Exhibit 10.2


 


Ardenwood III-G


 


AMENDMENT NO. 1

TO LEASE


 


THIS
AMENDMENT NO. 1 (“Amendment”) is made and entered into
this 9th day of February, 2010, by and between JOHN ARRILLAGA, Trustee,
or his Successor Trustee UTA dated 7/20/77 (.JOHN ARRILLAGA
SURVIVOR’S TRUST) as amended, and RICHARD T. PEERY, Trustee, or his Successor
Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as
amended, collectively as LANDLORD, and ACTIVIDENTITY, INC., a California
corporation, as TENANT.


 


RECITALS


 


A.           WHEREAS, by
Lease Agreement dated April 11, 2000 Landlord
leased to Tenant all of that certain 41,075+ square foot building
located at 6623 Dumbarton Circle, Fremont, California, the details of which are
more particularly set forth in said April 11, 2000 Lease Agreement, and


 


B.             WHEREAS, said Lease was
amended by the Commencement Letter dated February 12, 2001 which changed
the Commencement Date of the Lease from January 1, 2001 to February 12,
2001, and changed the Termination Date from December 31, 2010 to February 28,
2011, and


 


C.             WHERESAS, said
Lease was amended by Letter Agreement dated December 28, 2005, whereby
Landlord acknowledged Tenant’s name change from “ActivCard, Inc., a California
corporation” to “ActivIdentity, Inc., a California corporation” (“ActivIdentity
Letter Agreement”), and


 


D.            WHEREAS, Tenant
subleased the Relinquished Premises (defined below) to eTouch Systems
Corporation (“eTouch”) pursuant to a Sublease dated June 3, 2005 (the
“eTouch Sublease”) and Landlord consented to such sublease under certain terms
and conditions pursuant to a letter agreement dated July 7, 2005, and


 


E.              WHEREAS, it is
now the desire of the parties hereto to further amend the Lease by (i) extending
the Term for nine (9) years, changing the Termination Date from February 28,
2011 to February 29, 2020; (ii) reducing the square footage of the Leased Premises
effective March 1, 2011 by 12,075+ square feet, or from 41,075+
square feet to 29,000+ square feet; (iii) as of March 1, 2010
reducing the Security Deposit required under the Lease; (iv) amending the
Basic Rent schedule and Aggregate Basic Rent; (v) effective March 1,
2011 reducing Tenant’s non-exclusive parking spaces; (vi) amending Lease
Paragraphs 4.D (“Rent: Additional Rent”), 5 (“Acceptance and Surrender of
Premises”), 40 (“As-Is Basis”), 7 (“Tenant Maintenance”), 8 (“Utilities”), 12
(“Property Insurance”), 14 (“Compliance”), 16 and 42 (“Assignment and
Subletting”), 21 (“Destruction”), 31 (“Notices”), 45 (“Hazardous Materials”)
and (vii) adding paragraphs (“Rules and Regulations and Common
Area”), (“Parking”), (“Brokers”), (“Tenant’s Option to Terminate Lease”) and
(“Option to Extend Lease for Five (5) Years”) to the Lease as hereinafter
set forth (the Lease Agreement, Construction Agreement, Commencement Letter
dated February 12, 2001, ActivIdentity Letter Agreement dated December 28,
2005 and this Amendment No. 1


 


	
   

  	
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hereinafter
are referred to collectively as the “Lease”).


 


AGREEMENT


 


NOW
THEREFORE, for valuable consideration, receipt of which is hereby acknowledged, and in
consideration of the hereinafter mutual promises, the parties hereto do agree
as follows:


 


1.               TERM OF LEASE: It is agreed
between the parties that the Term of the Lease shall be extended for an
additional nine (9) year period (the “Extended Term”), and the Lease
Termination Date shall be changed from February 28, 2011 to February 29,
2020 (the “Revised Termination Date”). Tenant shall be responsible for paying
all Basic Rent and Additional Rent and fulfilling all Lease obligations as
contained in said Lease through the Revised Termination Date. Notwithstanding
the above, Tenant’s obligations as stated in Lease Paragraphs 9 (“Taxes”), 13
(“Indemnification”), 14 (“Compliance”) and 45 (“Hazardous Materials”) shall
survive the termination of the Lease.


 


2.               REDUCED
PREMISES: Subject to the terms of this Amendment No. 1,
effective March 1, 2011 (the scheduled “Surrender Date”), the size of the
Leased Premises will be reduced by 12,075+ square feet (the
“Relinquished Premises”), or from 41,075+ square feet to 29,000+
square feet of space (“Retained Premises”) (including Tenant’s Proportionate
Share of the Common Area of the Building). The remaining 29,000+ square
feet of currently leased space is shown in Red on Exhibit B
attached hereto (“Remaining Square Footage”). The Remaining Square Footage of
the Premises is more particularly shown within the area outlined in Red on Exhibit A
attached hereto. Tenant shall be responsible for relinquishing the Relinquished
Space in the condition required under Lease Paragraphs 5 (“Acceptance and
Surrender of Premises”), 6 (“Alterations and Additions”) and 45 (“Hazardous
Materials”). As soon as possible following the full execution of this Amendment,
Landlord and Tenant shall conduct a joint inspection of the Relinquished
Premises to determine the extent of the work required by Tenant to comply with
the provisions of said Lease Paragraphs 5 and 6 (“Restoration Work”) and
Landlord shall obtain the required bid from its contractors to complete said
Restoration Work. In lieu of Tenant completing the required Restoration Work,
Tenant agrees (i) to pay to Landlord a fee equal to the total estimates
received from Landlord’s contractors for the Restoration Work (“Restoration
Fee”) within ten (10) days after Tenant receives Landlord’s statement of
said Restoration Fee Notwithstanding the above, Tenant’s obligations as stated
in Lease Paragraphs 9 (“Taxes”), 13 (“Indemnification”), 14 (“Compliance”) and
45 (“Hazardous Materials”) shall survive the Surrender Date of the Relinquished
Premises.


 


A.                  Taxes.
Tenant’s ongoing obligation related to Lease Paragraph 9 (“Taxes”)
shall include all regularly assessed Real Estate Taxes and any supplemental
taxes related to the period of Tenant’s Lease Term whenever levied, including
any such taxes that may be levied on the Relinquished Premises and/or the
Remaining Premises after the Lease Surrender Date with respect to the Lease
Term.


 


B.                  Hazardous
Materials. In the event any Hazardous Materials were used
and/or stored on the Relinquished Premises during the Term of the Lease by
Tenant, Tenant’s assignor (if any) or subtenants (if any), prior to the
Surrender Date, Tenant shall provide Landlord, concurrently with the


 


	
   

  	
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return
of this executed Amendment No. 1, with (i) a list of Hazardous
Materials used and/or stored on the Relinquished Premises, including the
quantities so used and/or stored, (ii) copies of all Hazardous Materials
permits, (iii) copies of all related Hazardous Materials manifests, (iv) a
copy of the floor and site plan of the Relinquished Premises reflecting the
location where any and all Hazardous Materials were used, stored and/or
disposed, and (v) a copy of the preliminary and final Hazardous Materials
Closure Plan filed with and approved by the City of Fremont. If no Hazardous
Materials were  used and/or stored on the
Relinquished Premises, Tenant shall provide Landlord with a written statement
representing and warranting the same. For purposes of this Paragraph 2.B, the
term “Hazardous Materials” shall exclude customary office and
janitorial supplies.


 


3.               REDUCED
SECURITY DEPOSIT: Effective March 1, 2010 Tenant’s Security
Deposit shall be reduced by $354,395.00 (“Security Deposit Reduction Amount”),
or from $435,395.00 to $81,000.00. Said Security Deposit Reduction Amount shall
be applied as credit to the Basic Rent due as shown in Paragraph 4. C below
commencing March 1, 2010 until one hundred percent (100%) of said Security
Deposit Reduction Amount is applied in full to Basic Rent.


 


4.               BASIC RENT
SCHEDULE: Subject to Paragraph 18 (“Tenant’s Option to
Terminate Lease”) herein, the Basic Rent schedule, as shown in Paragraph 39 of
the Lease, shall be amended as follows:


 


A.                Deferred
Basic Rent. Subject to the terms and conditions stated herein,
the total Basic Rent due under Lease Paragraph 39 (“Basic Rent”) for the period
commencing March 1, 2010 through February 28, 2011 (the “Basic Rent
Deferral Period”) is $2,602,370.00 ($217,697.50 x 12 months less $10,000.00
reduction for Basic Rent due under the original Lease Term for period March 1,
2010 through March 31, 2010) net of the Sublease Basic Rent of $187,899.30
($20,877.70 x 9 months) for a net total Deferred Basic Rent of $2,414,470.70
shall be amortized and paid to Landlord over one hundred twenty (120) months
commencing March 1, 2010 through February 29, 2020 (the “Basic Rent
Repayment Period”). The monthly amortized amount of the Deferred Basic Rent to
be repaid during the Basic Rent Repayment Period is $20,120.59 per month and is
included in the monthly Basic Rent detailed in Paragraph 4.C below. In the
event of a monetary default that is not cured within the period allowed in the
Lease, the full amount of the then remaining unamortized and/or unpaid portion
of the Deferred Basic Rent shall be due in full upon the occurrence of such
uncured monetary default.


 


B.                  Application
of Reduction Amount in Reduced Security Deposit. Effective March 1,
2010, and pursuant to Amendment No. 1, Paragraph 3 (Reduced Security
Deposit) the Security Deposit required under the Lease is reduced from
$435,395.00 to $81,000.00 or by $354,395.00 (“Security Deposit Reduction
Amount”). The Security Deposit Reduction Amount shall be applied to the Basic
Rent due commencing March 1, 2010 and each month thereafter until the full
Security Deposit Reduction Amount has been applied in full to the Basic Rent
due.


 


C.                  Revised
Basic Rent Schedule. The monthly Basic Rent Schedule of the Lease
shall be as follows.


 


The
Basic Rent of $217,697.50 due for the period March 1, 2010 through March 31,
2010


 


	
   

  	
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reflected
in Lease Paragraph 39 is reduced by $10,000.00 to $207,697.50. Said Basic Rent
shall be further amended as reflected below:


 


On
March 1, 2010, the sum of FORTY THOUSAND NINE HUNDRED N1NETY-EIGHT AND 29/100 DOLLARS ($40,998.29)
shall he due less the Security Deposit Reduction Amount of FORTY THOUSAND NINE
HUNDRED NINETY-EIGHT AND 29/100 DOLLARS ($40,998.29), with a net amount of ZERO DOLLARS ($0.00) due each month for
the period March 1, 2010 through October 1, 2010.


 


On
November 1, 2010, the sum of FORTY THOUSAND NINE HUNDRED NINETY- EIGHT AND
29/100 DOLLARS ($40,998.29) shall be due less the Security Deposit Reduction
Amount of TWENTY-SIX THOUSAND FOUR HUNDRED EIGHT AND 68/100 DOLLARS
($26,408.68), with a net amount of FOURTEEN THOUSAND FIVE HUNDRED EIGHTY-NINE
AND 61/100 DOLLARS ($14,589.61) due for the period November 1, 2010
through November 30, 2010.


 


On
December 1, 2010, the sum of TWENTY THOUSAND ONE HUNDRED TWENTY AND 59/100
DOLLARS ($20,120.59) shall be due, and a like sum due on the first day of each
month thereafter through and including April 1, 2011.


 


On
May 1, 2011, the sum of FORTY-SIX THOUSAND TWO HUNDRED TWENTY AND 59/100
DOLLARS ($46,220.59) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2012.


 


On
March 1, 2012, the sum of FORTY-SEVEN THOUSAND SIX HUNDRED SEVENTY AND
59/100 DOLLARS ($47,670.59) shall be due, and a like sum due on the first day
of each month thereafter through and including February 1, 2013.


 


On
March 1, 2013, the sum of FORTY-NINE THOUSAND ONE HUNDRED TWENTY AND
59/100 DOLLARS ($49,120.59) shall be due, and a like sum due on the first day
of each month thereafter though and including February 1, 2014.


 


On
March 1, 2014, the sum of FIFTY THOUSAND FIVE HUNDRED SEVENTY AND 59/100
DOLLARS ($50,570.59) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2015.


 


On
March 1, 2015, the sum of FIFTY-TWO THOUSAND TWENTY AND 59/100 DOLLARS
($52,020.59) shall be due, and a like sum due on the first day of each month
thereafter through and including February 1, 2016.


 


On
March 1, 2016, the sum of FIFTY-THREE THOUSAND FOUR HUNDRED SEVENTY AND
59/100 DOLLARS ($53,470.59) shall be due, and a like sum due on the first day
of each month thereafter through and including February 1, 2017.


 


On
March 1, 2017, the sum of FIFTY-FOUR THOUSAND NINE HUNDRED TWENTY


 


	
   

  	
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AND
59/100 DOLLARS ($54,920.59) shall be due, and a like sum due on the first day
of each month thereafter through and including February 1, 2018.


 


On
March 1, 2018, the sum of FIFTY-SEVEN THOUSAND EIGHT HUNDRED TWENTY AND
59/100 DOLLARS ($57,820.59) shall be due, and a like sum due on the first day
of each month thereafter through and including February 1, 2019.


 


On
March 1, 2019, the sum of SIXTY THOUSAND SEVEN HUNDRED TWENTY AND 59/100 DOLLARS ($60,720.59)
shall be due, and a like sum due on the first day of each month thereafter through and
including February 1, 2020;


 


The
Aggregate Basic Rent for the Lease shall be increased by $3,435,200.10 or from
$21,774,884.38 to $25,210,084.48.


 


D.
Management Fee. Notwithstanding
anything to the contrary in Lease Paragraph 4.E (“Management Fee”), effective March 1,
2010, the management fee shall be amended to reflect the amount due each month
as follows:


 


On
March 1, 2010, the sum of ONE THOUSAND TWO HUNDRED TWENTY-NINE AND 95/100
DOLLARS ($1,229.95) shall be due, and a like sum due on the first day of each
month thereafter through and including November 1, 2010.


 


On
December 1, 2010, the sum of SIX HUNDRED THREE AND 62/100 DOLLARS
($603.62) shall be due, and a like sum due on the first day of each month
thereafter through and including April 1, 2011.


 


On
May 1, 2011, the sum of ONE THOUSAND THREE HUNDRED EIGHTY-SIX AND 62/100
DOLLARS ($1,386.62) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2012.


 


On
March 1, 2012, the sum of ONE THOUSAND FOUR HUNDRED THIRTY AND 12/100
DOLLARS ($1,430.12) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2013.


 


On
March 1, 2013, the sum of ONE THOUSAND FOUR HUNDRED SEVENTY-THREE AND
62/100 DOLLARS ($1,473.62) shall be due, and a like sum due on the first day of
each month thereafter through and including February 1, 2014.


 


On
March 1, 2014, the sum of ONE THOUSAND FIVE HUNDRED SEVENTEEN AND 12/100
DOLLARS ($1,517.12) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2015.


 


	
   

  	
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On
March 1, 2015, the sum of ONE THOUSAND FIVE HUNDRED SIXTY AND 62/100
DOLLARS ($1,560.62) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2016.


 


On
March 1, 2016, the sum of ONE THOUSAND SIX HUNDRED FOUR AND 12/100 DOLLARS
($1,604.12) shall be due, and a like sum due on the first day of each month
thereafter through and including February 1, 2017.


 


On
March 1, 2017, the sum of ONE THOUSAND SIX HUNDRED FORTY-SEVEN AND 62/100
DOLLARS ($1,647.62) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2018.


 


On
March 1, 2018, the sum of ONE THOUSAND SEVEN HUNDRED THIRTY-FOUR AND
62/100 DOLLARS ($1,734.62)( shall be due, and a like sum due on the first day
of each month thereafter through and including February 1, 2019.


 


On
March 1, 2019, the sum of ONE THOUSAND EIGHT HUNDRED TWENTY-ONE AND 62/100
DOLLARS ($1,821.62) shall be due, and a like sum due on the first day of each
month thereafter through and including February 1, 2020.


 


E.
Return of Basic Rent Paid to Landlord. Prior to this
Amendment No. 1, the Basic Rent payment as scheduled in the Lease for March 1,
2010 was $217,697.50. Tenant paid said amount to Landlord and Landlord agrees
within ten (10) business days following the full execution of this
Amendment to return said $217,697.50 payment to Tenant due to the adjustment in
the Basic Rent amount due for said period as reflected in Paragraphs 4.B and 4.C
above.


 


5.               TENANT’S REVISED
PROPORTIONATE SHARE AS A PERCENTAGE OF THE 
BUILDING: Due to the reduction in the square footage of
the Premises, effective March 1, 2011, the reference to Tenant’s
Proportionate Share as a percentage of the Building shall be changed to 70.60%
(29,000+ square foot Leased Premises divided by 41,075+ square
foot Building), or such other equitable basis, as reasonably calculated by
Landlord. For example: If a tenant is solely responsible for damage to a
specific Common Area item, said tenant will be one hundred percent (100%)
liable for the cost to repair and in such event, the non-responsible tenant
would not be required to pay its Proportionate Share of said cost.


 


6.               ADDITIONAL RENT: Lease Paragraph
4.D (“Rent: Additional Rent”) shall be amended to include the following
language related to Tenant’s audit rights:


 


Tenant’s
right to audit period shall be changed from thirty (30) days to sixty (60) days
after receipt of Landlord’s most recent reconciliation. In the event Tenant
assigns this Lease and obtains Landlord’s written consent to said assignment,
the audit rights provided to Tenant may be assigned to such assignee by Tenant;
however, the audit rights of the assignee shall only be applicable to the
period that commences after the date of assignment.


 


	
   

  	
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7.               AS-IS BASIS: Lease
Paragraph 40 (“As-Is Basis”) shall be amended to include the following
language:


 


A.           Interior
Improvements to be Completed by Landlord. Landlord has agreed to
complete, at Landlord’s cost and expense, the following interior improvements
as listed below in the Retained Premises, (“Interior Improvements”).


 


1)              Remove and replace existing
VCT tiled floor, with new VCT tile (the color and material to be determined by
Landlord and reasonably approved by Tenant), in the following areas: lobby,
kitchen, kitchenette, copy room and side entry as shown in Green Crosshatch on Exhibit B
attached hereto;


 


2)              Remove and replace the
chipped and/or cracked hard surface tiles in the lobby;


 


3)              Clean, seal and re-grout, as
necessary, the existing tile countertops in the restrooms;


 


4)              Remove and replace existing
carpet throughout Retained Premises (with color and type carpet to be determined
by Landlord and reasonably approved by Tenant) and


 


5)              Remove two walls in the area
shown in Pink dashed lines on Exhibit B attached hereto if so
requested by Tenant provided the request is received prior to Landlord
replacing the carpet as referenced above.


 


Landlord shall commence the construction of the Interior Improvements
within thirty (30) days of Landlord’s receipt of notice from Tenant advising
Landlord to commence the construction of the Interior Improvements. Tenant
shall be responsible for removing any and all personal property from the above
work areas and for the reinstallation of any personal property Tenant may want
to reinstall in said areas. The Interior Improvements referenced above shall
become a part of the Premises upon completion and Tenant shall not be required
or allowed to remove said Interior Improvements upon Lease Termination. In the
event this Lease is terminated early due to an uncured default by Tenant and/or
a written agreement between Landlord and Tenant to terminate the Lease prior to
the scheduled Termination Date (but specifically excluding a termination of the
Lease by Tenant pursuant to Paragraph 18 of this Amendment), Tenant agrees to
reimburse Landlord for one hundred percent (100%) of the balance of the unamortized
cost of the Interior Improvements (amortized over the Extended Term) paid for
by Landlord outstanding as of the early termination date. Said amount shall be
paid by Tenant to Landlord by the termination date and/or Landlord may, at its
option, deduct part or all of said unamortized Interior Improvement cost from
Tenant’s Security Deposit. The Interior Improvements shall be constructed
during normal business hours, in a good and workmanlike manner, free of defects
and using new materials. Prior to the commencement of construction of the
Interior Improvements, Landlord and Tenant shall mutually agree upon a
construction schedule that reasonably minimizes interference with Tenant’s
operations in the Premises. Within thirty (30) days following Landlord’s completion
of the Interior Improvements, Tenant shall have the right to submit a written
“punch list” to Landlord, setting forth any defective item of construction, and
Landlord shall promptly cause such items to be corrected subject to any damage,
wear and tear caused by Tenant, its employees, agents and/or contractors,
subtenant and/or assignee, if any.


 


B.
New Interior Improvements to be Constructed
by Tenant. Landlord acknowledges that Tenant intends to make certain
initial improvements to the Premises, at Tenant’s sole cost and expense
(“Tenant’s New Interior Improvements”). Tenant shall provide Landlord with
detailed construction plans,


 


	
   

  	
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which
plans shall be prepared at Tenant’s sole cost and expense, subject to
reimbursement from the New Interior Improvement Allowance referenced in
Paragraph 7.C below. Tenant’s New Interior Improvements shall not be subject to
restoration, unless Landlord upon its review and approval of Tenant’s plans designates
and approves certain of the proposed Tenant’s New Interior Improvements as non-standard
office installations in the Premises (“Non-Standard Improvements”), then
Landlord may require Tenant in Landlord’s written approval of Tenant’s New
Interior Improvements, to remove the Non- Standard Improvements, by the Revised
Termination Date, at Tenant’s expense or at Tenant’s option, Tenant may pay
Landlord a fee equal to the average of two (2) estimates received by
Landlord to perform such removal work after bidding such work to at least two (2) contractors,
in lieu of Tenant removing the Non-Standard Improvements and restoring the
impacted areas to the configuration that existed prior to said modifications
being made; however Landlord shall not obtain the estimates until Tenant has
notified Landlord that it wants to pay the fee versus doing the work itself.


 


C.
Tenant’s New Interior Improvement
Allowance. In addition to the Interior Improvements to be made
by Landlord as referenced in Paragraph 7.A above, Landlord shall provide Tenant
with an allowance towards Tenant’s New Interior Improvements costs (the
“Allowance”) not to exceed Two Hundred Seventeen Thousand Five Hundred and
No/100 Dollars ($217,500.00) [29,000+ square foot Premises x $7.50
allowance per square foot]. Said Allowance is to be applied to the design and
construction cost of the New Interior Improvements to the real property to be
approved by Landlord as well as the cost of any new furniture, fixtures,
equipment, or cabling purchased by Tenant and to be installed in the Leased
Premises (the “Construction Cost Items”) provided Tenant gives Landlord a
descriptive list of said Construction Cost Items, the price per item and paid
invoices. Landlord, at its election, may require said Construction Cost Items
to become the property of Landlord upon Lease Termination or shall have the
right to require Tenant to remove said items from the Premises. Tenant shall
determine from Landlord thirty (30) days prior to Lease Termination if Landlord
wants said Construction Cost Items to remain. All other construction costs in
excess of the Allowance contributed by Landlord shall be paid one hundred
percent (100%) by Tenant. Upon Tenant’s completion of the New Interior
Improvements, Landlord shall pay Tenant the Allowance equal to the amount
supported by the following documents but not more than Two Hundred Seventeen
Thousand Five Hundred and No/100 Dollars ($217,500.00): (1) copy of
Tenant’s related invoices, (2) signed lien release from the applicable
contractors performing such New Interior Improvements or evidence of payment by
Tenant to the respective contractor, (3) full lien release signed by the
general contractor and (4) recorded copy of Filed Notice of Completion,
collectively (“Required Disbursement Documents”). Tenant, or Tenant’s
representative on behalf of Tenant, shall, upon final approval by Landlord of
the new interior improvement plans, enter into a contract for the construction
of the New Interior Improvements with a licensed contractor reasonably approved
by Landlord. Landlord shall disburse the appropriate portion of the Allowance
within fifteen (15) business days after Tenant provides the Required
Disbursement Documentation. Landlord’s payment to Tenant shall be contingent
upon receiving copies of the Required Disbursement Documents.


 


8.
RULES AND REGULATIONS AND COMMON AREA: Subject to the terms and
conditions of the Lease and such Rules and Regulations as Landlord may
from time to time prescribe, Tenant and Tenant’s employees, invitees and
customers shall, in common with other occupants of the Parcel/Building in which
the Premises are located, and their respective employees, invitees and
customers, and others entitled to the use thereof, have the non-exclusive right
to use the access roads, parking areas, and facilities


 


	
   

  	
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provided
and designated by Landlord for the general use and convenience of the occupants
of the Parcel/Building in which the Premises are located, which areas and facilities
are referred to herein as “Common Area”. The Common Area comprised of
respective Common Area hallways shall be used only for applicable (i) access
to and from the respective tenant’s suite to the common area restrooms; and (ii) entering
into and exiting from the Building by tenants who share said Common Area.
Tenant shall not use or allow use of any such
Common Area to store supplies, materials, inventory or any other item of any
type whatsoever. This non-exclusive right to use the Common Area shall
terminate upon the termination of this Lease. Landlord reserves the right from
time to time to make changes in the shape, size, location, amount
and extent of Common Area, including changing the location and number of parking spaces
allocated to Tenant. Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the Common Area,
and any part or parts thereof, as Landlord may reasonably deem appropriate for
the best interests of the occupants of the Parcel/Building (“Rules and
Regulations”). Such Rules and Regulations may be amended by Landlord from
time to time, with or without advance notice, and all amendments shall be
effective upon delivery of a copy to Tenant. Landlord shall not be responsible
to Tenant for the non-performance by any other tenant or occupant of the Parcel/Building
of any of said Rules and Regulations.


 


Landlord
shall operate, manage and maintain the Common Areas within the Building and/or
Parcel in good condition as reasonably determined by Landlord.


 


Notwithstanding
anything to the contrary contained in the Lease, effective as of March 1,
2011, (i) the Common Areas of the Parcel shall include all areas of the
Parcel exterior to the Building, including driveways, pathways, sidewalks, fountains
and landscaping and (ii) the Common Areas of the Building shall include
but not be limited to the electrical/MPOE room identified in red cross hatch on
Exhibit B  attached hereto,
and such electrical/MPOE room shall be excluded from the non common areas of
the Leased Premises.


 


9.
REDUCED PARKING: Effective March 1, 2011, Tenant shall have the
right to the nonexclusive use of a maximum of one hundred sixteen (116) parking
spaces (which number shall be amended to reflect Tenant’s Proportionate Share
in the event the square footage of the Premises is amended in the future) in
the common parking area of the Parcel, which common parking area may be used by
Tenant in common with other tenants or occupants of the Building. Tenant agrees
that Tenant, Tenant’s employees, agents, representatives, and/or invitees shall
not use parking spaces in excess of said one hundred sixteen (116) parking
spaces allocated to Tenant hereunder. Landlord shall have the right, at
Landlord’s reasonable discretion, to specifically designate the location of
Tenant’s parking spaces within the Parcel, in which event Tenant agrees that
Tenant, Tenant’s employees, agents, representatives and/or invitees shall not
use any parking spaces other than those parking spaces specifically designated
by Landlord for Tenant’s use. Said parking spaces, if specifically designated
by Landlord to Tenant, may be reasonably relocated by Landlord within the
Parcel at any time, and from time to time if necessary. Landlord shall give
Tenant at least ten (10) days prior written notice of any specific
designation of Tenant’s parking spaces. Tenant shall not, at any time, park, or
permit to be parked by Tenant Parties, any trucks or vehicles adjacent to the
loading area so as to interfere in any way with the use of such areas, nor
shall Tenant, at any time, park or permit the parking of Tenant’s trucks and
other vehicles or the trucks and vehicles of Tenant’s suppliers or others, in
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such
use by Tenant. Tenant shall not park nor permit to be parked, any inoperative
vehicles or equipment on any portion of the common parking area or other common
areas of the Parcel.  Tenant agrees to assume responsibility
for compliance by its employees with the parking provision contained
herein. If Tenant or its employees park in other than designated parking areas,
then Landlord may charge Tenant, as an additional charge, and Tenant agrees to
pay Ten Dollars ($10.00) per day for each day or partial day each such vehicle
is parking in any area other than that designated. Tenant hereby authorizes
Landlord, at Tenant’s sole expense, to tow away from the Building any vehicle
belonging to Tenant or Tenant’s employees parked in violation of these
provisions, or to attach violation stickers or notices to such vehicles;
provided, however, that unless any such vehicle is parked in a dangerous and/or
designated no parking zone, Landlord will attach a twenty-four (24) hour
violation notice on said vehicle prior to having the vehicle towed from the
Parcel. Tenant shall use the parking area for vehicle parking only and shall
not use the parking areas for storage. Notwithstanding the foregoing, in the
event Landlord offers any other tenant or occupant of the Parcel reserved
parking spaces, Landlord shall offer Tenant an amount of reserved parking
spaces in an amount proportionate to the amount of reserved parking spaces
given to such other tenant or occupant of the Parcel (such proportionate amount
to be determined in accordance with the size of the Premises and size of the
other tenant’s or occupant’s premises and the total number of parking spaces of
Tenant and the total number of parking spaces of such other tenant or occupant
of the Parcel).


 


10.
ACCEPTANCE AND
SURRENDER OF PREMISES: Effective as of March 1, 2011 Lease
Paragraph 5 (“Acceptance and Surrender of Premises”) shall be replaced with the
following:


 


Subject
to Landlord’s completion of its obligations under Amendment No. 1,
Paragraph 7.A (“AS- IS Basis: Interior Improvements to be Constructed by
Landlord”) above, by entry hereunder, Tenant accepts the Premises as being in
good and sanitary order, condition and repair and accepts the Building and
improvements included in the Premises in their present condition and without
representation or warranty by Landlord as to the condition of such Building or
as to the use or occupancy which may be made thereof. Any exceptions to the
foregoing must be by written agreement executed by Landlord and Tenant. Tenant
agrees on the last day of the Term, or on the sooner termination of this Lease,
to surrender the Premises promptly and peaceably to Landlord in good condition
and repair (damage by Acts of God, fire, normal wear and tear excepted), with
all interior walls cleaned, and repaired or replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed; all broken, marred or
nonconforming acoustical ceiling tiles replaced; all windows washed; the air conditioning
and heating systems exclusive to the Premises, if any, serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been the Tenant’s responsibility during the
Term of this Lease) and repair; the plumbing and electrical systems and
lighting within the non-common areas of the Premises in good order and repair,
including replacement of any burned out or broken light bulbs or ballasts (all
lights and ballasts must be of the same type, color and wattage); together with
all alterations, additions, and improvements (collectively “Alterations”) which
may have been made, in, to, or on the Premises, except as referenced in Lease
Paragraph 6 (“Alterations and Additions”), Tenant shall not be required to
remove any Alterations that are not subject to restoration pursuant to
Landlord’s written Consent to Alterations agreement executed by Tenant and
Landlord. Tenant shall be responsible for repairing any damage caused by the
installation and/or the removal of Tenant’s trade fixtures by Tenant or
Tenant’s employees, agents or contractors. For purposes of clarification,
Landlord agrees that Tenant shall not be required to remove any Alterations
that existed in the Premises (including the Relinquished


 


	
   

  	
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Premises)
on March 1, 2010. For all other such
Alterations, Tenant shall ascertain from Landlord within thirty (30)
days before the end of the Term of this Lease whether Landlord desires to have
the Premises or any part or parts thereof restored to their condition
and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, then at Tenant’s
option, Tenant shall either (i) pay to Landlord a fee in an amount equal to (a) Landlord’s estimated
cost to the average of two (2) estimates received by Landlord to perform
such removal work required to restore the Premises to the configuration as
shown on Exhibit B attached hereto that existed on March 1, 2010
after bidding such work to at least two (2) contractors; however Landlord shall
not obtain the estimates until Tenant has notified Landlord that it wants to
pay the fee versus doing the work itself, or (ii) Tenant shall restore
said Premises or such part or parts thereof before the end of this Lease at
Tenant’s sole cost and expense. In the event Tenant elects to pay for the cost
of the restoration, the fee shall be paid by Tenant to Landlord regardless of
whether or not Landlord elects to restore all or part of said Premises. In the
event Tenant is required to complete the restoration and said restoration is
not completed prior to the Termination Date, Tenant acknowledges that Tenant
shall enter into a Hold Over period pursuant to the terms of Lease Paragraph 25
(“Holding Over”) and Tenant shall automatically be liable to Landlord for the
monthly Hold Over Basic Rent and all other Additional Rent until said
restoration is completed by Tenant. Tenant, on or before the end of the Term or
sooner termination of this Lease, shall remove all of Tenant’s personal
property and trade fixtures from the Premises, and all property not so removed
on or before the end of the Term or sooner termination of this Lease shall be
deemed abandoned by Tenant and title to same shall thereupon pass to Landlord
without compensation to Tenant. Landlord may, upon termination of this Lease,
remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s
sole cost, and repair any damage caused by such removal at Tenant’s sole cost.
Upon surrender of the Premises to Landlord, Tenant shall provide Landlord with
keys for all exterior and interior locking doors (including mechanical rooms).
If the Premises is not surrendered at the end of the Term or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, any claims made by any succeeding Tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the Term
hereof or as a consent of Landlord to any holding over by Tenant. The voluntary
or other surrender of this Lease or the Premises by Tenant or a mutual
cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies
or operate as an assignment to Landlord of all or any such subleases or
subtenancies.


 


11. MAINTENANCE:


 


A.
Tenant Maintenance of the Building. Effective March 1,
2011 Lease Paragraph 7 (“Maintenance”) shall be replaced by the following paragraph
for the period commencing March 1, 2011 and thereafter.


 


“Tenant shall, at its sole cost and expense, keep and maintain the
non-common areas of the Premises (including appurtenances) and every part
thereof in a high standard of maintenance and repair, and in good and sanitary
condition. Tenant’s maintenance, repair and replacement responsibilities herein
referred to include, but are not limited to, janitorization, plumbing systems
within the non-common areas of the Premises (such as water and drain lines,
sinks), electrical systems within the non-common areas of the Premises (such as
outlets, lighting fixtures, lamps,


 


 


	
   

  	
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bulbs,
tubes, ballasts), heating and air-conditioning controls within the non-common
areas of the Premises (such as thermostats, time clocks, supply and return
grills) and any HVAC systems/unit(s) that serve Tenant’s server room(s),
and all interior improvements within the Premises including but not limited to:
wall coverings, window coverings, acoustical ceilings, vinyl tile, carpeting,
partitioning, doors (both interior and exterior, including closing mechanisms,
latches and locks), fire extinguishers as required by code, and all other
interior improvements of any nature whatsoever. Tenant agrees to provide carpet
shields under all rolling chairs or to otherwise be responsible for wear and
tear of the carpet caused by such rolling chairs if such wear and tear exceeds that caused by normal
foot traffic in surrounding
areas. Areas of excessive wear shall be replaced at Tenant’s sole expense upon
Lease termination. Tenant hereby waives all rights hereunder, and benefits of,
subsection 1 of Section 1932 and Sections 1941 and 1942 of the California
Civil Code and under any similar law, statute or ordinance now or hereafter in
effect.”


 


B.
Landlord Maintenance of
the Common Areas of the Building. Effective March 1, 2011
Landlord shall operate, manage and maintain the Common Areas of the Building.
As Additional Rent and in accordance with Paragraph 4.D of this Lease (but
subject to Section 50 of this Lease), Tenant shall pay its Proportionate
Share of the cost of operation (including common utilities), management,
maintenance, repair and replacement of the common areas of the Building
including, but not limited to lobbies, restrooms, janitor’s closets, hallways,
mechanical and telephone rooms, entrances, spaces above the ceilings and
janitorization of said common areas). The maintenance items herein referred to
include, but are not limited to, all common area windows, window frames, plate
glass, glazing, truck doors, main plumbing systems of the Building (such as
water drain lines, sinks, toilets, faucets, drains, showers and water
fountains), main electrical systems (such as panels and conduits), all
non-server room roof top heating and air-conditioning systems exclusively
and/or non exclusively serving the Premises (such as compressors, fans, air
handlers, ducts, boilers, heaters and any elements of the foregoing located above
the ceiling grid in the Premises) excluding, however, any HVAC unit(s) that
serve Tenant’s server room(s), structural elements and exterior surfaces of the
Building; store fronts, roof, roof membrane, downspouts, Building common area
interiors (such as wall coverings, window coverings, floor coverings,
partitioning and ceilings in the Common Area), Building exterior Common Area
doors, exterior lighting, skylights (if any), and automatic fire extinguishing
systems (but not the fire extinguishers required by code in Tenant’s Premises);
license, permit and inspection fees; security, supplies, materials, equipment
and tools; and the cost of capital expenditures which have the effect of
reducing operating expenses.  In the
event Landlord makes capital improvements (such as a replacement of the entire
roof membrane) not related to an insured peril, Landlord shall amortize the
cost of capital improvements using an interest rate equal to the higher of (i) Landlord’s
borrowing rate per annum or (ii) the prime rate of interest plus one per
annum over the useful economic life of such capital improvements as determined
by Landlord in its reasonable discretion in accordance with GAAP (“Amortized
Cost”) and Tenant shall pay its Proportionate Share of said Amortized Cost
monthly as Additional Rent over the term remaining in the Lease plus, if
applicable, during the extended Term as provided for in Paragraph 19 (“Option to Extend Lease for
Five (5) Years”), subject to the provisions of Section 50 of the
Lease.


 


In
the event an entire HVAC unit(s) (excluding any server room HVAC unit(s)),
including condenser unit(s), but excluding components thereof (for example a
condenser) to the Leased Premises has served its useful life and needs to be
replaced during the period commencing March 1, 2011 and thereafter


 


 


	
   

  	
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during
the remaining term of the Lease, Landlord shall replace said unit(s) provided
said replacement is not the result of (a) Tenant’s failure to have said
unit(s) serviced
on a quarterly basis, maintained, repaired and/or replaced if
recommended by the third party licensed HVAC company retained by Tenant during the period
Tenant leased one hundred percent (100%) of the Building and/or (b) damage
caused by Tenant, its agents, employees, invitees, contractors, or its future
subtenants and/or assignees (if any) at any time during the Term of the Lease.
In the event Landlord replaces an HVAC unit, Landlord shall amortize the cost
of the HVAC unit using an interest rate equal to the higher of (i) Landlord’s
borrowing rate per annum or (ii) the prime rate of interest plus one per annum over the
useful economic life of such capital improvements as determined by Landlord in
its reasonable discretion in accordance with GAAP (“Amortized Cost”) and Tenant
shall pay its Proportionate Share of said Amortized Cost monthly as Additional
Rent over the term remaining in the Lease plus, if applicable, during the
extended Term as provided for in Paragraph 19 (“Option to Extend Lease for Five
(5) Years”), subject to the provisions of Section 50 of the Lease.


 


Tenant
hereby waives all rights under, and benefits of subsection I of Section 1932
and Sections 1941 and 1942 of the California Civil Code and under any similar
law, statute or ordinance now or hereafter in effect.


 


C.
Landlord Maintenance of the Common Areas of the
Parcel. Effective March 1, 2011, Lease Paragraph 49
(“Expenses of Operation, Management and Maintenance of the Driveway, Parking
Lot and Landscaped Areas of the Parcel on Which the Premises are Located”)
shall be replaced with the following for the period remaining in the Lease
commencing March 1, 2011. Landlord shall operate, manage and maintain the
Common Areas of the Parcel. As Additional Rent and in accordance with Paragraph
4.D of this Lease (but subject to Section 50 of the Lease), Tenant shall
pay to Landlord Tenant’s Proportionate Share of all expenses of operation,
management, maintenance, repair and replacement of the Common Areas of the
Parcel including, but not limited to, license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water and sewer charges); all charges incurred in the maintenance
and replacement of landscaped areas, ponds, fountains, lakes, if any, parking
lots, parking lot lights and paved areas (including repairs, replacement,
resealing and restriping), sidewalks, driveways, maintenance, repair and
replacement of all fixtures and electrical, mechanical and plumbing systems;
supplies, materials, equipment and tools and the cost of capital expenditures
which have the effect of reducing operating expenses. In the event Landlord
makes capital improvements, Landlord shall amortize the cost of capital
improvements using an interest rate equal to the higher of (i) Landlord’s
annual borrowing rate per annum or (ii) the prime rate of interest plus
one per annum over the useful economic life of such capital improvements as
determined by Landlord in its reasonable discretion in accordance with GAAP
(“Amortized Cost”) and Tenant shall pay its Proportionate Share of said
Amortized Cost monthly as Additional Rent over the term remaining in the Lease,
plus, if applicable, during the extended Term as provided for in Paragraph 19
(“Option to Extend Lease for Five (5) Years”), subject to the provisions
of Section 50 of the Lease.


 


Tenant
hereby waives all rights hereunder, and benefits of, subsection 1 of Section 1932
and Sections 1941 and 1942 of the California Civil Code and under any similar
law, statute or ordinance now or hereafter in effect.


 


 


	
   

  	
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D. Structural
Maintenance. Effective March 1, 2011 and notwithstanding
anything to the contrary in Paragraph 11.A above, (i) Landlord shall
repair, including replacement related to, damage to the structural shell,
foundation, roof structure and roof membrane (provided Landlord replaces the
entire roof membrane) (but not the interior improvements or glazing) of the
Building leased hereunder at Landlord’s cost; however, Landlord shall amortize
the cost of such repairs or replacements not covered by an insured peril using
an interest rate equal to the higher of (i) Landlord’s annual borrowing
rate per annum or (ii) the prime rate of interest plus one per annum over
the useful economic life of such repairs or replacements as determined by
Landlord in its reasonable discretion in accordance with GAAP (“Amortized Cost”)
and Tenant shall pay its Proportionate Share of said Amortized Cost monthly as
Additional Rent over the term remaining in the Lease subject to Paragraph 50 of
the Lease, plus Tenant’s Proportionate Share of the insurance deductible (if
such damage is the result of an insured peril); provided Tenant has not caused
such damage, in which event Tenant shall be responsible for one hundred percent
(100%) of the insurance deductible and any such costs and expense not
reimbursed to Landlord by insurance proceeds for repair and/or replacement or
damage so caused by the Tenant and shall pay such amount to Landlord within
thirty (30) days of the invoice date. Tenant hereby waives all rights under,
and benefits of subsection I of Section 1932 and Sections 1941 and 1942 of
the California Civil Code and under any similar law, statute or ordinance now
or hereafter in effect. Notwithstanding the foregoing, a crack in the
foundation or exterior walls, or any other defect in the Building that does not
endanger the structural integrity of the building for which Tenant is or is not
responsible, or which is not life-threatening, shall not be considered
material, and Landlord may elect, in its sole and absolute discretion, not to
repair and/or replace the same; however, Landlord may require Tenant to repair
and/or replace the same at Tenant’s sole cost and expense, within thirty days
of written notice from Landlord, if Tenant is responsible for the repair and/or
replacement.


 


In
the event the Term of the Lease is extended for any reason whatsoever, Tenant’s
Proportionate Share of the Amortized Cost of the earlier repair and/or
replacement cost shall be increased to include the additional amount payable to
Landlord due to the Extended Term of the Lease.


 


12.
UTILITIES OF THE
BUILDING IN WHICH THE PREMISES ARE LOCATED: As Additional Rent and in accordance with
Paragraph 4.D of this Lease Tenant shall pay its Proportionate Share, (or if
the Building in which the Premises is located is not one hundred percent (100%)
leased, said Proportionate Share for utilities shall be calculated based on (i) Tenant’s
Premises square footage as a percentage of the total square footage leased to
Tenant and any other third party tenants in the Building or (ii) other
equitable basis as calculated by Landlord of the cost of all utility charges
such as water, gas, electricity, (and telephone, telex and other electronic
communications service, if applicable), sewer service, waste pick-up and any
other utilities, materials or services furnished directly to the Building in
which the Premises is located, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. Notwithstanding anything to the contrary herein, in the event any
utility charges apply only to the Premises leased by Tenant, Tenant shall place
such utilities in Tenant’s name and shall pay the related costs directly to the
utility company(ies).


 


Landlord
shall not be liable for and Tenant shall not be entitled to any abatement or
reduction of rent by reason of any interruption or failure of utility services
to the Premises when such interruption or failure is caused by accident,
breakage, repair, strikes, lockouts, or other labor disturbances or labor
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nature,
or by any other cause, similar or dissimilar, beyond the reasonable control of
Landlord.


 


Landlord
shall furnish to the Premises between the hours of 8:00 am and 6:00 pm, Mondays
through Fridays (holidays excepted) and subject to the Rules and
Regulations of the Common Area hereinbefore referred to, reasonable quantities
of water, gas and electricity suitable for the intended use of the Premises and
heat and air-conditioning required in Landlord’s judgment for the comfortable
use and occupation of the Premises for such purposes. Tenant may, from time to
time, have its staff and equipment operate on a twenty-four (24) hour-a-day,
seven (7) day-a-week schedule, and Tenant shall pay for extra consumption
of such utilities attributable to such after-hours occupancy, if any, used by
Tenant, but Tenant shall not be subject to any after-hours charge by Landlord
other than the cost of the extra consumption of such utilities attributable to
such after-hours use and after hours charge or premium as reflected on PG&E
statements. Tenant agrees that at all times it will cooperate fully with
Landlord and abide by all regulations and requirements that Landlord may
prescribe for the proper functioning and protection of the Building heating,
ventilating and air-conditioning systems. Whenever heat generating machines,
equipment, or any other devices (including exhaust fans) are used in the
Premises by Tenant which affect the temperature otherwise maintained by the
air-conditioning system, Landlord shall have the right to install supplementary
air-conditioning units in the Premises and the cost thereof, including the cost
of installation and the cost of operation and maintenance thereof, shall be
paid by Tenant to Landlord upon demand by Landlord. Tenant will not, without
the written consent of Landlord, use any apparatus or device in the Premises
(including, without limitation), electronic data processing machines or
machines using voltage in excess of 120 Volts which will in any way increase
the amount of electricity, gas, water or air-conditioning usually furnished or
supplied to premises being used as general office space, or connect with
electric current (except through existing electrical outlets in the Premises),
or with gas or water pipes any apparatus or device for the purposes of using
electric current, gas, or water. Landlord acknowledges that Tenant may use
electrical current up to 220 Volts subject to the terms and conditions of this
Paragraph. If (i) Tenant shall require water, gas, or electric current in
excess of that usually furnished or supplied to Premises being used as general
office space, Tenant shall first obtain the written consent of Landlord, which
consent shall not be unreasonably withheld, or (ii) if Tenant is found to
be using water, gas and/or electrical current in excess of its Proportionate
Share (as such excess usage is confirmed by a study conducted by Landlord’s
contractor(s) and/or licensed electrician(s), Landlord may (a) adjust
the Proportionate Share allocated to Tenant based on Tenant’s actual or estimated
use or (b) cause an electric current, gas or water meter to be installed
in the Premises in order to measure the amount of electric current, gas or
water consumed for any such excess use. In the event Landlord questions
Tenant’s usage, Landlord shall employ the services of a licensed electrical or
plumbing contractor to determine what Tenant’s actual use is and Tenant shall
be responsible for paying the cost related to said investigation by the
licensed contractor or any other qualified third party vendor that Landlord may
employ to provide such service. The cost of any such meter and of the
installation, maintenance and repair thereof, all charges for such excess
water, gas and electric current consumed (as shown by such meters and at the
rates then charged by the furnishing public utility); and any additional
expense incurred by Landlord in keeping account of electric current, gas, or
water so consumed shall be paid by Tenant, and Tenant agrees to pay Landlord
therefor promptly following demand by Landlord.


 


13.
COMPLIANCE. Lease Paragraph 14 (“Compliance”) shall be amended to
include the


 


 


	
   

  	
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following:


 


The
provisions of this Paragraph 14 shall survive the expiration or termination of
this Lease.


 


Any
non-conformance of the Premises
and/or the improvements installed and paid for by Landlord, required by the
governing agency to be corrected, shall be corrected at the cost
and expense of Landlord if such non-conformance exists as of the Commencement
Date of the Lease and
further provided that such governing agency’s requirement to correct the
non-conformance is not initiated as a result of: (i) any improvements made
by or for Tenant (excluding however the Interior Improvements completed by Landlord
as referenced in Paragraph 7.A); or (ii) any permit request made to a governing agency by or for Tenant
(excluding however the Interior Improvements completed by Landlord as
referenced in Paragraph 7.A). Except as noted above, Landlord agrees that the
Amortized Cost of capital improvements which are not necessitated by Tenant’s
particular use, but are necessitated by any new laws, statutes, ordinances or
governmental rules, regulations, or requirements that become effective after
the Lease Commencement Date will be amortized over the useful life of such
improvement, and Tenant shall be required to pay its Proportionate Share of the
Amortized Cost over (a) the remaining term of the Lease and Tenant shall
pay its Proportionate Share of said Amortized Cost monthly over the term then
remaining in the Lease. Notwithstanding anything to the contrary above, Tenant
will immediately pay one hundred percent (100%) of the cost of required capital
improvements related to Tenant’s particular use of the Premises and resulting
from (i) and/or (ii) above.


 


In
the event the Term of the Lease is extended for any reason whatsoever, Tenant’s
Proportionate Share of the earlier Amortized Cost shall be increased to include
the additional amount payable to Landlord due to the Extended Term of the
Lease.


 


14. ASSIGNMENT AND SUBLETTING: Effective March 1, 2010
Lease Paragraphs 16 and 42 (“Assignment and Subletting”) is hereby amended to
reflect that Tenant shall pay to Landlord, as Additional Rent (i) from March 1, 2010 through April 30,
2011, one hundred percent (100%) of all Basic Rents and/or consideration due
Tenant from its assignees, transferees, or subtenants in excess of the Basic
Rent payable by Tenant to Landlord hereunder for the assigned, transferred
and/or subleased space (“Excess Rent”) and (ii) fifty percent (50%) of the
Excess Rent from May 1, 2011 through the remaining term of the Lease.
Provided, however, that before payment to Landlord of such Excess Rent, Tenant
shall first be entitled to recover from such Excess Rent the future subtenant
amounts, the amount of the reasonable leasing commission related to said
transaction paid by Tenant to a third party broker not affiliated with Tenant;
third party attorneys’ fees Tenant incurs for said sublease, and leasehold improvement
costs made specifically for the subtenant, if any.


 


15. NOTICES: Lease Paragraph 31 (“Notices”) is hereby amended to
change the address for notices, demand, requests, advices or designations from
Tenant to Landlord to: PEERY/ARRILLAGA, 2450 WATSON COURT, PALO
ALTO, CA 94303.


 


16. HAZARDOUS MATERIALS: Effective March 1, 2010, the
definition of Anniversary Date as used in Lease Paragraph 45 (“Hazardous
Materials”) refers to the anniversary date of the Lease Commencement Date and
is hereby amended to refer to April 1st of each year
vs. the anniversary date of


 


 


	
   

  	
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the
Lease Commencement Date.


 


In
the event Tenant’s Hazardous Materials Activities includes radioactive
materials, Tenant acknowledges and agrees that all such radioactive materials
use shall cease in sufficient time prior to the Lease
Termination Date to enable Tenant to obtain complete closure and complete
decommissioning of the Premises by all applicable governing agencies (local and
State) by no later than the Lease Termination Date. Tenant shall provide
Landlord with copies of the written confirmation by the governing agencies that
closure and decommission have been completed.


 


17. BROKERS: Tenant and Landlord represent and warrant that
neither has dealt with any real estate brokers, agents, or finders in
connection with this Amendment No. 1, and neither knows of no real estate
broker, agent or finder who is entitled to a commission in connection with this
Lease Amendment (“Lease Commission”), except as follows: Jay Seiden and Nathan
Zoucha of Cushman & Wakefield (collectively “Broker”), whose Lease
Commission of $120,000.00 shall be paid by Landlord to Broker in accordance
with Landlord’s standard commission policy and within fifteen (15) business
days following Landlord’s receipt of the fully executed Lease Amendment and
Broker’s statement. Each party agrees to defend, protect, indemnify and hold
the other harmless from and against all claims for Lease Commissions, finder’s
fees, and other compensation made by any other broker, agent, or finder as
consequence of the respective party’s actions or dealings with such other
broker, agent or finder.


 


18. TENANT’S OPTION TO TERMINATE LEASE: Provided that, as of the
date Tenant exercises its Option to Terminate, Tenant is not in monetary
default or non-monetary material default following the expiration of applicable
notice and cure period of the terms, covenants and conditions of this Lease and
any amendments thereto, Landlord hereby grants to Tenant an Option to Terminate
the Lease anytime after March 1, 2016, subject to Tenant providing six (6) months
pre notice to Landlord of its intent to terminate; the effective date of early
termination shall be six (6) months following Landlord’s receipt of said
notice, but in no event shall the Lease terminate prior to March 1,
2016.


 


A.       Amended Termination Date. In the event
Tenant exercises Tenant’s Option to Terminate as set forth herein, this Lease
shall be further amended (and said amendment executed by Landlord and Tenant)
to reflect the amended Termination Date and, except for those provisions in
this Lease which survive the Termination of this Lease, said Lease shall be of
no further force and effect as of the expiration of the amended Termination
Date with Tenant being responsible for the full performance of all terms,
covenants, and conditions of this Lease through the effective date of
termination as set forth above, subject to the payment of the Termination Fee
as set forth in Paragraph 18.B. below.


 


B.       Termination Fee. As
consideration to be paid Landlord for the privilege of the early termination of
this Lease, Tenant shall pay to Landlord a “Termination Fee” equal to the total
of the unamortized (i) $120,000.00 brokerage fee payable to Cushman &
Wakefield as set forth in Paragraph 17 in this Amendment No. 1, (ii) the
$217,500.00 Interior Improvement Allowance (which Interior Improvement
Allowance amount shall be reduced in the event Tenant does not request full
distribution of the $217,500.00 as provided for in Paragraph 7.C) and (iii) the
$2,414,470.70 Deferred Basic Rent as set forth in this Amendment No. 1.
The amortization period shall be ten (10) years and commences on March 1,
2010. Following Landlord’s receipt of Tenant’s election to terminate the Lease
as provided in


 


 


	
   

  	
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Paragraph
18, Tenant agrees to pay the Termination Fee  to Landlord
within ten (10) days following Tenant’s receipt of an invoice from
Landlord reflecting the amount due. For example: if Tenant elects to terminate
the Lease on February 28, 2017 and if Tenant uses one hundred percent (100%) of
the Interior Improvement Allowance of $217,500.00, Tenant would be responsible
for paying a Termination Fee equal to $825,591.24 which includes the following
unamortized then remaining balances: (i) $36,000.00 brokerage fee ($120,000.00
/ 10 years / 12 months = $1,000.00 x 36 months), (ii) $65,250.000 Interior
Improvement Allowance ($217,500.00 / 10 years / 12 months = $1,812.50 x 36
months) and (iii) $724,341.24 Deferred Basic Rent ($2,414,470.70 / 10
years / 12 months = $20,120.59 x 36 months).


 


C.       Personal
Nature of Option to Terminate. The Option rights of Tenant
under this Paragraph 18 are granted for Tenant’s personal benefit and may not
be assigned or transferred by Tenant, either voluntarily or by operation of
law, in any manner whatsoever, other than in connection with a Permitted
Transfer. In the event that the Lease is assigned (other than in connection
with a Permitted Transfer), the Option granted herein shall be void and of no
force and effect.


 


19.
OPTION TO EXTEND LEASE FOR FIVE (5) YEARS: Provided said
Lease is not terminated prior to the scheduled Termination Date and provided
Tenant has not assigned the Lease or subleased more than fifty percent (50%) of
the Premises (other than in connection with a Permitted Transfer) at the time
said “Option to Extend” (as herein called) is exercised, Landlord hereby grants
to Tenant an Option to Extend this Lease Agreement for an additional five (5) year
period (“Extended Term”) upon the following terms and conditions:


 


A.    Notice;
Deadline. Tenant shall give Landlord written notice of Tenant’s
exercise of this Option to Extend not earlier than nine (9) months prior
to the scheduled Lease Termination Date, in which event the Lease shall be
considered extended for an additional five (5) years with: (i) the
Basic Rent to be determined pursuant to Paragraph 19.B below; and (ii) this
Paragraph 19 deleted. In the event that Tenant fails to timely exercise
Tenant’s Option to Extend as set forth herein in writing, Tenant shall have no
further Option to Extend this Lease, and this Lease shall continue in full
force and effect for the full remaining Term hereof, absent this Paragraph 19.


 


B.    Notice
and Acceptance of Terms. In the event Tenant timely
exercises Tenant’s Option to Extend as set forth herein, Landlord shall, within
ten (10) business days after receipt of Tenant’s exercise of its Option to
Extend, advise Tenant of the Basic Rent required for the Extended Term of the
Lease. Said Basic Rent shall be equal to the then current market per square
foot rate for similar quality buildings in the vicinity of the Premises of
equivalent quality, size, utility and location (the “Market Basic Rent Rate”).
Tenant shall have ten (10) business days after receipt from Landlord of
the proposed Basic Rent in which to reject said proposed Basic Rent. Tenant’s
failure to timely reject the proposed Basic Rent shall be deemed as Tenant’s
acceptance of such proposed Basic Rent and Tenant shall enter into written
documentation confirming same. If Tenant timely rejects the proposed Basic
Rent, then Landlord and Tenant shall then negotiate in good faith to agree to
the Basic Rent for a period of five (5) business days following such
rejection notice from Tenant. In the event Landlord and Tenant fail to agree to
the Basic Rent within such five (5) business day period (the “Outside
Agreement Date”), then Landlord and Tenant shall each make a separate
determination of the Market Basic Rent Rate which shall be submitted to each
other and to arbitration in accordance with the following items (i) through
(vii):


 


 


	
   

  	
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(i)               Landlord and Tenant
shall each appoint, within ten (10) days of the Outside Agreement Date,
one arbitrator who shall by profession be a certified MAI designated appraiser
licensed to practice in California with at least five (5) years experience
in the appraisal of properties in the vicinity of the Premises. The
determination of the arbitrators shall be limited solely to the issue of
whether Landlord’s or Tenant’s submitted Market Basic Rent Rate is the closest
to the actual Market Basic Rent Rate as determined by the arbitrators;
provided, however, the arbitrators may only select Landlord’s or Tenant’s
determination of Market Basic Rent Rate and shall not be entitled to make a
compromise determination.


 


(ii)              The two
arbitrators so appointed shall within five (5) business days of the date
of the appointment of the last appointed arbitrator agree upon and appoint a
third arbitrator who shall be qualified under the same criteria set forth
hereinabove for qualification of the initial two arbitrators.


 


(iii)             The three arbitrators
shall within fifteen (15) days of the appointment of the third arbitrator reach
a decision as to whether the parties shall use Landlord’s or Tenant’s submitted
Market Basic Rent Rate, and shall notify Landlord and Tenant thereof.


 


(iv)             The decision of
the majority of the three arbitrators shall be binding upon Landlord and
Tenant.


 


(v)              If either Landlord
or Tenant fails to appoint an arbitrator within ten (10) days after the
applicable Outside Agreement Date, the arbitrator appointed by one of them shall
reach a decision, notify Landlord and Tenant thereof, and such arbitrator’s
decision shall be binding upon Landlord and Tenant.


 


(vi)            If the two
arbitrators fail to agree upon and appoint a third arbitrator, or both

parties fail to appoint an arbitrator, then the appointment of the third
arbitrator or any arbitrator shall be dismissed and the matter to be decided
shall be forthwith submitted to arbitration under the provisions of the
American Arbitration Association.


 


(vii)           The cost of
arbitration shall be paid by Landlord and Tenant equally.


 


C.      Personal
Nature of Option to Extend. The option rights of Tenant
under this Paragraph 19, and the Extended Term thereunder, are granted for
Tenant’s personal benefit and may not be assigned or transferred by Tenant,
either voluntarily or by operation of law, in any manner whatsoever except in
connection with a Permitted Transfer. In the event that Landlord consents to a
sublease of more than fifty percent (50%) of the Premises or assignment under
Lease Paragraphs 16 and 42 (other than a Permitted Transfer), the option
granted herein and any Extended Term thereunder shall at Landlord’s option be
void and of no force and effect (without notice from Landlord), whether or not
Tenant shall have purported to exercise such option prior to such assignment or
sublease, and this Lease will continue in full force and effect for the full
remaining Term hereof, absent of this Paragraph 19.


 


D.      Loss of
Option to Extend Right. It is agreed that if Tenant is at the time it
exercises its 


 


 


	
   

  	
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Option
to Extend in monetary default of this Lease or in a material non-monetary
default as provided for in Lease Paragraphs 19 and 43 (“Bankruptcy and Default”)
and has failed to cure the default in the cure period provided for under this
Lease following Tenant’s receipt of notice from Landlord, this Option to Extend
is automatically forfeited by Tenant (without notice from Landlord). In the
event said Option to Extend is forfeited as stated herein, Tenant shall have no
further Option to Extend this Lease. It is further agreed that if Tenant has
exercised its Option to Extend and is subsequently in default prior to, or at
any time prior to the commencement of the Extended Term and has failed to cure
the (a) monetary default within five (5) days from the date of
written notice from Landlord, or (b) material non-monetary default within
the cure period provided for under this Lease, Landlord may at its sole and
absolute discretion, cancel and rescind Tenant’s Option to Extend, and, unless
said Lease is also terminated due to said uncured default, this Lease will
continue in full force and effect for the full remaining Term hereof, absent of
this Paragraph 19.


 


20.
REPLACEMENT OF LEASE PARAGRAPH 12 (“PROPERTY INSURANCE”): Said Lease
Paragraph 12 (“Property Insurance”) is hereby deleted in its entirety and
replaced with the following:


 


“12.
PROPERTY INSURANCE. Throughout the Lease Term, Landlord shall purchase
and keep in force, and Tenant shall pay to Landlord (or Landlord’s agent if so
directed by Landlord), as Additional Rent and in accordance with Paragraph 4.D
of this Lease, Tenant’s Proportionate Share of the deductibles on insurance
claims and the cost of, policy or policies of insurance covering loss or damage
to and/or destruction of the Building (excluding routine maintenance and
repairs and incidental damage or destruction intentionally caused by Tenant,
its officers, employees, agents, contractors and/or representatives) in the amount
of the full replacement value thereof, providing protection against those
perils included within the classification of “all risks” “special form”
insurance and flood and/or earthquake insurance, if available, plus a policy of
rental income insurance in the amount of one hundred (100%) percent of twelve
(12) months Basic Rent, plus  sums paid as Additional
Rent. If such insurance cost is increased due to Tenant’s use of the Premises,
Tenant agrees to pay to Landlord, in addition to its Proportionate Share of the
deductibles, the full cost of such increase within five (5) business days
of receipt of the related invoice. Tenant shall have no interest in or any
right to the proceeds of any insurance procured by Landlord for the Premises.


 


In addition and notwithstanding anything to the contrary in this
Paragraph 12, each party to this Lease hereby waives all rights of recovery
against the other party or its officers, employees, agents and representatives
for loss or damage to its property or the property of others under its control,
arising from any cause insured against under the fire and extended “special
form” property coverage (excluding, however, any loss resulting from Hazardous
Material contamination of the Property) required to be maintained by the terms
of this Lease to the extent full reimbursement of the loss/claim is received by
the insured party. Each party required to carry property insurance hereunder
shall cause the policy evidencing such insurance to include a provision
permitting such release of liability (“waiver of subrogation endorsement”). If
such waiver is so prohibited, the insured party affected shall promptly notify
the other party thereof.  Notwithstanding
anything to the contrary herein, the foregoing waiver of subrogation shall not
include any loss resulting from Hazardous Material contamination of the
Property or any insurance coverage relating thereto.”


 


 


	
   

  	
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21.
DESTRUCTION: Lease Paragraph 21
(“Destruction”) is hereby deleted in its entirety and replaced with the
following:


 


“In
the event the Premises are destroyed in whole or in part from any cause,
Landlord may, at its option:


 


(a)           Rebuild or restore
the Premises to their condition prior to the damage or destruction, or


 


(b)           Terminate this Lease
(providing that the Premises is damaged to the extent of thirty-three and one
third percent (33 1/3%) or more of the replacement cost, exclusive of footings,
foundations and floor slabs).


 


If Landlord does not give
Tenant notice in writing within thirty (30) days from the destruction of the
Premises of its election to either rebuild and restore the Premises, or to terminate
this Lease, Landlord shall be deemed to have elected to rebuild or restore the
Premises, in which event Landlord agrees, at its expense except for any
deductible, which is the responsibility of the Tenant, promptly to rebuild or
restore the Premises to the condition existing prior to the damage or destruction.
Tenant shall be entitled to a reduction in Rent from the date of such damage or
destruction, provided Tenant is not using any portion of such damaged area,
while such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Leased
Premises. If Landlord initially estimates that the rebuilding or restoration
will exceed one hundred eighty (180) days or if Landlord does not complete the
rebuilding or restoration within one hundred eighty (180) days following the
commencement date of construction (such period of time to be extended for
delays caused by the fault or neglect of Tenant or because of Acts of God, acts
of public agencies, labor disputes, strikes, fires, freight embargos, rainy or
stormy weather, inability to obtain materials, supplies or fuels, acts of
contractors or subcontractors, or delay of the contractors or subcontractors
due to such causes or other contingencies beyond the control of Landlord) (the
“Allowed Restoration Period”), and provided the damage or destruction does not
result from intentional damage or destruction caused by Tenant, its officers,
employees, agents, contractors and/or representatives, then Tenant shall have
the right to terminate this Lease by giving written notice to Landlord within
five (5) business days following the date Tenant receives Landlord’s
written notice stating that the restoration will exceed the Allowed Restoration
Period. During the period the Landlord named in this Amendment No. 1 or
any of its affiliates owns the Building and Tenant elects to terminate this Lease
early pursuant to the terms of this Paragraph 21.(b), Tenant shall remain
liable for its Proportionate Share of the insurance deductible as it relates to
the Premises. Subject to the terms of this Paragraph 21, Tenant shall not be
liable for its Proportionate Share of the insurance deductible if Landlord
terminates the Lease pursuant to this Paragraph 21 or Tenant terminates the
Lease pursuant to this Paragraph 21 provided neither the Landlord named in
Amendment No. 1 nor any of its affiliates owns the Building at the time
the damage to the Building occurs that results in the right of either party to
terminate the Lease. Notwithstanding anything herein to the contrary,
Landlord’s obligation to rebuild or restore shall be limited to the Building
and interior


 


 


	
   

  	
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improvements
constructed by Landlord as they existed on the later of
(a) the Commencement Date of the Lease or (b) March 1, 2011 and shall
not include restoration of Tenant’s trade fixtures, equipment, merchandise, or
any improvements, alterations or additions made by Tenant to the Premises,
which Tenant shall forthwith replace or fully repair at Tenant’s sole cost and
expense provided this Lease is not terminated according to the provisions
above.


 


Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly
waives the provision of Section 1932, Subdivision 2, in Section 1933,
Subdivision 4 of the California Civil Code.


 


In any event that the Building in which the Premises are situated is
damaged or destroyed to the extent of not less than thirty-three and one third
percent (33 1/3%) of the replacement cost thereof, Landlord may elect to
terminate this Lease, whether the Premises be injured or not. Notwithstanding
anything to the contrary herein, Landlord may terminate this Lease in the event
of an uninsured event or if insurance proceeds are insufficient to cover one
hundred percent of the rebuilding costs net of the deductible.”


 


22.
CHOICE OF LAW/VENUE; SEVERABILITY: This Amendment shall in all respects
be governed by and construed in accordance with the laws of the County of
Alameda in the State of California and each party specifically stipulates to
venue in Alameda County. If any provisions of this Amendment shall be invalid,
unenforceable, or ineffective for any reason whatsoever, all other provisions
hereof shall be and remain in full force and effect.


 


23.
AUTHORITY TO EXECUTE: The parties executing this Amendment hereby
warrant and represent that they are properly authorized to execute this
Amendment and that the individuals executing this Lease are authorized to bind
the parties on behalf of whom they execute this Amendment and to all of the
terms, covenants and conditions of this Amendment as they relate to the
respective parties hereto.


 


24.
EXAMINATION OF AMENDMENT: This Amendment No. 1 shall not be
effective until its execution by both Landlord and Tenant.


 


EXCEPT
AS MODIFIED HEREIN, all other terms, covenants, and conditions of the Lease
shall remain in full force and effect.


 


[SIGNATURES
ON FOLLOWING PAGE]


 


 


	
   

  	
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IN
WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 to
Lease as of the day and year last written below.


 


 


	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  JOHN
  ARRILLAGA SURVIVOR’S TRUST

  	
   

  	
  ACTIVIDENTITY,
  INC.

  
	
   

  	
   

  	
  a
  California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  John Arrillaga

  	
   

  	
  By

  	
  /s/
  Jacques Kerrest

  
	
  John
  Arrillaga, Trustee

  	
   

  	
   

  
	
   

  	
   

  	
  Jacques
  Kerrest

  
	
  Date:

  	
  3/24/10

  	
   

  	
  Printer
  or Type Name

  
	
   

  	
   

  	
   

  
	
  RICHARD
  T. PEERY SEPARTE

  	
   

  	
  Title:

  	
  CFO

  
	
  PROPERTY
  TRUST

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/
  Richard T. Peery

  	
   

  	
  Date:

  	
  3/23/2010

  
	
  Richard
  T. Peery, Trustee

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  3/24/10

  	
   

  	
   

  
							



 


 


	
   

  	
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EXHIBIT A
TO AMENDMENT NO. 1 DATED FEBRUARY 9, 2010 BETWEEN THE JOHN ARRILLAGA
SURVIVOR’S TRUST AND THE RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS LANDLORD,
AND ACTIVIDENTITY INC., AS TENANT


 


ARDEN WOOD III-G


 


 


	
   

  	
   

  	
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EXHIBIT B TO AMENDMENT
NO. 1 DATED FEBRUARY 9, 2010 BETWEEN THE JOHN ARRILLAGA SURVIVOR’S TRUST AND
THE RICHARD T. PEERY SEPARATE PROPERTY TRUST, AS LANDLORD, AND ACTIVIDENTITY
INC., AS TENANT


 


ARDEN WOOD III-G


 


 


	
   

  	
   

  	
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  JDK