during such period which shall be payable by Tenant to Landlord within 30 days of written demand). 



        11.   Roof-top Devices.    Tenant shall, at Tenant's sole cost and expense but without payment of any
Additional Rent, and as part of the Tenant's Work or a subsequent Alteration, have the right to install up to five satellite dishes (or similar devices) and associated equipment (collectively
"Equipment") on the roof of the Building upon the terms, provisions, and conditions of this Paragraph 11. 



        11.1.  Any
installation of Equipment shall be in a location or locations on the roof of the Building approved by Landlord; such approval shall not be unreasonably withheld,
conditioned, or delayed provided Tenant has submitted to Landlord reasonably detailed elevations and specifications for the Equipment and its proposed installation, and further provided Tenant has
obtained all necessary governmental approvals. Such installation work must be carried out by Landlord's roof subcontractor or another trained, licensed contractor approved by Landlord, and must be
performed in a manner which does not negate or otherwise adversely affect Landlord's roof warranty. Landlord shall have the right to approve the means by which such equipment will be installed prior
to Tenant commencing such installation and such installation work (and subsequent maintenance work) will be subject to the provisions of  Exhibit "C" to the Lease. As a condition to approving such
installation, Landlord may require Tenant to agree to install a screening device
reasonably satisfactory to Landlord to prevent such equipment from being visible from elsewhere within and about the Project. Tenant's installed Equipment shall comply with all rules, including all
non-interference rules, of the Federal Communications Commission and any California-equivalent agency. 


        11.2.  Tenant
shall be solely responsible, at its expense, for the maintenance of the Equipment, and is hereby granted access to the roof to carry out its obligations
hereunder. Such maintenance shall include, but not be limited to, periodic painting of any exterior equipment and removal of any graffiti or non-approved markings. Further, Tenant shall
move any such Equipment to an alternate location on the roof at the request of Landlord, within ten business days of such request, if reasonably necessary for the purpose of building maintenance, roof
repair or replacement. In addition, Tenant shall maintain all roof and wall penetrations and impacts on other portions of the Project arising from or relating to Tenant's Equipment or its use
hereunder in a first class condition and in a manner which will not invalidate any roof warranty. Tenant shall not install any 



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additional
equipment or add any equipment to the roof without Landlord's prior approval. Should any damage to the Building or the Project result from Tenant's (or its employees, agents, contractors or
subcontractors) use thereof or exercise of its rights hereunder, Tenant shall immediately upon notice make any repairs to the Premises or the Property required to correct such damage. Notwithstanding
the foregoing, Landlord may elect to make any such repairs itself (or cause such repairs to be undertaken), whereupon the cost of such repairs, plus a supervisory fee of a five percent of the cost
thereof, shall be immediately due and payable from Tenant to Landlord within ten business days of receipt of written demand accompanied by evidence of Landlord's expenditures. 


        11.3.  Any
roof leaks or other damage resulting from the installation, maintenance, use, removal, or existence of any such Equipment on the roof by Tenant or Tenant's agents,
employees, or contractors (as opposed to Landlord or Landlord's agents, employees or contractors) will be Tenant's sole responsibility and Tenant shall indemnify, defend, and hold Landlord and the
Project harmless from
any such damage or claims relating thereto. Unless otherwise elected by Landlord, upon the Expiration Date, Tenant shall cause all such Equipment and related improvements to be removed by a qualified
contractor reasonably approved by Landlord and all damage caused by such removal shall be promptly repaired. 


        11.4.  Upon
Landlord's approval, the installation of the Equipment shall be undertaken in a good and workmanlike manner and in conformance with all applicable laws. All
Equipment shall remain the personal property of Tenant. Landlord reserves the right to impose reasonable rules and regulations relative to the installation, operation, maintenance, and replacement of
the Equipment and any material failure by Tenant to adhere to (and cause its employees, agents, contractors, vendors, and subcontractors to adhere to) such rules and regulations, if not corrected
within 48 hours of written or telephonic notice of such violation, shall constitute a default under this Lease and in addition to Landlord's other rights under this Lease, Landlord may take
immediate steps, following Tenant's failure to correct same, to correct such failure; whereupon the actual third party costs incurred by Landlord in connection therewith, along with a supervisory fee
equal to five percent of such cost, shall be due and payable by Tenant to Landlord, as Additional Rent, within ten business days of written demand accompanied by evidence of Landlord's expenditures.
Furthermore, if such default is not cured within such 48 hour period and thereafter continues uncured for a period of three business days following delivery to Tenant of an additional written
notice from Landlord, then such failure will constitute an Event of Default under the Lease which will not require any further notice or cure period; provided, however, if the nature of such default
is such that more than three business days are reasonably required for its cure, then an Event of Default shall not exist under the Lease if Tenant commences to cure such default within such three
business day period and thereafter diligently prosecutes such cure to completion within 60 days after Landlord's written notice. 




        12.   Potential Addition of Ninth Floor to Premises.    Landlord acknowledges that Tenant is interested in also
leasing the 9th floor of the Building (the "9th Floor") as part of Phase II of the Premises; however, Tenant acknowledges that the
9th Floor is currently leased to another tenant (the "Existing Tenant"). Notwithstanding the fact that the 9th Floor is currently leased to Existing Tenant,
Landlord hereby agrees to approach Existing Tenant relative to the possibility of canceling Existing Tenant's current lease. While Landlord has agreed to approach Existing Tenant relative to such a
cancellation, Landlord shall not be required to pay any costs, incur any additional expenses, grant any additional financial accommodations, or accept any penalty in connection with any such
termination. If 


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Landlord
is successful in negotiating the terms of an agreement with Existing Tenant which makes the 9th Floor available prior to the Lease Commencement Date, then the following
provisions shall apply: 



        12.1.  Landlord
and Tenant shall execute an Amendment to the Lease adding the 9th Floor to the Premises and adjusting all portions of the Lease which are
affected by the size of the Premises (Rent, Security Deposit, Tenant's Share, etc.). 


        12.2.  The
9th Floor will be treated, for all purposes, as part of Phase II of the Premises and will be built-out as a call center,
comparable to the call centers built-out in Phase I, as provided for in Exhibit "C" of the Lease. 




        13.   Conflicts.    To the extent of any conflict between the provisions of this Addendum and the provisions of the
Lease, the provisions of this Addendum shall control. 



					
	 LANDLORD:
	 	Sunroad Centrum Office I, L.P.,

a California limited partnership
	     
	 	 	 	 
	 
	 	By:	 	Sunroad Asset Management, Inc.,

a California corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Richard Vann






  Richard Vann
	 
	 	Its:	 	Executive Vice President
	     
	 	 	 	 
	     
	 	 	 	 
	     
	 	 	 	 
	 TENANT:
	 	Bridgepoint Education, Inc.,

a Delaware corporation
	     
	 	 	 	 
	 
	 	By:	 	/s/ Andrew Clark






  Andrew Clark
	 
	 	Its:	 	Chief Executive Officer
	     
	 	 	 	 
	 
	 	By:	 	/s/ Daniel J. Devine






  Daniel J. Devine
	 
	 	Its:	 	Chief Financial Officer





18











QuickLinks



Exhibit 10.17


STANDARD FORM MODIFIED GROSS OFFICE LEASE


EXHIBIT "A"

LEGAL DESCRIPTION OF PROJECT

EXHIBIT "B"

DEPICTION OF BUILDING FLOOR SHELLS COMPRISING PREMISES

EXHIBIT "C"

WORK LETTER


Description of Landlord's Building-Standard Materials and Finishes Part One

Description of Landlord's Building-Standard Materials and Finishes Part Two

EXHIBIT "D"

TENANT'S PRE-APPROVED SIGNAGE

[BRIDGEPOINT LOGO]

EXHIBIT "E"

FORM OF SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT

SUBORDINATION NONDISTURBANCE AND ATTORNMENT AGREEMENT

EXHIBIT "A" LEGAL DESCRIPTION OF THE LAND

ACKNOWLEDGMENT

ACKNOWLEDGMENT

ACKNOWLEDGMENT

ACKNOWLEDGMENT

EXHIBIT "F"

SIGN CRITERIA


ADDENDUM TO STANDARD FORM MODIFIED GROSS OFFICE LEASE