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  Exhibit 10.15    
    


 
 

  OFFICE LEASE
  
    KILROY REALTY
  
    KILROY SABRE SPRINGS    
    


 
 

  KILROY REALTY, L.P.,
  
    a Delaware limited partnership,
  
    as Landlord,
  
    and
  
    BRIDGEPOINT EDUCATION, INC.,

  
    a Delaware corporation,
  
    as Tenant.    








 
 
 

TABLE OF CONTENTS    
    



			
	 
	 	Page 
	 ARTICLE 1      PREMISES, BUILDING, PROJECT, AND COMMON AREAS
	 	

6
	 ARTICLE 2      LEASE TERM; OPTION TERM(S)
	 	

12
	 ARTICLE 3      BASE RENT
	 	

15
	 ARTICLE 4      ADDITIONAL RENT
	 	

16
	 ARTICLE 5      USE OF PREMISES
	 	

27
	 ARTICLE 6      SERVICES AND UTILITIES
	 	

28
	 ARTICLE 7      REPAIRS
	 	

30
	 ARTICLE 8      ADDITIONS AND ALTERATIONS
	 	

31
	 ARTICLE 9      COVENANT AGAINST LIENS
	 	

33
	 ARTICLE 10    INSURANCE
	 	

34
	 ARTICLE 11    DAMAGE AND DESTRUCTION
	 	

37
	 ARTICLE 12    NONWAIVER
	 	

39
	 ARTICLE 13    CONDEMNATION
	 	

40
	 ARTICLE 14    ASSIGNMENT AND SUBLETTING
	 	

40
	 ARTICLE 15    SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
	 	

44
	 ARTICLE 16    HOLDING OVER
	 	

45
	 ARTICLE 17    ESTOPPEL CERTIFICATES
	 	

45
	 ARTICLE 18    SUBORDINATION
	 	

45
	 ARTICLE 19    DEFAULTS; REMEDIES
	 	

46
	 ARTICLE 20    COVENANT OF QUIET ENJOYMENT
	 	

49
	 ARTICLE 21    LETTER OF CREDIT
	 	

49
	 ARTICLE 22    COMMUNICATION EQUIPMENT
	 	

51
	 ARTICLE 23    SIGNS
	 	

53
	 ARTICLE 24    COMPLIANCE WITH LAW
	 	

54
	 ARTICLE 25    LATE CHARGES
	 	

55
	 ARTICLE 26    LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
	 	

55
	 ARTICLE 27    ENTRY BY LANDLORD
	 	

56
	 ARTICLE 28    TENANT PARKING
	 	

57
	 ARTICLE 29    MISCELLANEOUS PROVISIONS
	 	

58






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


ii








 
 
 

INDEX    
    





			
	 
	 	Page(s) 
	 Accountant
	 	32
	 Additional Rent
	 	20
	 Advocate Arbitrators
	 	16
	 Alterations
	 	37
	 Applicable Laws
	 	65
	 Arbitration Agreement
	 	17
	 [***]
	 	18
	 Bank Prime Loan
	 	66
	 Base Building
	 	37
	 Base Rent
	 	18
	 Base Year
	 	20
	 BOMA
	 	9
	 Briefs
	 	17
	 Brokers
	 	74
	 BS/BS Exception
	 	36
	 Building Hours
	 	33
	 Building Structure
	 	36
	 Building Systems
	 	36
	 Cap
	 	25
	 CC&Rs
	 	33
	 Common Areas
	 	9
	 Communication Equipment
	 	60
	 Comparable Area
	 	2
	 Control,
	 	52
	 Controllable Expenses
	 	25
	 Cosmetic Alterations
	 	37
	 Cost Pools
	 	28
	 Damage Termination Date
	 	46
	 Damage Termination Notice
	 	46
	 Direct Competitor
	 	65
	 Direct Expenses
	 	20
	 Environmental Laws
	 	76
	 Estimate
	 	29
	 Estimate Statement
	 	29
	 Estimated Excess
	 	29
	 Excess
	 	28
	 Exercise Notice
	 	15
	 Expense Year
	 	20
	 First Offer Suspension Period
	 	13
	 [***]
	 	17
	 First Refusal Commencement Date
	 	13
	 First Refusal Exercise Notice
	 	10
	 First Refusal Notice
	 	10
	 Force Majeure
	 	72
	 Hazardous Material(s)
	 	76
	 Holidays
	 	33
	 HVAC
	 	33
	 Interest Rate
	 	66






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


iii







 




			
	 
	 	Page(s) 
	 Landlord
	 	1
	 Landlord Parties
	 	40
	 Landlord Repair Notice
	 	44
	 Landlord Response Date
	 	15
	 Landlord Response Notice
	 	15
	 [***]
	 	17
	 Landlord's Option Rent Calculation
	 	15
	 [***]
	 	18
	 Lease
	 	1
	 Lease Commencement Date
	 	13
	 Lease Expiration Date
	 	13
	 Lease Term
	 	13
	 Lease Year
	 	13
	 Lines
	 	75
	 Mail
	 	72
	 Memorandum
	 	70
	 Neutral Arbitrator
	 	16
	 New Services. 
	 	24
	 Nondisturbance Agreement
	 	54
	 Non-Economic Terms
	 	11
	 Notices
	 	72
	 Objectionable Name
	 	64
	 Operating Expenses
	 	20
	 Option Rent
	 	14
	 Option Term
	 	14
	 Original Improvements
	 	43
	 Other Improvements
	 	78
	 Permitted Transferee. 
	 	52
	 Premises
	 	8
	 Proposition 13
	 	25
	 Reminder Notice
	 	15
	 Renovations
	 	75
	 Rent. 
	 	20
	 Reserved Pasess
	 	68
	 Re-Submittal Date
	 	16
	 Review Period
	 	31
	 Right Holders
	 	14
	 [***]
	 	17
	 Sign Specifications
	 	63
	 Statement
	 	28
	 Subject Space
	 	48
	 Summary
	 	1
	 Superior Right Holders
	 	10
	 Tax Expenses
	 	25
	 Tenant
	 	1
	 Tenant Election Notice
	 	16
	 Tenant Parties
	 	41
	 [***]
	 	17
	 Tenant's Option Rent Calculation
	 	15
	 [***]
	 	17






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


iv







 




			
	 
	 	Page(s) 
	 Tenant's Share
	 	27
	 Tenant's Signage
	 	63
	 Transfer
	 	51
	 Transfer Notice
	 	48
	 Transfer Premium
	 	50
	 Transferee
	 	48
	 Transfers
	 	48
	 Utilities Costs
	 	27
	 Work Letter Agreement
	 	8





v












































 



 
 

KILROY SABRE SPRINGS
  
    OFFICE LEASE    
    


        This Office Lease (the "Lease"), dated as of the date set forth in  Section 1 of the
Summary of Basic Lease Information (the "Summary"), below, is made by and
between KILROY REALTY, L.P., a Delaware limited partnership ("Landlord"), and BRIDGEPOINT EDUCATION, INC., a Delaware corporation
("Tenant"). 


 
 

SUMMARY OF BASIC LEASE INFORMATION    
    



					
	TERMS OF LEASE



 
	 	DESCRIPTION 
	1.	 	Date:	 	January 31, 2008.
	
2.	
 	
Premises:	
 	

 
	

 	
 	
2.1    Building:	
 	
That certain six (6)-story office building (the "Building") located at 13480 Evening Creek Drive North, San Diego, California 92128-8104.
	

 	
 	
2.2    Premises:	
 	
All of the approximately 147,533 rentable square feet of space located in the Building, as further identified in Exhibit A to the Office Lease. On a
floor-by-floor basis, the anticipated rentable square footage of each portion of the Premises is anticipated to be as follows:
	

 	
 	
 	
 	
Floor 6: Approximately 24,496 RSF

Floor 5: Approximately 25,396 RSF

Floor 4: Approximately 25,396 RSF

Floor 3: Approximately 25,396 RSF

Floor 2: Approximately 23,688 RSF

Floor 1: Approximately 23,161 RSF
	

 	
 	
2.3    Project:	
 	
The Building is part of an office project known as "Kilroy Sabre Springs," as further set forth in Section 1.1.2 of
this Lease.
	
3.	
 	
Lease Term

(Article 2):	
 	

 
	

 	
 	
3.1    Length of Term:	
 	
Approximately ten (10) years and one (1) month.
	

 	
 	
3.2    Lease Commencement Date:	
 	
Landlord and Tenant hereby acknowledge that Landlord shall be constructing the improvements in the Premises and delivering the same to Tenant on a phased basis, with the first phase consisting of floors 6, 5 and 1
(which delivery is anticipated to occur on July 1, 2008) and the second phase consisting of floors 4, 3 and 2 (which delivery is anticipated to occur on September 1, 2008), as more particularly indicated in Section 3.2 of this Summary, below.
	

 	
 	
 	
 	
The Lease Commencement Date shall be the later to occur of (i) the date upon which the sixth (6th), fifth (5th) and first (1st) floor portions of the Premises are "Ready for
Occupancy," as that term is set forth in Section 5.1 of the Work Letter Agreement attached as Exhibit B to the Lease, and (ii)
 July 1, 2008.










 


					
	TERMS OF LEASE



 
	 	DESCRIPTION 
	 	 	 	 	The date for the commencement of Tenant's lease of the remaining portions of the Premises (the "Phase 2 Commencement Date") shall be the later to occur of (i) the
date upon which the fourth (4th), third (3rd) and second (2nd) floor portions of the Premises are "Ready for Occupancy," as that term is set forth in Section 5.1 of
the Work Letter Agreement attached as Exhibit B to the Lease, and (ii) September 1, 2008.
	

 	
 	
 	
 	
The dates for the commencement of Tenant's obligation to pay "Base Rent" and "Direct Expenses," as those terms are defined in Article 3 and Article 4, of this Lease, respectively, shall be as follows (for each floor, the "Scheduled Floor Rent Commencement Date"):
	

 	
 	
 	
 	
Floor 6: July 1, 2008

Floor 5: September 1, 2008

Floor 4: December 1, 2008

Floor 3: March 1, 2009

Floor 2: June 1, 2009

Floor 1: September 1, 2009
	

 	
 	
 	
 	
Notwithstanding the foregoing, if Landlord fails to deliver any floor of the Premises to Tenant in a Ready for Occupancy condition on or before the date required by the terms of this Section 3.2 (i.e., July 1, 2008 with respect to floors 6, 5 and 1, and September 1, 2008 with respect to floors 4, 3 and 2), then to the extent such
failure is not due to a "Tenant Delay," as that term is defined in the Work Letter Agreement, the corresponding Scheduled Floor Rent Commencement Date shall be extended by one (1) day for each day that occurs after the scheduled delivery date
(i.e., July 1, 2008 or September 1, 2008, as applicable) and before the date Landlord actually delivers such floor to Tenant in a Ready for Occupancy condition.
	

 	
 	
3.3    Lease Expiration Date:	
 	
The last day of the calendar month in which the ten (10) year and one (1) month anniversary of the Lease Commencement Date occurs; provided, however, to the extent the Lease Commencement Date occurs on the
first day of a calendar month, then the Lease Expiration Date shall be the day immediately preceding the ten (10) year and one (1) month anniversary of the Lease Commencement Date. As the Lease Commencement Date is anticipated to occur on
July 1, 2008, the anticipated Lease Expiration Date is July 31, 2018.
	

 	
 	
3.4    Option Term(s):	
 	
Two (2) five (5)-year option(s) to renew, as more particularly set forth in Section 2.2 of this Lease.





2







 




					
	TERMS OF LEASE



 
	 	DESCRIPTION 
	4.	 	Base Rent (Article 3):	 	 






 





											
	Period during Lease Term*



 
	 	Applicable

Square Footage* 	 	Monthly

Installment

of Base Rent** 	 	Monthly

Rental Rate

per Rentable

Square Foot** 	 
	 July 1, 2008 through August 31, 2008
	 	 	24,496	 	$	[***]	 	$	[***]	 
	 September 1, 2008 through November 30, 2008
	 	 	49,892	 	$	[***]	 	$	[***]	 
	 December 1, 2008 through February 28, 2009
	 	 	75,288	 	$	[***]	 	$	[***]	 
	 March 1, 2009 through May 31, 2009
	 	 	100,684	 	$	[***]	 	$	[***]	 
	 June 1, 2009 through August 31, 2009
	 	 	124,372	 	$	[***]	 	$	[***]	 
	 September 1, 2009 through June 30, 2010
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2010 through June 30, 2011
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2011 through June 30, 2012
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2012 through June 30, 2013
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2013 through June 30, 2014
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2014 through June 30, 2015
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2015 through June 30, 2016
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2016 through June 30, 2017
	 	 	147,533	 	$	[***]	 	$	[***]	 
	 July 1, 2017 through July 31, 2018
	 	 	147,533	 	$	[***]	 	$	[***]	 











	*
	The
foregoing schedule is based upon the anticipated rentable square footages for each per-floor portion of the Premises and the corresponding
Scheduled Floor Rent Commencement Date, as more particularly identified in Sections 2.2 and 3.2
of this Summary, above. Accordingly, such schedule will be updated and confirmed following the Lease Commencement Date, the Phase 2 Commencement Date, and the verification of square footage
pursuant to Section 1.2 of the Lease. Notwithstanding that Tenant shall actually be occupying approximately 73,053 rentable square feet of the
Premises for the period during the Lease Term from July 1, 2008 through August 31, 2008, the Monthly Installment of Base Rent was calculated based on the Applicable Square Footage
amounts, as set forth above. Additionally, notwithstanding that Tenant shall actually be occupying all of the approximately 147,533 rentable square feet of the Premises for the period during the Lease
Term from September 1, 2008 through August 31, 2009, the Monthly Installment of Base Rent was calculated based on the Applicable Square Footage amounts, as set forth above.



	**
	The
Monthly Installment of Base Rent for the period during the Lease Term from July 1, 2008 through May 31, 2009 was calculated by multiplying
$[***] by the then-applicable number of rentable square feet of space in the Premises. The Monthly Installment of Base Rent for the period during the Lease Term
from June 1, 2009 through June 30, 2010 was calculated by multiplying $[***] by the then-applicable number of rentable square feet of space in the
Premises. In all subsequent Lease Years, the calculation of Monthly Installment of Base Rent reflects an annual increase of [***]. 






					
	 
	 	 
	 	 

	5.	 	Base Year

(Article 4):	 	Calendar year 2008.
	
6.	
 	
Tenant's Share

(Article 4):	
 	
One hundred percent (100%) of the Building; provided, however, prior to September 1, 2009, Tenant's Share shall be equal to the Applicable Square Footage of the Premises (as set forth in Section 4 of this Summary, above), multiplied by 100, and the product thereof divided by the total number of rentable square feet in the Building.






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


3







 




					
	TERMS OF LEASE



 
	 	DESCRIPTION 
	7.	 	Permitted Use

(Article 5):	 	Tenant shall use the Premises solely for general office use and uses incidental thereto, including, without limitation, support for online services (the "Permitted Use");
provided, however, that notwithstanding anything to the contrary set forth hereinabove, and as more particularly set forth in the Lease, Tenant shall be responsible for operating and maintaining the Premises pursuant to, and in no event may Tenant's
Permitted Use violate, (A) Landlord's "Rules and Regulations," as that term is set forth in Section 5.2 of this Lease, (B) all "Applicable Laws," as that term is set forth in Article 24 of this Lease, (C) all applicable zoning, building codes and the "CC&Rs," as that term is set forth in Section 5.3 of this Lease, and
(D) the character of the Project as a first-class office building Project.
	
8.	
 	
Letter of Credit

(Article 21):	
 	
$[***].
	
9.	
 	
Parking Pass

(Article 28):	
 	
[***], pursuant to the terms and conditions of Article 28.
	
10.	
 	
Address of Tenant

(Section 29.18):	
 	
Bridgepoint Education, Inc.

13500 Evening Creek Drive North, Suite 600

San Diego, CA 92128

Facsimile No.: 858-408-2903

Attention: Andrew S. Clark

[Prior to, and following, Lease Commencement Date]
	

 	
 	
 	
 	
 with copies to:
	

 	
 	
and	
 	
Sheppard Mullin Richter & Hampton LLC

12275 El Camino Real, Ste 200

San Diego, CA 92130-2006

Attention: Richard L. Kintz, Esq.

Facsimile: 858-509-3691
	
11.	
 	
Address of Landlord

(Section 29.18):	
 	
See Section 29.18 of the Lease.
	
12.	
 	
Broker(s)

(Section 29.24):	
 	

 
	

 	
 	
 Representing Landlord:	
 	
 Representing Tenant:
	

 	
 	
 Grubb & Ellis/BRE Commercial

4350 La Jolla village Dr., Suite 500

San Diego, CA 92122

Attention: Mr. Chris Hobson	
 	
 CB Richard Ellis

4365 Executive Drive, Suite 1600

San Diego, California 92121-2127

Attention: Mr. Doug Lozier
	
13.	
 	
Improvement Allowance

(Section 2 of Exhibit B):	
 	
An amount equal to $[***] per rentable square foot of the Premises (i.e., an amount anticipated to total $[***] based upon 147,533 rentable square feet in the
Premises).






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


4







 




					
	TERMS OF LEASE



 
	 	DESCRIPTION 
	14.	 	Mid-Term Improvement Allowance

(Section 8.6)	 	An amount equal to $[***] per rentable square foot of the Premises (i.e., an amount anticipated to total $[***] based upon 147,533 rentable square feet in the
Premises).






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


5








 








































 
 

ARTICLE 1
  
    PREMISES, BUILDING, PROJECT, AND COMMON AREAS    
    



        1.1    Premises, Building, Project and Common Areas.    



        1.1.1    The Premises.    Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises which are being constructed by Landlord and are set forth in Section 2.2 of the Summary (the
"Premises"). The outline of each floor of the Premises is set forth in Exhibit A attached hereto
and each floor or floors of the Premises shall have approximately the number of rentable square feet as set forth in Section 2.2 of the Summary.
The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions (the "TCCs") herein set forth, and
Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such TCCs by it to be kept and performed and that this Lease is made upon the condition of
such performance. The parties hereto hereby acknowledge that the purpose of Exhibit A is to show the approximate location of the Premises in the
"Building," as that term is defined in Section 1.1.2, below, only, and such Exhibit is not meant
to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the "Common
Areas," as that term is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or
the "Project," as that term is defined in Section 1.1.2, below. Except as specifically set forth
in this Lease and in the Work Letter Agreement attached hereto as Exhibit B (the "Work Letter
Agreement"), Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises. Tenant also acknowledges that
neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or the Project or with respect to the suitability of any of the
foregoing for the conduct of Tenant's business, except as specifically set forth in this Lease and the Work Letter Agreement. The taking of possession of each floor of the Premises by Tenant shall
conclusively establish that such floor
of the Premises was at such time in good and sanitary order, condition and repair, subject only to (i) punchlist items provided to Landlord in writing within thirty (30) days following
Landlord's delivery of the Premises to Tenant, (ii) latent defects to the extent identified and, thereafter, promptly communicated to Landlord, (iii) Landlord's ongoing obligations set
forth in Sections 1.1.3 and 29.33, and  Articles 7 and 24 of this Lease, and (iv) the terms of the Work Letter Agreement. 


        1.1.2    The Building and The Project.    The Premises are a part of the building set forth in  Section 2.1 of the Summary (the "Building"). The Building is part of an office project known as
"Kilroy Sabre Springs." The term "Project," as used in this Lease, shall mean (i) the Building
and the Common Areas, (ii) the land (which is improved with landscaping, parking facilities and other improvements) upon which the Building and the Common Areas are located, and
(iii) the other office buildings commonly known as 13500 and 13520 Evening Creek Drive North (respectively, the "13500 Building" and
"13520 Building"), which are located adjacent to the Building and the land upon which such adjacent office buildings are located. 


        1.1.3    Common Areas.    Tenant shall have the non-exclusive right to use in
common with other tenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas, together with such other portions of the Project designated by
Landlord, in its discretion, including certain areas designated for the exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the
"Common Areas"). Landlord and Tenant hereby acknowledge and agree that, as long as Tenant leases one hundred percent (100%) of the Building, no portion
of the Building shall be designated as a Common Area. Landlord shall operate and maintain the Common Areas in a manner consistent with the "Comparable Buildings" as that term is set forth in  Section 4 of Exhibit G, attached to this Lease. Notwithstanding anything set forth herein
to the 



6







 




contrary,
the use of the Common Areas shall be subject to the express provisions of this Lease and such rules, regulations and restrictions as Landlord may make from time to time, provided that such
rules, regulations and restrictions do not (a) unreasonably interfere with the rights granted to Tenant under this Lease and the Permitted Use granted under  Section 5.1, below, or
(b) materially increase the cost of Tenant's occupancy of the Premises through a material increase in Additional
Rent. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas; provided that no such changes shall be
permitted which materially reduce Tenant's rights or access hereunder, or otherwise materially interferes with Tenant's ability to use the Premises for the Permitted Use. Except when and where
Tenant's right of access is specifically excluded in this Lease, Tenant shall have the right of access to the Premises, the Building, and the Project parking facility twenty-four
(24) hours per day, seven (7) days per week during the "Lease Term," as that term is defined in Section 2.1, below. 




        1.2    Verification of Rentable Square Feet of Premises and Building.    For purposes of this
Lease, "rentable square feet" shall be calculated pursuant to Standard Method of Measuring Floor Area in Office Building, ANSI Z65.1—1996, and its accompanying guidelines, as applicable to
single-tenant buildings (collectively, "BOMA"). Within thirty (30) days after the Lease Commencement Date,
Landlord's space planner/architect shall measure the rentable square feet of the entire Premises on a floor-by-floor basis, and thereafter such determined rentable square
footages of the Premises, each floor-by-floor portion of the Premises, and the results thereof shall be presented to Tenant in writing; provided, however, Landlord and Tenant
hereby acknowledge that [***] of the usable square footage of the "Project Gym," as that term is defined in the "13500 Lease," as that term is defined in  Section 1.4, below, shall be allocated to
the rentable square footage of the Building. Tenant's space planner/architect may review Landlord's
space planner/architect's determination of the number of rentable square feet and usable square feet of the Premises and Tenant may, within fifteen (15) business days after Tenant's receipt of
Landlord's space planner/architect's written determination, object to such determination by written notice to Landlord. Tenant's failure to deliver written notice of such objection within said fifteen
(15) business day period shall be deemed to constitute Tenant's acceptance of Landlord's space planner/architect's determination. If Tenant objects to such determination, Landlord's space
planner/architect and Tenant's space planner/architect shall promptly meet and attempt to agree upon the rentable and usable square footage of the Premises. If Landlord's space planner/architect and
Tenant's space planner/architect cannot agree on the rentable and useable square footage of the Premises within thirty (30) days after Tenant's objection thereto, Landlord and Tenant shall
mutually select an independent third party space measurement professional to field measure the Premises pursuant to BOMA. Such third party independent measurement professional's determination shall be
conclusive and binding on Landlord and Tenant. [***] pay [***] of the fees and expenses of the independent third party space measurement professional.
If the Lease Term commences prior to such final determination, [***] determination shall be utilized until a final determination is made, whereupon an appropriate adjustment,
if necessary, shall be made retroactively, and Landlord shall make appropriate payment (if applicable) to Tenant. In the event that pursuant to the procedure described in this  Section 1.2 above, it
is determined that the square footage amounts shall be different from those set forth in this Lease, all amounts,
percentages and figures appearing or referred to in this Lease based upon such incorrect amount (including, without limitation, the amount of the "Rent"
and any "Security Deposit," as those terms are defined in Section 4.1 and  Article 21 of this Lease,
 respectively, and the amount of the "Improvement Allowance," as that term is defined in  Section 2.1 of the Work Letter Agreement) shall be modified in accordance with such determination. If such
determination is made, it will be
confirmed in writing by Landlord to Tenant. 


        1.3    Right of First Refusal.    Landlord hereby grants to the Tenant originally named herein
(the "Original Tenant"), and any "Permitted Transferee," as that term is set forth in  Section 14.8 of this 


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


7







 

Lease,
an on-going right of first refusal during the initial Lease Term with respect to the 13520 Building (the "Refusal Space").
Notwithstanding the foregoing, such right of first refusal shall be subordinate to all rights of which are set forth in leases of space in the Project as of the date hereof (the
"Superior Rights"), including any renewal, extension or expansion rights set forth in such leases. The holders of any such Superior Rights shall be
referred to herein collectively as the "Superior Right Holders"). The Superior Right Holders and their Superior Rights are set forth on  Exhibit A-1, attached hereto. Tenant acknowledges and agrees that Superior Rights need not be exercised strictly pursuant to their
terms, provided that (i) no expansion right which is a Superior Right shall be for a materially more space than is set forth in the Superior Right as written, (ii) no renewal right shall
be for materially longer term than is set forth in the Superior Right as written, and (iii) no new rights shall be granted which materially diminish Tenant's rights under this Lease. Tenant
further acknowledges and agrees that, if a Superior Right Holder exercises a Superior Right, then such Superior Right may be documented pursuant to a lease amendment or a new lease. Tenant's right of
first refusal shall be on the terms set forth in this Section 1.3. 



        1.3.1    Procedure for First Refusal Notice.    Subject to the terms hereof, Landlord shall
notify Tenant (the "First Refusal Notice") from time to time when the Refusal Space or any portion thereof becomes available for lease to third parties,
provided that no Superior Right Holder wishes to lease such space pursuant to its Superior Right. The First Refusal Notice shall describe the space so offered to Tenant and shall set forth the
"Economic Terms" and the "Non-Economic Terms," as those terms are defined in Section 1.3.2, below, applicable to the Refusal Space
(collectively, the "Refusal Rent"). 


        1.3.2    Procedure for Acceptance.    If Tenant wishes to exercise Tenant's right of first
refusal with respect to the space described in the First Refusal Notice, then within [***] business days of delivery of the First Refusal Notice to Tenant (or within
[***] business days after delivery of a "Second Notice", as defined below), Tenant shall deliver notice (the "First Refusal Exercise
Notice") to Landlord of Tenant's election to exercise its right of first refusal with respect to the entire Refusal Space described in the First Refusal Notice on the terms
contained in such notice. The First Refusal Notice shall include the "Economic Terms" and the "Non-Economic Terms," as those terms are defined, below, which will be applicable to such
Refusal Space. If Tenant does not so notify Landlord within the [***] business day period, then Landlord shall be free to lease the space described in the First Refusal Notice
to anyone to whom Landlord desires on any terms Landlord desires; provided, however, that prior to leasing such space to any third party (A) at a rental (taking into consideration the Economic
Terms, calculated on a "Net Equivalent Lease Rate" basis pursuant to Sections 5.1 through 5.5 of  Exhibit G to the Lease), more than [***] percent ([***]%) more favorable than those set
forth in the corresponding First Refusal Notice, or (B) pursuant to Non-Economic Terms which are materially more beneficial to such tenant than those set forth in the corresponding
First Refusal Notice, Landlord shall first again offer such Refusal Space to Tenant on such more favorable Economic Terms and/or Non-Economic Terms (the "Second
Notice"); provided further, however, that notwithstanding anything in this Section 1.3 to the contrary, Tenant hereby
acknowledges and agrees that the tenant with whom Landlord enters into any such lease and any tenant entering into a lease during any "First Offer Suspension Period," as that term is defined in  Section 1.3.6 below, shall, with respect to any and all renewal, extension, expansion, first offer, first refusal or similar rights granted in
such lease, be a Superior Right Holder for purposes of this Section 1.3. In addition, if Landlord fails to execute a letter of intent or a lease
agreement with a tenant on, or within the allowed variances of, the Economic Terms and Non-Economic Terms set forth in the First Refusal Notice within
[***] days following the expiration of the [***] business day period for Tenant to submit a First Refusal Exercise Notice, then the right of first
refusal granted under this Section 1.3 shall again apply and 




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Landlord
shall be required, prior to leasing or granting any rights to lease such Refusal Space to any third party, to provide Tenant with a First Refusal Notice and an opportunity to lease such
Refusal Space as provided in this Section 1.3. Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right
of first refusal, if at all, with respect to all of the Refusal Space identified in any particular First Refusal Notice (or Second Notice), and Tenant may not elect to lease only a portion thereof.
For purposes hereof, the "Economic Terms" shall be the following items: (i) base rent and free rent, including escalations thereto,
(ii) monetary concessions (e.g., free rent, improvement allowances), and (iii) any rent stop or base year protections. For purposes
hereof, the "Non-Economic Terms" shall be the following items: (a) the rentable square footage of the applicable Refusal Space,
(b) the length of term, including the lease commencement date, and (c) the date by which the Refusal Space will be delivered to the tenant and the period of time, if any, granted to the
tenant for the construction or build-out period of the Refusal Space prior to the obligation to pay rent. The amount of the security deposit required of a third party tenant shall not be
deemed an Economic Term or a material Non-Economic Term; provided, that Landlord shall have the right to require that Tenant provide Landlord with financial security, such as a letter of
credit or guaranty, for Tenant's Rent obligations in connection with Tenant's lease of the Refusal Space. Such financial security determination shall be made by reviewing the extent of financial
security then generally being imposed by landlord of the Comparable Buildings on tenants of comparable financial condition and credit history to the then existing financial condition and credit
history of Tenant for transactions comparable to the transaction for the Refusal Space (with appropriate adjustments to account for differences in the then-existing financial condition of
Tenant and such other tenants). 


        1.3.3    Refusal Space Rent.    Tenant shall pay Base Rent and Direct Expenses with respect to
the Refusal Space in accordance with the terms of this Lease and the First Refusal Notice, provided that Tenant's Share with respect to any particular Refusal Space shall equal an amount calculated by
dividing the rentable square footage of the Refusal Space by the rentable square footage of the 13520 Building. 


        1.3.4    Construction In Refusal Space.    Tenant shall take the Refusal Space in its then "as
is" condition (subject to any improvement allowance granted as indicated in the corresponding First Refusal Notice, which improvement allowance would be a component of the First Refusal Rent), and the
construction of improvements in the Refusal Space shall comply with the terms of the Work Letter Agreement, with appropriate adjustments to account for the terms of the First Refusal Notice and terms
of this Section 1.3. 


        1.3.5    Refusal Space Lease.    If Tenant timely exercises Tenant's right to lease the
Refusal Space as set forth herein, Landlord and Tenant shall within thirty (30) days thereafter execute a new lease for such Refusal Space (the "Refusal Space
Lease") upon the terms set forth in the First Refusal Notice and this Section 1.3. Such Refusal Space Lease shall be on
substantially the same terms and conditions as this Lease (excluding Sections 1.3, 1.4,  2.2 of this
Lease and the Work Letter Agreement); provided, however, if such Refusal Space Lease is applicable to less than an entire building, then
reasonable and equitable changes may be made to Articles 22, 23, and  28 of the Lease, and Exhibit D, to reflect the fact that the lease is for a multi-tenant building
as opposed to a single tenant building lease; provided further, however, if, and for so long as, the total rentable square footage leased by Tenant pursuant to the Refusal Space Lease is equal to or
greater than 49,178 rentable square feet, then, to the extent available (i.e., to the extent the same would not violate Applicable Laws, taking into
account any building-top signage rights previously granted by Landlord to third parties), Tenant shall have the non-exclusive right to install one
(1) Building-top sign (the "First 13520 Building Top Sign"), which First 13520 Building Top Sign shall otherwise be consistent with
the terms and conditions of Article 23 of this Lease. If Tenant installs the First 13520 Building Top Sign, and thereafter Landlord does not have
a full floor (i.e., 



9







 




either
floor 1, 2, 3, 4, 5 or 6) available to lease in the 13520 Building (for purposes of this Section 1.3.5, "available to lease" shall
include vacant space and space which is then currently leased pursuant to a lease that is scheduled to expire within twelve (12) months), then, to the extent available
(i.e., to the extent the same would not violate Applicable Laws, taking into account any building-top signage rights previously granted by
Landlord to Tenant and any third parties), Tenant shall have the non-exclusive right to install a second Building-top sign (the "Second 13520 Building
Top Sign"), which Second 13520 Building Top Sign shall otherwise be consistent with the terms and conditions of  Article 23 of this Lease; provided, however, if Landlord
thereafter has at least a full floor available to lease in the Building, and Tenant
fails to exercise its right to Lease such space, then Landlord shall have the right to require Tenant, at Tenant's sole cost and expense, to remove such Second 13520 Building Top Sign and to repair
any damage caused by such removal (provided that Tenant shall thereafter continue to have the right to install such Second 13520 Building Top Sign to the extent the circumstances that initially
allowed Tenant to install such Second 13520 Building Top Sign were to again occur). In addition, if, and for so long as, the total rentable square footage leased by Tenant pursuant to the Refusal
Space Lease is equal to or greater than 49,178 rentable square feet, then, to the extent available, Tenant shall have the right to install one exclusive "eyebrow" sign at the main entrance to the
Building, which eyebrow sign shall otherwise be consistent with the terms and conditions of Article 23 of this Lease. In the event of any
conflict between the terms and conditions of the First Refusal Notice and the terms and conditions of this Lease, the terms and conditions of the First Refusal Notice shall control. Tenant shall
commence payment of Rent for the Refusal Space, and the term of the Refusal Space shall commence upon the date of delivery of the Refusal Space to Tenant (except to the extent a period of time,
without the payment of Rent, to construct improvements in the Refusal Space is granted as indicated in the corresponding First Refusal
Notice, which period of time would be a component of the First Refusal Rent) (the "First Refusal Commencement Date") and shall terminate on the date set
forth in the First Refusal Notice. 


        1.3.6    Termination of Right of First Refusal.    The rights contained in this  Section 1.3 shall be personal to the
Original Tenant and any Permitted Transferee, and may only be exercised by the Original Tenant and such
Permitted Transferee (and not any other assignee or any sublessee or other transferee of the Original Tenant's interest in this Lease) if the Original Tenant or the Permitted Transferee, as the case
may be, occupies no less than [***] percent ([***]%) of the aggregate rentable square footage of the then-existing Premises and the
then-existing "13500 Premises" (as that term is defined in Section 1.4, below). The right to lease the Refusal Space as provided in
this Section 1.3 may not be exercised if, as of the date of the attempted exercise of such refusal right by Tenant, or as of the scheduled date
of delivery of such Refusal Space to Tenant, (i) Tenant is in monetary or material non-monetary default under this Lease or the 13500 Lease (beyond any applicable notice and cure
periods), (ii) Tenant has previously been in monetary or material non-monetary default under this Lease or the 13500 Lease (beyond any applicable notice and cure periods) more than
once during the prior [***] month period, or (iii) Landlord reasonably determinates that Tenant is not a party of reasonable financial worth and/or financial stability
in light of the responsibilities to be undertaken in connection with Tenant's lease of the Refusal Space (any period during which any of the foregoing items (i) through (iii) is
occurring shall be known as a "First Offer Suspension Period"). 




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        1.4    13500 Premises; 13500 Lease.    Landlord and Tenant are parties to that certain Office
Lease dated as of even date herewith (the "13500 Lease"), whereby Tenant leases from Landlord, and Landlord leases to Tenant those certain premises
consisting of the entirety of the 13500 Building and containing approximately 147,533 rentable square feet (the "13500 Premises"). The terms of the
13500 Lease shall govern Tenant's lease of the 13500 Premises in all respects and the terms of this Lease shall not be applicable with respect to the 13500 Lease, except to the extent expressly set
forth to the contrary herein and therein. 


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ARTICLE 2
  
    LEASE TERM; OPTION TERM(S)    
    


        2.1    Initial Lease Term.    The TCCs and provisions of this Lease shall be effective as of
the date of this Lease. The term of this Lease (the "Lease Term") shall be as set forth in  Section 3.1 of the Summary, shall commence on the date set
forth in Section 3.2 of the
Summary (the "Lease Commencement Date"), and shall terminate on the date set forth in Section 3.3
of the Summary (the "Lease Expiration Date") unless this Lease is sooner terminated as hereinafter provided. For purposes of this Lease, the term
"Lease Year" shall mean each consecutive twelve (12) month period during the Lease Term; provided, however, that to the extent the Lease
Commencement Date falls on a date other than the first day of a calendar month, then the first Lease Year shall commence on the Lease Commencement Date and end on the last day of the month in which
the first anniversary of such Lease Commencement Date occurs and the second and each succeeding Lease Year shall commence on the first day of the next calendar month; and further provided that the
last Lease Year shall end on the Lease Expiration Date. At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth in  Exhibit C, attached hereto, as
a confirmation only of the information set forth therein, which Tenant shall, after confirming the accuracy
thereof, execute and return to Landlord within five (5) business days of receipt thereof. 


        2.2    Option Term(s).    



        2.2.1    Option Right.    Landlord hereby grants the Original Tenant, its Permitted
Transferees and any approved assignee of all of Original Tenant's interest in this Lease and the "13500 Lease" (defined in Section 1.4) pursuant
to the TCCs of Article 14 (a "Approved Assignee") (collectively, the
"Right Holders"), two (2) options to extend the Lease Term for the entire Premises, each by a period of five (5) years (each, an
"Option Term"). Such option shall be exercisable only by Notice delivered by Tenant to Landlord as provided below, provided that, as of the date of
delivery of such Notice, (i) Tenant is not then in monetary or material non-monetary default under this Lease (beyond any applicable notice and cure periods), (ii) Tenant has
not been in monetary or material non-monetary default under this Lease (beyond any applicable notice and cure periods)
more than once during the prior [***] month period, (iii) Landlord reasonably determines that Tenant is a party of reasonable financial worth and/or financial
stability in light of the responsibilities to be undertaken in connection with Tenant's lease of the Premises during the Option Term, and (iv) this Lease then remains in full force and effect
and Original Tenant, its Permitted Transferees and/or its Approved Assignees are then in occupancy of no less than [***] of the rentable square footage of the Premises (the
foregoing items (i) through (iv) collectively constituting the "Exercise Conditions"). Upon the proper exercise of each such option to
extend, and provided that, as of the end of the then-applicable Lease Term, there is no then-existing violation of the Exercise Conditions, the Lease Term, as it applies to the
entire Premises, shall be extended for a period of five (5) years. The rights contained in this Section 2.2 shall only be exercised by the
Right Holders (but not any other assignee, sublessee or other transferee of Tenant's interest in this Lease). If Tenant fails to exercise its first option to extend, the second option to extend shall
no longer apply 


        2.2.2    Option Rent.    The Rent payable by Tenant during each Option Term (the
"Option Rent") shall be equal to (a) [***] of the "Market Rent," as that
term is defined in, and determined pursuant to, Exhibit G attached hereto, during the first (1st) Option Term, and
(b) [***] of the Market Rent during the second (2nd) Option Term; provided, however, that the Market Rent for each Lease Year during such Option Term shall
be equal to the amount set forth on a "Market Rate Schedule," as that term is defined below, and under no circumstances shall the Market Rent for any Lease Year occurring during any Option Term, as
set forth on the Market Rate Schedule, be less than the corresponding "Contract Rent," as that term is defined below, as such Contract Rent is set forth on the 




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12







 

"Contract
Rate Schedule," as that term is defined below. The "Market Rate Schedule" shall be derived from the Market Rent for the Option Term as
determined pursuant to Exhibit G, attached hereto, as follows: (i) the Market Rent for the first Lease Year of the Option Term shall be
equal to the sum of [***], and (ii) the Market Rent for each subsequent Lease Year shall be equal to [***] of the prior Lease Year's Market Rent.
The "Contract Rate Schedule" shall be derived from the Base Rent applicable to the Premises for the Lease Year immediately preceding such Option Term,
as follows: (x) the "Contract Rent" for the first Lease Year of any Option Term shall equal the sum of (A) the Base Rent in effect under
this Lease for the Lease Year immediately preceding the commencement of the subject Option Term, (B) an amount equal to
the "Excess" (as defined in Section 4.4) which is due under Article 4 of this Lease for
the Base Year immediately preceding the commencement of the subject Option Term, and (C) an amount equal to the monthly amortization reimbursement payment for the "Renewal Allowance" (as
defined in Section 3 of Exhibit G to this Lease) to be paid by Landlord in connection with
Tenant's lease of the Premises for the Option Term, with such Renewal Allowance being amortized at a reasonable rate of return to Landlord based on the rates of return then being received by the
landlords of the Comparable Buildings in connection with tenant improvement allowances then be granted by such landlords, and (y) the Contract Rent for each subsequent Lease Year shall be equal
to [***] of the prior Lease Year's Contract Rent. The calculation of the Market Rent shall be derived from a review of, and comparison to, the "Net
Equivalent Lease Rates" of the "Comparable Transactions," as provided for in  Exhibit G. Notwithstanding anything set
forth in this Lease to the contrary, the Base Year for the applicable Option Term with respect to the
Renewal Space shall be the calendar year in which the Option Term commences. 


        2.2.3    Exercise of Options.    The options contained in this  Section 2.2 shall be exercised
by Tenant, if at all, only in the manner set forth in this  Section 2.2.3. Tenant shall deliver notice (the "Exercise Notice") to Landlord not more
than
eighteen (18) months nor less than twelve (12) months prior to the expiration of the then Lease Term, stating that Tenant is irrevocably exercising its extension option; provided,
however, in the event Tenant fails to deliver the Exercise Notice by the date which is twelve months prior to the expiration of the then Lease Term, then Landlord shall deliver Tenant written notice
of such failure (the "Reminder Notice"), in which event, notwithstanding the failure identified in such Reminder Notice, Tenant shall be deemed to have
timely delivered the Exercise Notice as long as the same is delivered to Landlord within five (5) business days following Tenant's receipt of the Reminder Notice. If Tenant timely delivers an
Exercise Notice to Landlord, then, on or before the date which is nine (9) months prior to the expiration of the then Lease Term, Tenant shall deliver to Landlord Tenant's calculation of the
Market Rent (the "Tenant's Option Rent Calculation"). Landlord shall deliver notice (the "Landlord Response
Notice") to Tenant on or before the date that is eight (8) months prior to the end of the applicable Term, (the "Landlord Response
Date"), stating that (A) Landlord is accepting Tenant's Option Rent Calculation as the Market Rent, or (B) rejecting Tenant's Option Rent Calculation and setting
forth Landlord's calculation of the Market Rent (the "Landlord's Option Rent Calculation"). Within ten (10) business days of its receipt of the
Landlord Response Notice, Tenant shall deliver written notice to Landlord (the "Tenant Election Notice"), which shall set forth Tenant election to
either (i) accept the Market Rent contained in the Landlord's Option 




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13







 

Rent
Calculation, or (ii) reject the Market Rent contained in the Landlord's Option Rent Calculation, in which event the parties shall follow the procedure, and the Market Rent shall be
determined as set forth in Section 2.2.4. Tenant's failure to timely deliver the Tenant Election Notice shall be conclusively deemed to
constitute Tenant's election to proceed pursuant to alternative (ii) from the immediately preceding sentence. 


        2.2.4    Determination of Market Rent.    In the event Tenant objects or is deemed to have
objected to the Market Rent, Landlord and Tenant shall attempt to agree upon the Market Rent using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement within
sixty (60) days following Tenant's objection or deemed objection to the Landlord's Option Rent Calculation (the "Outside Agreement Date"), then
each party shall make a separate, final and binding determination of the Market Rent, within five (5) days following the Outside Agreement Date, and such determinations shall be submitted to
the other party and to the arbitrators pursuant to the TCCs of this Section 2.2.4. 



        2.2.4.1    Landlord
and Tenant shall each appoint one arbitrator who shall by profession be a commercial real estate lease broker or commercial real estate lease appraiser who
shall have been active over the five (5) year period ending on the date of such appointment in the leasing (or appraisal, as the case may be) of Comparable Buildings. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord's or Tenant's submitted Market Rent, is the closest to the actual Market Rent as determined by the arbitrators, taking into account
the requirements of Section 2.2.2 of this Lease. Each such arbitrator shall be appointed within fifteen (15) days after the applicable
Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The
arbitrators so selected by Landlord and Tenant shall be deemed ("Advocate Arbitrators"). 


        2.2.4.2    The
two Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of the date of the appointment
of the last appointed Advocate Arbitrator agree upon and appoint a third arbitrator ("Neutral Arbitrator") who shall be a commercial real estate lease
attorney who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of Comparable Buildings, except that neither the Landlord or Tenant or
either party's Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior to or subsequent to his or her appearance; provided, however, the Neutral Arbitrator shall
retain an appraiser (the "Neutral Appraiser") to assist such Neutral Arbitrator (which Neutral Appraiser shall be selected by the Advocates
Arbitrators). The Neutral Appraiser shall be retained for the sole purpose of advising and assisting the Neutral Arbitrator, and such Neutral Appraiser shall not have an independent vote as the
whether Landlord's or Tenant's submitted Market Rent is closest to the Market Rent. In no event shall either the Neutral Arbitrator or the Neutral Appraiser have represented (or have been engaged to
represent) Landlord or Tenant during the five (5) year period preceding the Outside Agreement Date or have any business or ownership affiliation with either of the Advocate Arbitrators during
such five (5) year period (as opposed to having had professional interaction with the same). The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord's
counsel and Tenant's counsel. 


        2.2.4.3    The
parties shall, in connection with the determination of the Market Rent, enter into an arbitration agreement (the "Arbitration
Agreement") which shall set forth the following: [***] 





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14







 


        2.2.4.4    If
either Landlord or Tenant fail to appoint an Advocate Arbitrator within fifteen (15) days after the applicable Outside Agreement Date, either party may
petition the presiding judge of the Superior Court of San Diego County to appoint such Advocate Arbitrator subject to the criteria in  Section 2.2.4.1 of this Lease, or if he or she refuses to act,
either party may petition any judge having jurisdiction over the parties to
appoint such Advocate Arbitrator. 


        2.2.4.5    If
the two Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either party may petition the presiding judge of the Superior Court of
San Diego County to appoint the Neutral Arbitrator, subject to criteria in Section 2.2.4.1 of this Lease, or if he or she refuses to act, either
party may petition any judge having jurisdiction over the parties to appoint such arbitrator. 


        2.2.4.6    The
costs of the Neutral Arbitrator and Neutral Appraiser shall be [***]. The costs of the Advocate Arbitrator representing the Tenant shall
be borne by the Tenant. The Costs of the Advocate Arbitrator representing the Landlord shall be borne by the Landlord. The costs of petitioning any judge under  Section 2.2.4.4 shall be [***]. The
costs of petitioning any judge under  Section 2.2.4.5 shall be [***]. 




 
 

ARTICLE 3
  
    BASE RENT; ABATEMENT OF RENT    
    


        3.1    Base Rent.    Tenant shall pay, without prior notice or demand, to Landlord or
Landlord's agent at the management office of the Project, or, at Landlord's option, at such other place as Landlord may from
time to time designate in writing, by a check for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, base rent
("Base Rent") as set forth in Section 4 of the Summary, payable in equal monthly installments as
set forth in Section 4 of the Summary in advance on or before the first day of each and every calendar month during the Lease Term, without any
setoff or deduction whatsoever. The Base Rent for the first full month of the Lease Term which occurs after the expiration of any free rent period shall be paid at the time of Tenant's execution of
this Lease. If any Rent payment date (including the Lease Commencement Date) falls on a day of the month other than the first day of such month or if any payment of Rent is for a period which is
shorter than one month, the Rent for any such fractional month shall accrue on a daily basis during such fractional month and shall total an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in such fractional month and the denominator of which is the actual number of days occurring in such calendar month, and (ii) the
then-applicable Monthly Installment of Base Rent. All other payments or adjustments required to be made under the TCCs of this Lease that require proration on a time basis shall be
prorated on the same basis. 


        3.2    Abatement of Rent.    In the event that Tenant is prevented from using, and does not
use, the Premises or any portion thereof, as a result of (i) [***]; or (ii) [***]; or (iii) the presence of "Hazardous Materials"
(as that term is defined in Section 29.33.1, below) not brought on the Premises by "Tenant Parties," as that term is set forth in  Section 10.1 of
this Lease, to the extent such presence substantially interferes with Tenant's use of or ingress to or egress from the
 


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Building,
Project (including the Common Areas), or Premises (including the Project parking areas to the extent reasonable replacement spaces are not provided) (any such set of circumstances as set
forth in items (i) through (iii) , above, to be known as an "Abatement Event"), then Tenant shall give Landlord notice of such Abatement
Event, and if such Abatement Event continues for five (5) or more consecutive business days after Landlord's receipt of any such notice (the "Eligibility
Period"), then Tenant may deliver an additional notice to Landlord (the "Additional Notice"), specifying such Abatement Event
and Tenant's intention to abate the payment of Rent under this Lease. If Landlord does not cure such Abatement Event within three (3) business days of receipt of such Additional Notice, then as
Tenant's sole remedy vis-à-vis such Abatement Event, the Base Rent and Tenant's Share of Direct Expenses shall be abated or reduced, as the case may be, after
expiration of the Eligibility Period, for such time that Tenant continues to be so prevented from using, and does not use, the Premises, or a portion thereof, in the proportion of the rentable area of
the portion of the Premises that Tenant is prevented from using and does not use ("Unusable Area"). To
the extent an Abatement Event is caused by an event covered by Articles 11 or 13 of this Lease,
then the terms of such Article 11 or 13, as the case may be, shall govern Tenant's right to abate
rent and the terms of this Section 6.6 shall not be applicable thereto. 


 
 

ARTICLE 4
  
    ADDITIONAL RENT    
    


        4.1    General Terms.    In addition to paying the Base Rent specified in  Article 3 of this
Lease, Tenant shall pay "Tenant's Share" of the annual
"Direct Expenses" (as those terms are defined in Sections 4.2.6 and  4.2.2, respectively, of this Lease),
 which are in excess of the amount of Direct Expenses applicable to the "Base Year," as that term is defined in
Section 4.2.1, below; provided, however, that in no event shall any decrease in Direct Expenses for any Expense Year below Direct Expenses for
the Base Year entitle Tenant to any decrease in Base Rent or any credit against sums due under this Lease. Such payments by Tenant, together with any and all other amounts payable by Tenant to
Landlord pursuant to the TCCs of this Lease, are hereinafter collectively referred to as the "Additional Rent," and the Base Rent and the Additional
Rent are herein collectively referred to as "Rent." All amounts due under this Article 4 as
Additional Rent shall be payable for the same periods and in the same manner as the Base Rent; provided, however, the parties hereby acknowledge that the first monthly installment of Tenant's Share of
any "Estimated Excess," as that term is set forth in, and pursuant to the terms and conditions of, Section 4.4.2 of this Lease, shall first be
due and payable for the calendar month occurring immediately following the expiration of the Base Year. Without limitation on other obligations of Tenant which survive the expiration of the Lease
Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of the Lease Term. 


        4.2    Definitions of Key Terms Relating to Additional Rent.    As used in this  Article 4,
the following terms shall have the meanings hereinafter set forth: 



        4.2.1  "Base Year" shall mean the period set forth in Section 5 of the
Summary. 


        4.2.2  "Direct Expenses" shall mean "Operating Expenses," "Tax Expenses" and "Utilities Costs." 


        4.2.3  "Expense Year" shall mean each calendar year in which any portion of the Lease Term falls, through and including the
calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period,
and, in the event of any such change, Tenant's Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change. 


        4.2.4  "Operating Expenses" shall be calculated in accordance with sound real estate accounting practices, consistently
applied from year to year, and shall mean all expenses, costs and 



16







 




amounts
of every kind and nature which, in accordance with sound real estate management practices, consistently applied from year to year, Landlord pays or accrues during any Expense Year because of
or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof. Without limiting the generality of the
foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost of operating, repairing, maintaining, and renovating the utility, telephone, mechanical,
sanitary, storm drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and
the cost of contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with a governmentally mandated transportation system management program or
similar program; (iii) the cost of all insurance carried by Landlord in connection with the Project; (iv) the cost of landscaping, relamping, and all supplies, tools, equipment and
materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) costs incurred in connection with the parking areas servicing the Project; (vi) fees
and other costs, including management fees (which management fees shall equal [***]), consulting fees, legal fees and accounting fees, of all contractors and consultants in
connection with the management, operation, maintenance and repair of the Project; (vii) payments under any equipment rental agreements and the fair rental value of any management office space;
(viii) wages, salaries and other compensation and benefits, including taxes levied thereon, of all persons (other than persons generally considered to be higher in rank than the position of
"Asset Manager") engaged in the operation, maintenance and security of the Project; (ix) costs under any instrument pertaining to the sharing of costs by the Project; (x) operation,
repair, maintenance and replacement (but with respect to replacement, only to the extent necessitated by normal wear and tear during the Lease Term) of all systems and equipment and components thereof
of the Building; (xi) the cost of janitorial, alarm, security and other services, non-capital replacement of wall and floor coverings, ceiling tiles and fixtures in common areas
(but only to the extent necessitated by normal wear and tear during the Lease Term), maintenance and replacement of curbs and walkways, repair to roofs; (xii) amortization of the cost of
acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof (which amortization calculation shall include interest at the
"Interest Rate," as that term is set forth in Article 25 of this Lease); (xiii) the cost of capital improvements or other costs incurred
in connection with the Project (A) which are reasonably intended to effect economies in the operation or maintenance of the Project, or any portion thereof, to the extent of cost savings
reasonably anticipated by Landlord at the time of such expenditure to be incurred in connection therewith, (B) that are required to comply with present or anticipated conservation programs,
(C) which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition (but only to the extent necessitated
by normal wear and tear during the Lease Term), or (D) that are required under any governmental law or regulation by a federal, state or local governmental agency, except for capital repairs,
replacements or other improvements to remedy a condition existing prior to the Lease Commencement Date which an applicable governmental authority, if it had knowledge of such condition prior to the
Lease Commencement Date, would have then required to be remedied pursuant to then-current governmental laws or regulations in their form existing as of the Lease Commencement Date and
pursuant to the then-current interpretation of such governmental laws or regulations by the applicable governmental authority as of the Lease Commencement Date; provided, however, that any
capital expenditure shall be amortized with interest
at the Interest Rate over its useful life as Landlord shall reasonably determine in accordance with sound real estate management and accounting practices, and such amortized costs shall be included in
Operating Expenses only for that portion of the useful life which falls within the Lease Term; (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on
Landlord by, any federal, state 




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        or
local government for fire and police protection, trash removal, community services, or other services which do not constitute "Tax Expenses" as that term is defined in  Section 4.2.5, below; and
(xv) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the sharing of costs by the Building. Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include: 



        (a)   costs,
including marketing costs, legal fees, space planners' fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original
construction or development, or original or future leasing of the Project, and costs, including permit, construction, license and inspection costs, improvement allowances, incurred with respect to the
installation of premises improvements made for tenants or occupants occupying space in the Project or incurred in renovating or otherwise improving, decorating, painting or redecorating space for
tenants or other occupants of the Project (excluding, however, such costs relating to any Common Areas or parking facilities); 


        (b)   except
as set forth in items (xii), (xiii), and (xiv) above, depreciation, interest and principal payments on mortgages and other debt costs, if any,
penalties and interest, costs of capital repairs, replacements and alterations, and costs of capital improvements and equipment, and costs to repair defects in the original construction of the Project
to the extent such repair is covered by a warranty; 


        (c)   costs
for which the Landlord is reimbursed, or would have been reimbursed if Landlord had used commercially reasonable efforts to collect such amounts, by any tenant or
occupant of the Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power or other utility costs for which any tenant directly contracts with the local
public service company; 


        (d)   any
bad debt loss, rent loss, or reserves for bad debts or rent loss; 


        (e)   costs
associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of
operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business
of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee or ground lessor (except as
the actions of the Tenant may be in issue), costs and fees incurred in the selling, syndicating, financing, mortgaging or hypothecating any of the Landlord's interest in the Project, and costs or fees
incurred in connection with any disputes between Landlord and its employees or brokers, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord's
general corporate overhead and general and administrative expenses; 


        (f)    the
wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to
reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall
Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Asset manager; 


        (g)   amount
paid as ground rental for all or any portion of the Project by the Landlord and attorneys fees, transfer taxes, and any other transactional expenses associated
with any ground lease of the Project; 


        (h)   overhead
and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs
of such 




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services
rendered by qualified, first-class unaffiliated third parties providing similar services in the Comparable Area on a competitive basis; 



        (i)    any
compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at
the Project shall be includable as an Operating Expense; 


        (j)    rentals
and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from
Operating Expenses as a capital cost, except equipment not affixed to the 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 condition in the Project; 



        (k)   all
items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than
Tenant) without reimbursement; 


        (l)    costs,
other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art; 


        (m)  any
costs expressly excluded from Operating Expenses elsewhere in this Lease; 


        (n)   rent
for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental
value of office space occupied by management personnel of the Comparable Buildings, with adjustment where appropriate for the size of the applicable project; 


        (o)   costs
to the extent arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or
services; 


        (p)   costs
incurred to comply with laws relating to the removal of hazardous material (as defined under applicable law) which was in existence in the Building or on the
Project as of the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material,
in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action
with respect thereto; and costs incurred to remove, remedy, contain, or treat hazardous material, which hazardous material is brought into the Building or onto the Project after the date hereof by
Landlord or a "Landlord Party," as that term is defined in Section 10.1 of this Lease, or any other tenant of the Project and is of such a
nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions, that
it then exists in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto; provided, however,
Landlord hereby acknowledges that it has not received written notice of the existence of hazardous material in the Building or the Project; 


        (q)   costs,
fees, dues, contributions or similar expenses for political or charitable organizations; 


        (r)   reserves
for future improvements, repairs, additions, etc., in excess of such amounts in the Base Year; and 



        (s)   costs
incurred in order to cause the Building or the Project to comply with any applicable governmental law or regulation in effect and enforced as of the Lease
Commencement Date, but only to the extent such law or regulation required compliance prior to the Lease Commencement Date. 




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        [***]. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a
tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional
Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least
[***] percent ([***]%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the
components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been [***] percent
([***]%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year. Operating Expenses for the Base Year shall include
market-wide cost increases (including utility rate increases) due to extraordinary circumstances, including, but not limited to, Force Majeure, boycotts, strikes, conservation surcharges,
embargoes or shortages, or amortized costs relating to capital improvements (collectively, "Increases"); provided, however, that at such time as any
such particular Increases are no longer included in Operating Expenses, such Increases shall be excluded from the Base Year calculation of Operating Expenses. In no event shall the components of
Direct Expenses for any Expense Year related to Utility Costs or Project services or Project insurance costs be less than the corresponding components of Direct Expenses related to Utility Costs,
Project Services and Project insurance costs in the Base Year. Landlord shall not (i) make a profit by charging items to Operating Expenses that are otherwise also charged separately to others
and (ii) subject to Landlord's right to adjust the components of Operating Expenses described above in this paragraph, collect Operating Expenses from Tenant and all other tenants in the
Project in an amount in excess of what Landlord incurs for the items included in Operating Expenses. If Landlord, in any Expense Year following the Base Year, begins providing any new category of
services (as opposed to an expansion in scope of a service or a change in a type of service) (the "New Services"), then for such period of time in which
such New Services apply, Operating Expenses for the Base Year shall be increased by the amount that Landlord reasonably determines it would have incurred had Landlord provided such New Services during
the same period of time during the Base Year as such New Services were provided during such subsequent Expense Year. Notwithstanding the foregoing, no adjustment to the Operating Expenses for the Base
Year shall occur to the extent such New Services (1) are attributable to Tenant's use of the Premises (as opposed to office use generally), in which case Landlord may elect (Y) to
include the cost of such New Services in Operating Expenses, or (Z) to invoice Tenant directly for such costs, depending upon the nature of the New Services and the extent to which the need for
such New Services is directly attributable to Tenant's use, as determined in Landlord's reasonable discretion, (2) is being offered by landlords in the majority
of Comparable Buildings, or (3) is required by "Applicable Laws," as that Term is set forth in Article 24. If Landlord, in any Expense
Year after the Base Year, discontinues any type or category of service then for such period of time in which such services are discontinued, Operating Expenses for the Base Year shall be decreased by
the amount that Landlord reasonably determines it incurred for such type or category of service throughout the Base Year. In no event shall Tenant be responsible to pay any "Controllable Expenses", as
defined below, to the extent such Controllable Expenses exceed an amount that such Controllable Expenses would have been had they increased, from the amount of Controllable Expenses incurred during
the first twelve (12) month period following Tenant's commencement of business in the entire Premises, at a compounded rate of [***] per Expense Year (the
"Cap"). As used herein "Controllable Expenses" shall mean 



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any
costs incurred by Landlord relating to services (not including utility services) provided to the Project, labor costs paid by Landlord, and maintenance contracts paid by Landlord. Controllable
Expenses shall not include Tax Expenses, costs relating to the HVAC systems of a Building, costs of insurance premiums, utility charges, or market-wide increases in labor costs due to
extraordinary circumstances, including, without limitation, boycotts and strikes. 



        4.2.5    Taxes.



        4.2.5.1    "Tax Expenses" shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or
other impositions of every kind and nature, whether general, special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and special assessments, transit taxes,
leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes
imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof),
excluding fines, default interest, and penalties, which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority)
because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof. [***]. 


        4.2.5.2    Tax
Expenses shall include, without limitation: (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof, or as against
the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee,
levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in
the June 1978 election ("Proposition 13") and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or
the Project's contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, without limitation, any
business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises [***]. 


        4.2.5.3    Any
costs and expenses (including, without limitation, reasonable attorneys' fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be
included in Tax Expenses in the Expense Year such expenses are paid. Except as set forth in Section 4.2.5.4, below, refunds of Tax Expenses shall
be credited against Tax Expenses and refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense 





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Year
exceed the total amount paid by Tenant as Additional Rent under this Article 4 for such Expense Year. If Tax Expenses for any period during
the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax Expenses included by Landlord as Building Tax Expenses pursuant to the TCCs of
this Lease. Notwithstanding anything to the contrary contained in this Section 4.2.5 (except as set forth in  Section 4.2.5.1, above), there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord's general or net income (as opposed to rents, receipts
or income attributable to operations at the Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under  Section 4.5 of this Lease. 



        4.2.5.4    Notwithstanding
anything to the contrary set forth in this Lease, the amount of Tax Expenses for the Base Year and any Expense Year shall be calculated without
taking into account any decreases in real estate taxes obtained in connection with Proposition 8, and, therefore, the Tax Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due under this Lease; provided that (i) any costs and expenses incurred by Landlord in securing any Proposition 8
reduction shall not be included in Direct Expenses for purposes of this Lease, and (ii) tax refunds under Proposition 8 shall not be deducted from Tax Expenses, but rather shall be the sole
property of Landlord. Landlord and Tenant acknowledge that this Section 4.2.5.4 is not intended to in any way affect (A) the inclusion in
Tax Expenses of the statutory two percent (2.0%) annual increase in Tax Expenses (as such statutory increase may be modified by subsequent legislation), or (B) the inclusion or exclusion of Tax
Expenses pursuant to the terms of Proposition 13, which shall be governed pursuant to the terms of Sections 4.2.5.1 through  4.2.5.3, above.



        4.2.5.5    [***]





        4.2.6    "Tenant's Share" shall mean the percentage set forth in  Section 6 of the Summary. Tenant's Share was calculated by multiplying the number of rentable square feet of
the Premises, as set forth in  Section 2.2 of the Summary, by 100, and dividing the product by the total number of rentable square feet in the Building. 


        4.2.7    "Utilities Costs" shall mean all actual charges for utilities for the Building and the Project which Landlord shall pay
during any Expense Year, including, but not limited to, the costs of water, sewer and electricity, and the costs of HVAC (excluding the cost of electricity to operate the HVAC air handlers) and other
utilities (but excluding (i) the cost of electricity consumed in the Premises and any other buildings in the Project (since Tenant is separately paying for the cost of electricity pursuant to  Section 6.1.2 below) and (ii) those charges for which tenants directly reimburse Landlord or otherwise pay directly to the utility
company) as well as related fees, assessments and surcharges. Utilities Costs shall be calculated assuming the Buildings (and during the period of time when any other office buildings are fully
constructed and ready for occupancy and are included by Landlord within the Project), are at least [***] percent ([***]%) occupied. If, during all or
any part of any Expense Year, Landlord shall not provide any utilities other than gas and electricity (the cost of which, if provided by Landlord, would be included in Utilities Costs) to a tenant
(including Tenant) who has undertaken to provide the same instead of Landlord, Utilities Costs shall be deemed to be increased by an amount equal to the additional Utilities Costs which would
reasonably have been incurred during such period by Landlord if 




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Landlord
had at its own expense provided such utilities to such tenant. Utilities Costs shall include any costs of utilities which are allocated to the Real Property under any declaration, restrictive
covenant, or other instrument pertaining to the sharing of costs by the Real Property or any portion thereof, including any covenants, conditions or restrictions now or hereafter recorded against or
affecting the Real Property. For purposes of determining Utilities Costs incurred for the Utilities Base Year, Utilities Costs for the Utilities Base Year shall not include any one time special
charges, costs or fees or extraordinary charges or costs incurred in the Utilities Base Year only, including those attributable to boycotts, embargoes, strikes or other shortages of services or fuel.
In addition, if in any Expense Year subsequent to the Utilities Base Year, the amount of Utilities Costs decreases due to a reduction in the cost of providing utilities to the Real Property for any
reason, including without limitation, because of deregulation of the utility industry and/or reduction in rates achieved in contracts with utilities providers, then for purposes of the Expense Year in
which such decrease in Utilities Costs occurred and all subsequent Expense Years, the Utilities Costs for the Utilities Base Year shall be decreased by an amount equal to such decrease. 




        4.3    Allocation of Direct Expenses.    The parties acknowledge that the Building is a part
of a multi-building project and that the costs and expenses incurred in connection with the Project (i.e. the Direct Expenses) should be shared between
the tenants of the Building and the tenants of the other buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct
Expenses (which consists of Operating Expenses, Tax Expenses and Utilities Costs) are determined annually for the Project as a whole, and a portion of the Direct Expenses, which portion shall be
determined by Landlord on an equitable basis, shall be allocated to the tenants of the Building (as opposed to the tenants of any other buildings in the Project) and such portion shall be the Direct
Expenses for purposes of this Lease. Such portion of Direct Expenses allocated to the tenants of the Building shall include all Direct Expenses attributable solely to the Building and an equitable
portion of the Direct Expenses attributable to the Project as a whole (i.e., Direct Expenses which are not attributable to any specific building in the
Project). 



        4.3.1    Cost Pools.    In conjunction with the allocation of Direct Expenses pursuant to  Section 4.3, above, Landlord shall have the right, from time to time, to equitably allocate some or all of the Direct Expenses for the Project
among different portions or occupants of the Project (the "Cost Pools"), in Landlord's discretion; [***]. For purposes of
example only, such Cost Pools may include, but shall not be limited to, the office space tenants of a building of the Project or of
the Project, and the retail space tenants of a building of the Project or of the Project. The Direct Expenses within each such Cost Pool shall be allocated and charged to the tenants within such Cost
Pool in an equitable manner. 




        4.4    Calculation and Payment of Additional Rent.    If for any Expense Year ending or
commencing within the Lease Term, Tenant's Share of Direct Expenses for such Expense Year exceeds Tenant's Share of Direct Expenses applicable to the Base Year, then Tenant shall pay to Landlord, in
the manner set forth in Section 4.4.1, below, and as Additional Rent, an amount equal to the excess (the
"Excess"). 



        4.4.1    Statement of Actual Building Direct Expenses and Payment by Tenant.    Landlord shall
give to Tenant following the end of each Expense Year, a statement (the "Statement") which shall state in general major categories the Building Direct
Expenses incurred or accrued for the Base Year or such preceding Expense Year, as applicable, and which shall indicate the amount of the Excess. Landlord shall use commercially reasonable efforts to
deliver such Statement to Tenant on or before May 1 following the end of the Expense Year to which such Statement relates. Upon receipt of the Statement for each Expense Year commencing or
ending during the Lease Term, if an Excess is present, Tenant shall pay, within thirty (30) days after receipt of the Statement, the 




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full
amount of the Excess for such Expense Year, less the amounts, if any, paid during such Expense Year as "Estimated Excess," as that term is defined in  Section 4.4.2, below, and if Tenant paid more
as Estimated Excess than the actual Excess, Tenant shall receive a credit in the amount of Tenant's
overpayment against Rent next due under this Lease. The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or Tenant from enforcing its rights under
this Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant's
Share of Building Direct Expenses for the Expense Year in which this Lease terminates, if an Excess is present, Tenant shall, within thirty (30) days after receipt of the Statement, pay to
Landlord such amount, and if Tenant paid more as Estimated Excess than the actual Excess, Landlord shall, within thirty (30) days, deliver a check payable to Tenant in the amount of the
overpayment. The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term. Notwithstanding the
immediately preceding sentence, Tenant shall not be responsible for Tenant's Share of any Building Direct Expenses attributable to any Expense Year which
are first billed to Tenant more than two (2) calendar years after the end of such Expense Year (provided that any expense that was not originally included in the Statement applicable to the
Expense Year in which such expense was incurred must be billed to Tenant within [***] of the date Landlord receives the invoice for such expense), provided that in any event
Tenant shall be responsible for Tenant's Share of Direct Expenses levied by any governmental authority or by any public utility companies which are attributable to any Expense Year. 


        4.4.2    Statement of Estimated Building Direct Expenses.    In addition, Landlord shall give
Tenant a yearly expense estimate statement (the "Estimate Statement") which shall set forth in general major categories Landlord's reasonable estimate
(the "Estimate") of what the total amount of Building Direct Expenses for the then-current Expense Year shall be and the estimated excess
(the "Estimated Excess") as calculated by comparing the Building Direct Expenses for such Expense Year, which shall be based upon the Estimate, to the
amount of Building Direct Expenses for the Base Year. Landlord shall use commercially reasonable efforts to deliver such Estimate Statement to Tenant on or before May 1 following the end of the
Expense Year to which such Estimate Statement relates. The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to
collect any Additional Rent under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Excess
theretofore delivered to the extent necessary. Thereafter, Tenant shall pay, within thirty (30) days after receipt of the Estimate Statement, a fraction of the Estimated Excess for the
then-current Expense Year (reduced by any amounts paid pursuant to the second to last sentence of this Section 4.4.2). Such fraction
shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of such payment, and twelve (12) as its denominator. Until a new Estimate
Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth 1/12) of the total Estimated Excess set forth in the previous Estimate Statement delivered by Landlord to Tenant. Throughout the Lease Term Landlord shall maintain books
and records with respect to Building Direct Expenses in accordance with generally accepted real estate accounting and management practices, consistently applied. 




        4.5    Taxes and Other Charges for Which Tenant Is Directly Responsible.    



        4.5.1    Tenant
shall be liable for and shall pay ten (10) days before delinquency, taxes levied against Tenant's equipment, furniture, fixtures and any other personal
property located in or about the Premises. If any such taxes on Tenant's equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord's property or if the
assessed value of Landlord's property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the taxes
based upon such increased 




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assessment,
which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so
levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be. 


        4.5.2    If
the premises improvements in the Premises, whether installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a
part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which premises improvements conforming to Landlord's "building standard" in other space in the
Building are assessed, then the Tax Expenses levied against Landlord or the property by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant
and shall be governed by the provisions of Section 4.5.1, above; provided, however, Landlord's "building standard" shall be reasonably
established vis-à-vis the customary level of premises improvements for Comparable Buildings in the Comparable Area (as such terms are defined in  Exhibit G to this Lease). 



        4.5.3    Notwithstanding
any contrary provision herein, Tenant shall pay prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value added
tax, or any other applicable tax on the rent or services herein or otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Project, including the Project parking facility; or (iii) taxes assessed upon this transaction
or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. 




        4.6    Tenant's Payment of Certain Taxes.    Notwithstanding anything to the contrary
contained in this lease, in the event that, at any time during the first (1st) [***] years of the initial Lease Term, any sale, refinancing, or change in
ownership of the Building is consummated (specifically excluding, however, a change in ownership due to a "Portfolio Sale," as that term is defined below, and a change in ownership to a lender
resulting from a foreclosure or a deed-in-lieu of foreclosure), and as a result thereof, and to the extent that in connection therewith, the Building or Project is reassessed
(the "Reassessment") for real estate tax purposes by the appropriate governmental authority pursuant to the terms of Proposition 13, then the terms and
conditions of this Section 4.6 shall apply to such Reassessment of the Building or Project. For purposes of this  Section 4.6, a "Portfolio Sale" shall mean a sale or other transfer of all or any portion of the
Building together with one or more other properties located outside of the Project; provided, however, during the first [***] Lease Years, a Portfolio Sale shall only be
deemed to have occurred if the total value of all the properties included in such transaction is equal to or greater than [***]. 



        4.6.1    The Tax Increase.    For purposes of this  Article 4, the term "Tax Increase" shall mean that portion of the Tax Expenses, as calculated
immediately following the Reassessment, which is attributable solely to the Reassessment. Accordingly, the term Tax Increase shall not include any portion of the Tax Expenses, as calculated
immediately following the Reassessment, which (i) is attributable to the initial assessment of the value of the Project, the base, shell and core of the Building or the premises improvements
located in the Building; (ii) is attributable to assessments which were pending immediately prior to the Reassessment which assessments were conducted during, and included in, such
Reassessment, or which assessments were otherwise rendered unnecessary following the Reassessment; (iii) is attributable to the annual inflationary increase of real estate taxes, but not in
excess of two percent (2.0%) per annum, or (iv) is attributable to Tax Expenses incurred during the Base Year (calculated without regard to the effect of Proposition 8). 



        4.6.2    Protection.    During the first (1st)
[***] years of the initial Lease Term, Tenant shall not be obligated to pay that portion of the Tax Increase relating to any Reassessment of the Building or Project. 




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


25







 

        4.6.3    Landlord's Right to Purchase the Proposition 13 Protection Amount Attributable to a Particular
Reassessment.    The amount of Tax Expenses which Tenant is not obligated to pay or will not be obligated to pay during the Lease Term in connection with a particular
Reassessment pursuant to the terms and conditions of Section 4.6, shall be sometimes referred to hereafter as a
"Proposition 13 Protection Amount." If the occurrence of a Reassessment is reasonably foreseeable by Landlord and the Proposition 13 Protection Amount
attributable to such Reassessment can be reasonably quantified or estimated for each Lease Year commencing with the Lease Year in which the Reassessment will occur, the terms and conditions of this  Section 4.6.3 shall apply to each such Reassessment. Upon Notice to Tenant, Landlord shall have the right to purchase the Proposition 13
Protection Amount relating to the applicable Reassessment (the "Applicable Reassessment"), at any time during the first (1st)
[***] years of the Lease Term, by paying to Tenant an amount equal to the "Proposition 13 Purchase Price," as that term is defined in this  Section 4.6.3, provided that the right of any
successor of Landlord to exercise its right of repurchase hereunder shall not apply to any
Reassessment which results from the event pursuant to which such successor of Landlord became the Landlord under this Lease. As used herein, "Proposition 13 Purchase
Price" shall mean the present value of the Proposition 13 Protection Amount remaining during the Lease Term, as of the date of payment of the Proposition 13 Purchase Price by
Landlord. Such present value shall be calculated (i) by using the portion of the Proposition 13 Protection Amount attributable to each remaining Lease Year
(as though the portion of such Proposition 13 Protection Amount benefited Tenant at the end of each Lease Year), as the amounts to be discounted, and (ii) by using discount rates for each
amount to be discounted equal to (A) the average rates of yield for United States Treasury Obligations with maturity dates as close as reasonably possible to the end of each Lease Year during
which the portions of the Proposition 13 Protection Amount would have benefited Tenant, which rates shall be those in effect as of Landlord's exercise of its right to purchase, as set forth in this  Section 4.6.3, plus (B) two percent (2%) per annum. Upon such payment of the Proposition 13 Purchase Price, the provisions of  Section 4.6.2 of this Lease
shall not apply to any Tax Increase attributable to the Applicable Reassessment. Since Landlord is estimating the
Proposition 13 Purchase Price because a Reassessment has not yet occurred, then when such Reassessment occurs, if Landlord has underestimated the Proposition 13 Purchase Price, then upon Notice by
Landlord to Tenant, Landlord shall promptly pay to Tenant the amount of such underestimation, and if Landlord overestimates the Proposition 13 Purchase Price, then upon Notice by Landlord to Tenant,
Rent next due shall be increased by the amount of such overestimation. 




        4.7    Landlord's Books and Records.    Upon Tenant's written request given not more than
[***] months after Tenant's receipt of a Statement for a particular Expense Year, and provided that Tenant is not then in monetary default or material
non-monetary default under this Lease beyond the applicable notice and cure period provided in this Lease, Landlord shall furnish Tenant with such reasonable supporting documentation in
connection with said Building Direct Expenses as Tenant may reasonably request. Landlord shall provide said information to Tenant within sixty (60) days after Tenant's written request therefor.
Within [***] months after receipt of a Statement by Tenant (the "Review Period"), if Tenant disputes the amount of
Additional Rent set forth in the Statement, an independent certified public accountant (which accountant (A) is a member of a nationally or regionally recognized accounting firm, and
(B) is not working on a contingency fee basis), designated and paid for by Tenant, may, after reasonable notice to Landlord and at reasonable times, inspect Landlord's records with respect to
the Statement at Landlord's corporate office (located in either San Diego County or Los Angeles County), provided that Tenant is not then in monetary default or material non-monetary
default under this Lease (beyond any applicable notice and cure periods) and Tenant has paid all amounts required to be paid under the applicable Estimate Statement and Statement, as the case may be.
In connection with such inspection, Tenant and Tenant's agents must agree in advance to follow Landlord's reasonable rules and procedures regarding inspections of 


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


26







 

Landlord's
records, and shall execute a commercially reasonable confidentiality agreement regarding such inspection. Tenant's failure to dispute the amount of Additional Rent set forth in any
Statement within the Review Period shall be deemed to be Tenant's approval of such Statement and Tenant, thereafter, waives the right or ability to dispute the amounts set forth in such Statement. If
after such inspection, Tenant still disputes such Additional Rent, a determination as to the proper amount shall be made, at Tenant's expense, by an independent certified public accountant (the
"Accountant") selected by Landlord and subject to Tenant's reasonable approval; provided that if such determination by the Accountant proves that Direct
Expenses were overstated by more than five percent (5%), then the cost of the Accountant and the cost of such determination shall be paid for by Landlord. Tenant hereby acknowledges that Tenant's sole
right to inspect Landlord's books and records and to contest the amount of Direct Expenses payable by Tenant shall be as set forth in this  Section 4.7, and Tenant hereby waives any and all other
rights pursuant to applicable law to inspect such books and records and/or to contest the
amount of Direct Expenses payable by Tenant. 


 
 

ARTICLE 5
  
    USE OF PREMISES    
    



        5.1    Permitted Use.    Tenant shall use the Premises solely for the Permitted Use set forth
in Section 7 of the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes
whatsoever without the prior written consent of Landlord, which may be withheld in Landlord's sole discretion; provided, however, that Landlord shall use its reasonable discretion in determining
whether a particular use is within the parameters of the Permitted Use. 



        5.2    Prohibited Uses.    The uses prohibited under this Lease shall include, without
limitation, use of the Premises or a portion thereof for (i) offices of any agency or bureau of the United States or any state or political subdivision thereof; (ii) offices or agencies
of any foreign governmental or political subdivision thereof; (iii) offices of any health care professionals or service organization; (iv) schools or other training facilities which are
not ancillary to corporate, executive or professional office use; (v) retail or restaurant uses; or (vi) communications firms such as radio and/or television stations. Tenant shall not
allow occupancy density of use of the Premises which is greater than the occupancy density that can be reasonably supported by the Building Systems (taking into consideration any supplemental systems
installed by Tenant) or which would result in the use of more Project parking spaces than provided to Tenant under the terms of this Lease (taking into consideration any offsite parking programs
enacted by Tenant). Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to
the provisions of the Rules and Regulations set forth in Exhibit D, attached hereto, or in violation of the laws of the United States of America,
the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project) including,
without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by applicable laws now or hereafter in effect;
provided, however, Landlord shall not enforce, change or modify the Rules and Regulations in a discriminatory manner and Landlord agrees that the Rules and Regulations
shall not be unreasonably modified or enforced in a manner which will unreasonably interfere with the normal and customary conduct of Tenant's business. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way damage the reputation of the Project or obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or
unreasonably annoy them or use or allow the Premises to be used for any unlawful or reasonably objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises. 


        5.3    CC&Rs.    Tenant shall comply with all recorded covenants, conditions, and restrictions
currently affecting the Project (including, but not limited to, the prohibition against using all or any portion of the Premises as a school). Additionally, Tenant acknowledges that the Project may be
subject 


27







 



to
any future covenants, conditions, and restrictions (the "CC&Rs") which Landlord, in Landlord's discretion, deems reasonably necessary or desirable,
and Tenant agrees that this Lease shall be subject and subordinate to such CC&Rs; provided, however, any such future CC&Rs shall not materially and adversely affect Tenant's use or occupancy of the
Premises for the Permitted Use nor any of Tenant's rights hereunder. Landlord hereby acknowledges that general office use does not violate the CC&R's. Landlord shall have the right to require Tenant
to execute and acknowledge, within fifteen (15) business days of a request by Landlord, a "Recognition of Covenants, Conditions, and Restriction," in a form substantially similar to that
attached hereto as Exhibit F, agreeing to and acknowledging the CC&Rs. 


 
 

ARTICLE 6
  
    SERVICES AND UTILITIES    
    


        6.1    Standard Tenant Services.    Landlord shall provide the following services on all days
(unless otherwise stated below) during the Lease Term. 



        6.1.1    Subject
to limitations imposed by all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning
("HVAC") when necessary for normal comfort for normal office use in the Premises from 7:00 A.M. to 6:00 P.M. Monday through Friday, and on
Saturdays from 9:00 A.M. to 1:00 P.M. (collectively, the "Building Hours"), except for the date of observation of New Year's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and, at Landlord's discretion, other locally or nationally recognized holidays (collectively, the
"Holidays"); provided, however, Landlord acknowledges that, pursuant to Tenant's requirements, in no event shall Holidays include Martin Luther King
Day, Columbus Day or Veterans Day. The daily time periods identified hereinabove are sometimes referred to as the "Business Hours." 



        6.1.2    Landlord
shall provide adequate electrical wiring and facilities and power for normal general office use as more specifically set forth on  Schedule 3 to Exhibit B, attached hereto. Tenant shall
pay directly to the utility company pursuant to the utility company's separate
meters, the cost of all electricity provided to and/or consumed in the Premises (including normal and excess consumption and including the cost of electricity to operate the HVAC air handlers), which
electricity shall be separately metered (as described above). Landlord may designate the electricity utility provider from time to time. 



        6.1.3    As
part of Operating Expenses, Landlord shall replace lamps, starters and ballasts for Building standard lighting fixtures within the Premises. In addition, Tenant
shall bear the cost of replacement of lamps, starters and ballasts for non-Building standard lighting fixtures within the Premises. 


        6.1.4    Landlord
shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes, and for the Building's life safety systems. 


        6.1.5    Landlord
shall provide janitorial services to the Premises five (5) days per week, except the date of observation of the Holidays, in and about the Premises and
window washing services in a manner consistent with Comparable Buildings in the vicinity of the Project. 


        6.1.6    Landlord
shall provide nonexclusive, non-attended automatic passenger elevator service during the Building Hours, shall have one elevator available at all
other times, except on the Holidays. 


        Tenant
shall cooperate fully with Landlord at all times and abide by all regulations and requirements that Landlord may reasonably prescribe for the proper functioning and protection of
the HVAC, electrical, mechanical and plumbing systems. 



28







 

        6.2    Overstandard Tenant Use.    



        6.2.1    Generally.    Tenant shall not, without Landlord's prior written consent, use
heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than Building standard lights in the Premises, which may
substantially affect the temperature otherwise maintained by the air conditioning system unless [***] then Landlord shall have the right to install supplementary air
conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the cost thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord upon billing by Landlord. Tenant's use of electricity shall never exceed the capacity of
the feeders to the Project or the risers or wiring installation. 


        6.2.2    HVAC.    Tenant shall be provided access to the HVAC controls for the Premises, which
shall be operable on a floor-by-floor basis. If, for any floor of the Premises, Tenant uses HVAC in excess of [***] cumulative hours during any
calendar week of the Lease Term, such excess-hours of HVAC shall be provided to Tenant subject to Tenant's payment to Landlord of an amount reasonably determined by Landlord to be directly
attributable to increased wear and tear on existing Building Systems caused by such excess use; provided, however, promptly following Tenant's request therefore, Landlord shall provide reasonable
backup documentation in support of Landlord's determination of such excess-hours charge; provided further, however, Tenant's use of HVAC on any floor of the Building (for hours other than the normal
and customary business hours maintained by Tenant) shall be for a minimum of [***] consecutive hours per such use. As of the execution of this Lease, the excess-hours
charge is anticipated to total approximately [***] per floor per hour. Amounts payable by Tenant to Landlord for such excess-hours use shall be deemed Additional Rent and shall
be paid within thirty (30) days after Tenant's receipt of an invoice therefor. 




        6.3    Interruption of Use.    Except as otherwise provided in  Section 3.2 or elsewhere in
this Lease, Tenant agrees that Landlord shall 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 any diminution in the quality or quantity thereof, when such failure or delay or
diminution is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or
other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord's reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or 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 as otherwise provided in  Section 3.2 or elsewhere in this Lease.
Furthermore, Landlord shall 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, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of
the services or utilities as set forth in this Article 6. 


        6.4    Tenant Maintained Security.    Tenant hereby acknowledges that
Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, the Building or the Project. Any such security measures for the benefit of the
Premises, the Building or the Project shall be provided by Tenant, at Tenant's sole cost and expense. Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees,
contractors, invitees and guests, 


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


29







 

and
the property thereof, from acts of third parties, including keeping doors locked and other means of entry to the Premises closed. Tenant shall be entitled to install a separate security system for
the Premises ("Tenant's Security System"), either as an Alteration (pursuant to the TCCs of  Article 8) or as a part of the initial Improvements being
constructed pursuant to the TCCs of  Exhibit B; provided, however, that the plans and specifications for Tenant's Security System shall be subject to Landlord's reasonable approval,
and the installation of Tenant's Security System shall otherwise be subject to the terms and conditions of Article 8 of this Lease and/or the
Work Letter Agreement, as applicable. Tenant shall at all times provide Landlord with a contact person who can disarm the security system and who is familiar with the functions of Tenant's Security
System in the event of a malfunction. 


 
 

ARTICLE 7
  
    REPAIRS    
    


        Landlord shall maintain in first-class condition and operating order and keep in good repair and condition the structural portions of
the Building, including the foundation, floor/ceiling slabs, roof structure (as opposed to roof membrane), curtain wall, exterior glass and mullions, columns, beams, shafts (including elevator
shafts), fire stairs, parking areas, landscaping, exterior Project signage, stairwells, elevator cab, men's and women's washrooms, Building mechanical, electrical and telephone closets, and all common
and public areas (collectively, "Building Structure") and the Base Building mechanical, electrical, life safety, plumbing, sprinkler systems and HVAC
systems which were not constructed by Tenant Parties (collectively, the "Building Systems") and the Common Areas. Notwithstanding anything in this Lease
to the contrary, Tenant shall be required to repair the Building Structure and/or the Building Systems to the extent caused due to Tenant's use of the Premises for other than normal and customary
business office operations, unless and to the extent such damage is covered by insurance carries or required to be carried by Landlord pursuant to  Article 10 and to which the waiver of subrogation
is applicable (such obligation to the extent applicable to Tenant as qualified and conditioned
will hereinafter be defined as the "BS/BS Exception"). Tenant shall, at Tenant's own expense, keep the Premises, including all improvements, fixtures
and furnishings therein, and the floor or floors of the Building on which the Premises are located, in good order, repair and condition at all times during the Lease Term, but such obligation shall
not extend to the Building Structure and the Building Systems except pursuant to the BS/BS Exception. In addition, Tenant shall,
at Tenant's own expense, but under the supervision and subject to the prior approval of Landlord, and within any reasonable period of time specified by Landlord, promptly and adequately repair all
damage to the Premises and replace or repair all damaged, broken, or worn fixtures and appurtenances, but such obligation shall not extend to the Building Structure and the Building Systems except
(i) pursuant to the BS/BS Exception, and/or (ii) for damage caused by ordinary wear and tear or beyond the reasonable control of Tenant; provided however, that, at Landlord's option, or
if Tenant fails to make such repairs, Landlord may, after written notice to Tenant and Tenant's failure to repair within five (5) days thereafter, but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established for the Building and/or the Project, and to be reasonably
consistent with similar percentages paid for such services by tenant in the Comparable Buildings) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses paid to third parties arising from Landlord's involvement with such repairs and replacements forthwith upon being billed for same. . Landlord may, but shall not be required to, enter the
Premises at all reasonable times to make such repairs, alterations, improvements or additions to the Premises or to the Project or to any equipment located in the Project as Landlord shall desire or
deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or quasi-governmental authorities or court order or decree, or (iii) repairs which are the obligation of Tenant hereunder, any
such entry into the Premises by Landlord shall be performed in a manner so as not to 


30







 

materially
interfere with Tenant's use of, or access to, the Premises; provided that, with respect to items (ii) and (iii) above, Landlord shall use commercially reasonable efforts to
not materially interfere with Tenant's use of, or access to, the Premises. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect. 


 
 

ARTICLE 8
  
    ADDITIONS AND ALTERATIONS    
    


        8.1    Landlord's Consent to Alterations.    Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the
"Alterations") without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less
than ten (10) business days
prior to the commencement thereof, and which consent shall not be unreasonably withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which
adversely affects the structural portions or the systems or equipment of the Building or is visible from the exterior of the Building. Notwithstanding the foregoing, Tenant shall be permitted to make
Alterations following five (5) business days notice to Landlord, but without Landlord's prior consent, to the extent that such Alterations do not (i) adversely affect the Building
Systems, Building Structure, or the exterior appearance of the Building, or structural aspects of the Building, or (ii) adversely affect the value of the Premises or Building (the
"Cosmetic Alterations"). The construction of the initial improvements to the Premises shall be governed by the terms of the Work Letter Agreement and
not the terms of this Article 8. 


        8.2    Manner of Construction.    Landlord may impose, as a condition of its consent to any
and all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable, including, but not limited to, the requirement that
Tenant utilize for such purposes only contractors reasonably approved by Landlord, and the requirement that upon Landlord's timely request (as more particularly set forth in  Section 8.5, below),
Tenant shall, at Tenant's expense, remove such Alterations upon the expiration or any early termination of the Lease Term
and return the affected portion of the Premises to a building standard tenant improved condition as determined by Landlord. Tenant shall construct such Alterations and perform such repairs in a good
and workmanlike manner, in conformance with any and all applicable federal, state, county or municipal laws, rules and regulations and pursuant to a valid building permit, issued by the City of San
Diego, all in conformance with Landlord's construction rules and regulations; provided, however, that prior to commencing to construct any Alteration (other than Cosmetic Alterations), Tenant shall
meet with Landlord to discuss Landlord's design parameters and code compliance issues. In the event Tenant performs any Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then Landlord shall, at Tenant's expense, make such changes to the Base Building. The "Base
Building" shall include the structural portions of the Building, and the public restrooms, elevators, fire stairwells and the systems and equipment located in the internal core
of the Building on the floor or floors on which the Premises are located. In performing the work of any such Alterations, Tenant shall have the work performed in such manner so as not to obstruct
access to the Project or any portion thereof, by any other tenant of the Project, and so as not to obstruct the business of Landlord or other tenants in the Project. Tenant shall not use (and upon
notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord's reasonable judgment, would disturb labor harmony with the workforce or trades
engaged in performing other work, labor or services in or about the Building or the Common Areas. In addition to Tenant's obligations under  Article 9 of this Lease, upon completion of any
Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the
Recorder of the County of San Diego in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Project construction
manager a 


31







 



reproducible
copy and an electronic copy of the "as built" drawings of the Alterations, to the extent such Alterations are of a type for which as-built plans are generally prepared, as
well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations. 


        8.3    Payment for Improvements.    If payment is made directly to contractors, Tenant shall
(i) comply with Landlord's requirements for final lien releases and waivers in connection with Tenant's payment for work to contractors, and (ii) sign Landlord's standard contractor's
rules and regulations. If Tenant orders any work directly from Landlord, Tenant shall pay to Landlord an amount equal to five percent of the cost of such work to compensate Landlord for all overhead,
general conditions, fees and other costs and expenses arising from Landlord's involvement with such work. If Tenant does not order any work directly from Landlord, Tenant shall reimburse Landlord for
Landlord's reasonable, actual, out-of-pocket costs and expenses actually incurred in connection with Landlord's review of such work. 


        8.4    Construction Insurance.    In addition to the requirements of  Article 10 of this
Lease, in the event that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide
Landlord with evidence that Tenant carries "Builder's All Risk" insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, and such other insurance as
Landlord may reasonably require, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of
this Lease immediately upon completion thereof. In addition, Landlord may, if the cost of any Alteration is reasonably expected to exceed [***], in its reasonable discretion,
require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such
Alterations and naming Landlord as a co-obligee. For purposes of determining the cost of an Alteration, work done in phases or stages shall be considered part of the same Alteration, and
any Alteration shall be deemed to include all trades and materials involved in accomplishing a particular result. 


        8.5    Landlord's Property.    Landlord and Tenant hereby acknowledge and agree that
(i) all Alterations, improvements, fixtures, equipment and/or appurtenances which may be installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant
(subject to the provisions of Section 8.6, below) and shall be and become part of the Premises and the property of Landlord, and (ii) the
Improvements to be constructed in the Premises pursuant to the TCCs of the Work Letter Agreement shall, upon completion of the same, be and become a part of the Premises and the property of Landlord;
provided, however, Tenant may remove any Alterations, improvements (excluding the Improvements), fixtures and/or equipment which Tenant can substantiate to Landlord have not been paid for by any
Improvement Allowance funds, provided that Tenant repairs any and all damage to the Premises or the Building caused in whole or in part by such removal, and returns the affected portion of the
Building or the Premises to an as-improved building standard condition, as reasonably approved by Landlord. Furthermore, Landlord may, by written notice to Tenant, at least sixty
(60) days prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at Tenant's expense, to remove any Alterations or improvements located
within the Premises, to repair any damage to the Premises and Building caused by such removal, and to return the affected portion of the Premises to a building standard tenant improved condition as
determined by Landlord; provided, however, if, in connection with its notice to Landlord with respect to any such Alterations (including any Cosmetic Alterations),
(x) Tenant requests Landlord's decision with regard to the removal of such Alterations or Cosmetic Alterations, and
(y) Landlord thereafter agrees in writing to waive the removal requirement when approving (or, if applicable, following notification of) such
Alterations or Cosmetic Alterations, then Tenant shall not be required to so remove such Alterations or Cosmetic Alterations; provided further, however, that if Tenant requests such a determination
from Landlord and Landlord, within ten (10) business days following Landlord's receipt of such request from Tenant with respect to Alterations or Cosmetic Alterations, fails to address the
removal requirement with regard to such Alterations or Cosmetic Alterations, Landlord shall be deemed to have agreed to 


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


32







 

waive
the removal requirement with regard to such Alterations or Cosmetic Alterations. If Tenant fails to complete such removal and/or to repair any damage caused by the removal of any Alterations or
improvements in the Premises, and return the affected portion of the Premises to a building standard tenant improved condition as determined by Landlord, then Landlord may do so and may charge the
cost thereof to Tenant. Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations, improvements, fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall survive the expiration or
earlier termination of this Lease. 


        8.6    Mid-Term Improvement Allowance.    To the extent Tenant is not then in
economic or material, non-economic default under this Lease (beyond any applicable notice and cure periods), then Tenant may, upon written notice to Landlord given no later than
April 1, 2013 (the "Improvement Allowance Election Notice"), elect to cause Landlord to provide an allowance (in an amount to be set forth in
such Improvement Allowance Election Notice) for the cost of the design and construction of certain mid-term Alterations intended to enhance the then-existing condition of the
Premises (the "Mid-Term Improvement Allowance"); provided, however, that the amount of such Mid-Term Improvement Allowance shall
(i) be disbursed by Landlord following July 1, 2013 upon receipt of invoices for such costs, reasonable backup documentation and conditional lien releases relating to the items covered
by such invoices, (ii) be an amount equal to an even number of United States Dollars (as opposed to fractions of United States Dollars), and (iii) in no event exceed the amount set forth
in Section 14 of the Summary. In the event Tenant exercises its right to use all or any portion of the Mid-Term Improvement
Allowance, then Tenant shall deliver to Landlord, on or before July 1, 2013, a letter of credit, in the form attached to the Lease as  Exhibit H and subject to the terms and conditions
of Article 21 of the Lease, in an amount
equal to [***], which letter of credit shall be held by Landlord pursuant to the terms of Article 21 of the Lease. The
rights contained in this Section 8.6 shall be personal to the Original Tenant, and may only be exercised by the Original Tenant (and not any
assignee, sublessee or other Transferee of the Original Tenant's interest in this Lease). 


 
 

ARTICLE 9
  
    COVENANT AGAINST LIENS    
    


        Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials furnished
or obligations incurred by or on behalf of Tenant, and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without
limitation, reasonable attorneys' fees and costs) arising out of same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any
such work on the Premises (or such additional time as may be necessary under applicable laws) to afford Landlord the opportunity of posting and recording appropriate notices of
non-responsibility. Tenant shall remove any such lien or encumbrance by bond or otherwise within ten (10) business days after notice by Landlord, and if Tenant shall fail to do so,
Landlord may pay the amount necessary to remove such lien or encumbrance, without being responsible for investigating the validity thereof. The amount so paid shall be deemed Additional Rent under
this Lease payable upon demand, without limitation as to other remedies available to Landlord under this Lease. Nothing contained in this Lease shall authorize Tenant to do any act which shall subject
Landlord's title to the Building or Premises to any liens or encumbrances whether claimed by operation of law or express or implied contract. Any claim to a lien or encumbrance upon the Building or
Premises arising in connection with any such work or respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord's option shall attach only against
Tenant's interest in the Premises and shall in all respects be subordinate to Landlord's title to the Project, Building and Premises. 


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


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ARTICLE 10
  
    INSURANCE    
    


        10.1    Indemnification and Waiver.    To the extent not prohibited by law and except as
otherwise expressly provided herein, Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises from any cause whatsoever and agrees that Landlord, its
partners, subpartners and their respective officers, agents, servants, employees, and independent contractors (collectively, "Landlord Parties") shall
not be liable for, and are hereby released from any responsibility for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by
other persons claiming through Tenant. Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys' fees) incurred in connection with or arising from any cause in, on or about the Premises, any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the
TCCs of this Lease, either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the negligence or willful misconduct of
Landlord or any Landlord Party. Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant's occupancy of the Premises, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers', accountants' and attorneys' fees. Landlord shall indemnify,
defend, protect, and hold harmless Tenant, its partners, and their respective officers, agents, servants, employees, and independent contractors (collectively, "Tenant
Parties") from any and all loss, cost, damage, expense and liability (including without limitation reasonable attorneys' fees) arising from the gross negligence or willful
misconduct of Landlord in, on or about the Project (excluding the Premises), except to the extent caused by the negligence or willful misconduct of the Tenant Parties. Notwithstanding anything to the
contrary set forth in this Lease, either party's agreement to indemnify the other party pursuant to this Section 10.1 is not intended and shall
not relieve any insurance carrier of its obligations under policies required to be carried by such party pursuant to the provisions of this Lease. In addition, either party's agreement to indemnify
the other party as set forth in this Section 10.1 shall be ineffective to the extent the matters for which such party agreed to indemnify the
other party are covered by insurance required to be carried by the non-indemnifying party pursuant to this Lease. The provisions of this  Section 10.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability arising in connection with
any event occurring prior to such expiration or termination. Notwithstanding anything to the contrary contained in this Lease, nothing in this Lease shall impose any obligations on Tenant or Landlord
to be responsible or liable for, and each hereby releases the other from all liability for, consequential damages other than those consequential damages incurred by Landlord in connection with a
holdover of the Premises by Tenant after the expiration or earlier termination of this Lease or incurred by Landlord in connection with any repair, physical construction or improvement work performed
by or on behalf of Tenant in the Project, but Tenant shall not be responsible for any direct or consequential damages resulting from Landlord's or contractor's acts in connection with the completion
by Landlord of the premises improvements in the Premises pursuant to the Work Letter Agreement or Landlord's ownership or removal of any Alterations that are not required to be removed by Tenant
pursuant to Article 8, above. 



        10.2    Landlord's Fire, Casualty and Liability Insurance.    



        10.2.1    Landlord
shall maintain Commercial/Comprehensive General Liability Insurance with respect to the Building during the Lease Term covering claims for bodily injury,
personal injury and property damage in the Common Areas and with respect to Landlord's activities in the Premises. 



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        10.2.2    Landlord
shall insure the Building and Landlord's remaining interest in the Improvements and Alterations with a policy of Physical Damage Insurance including building
ordinance coverage, written on a standard Causes of Loss—Special Form basis (against loss or damage due to fire and other casualties covered within the classification of fire and extended
coverage, vandalism, and malicious mischief, sprinkler leakage, water damage and special extended coverage), covering the full replacement cost of the Base Building, Premises and other improvements
(including coverages for enforcement of Applicable Laws requiring the upgrading, demolition, reconstruction and/or replacement of any portion of the Building as a result of a covered loss) without
deduction for depreciation. 


        10.2.3    Landlord
shall maintain Boiler and Machinery/Equipment Breakdown Insurance covering the Building against risks commonly insured against by a Boiler &
Machinery/Equipment Breakdown policy and such policy shall cover the full replacement costs, without deduction for depreciation. 


        10.2.4    The
foregoing coverages shall contain commercially reasonable deductible amounts from such companies, and on such other terms and conditions, as Landlord may from
time to time reasonably determine. 


        10.2.5    Additionally,
at the option of Landlord, such insurance coverage may include the risk of (i) earthquake, (ii) flood damage and additional hazards,
(iii) a rental loss endorsement for a period of up to two (2) years, (iv) one or more loss payee endorsements in favor of holders of any mortgages or deeds of trust encumbering
the interest of Landlord in the Building, or any portion thereof. 


        10.2.6    Notwithstanding
the foregoing provisions of this Section 10.2, the coverage amounts, and corresponding
deductibles of insurance carried by Landlord in connection with the Building shall be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of
Comparable Buildings, and Worker's Compensation and Employer's Liability coverage as required by applicable law. Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for
any such increase. Tenant, at Tenant's expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body. 




        10.3    Tenant's Insurance.    Tenant shall maintain the following coverages in the following
amounts. 



        10.3.1    Commercial
General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof)
arising out of Tenant's operations, and contractual liabilities (covering the performance by Tenant of its indemnity agreements) including a Broad Form endorsement covering the insuring provisions of
this Lease. Landlord shall be named as an additional insured as their interests may appear using form CG2011 or its comparable. An endorsement showing that Tenant's coverage is primary and any
insurance carried by Landlord shall be excess and noncontributing. Such insurance shall (i) name Landlord, and any other party the Landlord so specifies that has a material financial interest
in the Project as an additional insured, including Landlord's managing agent, if any, and (ii) specifically 



35







 

cover
the liability assumed by Tenant under this Lease, including, but not limited to, Tenant's obligations under Section 10.1 of this Lease.
Liability limits shall not be less than: 



				
	 	Bodily Injury and	 	$5,000,000 each occurrence
	
 	
Property Damage Liability	
 	
$5,000,000 annual aggregate, or any combination of primary insurance and excess insurance
	
 	
Personal Injury Liability	
 	
$5,000,000 each occurrence

$5,000,000 annual aggregate, or any combination of primary insurance and excess insurance

0% Insured's participation






        10.3.2    Property
Insurance covering (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable
partitions, merchandise and all other items of Tenant's property on the Premises installed by, for, or at the expense of Tenant, (ii) the "Improvements," as that term is defined in  Section 2.1
of the Work Letter Agreement, and any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the
Base Building) (the "Original Improvements"), and (iii) all other improvements, alterations and additions to the Premises. Such insurance shall
be written on an "all risks" of physical loss or damage basis, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for damage or other loss caused by fire or other
peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion. 


        10.3.3    Worker's
Compensation or other similar insurance pursuant to all applicable state and local statutes and regulations, and Employer's Liability Insurance or other
similar insurance pursuant to all applicable state and local statutes and regulations, with minimum limits of One Million and No/100 Dollars ($1,000,000.00) per employee and One Million and No/100
Dollars ($1,000,000.00) per occurrence. 


        10.3.4    Commercial
Automobile Liability Insurance covering all owned, hired, or non-owned vehicles with the following limits of liability: One Million Dollars
($1,000,000.00) combined single limit for bodily injury and property damage. 


        10.3.5    Business
Interruption, loss of income and extra expense insurance in such amounts as will reimburse Tenant for actual direct or indirect loss of earnings for up to
one (1) year attributable to the risks outlined in Section 10.3.2, above. 




        10.4    Form of Policies.    The minimum limits of policies of insurance required of Tenant
under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (i) be issued by an insurance company having a rating of not less than A-X in
Best's Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of California; (ii) be in form and content reasonably acceptable to Landlord; and
(iii) provide that said insurance shall not be canceled or coverage changed unless thirty (30) days' prior written notice shall have been given to Landlord and any mortgagee of Landlord,
the identity of whom has been provided to Tenant in writing. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the Lease Commencement Date and at least
thirty (30) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate, Landlord may, at its option, after
written notice to Tenant and Tenant's failure to obtain such insurance within five (5) 


36







 

business
days thereafter, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within thirty (30) days after delivery to Tenant of bills therefor. 


        10.5    Subrogation.    Landlord and Tenant intend that their respective property loss risks
shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers
in the event of a property loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive
all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective
insurance policies are now, or shall be,
endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged therefor. 


        10.6    Additional Insurance Obligations.    Tenant shall carry and maintain during the entire
Lease Term, at Tenant's sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10
and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant's operations therein, as may be reasonably requested by Landlord. Notwithstanding
the foregoing, Landlord's request shall only be considered reasonable if such increased coverage amounts and/or such new types of insurance are consistent with the requirements of a majority of
Comparable Buildings, and Landlord shall not so increase the coverage amounts or require additional types of insurance during the first five (5) years of the Lease Term and thereafter no more
often than one time in any five (5) year period. 


 
 

ARTICLE 11
  
    DAMAGE AND DESTRUCTION    
    


        11.1    Repair of Damage to Premises by Landlord.    Tenant shall promptly notify Landlord of
any damage to the Premises resulting from fire or any other casualty. If the Premises or any Common Areas serving or providing access to the Premises shall be damaged by fire or other casualty,
Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord's reasonable control, and subject to all other terms of this  Article 11, restore the Base Building and such Common Areas. Such restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage on the Building or Project or any other
modifications to the Common Areas deemed desirable by Landlord, which are consistent with the character of the Project and which are reasonably approved by Tenant, provided that access to the Premises
and any common restrooms serving the Premises shall not be materially impaired. Upon the occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under Section 10.3 of this Lease, and Landlord shall repair any injury or damage to the Improvements and any Alterations installed in
the Premises and shall return such Improvements and Original Improvements to their original condition; provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds
received by Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's commencement of repair of the damage. In
the event that Landlord does not deliver the Landlord Repair Notice within sixty (60) days following the date the casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Improvements and Alterations installed in the Premises and shall return such Improvements and Original Improvements to their original condition. Whether or not
Landlord delivers a Landlord Repair Notice, prior to the commencement of construction, Tenant shall submit to Landlord, for Landlord's review and approval, all plans, specifications and working
drawings relating thereto, and Landlord shall select the contractors to perform such improvement work subject to 


37







 

Tenant's
reasonable approval. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the
repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant's occupancy, and the Premises are not occupied by Tenant as a
result thereof, then during the time and to the extent the Premises are unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentable square feet of the Premises
which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable square feet of the Premises. In the event that Landlord shall not deliver the Landlord Repair
Notice, Tenant's right to rent abatement pursuant to the preceding sentence shall terminate as of the date which is reasonably determined by Landlord to be the date Tenant should have completed
repairs to the Premises assuming Tenant used reasonable due diligence in connection therewith. 


        11.2    Landlord's Option to Repair.    Notwithstanding the terms of  Section 11.1 of this
Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this
Lease, by notifying Tenant in writing of such termination within ninety (90) days after the date of discovery of the damage, such notice to include a termination date giving Tenant ninety
(90) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and
one or more of the following conditions is present: (i) in Landlord's reasonable judgment, repairs cannot reasonably be completed within two hundred seventy (270) days after the date of
discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the
Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate
the ground lease, as the case may be; (iii) the damage is not fully covered by Landlord's insurance policies; (iv) Landlord decides to rebuild the Building or Common Areas so that they
will be substantially different structurally or architecturally; or (v) the damage occurs during the last twelve (12) months of the Lease Term. Notwithstanding the foregoing, if Landlord
elects to terminate this Lease pursuant to item (i), above, then Tenant may, [***] If Landlord does not elect to terminate this Lease pursuant to Landlord's termination
right as provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within two hundred seventy (270) days after being commenced, Tenant may elect not later than
ninety (90) days after the date of Tenant's receipt of Landlord's reasonable estimate, in writing, of the time required to effectuate such repairs, to terminate this Lease by written notice to
Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant.
Furthermore, if neither Landlord nor Tenant has terminated this Lease, and the repairs are not actually completed within such 270-day period, Tenant shall have the right to terminate this
Lease during the first five (5) business days of each calendar month following the end of such period until such time as the repairs are complete, by notice to Landlord (the
"Damage Termination Notice"), effective as of a date set forth in the Damage Termination Notice (the "Damage Termination
Date"), which Damage Termination Date shall not be less than ten (10) business days following the end of each such month. Notwithstanding the foregoing, if Tenant
delivers a Damage Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the Damage Termination Date for a period ending thirty (30) days after the
Damage Termination Date set forth in the Damage Termination Notice by delivering to Tenant, within five (5) business days of Landlord's receipt of the Damage Termination Notice, a certificate
of Landlord's contractor responsible for the repair of the damage certifying that it is such contractor's good faith judgment that the repairs shall be substantially completed within thirty
(30) days after the Damage Termination Date. If repairs shall be substantially completed prior to the expiration of such thirty-day period, then the Damage 



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


38







 

Termination
Notice shall be of no force or effect, but if the repairs shall not be substantially completed within such thirty-day period, then this Lease shall terminate upon the
expiration of such thirty-day period. At any time, from time to time, after the date occurring sixty (60) days after the date of the damage, Tenant may request that Landlord inform
Tenant of Landlord's reasonable opinion of the date of completion of the repairs and Landlord shall respond to such request within five (5) business days. Notwithstanding the provisions of this  Section 11.2, Tenant shall have the right to terminate this Lease under this Section 11.2
to the extent each of the following conditions is satisfied: (a) the damage to the Project by fire or other casualty was not caused by the gross negligence
or intentional act of Tenant or its partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b) Tenant is not then in monetary default
or material non-monetary default under this Lease; (c) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (d) as a result of the
damage to the Project, Tenant does not occupy or use the Premises at all. In the event this Lease is terminated in accordance with the terms of this  Section 11.2, Tenant shall pay to Landlord (or
to any party designated by Landlord) a portion of the insurance proceeds payable to Tenant under
Tenant's insurance required under items (ii) and (iii) of Section 10.3.2 of this Lease, which portion shall be equal to
[***]. 


        11.3    Waiver of Statutory Provisions.    The provisions of this Lease, including this  Article 11, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project. 


 
 

ARTICLE 12
  
    NONWAIVER    
    


        No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby. The
waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or
condition herein contained. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this
Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent. No acceptance of a
lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord's right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter
accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the full amount due. No receipt
of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant's right of possession hereunder, or after the giving of any
notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of
a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment. 



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


39








 



































 



 
 

ARTICLE 13
  
    CONDEMNATION    
    


        If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require
the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation,
Landlord shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. If more than twenty-five percent (25%) of the
rentable square feet of the Premises is taken, or if access to the Premises is substantially impaired, in each case for a period in excess of one hundred eighty (180) days, Tenant shall have
the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the
authority for any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for any taking of Tenant's personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this
Lease, and for moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is
payable separately to Tenant. All Rent shall be apportioned as of the date of such termination. If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure. Notwithstanding anything to the
contrary contained in this Article 13, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and
eighty (180) days or less, then this Lease shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount
of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in connection with any such temporary
taking. 


 
 

ARTICLE 14
  
    ASSIGNMENT AND SUBLETTING    
    


        14.1    Transfers.    Tenant shall not, without the prior written consent of Landlord, assign,
mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part
thereof by any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to collectively as
"Transfers" and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a
"Transferee"). If Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the Transfer, which shall not be less than fifteen (15) days nor more
than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the
"Subject Space"), (iii) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the
"Transfer Premium", as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, including all existing operative
documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, provided 


40







 

that
Landlord shall have the right to require Tenant to utilize Landlord's standard Transfer documents in connection with the documentation of such Transfer, (iv) current financial statements
of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information reasonably
required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee's business and proposed use
of the Subject Space and (v) an executed estoppel certificate from Tenant in the form attached hereto as Exhibit E. Any Transfer made
without Landlord's prior written consent shall, at Landlord's option, be null, void and of no effect, and shall, at Landlord's option, constitute a default by Tenant under this Lease. Whether or not
Landlord consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys',
accountants', architects', engineers' and consultants' fees) incurred by Landlord, not to exceed [***] for a Transfer in the ordinary course of business, within thirty
(30) days after written request by Landlord. 


        14.2    Landlord's Consent.    Landlord shall not unreasonably withhold its consent to any
proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice. Without limitation as to other reasonable grounds for withholding consent, the parties hereby
agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply: 



        14.2.1    The
Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project; 


        14.2.2    The
Transferee intends to use the Subject Space for purposes which are not permitted under this Lease; 


        14.2.3    The
Transferee is either a governmental agency or instrumentality thereof, and such Transferees occupancy in the Project may cause issues (in terms of
[***]; 


        14.2.4    The
Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the
Transfer on the date consent is requested; 


        14.2.5    The
proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease; 


        14.2.6    Either
the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed
Transferee, (i) occupies space in the Project at the time of the request for consent (provided, however, that Tenant may assign or sublease space to an occupant of the Project to the extent
Landlord cannot meet such occupant's space needs), or (ii) is negotiating with Landlord to lease space in the Project at such time, or (iii) has negotiated with Landlord during the
[***]-month period immediately preceding the Transfer Notice; or 


        14.2.7    The
Transferee does not intend to occupy at least [***] of the Premises and conduct its business therefrom for a substantial portion of the
term of the Transfer. 




        If
Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights
Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's consent, but not later than the
expiration of said six-month period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice
furnished by Tenant to Landlord pursuant to 



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


41







 

Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, or
(ii) which would cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in Tenant's original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including Landlord's right of recapture, if any, under  Section 14.4 of this
Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord
has unreasonably withheld or delayed its consent under Section 14.2 or otherwise has breached or acted unreasonably under this  Article 14, their
sole remedies shall be a suit for contract damages (other than damages for injury to, or interference with, Tenant's business
including, without limitation, loss of profits, however occurring) or a declaratory judgment and an injunction for the relief sought without any monetary damages, and Tenant hereby waives all other
remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed
Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any and all liability, losses, claims, damages, costs, expenses, causes of action and proceedings involving any third party
or parties (including without limitation Tenant's proposed subtenant or assignee) who claim they were damaged by Landlord's wrongful withholding or conditioning of Landlord's consent. 


        14.3    Transfer Premium.    If Landlord consents to a Transfer, as a condition thereto which
the parties hereby agree is reasonable, Tenant shall pay to Landlord [***] percent ([***]%) of any "Transfer Premium," as that term is defined in this  Section 14.3, received by Tenant from such
Transferee. "Transfer Premium" shall mean all rent,
additional rent or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for (i) any changes, alterations and
improvements to the Premises in connection with the Transfer, (ii) any free base rent and other economic concessions reasonably provided to the Transferee, (iii) any brokerage
commissions and reasonable legal fees and costs in connection with the Transfer, (iv) any lease takeover costs incurred by Tenant in connection with the Transfer, (v) any costs of
advertising the space which is the subject of the Transfer, and (vi) any review and processing fees paid to Landlord in connection with such Transfer (collectively, the
"Transfer Costs"). "Transfer Premium" shall also include, but not be limited to, (vii) key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and (y) any payment in excess of fair market value for (1) services rendered by Tenant to
Transferee, or (2) for tangible assets (as opposed to intellectual property), fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer.
In the calculations of the Rent
(as it relates to the Transfer Premium calculated under this Section 14.3), the Rent paid during each annual period for the Subject Space shall
be computed after adjusting such rent to the actual effective rent to be paid, taking into consideration any and all Transfer Costs. For purposes of calculating any such effective rent all such
concessions shall be amortized on a straight-line basis over the relevant term. 


        14.4    Landlord's Option as to Subject Space.    Notwithstanding anything to the contrary
contained in this Article 14, Landlord shall have the option, by giving written notice to Tenant within fifteen (15) days after receipt of
any Transfer Notice, to recapture the Subject Space; provided, however, if Landlord exercises its right to recapture the Subject Space, then Tenant shall have the right, by giving written notice to
Landlord within fifteen (15) days after receipt of Landlord recapture notice, to rescind its Transfer Notice, in which event Tenant shall not proceed with the Transfer contemplated by the
Transfer Notice and Landlord's recapture notice shall be null and void. Such recapture notice shall cancel and terminate this Lease with respect to the Subject Space as of the date stated in the
Transfer Notice as the effective date of the proposed Transfer until the last day of the term of the Transfer as set forth in the Transfer Notice (or at Landlord's option, shall cause the Transfer to
be made to 


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


42







 

Landlord
or its agent, in which case the parties shall execute the Transfer documentation promptly thereafter). In the event of a recapture by Landlord, if this Lease shall be canceled with respect to
less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet
contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the
same. If Landlord declines, or fails to elect in a timely manner to recapture the Subject Space under this Section 14.4, then, provided Landlord
has consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of this  Article 14. 


        14.5    Effect of Transfer.    If Landlord consents to a Transfer, (i) the TCCs of this
Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant
shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall
furnish upon Landlord's request a complete statement, certified by an independent certified public accountant, or Tenant's chief financial officer, setting forth
in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into with respect
thereto, whether with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease from any liability under this Lease, including, without limitation, in connection with the
Subject Space. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the
right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if
understated by more than five percent (5%), Tenant shall pay Landlord's costs of such audit. 


        14.6    Additional Transfers.    For purposes of this Lease, the term
"Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of more
than fifty percent (50%) or more of the partners, or transfer of more than fifty percent (50%) or more of partnership interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly held
and not traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or other reorganization of Tenant or (B) the sale or other transfer of an aggregate of
more than fifty percent (50%) or more of the voting shares of Tenant (other than to immediate family members by reason of gift or death), within a twelve (12)-month period, or (C) the sale,
mortgage, hypothecation or pledge of an aggregate of more than fifty percent (50%) or more of the value of the unencumbered assets of Tenant within a twelve (12)-month period. 



        14.7    Occurrence of Default.    Any Transfer hereunder shall be subordinate and subject to
the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to: (i) treat such Transfer as cancelled and repossess the
Subject Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall be in default under this Lease,
Landlord is hereby irrevocably authorized, as Tenant's agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer
directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease) until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is
in default hereunder, without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed
or observed under this Lease. No collection or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this  Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or thereafter
accruing. In no event shall Landlord's enforcement of any 


43







 



provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to enforce any term of this Lease against Tenant or any other person. 


        14.8    Non-Transfers.    Notwithstanding anything to the contrary contained in
this Article 14, (i) an assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is
controlled by, controls, or is under common control with, Tenant), (ii) an assignment of the Premises to an entity which acquires all or substantially all of the assets or interests
(partnership, stock
or other) of Tenant, (iii) an assignment of the Premises to an entity which is the resulting entity of a merger or consolidation of Tenant, or (iv) a sale of corporate shares of capital
stock in Tenant in connection with an initial public offering of Tenant's stock on a nationally-recognized stock exchange, and the subsequent sale of Tenant's capital stock as long as Tenant is a
publicly traded company on a nationally-recognized stock exchange, shall not be deemed a Transfer under this Article 14, provided that Tenant
notifies Landlord of any such assignment or sublease and promptly supplies Landlord with any documents or information requested by Landlord regarding such assignment or sublease or such affiliate, and
further provided that such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease or otherwise effectuate any "release" by Tenant of such obligations. The
transferee under a transfer specified in items (i), (ii) or (iii) above shall be referred to as a "Permitted Transferee."
"Control," as used in this Section 14.8, shall mean the ownership, directly or indirectly, of at
least fifty-one percent (51%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of at least fifty-one percent (51%) of
the voting interest in, any person or entity. 


 
 

ARTICLE 15
  
    SURRENDER OF PREMISES; OWNERSHIP AND
  REMOVAL OF TRADE FIXTURES    
    


        15.1    Surrender of Premises.    No act or thing done by Landlord or any agent or employee of
Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are
thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly
terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of Landlord shall
operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises or terminate any or all such sublessees or subtenancies. 



        15.2    Removal of Tenant Property by Tenant.    Upon the expiration of the Lease Term, or
upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically
made the responsibility of Landlord hereunder excepted. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, business and trade fixtures, free-standing cabinet work, movable partitions and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to
be removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal. 


44








 
 
 

ARTICLE 16
  
    HOLDING OVER    
    


        If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, with or without the express or implied
consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case Base Rent
shall be payable at a monthly rate equal to the product of (i) the Base Rent applicable during the last rental period of the Lease Term under this Lease, and (ii) a percentage equal to
[***] during the first two (2) months immediately following the expiration or earlier termination of the Lease Term, and [***] thereafter. Such
month-to-month tenancy shall be subject to every other applicable term, covenant and agreement contained herein. Nothing contained in this  Article 16 shall be construed as consent by Landlord to
any holding over by Tenant, and Landlord expressly reserves the right to require Tenant
to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this  Article 16 shall not be deemed to limit
or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant
fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by
any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom. 


 
 

ARTICLE 17
  
    ESTOPPEL CERTIFICATES    
    


        Within ten (10) business days following a request in writing by Landlord, Tenant shall execute, acknowledge and deliver to
Landlord an estoppel certificate, which, as submitted by Landlord, shall be substantially in the form of Exhibit E, attached hereto (or such
other form as may be required by any prospective mortgagee or purchaser of the Project, or any portion thereof),
indicating therein any exceptions thereto that may exist at that time, and shall also contain any other factual information reasonably requested by Landlord or Landlord's mortgagee or prospective
mortgagee. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of the Project. At any time during the Lease Term, Landlord may require Tenant to
provide Landlord with a current financial statement and financial statements of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance
with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Failure of Tenant to timely execute,
acknowledge and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel
certificate are true and correct, without exception. Landlord hereby agrees to provide to Tenant an estoppel certificate signed by Landlord, containing the same types of information, and within the
same periods of time, as set forth above, with such changes as are reasonably necessary to reflect that the estoppel certificate is being granted and signed by Landlord to Tenant, rather than from
Tenant to Landlord or a lender. 


 
 

ARTICLE 18
  
    SUBORDINATION    
    


        This Lease shall be subject and subordinate to all present and future ground or underlying leases of the Building or Project and to the
lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Project or any part thereof, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or 


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


45







 

hereafter
to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages, trust deeds or other encumbrances, or the lessors under such ground lease or underlying
leases, require in writing that this Lease be superior thereto. Landlord's delivery to Tenant of a commercially reasonable non-disturbance agreement(s) (the
"Nondisturbance Agreement") in favor of Tenant from any such ground lessor, mortgage holders or lien holders of Landlord who later come into existence
at any time prior to the expiration of the Lease Term shall be in consideration of, and a condition precedent to, Tenant's agreement to be bound by the terms and
conditions of this Article 18. Subject to Tenant's receipt of a Nondisturbance Agreement, Tenant covenants and agrees in the event any
proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to, subject to the terms of the applicable Nondisturbance Agreement,
attorn, without any deductions or set-offs whatsoever, to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground
lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and not disturb Tenant's occupancy, so long as Tenant timely pays the rent and observes and performs the TCCs of this Lease to
be observed and performed by Tenant. Landlord's interest herein may be assigned as security at any time to any lienholder. Tenant shall, within five (5) business days of request by Landlord,
execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise
adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. 


 
 

ARTICLE 19
  
    DEFAULTS; REMEDIES    
    



        19.1    Events of Default.    The occurrence of any of the following shall constitute a
default of this Lease by Tenant: 



        19.1.1    Any
failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due unless such failure is cured within five
(5) business days after notice; or 


        19.1.2    Except
where a specific time period is otherwise set forth for Tenant's performance in this Lease, in which event the failure to perform by Tenant within such time
period shall be a default by Tenant under this Section 19.1.2, any failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature
of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but in no event exceeding a period of time in excess of ninety (90) days after written notice thereof from Landlord
to Tenant; or 


        19.1.3    To
the extent permitted by law, a general assignment by Tenant or any guarantor of this Lease for the benefit of creditors, or the taking of any corporate action in
furtherance of bankruptcy or dissolution whether or not there exists any proceeding under an insolvency or bankruptcy law, or the filing by or against Tenant or any guarantor of any proceeding under
an insolvency or bankruptcy law, unless in the case of a proceeding filed against Tenant or any guarantor the same is dismissed within sixty (60) days, or the appointment of a trustee or
receiver to take possession of all or substantially all of the assets of Tenant or any guarantor, unless possession is restored to Tenant or such guarantor within thirty (30) days, or any
execution or 



46







 




other
judicially authorized seizure of all or substantially all of Tenant's assets located upon the Premises or of Tenant's interest in this Lease, unless such seizure is discharged within thirty
(30) days; or 


        19.1.4    Abandonment,
pursuant to California Civil Code Section 1951.3, of the Premises by Tenant; or 


        19.1.5    The
failure by Tenant to observe or perform according to the provisions of Articles 5,  14, 17 or
18 of this Lease where such failure continues
for more than five (5) business days after notice from Landlord; or 


        19.1.6    Tenant's
default under the terms and conditions of the 13500 Lease (beyond any applicable notice and cure periods). 




        The
notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law. 


        19.2    Remedies Upon Default.    Upon the occurrence of any event of default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or
more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever. 



        19.2.1    Terminate
this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or
any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following: 



        (a)   The
worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus 


        (b)   The
worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus 



        (c)   The
worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus 


        (d)   Any
other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in
the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and 



        (e)   At
Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law. 





        The
term "rent" as used in this Section 19.2 shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in  Sections 19.2.1(a) and (b)
, above, the "worth at the time of award" shall be computed by allowing
interest at the Interest Rate. As used in Section 19.2.1(c), above, the "worth at the time of award" shall 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 (1%). 


47







 

        19.2.2    Landlord
shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and
recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any
default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due. 


        19.2.3    Landlord
shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies
available under Sections 19.2.1 and 19.2.2, above, or any law or other provision of this Lease),
without prior demand or notice except as required by applicable law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof. 




        19.3    Subleases of Tenant.    Whether or not Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in such subleases,
licenses, concessions or arrangements. In the event of Landlord's election to succeed to Tenant's interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of
notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder. 


        19.4    Form of Payment After Default.    Following the occurrence of
[***] defaults by Tenant in any [***] consecutive month time period, Landlord shall have the right to require that any or all subsequent amounts
paid by Tenant to Landlord hereunder, whether to cure the default in question or otherwise, be paid in the form of cash, money order, cashier's or certified check drawn on an institution acceptable to
Landlord, or by other means approved by Landlord, notwithstanding any prior practice of accepting payments in any different form. 


        19.5    Efforts to Relet.    No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to protect Landlord's interests hereunder, or any other action or omission by Landlord shall be construed as an election by
Landlord to terminate this Lease or Tenant's right to possession, or to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise available under any law to redeem or
reinstate this Lease. 


        19.6    Landlord Default.    Notwithstanding anything to the contrary set forth in this Lease,
Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty
(30) days after the receipt of notice from Tenant specifying in detail Landlord's failure to perform; provided, however, if the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its
rights provided at law or in equity. Any award from a court or arbitrator in favor of Tenant requiring payment by Landlord which is not paid by Landlord within the time period directed by such award,
may be offset by Tenant from Rent next due and payable under this Lease; provided, however, Tenant may not, [***] 



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


48







 

[***]
provided further, however, [***]. 


 
 

ARTICLE 20
  
    COVENANT OF QUIET ENJOYMENT    
    


        Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved and on keeping, observing
and performing all the other TCCs, provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the Lease Term, peaceably and quietly have, hold
and enjoy the Premises subject to the TCCs, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in lieu of any
other covenant express or implied. 


 
 

ARTICLE 21
  
    LETTER OF CREDIT    
    



        21.1    Delivery of Letter of Credit.    Within five (5) business days following the
full execution and delivery of this Lease by and between Tenant and Landlord, Tenant shall deliver to Landlord, as protection for the full and faithful performance by Tenant of all of its obligations
under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease, an
irrevocable and unconditional negotiable standby letter of credit (the "Letter of Credit"), in the form attached hereto as  Exhibit H and
containing the terms required herein, payable in either the City of San Diego or the City of Los Angeles (both,
California), running in favor of Landlord and issued by a solvent, nationally recognized bank with a long term rating of BBB or higher, under the supervision of the Superintendent of Banks of the
State of California, or a national banking association, in the amount of [***] (the "Letter of Credit Amount"). The Letter of
Credit shall (i) be "callable" at sight, irrevocable and unconditional, (ii) be maintained in effect, whether through renewal or extension, for the period from the Lease Commencement
Date and continuing until the date (the "LC Expiration Date") that is one hundred twenty (120) days after the expiration of the Lease Term, and
Tenant shall deliver a new Letter of Credit or certificate of renewal or extension to Landlord at least sixty (60) days prior to the expiration of the Letter of Credit then held by Landlord,
without any action whatsoever on the part of Landlord, (iii) be fully assignable by Landlord, its successors and assigns, (iv) permit partial draws and multiple presentations and
drawings, and (v) be otherwise subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev), International Chamber of Commerce Publication #500, or the
International Standby Practices-ISP 98, International Chamber of Commerce Publication #590. In addition to the foregoing, the form and terms of the Letter of Credit (and the bank issuing
the same (the "Bank")) shall be acceptable to Landlord, in Landlord's sole discretion. Landlord, or its then managing agent, shall have the right to
draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions
of this Lease, or (B) Tenant has filed a voluntary petition under the U.S. Bankruptcy Code or any state bankruptcy code (collectively, "Bankruptcy
Code"), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the Letter of Credit
will not be renewed or extended through the LC Expiration Date. The Letter of Credit will be honored by the Bank regardless of whether Tenant disputes Landlord's right to draw upon the Letter of
Credit. 


        21.2    Transfer of Letter of Credit.    The Letter of Credit shall also provide that
Landlord, its successors and assigns, may, at any time and without notice to Tenant and without first obtaining Tenant's consent thereto, transfer (one or more times) all or any portion of its
interest in and to the 


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Letter
of Credit to another party, person or entity, regardless of whether or not such transfer is separate from or as a part of the assignment by Landlord of its rights and interests in and to this
Lease. In the event of a transfer of Landlord's interest in the Building, Landlord shall transfer the Letter of Credit, in whole or in part, to the transferee and thereupon Landlord shall, without any
further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any
portion of said Letter of Credit to a new landlord. In connection with any such transfer of the Letter of Credit by
Landlord, Tenant shall, [***], execute and submit to the Bank such applications, documents and instruments as may be necessary to effectuate such transfer; provided that
Landlord shall be responsible for paying the Bank's transfer and processing fees in connection therewith up to an amount equal to [***] (the
"L-C Transfer Cap"), and Tenant shall pay be responsible for paying the Bank's transfer and processing fees in excess of the L-C
Transfer Cap. 


        21.3    Application of Letter of Credit.    Tenant hereby acknowledges and agrees that
Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the Letter of Credit upon the occurrence of any breach or default on the part of Tenant under this
Lease or the 13500 Lease. If Tenant shall breach any provision of this Lease or the 13500 Lease (or otherwise be in default hereunder or thereunder), Landlord may, but without obligation to do so, and
without notice to Tenant, draw upon the Letter of Credit, in part or in whole, to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature
sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant's breach or default of this Lease or the 13500 Lease, including, but not limited to, all damages or rent due
upon termination of this Lease pursuant to Section 1951.2 of the California Civil Code. The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not
prevent Landlord from exercising any other right or remedy provided by this Lease, by the 13500 Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed
against the Letter of Credit, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of
the proceeds of the Letter of Credit, either prior to or following a "draw" by Landlord of any portion of the Letter of Credit, regardless of whether any dispute exists between Tenant and Landlord as
to Landlord's right to draw upon the Letter of Credit. No condition or term of this Lease or the 13500 Lease shall be deemed to render the Letter of Credit conditional to justify the issuer of the
Letter of Credit in failing to honor a drawing upon such Letter of Credit in a timely manner. Tenant agrees and acknowledges that (i) the Letter of Credit constitutes a separate and independent
contract between Landlord and the Bank, (ii) Tenant is not a third party beneficiary of such contract, (iii) Tenant has no property interest whatsoever in the Letter of Credit or the
proceeds thereof, and (iv) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant's bankruptcy estate shall have any right to
restrict or limit Landlord's claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise. 


        21.4    Letter of Credit not a Security Deposit.    Landlord and Tenant acknowledge and agree
that in no event or circumstance shall the Letter of Credit or any renewal thereof or any proceeds thereof be (i) deemed to be or treated as a "security deposit" within the meaning of
California Civil Code Section 1950.7, (ii) subject to the terms of such Section 1950.7, or (iii) intended to serve as a "security deposit" within the meaning of such
Section 1950.7. The parties hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules
and regulations applicable to security deposits in the commercial context ("Security Deposit Laws") shall have no applicability or relevancy thereto and
(B) waive any and all rights, duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws. 



[***]
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ARTICLE 22    
    


COMMUNICATIONS EQUIPMENT



        22.1    Communication Equipment.    Subject to all governmental laws, rules and regulations,
Tenant and Tenant's contractors (which shall first be reasonably approved by Landlord) shall have the non-exclusive right and access to install, repair, replace, remove, operate and
maintain so-called "satellite dishes" or other similar devices, such as antennae no greater than thirty-six (36) inches in diameter and weighing no more than fifty
(50) pounds each, together with all cable, wiring, conduits and related equipment (collectively, "Communication Equipment"), for the purpose of
receiving and sending radio, television, computer, telephone or other communication signals, to the extent reasonably necessary to support Tenant's use of the Premises, at a location on the roof of
the Building designated by Landlord and reasonably approved by Tenant. There shall be no rental charge, license fee or similar charge to Tenant for the right to install and maintain such Communication
Equipment at the Building during the initial Lease Term or any extension thereof. Further, Tenant shall have the right of access, consistent with this  Section 22.1, to the area where the
Communication Equipment is located for the purposes of maintaining, repairing, testing and replacing the
same. Landlord shall have the right to require Tenant to relocate the Communication Equipment at any time to another location on the roof of the Building, which location is reasonably acceptable to
Tenant. Unless Landlord elects to perform such penetrations at Tenant's sole cost and expense, Tenant shall retain Landlord's designated roofing contractor to make any necessary penetrations and
associated repairs to the roof in order to preserve Landlord's roof warranty. Tenant's installation and operation of the Communication Equipment shall be governed by the following terms and
conditions: 



        22.1.1  Tenant's
right to install, replace, repair, remove, operate and maintain the Communication Equipment shall be subject to all Applicable Laws and Landlord makes no
representation that such Applicable Laws permit such installation and operation; 


        22.1.2  All
plans and specifications for the Communication Equipment shall be subject to Landlord's reasonable approval; 



        22.1.3  All
costs of installation, operation and maintenance of the Communication Equipment and any necessary related equipment (including, without limitation, costs of
obtaining any necessary permits and connections to the Building's electrical system) shall be borne by Tenant; 


        22.1.4  It
is expressly understood that Tenant's rights are superior to any later users of the roof area and subject to the foregoing, Landlord retains the right to use the
roof of the Building for any purpose whatsoever (including granting rights to third parties to utilize any portion of the roof not utilized by Tenant); provided,
however, [***]. 


        22.1.5  Tenant
shall use the Communication Equipment so as not to cause any interference to other pre-existing tenants at the Project or with any other such
tenant's communication equipment, and not to damage the Project or interfere with the normal operation of the Project and Tenant hereby agrees to indemnify, defend and hold Landlord harmless from and
against any and all claims, costs, damages, expenses and liabilities (including attorneys' fees) arising out of Tenant's failure to comply with the provisions of this  Section 22.1.5, except to the
extent same is caused by the gross negligence or willful misconduct of Landlord which is not covered by the
insurance carried by Tenant under this Lease (or which would not be covered by the insurance required to be carried by Tenant under this Lease); 



        22.1.6  For
the purposes of determining Tenant's obligations with respect to its use of the roof of the Building herein provided, all of the provisions of this Lease relating
to compliance with 




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requirements
as to insurance, indemnity, and compliance with laws shall apply to the installation, use and maintenance of the Communication Equipment; provided, however, Tenant shall only be provided
access to the roof after prior written notice to Landlord and subject to Landlord's reasonable rules and
restrictions regarding access (including, at Landlord's option, the requirement that Tenant be accompanied by a representative of Landlord during such access). Landlord shall not have any obligations
with respect to the Communication Equipment. Landlord makes no representation that the Communication Equipment will be able to receive or transmit communication signals without interference or
disturbance and Tenant agrees that Landlord shall not be liable to Tenant therefor; 



        22.1.7  Tenant
shall (i) be solely responsible for any damage caused as a result of the Communication Equipment, (ii) promptly pay any tax, license or permit
fees charged pursuant to any laws or regulations in connection with the installation, maintenance or use of the Communication Equipment and comply with all precautions and safeguards required by all
applicable governmental authorities, and (iii) pay for all necessary repairs, replacements to or maintenance of the Communication Equipment, except to the extent such repairs, replacements to
or maintenance of the Communication Equipment is necessitated as a result of the gross negligence or willful misconduct of Landlord or Landlord Parties; 



        22.1.8  The
Communication Equipment shall remain the sole property of Tenant. Tenant shall remove the Communication Equipment and related equipment at Tenant's sole cost and
expense upon the expiration or sooner termination of this Lease or upon the imposition of any governmental law or regulation which may require removal, and shall repair the Building upon such removal
to the extent required by such work of removal. If Tenant fails to remove the Communication Equipment and repair the Building upon the expiration or earlier termination of this Lease, Landlord may do
so at Tenant's expense. The provisions of this Section 24.32.8 shall survive the expiration or earlier termination of this Lease; 



        22.1.9  The
Communication Equipment shall be deemed to constitute a portion of the Premises for purposes of Article 10
of this Lease; 


        22.1.10  Tenant,
at Tenant's sole cost and expense, shall install and maintain such fencing and other protective equipment and/or visual screening on or about the
Communication Equipment as Landlord may reasonably determine; 


        22.1.11  If
any of the conditions set forth in this Section 22.1 are not complied with by Tenant, then without limiting
Landlord's rights and remedies it may otherwise have under this Lease, at law and/or in equity, Tenant shall correct such noncompliance within five (5) business days after receipt of notice (or
such longer period as may be reasonably required as long as Tenant commences such correction within such five (5) business day period and diligently prosecutes the same to completion). If
Tenant fails to correct any such noncompliance within such five (5) day period (as may be extended), then, at Landlord's option, Tenant shall immediately discontinue its use of such
Communication Equipment and remove the same in accordance with the terms hereof; and 


        22.1.12  Tenant's
rights under this Section 22.1 with respect to the Communication Equipment shall be personal to the
Original Tenant or any Permitted Transferee, and may only be utilized by the Original Tenant or such Permitted Transferee (and may not be exercised or utilized by any other assignee,
sublessee or other transferee of the Original Tenant's interest in this Lease or the Premises) if the Original Tenant occupies the entire Premises then leased by Original Tenant. 



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ARTICLE 23
  
    SIGNS    
    


        23.1    Interior Signage.    Subject to Landlord's reasonable prior written approval, and
provided all signs are in keeping with the quality, design and style of the Building and Project, Tenant, at its sole cost and expense, may install identification signage anywhere in the Premises
including in the elevator lobby of the Premises, provided that such signs must not be visible from the exterior of the Building. 



        23.2    Prohibited Signage and Other Items.    Any signs, notices, logos, pictures, names or
advertisements which are installed and that have not been separately approved by Landlord may be removed without notice by Landlord at the sole expense of Tenant. Except as provided in  Section 23.3,
 Tenant may not install any signs on the exterior or roof of the Project or the Common Areas. Any signs, window coverings, or blinds
(even if the same are located behind the Landlord-approved window coverings for the Building), or other items visible from the exterior of the Premises or Building, shall be subject to the
prior approval of Landlord, in its sole discretion. 



        23.3    Tenant's Signage.    Tenant shall be entitled to install the following signage in
connection with Tenant's lease of the Premises (collectively, the "Tenant's Signage"): 



	(i)
	All
available exterior signage to the extent allowed pursuant to Applicable Laws and the CC&R's, including without limitation any Building-top
signage identifying Tenant's name or logo located at the top of the Building, and any "eyebrow" signage located at the main entrance of the Building; and



	(ii)
	A
pro-rata share of the monument signage located within the Project. Tenant hereby acknowledges and agrees that Landlord may, at Landlord's
sole cost and expense, place a standard "owned and managed" sign on such Building Monument Sign, [***]. 




        23.3.1    Specifications and Permits.    Tenant's Signage shall set forth Tenant's name and
logo as determined by Tenant in its sole discretion; provided, however, in no event shall Tenant's Signage include an "Objectionable Name," as that term is defined in  Section 23.3.2, of this Lease.
The graphics, materials, color, design, lettering, lighting, size, illumination, specifications and exact location
of Tenant's Signage (collectively, the "Sign Specifications") shall be subject to the prior written approval of Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed, and shall be consistent and compatible with the quality and nature of the Project. For purposes of this  Section 23.3.1, the reference to "name" shall
mean name and/or logo. In addition, Tenant's Signage shall be subject to Tenant's receipt of all
required governmental permits and approvals and shall be subject to all Applicable Laws and to any CC&Rs affecting the Project. Landlord shall use commercially reasonable efforts to assist Tenant in
obtaining all necessary governmental permits and approvals for Tenant's Signage. Tenant hereby acknowledges that, notwithstanding Landlord's approval of Tenant's Signage, Landlord has made no
representation or warranty to Tenant with respect to the probability of obtaining all necessary governmental approvals and permits for Tenant's Signage. In the event Tenant does not receive the
necessary governmental approvals and permits for Tenant's Signage, Tenant's and Landlord's rights and obligations under the remaining TCCs of this Lease shall be unaffected. 


        23.3.2    Objectionable Name.    To the extent Tenant desires to change the name and/or logo
set forth on Tenant's Signage, such name and/or logo shall not have a name which relates to an entity which is of a character or reputation, or is associated with a political faction or orientation,
which is inconsistent with the quality of the Project, or which would otherwise reasonably offend a landlord of the Comparable Buildings (an "Objectionable
Name"). The parties hereby agree that the following names shall be deemed not to constitute an Objectionable Name: Bridgepoint 




[***]
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Education;
Ashford Edu.; Ashford.Edu; Ashford Education; Ashford University; Rockies.Edu; University of the Rockies; BPE; UOR; Bridgepoint; Centerleaf; and Centerleaf Partners. 


        23.3.3    Termination of Right to Tenant's Signage.    Except as expressly identified in  Sections 23.3(i)
 and (ii), the rights contained in this  Section 23.3 shall be personal to Original Tenant, its Permitted Transferees and/or
any Approved Assignee, and may only be exercised and
maintained by such parties (and not any other assignee, sublessee or other transferee of the Original Tenant's interest in this Lease) to the extent (x)
they are not in monetary or material non-monetary default under this Lease (beyond any applicable notice and cure period) and (y) if
they occupy at least fifty percent (50%) of the entire Premises. 


        23.3.4    Cost and Maintenance.    The costs of the actual signs comprising Tenant's Signage
and the installation, design, construction, and any and all other costs associated with Tenant's Signage, including, without limitation, utility charges and hook-up fees, permits, and
maintenance and repairs, shall be the sole responsibility of Tenant; provided that the costs and fees associated with the initial installation, design, and construction of such Tenant's Signage may,
at Tenant's option, be deemed "FF&E," as that term is set forth in Section 2.2.5 of the Work Letter Agreement. Should Tenant's Signage require
repairs and/or maintenance, as determined in Landlord's reasonable judgment, Landlord shall have the right to provide Notice thereof to Tenant and Tenant (except as set forth above) shall cause such
repairs and/or maintenance to be performed within ten (10) business days after receipt of such Notice from Landlord, at Tenant's sole cost and expense; provided, however, if such repairs and/or
maintenance are reasonably expected to require longer than ten (10) business days to perform, Tenant shall commence such repairs and/or maintenance within such ten (10) business day
period and shall diligently prosecute such repairs and maintenance to completion. Should Tenant fail to perform such repairs and/or maintenance within the periods described in the immediately
preceding sentence, Landlord shall, upon the delivery of an additional five (5) business days' prior written notice, have the right to cause such work to be performed and to charge Tenant as
Additional Rent for the cost of such work. Upon the expiration or earlier termination of this Lease, Tenant shall, at Tenant's sole cost and expense, cause Tenant's Signage to be removed and shall
cause the areas in which such Tenant's Signage was located to be restored to the condition existing immediately prior to the placement of such Tenant's Signage (excepting normal wear and tear caused
by the sun, rain and other elements to which such Tenant's Signage is exposed). If Tenant fails to timely remove such Tenant's Signage or to restore the areas in which such Tenant's Signage was
located, as provided in the immediately preceding sentence, then Landlord may perform such work, and all costs incurred by Landlord in so performing shall be reimbursed by Tenant to Landlord within
thirty (30) days after Tenant's receipt of an invoice therefor. The TCCs of this Section 23.3.4 shall survive the expiration or earlier
termination of this Lease. 


        23.3.5    Project Signage Exclusivity.    Provided Tenant is not then in default of this Lease
(beyond any applicable notice and cure periods), Landlord agrees not to allow any "Direct Competitor" (defined below) to have any exterior signage in the Project (as opposed to lobby or suite
signage). For purposes of this Lease, a "Direct Competitor" shall mean the entities identified on  Exhibit I, attached hereto. 



 
 

ARTICLE 24
  
    COMPLIANCE WITH LAW    
    


        Tenant shall not do anything or suffer anything to be done in or about the Premises or the Project which will in any way conflict with
any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated (collectively, "Applicable
Laws"). At its sole cost and expense, Tenant shall promptly comply with all such Applicable Laws which relate to (i) Tenant's use of the Premises for
non-general office use, (ii) the Alterations or 


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Improvements
in the Premises, or (iii) the Base Building, but, as to the Base Building, only to the extent such obligations are triggered by Tenant's Alterations, the Improvements, or use of
the Premises for non-general office use. Should any standard or regulation now or hereafter be imposed on Landlord or Tenant by a state, federal or local governmental body charged with the
establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, at its sole cost and expense, to comply
promptly with such standards or regulations. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto,
that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant. Landlord shall comply with all Applicable Laws relating to the Base
Building and the Common Areas, provided that compliance with such Applicable Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord's failure to comply therewith
would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would expose Tenant to liability to any of its employees, subtenants, invitees or customers, or any
governmental or quasi-governmental authority, or would unreasonably and materially affect the safety of Tenant's employees, subtenants, invitees, or customers, or create a significant health hazard
for Tenant's employees. Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under this  Article 24 to the extent consistent with the terms of
Section 4.2.4, above. 


 
 

ARTICLE 25
  
    LATE CHARGES    
    


        If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee when due, then
Tenant shall pay to Landlord a late charge equal to [***] percent ([***]%) of the overdue amount plus any reasonable attorneys' fees incurred by
Landlord by reason of Tenant's failure to pay Rent and/or other charges when due hereunder; provided, however, with regard to the first [***] such failures in any
[***] month period, Landlord will waive such late charge to the extent Tenant cures such failure within five (5) business days following Tenant's receipt of
written notice from Landlord that the same was not received when due. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord's other rights
and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid within ten (10) days after the date they are due shall bear interest from the date when due until paid at the "Interest Rate." For purposes of this
Lease, the "Interest Rate" shall be an annual rate equal to the lesser of (i) the annual "Bank Prime
Loan" rate cited in the Federal Reserve Statistical Release Publication H.15(519), published weekly (or such other comparable index as Landlord and Tenant shall reasonably
agree upon if such rate ceases to be published), plus four (4) percentage points, and (ii) the highest rate permitted by applicable law. 


 
 

ARTICLE 26
  
    LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT    
    


        26.1    Landlord's Cure.    All covenants and agreements to be kept or performed by Tenant
under this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwise expressly provided herein. If Tenant shall
fail to perform any obligation under this Lease, and such failure shall continue in excess of the time allowed under Section 19.1.2, above,
unless a specific time period is otherwise stated in this Lease, Landlord may, but shall not be obligated to, make any such payment or perform any such act on Tenant's part without waiving its rights
based upon any default of Tenant and without releasing Tenant from any obligations hereunder. 


[***]
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        26.2    Tenant's Reimbursement.    Except as may be specifically provided to the
contrary in
this Lease, Tenant shall pay to Landlord, upon delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably made and obligations incurred by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii) sums equal to all losses,
costs, liabilities, damages and expenses referred to in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant's obligations under this Section 26.2 shall survive the expiration or sooner
termination of the Lease Term. 


 
 

ARTICLE 27
  
    ENTRY BY LANDLORD    
    


        Landlord reserves the right at all reasonable times (during Building Hours with respect to items (i) and (ii) below) and
upon at least twenty-four (24) hours prior notice to Tenant (except in the case of an emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, or to current or prospective mortgagees, ground or underlying lessors or insurers, or during the last twelve (12) months of the Lease Term, to prospective tenants;
(iii) post notices of nonresponsibility; or (iv) alter, improve or repair the Premises or the Building, or for structural alterations, repairs or improvements to the Building or the
Building's systems and equipment; provided, however, Tenant may elect to have a representative accompany Landlord during any such entry; provided further, however, Landlord shall not be required to
delay any such entry due to the unavailability of a Tenant representative. Notwithstanding anything to the contrary contained in this Article 27,
Landlord may enter the Premises at any time to (A) perform regularly scheduled services required of Landlord, including janitorial service; (B) take possession due to any breach of this
Lease in the manner provided herein; and (C) perform any covenants of Tenant which Tenant fails to perform. Landlord may make any such entries without the abatement of Rent, except as otherwise
provided in this Lease, and may take such reasonable steps as required to accomplish the stated purposes; provided, however, except for
(w) taking possession of the Premises due to any breach of this Lease, (x)
emergencies, (y) repairs, alterations, improvements or additions required by governmental or quasi-governmental authorities or court order or decree, or
(z) repairs which are the obligation of Tenant hereunder, any such entry shall be performed in a manner so as not to unreasonably interfere with
Tenant's use of the Premises and shall be performed after normal business hours if reasonably practical. With respect to items (y) and
(z) above, Landlord shall use commercially reasonable efforts to not materially interfere with Tenant's use of, or access to, the Premises. Except as
otherwise set forth in Section 3.2, Tenant hereby waives any claims for damages or for any injuries or inconvenience to or interference with
Tenant's business, lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults, safes and special security areas designated in advance by Tenant. In an emergency, Landlord shall have the right to use
any means that Landlord may deem proper to open the doors in and to the Premises. Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises. No provision of this Lease shall be construed as obligating
Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed to be performed by Landlord herein. 


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ARTICLE 28
  
    TENANT PARKING    
    


        Tenant shall be entitled to utilize, [***], commencing on the Lease Commencement Date, the amount of parking
passes set forth in Section 9 of the Summary (provided that any visitor parking spaces and/or handicap parking spaces required by Applicable Laws
due to Tenant's occupancy shall be included as part of the number passes provided to Tenant), on a monthly basis throughout the Lease Term, which parking passes shall pertain to those certain spaces
located within parking areas in the Project designated for Tenant's exclusive use or designated for all access use; provided, however, that in connection with the foregoing, (i) the entirety of
the Project parking structure commonly referred to as "Parking Structure A," which contains a total of eight hundred
thirty-three (833) parking spaces, shall be designated for Tenant's exclusive use as long as Tenant continues to lease the entirety of the Premises and the 13500 Premises, and
(ii) except with regard to the "Reserved Spaces" identified hereinbelow, the entirety of the Project parking structure commonly referred to as "Parking Structure
B" shall be designated for the exclusive use of the tenants of the 13520 Building. Landlord shall implement an access control system for each of Parking Structure A and Parking
Structure B in order to ensure that only parkers with the appropriate parking pass can park in the applicable parking structure. As part of the number of parking passes set forth in  Section 9 of
the Summary, Tenant shall have the right to rent up to twenty-five (25) passes, each relating to one
(1) reserved parking space located on the second (2nd) level of Parking Structure B on a monthly basis throughout the remainder of the Lease Term (the
"Reserved Passes"); provided that the right to rent such Reserved Pass must be exercised by Tenant, if at all, pursuant to a written notice to
Landlord expressing Tenants' desire to rent such Reserved Passes for a minimum of twelve (12) consecutive calendar months. Tenant shall pay to Landlord for each Reserved Pass so rented and on a
monthly basis, the then-prevailing rate charged from time to time at the location of such parking passes (the initial amount of which is acknowledged by the parties to be
[***]. Notwithstanding the foregoing, Tenant shall at all times be responsible for the full amount of any taxes imposed by any governmental authority in connection with the
renting of such parking passes by Tenant or the use of the parking facility by Tenant. All remaining parking passes which Landlord is required to provide to Tenant shall be applicable to the surface
parking areas of the Project. Tenant's continued right to use the parking passes is conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly
operation and use of the parking facility where the parking passes are located, including any sticker or other identification system established by Landlord, Tenant's exercise of commercially
reasonable efforts to cause that Tenant's employees and visitors also comply with such rules and regulations, and Tenant not being in default under this Lease. To the extent reasonably necessary to
ensure Tenant's parking rights and obligations hereunder are readily available to and maintained by Tenant and its employees, Landlord shall establish a sticker or other identification system for the
Project; provided, however, to the extent the foregoing measures prove insufficient, Landlord shall additionally implement, at Tenant's sole cost and expense, reasonable access control and/or other
parking management services or systems with regard to such Project parking facilities. Landlord specifically reserves the right to change the size, configuration, design, layout and all other aspects
of the Project parking facility at any time and Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease (except
to the extent expressly set forth in Section 3.2 of this Lease, above), from time to time, close-off or restrict access to the
Project parking facility for purposes of permitting or facilitating any such construction, alteration or improvements. During any period of closure of or restricted access to the Project parking
areas, Landlord shall be responsible to provide Tenant with reasonable replacement parking in reasonable proximity and with reasonable access to the Premises. 


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


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Landlord
may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control attributed hereby to the Landlord. The parking
passes rented by Tenant pursuant to this Article 28 are provided to Tenant solely for use by Tenant's own personnel, employees, agents,
contractors or invitees and such passes may not be transferred, assigned, subleased or otherwise alienated by Tenant without Landlord's prior approval. If at any time Tenant is not leasing the
entirety of the Premises and the 13500 Premises (excluding the "First Pacific Space" (to the extent First Pacific continues to lease such space) and the "Project Gym," as those terms are defined in
the 13500 Lease), then (1) the number of parking passes that Landlord is required to provide Tenant pursuant to the terms of this Lease shall be proportionately reduced (based on the reduction
in
the total square footage leased by Tenant in the Building and the 13500 Building), (2) such reduction shall be at the same ratio of covered to non-covered parking as required under
this Article 28, and (3) Tenant shall not have the exclusive use of Parking Structure A. 


 
 

ARTICLE 29
  
    MISCELLANEOUS PROVISIONS    
    


        29.1    Terms; Captions.    The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may
require, shall in all cases be assumed as though in each case fully expressed. The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or
alter the meaning of such Articles and Sections. 


        29.2    Binding Effect.    Subject to all other provisions of this Lease, each of the
covenants, conditions and provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective
heirs, personal representatives, successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of  Article 14 of this Lease. 



        29.3    No Air Rights.    No rights to any view or to light or air over any property, whether
belonging to Landlord or any other person, are granted to Tenant by this Lease. If at any time any windows of the Premises are temporarily darkened or the light or view therefrom is obstructed by
reason of any repairs, improvements, maintenance or cleaning in or about the Project, the same shall be without liability to Landlord and without any reduction or diminution of Tenant's obligations
under this Lease. 


        29.4    Modification of Lease.    Should any current or prospective mortgagee or ground lessor
for the Building or Project require a modification of this Lease, which modification will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the
rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever documents are reasonably required therefor and to
deliver the same to Landlord within ten (10) days following a request therefor. At the request of Landlord or any mortgagee or ground lessor, Tenant agrees to execute a short form of Lease and
deliver the same to Landlord within ten (10) days following the request therefor. 


        29.5    Transfer of Landlord's Interest.    Tenant acknowledges that Landlord has the right to
transfer all or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all
liability under this Lease that accrues after the effective date of the transfer and Tenant agrees to look solely to such transferee for the performance of Landlord's obligations hereunder after the
date of such transfer, provided such transferee shall have fully assumed in writing all obligations of this Lease to be performed by Landlord after the date of such transfer, including the return of
any Security Deposit, and Tenant shall attorn to such transferee. In addition, Landlord shall be released from all liability that accrues prior to the date of such transfer if such transferee assumes
such liability in writing. Tenant 


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further
acknowledges that Landlord may assign its interest in this Lease to a mortgage lender as additional security and agrees that such an assignment shall not release Landlord from its obligations
hereunder and that Tenant shall continue to look to Landlord for the performance of its obligations hereunder. 


        29.6    Prohibition Against Recording.    Except as provided in  Section 29.4 of this Lease,
neither Landlord nor Tenant shall record this Lease, but upon request by Tenant, Landlord shall execute and deliver
to Tenant, for Tenant to record, a Memorandum of Lease in the form attached hereto as Exhibit J (the
"Memorandum"). Within 10 days after the expiration or earlier termination of this Lease, Tenant shall enter into such documentation as is
reasonably required by Landlord to remove the memorandum of record. The terms of this Section 29.6 shall survive the expiration or earlier
termination of this Lease. 


        29.7    Landlord's Title.    Landlord's title is and always shall be paramount to the title of
Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord. 


        29.8    Relationship of Parties.    Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant. 


        29.9    Application of Payments.    Landlord shall have the right to apply payments received
from Tenant pursuant to this Lease, regardless of Tenant's designation of such payments, to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion,
may elect. 


        29.10    Time of Essence.    Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor. 


        29.11    Partial Invalidity.    If any term, provision or condition contained in this Lease
shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons or circumstances other than those with respect to
which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible
permitted by law. 


        29.12    No Warranty.    In executing and delivering this Lease, Tenant has not relied on any
representations, including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that Landlord is
furnishing the same services to other tenants, at all, on the same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the
exhibits attached hereto. 


        29.13    Landlord Exculpation.    The liability of Landlord or the Landlord Parties to Tenant
for any default by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration or any other matter relating to the
Project or the Premises shall be limited solely and exclusively to an amount which is equal to the equity interest of Landlord in the Building. Neither Landlord, nor any of the Landlord Parties shall
have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations
of liability contained in this Section 29.13 shall inure to the benefit of Landlord's and the Landlord Parties' present and future partners,
beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Notwithstanding any contrary provision in Lease,
Landlord agrees (i) that the partners, shareholders, principals and members of Tenant shall have no personal liability in respect of (or arising out of or relating to) the obligations of Tenant
under this Lease; and (ii) to look only to assets of Tenant for satisfaction of Landlord's remedies arising out of 


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the
obligations of Tenant under this Lease, and that no property or assets of any partner, shareholder, principal or member of Tenant shall be subject to levy, execution or other enforcement procedure
for satisfaction of Landlord's remedies arising out of such obligations; provided, however nothing herein shall prevent Landlord from obtaining, entering and enforcing a judgment against, from and out
of the assets of Tenant with respect to any obligations of Tenant under this Lease. Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or
beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord's obligations under this Lease. Notwithstanding any contrary provision herein,
neither Landlord nor the Landlord Parties shall be liable under any circumstances for injury or damage to, or interference with, Tenant's business, including but not limited to, loss of profits, loss
of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring. 


        29.14    Entire Agreement.    It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease constitutes the parties' entire agreement with respect to the leasing of the Premises and supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be
used to interpret or construe this Lease. None of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties hereto. 


        29.15    Right to Lease.    Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building or Project. Tenant does not rely on the fact, nor does
Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any space in the Building or Project. 


        29.16    Force Majeure.    Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease and except as to
Tenant's obligations under Articles 5 and 24 of this Lease (collectively, a
"Force Majeure"), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any
such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay
in such party's performance caused by a Force Majeure. 


        29.17    Waiver of Redemption by Tenant.    Tenant hereby waives, for Tenant and for all those
claiming under Tenant, any and all rights now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant's right of occupancy of the Premises after any
termination of this Lease. 


        29.18    Notices.    All notices, demands, statements, designations, approvals or other
communications (collectively, "Notices") given or required to be given by either party to the other hereunder or by law shall be in writing, shall be
(A) sent by United States certified or registered mail, postage prepaid, return receipt requested ("Mail"), (B) transmitted by telecopy,
if such telecopy is promptly followed by a Notice sent by Mail, (C) delivered by a nationally recognized overnight courier, or (D) delivered personally. Any Notice shall be sent,
transmitted, or delivered, as the case may be, to Tenant at the appropriate address set forth in Section 10 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to Landlord at the addresses set forth below, or to such other places as Landlord may from time to time designate in a
Notice to Tenant. Any Notice will be deemed given (i) three (3) days after the date it is posted if sent by Mail, (ii) the date the telecopy is transmitted, (iii) the date
the overnight courier delivery is made, or (iv) the 


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date
personal delivery is made or attempted to be made. If Tenant is notified of the identity and address of Landlord's mortgagee or ground or underlying lessor, Tenant shall give to such mortgagee or
ground or underlying lessor written notice of any default by Landlord under the terms of this Lease by registered or certified mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant's exercising any remedy available to Tenant.
As of the date of this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses: 



			
	 
	 	 Kilroy Realty, L.P.

c/o Kilroy Realty Corporation

12200 West Olympic Boulevard, Suite 200

Los Angeles, California 90064

Attention: Legal Department

	 
	 	  with copies to:

	 
	 	 Kilroy Realty Corporation

12200 West Olympic Boulevard, Suite 200

Los Angeles, California 90064

Attention: Mr. John Fucci

	 
	 	  and

	 
	 	 Kilroy Realty Corporation

13500 Evening Creek Drive North, Suite 130

San Diego, California 92128

Attention: Mr. Michael Nelson

	 
	 	  and

	 
	 	 Allen Matkins Leck Gamble Mallory & Natsis LLP

1901 Avenue of the Stars, Suite 1800

Los Angeles, California 90067

Attention: Anton N. Natsis, Esq.







        29.19    Joint and Several.    If there is more than one Tenant, the obligations imposed upon
Tenant under this Lease shall be joint and several. 


        29.20    Authority.    If Tenant is a corporation, trust or partnership, each individual
executing this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in California and that Tenant has full right and
authority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so. In such event, Tenant shall, within ten (10) days after execution of this
Lease, deliver to Landlord satisfactory evidence of such authority and, if a corporation, upon demand by Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in
Tenant's state of incorporation and (ii) qualification to do business in California. 


        29.21    Attorneys' Fees.    In the event that either Landlord or Tenant should bring suit for
the possession of the Premises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease or for any other relief against the other, then all costs and
expenses, including reasonable attorneys' fees, incurred by the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment. 


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        29.22    Governing Law; WAIVER OF TRIAL BY JURY.    This Lease shall be construed and enforced
in accordance with the laws of the State of California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN
THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR
ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR
ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW. 


        29.23    Submission of Lease.    Submission of this instrument for examination or signature by
Tenant does not constitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant. 



        29.24    Brokers.    Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in  Section 12 of the Summary (the
"Brokers"), and that they know of no other real estate broker or
agent who is entitled to a commission in connection with this Lease. Landlord shall pay the Brokers pursuant to the terms of separate commission agreements. Each party agrees to indemnify and defend
the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable
attorneys' fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers,
occurring by, through, or under the indemnifying party. 


        29.25    Independent Covenants.    This Lease shall be construed as though the covenants
herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its
obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord's expense or to any setoff of the Rent or other amounts owing hereunder against
Landlord. 


        29.26    Project or Building Name and Signage.    Landlord shall have the right at any time to
change the name of the Project or Building. Tenant shall not use the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by Tenant in the Premises, without the prior written consent of Landlord. 



        29.27    Counterparts.    This Lease may be executed in counterparts with the same effect as
if both parties hereto had executed the same document. Both counterparts shall be construed together and shall constitute a single lease. 


        29.28    Confidentiality.    Tenant acknowledges that the content of this Lease and any
related documents are confidential information. Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other
than Tenant's financial, legal, and space planning consultants. 


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        29.29    Transportation Management.    Tenant shall fully comply with all present or future
programs intended to manage parking, transportation or traffic in and around the Building, and in connection therewith, Tenant shall take responsible action for the transportation planning and
management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or
entities. 


        29.30    Building Renovations.    It is specifically understood and agreed that Landlord has
made no representation or warranty to Tenant and has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate the Premises, Building, or any part thereof and
that no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant except as specifically set forth herein or in the Work Letter Agreement. However,
Tenant hereby acknowledges that Landlord is currently renovating or may during the Lease Term renovate, improve, alter, or modify (collectively, the
"Renovations") the Project, the Building and/or the Premises including without limitation the parking structure, common areas, systems and equipment,
roof, and structural portions of the same, which Renovations may include, without limitation, (i) installing sprinklers in the Building common areas and tenant spaces, (ii) modifying the
common areas and tenant spaces to comply with applicable laws and regulations, including regulations relating to the physically disabled, seismic conditions, and building safety and security, and
(iii) installing new floor covering, lighting, and wall coverings in the Building common areas, and in connection with any Renovations, Landlord may, among other things, erect scaffolding or
other necessary structures in the Building, limit or eliminate access to portions of the Project, including portions of the common areas, or perform work in the Building, which work may create noise,
dust or leave debris in the Building. Tenant hereby agrees that such Renovations and Landlord's actions in connection with such Renovations shall in no way constitute a constructive eviction of Tenant
nor entitle Tenant to any abatement of Rent. Landlord
shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant's business arising from the Renovations, nor shall Tenant be
entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant's personal property or improvements resulting from the Renovations or
Landlord's actions in connection with such Renovations, or for any inconvenience or annoyance occasioned by such Renovations or Landlord's actions. 


        29.31    No Violation.    Tenant hereby warrants and represents that neither its execution of
nor performance under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation by which Tenant is bound, and Tenant shall protect, defend,
indemnify and hold Landlord harmless against any claims, demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees and costs, arising from
Tenant's breach of this warranty and representation. 


        29.32    Communications and Computer Lines.    Tenant may install, maintain, replace, remove
or use any communications or computer wires and cables (collectively, the "Lines") at the Project in or serving the Premises, provided that
(i) Tenant shall obtain Landlord's prior written consent, use an experienced and qualified contractor reasonably approved by Landlord, and comply with all of the other provisions of  Articles 7
and 8 of this Lease, (ii) an acceptable number of spare Lines and space for
additional Lines shall be maintained for existing and future occupants of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables) shall be
(x) appropriately insulated to prevent excessive electromagnetic fields or radiation, (y) surrounded by a protective conduit reasonably acceptable to Landlord, and (z) identified
in accordance with the "Identification Requirements," as that term is set forth hereinbelow, (iv) any new or existing Lines servicing the Premises shall comply with all applicable governmental
laws and regulations, (v) as a condition to permitting the installation of new Lines, Tenant shall remove existing Lines located in or serving the Premises and repair any damage in connection
with such removal, and (vi) Tenant shall pay all costs in connection therewith. All Lines shall be clearly marked with adhesive plastic labels (or 


63







 



plastic
tags attached to such Lines with wire) to show Tenant's name, suite number, telephone number and the name of the person to contact in the case of an emergency (A) every four feet
(4') outside the Premises (specifically including, but not limited to, the electrical room risers and other Common Areas), and (B) at the Lines' termination point(s) (collectively,
the "Identification Requirements"). Landlord reserves the right to require that Tenant remove any Lines located in or serving the Premises which are
installed in violation of these provisions, or which are at any time (1) are in violation of any Applicable Laws, (2) are inconsistent with then-existing industry standards
(such as the standards promulgated by the National Fire Protection Association (e.g., such organization's "2002 National Electrical Code")), or
(3) otherwise represent a dangerous or potentially dangerous condition. 


        29.33    Hazardous Substances.    



        29.33.1    Definitions.    For purposes of this Lease, the following definitions shall apply:
"Hazardous Material(s)" shall mean any solid, liquid or gaseous substance or material that is described or characterized as a toxic or hazardous
substance, waste, material, pollutant, contaminant or infectious waste, or any matter that in certain specified quantities would be injurious to the public health or welfare, or words of similar
import, in any of the "Environmental Laws," as that term is defined below, or any other words which are intended to define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity or reproductive toxicity and includes, without limitation, asbestos, petroleum (including crude oil or any fraction thereof, natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas, nuclear or
radioactive matter, medical waste, soot, vapors, fumes, acids, alkalis, chemicals, microbial matters (such as molds, fungi or other bacterial matters), biological agents and chemicals which may cause
adverse health effects, including but not limited to, cancers and /or toxicity. "Environmental Laws" shall mean any and all federal, state, local or
quasi-governmental laws (whether under common law, statute or otherwise), ordinances, decrees, codes, rulings, awards, rules, regulations or guidance or policy documents now or hereafter enacted or
promulgated and as amended from time to time, in any way relating to (i) the protection of the environment, the health and safety of persons (including employees), property or the public
welfare from actual or potential release, discharge, escape or emission (whether past or present) of any Hazardous Materials or (ii) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Materials. 


        29.33.2    Compliance with Environmental Laws.    Landlord covenants that during the Lease
Term, Landlord shall comply with all Environmental Laws in accordance with, and as required by, the TCCs of Article 24 of this Lease. Tenant
represents and warrants that, except as herein set forth, it will not use, store or dispose of any Hazardous Materials in or on the Premises. However, notwithstanding the preceding sentence, Landlord
agrees that Tenant may use, store and properly dispose of commonly available household cleaners and chemicals to maintain the Premises and Tenant's routine office operations (such as printer toner and
copier toner) (hereinafter the "Permitted Chemicals"). Landlord and Tenant acknowledge that any or all of the Permitted Chemicals described in this
paragraph may constitute Hazardous Materials. However, Tenant may use, store and dispose of same, provided that in doing so, Tenant fully complies with all Environmental Laws. 



        29.33.3    Landlord's Right of Environmental Audit.    Landlord may, upon reasonable notice to
Tenant, be granted access to and enter the Premises no more than once annually to perform or cause to have performed an environmental inspection, site assessment or audit. Such environmental inspector
or auditor may be chosen by Landlord, in its sole discretion, and be performed at Landlord's sole expense. To the extent that the report prepared upon such inspection, assessment or audit, indicates
the presence of Hazardous Materials in violation of Environmental Laws, or provides recommendations or suggestions to prohibit the release, 



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discharge,
escape or emission of any Hazardous Materials at, upon, under or within the Premises, or to comply with any Environmental Laws, Tenant shall promptly, at Tenant's sole expense, comply with
such recommendations or suggestions, including, but not limited to performing such additional investigative or subsurface investigations or remediation(s) as recommended by such inspector or auditor.
Notwithstanding the above, if at any time, Landlord has actual notice or reasonable cause to believe that Tenant has violated, or permitted any violations of any Environmental Law, then Landlord
will be entitled to perform its environmental inspection, assessment or audit at any time, notwithstanding the above mentioned annual limitation, and Tenant must reimburse Landlord for the reasonable
cost or fees incurred for such as Additional Rent. 


        29.33.4    Indemnifications.    Landlord agrees to indemnify, defend, protect and hold
harmless the Tenant Parties from and against any liability, obligation, damage or costs, including without limitation, attorneys' fees and costs, resulting directly or indirectly from any use,
presence, removal or disposal of any Hazardous Materials to the extent such liability, obligation, damage or costs was a result of actions caused or permitted by Landlord or a Landlord Party. Tenant
agrees to indemnify, defend, protect and hold harmless the Landlord Parties from and against any liability, obligation, damage or costs, including without limitation, attorneys' fees and costs,
resulting directly or indirectly from any use, presence, removal or disposal of any Hazardous Materials or breach of any provision of this section, to the extent such liability, obligation, damage or
costs was a result of actions caused or permitted by Tenant or a Tenant Party. 


        29.34    Development of the Project.    



        29.34.1    Subdivision.    Landlord reserves the right to further subdivide all or a portion
of the Project. Tenant agrees to execute and deliver, upon demand by Landlord and in the form reasonably requested by Landlord, any additional documents needed to conform this Lease to the
circumstances resulting from such subdivision. 


        29.34.2    The Other Improvements.    If portions of the Project or property adjacent to the
Project (collectively, the "Other Improvements") are owned by an entity other than Landlord, Landlord, at its option, may enter into an agreement with
the owner or owners of any or all of the Other Improvements to provide (i) for reciprocal rights of access and/or use of the Project and the Other Improvements, (ii) for the common
management, operation, maintenance, improvement and/or repair of all or any portion of the Project and the Other Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other Improvements to the Project, and (iv) for the use or improvement of the Other Improvements and/or the Project in
connection with the improvement, construction, and/or excavation of the Other Improvements and/or the Project, provided that in no event shall any such actions by Landlord result in any increased
Rent, or any costs or charges upon Tenant, or otherwise materially and adversely affect Tenant's right or obligations under this Lease. Nothing contained herein shall be deemed or construed to limit
or otherwise affect Landlord's right to convey all or any portion of the Project or any other of Landlord's rights described in this Lease. 


        29.34.3    Construction of Project and Other Improvements.    Tenant acknowledges that
portions of the Project and/or the Other Improvements may be under construction following Tenant's occupancy of the Premises, and that such construction may result in levels of noise, dust,
obstruction of access, etc. which are in excess of that present in a fully constructed project. Tenant hereby waives any and all rent offsets (except as specifically set forth in this Lease) in
connection with such construction. Furthermore, provided that Landlord employs commercially reasonable efforts to minimize interference with the
conduct of Tenant's business, Tenant hereby waives any claims of constructive eviction which may arise in connection with such construction. 



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        29.35    No Discrimination.    Tenant covenants by and for itself, its heirs, executors,
administrators and assigns, and all persons claiming under or through Tenant, and this Lease is made and accepted upon and subject to the following conditions: that there shall be no discrimination
against or segregation of any person or group of persons, on account of race, color, creed, sex, religion, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, or
enjoyment of the Premises, nor shall Tenant itself, or any person claiming under or through Tenant, establish or permit such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants or vendees in the Premises. 



 
 

[signature page to follow]    



66







 

        IN
WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written. 


 





					
	 	 	 "LANDLORD":
	

 	
 	
KILROY REALTY, L.P.,

a Delaware limited partnership
	

 	
 	
 By:	
 	
Kilroy Realty Corporation,

a Maryland corporation,

General Partner






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 By:	 	/s/ Jeffrey C. Hawken







 






									
	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 	 	 Its:	 	Executive Vice President

Chief Operating Officer







 






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 By:	 	/s/ Nadine K. Kirk







 






									
	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 	 	 Its:	 	Vice President Legal Administration







 






					
	 	 	 "TENANT":
	

 	
 	
BRIDGEPOINT EDUCATION, INC

a Delaware corporation






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 By:	 	/s/ Andrew Clark







 






									
	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 	 	 Its:	 	CEO







 






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 By:	 	/s/ Daniel J. Devine







 






									
	

 	
 	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 	 	 Its:	 	CFO







 





67








 








































 
 

EXHIBIT A    
    


 
  KILROY SABRE SPRINGS
  
    OUTLINE OF PREMISES    
    



[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	FIRST FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"






[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	SECOND FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"






[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	THIRD FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"






[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	FOURTH FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"






[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	FIFTH FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"






[Floor Plan]





			
	KILROY SABRE SPRINGS OFFICE BUILDING 3	 	SIXTH FLOOR PLAN
	13480 EVENING CREEK DRIVE NORTH	 	SCALE 1"–30"





1








 








































 
 

EXHIBIT A-1    
    
    SUPERIOR RIGHT HOLDERS    
    



[***] 


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


1








 








































 
 

EXHIBIT B
  
    KILROY SABRE SPRINGS
  
    WORK LETTER AGREEMENT    
    


        This Work Letter shall set forth the terms and conditions relating to the construction of the improvements in the Premises. This Work
Letter is essentially organized chronologically and addresses the issues of the construction of the Premises, in sequence, as such issues will arise during the actual construction of the Premises. All
references in this Work Letter to Articles or Sections of "this Lease" shall mean the relevant portion of Articles 1 through  29 of the Office Lease to
which this Work Letter is attached as Exhibit B and of which this Work
Letter forms a part, and all references in this Work Letter to Sections of "this Work Letter" shall mean the relevant portion of  Sections 1 through 6 of this Work Letter. 


 SECTION 1  


 LANDLORD'S INITIAL CONSTRUCTION  


        Landlord shall have constructed the "Base Building," as that term is defined in  Section 8.2 of this Lease, which Base Building shall
be LEED Certified and otherwise constructed in manner which is materially consistent with
the level of quality set forth in the Base Building Specifications attached hereto as Schedule 3 to this  Exhibit B. Such
construction shall be at Landlord's sole cost and expense and without application of any portion of the "Improvement
Allowance," as that term is set forth in Section 2.1 of this Work Letter below, except as expressly set forth in  Section 2.2.2, below.



 SECTION 2  


 IMPROVEMENTS  


        2.1    Improvement Allowance.    Tenant shall be entitled to a one-time
improvement allowance (the "Improvement Allowance") in the amount set forth in Section 13 of the
Summary, for the costs relating to the initial design and construction of the improvements made to the Premises pursuant to this Work Letter which are permanently affixed to the Premises (the
"Improvements"). Subject to Section 2.3, below, in no event shall Landlord be obligated to
(i) make disbursements pursuant to this Work Letter in the event that Tenant fails to timely pay any portion of the "Over-Allowance Amount," as defined in, and pursuant to the terms
of, Section 4.3.1, (ii) pay a total amount which exceeds the Improvement Allowance, (iii) pay any "A&E Costs," in excess of the cap
set forth in Section 2.2.1 of this Work Letter, or (iv) pay any "FF&E Costs" in excess of the cap set forth in  Section 2.2.5 of this
Work Letter. Notwithstanding the foregoing or any contrary provision of this Lease, all Improvements shall be deemed
Landlord's property under the terms of this Lease. Any unused portion of the Improvement Allowance remaining as of [***], shall remain with Landlord and Tenant shall have no
further right thereto. 


        2.2    Disbursement of the Improvement Allowance.    Except as otherwise set forth in this
Work Letter, the Improvement Allowance shall be disbursed by Landlord (each of which disbursements shall be made pursuant to Landlord's disbursement process, including, without limitation, Landlord's
receipt of invoices for all costs and fees described herein) for costs related to the construction of the Improvements and for the following items and costs (collectively, the
"Improvement Allowance Items"): 



      2.2.1  Payment
of the fees of the "Architect" and the "Engineers," as those terms are defined in Section 3.1 of this
Work Letter, which fees shall, notwithstanding anything to the contrary contained in this Work Letter Agreement, not exceed an aggregate amount equal to [***] per rentable
square foot of the Premises, and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord's consultants in connection with the preparation and review
of the "Construction Drawings," as that term is defined in Section 3.1 of this Work Letter (collectively, the "A&E
Costs"); 




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


1







 

      2.2.2  The
cost of any changes in the Base Building (as opposed to the original construction of the Base Building identified in  Section 1 pursuant to the final Base Building plans previously permitted), when
such changes are required by the Construction Drawings; 


      2.2.3  The
cost of any changes to the Construction Drawings or Improvements required by all applicable building codes (the
"Code"); 


      2.2.4  The
"Landlord Supervision Fee", as that term is defined in Section 4.3.2 of this Work Letter; 



      2.2.5  The
cost of installing Tenant's voice and data cabling, signage, and other similar costs (collectively, "FF&E Costs"),
not to exceed an aggregate amount equal to [***] per rentable square foot of the Premises; and 


      2.2.6  [***].





Landlord
and Tenant hereby acknowledge and agree that in no event shall the Improvement Allowance Items include, and Landlord shall be solely responsible for, any and all costs to the extent
(i) related to and arising from the negligence or willful misconduct of Landlord, the Architect, Engineers or Contractor, or (ii) the same are recovered (or reasonably recoverable) from
third parties. 


        2.3    Additional Allowance.    Tenant may, upon written notice to Landlord given on or before
the "Cost Proposal Delivery Date," as that term is set forth in Section 4.2 of this Work Letter, below, elect to cause the Improvement Allowance
for the initial Premises to be increased by an amount (the "Additional Allowance") set forth in such notice. Any such resulting Additional Allowance
shall (i) be an amount equal to an even number of United States Dollars (as opposed to fractions of United States Dollars), and (ii) in no event exceed the product of
(A) [***], and (B) the number of rentable square feet of the Premises (i.e., an amount anticipated to equal
[***] based upon 147,533 rentable square feet, which square footage is subject to confirmation pursuant to the TCCs of  Section 1.2 of the Lease). In the event Tenant exercises its right to use all
or any portion of the Additional Allowance, the Monthly Installment
of Base Rent
for the Premises shall be increased by an amount equal to the "Additional Monthly Base Rent," as that term is defined below, in order to repay the Additional Allowance to Landlord. The
"Additional Monthly Base Rent" shall be determined as the missing component of an annuity, which annuity shall have (w) the amount of the
Additional Allowance which Tenant elects to utilize as the present value amount, (x) [***]. If Tenant elects to utilize all or a portion of the Additional Allowance,
then (i) all references in this Work Letter to the "Improvement Allowance," shall be deemed to include the Additional Allowance which Tenant elects to utilize, (ii) the parties shall
promptly execute an amendment (the "Additional Allowance Amendment") to this Lease setting forth the new amount of the Base Rent and Improvement
Allowance computed in accordance with this Section 2.3, and (iii) Tenant shall deliver to Landlord, concurrently with Tenant's execution
and delivery of the Additional Allowance Amendment to Landlord, a letter of credit, in the form attached to the Lease as Exhibit H and subject to
the terms and conditions of Article 21 of the Lease, in an amount equal to [***], which letter of credit shall be held by
Landlord pursuant to the terms of Article 21 of the Lease. 


        2.4    Building Standards.    Landlord has established or may establish specifications for
certain Building standard components, materials and finishes (collectively, "Building Standards") as well as certain LEED tenant design and construction
guidelines (collectively, "LEED Criteria") to be used in the construction of the Improvements in the Premises, which Building Standards and LEED
Criteria are set forth on Schedule 2 attached hereto and made a part hereof. The quality of Improvements shall be equal to or of greater quality
than the quality of such Building standards, provided that Landlord may, at Landlord's option, require the Improvements to comply with certain Building standards. Landlord may make reasonable changes
to such Building Standards and LEED Criteria from time to time. 


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


2







 
 SECTION 3  


 CONSTRUCTION DRAWINGS  


        3.1    Selection of Architect/Construction Drawings.    Landlord shall retain
(i) Hurkes Harris Design Associates, Inc. (the "Architect") to prepare the "Construction Drawings," as that term is defined in this  Section 3.1, and (ii) engineering consultants reasonably designated by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work of the Improvements; provided, however, to the extent the same is consistent with commercially reasonable construction procedures, Landlord may reserve the right to employ
"design-build" trades at the time of contracting. The plans and drawings to be prepared by Architect and the Engineers pursuant to Sections 3.3
and 3.4 of this Work Letter shall be known collectively as the "Construction Drawings." Notwithstanding
the foregoing, Tenant may elect to have Landlord retain ID Studios as the Architect by delivering written notice of such elect to Landlord on or before February 15, 2008, in which event
(A) ID Studios shall thereafter be deemed to the Architect, and (B) all fees paid or owing to Hurkes Harris Design Associates, Inc. prior to the date Tenant delivers such notice
shall be deemed to be fees of the Architect pursuant to Section 2.2.1 of this Work Letter Agreement. 


        3.2    Final Space Plan.    On or before the date set forth in  Schedule 1, attached hereto, Tenant shall deliver the
final space plan for Improvements in the Premises (collectively, the
"Final Space Plan"), which Final Space Plan shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and
equipment to be contained therein, to Landlord. Landlord hereby acknowledges that the Final Space Plan shall include an MDF (main distribution frame) located on the second (2nd) floor of
the Building. The Final Space Plan shall not require the installation of any "Non-Conforming Improvements," as defined below. As used herein,
"Non-Conforming Improvements" shall mean items which are inconsistent with Building Standards. 


        3.3    Preparation of Final Working Drawings.    Landlord shall cause the Architect and
Engineers to prepare "Final Working Drawings," as that term is defined in this Section 3.3, below, based upon the Final Space Plan; provided,
however, that the parties acknowledge that during the course of development of the Final Working Drawings, there may be changes made to the drawings and specifications set forth in the Final Space
Plan (any such change, a "Change"); provided further, however, that Tenant shall have the right to approve or disapprove a Change which is a "Material
Change," as more particularly set forth below. A Change which (i) is not consistent with the Final Space Plan (as reasonably and mutually determined by Landlord and Tenant), and (ii) is
not required in order to comply with Applicable Laws, shall be referred to herein as a "Material Change." Tenant shall cooperate in good faith with
Landlord, Architect and Engineers to supply the necessary information, if any, required to allow the Architect and Engineers to complete final working drawings for the Improvements in a form which is
complete to allow subcontractors to bid on the work and for Landlord to obtain all applicable permits (the "Final Working Drawings"). 


        3.4    Tenant's Review and Approval of Final Working Drawings.    Landlord shall deliver the
Final Working Drawings to Tenant for Tenant's review and Approval. Tenant shall give or withhold its approval to the Final Working Drawings promptly, but in no event more than five (5) business
days after Landlord's delivery thereof to Tenant (the "Design Review Period"), it being hereby acknowledged that the Final Working Drawings for floors
1, 5 and 6 will be delivered separately from the Final Working Drawings for floors 2 3 and 4, and such Design Review Period shall apply to each set of documents independently. Notwithstanding anything
to the contrary contained in this Work Letter, Tenant shall not withhold its approval to the Final Working Drawings, or any portion thereof, unless the same are not consistent with, and not a logical
extension of, the Final Space Plan. If Tenant timely disapproves the Final Working Drawings, Tenant shall notify Landlord of such disapproval, along with the specific and detailed reasons for the
same, and Landlord shall promptly, but in no event more than five (5) business days after receipt of Tenant's disapproval, revise the applicable portions of the Final 


3







 



Working
Drawings to correct such disapproved matter, and shall resubmit the Final Working Drawings to Tenant, and Tenant shall approve or disapprove the resubmitted Final Working Drawings promptly,
but in no event more than three (3) business days after such resubmittal; provided, however, Tenant shall not withhold its approval to the resubmitted Final Working Drawings unless the same are
not consistent with, and not a logical extension of, the Final Space Plan, and Tenant shall not withhold its approval of any portion of the resubmitted Final Working Drawings that had been previously
approved (or deemed approved) by Tenant. Such procedure shall be repeated until the Final Working Drawings are approved by Tenant (the "Approved Working
Drawings"). To the extent Tenant fails to (a) respond to Landlord within the applicable time periods provided for Tenant's review, or (b) disapprove all or any
specific portion or detail of the Final Working Drawings, Tenant shall be deemed to have approved the Final Working Drawings or the specific portion or detail thereof, as applicable. 


        3.5    Change Orders.    In the event Tenant desires to materially change the Approved Working
Drawings, Tenant shall deliver Notice (the "Drawing Change Request") of the same to Landlord, setting forth in detail the changes (the
"Tenant Change") Tenant desires to make to the Approved Working Drawings. Landlord shall, no later than (A) five (5) business days after
receipt of any Drawing Change Request relating to a proposed Tenant Change affecting the Building structure, or (B) three (3) business days after receipt of any Drawing Change Request
relating to a proposed Tenant Change not affecting the Building structure, deliver a written notice to Tenant (the "Response Notice") either
(i) approving the Tenant Change, or (ii) disapproving the Tenant Change and deliver a Notice to Tenant specifying in reasonably sufficient detail the reasons for Landlord's disapproval;
provided, however, Landlord's Response Notice shall indicate the anticipated cost of implementing such Tenant Change and any Tenant Delay anticipated to result therefrom; provided further, however,
that Landlord may only disapprove of the Tenant Change if the Tenant Change (u) would have an adverse effect on the structural integrity of the
Building; (v) fails to comply with applicable Code and or other applicable governmental regulations; (x)
would have an material adverse effect on the systems and equipment of the Building; (y) would have an adverse effect on the exterior appearance of the
Building; or (z) would have an material adverse effect on the value of the Project. Within two (2) business days following Tenant's receipt of
the applicable Response Notice, Tenant shall either ratify its Drawing Change Request or rescind the same. Any additional costs which arise in connection with such Tenant Change shall be paid by
Tenant, provided that to the extent a portion of the Improvement Allowance remains unpaid and unallocated, such payment shall be made from the Improvement Allowance. 


        3.6    Time Deadlines.    The applicable dates for approval of items, plans and drawings as
described in this Section 3, Section 4, below, and in this Work Letter, including without
limitation the dates set forth in Schedule 1, shall be known herein as the "Time Deadlines."
Tenant agrees to comply with the Time Deadlines. 


 SECTION 4  


 CONSTRUCTION OF THE IMPROVEMENTS  


        4.1    Contractor.    Reno Contracting, Inc.
("Contractor") shall construct the Improvements; provided, however, Landlord hereby agrees and covenants that in its construction contract with
Contractor for the construction of the Improvements pursuant to this Work Letter, Contractor's overhead, fees and other charges shall be consistent with the corresponding components of the
construction contract Landlord and Contractor entered into with regard to the construction of the Base Building. 


        4.2    Cost Proposal.    After the Approved Working Drawings are approved by Tenant, Landlord
shall provide Tenant with a cost proposal in accordance with the Approved Working Drawings, which cost proposal shall include, as nearly as possible, the cost of all Improvement Allowance Items to be
incurred in connection with the design and construction of the Improvements (the "Cost Proposal"); provided, however, Contractor shall be required to
bid each of the major subcontractors (as reasonably 


4







 



determined
by Landlord) with at least three (3) qualified subcontractors (except that the fire, life safety subcontractor shall be designated by Landlord), and Landlord shall, unless otherwise
directed by Tenant at the time Tenant approves the Cost Proposal, select the lowest cost bid which is conforming and consistent with the bid assumptions and directions and Landlord's construction
schedule. Tenant shall approve and deliver the Cost Proposal to Landlord within five (5) days of the receipt of the same, and upon receipt of the same by Landlord, Landlord shall be released by
Tenant to purchase the items set forth in the Cost Proposal and to commence the construction relating to such items. The date by which Tenant must approve and deliver the Cost Proposal to Landlord
shall be known hereafter as the "Cost Proposal Delivery Date". 


        4.3    Construction of Improvements by Contractor under the Supervision of Landlord.    



        4.3.1    Over-Allowance Amount.    On the Cost Proposal Delivery Date, Landlord
shall identify the amount (the "Over-Allowance Amount") equal to the difference between (i) the amount of the Cost Proposal and
(ii) the amount of the Improvement Allowance. Subject to the terms of Section 2.3 of this Work Letter Agreement, the
Over-Allowance Amount shall be delivered from Tenant to Landlord (on a pro-rata basis, based upon the percentage of the Tenant Improvements completed) within fifteen
(15) days of Tenant's receipt of an invoice for such portion of the Over-Allowance Amount. In the event that, after the Cost Proposal Delivery Date, any revisions, changes, or
substitutions shall be made to the Construction Drawings or the Improvements as the result of (i) a ratified Tenant Change, or (ii) a change requested by Landlord and reasonably approved
by Tenant, then, subject to the terms of Section 2.3 of this Work Letter Agreement, any additional costs which arise in connection with such
revisions, changes or substitutions or any other additional costs shall be paid by Tenant to Landlord immediately upon Landlord's request as an addition to the Over-Allowance Amount.
Subject to the terms of Section 2.3 of this Work Letter Agreement, in the event that Tenant fails to deliver the Over-Allowance
Amount as provided in this Section 4.3.1, then Landlord may, at its option, cease work in the Premises until such time as Landlord receives
payment of the Over-Allowance Amount (and such failure to deliver shall be treated as a Tenant delay in accordance with the terms of  Section 5.2 below). 


        4.3.2    Landlord's Retention of Contractor.    Landlord shall independently retain Contractor
to construct the Improvements in accordance with the Approved Working Drawings and the Cost Proposal and Landlord shall supervise the construction by Contractor, and Tenant shall pay a construction
supervision and management fee (the "Landlord Supervision Fee") to Landlord in an amount equal to the product of (i) two percent (2%) and
(ii) an amount equal to the sum of the those certain Improvement Allowance Items identified in Sections 2.2.2,  2.2.3 and 2.2.5 of this Work Letter (i.e., the "hard"
costs of construction). 


        4.3.3    Contractor's Warranties and Guaranties.    Notwithstanding any contrary provision of
the Lease or this Work Letter Agreement, Landlord hereby covenants and agrees to enforce all warranties and guaranties by Contractor relating to the Improvements and shall cause Tenant to be named a
third-party beneficiary under the construction agreement with the Contractor. 



 SECTION 5  


 COMPLETION OF THE IMPROVEMENTS;

LEASE COMMENCEMENT DATE  


        5.1    Ready for Occupancy.    The Premises shall be deemed "Ready for
Occupancy" upon the Substantial Completion of the Improvements. For purposes of this Lease, "Substantial Completion" of the
Improvements shall occur upon the completion of construction of the Improvements in the Premises pursuant to the Approved Working Drawings, in compliance with all applicable permits, licenses, laws,
statutes, and ordinances to the extent necessary to cause a certificate of occupancy, or its legal equivalent, to be issued for the Premises for general office use, with all utilities hooked up and
available for Tenant's use, with the exception of any punch list items and any tenant fixtures, 


5







 

work-stations,
built-in furniture, or equipment to be installed by Tenant or under the supervision of Contractor. Throughout the construction of the Improvements, Tenant shall
have the right, on no less than two (2) business days advance notice, and when accompanied by a representative of Landlord, to inspect the construction of the Improvements. Notwithstanding
anything set forth in this Work Letter to the contrary, Landlord and Tenant hereby acknowledge and agree that the construction of the Improvements shall be completed in two (2) phases, and,
therefore, the Premises shall be deemed Ready for Occupancy on two (2) separate dates. 


        5.2    Delay of the Substantial Completion of the Premises.    Except as provided in this  Section 5.2, the Lease
Commencement Date shall occur as set forth in the Lease and  Section 5.1, above. If there shall be a delay or there are delays in the Substantial Completion of the Improvements or in the occurrence
of any
of the other conditions precedent to the Lease Commencement Date, as set forth in the Lease, as a direct, indirect, partial, or total result of: 



      5.2.1  Tenant's
failure to comply with the Time Deadlines; 


      5.2.2  A
breach by Tenant of the terms of this Work Letter or the Lease, beyond any applicable notice and cure periods; 


      5.2.3  Tenant's
request Tenant Changes pursuant to Section 3.5 of this Work Letter; 


      5.2.4  Tenant's
requirement for materials, components, finishes or improvements which are not available in a commercially reasonable time given the anticipated date of
Substantial Completion of the Improvements, as set forth in the Lease, or which are different from, or not included in the Building Standards, but only to the extent an alternate Building Standard
material, component, finish or improvement is available in a commercially reasonable time given the anticipated date of Substantial Completion of the Improvements; 


      5.2.5  Tenant's
requirement for specialized or unusual improvements and/or delays in obtaining Permits due thereto; 


      5.2.6  Any
failure by Tenant to timely pay to Landlord any portion of the Over-Allowance Amount; or 


      5.2.7  Any
other willful acts or negligent omissions of Tenant, or its agents, or employees, which actually interferes with the progress of constructing the Improvements and
which is not remedied by Tenant within two (2) business days after written notice to Tenant's representative of such act or omission; 




(each,
a "Tenant Delay") then, notwithstanding anything to the contrary set forth in the Lease or this Work Letter and regardless of the actual date of
the Substantial Completion of the Improvements, the Lease Commencement Date shall be deemed to be the date the Lease Commencement Date would have occurred if no Tenant Delay or Tenant Delays, as set
forth above, had occurred. 


 SECTION 6  


 MISCELLANEOUS  


        6.1    Tenant's Entry Into the Premises Prior to Substantial Completion.    Provided that
Tenant and its agents do not interfere with construction of the Improvements, Contractor shall allow Tenant access to the Premises at least twenty (20) days prior to the Substantial Completion
of the Improvements for the purpose of Tenant installing equipment, furniture, fixtures, and/or signage (including Tenant's data and telephone equipment) in the Premises. Prior to Tenant's entry into
the Premises as permitted by the terms of this Section 6.1, Tenant shall submit a schedule to Landlord and Contractor, for their approval, which
schedule shall detail the timing and purpose of Tenant's entry. Tenant shall hold Landlord harmless from and indemnify, protect and defend Landlord against any loss or damage to the Building 


6







 

or
Premises and against injury to any persons to the extent caused by Tenant's actions pursuant to this Section 6.1. 


        6.2    Freight Elevators.    Landlord shall cause one (1) passenger elevator to be
"padded" and otherwise prepared and ready for freight service and shall make the same reasonably available to Tenant, in connection with initial decorating, furnishing and moving into the Premises. 


        6.3    Tenant's Representative.    Tenant has designated Ms. Pattie Jensen and
Mr. Rocky Sheng as its representatives with respect to the matters set forth in this Work Letter, each of whom, until further notice to Landlord, shall have full authority and responsibility to
act on behalf of the Tenant as required in this Work Letter. 


        6.4    Landlord's Representatives.    Landlord has designated Mr. Rick Mount as the
"Project Manager" who shall be responsible for the implementation of all Improvements to be performed by Landlord in the Premises. With regard to all
matters involving such Improvements, Tenant shall communicate with the Project Manager rather than with the Contractor. Landlord shall not be responsible for any statement, representation or agreement
made between Tenant and the Contractor or any subcontractor. It is hereby expressly acknowledged by Tenant that such Contractor is not Landlord's agent and has no authority whatsoever to enter into
agreements on Landlord's behalf or otherwise bind Landlord. The Project Manager will furnish Tenant with notices of substantial completion, cost estimates for above standard Improvements, Landlord's
approvals or disapprovals of all documents to be prepared by Tenant pursuant to this Work Letter and changes thereto. 


        6.5    Intentionally Omitted.    


        6.6    Time is of the Essence.    Time is of the essence under this Work Letter. Unless
otherwise indicated, all references herein to a "number of days" shall mean and refer to calendar days. In all instances where Tenant is required to approve or deliver an item, if no written notice of
approval is given or the item is not delivered within the stated time period, at Landlord's sole option, at the end of such period the item shall automatically be deemed approved or delivered by
Tenant and the next succeeding time period shall commence. Furthermore, in all instances where Landlord is required to approve or deliver an item, if no written notice of approval is given or the item
is not delivered within the stated time period, at Tenant's sole option, at the end of such period the item shall automatically be deemed approved or delivered by Landlord and the next succeeding time
period shall commence. 


        6.7    Tenant's Lease Default.    Notwithstanding any provision to the contrary contained in
the Lease or this Work Letter, if any default (beyond any applicable notice and cure periods) by Tenant under the Lease or this Work Letter (including, without limitation, any failure by Tenant to
fund any portion of the Over-Allowance Amount) occurs at any time on or before the Substantial Completion of the Improvements, then (i) in addition to all other rights and remedies
granted to Landlord pursuant to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Improvement Allowance and/or Landlord may, without any liability whatsoever,
cause the cessation of construction of the Improvements (in which case, Tenant shall be responsible for any delay in the Substantial Completion of the Improvements and any costs occasioned thereby),
and (ii) all other obligations of Landlord under the terms of the Lease and this Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of this Lease. 


7








 








































 
 

SCHEDULE 1 TO EXHIBIT B
  
    TIME DEADLINES    
    



					
	 
	 	Dates 	 	Actions to be Performed 
	A.	 	February 26, 2008	 	Final Space Plan with respect to floors 1, 5 and 6 to be completed by Tenant and delivered to Landlord.
	
B.	
 	
March 18, 2008	
 	
Final Space Plan with respect to floors 2, 3 and 4 to be completed by Tenant and delivered to Landlord.
	
C.	
 	
Five (5) business days after the receipt of the Cost Proposal by Tenant	
 	
Tenant to approve Cost Proposal and deliver Cost Proposal to Landlord.





1








 








































 
 

SCHEDULE 2 TO EXHIBIT B
  
    BUILDING STANDARDS    
    


The
following Premise Improvements Standards and LEED Tenant Design and Construction Guidelines identify the minimum quality for items used in the construction of Premise Improvements at the property
identified above. 


All
new Premise Improvement work associated with the project identified above shall comply with this Building Standard for a minimum quality of material and general design guidelines and the LEED
Tenant Improvement Guidelines for specific design criteria, product specifications and means and methods to be employed during the execution of the work. 



 STANDARD PARTITIONS  


 DEMISING PARTITION  


	a.
	35/8" × 25
min. gauge metal studs @ 16" on center.



	b.
	1
layer each side 5/8" thick type 'x' gypsum wallboard (where required).



	c.
	From
[***].



	d.
	R11
batt sound insulation in partition cavity (portion of walls—corridor, bathrooms & some office). .



	e.
	Partition
taped and sanded smooth to receive paint.



	f.
	Fire
caulk @ partition and metal deck as required by City of San Diego.



	g.
	Provide
minimum opening above ceiling as required for return air, with sound boots. 



 INTERIOR PARTITION  


	a.
	21/2" × 25
gauge metal studs @ 24" on center.



	b.
	1
layer each side 5/8" thick type 'x' gypsum wallboard. From [***] as applicable. Height may vary.



	c.
	Diagonal
Bracing: 21/2" × 25 gauge metal studs at 45 degree diagonal to structure above staggered
@ 4'-0" on center, and at door openings.



	d.
	Partition
taped and sanded smooth to receive paint to a minimum of Level 4 finish.



	e.
	Metal
corner bead at terminations of partitions and at the ceiling.



	f.
	All
demising walls and tenant conference room walls to receive R-11 batt insulation within partition cavity and four foot on either side of
partition over ceiling. 



 INTERIOR ONE-HOUR SEPARATION PARTITION  


	a.
	Same
as demising partition with fire dampers as required for penetrations and return air.



	b.
	Type X
5/8" wallboard shall be fire taped where fire ratings are required. 



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


1







 

 INTERIOR LOW PARTITION  


	a.
	21/2" × 25
gauge metal studs @ 16" on center.



	b.
	1
layer each side and top 5/8" thick type 'x' gypsum wallboard.



	c.
	Heights
vary to maximum of 68" above floor.



	d.
	Metal
corner beads at all exposed corners.



	e.
	Partition
taped and sanded smooth to receive paint to a minimum of Level 4 finish.



	f.
	Pipe
support at free end within partition cavity and every 4' on center. 



 EXTERIOR WALL FURRING  


	a.
	Below
glazing sill and above glazing head, 1 layer 5/8" thick gypsum wallboard.



	b.
	Taped
and sanded smooth to receive paint. 



 COLUMN FURRING  


	a.
	21/2" × 25
gauge metal studs @ 24" on center.



	b.
	1
layer one side 5/8" thick type 'x' gypsum wallboard.



	c.
	From
floor slab to 6" above ceiling grid or to deck above.



	d.
	Partition
taped and sanded smooth to receive paint to a minimum of Level 4 finish. 



 DOORS, FRAMES AND HARDWARE  


 SINGLE CORRIDOR DOOR AND HARDWARE  


	a.
	Single
leaf U.L. rated, 20-minute suite entry door label attached to hinge side of door,
13/4" × 3'-0" × 8'-10", solid core wood, clear plain sliced select white maple, book matched edges. Door
shall be pre-finished and pre-mortised for hardware.



	b.
	Frame:
3'-0" × 8'-10" "Western Integrated prefinished satin aluminum with clear coat with squared edge,
20-minute fire rated.



	c.
	Hardware:
Butts: two pair per door, Hager 700; Door Hardware: Schlage "L" Series, Lever style #17, A- Wrought
Rose- typ.; Entrance Lockset # L9453P-626, Latchset # L9010P-626, and Office Lockset # L9050-626; Door Stop: Hager 236W,
concave wall stop; Closer: LCN #1461FC (where required); typical hardware finish: satin aluminum or satin stainless steel throughout unless otherwise noted.



	d.
	Closer
at entry doors and any rated doors required by code: LCN 1460 Series, 4111 cylinder for accessibility. 



 DOUBLE CORRIDOR DOOR AND HARDWARE  


	a.
	Double
leaf U.L. rated 20-minute suite entry doors with label attached to hinge side of doors,
13/4" × 6'-0" × 8'-10", solid core wood, clear plain sliced select white maple, book matched edges. Door
shall be pre-finished and pre-mortised for hardware. Book match face veneers with premium veneers grade of doors with matching veneer at vertical edge.



	b.
	Door
shall be pre-finished and mortised for hardware.



	c.
	Frame:
6'-0" × 8'-10", 'Western Integrated' prefinished satin aluminum with clear coat with squared edge,
20-minute fire rated.



	d.
	Hardware:
Same as above modified and supplemented for double doors. 



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


2







 

 SINGLE INTERIOR DOOR AND HARDWARE  


	a.
	Single
leaf, 13/4" × 3'-0" × 8'-10", solid core wood,
5 ply, plain sliced maple veneer, clear finish and premium grade.



	b.
	Matching
veneer at vertical edges.



	c.
	20-minute
rated with label attached to hinge side of door.



	d.
	Door
shall be prefinished and mortised for hardware.



	e.
	Frame:
3'-0" × 8'-10", 'Western Integrated' flush trim clear anodized extruded aluminum,
20-minute fire rated.



	f.
	Hardware:
Schlage "L" Series: Lever style #17, A- Wrought Rose, finish 626 satin chrome. Corbin Russwin
cylinders with an inter-changeable core and keyway. Hinges: AB700, 4.5 × 4.5, 'Hager', finish: stainless steel—satin. Stop: 'Trimco'
1211 series, finish 626.



	g.
	[***]
as applicable. 



 DOUBLE INTERIOR DOOR AND HARDWARE  


	a.
	Double
leaf, 13/4" × 6'-0" × 8'-10", solid core wood,
5 ply, plain sliced maple veneer, clear finish and premium grade.



	b.
	Match
face veneers of doors. Matching veneer at vertical edges.



	c.
	20-minute
rated with label attached to hinge side of the door.



	d.
	Door
shall be prefinished and mortised for hardware.



	e.
	Frame:
6'-0" × 8'-10", 'Western Intgrated' flush trim clear anodized extruded aluminum,
20-minute fire rated.



	f.
	Hardware:
Schlage "L" Series: , Lever style #17, A- Wrought Rose- typ, finish 626 hardware finish
626 satin chrome. Corbin Russwin cylinders with an inter-changeable core and D3 keyway. Hinges: AB700, 4.5 × 4.5, 'Hager', finish: stainless
steel—satin. Stop: 'Trimco' 1211 series, finish 626. Auto flush bolts: DCI No. 942, finish to match 626. Coordinator: DCI No. 600 series, finish to match 626.
Closer: LCN 4041 series, parallel arm-heavy duty, finish: to match 626. Closer: LCN 4041 series, parallel arm-heavy duty, finish to match 626. Astragal: 'Pemco'
355CV. 



 OPTIONAL DOORS AS APPROVED BY LANDLORD  


	a.
	Optional
Doors as Selected by the Tenant for the tenant's interior space may be submitted as outlined below subject to Landlords
Approval:  



	•
	Premium Grade wood doors with single glass lites with a stained and lacquered finish. Colors to match building standard,
subject to Landlord Approval   



	•
	Herculite Glass Doors with Stainless Steel Styles at top and bottom and concealed hinges.   



	•
	Aluminum Storefront Doors with clear anodized finish set in Aluminum frames to match. 






[***]



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


3







 

 ELECTRICAL  


The
base building is served by a 277/480v 3ph. Main Distribution Section with 3000 amp meter section. 


New
277v distribution, lighting panels, transformers and 120v convenience power panels shall be part of the Premise Improvements. 



All
electrical distribution shall be fully engineered in compliance with local building codes, the National Electric Code and California Title 24 and shall be subject to Landlords review and
approval. 


Tenant
electrical drawings shall include a review of the base building electrical drawings to include all necessary metering, distribution and connections. 


Tenant
electrical design, fixtures and components shall be compliant with Kilroy Sabre Springs LEED Tenant Design and Construction Guidelines and subject to certification by Landlord's consultant. 



 LIGHT FIXTURES  


	a.
	Recessed
Lightolier or similar 2x2 and 2x4 Direct/Indirect Fluorescent Fixtures   



	•
	51/2" Micro Perforated Mesh Lamp Shield.   



	•
	(2) T-5 lamps per fixture with electronic T-5 rapid start ballast  



	•
	Lamps: Phillips 32 Watt   



	•
	Color 741-4100K (cool white)






	b.
	Delray
Rocket II Pendant Hung Compact Fluorescent Light Fixtures



	c.
	Verve
II Suspended Linear Indirect Fixture 



Tenant
may elect to use additional or alternate Architectural Lighting subject to Landlords Approval of Plans and Specs. 



Corridors—General
Lighting: Lithonia Lighting—Avante 2' × 2', 2 lamp Linear T8 indirect recessed luminaire, model
#2AV-G-2-17-MDR-277-GEB. 


 LIGHT CONTROLS  


	a.
	Novitas
Sensors.



	b.
	Wall—#01-DL401.



	c.
	Ceiling:
One Way 01-100.



	d.
	Ceiling:
Two Way 01-110 



 ELECTRICAL WALL OUTLET  


	a.
	Specification
Grade, Leviton 15A, 125V, Decora/single switch.



	b.
	Color—White.



	c.
	Mounted
vertically.



	d.
	Outlet
height at 15" above finish floor to centerline of outlet U.O.N. as required for ADA compliance. 


4







 

 TELEPHONE WALL OUTLET  


	a.
	Mud
ring cut into wall—mounted vertically.



	b.
	3/4"
metal conduit stub above ceiling with 6" pigtail at top of wall.



	c.
	Cover
plate and wiring by Tenant's telephone vendor. 



 EXIT SIGN LIGHTS  


	a.
	Alkco
Edge-Glo Exit/Directional signs, recessed ceiling mounted LED housing, green letters on a clear panel background or equivalent.



	b.
	Provide
exit lights with battery back up at all exits required by code.



	c.
	All
life safety items including horns & strobes and speaker shall have white covers. 



 AUTOMATIC FIRE SPRINKLERS  


	a.
	Fully
fire sprinklered building with main and branch distribution lines available for tenant modification.



	b.
	Reliable
sprinkler model "G" pendant semi-recessed sprinkler with white sprinkler and escutcheon.   



	•
	165 degree Fahrenheit temperature rating.






	c.
	Reliable
sprinkler model "G4" concealed sprinkler head with white cover plate. (To be used in all public areas).   



	•
	165 degree Fahrenheit temperature rating. 






 HEATING AND AIR CONDITIONING DISTRIBUTION  


All
mechanical design shall be fully engineered in compliance with local building codes, the Uniform Mechanical Code and California Title 24. 


All
new mechanical fixtures and components shall be compliant with Kilroy Sabre Springs LEED Tenant Design and Construction Guidelines and subject to certification by Landlord's consultant. 


An
Indoor Air Quality Management Plan shall be prepared in compliance with the Kilroy Sabre Springs LEED Tenant Design and Construction Guidelines prior to construction. 



 AIR DISTRIBUTION FOR TYPICAL FLOORS  


VAV's
with DDC Controls and hot water reheat at exterior zones, designed and sized by a licensed Mechanical Engineer approved by Landlord, shall be supported by base building AHU's and
High-pressure ducts on a per floor basis. 


Each
zone shall be controlled by an electronic thermostats tied back to existing base building energy management system. 


Tenant
may elect to design an open ceiling plan with existing exposed galvanized rigid ductwork configured as required for tenant distribution of conditioned air. 



Air
delivery above concealed ceiling spaces may be via low pressure, insulated ducting with air diffusers as described below. [***] 


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


5







 

	•
	 [***]  



	•
	 [***]  



	•
	[***] 




 PLUMBING  


All
plumbing design shall be fully engineered in compliance with local building codes, the Uniform Plumbing Code and California Title 24. 



All
new plumbing fixtures shall be compliant with Kilroy Sabre Springs LEED tenant design and construction guidelines and subject to certification by Landlord's consultant. 


Approved
plumbing fixtures include: 


	a.
	"Elkay"
Pacemaker sink # PSR-1720—stainless steel, two faucet holes, or equivalent.



	b.
	Hi-Arc
Dual Handle bar faucet by "Elkay" # LK-2437-BH or equivalent.



	c.
	Undercounter
Dishwasher: Asko model #D1706, suitable for ADA requirements.



	d.
	Garbage
Disposal: Insinkerator, Model #77, 3/4 horsepower, stainless steel construction. 



 FINSHES  


 GLAZING / WINDOW FRAMES AT OFFICES & CONFERENCE ROOM:  


	a.
	Shall
be Western Integrated aluminum, 33/4" or 47/8" throat, pre-finished satin aluminum w/ clear coat with squared
edge- to match standard door frames style and color.



	b.
	1/4"
glazing, clear, tempered where required by code.



	c.
	Side-lite
glazing, size: 1'-6" wide by full height (inside window frame to window frame)



	d.
	All
private office shall have side-lites. 



 PAINT  


	a.
	Manufacturer:
To Be Determined, As approved Landlord consultant in compliance with the Kilroy Sabre Springs LEED tenant design and construction guidelines.



	b.
	Two
coats minimum semi-gloss interior latex washable paint.



	c.
	Include
paint on tenant side of demising partition, both sides of interior partition, above and below exterior glazing as required and all column fur outs
and perimeter walls. 



 FLOOR COVERING/LOBBY & COMMON AREAS  


	a.
	Carpet:
Loop: 28 oz. or equal, Manufacture To Be Determined, As approved Landlord consultant in compliance with the Kilroy Sabre Springs LEED tenant
design and construction guidelines.



	b.
	Direct
glue down installation for all carpet.



	c.
	12 × 12
Vinyl Tile shall be 'Armstrong' or approved equal.



	d.
	Optional
architectural flooring as approved by Landlord 



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


6







 

 TILE FLOORING  


	a.
	Ceramic
tile or Natural stone as selected by tenant subject to Landlord's approval. 



 BASE  


	a.
	21/2"
Rubber Base by Roppe



	b.
	21/2"
tile base in tiled areas as approved by Landlord. 



 PLASTIC LAMINATE  


	a.
	Formica,
Wilsonart or approved equal. 



 WINDOW COVERINGS  


	a.
	Exterior
window covering to be PVC Perforated Vertical Blinds.



	b.
	Blinds
to be sized to fit inside window module.



	c.
	[***]




 FIRE/LIFE SAFETY  


	a.
	As
required by code. 



 NOTES  


	a.
	Landlord
can substitute like quality materials and/or manufacturers.



	b.
	Landlord
may at the Landlord's discretion substitute Equivalent Demountable Partitions Systems containing integrated components such as Door and Glazing
systems in lieu of conventionally framed office interiors. 



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


7








 








































 
 

SCHEDULE 3 TO EXHIBIT B
  
    BASE BUILDING SPECIFICATIONS    
    


 Kilroy Sabre Springs  


 OUTLINE SPECIFICATIONS for OFFICE BUILDING 3  


[***]



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


1








 








































 
 

EXHIBIT C
  
    KILROY SABRE SPRINGS
  
    NOTICE OF LEASE TERM DATES    
    





					
	 
	 	 
	 	 

	To:	 	                                        
                                          
                                         
                                       
	

 	
 	
                                        
                                          
                                         
                                       
	

 	
 	
                                        
                                          
                                         
                                       
	

 	
 	
                                        
                                          
                                         
                                       
	

 	
 	
Re:	
 	
Office Lease dated
                                     ,
200         between
                                     , a
                                     ("Landlord"), and
                             , a
                             ("Tenant") concerning Suite
                                     on floor(s)
                                     of the office building
located at                                      ,
                                     ,
California.
	

Gentlemen:
	

              In accordance with the Office Lease (the "Lease"), we wish to advise you and/or confirm as follows:
	

 	
 	
1.	
 	
The Lease Term shall commence on or has commenced on
                                     for a term of
                                     ending on
                                     .
	

 	
 	
2.	
 	
Rent commenced to accrue on                          , in the amount of
                         .
	

 	
 	
3.	
 	
If the Lease Commencement Date is other than the first day of the month, the first billing will contain a pro rata adjustment. Each billing thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
	

 	
 	
4.	
 	
Your rent checks should be made payable to
                                     at
                                     .
	

 	
 	
5.	
 	
The exact number of rentable/usable square feet within the Premises is                  square feet.
	

 	
 	
6.	
 	
Tenant's Share as adjusted based upon the exact number of usable square feet within the Premises is             %.





[signature page to follow] 


1







 


							
	 
	 	 
	 	 
	 	 

	 	 	"Landlord":
	

 	
 	
                                        
                                         ,

	 	 	a	 	                                        
                            
	

 	
 	
By:	
 	
                                        
                            
	 	 	 	 	Its:	 	                                        
                






							
	 
	 	 
	 	 
	 	 

	Agreed to and Accepted

as of                                     ,
200       .	 	 
	

"Tenant":	
 	

 
	

                                         
                                       	
 	

 
	a	 	                                        
                            	 	 
	
 By:	
 	
                                        
                            	
 	

 
	 	 	Its:	 	                                        
                	 	 





2








 








































 
 

EXHIBIT D    
    


 
  KILROY SABRE SPRINGS
  
    RULES AND REGULATIONS    
    


[[NOTE: FOLLOWING ARE FOR SINGLE-TENANT BUILDINGS]]


        Tenant
shall faithfully observe and comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the nonperformance of any of said Rules and
Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the Project; provided, however, in no event shall Landlord enforce such Rules and Regulations in
a discriminatory manner to the detriment of Tenant. In the event of any conflict between the Rules and Regulations and the other provisions of this Lease, the latter shall control. 


        1.     Safes
and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight. Landlord
will not be responsible for loss of or damage to any such safe or property in any case. Any damage to any part of the Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant. 



        2.     The
requirements of Tenant will be attended to only upon application at the management office for the Project or at such office location designated by Landlord. Employees
of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord. 


        3.     No
advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by Tenant on any part of the Premises or the Building without the prior written
consent of the Landlord. Tenant shall not disturb, solicit, peddle, or canvass any occupant of the Project and shall cooperate with Landlord and its agents of Landlord to prevent same. 



        4.     Tenant
shall not exceed the load requirements of any floor of the Premises. 


        5.     Tenant
shall not use or keep in or on the Premises, the Building, or the Project any kerosene, gasoline, explosive material, corrosive material, material capable of
emitting toxic fumes, or other inflammable or combustible fluid chemical, substitute or material, except in compliance with applicable law. Tenant shall maintain material safety data sheets for any
Hazardous Material used or kept on the Premises. 


        6.     Tenant
shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises to the extent the same is noticeable in the Common
Areas of the Project or which affects other tenants of the project. Tenant shall not throw anything out of doors, windows or skylights. 


        7.     No
cooking shall be done or permitted on the Premises (unless Tenant receives Landlord's prior written approval to install a cafeteria for its employees in the Premises),
nor shall the Premises be used for lodging. Notwithstanding the foregoing, Underwriters' laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing
coffee, tea, hot chocolate and similar beverages for employees and visitors, provided that such use is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules
and regulations. 


        8.     Landlord
reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or
who shall in any manner do any act in violation of any of these Rules and Regulations. 


        9.     Tenant,
its employees and agents shall not loiter in any Common Areas for the purpose of smoking tobacco products or for any other purpose. Furthermore, in no event shall
Tenant, its 


1







 



employees
or agents smoke tobacco products within the Building or within two hundred feet (200') of any entrance into the Building or into any other Project building. 


        10.   Tenant
shall store all its trash and garbage within the interior of the Premises or in the appropriate external trash area(s) for the Building. No material shall be
placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in San
Diego, California without violation of any law or ordinance governing such disposal; provided, however, Tenant may maintain separate trash enclosures for the storage of non-conforming
disposal items to the extent Tenant satisfies and complies with any applicable laws or other governmental regulations relating to the storage and disposal thereof. If the Premises is or becomes
infested with vermin as a result of the use or any misuse or neglect of the Premises by Tenant, its agents, servants, employees, contractors, visitors or licensees, Tenant shall forthwith, at Tenant's
expense, cause the Premises to be exterminated from time to time to the satisfaction of Landlord and shall employ such licensed exterminators as shall be approved in writing in advance by Landlord. 



        11.   Tenant
shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 


        12.   Neither
the interior nor exterior of any windows shall be coated or otherwise sunscreened without the prior written consent of Landlord. 


        13.   Tenant
must comply with requests by the Landlord concerning the informing of their employees of items of importance to the Landlord
vis-à-vis the operation of the Project which are not inconsistent with the TCCs of the Lease. 



        14.   Tenant
must comply with any applicable "NO-SMOKING" ordinance of the State of California, County of San Diego
and/or City of San Diego. If Tenant is required under the ordinance to adopt a written smoking policy, a copy of said policy shall be on file in the office of the Building. 


        15.   Tenant
hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, the Building or
the Project. Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees, contractors, invitees and guests, and the property thereof, from acts of third parties,
including keeping doors locked and other means of entry to the Premises closed, whether or not Landlord, at its option, elects to provide security protection for the Project or any portion thereof.
Tenant further assumes the risk that any safety and security devices, services and programs which Landlord elects, in its sole discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to its other insurance obligations under this Lease, obtain its own insurance coverage to the extent Tenant desires
protection against losses related to such occurrences. Tenant shall cooperate in any reasonable safety or security program developed by Landlord or required by law. 



        16.   No
auction, liquidation, fire sale, going-out-of-business or bankruptcy sale shall be conducted in the Premises without the prior
written consent of Landlord. 


        17.   No
tenant shall use or permit the use of any portion of the Premises for living quarters, sleeping apartments or lodging rooms. 


        Landlord
reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in
Landlord's judgment may from time to time be necessary (relative to a building occupied solely by one tenant) for the management, safety, care and cleanliness of the Premises, Building, the Common
Areas and the Project, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein; provided, however, Landlord shall not make any new Rules
and 


2







 



Regulations,
or change any Rule and Regulation, which would materially and adversely affect Tenant's use, occupancy or access to the Premises, the Building, or the Project parking areas. Landlord may
waive any one or more of these Rules and Regulations for the benefit of any particular tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of
any other tenant, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Project; provided, however, in no event shall Landlord enforce such
Rules and Regulations in a discriminatory manner to the detriment of Tenant. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its
occupancy of the Premises. 


3








 








































 
 

EXHIBIT E    
    


 
  KILROY SABRE SPRINGS
  
    FORM OF TENANT'S ESTOPPEL CERTIFICATE    
    


        The undersigned as Tenant under that certain Office Lease (the "Lease") made and entered into as of
                                    , 200   by
and between                                      as Landlord,
and the undersigned as Tenant, for
Premises on the                                      floor(s)
of the office building located at
                                    ,
                                    ,
California                                     , certifies as
follows: 


        1.     Attached
hereto as Exhibit A is a true and correct copy of the Lease and all amendments and modifications thereto.
The documents contained in Exhibit A represent the entire agreement between the parties as to the Premises. 


        2.     The
undersigned currently occupies the Premises described in the Lease, the Lease Term commenced on
                                    , and the Lease Term
expires on                                     , and the
undersigned has no option to terminate or cancel the Lease or to purchase all or any part of the Premises, the Building and/or the
Project. 


        3.     Base
Rent became payable on                                     .




        4.     The
Lease is in full force and effect and has not been modified, supplemented or amended in any way except as provided in  Exhibit A. 


        5.     Tenant
has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows: 


        6.     Tenant
shall not modify the documents contained in Exhibit A without the prior written consent of Landlord's
mortgagee. 


        7.     All
monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through
                                    . The current monthly
installment of Base Rent is $                    . 


        8.     All
conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease have been satisfied and Landlord is not in default thereunder. In
addition, the undersigned has not delivered any notice to Landlord regarding a default by Landlord thereunder. 


        9.     No
rental has been paid more than thirty (30) days in advance and no security has been deposited with Landlord except as provided in the Lease. 


        10.   As
of the date hereof, there are no existing defenses or offsets, or, to the undersigned's knowledge, claims or any basis for a claim, that the undersigned has against
Landlord. 


        11.   If
Tenant is a corporation or partnership, each individual executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant is a duly
formed and existing entity qualified to do business in California and that Tenant has full right and authority to execute and deliver this Estoppel Certificate and that each person signing on behalf
of Tenant is authorized to do so. 


        12.   There
are no actions pending against the undersigned under the bankruptcy or similar laws of the United States or any state. 



        13.   Other
than in compliance with all applicable laws and incidental to the ordinary course of the use of the Premises, the undersigned has not used or stored any hazardous
substances in the Premises. 


        14.   To
the undersigned's knowledge, all tenant improvement work to be performed by Landlord under the Lease has been completed in accordance with the Lease and has been
accepted by the undersigned and all reimbursements and allowances due to the undersigned under the Lease in connection with any tenant improvement work have been paid in full. 


1







 

        The
undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to a prospective mortgagee or prospective purchaser, and acknowledges that said prospective
mortgagee or prospective purchaser will be relying upon the statements contained herein in making the loan or acquiring the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property. 


        Executed
at                                      on the
           day of
                                    ,
200  . 



			
	 	 	"Tenant":
	

 	
 	


                                         
                               ,

a
                                         
                           






					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 






					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 





2








 



































 



 
 

EXHIBIT F    
    


 
  KILROY SABRE SPRINGS    
    


RECORDING
REQUESTED BY

AND WHEN RECORDED RETURN TO: 


ALLEN
MATKINS LECK GAMBLE

    & MALLORY LLP

1901 Avenue of the Stars, 18th Floor

Los Angeles, California 90067

Attention: Anton N. Natsis, Esq. 







 
 

RECOGNITION OF COVENANTS,
  CONDITIONS, AND RESTRICTIONS    
    


        This Recognition of Covenants, Conditions, and Restrictions (this "Agreement") is
entered into as of the __ day of _______, 200__, by and between _________________ ("Landlord"), and _________________ ("Tenant"), with reference to the following facts: 



        A.    Landlord
and Tenant entered into that certain Office Lease Agreement dated _______, 200__ (the "Lease"). Pursuant to the Lease, Landlord leased to Tenant and Tenant
leased from Landlord space (the "Premises") located in an office building on certain real property described in  Exhibit A attached hereto and
incorporated herein by this reference (the "Property"). 


        B.    The
Premises are located in an office building located on real property which is part of an area owned by Landlord containing approximately __ (__) acres of real property
located in the City of _____ _______, California (the "Project"), as more particularly described in  Exhibit B attached hereto and incorporated
herein by this reference. 


        C.    Landlord,
as declarant, has previously recorded, or proposes to record concurrently with the recordation of this Agreement, a Declaration of Covenants, Conditions, and
Restrictions (the "Declaration"), dated _________________, 200__, in connection with the Project. 



        D.    Tenant
is agreeing to recognize and be bound by the terms of the Declaration, and the parties hereto desire to set forth their agreements concerning the same. 


        NOW,
THEREFORE, in consideration of (a) the foregoing recitals and the mutual agreements hereinafter set forth, and (b) for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows, 


        1.    Tenant's Recognition of Declaration.    Notwithstanding that the Lease has been executed prior to the
recordation of the Declaration, Tenant agrees to recognize and by bound by all of the terms and conditions of the Declaration. 


        2.     Miscellaneous. 



        2.1   This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, estates, personal representatives, successors, and
assigns. 


        2.2   This
Agreement is made in, and shall be governed, enforced and construed under the laws of, the State of California. 


        2.3   This
Agreement constitutes the entire understanding and agreements of the parties with respect to the subject matter hereof, and shall supersede and replace all prior
understandings and agreements, whether verbal or in writing. The parties confirm and acknowledge that there are no 



1







 




other
promises, covenants, understandings, agreements, representations, or warranties with respect to the subject matter of this Agreement except as expressly set forth herein. 


        2.4   This
Agreement is not to be modified, terminated, or amended in any respect, except pursuant to any instrument in writing duly executed by both of the parties hereto. 


        2.5   In
the event that either party hereto shall bring any legal action or other proceeding with respect to the breach, interpretation, or enforcement of this Agreement, or
with respect to any dispute relating to any transaction covered by this Agreement, the losing party in such action or proceeding shall reimburse the prevailing party therein for all reasonable costs
of litigation, including reasonable attorneys' fees, in such amount as may be determined by the court or other tribunal having jurisdiction, including matters on appeal. 


        2.6   All
captions and heading herein are for convenience and ease of reference only, and shall not be used or referred to in any way in connection with the interpretation or
enforcement of this Agreement. 


        2.7   If
any provision of this Agreement, as applied to any party or to any circumstance, shall be adjudged by a court of competent jurisdictions to be void or unenforceable
for any reason, the same shall not affect any other provision of this Agreement, the application of such provision under circumstances different form those adjudged by the court, or the validity or
enforceability of this Agreement as a whole. 


        2.8   Time
is of the essence of this Agreement. 


        2.9   The
Parties agree to execute any further documents, and take any further actions, as may be reasonable and appropriate in order to carry out the purpose and intent of
this Agreement. 


        2.10 As
used herein, the masculine, feminine or neuter gender, and the singular and plural numbers, shall each be deemed to include the others whenever and whatever the
context so indicates. 



2







 
 
 

  SIGNATURE PAGE OF RECOGNITION OF
  
    COVENANTS, CONDITIONS AND RESTRICTIONS    
    


        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. 



								
	 	 "LANDLORD":	 	 
	
 	






  	
 	
,
	 	a	 	





  	 	 
	
 	
 By:	
 	






  
	 	 	 	 Its:	 	





  
	
 	
 "TENANT":	
 	

 
	
 	






  	
 	
,
	 	a	 	





  	 	 
	
 	
 By:	
 	






  
	 	 	 	 Its:	 	





  
	
 	
 By:	
 	






  
	 	 	 	 Its:	 	





  





3








 








































 
 

EXHIBIT G
  
    KILROY SABRE SPRINGS
  
    MARKET RENT DETERMINATION FACTORS    
    



        When determining Market Rent, the following rules and instructions shall be followed. 


        1.    RELEVANT FACTORS.    


        The
"Comparable Transactions" shall be the "Net Equivalent Lease Rates" per rentable square foot, at which tenants, are, pursuant to
transactions consummated within twelve (12) months prior to the commencement of the Option Term, leasing non-sublease, non-encumbered space comparable in location and
quality to the Premises and consisting of one or more entire buildings containing a total of not less than [***] rentable square feet for a term of
[***]. The terms of the Comparable Transactions shall be calculated as a "Net Equivalent Lease Rate" pursuant to the terms of this  Exhibit G, and shall take into consideration only the
following terms and concessions: (i) the rental rate and escalations for the
Comparable Transactions, (ii) the amount of parking rent per parking permit paid in the Comparable Transactions, if any, (iii) operating expense and tax protection granted in such
Comparable Transactions such as a base year or expense stop (although for each such Comparable Transaction the base rent shall be adjusted to a triple net base rent using reasonable estimates of
operating expenses and taxes as determined by Landlord for each such Comparable Transaction); (iv) rental abatement concessions, if any, being granted such tenants in connection with such
comparable space, (v) any "Renewal Allowance," as defined herein below, to be provided by Tenant in connection with each Option as compared to the improvements or allowances provided or to be
provided in the Comparable Transactions, taking into
account the contributory value of the existing improvements in the Premises, such value to be based upon the age, design, quality of finishes, and layout of the existing improvements, and
(vi) all other monetary concessions (including the value of any signage), if any, being granted such tenants in connection with such Comparable Transactions. [***]. 



        2.    TENANT SECURITY.    The Market Rent shall additionally include a determination as to
whether, and if so to what extent, Tenant must provide Landlord with financial security, such as an enhanced security deposit, a letter of credit or guaranty, for Tenant's Rent obligations during the
Option Term. [***]. 


        3.    RENEWAL IMPROVEMENT ALLOWANCE.    Notwithstanding anything to the contrary set forth in
this Exhibit G, once the Market Rent for each Option Term is determined as a Net Equivalent Lease Rate, if (i) in connection with such
determination, it is deemed that Tenant is entitled to a improvement or comparable allowance for the improvement of the Premises (the total dollar value of such allowance, the
"Renewal Allowance"), Landlord shall disburse the Renewal Allowance pursuant to a reasonable disbursement procedure (consistent with the terms of  Section 2.2.1 of the Work Letter Agreement) and the terms of Article 8 of this Lease, and,
as set forth in Section 5, below, of this Exhibit G, the rental rate component of the
Market Rent shall be increased to be a rental rate which takes into consideration that Landlord will fund a Renewal Allowance and, accordingly, such payment with interest shall be factored into the
base rent component of the Market Rent. 


        4.    COMPARABLE BUILDINGS.    For purposes of this Lease, the term
"Comparable Buildings" shall mean first-class single-tenant occupancy office buildings comparable to the Building in terms of age (based upon the date
of completion of construction or major renovation), quality of construction, level of services and amenities (including the type (e.g., surface,
structured, subterranean) and amount of parking), ingress and egress, freeway access and visibility, which Comparable Buildings are located in comparably sized office projects and are located in the
"Comparable Area," which is the [***]. 


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


1







 

        5.    METHODOLOGY FOR REVIEWING AND COMPARING THE COMPARABLE TRANSACTIONS.    In order to
analyze the Comparable Transactions based on the factors to be considered in calculating
Market Rent, and given that the Comparable Transactions may vary in terms of length of term, rental rate, concessions, etc., the following steps shall be taken into consideration to "adjust" the
objective data from each of the Comparable Transactions. By taking this approach, a "Net Equivalent Lease Rate" for each of the Comparable Transactions shall be determined using the following steps to
adjust the Comparable Transactions, which will allow for an "apples to apples" comparison of the Comparable Transactions. 



        5.1.  The
contractual rent payments for each of the Comparable Transactions should be arrayed monthly or annually over the lease term. All Comparable Transactions should be
adjusted to simulate a net rent structure, wherein the tenant is responsible for the payment of all property operating expenses in a manner consistent with this Lease. This results in the estimate of
Net Equivalent Rent received by each landlord for each Comparable Transaction being expressed as a periodic net rent payment. 


        5.2   Any
free rent or similar inducements received over time should be deducted in the time period in which they occur, resulting in the net cash flow arrayed over the lease
term. 


        5.3   The
resultant net cash flow from the lease should be then discounted (using an [***] annual discount rate) to the lease commencement date,
resulting in a net present value estimate. 


        5.4   From
the net present value, up front inducements (improvements allowances and other concessions) and leasing commissions should be deducted. These items should be
deducted directly, on a "dollar for dollar" basis, without discounting since they are typically incurred at lease commencement, while rent (which is discounted) is a future receipt. 


        5.5   The
net present value should then amortized back over the lease term as a level monthly or annual net rent payment using the same annual discount rate of
[***] used in the present value analysis. This calculation will result in a hypothetical level or even payment over the option period, termed the "Net Equivalent Lease Rate"
(or constant equivalent in general financial terms). 




        6.    USE OF NET EQUIVALENT LEASE RATES FOR COMPARABLE TRANSACTIONS.    The Net Equivalent
Lease Rates for the Comparable Transactions shall then be used to reconcile, in a manner usual and customary for a real estate appraisal process, to a conclusion of Market Rent which shall be stated
as a "Base Year" lease rate applicable to each year of the Option Term. 


        An
example of the application of using the process set forth on this Exhibit G to arrive at the Market Rent is attached hereto as  Schedule 1.



 
 

SCHEDULE 1 TO EXHIBIT G    
    


 
  KILROY SABRE SPRINGS    
    


 
    DETERMINATION OF MARKET RENT—EXAMPLE    
    


        As an example of the determination of the Market Rent, assume that there is a 100,000 rentable square foot Comparable Transaction with
a five (5) year term, Base Rent of $75.00 per rentable square foot with One Dollar ($1) annual increases, a tenant improvement allowance of $25.00 per rentable square foot, three
(3) months of free rent, and Base Year Operating Expenses and Tax Expenses of $12.00 per rentable square foot. Based on the foregoing, the Net Equivalent Lease Rate analysis would be as
follows. 


        1.     The
contractual rent payments for each of the Comparable Transactions should be arrayed monthly over the lease term. See Column 2 in the attached spreadsheet. 



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


2







 

        2.     From
this figure, the initial lease year operating expenses (from gross leases) should be deducted, leaving a net lease rate over the lease term. See Column 3 in the
attached spreadsheet. 


        3.     This
results in the net rent received by each landlord under the Comparable Transactions being expressly as a monthly net rent payment. See Column 4 in the attached
spreadsheet. 


        4.     Any
free rent or similar inducements received over time should be deducted in the time period in which they occur, resulting in the net cash flow arrayed over the lease
term. See the amounts set forth in months 1, 2 and 3 of Column 2 in the attached spreadsheet. 


        5.     The
resultant net cash flow from the lease should be then discounted (using an 8.0% annual discount rate) to the lease commencement date, resulting in a net present value
estimate. The net present value of the amounts set forth in Column 4 of the attached spreadsheet is $24,798,516.60



        6.     From
the net present value, up-front inducements (tenant improvement allowances and other concessions) should be deducted. These items should be deducted
directly, on a "dollar for dollar" basis, without discounting, since they are typically incurred at lease commencement, while rent (which is discounted) is a future receipt. The net present value
amount set forth in number 5, above, less the tenant improvement allowance, is $22,298,516.60.


        7.     The
net present value should then amortized back over the lease term as a level monthly net rent payment using the same annual discount rate of 8.0% used in the present
value analysis. This calculation will result in a hypothetical level or even payment over the option period, termed the "Net Equivalent Lease Rate" (or constant equivalent in general financial terms).
The net present value amount set forth in number 6, above, amortized back over the term at 8% results in a net monthly rent payment of  $452,133.50


        8.     The
net monthly rent payment set forth in number 7 above must then be converted to a rentable square foot number by dividing the amount by the rentable square
footage of the space (i.e., 100,000 rentable square feet). This results in a net monthly rent payment per rentable square foot of
$4.52


        9.     The
net monthly rent payment per rentable square foot must then be multiplied by the rentable square footage of the Premises (for purposes of this example, assume the
rentable square footage of the Premises is 147,533 rentable square feet), resulting in a net monthly rent payment for the Premises during the applicable Term of $666,849.16. 


3







 
 
 

  SCHEDULE 2 TO EXHIBIT G    
    


KILROY SABRE SPRINGS  


Determination of Market Rent—Example 



					
	 Premises (RSF)
	 	 	100,000	 
	 Initial Annual Rental Rate per RSF
	 	$	75.00	 
	 Annual Escalation
	 	$	12.00	 
	 Abatement (months)
	 	 	3	 
	 Tenant Improvement Allowance per rsf
	 	$	25.00	 






 





											
	Period



 
	 	Monthly

Base Rent 	 	Monthly

Operating Expenses 	 	Monthly Net

Rent Payment 	 
	 1
	 	$	—	 	$	100,000.00	 	$	(100,000.00	)
	 2
	 	$	—	 	$	100,000.00	 	$	(100,000.00	)
	 3
	 	$	—	 	$	100,000.00	 	$	(100,000.00	)
	 4
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 5
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 6
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 7
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 8
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 9
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 10
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 11
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 12
	 	$	625,000.00	 	$	100,000.00	 	$	525,000.00	 
	 13
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 14
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 15
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 16
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 17
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 18
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 19
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 20
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 21
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 22
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 23
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 24
	 	$	633,333.33	 	$	100,000.00	 	$	533,333.33	 
	 25
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 26
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 27
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 28
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 29
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 30
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 31
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 32
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 33
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 34
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 35
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 36
	 	$	641,666.67	 	$	100,000.00	 	$	541,666.67	 
	 37
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 38
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 





4







 


											
	Period



 
	 	Monthly

Base Rent 	 	Monthly

Operating Expenses 	 	Monthly Net

Rent Payment 	 
	 39
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 40
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 41
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 42
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 43
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 44
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 45
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 46
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 47
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 48
	 	$	650,000.00	 	$	100,000.00	 	$	550,000.00	 
	 49
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 50
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 51
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 52
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 53
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 54
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 55
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 56
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 57
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 58
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 59
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 
	 60
	 	$	658,333.33	 	$	100,000.00	 	$	558,333.33	 






 





					
	 Net Present Value @ 8%
	 	$	24,798,516.60	 
	 Up-front inducements (Tenant Improvements & Other)
	 	
$	

2,500,000.00	 
	 	 	 	 
	 Net Present Value net of inducements
	 	
$	

22,298,516.60	 
	 	 	 	 
	 Monthly Amortization @ 8%
	 	
$	

452,133.50	 
	 	 	 	 
	 Net Monthly Rent Payment pre rentable square foot
	 	
$	

4.52	 
	 Rentable Square Footage of Premises
	 	 	

147,533	 
	 	 	 	 
	 Net Monthly Rent Payment for the Premises during the applicable Term
	 	
$	

666,849.16	 
	 	 	 	 





5








 








































 
 

EXHIBIT H    
    


 
  KILROY SABRE SPRINGS
  
    FORM OF LETTER OF CREDIT    
    


(Letterhead
of a money center bank

acceptable to the Landlord) 



			
	
 	
 	

 
	FAX NO. [(            )
            -            ]

SWIFT: [Insert No., if any]	 	 [Insert Bank Name And Address]
	

 	
 	
 DATE OF ISSUE:
                                    
	
BENEFICIARY:

[Insert Beneficiary Name And Address]	
 	
 APPLICANT:

[Insert Applicant Name And Address]
	

 	
 	
 LETTER OF CREDIT NO.
                                    
	
EXPIRATION DATE:
                                     AT OUR
COUNTERS	
 	
 AMOUNT AVAILABLE:

USD [Insert Dollar Amount]

(U.S. DOLLARS [Insert Dollar Amount])






 LADIES AND GENTLEMEN:  


        WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                                    
IN YOUR FAVOR FOR THE ACCOUNT OF [Insert Tenant's Name], A [Insert Entity Type] ("TENANT"), UP TO THE AGGREGATE AMOUNT OF USD [Insert
Dollar Amount] ([Insert Dollar Amount] U.S. DOLLARS) EFFECTIVE IMMEDIATELY AND EXPIRING ON (Expiration Date) AVAILABLE BY PAYMENT UPON
PRESENTATION OF YOUR DRAFT AT SIGHT DRAWN ON [Insert Bank Name] WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENT(S):


        1.     THE ORIGINAL OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT AND AMENDMENT(S), IF ANY.


        2.     BENEFICIARY'S SIGNED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF [Insert Landlord's Name], A
[Insert Entity Type] ("LANDLORD") STATING THE FOLLOWING:



"THE UNDERSIGNED HEREBY CERTIFIES THAT FUNDS IN THE AMOUNT OF USD                     ARE NOW DUE AND OWING BY TENANT UNDER
THE LANDLORD UNDER THE LEASE
(DEFINED BELOW) HAS THE RIGHT TO DRAW DOWN THE AMOUNT OF USD                     IN ACCORDANCE WITH THE TERMS OF THAT CERTAIN OFFICE LEASE
DATED [Insert Lease
Date], AS AMENDED (COLLECTIVELY, THE "LEASE"),


BY AND BETWEEN [Insert Landlord's Name], A [Insert Entity Type] ("LANDLORD"), AND [Insert Tenant's
Name], A [Insert Entity Type] ("TENANT", AS
AMENDED (COLLECTIVELY, THE "LEASE"), OR SUCH AMOUNT CONSTITUTES DAMAGES OWING BY TENANT THE TENANT UNDER SUCH LEASE TO BENEFICIARY RESULTING FROM THE TENANT'S BREACH OF THE SUCH LEASE BY THE TENANT
THEREUNDER, AND SUCH AMOUNT REMAINS UNPAID AT THE TIME OF THIS DRAWING."




OR  



"THE UNDERSIGNED HEREBY CERTIFIES THAT WE HAVE RECEIVED A WRITTEN NOTICE OF [Insert Bank Name]'S ELECTION NOT TO EXTEND ITS STANDBY LETTER OF
CREDIT NO.                      AND HAVE NOT RECEIVED A REPLACEMENT LETTER OF  



1







 

 CREDIT WITHIN AT LEAST SIXTY (60) DAYS PRIOR TO THE PRESENT EXPIRATION DATE."




OR  



"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE FULL AMOUNT OF LETTER OF CREDIT
NO.                      AS THE
RESULT OF TENANT'S THE FILING OF A VOLUNTARY PETITION UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE BY THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED [Insert Lease
Date], AS AMENDED (COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN DISMISSED AT THE TIME OF THIS DRAWING."




OR  



"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE FULL AMOUNT OF LETTER OF CREDIT
NO.                      AS THE
RESULT OF AN INVOLUNTARY PETITION HAVING BEEN FILED AGAINST TENANT UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE AGAINST THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED
[Insert Lease Date], AS AMENDED (COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN DISMISSED AT THE TIME OF THIS DRAWING."




SPECIAL CONDITIONS:  


PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS MAY BE MADE UNDER THIS STANDBY LETTER OF CREDIT, PROVIDED, HOWEVER, THAT EACH SUCH DEMAND THAT IS PAID BY US
SHALL REDUCE THE AMOUNT AVAILABLE UNDER THIS STANDBY LETTER OF CREDIT.


ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR OTHERWISE, MUST BE COMPLETED AT THE TIME OF DRAWING. [Please Provide The Required Forms For
Review, And Attach As Schedules To The Letter Of Credit.]


ALL SIGNATURES MUST BE MANUALLY EXECUTED IN ORIGINALS.  



ALL BANKING CHARGES OTHER THAN ISSUING BANK'S ARE FOR THE APPLICANT'S ACCOUNT.  


IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR A PERIOD OF ONE YEAR FROM THE
PRESENT OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION DATE WE SEND YOU NOTICE BY NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE THAT WE ELECT NOT TO
EXTEND THIS CREDIT FOR ANY SUCH ADDITIONAL PERIOD. SAID NOTICE WILL BE SENT TO THE ADDRESS INDICATED ABOVE, UNLESS A CHANGE OF ADDRESS IS OTHERWISE NOTIFIED BY YOU TO US IN WRITING BY RECEIPTED MAIL
OR COURIER. ANY NOTICE TO US WILL BE DEEMED EFFECTIVE ONLY UPON ACTUAL RECEIPT BY US AT OUR DESIGNATED OFFICE. IN NO EVENT, AND WITHOUT FURTHER NOTICE FROM OURSELVES, SHALL THE EXPIRATION DATE BE
EXTENDED BEYOND A FINAL EXPIRATION DATE OF (Expiration Date).


THIS LETTER OF CREDIT MAY BE TRANSFERRED SUCCESSIVELY IN WHOLE OR IN PART ONLY UP TO THE THEN AVAILABLE AMOUNT IN FAVOR OF A NOMINATED TRANSFEREE ("TRANSFEREE"), ASSUMING SUCH
TRANSFER TO SUCH TRANSFEREE IS IN COMPLIANCE WITH ALL APPLICABLE U.S. LAWS AND REGULATIONS. AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGINAL AMENDMENT(S) IF ANY, MUST BE SURRENDERED
TO US TOGETHER WITH OUR TRANSFER FORM (AVAILABLE UPON  


2







 



 REQUEST) AND PAYMENT OF OUR CUSTOMARY TRANSFER FEES BY BENEFICIARY. IN CASE OF ANY TRANSFER UNDER THIS LETTER OF CREDIT, THE DRAFT AND ANY REQUIRED
STATEMENT MUST BE EXECUTED BY THE TRANSFEREE AND WHERE THE BENEFICIARY'S NAME APPEARS WITHIN THIS STANDBY LETTER OF CREDIT, THE TRANSFEREE'S NAME IS AUTOMATICALLY SUBSTITUTED
THEREFOR.


ALL DRAFTS REQUIRED UNDER THIS STANDBY LETTER OF CREDIT MUST BE MARKED: "DRAWN UNDER [Insert Bank Name] STANDBY LETTER OF CREDIT
NO.                    ."


WE HEREBY AGREE WITH YOU THAT IF DRAFTS ARE PRESENTED TO [Insert Bank Name] UNDER THIS LETTER OF CREDIT AT OR PRIOR TO [Insert
Time—(e.g., 11:00 AM)], ON A BUSINESS DAY, AND PROVIDED THAT SUCH DRAFTS PRESENTED CONFORM TO THE TERMS AND CONDITIONS OF THIS
LETTER OF CREDIT, PAYMENT SHALL BE INITIATED BY US IN IMMEDIATELY AVAILABLE FUNDS BY OUR CLOSE OF BUSINESS ON THE SUCCEEDING BUSINESS DAY. IF DRAFTS ARE PRESENTED TO [Insert Bank
Name] UNDER THIS LETTER OF CREDIT AFTER [Insert Time—(e.g., 11:00 AM)], ON A BUSINESS DAY, AND PROVIDED
THAT SUCH DRAFTS CONFORM WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, PAYMENT SHALL BE INITIATED BY US IN IMMEDIATELY AVAILABLE FUNDS BY OUR CLOSE OF BUSINESS ON THE SECOND SUCCEEDING
BUSINESS DAY. AS USED IN THIS LETTER OF CREDIT, "BUSINESS DAY" SHALL MEAN ANY DAY OTHER THAN A SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN THE STATE OF CALIFORNIA ARE AUTHORIZED OR
REQUIRED BY LAW TO CLOSE. IF THE EXPIRATION DATE FOR THIS LETTER OF CREDIT SHALL EVER FALL ON A DAY WHICH IS NOT A BUSINESS DAY THEN SUCH EXPIRATION DATE SHALL AUTOMATICALLY BE EXTENDED TO THE DATE
WHICH IS THE NEXT BUSINESS DAY.


PRESENTATION OF A DRAWING UNDER THIS LETTER OF CREDIT MAY BE MADE ON OR PRIOR TO THE THEN CURRENT EXPIRATION DATE HEREOF BY HAND DELIVERY, COURIER SERVICE, OVERNIGHT MAIL, OR
FACSIMILE. PRESENTATION BY FACSIMILE TRANSMISSION SHALL BE BY TRANSMISSION OF THE ABOVE REQUIRED SIGHT DRAFT DRAWN ON US TOGETHER WITH THIS LETTER OF CREDIT TO OUR FACSIMILE NUMBER,
[Insert Fax Number—(            )
             -            ],
ATTENTION: [Insert Appropriate Recipient], WITH TELEPHONIC CONFIRMATION OF OUR RECEIPT OF SUCH FACSIMILE TRANSMISSION AT OUR TELEPHONE NUMBER [Insert
Telephone Number—(            )
             -            ] OR TO SUCH
OTHER FACSIMILE OR TELEPHONE NUMBERS, AS TO WHICH YOU HAVE RECEIVED WRITTEN NOTICE FROM US AS BEING THE APPLICABLE SUCH NUMBER. WE AGREE TO NOTIFY YOU IN WRITING, BY NATIONALLY RECOGNIZED OVERNIGHT
COURIER SERVICE, OF ANY CHANGE IN SUCH DIRECTION. ANY FACSIMILE PRESENTATION PURSUANT TO THIS PARAGRAPH SHALL ALSO STATE THEREON THAT THE ORIGINAL OF SUCH SIGHT DRAFT AND LETTER OF CREDIT ARE BEING
REMITTED, FOR DELIVERY ON THE NEXT BUSINESS DAY, TO [Insert Bank Name] AT THE APPLICABLE ADDRESS FOR PRESENTMENT PURSUANT TO THE PARAGRAPH PRECEDING THIS
ONE.


WE HEREBY ENGAGE WITH YOU THAT ALL DOCUMENT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS STANDBY LETTER OF CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR
PAYMENT AT OUR OFFICE LOCATED AT [Insert Bank Name], [Insert Bank Address], ATTN: [Insert Appropriate Recipient], ON OR BEFORE
THE EXPIRATION DATE OF THIS CREDIT, (Expiration Date).


IN THE EVENT THAT THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT IS LOST, STOLEN, MUTILATED, OR OTHERWISE DESTROYED, WE HEREBY AGREE TO ISSUE A DUPLICATE ORIGINAL HEREOF UPON
RECEIPT OF A WRITTEN REQUEST FROM YOU AND A CERTIFICATION BY YOU (PURPORTEDLY SIGNED BY YOUR AUTHORIZED  


3







 



 REPRESENTATIVE) OF THE LOSS, THEFT, MUTILATION, OR OTHER DESTRUCTION OF THE ORIGINAL HEREOF.


EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS STANDBY LETTER OF CREDIT IS SUBJECT TO THE "INTERNATIONAL STANDBY PRACTICES" (ISP 98) INTERNATIONAL
CHAMBER OF COMMERCE (PUBLICATION NO. 590).


Very
truly yours,



(Name of Issuing Bank) 


By:                                       
                                 
 


4








 








































 
 

EXHIBIT I    
    


 
  DIRECT COMPETITORS*    
    


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  


	*
	"Direct
Competitors" includes purchasers of all or substantially all of the assets of a Direct Competitor, or to an entity resulting, by operation of law or
otherwise, from the merger, consolidation or other reorganization of a Direct Competitor, successors, and, where the primary business of such competitors is an online or on-ground
education provider, and any holding company for which the majority of its net value is comprised of online or on-ground education providers, name changes. 


1












































 



 
 

EXHIBIT J    
    


 
 

  SHORT FORM OF MEMORANDUM OF LEASE    
    


RECORDING
REQUESTED BY

AND WHEN RECORDED RETURN TO: 


Sheppard
Mullin Richter & Hampton LLP

12275 El Camino Real, Suite 200

San Diego, CA 92130

Attention: Michael R. Leake, Esq. 








 
 

  SHORT FORM OF MEMORANDUM OF LEASE    
    


        THIS SHORT FORM OF MEMORANDUM OF LEASE is entered into as of the 31st day of January, 2008, by and between KILROY
REALTY, L.P., a Delaware limited partnership ("Landlord"), and BRIDGEPOINT EDUCATION, INC., a Delaware corporation
("Tenant"), who agree as follows. 



        1.    Terms and Premises.    Landlord leases to Tenant, and Tenant leases from Landlord, that
certain six (6)-story building (the "Building") located at 13480 Evening Creek Drive North, San Diego, California 92128, which Building contains
approximately 147,533 rentable square feet of space (the "Premises"), located on the real property legally described on  Schedule 1 attached
hereto and incorporated herein by this reference, for the term and in accordance with the provisions of that certain Lease by
and between Landlord and Tenant, dated as of the date hereof (the "Lease"). The provisions of the Lease are hereby incorporated herein. 


        2.    Certain Express Lease Terms.    As more particularly set forth in the referenced
sections of the Lease, Tenant enjoys the following rights pursuant to the terms and conditions of the Lease: (i) an initial Lease Term of approximately ten (10) years and one
(1) month, which initial Lease Term is anticipated to commence on July 1, 2008, as more particularly set forth in the Lease, (ii) two (2) options to extend the Lease Term
for the entire Premises each by a period of five (5) years, as more particularly set forth in the Lease, and (iii) a right of first refusal with respect to space in that certain building
(defined in the Lease as the 13520 Building), as more particularly set forth in the Lease. 


        3.    Provisions Binding on Parties.    The provisions of the Lease to be performed by
Landlord or Tenant, whether affirmative or negative in nature, are intended to and shall bind or benefit the respective parties hereto and their assigns or successors, as applicable, at all times. 







 

        4.    Purpose of Short Form of Memorandum of Lease.    This Short Form of Memorandum of Lease
is prepared solely for purposes of recordation, and in no way modifies the provisions of the Lease. 



					
	LANDLORD	 	KILROY REALTY, L.P.,

a Delaware limited partnership
	

 	
 	
 By:	
 	
Kilroy Realty Corporation,

a Maryland corporation,

General Partner






 





					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






 





							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 






 





					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






 





							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 






 





					
	TENANT	 	BRIDGEPOINT EDUCATION, INC.,

a Delaware corporation






 





					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






 





							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 






 





					
	

 	
 	

 	
 	

 
	 	 	 By:	 	  







 






 





							
	

 	
 	

 	
 	

 	
 	

 
	 	 	 	 	 Its:	 	  







 





2







 
 
 

  ACKNOWLEDGMENT    
    



					
	State of California	 	)
	County of	 	  







 	 	)





         




        On
                                     , before me,
                                         
                                          
                   ,
 


                                        
                                          
              (insert name and title of the officer) 


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. 








Signature
                                         
                                          
                                         
(Seal)
 


3







 
 
 

  ACKNOWLEDGMENT    
    



					
	State of California	 	)
	County of	 	  







 	 	)





         




        On
                                     , before me,
                                         
                                          
                   ,
 


                                        
                                          
              (insert name and title of the officer) 


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. 








Signature
                                         
                                          
                                         
(Seal)
 


4








 








































 
 

SCHEDULE 1
  
    LEGAL DESCRIPTION    
    


        Parcel 1 of Parcel Map No. 19990 in the City of San Diego, County of San Diego, State of California, filed in the Office of the
County Recorder of San Diego County May 05, 2006, as Instrument No. 2006-0319756 of Official Records. 


1











QuickLinks



Exhibit 10.15


OFFICE LEASE KILROY REALTY KILROY SABRE SPRINGS

KILROY REALTY, L.P., a Delaware limited partnership, as Landlord, and BRIDGEPOINT EDUCATION, INC., a Delaware corporation, as Tenant.

TABLE OF CONTENTS

INDEX


KILROY SABRE SPRINGS OFFICE LEASE

SUMMARY OF BASIC LEASE INFORMATION


ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS

ARTICLE 2 LEASE TERM; OPTION TERM(S)

ARTICLE 3 BASE RENT; ABATEMENT OF RENT

ARTICLE 4 ADDITIONAL RENT


ARTICLE 5 USE OF PREMISES

ARTICLE 6 SERVICES AND UTILITIES

ARTICLE 7 REPAIRS

ARTICLE 8 ADDITIONS AND ALTERATIONS

ARTICLE 9 COVENANT AGAINST LIENS

ARTICLE 10 INSURANCE

ARTICLE 11 DAMAGE AND DESTRUCTION

ARTICLE 12 NONWAIVER


ARTICLE 13 CONDEMNATION

ARTICLE 14 ASSIGNMENT AND SUBLETTING

ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

ARTICLE 16 HOLDING OVER

ARTICLE 17 ESTOPPEL CERTIFICATES

ARTICLE 18 SUBORDINATION

ARTICLE 19 DEFAULTS; REMEDIES

ARTICLE 20 COVENANT OF QUIET ENJOYMENT

ARTICLE 21 LETTER OF CREDIT

ARTICLE 22

ARTICLE 23 SIGNS

ARTICLE 24 COMPLIANCE WITH LAW

ARTICLE 25 LATE CHARGES

ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT


ARTICLE 27 ENTRY BY LANDLORD

ARTICLE 28 TENANT PARKING

ARTICLE 29 MISCELLANEOUS PROVISIONS

[signature page to follow]


EXHIBIT A

KILROY SABRE SPRINGS OUTLINE OF PREMISES


EXHIBIT A-1 SUPERIOR RIGHT HOLDERS


EXHIBIT B KILROY SABRE SPRINGS WORK LETTER AGREEMENT


SCHEDULE 1 TO EXHIBIT B TIME DEADLINES


SCHEDULE 2 TO EXHIBIT B BUILDING STANDARDS


SCHEDULE 3 TO EXHIBIT B BASE BUILDING SPECIFICATIONS


EXHIBIT C KILROY SABRE SPRINGS NOTICE OF LEASE TERM DATES


EXHIBIT D

KILROY SABRE SPRINGS RULES AND REGULATIONS


EXHIBIT E

KILROY SABRE SPRINGS FORM OF TENANT'S ESTOPPEL CERTIFICATE


EXHIBIT F

KILROY SABRE SPRINGS

RECOGNITION OF COVENANTS, CONDITIONS, AND RESTRICTIONS

SIGNATURE PAGE OF RECOGNITION OF COVENANTS, CONDITIONS AND RESTRICTIONS


EXHIBIT G KILROY SABRE SPRINGS MARKET RENT DETERMINATION FACTORS

SCHEDULE 1 TO EXHIBIT G

KILROY SABRE SPRINGS

DETERMINATION OF MARKET RENT—EXAMPLE

SCHEDULE 2 TO EXHIBIT G


EXHIBIT H

KILROY SABRE SPRINGS FORM OF LETTER OF CREDIT


EXHIBIT I

DIRECT COMPETITORS


EXHIBIT J

SHORT FORM OF MEMORANDUM OF LEASE

SHORT FORM OF MEMORANDUM OF LEASE

ACKNOWLEDGMENT

ACKNOWLEDGMENT


SCHEDULE 1 LEGAL DESCRIPTION