Document:

exv10w2

Exhibit 10.2

STANDARD INDUSTRIAL LEASE

(NET)

	1.	 	BASIC LEASE TERMS.

	 	(a)	 	DATE OF LEASE EXECUTION: August 7, 2009
	 
	 	(b)	 	TENANT: DENDREON CORPORATION, a Delaware corporation
	 
	 	 	 	Trade Name: Dendreon
	 
	 	 	 	Address (Premises): 1700 Saturn Way, Building #5, Seal Beach, California 90740

	 	 	 	 	 
	 

	 	Address for Notices:
	 	3005 First Avenue
	 

	 	 	 	Seattle, Washington 98121
	 

	 	 	 	Attention: Rick Hamm, General Counsel
	 

	 	 	 	Telephone: (206) 256-4545
	 

	 	 	 	Fax: (206) 256-0571

	 	(c)	 	LANDLORD: KNICKERBOCKER PROPERTIES, Inc. XLVI, a Delaware corporation

	 	 	 	 	 
	 

	 	Address for Rent:
	 	c/o Overton Moore Properties
	 

	 	 	 	19300 S Hamilton, Suite 200
	 

	 	 	 	Gardena, CA 90248
	 

	 	 	 	Attn: Pacific Gateway Business Center Property Manager

	 	 	 	 	 
	 

	 	Address for Notices:
	 	c/o Overton Moore Properties
	 

	 	 	 	19300 S. Hamilton Avenue, Suite 200
	 

	 	 	 	Gardena, CA 90248
	 

	 	 	 	Attn: Pacific Gateway Business Center Property Manager
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	c/o JP Morgan Asset Management
	 

	 	 	 	1999 Avenue of the Stars, Floor 26
	 

	 	 	 	Los Angeles, CA 90067
	 

	 	 	 	Attn: Mr. Steven M. Zaun
	 
	 	 	 	 
	 

	 	 	 	and
	 
	 	 	 	 
	 

	 	 	 	Allen Matkins Leck Gamble Mallory & Natsis LLP
	 

	 	 	 	515 South Figueroa Street, 9th Floor
	 

	 	 	 	Los Angeles, CA 90071
	 

	 	 	 	Attn: Thomas J. Masenga, Esq.

     (d) TENANT’S PERMITTED USE OF PREMISES: (i) Processing human cells, developing antibodies,
treating human blood and manufacturing therapeutic drugs, as well as any uses ancillary to the
foregoing (including, without limitation, ancillary office, warehouse and manufacturing uses)
(collectively, the “Specific Use”) and (ii) any other legally permissible use so long as the same
is (A) not in violation of the Project CC&Rs (defined hereinbelow), (B) not more hazardous or
dangerous than the Specific Use described above, and (C) subject to the provisions set forth in
this Lease and as permitted by law (clauses (i) and (ii) above may be collectively referred to
herein as the “Permitted Use”).

     (e) PREMISES; BUILDING; PROJECT: Approximately 184,000 square feet of space (the “Premises”)
comprising the entire building commonly known as 1700 Saturn Way, Building #5, Seal Beach,
California 90740, as shown on Exhibit A attached hereto (the “Building”). The Building is part of
the project commonly known as Pacific Gateway Business Center (the “Project”).

          TENANT’S SHARE OF THE BUILDING: 100%, which is the ratio that the square footage of the
Premises bears to the square footage of the Building.

          BUILDING’S SHARE OF THE PROJECT: 22.151%, which is the ratio that the square footage of the
Building bears to the square footage of the Project.

     (f) PREMISES LAND: Approximately 402,429 square feet (approximately 9.238 acres) of land on
which the Building is located more particularly described on Exhibit B attached hereto.

	 	(g)	 	TERM; COMMENCEMENT DATE; RENT COMMENCEMENT DATE; EXPIRATION DATE:

	 
	 	 	 	Term: Approximately One Hundred Twenty-Five (125) months, subject to extension as
set forth in Rider 1 attached hereto.

	 
	 	 	 	Commencement Date: Upon mutual execution of this Lease.

 

 

	 	 	 	Rent Commencement Date: January 1, 2010.

	 
	 	 	 	Expiration Date: December 31, 2019.

     (h) BASIC RENT:

	 	 	 	 	 
	Period	 	Basic Rent Per Month
	Commencement Date – Rent Commencement Date

	 	$	0.00	 
	1/1/10 – 6/30/12

	 	$	101,200.00	 
	7/1/12 – 12/31/14

	 	$	108,973.52	 
	1/1/15 – 6/30/17

	 	$	117,344.15	 
	7/1/17 – 12/31/19

	 	$	126,357.75	 

     (i) PREPAID RENT (Basic Rent and estimated additional rent for January, 2010): One Hundred
Thirty-Eight Thousand Nine Hundred Sixty-One and No/100 Dollars ($138,961.00).

     (j) LETTER OF CREDIT AMOUNT: Two Million One Hundred Thousand and No/100 Dollars
($2,100,000.00), which amount is subject to reduction as further specified herein.

     (k) BROKER(S): CB Richard Ellis, representing Landlord; Jones Lang LaSalle, representing
Tenant.

     (l) INTENTIONALLY OMITTED.

     (m) ALLOWANCE: Two and No/100 Dollars ($2.00) per square foot of the Premises, i.e., Three
Hundred Sixty-Eight Thousand and No/100 Dollars ($368,000.00).

     (n) RIDERS: Rider 1 and Rider 2 are attached hereto and made a part hereof.

     (o) EXHIBITS: Exhibits lettered A through K, inclusive, are attached hereto and made a part
hereof.

This Paragraph 1 represents a summary of the basic terms of this Lease. In the event of any
inconsistency between the terms contained in this Paragraph 1 and any specific provision of this
Lease, the terms of the more specific provision shall prevail.

2. PREMISES.

     (a) Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, the Premises
referenced in Paragraph 1 and outlined on the Depiction of Premises attached hereto as Exhibit A
and incorporated herein by this reference. The Premises consists of that certain Building located
at the address designated in Subparagraph 1(b) and the parcel or parcels of real property described
on the Description of Premises Land attached hereto as Exhibit B and incorporated herein by this
reference.

     (b) The parties agree that the letting and hiring of the Premises is upon and subject to the
terms, covenants and conditions herein set forth and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of said terms, covenants and
conditions by it to be kept and performed and that this Lease is made upon the condition of such
performance.

3. LEASE TERM.

     The Term of this Lease shall be for the period designated in Subparagraph 1(g) commencing on
the Commencement Date, and ending on the Expiration Date, unless the term hereby demised shall be
sooner terminated as herein provided (the “Term”). Landlord and Tenant shall execute Exhibit D to
confirm the Commencement Date and the Expiration Date and other matters.

4. POSSESSION; CONDITION OF PREMISES.

     (a) Delivery of Possession. Except as otherwise expressly provided in clauses (c) and
(d) below, Landlord agrees to deliver possession of the Premises to Tenant on the Commencement Date
in its “AS-IS,” “WHERE-IS,” with all faults condition. Notwithstanding the foregoing, Landlord
shall not be obligated to deliver possession of any portion of the Premises to Tenant until
Landlord has received from Tenant all of the following: (i) the Letter of Credit (defined
hereinbelow) and Prepaid Rent; (ii) executed copies of policies of insurance or certificates
thereof as required under Paragraph 16 of this Lease; and (iii) an executed original of the
Hazardous Materials Questionnaire in the form attached hereto as Exhibit I.

     (b) Condition of Premises. Except as otherwise expressly provided in clauses (c) and
(d) below, (i) by taking possession of the Premises, Tenant will be deemed to have accepted such
portion of the Premises in its “AS-IS,” “WHERE-IS,” with all faults condition on the date of
delivery of possession and to have acknowledged that there are no items needing work or repair, and
(ii) Tenant acknowledges that neither Landlord nor any agent of

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Landlord has made any
representation or warranty with respect to the Premises or any portions thereof or with
respect to the suitability of same for the conduct of Tenant’s business or any other business,
except as may be expressly provided herein.

     (c) Landlord’s Representations and Warranties. Landlord hereby represents and
warrants to Tenant that, as of the Commencement Date, to its actual knowledge: (i) Landlord has
received no written notice from any governmental agency that the Premises or any portion thereof is
in violation of any material building code or regulation applicable thereto; (ii) the Building
contains no defects, latent or patent; (iii) the Building, including the HVAC system and other
operating systems located therein, are in good working order; (iv) the Premises is in compliance
with the Americans with Disabilities Act of 1990, as amended (hereinafter, the “ADA”) (provided
Landlord shall not be responsible under this clause (iv) to the extent any noncompliance with the
ADA is attributable to (A) Tenant’s work within, or specific use of (as opposed to general
warehouse, office or manufacturing use), the Premises, and/or (B) any alterations to the Premises
made by or on behalf of Tenant); and, (v) except to the extent referenced on any environmental
report delivered to Tenant prior to the Commencement Date, there are no Hazardous Materials (as
defined in Exhibit H attached hereto) in the Building or on the Premises Land in violation of
applicable law. Tenant acknowledges and agrees that prior to the date of this Lease, Landlord
delivered to Tenant and Tenant received from Landlord copies of all of the environmental reports
identified on Exhibit L attached hereto.

     Notwithstanding the foregoing, Tenant acknowledges and agrees that (aa) if it is determined
that Landlord breached any of the representations and/or warranties described in clauses (i)
through (v) above, inclusive, Tenant’s sole and exclusive remedy shall be to cause Landlord to
remedy such breach (collectively, the “Breach Work”) and repair and restore any damage to Tenant’s
alterations and/or initial tenant improvements constructed by Tenant caused by Landlord during the
performance of the Breach Work (collectively, the “Alteration/TI Restoration Work”) (the Breach
Work and the Alteration/TI Restoration Work shall collectively be referred to herein as the
“Breach/Restoration Work”), (bb) if it purchases the Premises pursuant to the terms of Paragraphs 2
or 3 of Rider 1 attached hereto or otherwise, and this Lease is terminated substantially concurrent
with the close of escrow thereunder, Landlord’s above representations and warranties shall be void
and of no further force or effect (it being the intent of the parties hereto to recognize that such
representations and warranties shall not survive the termination of this Lease), (cc) the foregoing
representations and warranties of Landlord shall survive the Commencement Date only for a period of
twelve (12) months and shall thereafter be deemed extinguished except to the extent an action is
brought for a violation thereof within such twelve (12) month period, and (dd) under no
circumstances shall Landlord be obligated to expend in excess of Five Hundred Thousand and No/100
Dollars ($500,000.00) during its performance of any Alteration/TI Restoration Work.

     (d) Allowance; Tenant’s Work. So long as Tenant is not in default hereunder beyond
any applicable cure period, Landlord agrees to provide to Tenant a tenant improvement allowance of
$2.00 per square foot of space in the Premises, i.e., Three Hundred Sixty-Eight Thousand and No/100
Dollars ($368,000.00) (the “Allowance”). Tenant agrees to use the Allowance to (i) modify the base
Building and systems, (ii) remove all mezzanine space within the Building, and (iii) perform other
refurbishments and/or tenant improvements within the Building pursuant to the terms of Exhibit C
attached hereto (collectively, “Tenant’s Work”). Tenant further agrees that the exact scope and
construction of Tenant’s Work and Landlord’s payment of the Allowance to Tenant shall be governed
by the terms of the Work Letter Agreement attached hereto as Exhibit C.

5. RENT.

     (a) Basic Rent. From and after the Rent Commencement Date, Tenant agrees to pay
Landlord Basic Rent for the Premises at the Basic Rent rate designated in Subparagraph 1(h) in
twelve (12) equal monthly installments, each in advance of the first day of each and every calendar
month during the Term, except that the Prepaid Rent set forth in Subparagraph 1(i) shall be paid in
accordance with the terms of Paragraph 6 below. If the Term of this Lease commences on a day other
than the first day of a calendar month or ends on a day other than the last day of a calendar
month, then the rent (as defined below) for such periods shall be prorated in the proportion that
the number of days this Lease is in effect during such periods bears to thirty (30), and such rent
shall be paid at the commencement of such period. In addition to the Basic Rent, Tenant agrees to
pay Landlord as additional rent hereunder, Tenant’s Share of the Building’s Share of any expenses
incurred by Landlord and allocable to the Project as a whole, rather than allocated just to the
Building (e.g., any expenses payable by Landlord pursuant to the terms of the Project CC&Rs, etc.),
additional rent as provided in Paragraph 11 (Taxes), Paragraph 13 (Maintenance), Paragraph 16
(Insurance), the amount of all rental adjustments as and when hereinafter provided in this Lease,
and a management fee of two and one-half percent (2.5%) of the gross rent (i.e., Basic Rent and
additional rent) payable by Tenant pursuant to the terms of this Lease to cover Landlord’s
management, overhead and administrative expenses related to the operation of the Building, whether
performed by Landlord’s personnel or delegated by Landlord to a professional property manager. The
Basic Rent, any additional rent payable pursuant to the provisions of this Lease, and any rental
adjustments shall be paid to Landlord, without any prior demand therefor, and without any deduction
or offset, except as expressly provided herein, in lawful money of the United States of America,
which shall be legal tender at the time of payment, at the address of Landlord designated in
Subparagraph 1(c) or to such other person or at such other place as Landlord may from time to time
designate in writing. Further, all charges to be paid by Tenant hereunder, including, without
limitation, payments for real property taxes, insurance, repairs, and parking, if any, shall be
considered “additional rent” for the purposes of this Lease, and the word “rent” in this Lease
shall include such additional rent unless the context specifically or clearly implies that only the
Basic Rent is referenced. Basic Rent shall be adjusted as provided in Subparagraph 1(h).

     (b) Late Payment. Tenant acknowledges that late payment by Tenant to Landlord of any
rent or other sums due under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impracticable to ascertain.
Such costs include, without limitation,

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processing and accounting charges and late charges that may
be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefore, if any rent or other sum due from
Tenant is not received within five (5) calendar days when due, Tenant shall pay to Landlord an
additional sum equal to 5% of such overdue payment for each month such payment remains overdue.
Landlord and Tenant hereby agree that such late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of any such late payment. Additionally, all such
delinquent rents or other sums, shall bear interest at the lesser of (i) twelve percent (12%) per
annum or (ii) the maximum legal interest rate (as applicable, the “Interest Rate”). Any payments
of any kind returned for insufficient funds will be subject to an additional handling charge of
$25.00.

     (c) Audit Right. In the event of any dispute as to the amount of Tenant’s Share of
Maintenance Expenses, Real Property Taxes and/or the cost of any insurance maintained by Landlord
hereunder (collectively, “Expenses”), Tenant or an accounting firm selected by Tenant and
reasonably satisfactory to Landlord (billing hourly and not on a contingency fee basis) will have
the right, by prior written notice (“Audit Notice”) given within one (1) year (“Audit Period”)
following receipt of the final statement of such Expenses incurred by Landlord during the
immediately previous calendar year (an “Actual Statement”) and at reasonable times during normal
business hours, to audit Landlord’s accounting records with respect to the Expenses relative to the
year to which such Actual Statement relates at the offices of Landlord’s property manager. In no
event will Landlord or its property manager be required to (i) photocopy any accounting records or
other items or contracts, (ii) create any ledgers or schedules not already in existence,
(iii) incur any costs or expenses relative to such inspection (except as expressly provided below),
or (iv) perform any other tasks other than making available such accounting records as aforesaid.
Tenant must pay Tenant’s Share of Expenses when due pursuant to the terms of this Lease and may not
withhold payment of such Expenses or any other rent pending results of the audit or during a
dispute regarding Expenses. The audit must be completed within sixty (60) days of the date of
Tenant’s Audit Notice and the results of such audit shall be delivered to Landlord within
ninety (90) days of the date of Tenant’s Audit Notice. If Tenant does not comply with any of the
aforementioned time frames, then such Actual Statement will be conclusively binding on Tenant. If
such audit or review correctly reveals that Landlord has overcharged Tenant and Landlord agrees
with the results of such audit, then within thirty (30) days after the results of such audit are
made available to Landlord, Landlord agrees to reimburse Tenant the amount of such overcharge. If
the audit reveals that Tenant was undercharged, then within thirty (30) days after the results of
the audit are made available to Tenant, Tenant agrees to reimburse Landlord the amount of such
undercharge. Tenant agrees to pay the cost of such audit, provided that if the audit reveals that
Landlord’s determination of the Building’s total Expenses as set forth in the relevant Actual
Statement was in error in Landlord’s favor by more than five percent (5%) of the total amount of
such Expenses pursuant to such Actual Statement, then Landlord agrees to pay the reasonable,
third-party cost of such audit incurred by Tenant. To the extent Landlord must pay the cost of
such audit, such cost shall not exceed a reasonable hourly charge for a reasonable amount of hours
spent by such third-party in connection with the audit. Tenant agrees to keep the results of the
audit confidential and will cause its agents, employees and contractors to keep such results
confidential. To that end, Landlord may require Tenant and its auditor to execute a commercially
reasonable confidentiality agreement provided by Landlord.

6. PREPAID RENT.

     On or before December 31, 2009, Tenant shall pay to Landlord the Prepaid Rent set forth in
Subparagraph 1(i), and if Tenant is not in default of any provision of this Lease, such Prepaid
Rent shall be applied during the month of January, 2010 with respect to Tenant’s leasing of the
Premises. Landlord’s obligations with respect to the Prepaid Rent are those of a debtor and not of
a trustee, and Landlord can commingle the Prepaid Rent with Landlord’s general funds. Landlord
shall not be required to pay Tenant interest on the Prepaid Rent. Landlord shall be entitled to
immediately endorse and cash Tenant’s Prepaid Rent; however, such endorsement and cashing shall not
constitute Landlord’s acceptance of this Lease. In the event Landlord does not accept this Lease,
Landlord shall return said Prepaid Rent. If Landlord sells the Premises and deposits with the
purchaser the Prepaid Rent, Landlord shall be discharged from any further liability with respect to
the Prepaid Rent.

7. LETTER OF CREDIT.

     (a) General Provisions. Concurrently with Tenant’s execution of this Lease, Tenant
shall deliver to Landlord, as additional collateral for the full performance by Tenant of all of
its obligations under this Lease and for all losses and damages Landlord may suffer as a result of
any default by Tenant under this Lease, including, but not limited to, any post lease termination
damages under Section 1951.2 of the California Civil Code, a standby, unconditional, irrevocable,
transferable letter of credit (the “Letter of Credit”) in the form of Exhibit K hereto and
containing the terms required herein, in the face amount of Two Million One Hundred Thousand and
No/100 Dollars ($2,100,000.00) (the “Letter of Credit Amount”), naming Landlord as beneficiary,
issued by Wells Fargo Bank or a financial institution acceptable to Landlord in Landlord’s sole
discretion, permitting multiple and partial draws thereon, and otherwise in form acceptable to
Landlord in its sole discretion. Tenant shall cause the Letter of Credit to be continuously
maintained in effect (whether through replacement, renewal or extension) in the Letter of Credit
Amount (as the same may be reduced as described in Subparagraph 7(f) below) through the date (the
“Final LC Expiration Date”) that is thirty (30) days after the scheduled expiration date of the
Term or any renewal Term of this Lease. If the Letter of Credit held by Landlord expires earlier
than the Final LC Expiration Date (whether by reason of a stated expiration date or a notice of
termination or non-renewal given by the issuing bank), Tenant shall deliver a new Letter of Credit
or certificate of renewal or extension to Landlord not later than thirty (30) days prior to the
expiration date of the Letter of Credit then held by Landlord. Any renewal or replacement Letter
of Credit shall comply with all of the provisions of this Paragraph 7, shall be irrevocable,
transferable and shall remain in effect (or be automatically renewable) through the Final LC
Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be
acceptable to Landlord in its sole discretion.

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     (b) Drawings under Letter of Credit. Landlord shall have the immediate right to draw
upon the Letter of Credit, in whole or in part, at any time and from time to time: (i) In an
amount sufficient to compensate Landlord
for damages suffered by it, if an event of default occurs and is not cured within the
applicable cure period provided for such default in this Lease and/or to compensate Landlord for
any and all damages it suffers upon termination of the Lease (provided Landlord may draw upon the
entire amount of the Letter of Credit if it elects to terminate this Lease pursuant to the terms of
Paragraph 21(b) below); (ii) In whole, if the Letter of Credit held by Landlord expires (or is set
to expire) earlier than the Final LC Expiration Date (whether by reason of a stated expiration date
or a notice of termination or non-renewal given by the issuing bank), and Tenant fails to deliver
to Landlord, at least thirty (30) days prior to the expiration date of the Letter of Credit then
held by Landlord, a renewal or substitute Letter of Credit that is in effect and that complies with
the provisions of this Paragraph 7; or (iii) In whole, if Tenant either files a voluntary petition,
or an involuntary petition is filed against Tenant by an entity other than Landlord or an affiliate
thereof, under any chapter of the Federal Bankruptcy Code, Tenant executes an assignment for the
benefit of creditors or Tenant is placed in receivership or otherwise becomes insolvent. No
condition or term of this 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 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 event of default by Tenant under this Lease or upon the occurrence of any of the
other events described above in this Paragraph 7(b).

     (c) Use of Proceeds by Landlord. The proceeds of the Letter of Credit shall
constitute Landlord’s sole and separate property (and not Tenant’s property or the property of
Tenant’s bankruptcy estate) and Landlord may immediately upon any draw (and without notice to
Tenant) apply or offset the proceeds of the Letter of Credit: (i) against any rent payable by
Tenant under this Lease that is not paid when due; (ii) against all losses and damages (A) that
Landlord has suffered, or (B) to the extent arising under Section 1951.2 of the California Civil
Code following termination of this Lease, that Landlord reasonably estimates that it may suffer as
a result of any default by Tenant under this Lease; (iii) against any costs incurred by Landlord in
connection with this Lease (including attorneys’ fees) to the extent that Tenant is responsible to
reimburse Landlord therefor pursuant to the terms hereof; and (iv) against any other amount that
Landlord may spend or become obligated to spend by reason of Tenant’s default. Provided Tenant has
performed all of its obligations under this Lease, Landlord agrees to pay to Tenant within
thirty (30) days after the Final LC Expiration Date the amount of any proceeds of the Letter of
Credit received by Landlord and not applied as allowed above; provided, that if prior to the Final
LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed
against Tenant by any of Tenant’s creditors, under the Federal Bankruptcy Code, then Landlord shall
not be obligated to make such payment in the amount of the unused Letter of Credit proceeds until
either all preference issues relating to payments under this Lease have been resolved in such
bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed, in
each case pursuant to a final court order not subject to appeal or any stay pending appeal.

     (d) Additional Covenants of Tenant. If, as result of any application or use by
Landlord of all or any part of the Letter of Credit, the amount of the Letter of Credit shall be
less than the Letter of Credit Amount, Tenant shall, within ten (10) days after its receipt of
notice from Landlord, provide Landlord with additional letter(s) of credit in an amount equal to
the deficiency (or a replacement letter of credit in the total Letter of Credit Amount), and any
such additional (or replacement) letter of credit shall comply with all of the provisions of this
Paragraph 7, and if Tenant fails to comply with the foregoing, notwithstanding anything to the
contrary contained in this Lease, the same shall, at Landlord’s election, constitute an uncurable
event of default by Tenant. Tenant further covenants and warrants that it will neither assign nor
encumber the Letter of Credit or any part thereof and that neither Landlord nor its successors or
assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance.

     (e) Transfer of Letter of Credit. Landlord may, at any time and without notice to
Tenant and without first obtaining Tenant’s consent thereto, transfer all or any portion of its
interest in and to the Letter of Credit to any transferee of Landlord’s interest in the Building
and/or Landlord’s mortgagee and/or to have the Letter of Credit reissued in the name of Landlord’s
mortgagee. If Landlord transfers its interest in the Building and transfers the Letter of Credit
(or any proceeds thereof then held by Landlord) in whole or in part to the transferee, Landlord
shall, without any further agreement between the parties hereto, thereupon be released by Tenant
from all liability therefor. The provisions hereof shall apply to every transfer or assignment of
all or any part of the Letter of Credit to a new landlord. In connection with any such transfer of
the Letter of Credit by Landlord, Tenant shall, at Tenant’s sole cost and expense (except as
provided below), execute and submit to the issuer of the Letter of Credit such applications,
documents and instruments as may be reasonably necessary to effectuate such transfer.
Notwithstanding the foregoing, Landlord shall be responsible for paying the issuer’s transfer and
processing fees in connection with any transfer of the Letter of Credit.

     (f) Reduction in Letter of Credit Amount. Subject to the provisions of this
Subparagraph 7(f) and provided that Tenant has not been in default or breach of any provision of
the Lease beyond any applicable cure periods at any time prior to an applicable Reduction Date
(defined below), then Tenant shall be entitled to reduce the Letter of Credit Amount effective as
of the last day of the twelfth (12th), twenty-fourth (24th), thirty-sixth (36th) and
forty-eighth (48th) months of the initial Term (individually, a “Reduction Date” and
collectively, the “Reduction Dates”) as follows: On each Reduction Date, Tenant shall be entitled
to reduce the Letter of Credit Amount by an amount equal to Two Hundred Twenty-Five Thousand and
No/100 Dollars ($225,000.00). For example, if Tenant has not been in default or breach of any
provision of this Lease beyond any applicable cure periods at any time prior to the Reduction Date
occurring on the last day of the twelfth (12th) month of the Term and Tenant duly and timely pays
the Monthly Basic Rent and additional rent that is due and payable on the first day of the twelfth
(12th) month, Tenant would be entitled to reduce the Letter of Credit Amount by Two Hundred
Twenty-Five Thousand and No/100 Dollars ($225,000.00) to One Million Eight Hundred Seventy-Five
Thousand and No/100 Dollars ($1,875,000.00) effective as of the last day of the twelfth
(12th) month of the initial Term.

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     If Tenant is eligible for a Letter of Credit reduction on a Reduction Date, Landlord shall
execute any documents reasonably requested by Tenant and the issuing bank to effectuate the
applicable release of the Letter of Credit, within fifteen (15) days after Tenant submits such
documents to Landlord for execution provided Tenant is not then in default under this Lease.

     (g) Nature of Letter of Credit. Landlord and Tenant (1) acknowledge and agree that in
no event or circumstance shall the Letter of Credit or any renewal thereof or substitute therefor
or any proceeds thereof be deemed to be or treated as a “security deposit” under any Law applicable
to security deposits in the commercial context including Section 1950.7 of the California Civil
Code, as such section now exists or as may be hereafter amended or succeeded (“Security Deposit
Laws”), (2) acknowledge and agree that the Letter of Credit (including any renewal thereof or
substitute therefor or any proceeds thereof) is not intended to serve as a security deposit, and
the Security Deposit Laws shall have no applicability or relevancy thereto, and (3) 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. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code and all other provisions of law, now or hereafter in effect, which (i)
establish the time frame by which Landlord must refund a security deposit under a lease, and/or
(ii) provide that Landlord may claim from the Security Deposit only those sums reasonably necessary
to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the
Premises, it being agreed that Landlord may, in addition, claim those sums specified in this
Paragraph 7.

8. USE OF PREMISES AND PROJECT FACILITIES.

     (a) Tenant’s Use of the Premises. Tenant shall use the Premises for the Specific Use
set forth in Subparagraph 1(d) above, and shall not use or permit the Premises to be used for any
other purpose without the prior written consent of Landlord, which consent Landlord shall not
unreasonably withhold. Landlord makes no representations or warranties that said use of the
Premises or any other use of the Premises is permitted by any duly constituted public authority
having jurisdiction over the Premises or the conduct of Tenant’s business. Tenant acknowledges and
agrees that it, and not Landlord, is responsible to confirm whether (i) the Premises is properly
zoned for the Specific Use, (ii) Tenant may use the Premises for the Specific Use 24 hours a day,
and/or (iii) Tenant is required to obtain a conditional use permit to operate 24 hours a day from
the Premises (the “Conditional Use Permit”); provided, however, Landlord agrees to use its
commercially reasonable efforts to assist Tenant at no expense to Landlord in obtaining the
Conditional Use Permit; provided further, however, Tenant acknowledges and agrees that Tenant shall
not have the right to terminate this Lease or delay the Lease Commencement or Rent Commencement if
it fails to obtain such Conditional Use Permit.

     (b) Compliance. At Tenant’s sole cost and expense, Tenant shall procure, maintain and
hold available for Landlord’s inspection, all governmental licenses and permits required for
Tenant’s use of the Premises and the proper and lawful conduct of Tenant’s business from the
Premises. Tenant shall at all times during the Term of this Lease, at its sole cost and expense,
observe and comply with the certificate of occupancy issued for the Building, the Project CC&Rs
(defined below) and all laws, statutes, zoning restrictions, ordinances, rules, regulations and
requirements of any duly constituted public authority having jurisdiction over the Premises now or
hereafter in force relating to or affecting the use, occupancy, alteration or improvement of the
Premises including, without limitation, the provisions of Title III of the Americans with
Disabilities Act of 1990, as amended. Tenant shall not use or occupy the Premises in violation of
any of the foregoing. Tenant shall, upon written notice from Landlord, discontinue any use of the
Premises which is declared by any governmental and/or quasi-governmental authority having
jurisdiction over the Premises to be a violation of law or of said certificate of occupancy;
provided, any ADA compliance work triggered by a noncompliance with the ADA existing as of the date
of this Lease and necessitated by anything other than Tenant’s improvement work or Tenant’s
Permitted Use of the Premises (as opposed to general warehouse, office or manufacturing use) shall
be the responsibility of Landlord and shall be performed by Landlord at Landlord’s sole cost and
expense. Tenant shall comply with all rules, orders, regulations and requirements of the Board of
Fire Underwriters or any other insurance authority having jurisdiction over the Premises or any
present or future insurer relating to the Premises. Tenant shall promptly, upon demand, reimburse
Landlord for any additional premium charged for any existing insurance policy or endorsement
required by reason of Tenant’s failure to comply with the provisions of this Paragraph 8. Tenant
shall not use or allow the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises;
provided, Landlord hereby acknowledges that the use of the Premises for the Specific Use will not
violate the foregoing. Tenant shall comply with the Rules and Regulations referred to in
Paragraph 32 and attached hereto as Exhibit F, and all existing restrictive covenants and
obligations recorded against the Premises and/or Project, which affect the use and operation of the
Premises, including, without limitation, that certain Declaration of Covenants, Conditions and
Restrictions for Pacific Gateway Business Center dated December 22, 2005 and recorded in the
Official Records of Orange County, California on December 22, 2005 as Document No. 2005001023974
(as the same may be subsequently amended, the “Project CC&Rs”) and any other recorded documents;
provided, however, Landlord will not consent to and shall oppose any amendment to the Project CC&Rs
(to the extent Landlord has the right to do so under the Project CC&Rs) that if entered into, will
materially and adversely affect Tenant’s right to use the Premises pursuant to the terms of this
Lease for the Specific Use; provided further, however, nothing in this sentence above shall
obligate Landlord to commence litigation. Tenant shall not commit or suffer to be committed any
waste in or upon the Premises and shall keep the Premises in first-class repair and appearance,
ordinary wear and tear and damage resulting from a casualty (provided such casualty is not the
result of any Tenant Party’s negligence or willful misconduct) excepted. Further, Tenant’s
business machines and mechanical equipment which cause vibration or noise that may be transmitted
to the Building structure or, in the event any other tenant occupies space in the Building, to any
other space in the Building, shall be so installed, maintained and used by Tenant as to eliminate
or minimize such vibration or noise. Tenant shall be responsible for all structural engineering
required to determine structural load, as well as the expense thereof.

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     (c) Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials to
be brought upon, stored, used, generated, released into the environment or disposed of in, on,
under or about the Premises by Tenant, its agents, employees, contractors or invitees, in violation
of the terms of Exhibit H attached hereto.

     (d) Parking. Subject to the terms of the Project CC&Rs, Landlord grants to Tenant an
exclusive license to use the vehicle parking spaces within the designated parking areas at the
Premises as shown on Exhibit A for the use of motor vehicles during the Term of this Lease.
Landlord reserves the right at any time to promulgate reasonable rules and regulations relating to
the use of such parking areas, including reasonable restrictions thereon; provided, however,
subject to the terms of Subparagraph 8(b) above pursuant to which Landlord agrees to oppose certain
amendments to the Project CC&Rs, Tenant hereby agrees that any rules and/or regulations adopted
pursuant to the terms of the Project CC&Rs are deemed reasonable. Any vehicle violating any
vehicle regulation is subject to removal at the owner’s expense.

     (e) Survival. The provisions of this Paragraph 8 shall survive any termination of
this Lease.

9. SURRENDER OF PREMISES; HOLDING OVER.

     Upon the expiration of the Term of this Lease including any extension periods, Tenant shall
surrender to Landlord the Premises and all Tenant Improvements and/or alterations in good
condition, except for ordinary wear and tear, alterations Tenant has the right or is obligated to
remove under the provisions of Paragraph 14 herein and any other restoration that is then
prohibited by applicable law, e.g., Tenant shall not be required to restore any mezzanine space
removed from the Premises if the then current parking ratios required under applicable law prohibit
such restoration; provided, however, Tenant acknowledges and agrees that, unless otherwise agreed
to in writing by Landlord, Tenant shall, on or before the expiration or earlier termination of this
Lease, be required, at its sole cost and expense, to (a) remove all of Tenant’s Work from the
Premises, and (ii) restore the Premises and any improvements thereto that were removed or altered
during the Term, including, without limitation, any office area and/or mezzanine area located
within the Building on the Commencement Date, to the condition existing as of the date of this
Lease. Subject to Paragraph 14, Tenant shall remove all personal property, including, without
limitation, all wallpaper, paneling and other decorative improvements or fixtures and shall perform
all restoration made necessary by the removal of any alterations or Tenant’s personal property
before the expiration of the Term, including, for example, restoring all wall surfaces to their
condition prior to the commencement of this Lease, ordinary wear and tear and damage resulting from
a casualty (provided such casualty is not the result of any Tenant Party’s negligence or willful
misconduct) excepted. Landlord may elect to retain or dispose of in any manner Tenant’s personal
property not removed from the Premises by Tenant prior to the expiration of the Term. Tenant
waives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or
disposition of Tenant’s personal property. Tenant shall be liable to Landlord for Landlord’s
actual and reasonable costs for storage, removal or disposal of Tenant’s personal property.

     If Tenant, with Landlord’s consent, remains in possession of the Premises after expiration or
termination of the Term, or after the date in any notice given by Landlord to Tenant terminating
this Lease, such possession by Tenant shall be deemed to be a month-to-month tenancy terminable on
written thirty (30) day notice at any time, by either party. All provisions of this Lease, except
those pertaining to Term and rent, shall apply to the month-to-month tenancy. During such
month-to-month tenancy, Tenant shall pay monthly rent in an amount equal to 150% of Basic Rent for
the last full calendar month during the immediately preceding Term plus 100% of additional rent as
provided in Paragraph 11 (Taxes), Paragraph 13 (Maintenance), Paragraph 16 (Insurance), subject to
increase as provided therein; provided, however, during the first thirty (30) days of any such
month-to-month tenancy, the above reference to “150%” shall be changed to a reference to “125%”.
Any such holdover rent shall be paid on a per month basis without reduction for partial months
during the holdover. Acceptance by Landlord of rent after such expiration or earlier termination
shall not constitute consent to a hold over hereunder or result in an extension of this Lease.
This paragraph shall not be construed to create any express or implied right to holdover beyond the
expiration of the Term or any extension thereof. If Tenant, without Landlord’s written consent to
remain in the Premises, fails to surrender the Premises after expiration or termination of the
Term, Tenant shall indemnify, defend and hold harmless Landlord from all loss or liability,
including, without limitation, any loss or liability resulting from any claim against Landlord made
by any succeeding tenant founded on or resulting from Tenant’s failure to surrender and losses to
Landlord due to lost opportunities to lease any portion of the Premises to succeeding tenants,
together with, in each case, actual attorneys’ fees and costs.

10. SIGNAGE.

     Landlord shall designate the location at or adjacent to the Premises for one or more Tenant
identification sign(s). Landlord on behalf of Tenant and at the expense of Tenant, shall install
and maintain Tenant’s identification sign(s) in such designated locations in accordance with this
Paragraph 10 and Exhibit G. Tenant shall have no right to install or maintain Tenant
identification signs in any other location in, on or about the Premises and shall not display or
erect any other signs, displays or other advertising materials that are visible from the exterior
of the Building. The size, design, color and other physical aspects of permitted sign(s) shall be
subject to: (i) Landlord’s written approval prior to installation, which approval may be withheld
in Landlord’s discretion; (ii) the Project CC&Rs; and (iii) any applicable municipal or
governmental permits and approvals. The cost of the sign(s), including the installation,
maintenance and removal thereof, shall be at Tenant’s sole cost and expense. If Tenant fails to
install or maintain its sign(s), or if Tenant fails to remove same upon termination of this Lease
and repair any damage caused by such removal, including, without limitation, touching-up the
Building paint (or repainting a portion of the Building, if necessary) (if required by Landlord, in
Landlord’s sole but reasonable judgment), Landlord may do so at Tenant’s expense. Tenant shall
reimburse Landlord for all costs incurred by Landlord to effect such installation, maintenance or
removal, which amount shall be deemed additional rent, and shall include, without limitation, all
sums disbursed, incurred or deposited by Landlord, including Landlord’s costs and expenses

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with interest thereon at the Interest Rate from the date of Landlord’s demand until payment.
Any sign rights granted to Tenant under this Lease are personal to Tenant, any Permitted Transferee
(defined in Paragraph 19 below) and any other assignee or sublessee of the Building and may not be
assigned, transferred or otherwise conveyed to any third party without Landlord’s prior written
consent, which consent Landlord may withhold in its sole and absolute discretion.

11. TAXES.

     (a) Personal Property Taxes. Tenant shall pay before delinquency all taxes,
assessments, license fees and public charges levied, assessed or imposed upon its business
operations as well as upon all trade fixtures, leasehold improvements, merchandise and other
personal property in or about the Premises.

     (b) Real Property Taxes. Tenant shall pay, as additional rent, Tenant’s Share of all
Real Property Taxes, including all taxes, assessments (general and special) and other impositions
or charges which may be taxed, charged, levied, assessed or imposed with respect to any calendar
year or part thereof included within the Term upon all or any portion of or in relation to the
Premises or any portion thereof, any leasehold estate in the Premises or measured by rent from the
Premises, including any increase caused by the transfer, sale or encumbrance of the Premises or any
portion thereof, however, specifically excluding any income taxes payable by Landlord. “Real
Property Taxes” shall also include any form of assessment, levy, penalty, charge or tax (other than
estate, inheritance, net income or franchise taxes) imposed by any authority having a direct or
indirect power to tax or charge, including, without limitation, any city, county, state, federal or
any improvement or other district, whether such tax is: (1) determined by the area of the Premises
or the rent or other sums payable under this Lease; (2) upon or with respect to any legal or
equitable interest of Landlord in the Premises or any part thereof; (3) upon this transaction or
any document to which Tenant is a party creating a transfer in any interest in the Premises; (4) in
lieu of or as a direct substitute in who or in part of or in addition to any real property taxes on
the Premises; (5) based on any parking spaces or parking facilities provided at the Premises; or
(6) in consideration for services, such as police protection, fire protection, street, sidewalk and
roadway maintenance, refuse removal or other services that may be provided by any governmental or
quasi-governmental agency from time to time which were formerly provided without charge or with
less charge to property owners or occupants. Tenant shall pay Real Property Taxes on the date any
taxes or installments of taxes are due and payable as determined by the taxing authority, evidenced
by the tax bill. Landlord shall determine and notify Tenant of the amount of Real Property Taxes
not less than twenty (20) days in advance of the date such tax or installment of taxes is due and
payable. In the event Landlord fails to deliver such timely determination and notice to Tenant,
then Tenant shall have twenty (20) days from receipt of such notice to remit payment of Real
Property Taxes to Landlord. The foregoing notwithstanding, upon notice from Landlord, Tenant shall
pay, as additional rent, Real Property Taxes to Landlord in advance monthly installments equal to
one twelfth (1/12) of Landlord’s reasonable estimate of the Real Property Taxes payable under this
Lease, together with monthly installments of Basic Rent, and Landlord shall hold such payments in a
non-interest bearing account. Landlord shall determine and notify Tenant of any deficiency in the
impound account and Tenant shall pay any deficiency of funds in the impound account not less than
twenty (20) days in advance of the date such tax or installment of taxes is due and payable. In
the event Landlord fails to deliver such timely deficiency determination and notice to Tenant, then
Tenant shall have twenty (20) days from receipt of such notice to remit payment of such deficiency
to Landlord. If Landlord determines that Tenant’s impound account has accrued an amount in excess
of the Real Property Taxes due and payable, then such excess shall be credited to Tenant within
thirty (30) days from Landlord’s determination.

12. UTILITIES.

     Tenant shall pay directly to the utility companies providing such services, the cost of all
water, gas, heat, light, power, sewer, electricity, telephone or other service metered, chargeable
or provided to the Premises. Landlord shall not be liable in damages or otherwise for any failure
or interruption of any utility or other service furnished to the Premises. No such failure or
interruption shall entitle Tenant to terminate this Lease or abate rent in any manner and Tenant
hereby waives the provisions of any applicable existing or future law, ordinance or regulation
permitting the termination of this Lease due to an interruption, failure or inability to provide
any services (including, without limitation, the provisions of California Civil Code Section
1932(1)). Notwithstanding anything in this Lease to the contrary, if, as a result of the negligent
acts or omissions of Landlord or its agents, contractors or employees, for more than three (3)
consecutive business days following written notice to Landlord, there is such an interruption of
essential utilities and Building services, such as fire protection, electricity or water, so that
any portion of the Premises cannot be and is not used by Tenant, in Tenant’s judgment reasonably
exercised, then Tenant’s rent shall thereafter be abated until the Premises are again usable by
Tenant in proportion to the extent to which Tenant’s use of the Premises is interfered with;
provided, however, that if Landlord is diligently pursuing the repair of such utilities or services
and Landlord provides substitute services reasonably suitable for Tenant’s purposes, as for
example, bringing in portable air-conditioning equipment, then there shall not be an abatement of
rent. This paragraph shall not apply in case of damage to, or destruction of, the Building, which
shall be governed by a separate provision of this Lease.

13. MAINTENANCE.

     (a) Performed by Tenant. Except as provided below, Tenant shall maintain, repair and
replace (as necessary) the Premises in good condition, including, without limitation, maintaining,
repairing and replacing (as necessary) of all of the following: non-structural portions of the
walls and floors; ceilings; telephone equipment and wiring; doors; exterior and interior windows
and fixtures as well as damage caused by Tenant, its agents, contractors, employees or invitees.
Tenant shall comply with the provisions of California Health and Safety Code Sections 26142 and
26145. Upon expiration or termination of this Lease, Tenant shall surrender the Premises to
Landlord in the same condition as existed at the commencement of the Term, except for reasonable
wear and tear or

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damage caused by fire or other casualty. Tenant shall, at its own expense, provide, install
and maintain in good condition all of its personal property required in the conduct of its business
on the Premises. If Tenant refuses or neglects to repair, replace and maintain the Premises as
required hereunder and to the reasonable satisfaction of Landlord, Landlord may at any time
following ten (10) days from the date on which Landlord shall make a written demand on Tenant to
effect such repair, replacement and maintenance (emergencies excepted in which case no such demand
shall be required), enter upon the Premises and make such repairs, replacements and/or maintenance
without liability to Tenant for any loss or damage which might occur to Tenant’s merchandise,
fixtures or other property or to Tenant’s business by reason thereof, and upon completion thereof,
Tenant shall pay to Landlord, Landlord’s costs for making such repairs plus ten percent (10%) for
overhead, upon presentation of a bill therefor. Said bill shall include interest at the Interest
Rate on said costs from the date of completion of the maintenance and repairs by Landlord. Tenant
shall, at its own expense, provide, install and maintain in good condition all of its personal
property required in the conduct of its business on the Premises.

     (b) Performed by Landlord. Subject to reimbursement by Tenant as hereinafter
provided, Landlord shall be responsible to maintain, in good condition, the structural parts of the
Premises, which shall include only the foundations, bearing and exterior walls (including
painting), subflooring; the roof system and skylights; the unexposed electrical, plumbing and
sewerage systems, including without limitation, those portions of the systems lying outside the
Premises; the paved and hardscaped parking and driveway areas (including resurfacing and
restriping); window frames, gutters and downspouts on the Building; the heating, ventilating and
air conditioning system servicing the Premises; the outside areas of the Premises and every part
thereof, including, without limitation, the soil, landscaping (including replacement thereof),
sprinkler system, walkways, parking areas (including periodic sweeping), signs, site lighting and
pest control. Landlord shall not be liable for any failure to make any such repairs or any
maintenance unless such failure shall persist for an unreasonable time after written notice of the
need of such repairs or maintenance is given to Landlord by Tenant.

     (c) Reimbursement by Tenant. Prior to the commencement of each calendar year,
Landlord shall give Tenant a written estimate of the expenses Landlord anticipates will be incurred
for the ensuing calendar year with respect to the maintenance and repair to be performed by
Landlord as herein described (the “Maintenance Expenses”). Tenant shall pay, as additional rent,
such estimated expenses in equal monthly installments in advance on or before the first day of each
month concurrent with its payment of Basic Rent. Within ninety (90) days after the end of each
calendar year, Landlord shall furnish Tenant a statement showing in reasonable detail the actual
expenses incurred for the period in question and the parties shall within thirty (30) days
thereafter make payment or allowance as necessary to adjust Tenant’s estimated payments to the
actual expenses as shown by applicable periodic statements submitted by Landlord. If Landlord
shall determine at any time that the estimate of expenses for the current calendar year is or will
become inadequate to meet all such expenses for any reason, Landlord shall immediately determine
the appropriate amount of such inadequacy and issue a supplemental estimate as to such expenses,
and Tenant shall pay any increase in the estimated expenses as reflected by such supplemental
estimate within twenty (20) days following receipt of written request from Landlord. Tenant’s
failure to timely pay any of the charges in connection with the performance of its maintenance and
repair obligations to be paid under this Paragraph 13 shall constitute a material default under
this Lease.

     Landlord shall keep or cause to be kept separate and complete books of account covering costs
and expenses incurred in connection with its maintenance and repair of the Building and outside
areas, which costs and expenses shall include, without limitation, the actual costs and expenses
incurred in connection with labor and material utilized in performance of the maintenance and
repair obligations hereinafter described, public liability, property damage and other forms of
insurance which Landlord may, or is required to, maintain, assessments which may be levied against
the Premises under any recorded covenants, conditions and restrictions, and any other items
reasonable necessary from time to time to properly repair, replace and maintain the outside areas
and any interest paid in connection therewith. Landlord may elect to delegate its duties hereunder
to a professional property manager; provided, however, that any fee charged by such professional
property manager and passed through to Tenant hereunder shall reduce the management fee owed to
Landlord hereunder dollar-for-dollar.

     Except as provided in Paragraph 17 hereof, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s business arising
from the making of any repairs, alterations or improvements in or to any portion of the Building or
the Premises or in or to fixtures, appurtenances and equipment therein. Tenant waives the right to
make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code or any
similar law, statute or ordinance now or hereafter in effect and under the provisions of California
Health and Safety Code Section 26143 with respect to those maintenance obligations which are
Tenant’s responsibility under the terms of this Lease.

     (d) Structural/Foundation Capital Costs. Notwithstanding the terms of
Subparagraphs 13(b) and (c) above, Landlord agrees that (i) during the initial Term of this Lease
(i.e., the initial 126-month period), Tenant shall not be responsible to reimburse Landlord as part
of Maintenance Expenses for any costs which would otherwise be deemed capital in nature pursuant to
generally accepted accounting principles (“GAAP”) and incurred by Landlord solely in connection
with its replacement of (A) the structural portions of the Building’s roof or walls, and/or (B) the
Building’s foundation or slab (collectively, the “Structural/Foundation Capital Costs”), and
(ii) following the initial Term of this Lease, Tenant shall be responsible to reimburse Landlord as
part of Maintenance Expenses for all Structural/Foundation Capital Costs to the extent such costs
are amortized (including an interest factor equal to the rate announced from time to time by Wells
Fargo Bank or, if Wells Fargo Bank ceases to exist or ceases to publish such rate, then the rate
announced from time to time by the largest (as measured by deposits) chartered bank operating in
California, as its “prime rate” or “reference rate”) over the useful life (as determined in
accordance with GAAP) of such capital improvements, repairs or replacements; provided that Tenant
shall be responsible to immediately reimburse Landlord as part of Maintenance Expenses (without
regard to the amortization process or the

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initial Term protection described above) for any Structural/Foundation Capital Costs to the
extent the same are attributable to Tenant’s or any of the Tenant Parties’ negligence or willful
misconduct.

14. ALTERATIONS.

     (a) Alterations. Tenant shall not make any alterations to the Premises, including any
changes to the existing landscaping, without Landlord’s prior written consent. Any alterations
made shall remain on and be surrendered with the Premises upon expiration of the Term, except that
Landlord may, within thirty (30) days before or thirty (30) days after expiration of the Term,
elect to require Tenant to remove any alterations which Tenant may have made to the Premises
(unless otherwise agreed to in writing by Landlord prior to such date). If Landlord so elects,
Tenant shall, at its own cost, restore the Premises to the condition designated by Landlord in its
election, before the last day of the Term or within thirty (30) days after notice of its election
is given, whichever is later. Notwithstanding the foregoing, Tenant may make non-structural
alterations to the interior of the Premises upon twenty (20) days prior written notice to Landlord
so long as such alterations do not (i) exceed Two Hundred Fifty Thousand Dollars ($250,000.00)
individually and/or One Million Dollars ($1,000,000.00) in the aggregate during the Term of this
Lease, (ii) materially affect the Building’s and/or Project’s services or systems, or proper
functioning thereof, or Landlord’s or any other tenant’s access thereto, (iii) violate or require a
change in any occupancy certificate applicable to the Building or Premises, or (iv) materially
affect the Building’s foundation and/or the structural or exterior portions of the Building.

     (b) Standard of Work. Should Landlord consent in writing to Tenant’s alteration of
the Premises, Tenant shall contract with a contractor approved by Landlord for the construction of
such alterations, shall secure all appropriate governmental approvals and permits, and shall
complete such alterations with due diligence, in a first-class manner, in compliance with plans and
specifications approved by Landlord, and in compliance with all applicable laws, statutes and
regulations. Tenant shall pay all costs for such construction (including a commercially reasonable
construction management fee payable to Landlord or Landlord’s property manager not to exceed the
lesser of (i) five percent (5%) of the total cost of construction or (ii) $25,000.00) and shall
keep the Premises free and clear of all mechanics’ liens which may result from construction by
Tenant. In addition to the above described construction management fee payable to Landlord, Tenant
shall also be responsible to promptly reimburse Landlord upon request for any and all third party
structural engineer review fees (the “Engineer Fees”) incurred by Landlord in connection with
Landlord’s review of any Tenant requested alterations that affect the structural integrity of the
Building; provided, however, if Tenant elects to retain the structural engineer of record for the
Building as designated by Landlord to oversee its construction, Tenant shall not be responsible to
reimburse Landlord for any such Engineer Fees. Subject to the terms of Paragraph 23 below,
Landlord shall have the right, but not the obligation, to enter upon the Premises to inspect
periodically the work on the Premises.

     (c) Liens. Tenant shall pay all costs for such construction and shall keep the
Premises free and clear of all mechanics’ and materialmens’ liens which may result from
construction by Tenant. Tenant shall provide at least ten (10) days prior written notice to
Landlord before any labor is performed, supplies furnished or services rendered on or at the
Premises and Landlord shall have the right to post on the Premises notices of non-responsibility.

15. RELEASE AND INDEMNITY.

     As material consideration to Landlord, Tenant agrees that Landlord, its agents,
successors-in-interest with respect to the Premises and their respective directors, officers,
partners, members, employees, shareholders, agents and representatives and the directors, officers,
partners, members, employees, shareholders, agents and representatives of the partners or members
of Landlord (collectively, the “Landlord Indemnified Parties”) shall not be liable to Tenant or any
of the Tenant Parties for: (i) any damage to any property entrusted to employees of the Premises,
Landlord or the Landlord Indemnified Parties, (ii) loss or damage to any property by theft or
otherwise, (iii) consequential damages arising out of any loss of the use of the Premises or any
equipment or facilities therein, or (iv) any injury or damage to person or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any
part of the Premises or from pipes, appliances or plumbing work therein or from the roof, street,
sub-surface or from any other place or resulting from dampness or any other causes whatsoever.
Landlord and/or the Landlord Indemnified Parties shall not be liable for interference with light or
other incorporeal hereditaments, nor shall Landlord or the Landlord Indemnified Parties be liable
for any latent defects in the Premises. Tenant shall give prompt notice to Landlord in case of
fire or accidents in the Premises and of defects therein or in the fixtures or equipment located
therein.

     To the fullest extent permitted by law, Tenant agrees to indemnify, defend (with counsel
satisfactory to Landlord) and hold harmless Landlord and the Landlord Indemnified Parties from
(i) all claims, actions liabilities, and proceedings arising from Tenant’s use of the Premises or
the conduct of its business or from any activity, work or thing done, permitted or suffered by
Tenant, its agents, contractors, sublessees, employees or invitees, in or about the Premises and
any breach or default in the performance of any obligation to be performed by Tenant under the
terms of this Lease, or arising from any act, neglect, fault or omission of Tenant, or of its
agents, contractors, employee or invitees, and (ii) any and all costs, attorneys’ fees, expenses
and liabilities incurred with respect to any such claims, actions, liabilities, or proceedings, and
in the event any actions or proceedings shall be brought against Landlord by reason of such claims,
Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel approved in
writing by Landlord. Tenant hereby assumes all risk of damage to property or injury to person in,
upon or about the Premises from any cause whatsoever, and Tenant hereby waives all its claims in
respect thereof against Landlord. Notwithstanding anything to the contrary contained in this
Paragraph 15 or elsewhere in this Lease, Tenant shall not be required to indemnify and hold
Landlord or any Landlord Indemnified Parties harmless from any claims, actions, liabilities, and
proceedings to the extent resulting from the negligence or willful misconduct of Landlord or any
Landlord Indemnified Parties (the “Landlord Indemnified Claims”), and, subject to

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the limitations contained in Paragraph 27 of this Lease, Landlord agrees to indemnify and hold
Tenant harmless from and against any and all such Landlord Indemnified Claims (except for damage to
Tenant’s personal property, fixtures, furniture and equipment in the Premises, to the extent Tenant
is required to obtain insurance coverage therefor pursuant to the terms of this Lease) and any and
all reasonable costs, attorneys’ fees, expenses and liabilities incurred with respect to any such
Landlord Indemnified Claims to the extent the same shall be brought against Tenant by reason of
claims subject to this indemnity. Landlord’s and Tenant’s indemnification obligations under this
paragraph will survive the expiration or earlier termination of this Lease and are not intended to
and will not relieve any insurance carrier of its obligations under policies required to be carried
by Landlord and/or by Tenant pursuant to the provisions of this Lease.

     As used herein, the term “liabilities” shall include all suits, actions, claims and demands
and all expenses (including attorneys’ fees and costs of defense) incurred in or about any such
liability and any action or proceeding brought thereon. If any claim shall be made or any action
or proceeding brought against Landlord on the basis of any liability described in this
Paragraph 15, Tenant shall, upon notice from Landlord, defend the same at Tenant’s expense by
counsel reasonably satisfactory to Landlord. It is understood that payment shall not be a
condition precedent to recovery upon the foregoing indemnity.

16. INSURANCE.

     Tenant, at its cost, shall pay for and keep in full force and effect throughout the Term of
this Lease:

     (a) COMMERCIAL GENERAL LIABILITY insurance with respect to the Premises and the operations by
or on behalf of Tenant in, on or about the Premises, including, but not limited to, personal
injury, product liability (if applicable), blanket contractual, owner’s protective, broad form
property damage liability, liquor liability (if applicable) and owned and non-owned automobile
liability in an amount not less than $5,000,000 per occurrence. The insurance policy or policies
shall contain the following provisions: (1) severability of interest, (2) cross-liability, (3) an
endorsement naming Landlord, Landlord’s Mortgagees and Ground Lessors (as defined in
Subparagraph 34(m) below) if any, and any other parties-in-interest designated by Landlord as
additional insureds, (4) an endorsement stating “such insurance as is afforded by this policy for
the benefit of Landlord and any other additional insured shall be primary as respects any liability
or claims arising out of the occupancy of the Premises by the Tenant, or Tenant’s operations and
any insurance carried by Landlord, or any other additional insured shall be non-contributory,”
(5) with respect to improvements or alterations permitted under this Lease, contingent liability
and builder’s risk insurance, (6) an endorsement allocating to the Premises the full amount of
liability limits required by this Lease, and (7) coverage must be on an “occurrence basis.”
“Claims-Made” forms are not acceptable.

     (b) WORKERS COMPENSATION COVERAGE as required by law, together with Employers Liability
coverage with a limit of not less than $2,000,000.

     (c) TENANT’S PROPERTY INSURANCE: Tenant shall at all times during the Term hereof and at its
cost and expense, maintain in effect policies of insurance covering (1) all Tenant Improvements
and/or other alterations on the Premises installed by or on behalf of Tenant, (2) all personal
property of Tenant located in or at the Premises, including, but not limited to, fixtures,
furnishings, equipment and furniture, in an amount not less than their full replacement value, and
(3) loss of income or business interruption insurance. These policies shall provide protection
against any peril included normally covered under ISO Special Forms coverage (comparable to former
“All Risk” coverage), including, but not limited to, insurance against sprinkler leakage, vandalism
and malicious mischief. The proceeds of such insurance shall be used to repair or replace the
Tenant Improvements and personal property so insured. Tenant shall, at its cost, maintain rental
abatement insurance assuring that the rent payable hereunder will be paid to Landlord for a period
of not less than twelve (12) months if rent is to abate under any provision of this Lease or
applicable law. Such coverage shall include a sixty (60) day extended period of indemnity
endorsement.

     All policies of insurance required hereunder (other than commercial general liability) shall
include a clause or endorsement denying the insurer any rights of subrogation against the other
party to the extent rights have been waived by the insured before the occurrence of injury or loss,
if same are obtainable without unreasonable cost. Landlord and Tenant each hereby waive any rights
of recovery against the other for injury or loss to such waiving party or to its property or the
property of others under its control, arising from any cause insured against under any policy of
insurance required to be carried by such waiving party under this Lease (other than commercial
general liability). The foregoing waiver shall be effective whether or not the waiving party shall
actually obtain and maintain the insurance which such waiving party is obligated to obtain and
maintain under this Lease.

     All insurance required to be provided by Tenant under this Lease: (a) shall be issued by
insurance companies authorized to do business in the state in which the Premises are located and
holding a General Policyholders Rating of “A” and a Financial Rating of “X” or better, as set forth
in the most recent edition of Best’s Insurance Reports; and (b) shall contain an endorsement
requiring at least thirty (30) days prior written notice to Landlord and Landlord’s lender, before
cancellation or change in coverage, scope or amount of any policy. Tenant shall deliver a
certificate or copy of such policy together with evidence of payment of all current premiums to
Landlord within thirty (30) days of execution of this Lease and within fifteen (15) days of
expiration of each policy. Tenant’s failure to provide evidence of such coverage to Landlord may,
in Landlord’s sole discretion, constitute a default under this Lease.

     Subject to being reimbursed by Tenant, Landlord shall insure the Building and the Premises
Land (excluding all property which Tenant is obligated to insure) by obtaining and maintaining
property insurance for any and all reasonable risks (including (i) earthquake insurance in an
amount not to exceed the probable maximum loss and (ii) flood insurance) and public liability
insurance providing coverage in an amount of not less than $3,000,000

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and with such deductibles as Landlord considers appropriate, taking into account what
deductibles are maintained by similar institutional landlords of similar properties in the general
vicinity of the Building. Tenant shall pay, as additional rent, Tenant’s Share of the cost of any
insurance maintained by Landlord hereunder and any other insurance Landlord may reasonably elect to
obtain for the Building and/or the Premises Land from time to time during the Term (including,
without limitation, earthquake, flood, terrorism and/or environmental insurance), taking into
account the types of insurance maintained by similar institutional landlords of similar properties
in the general vicinity of the Building; provided, however, the foregoing insurance policy amounts
may be increased, and related deductibles may be increased or decreased, from time to time by
Landlord (however, not more than once per annum), taking into account what other similar
institutional landlords of similar properties in the general vicinity of the Building maintain.
Such property insurance required to be provided by Landlord will include an express waiver of
subrogation by the insurer in favor of Tenant, and will release Tenant from any claims for damage
to the Premises and to Landlord’s personal property, equipment and improvements in or on the
Premises, caused by or resulting from risks which are insured against by Landlord. Tenant shall
pay, as additional rent, Tenant’s Share of all such insurance premiums to Landlord in advance
monthly installments equal to one twelfth (1/12) of Landlord’s reasonable estimate of the insurance
premiums payable under this Lease, together with monthly installments of Basic Rent, and Landlord
shall hold such payments in a non-interest bearing account. Upon determination of the actual
insurance premium due and payable, Landlord shall determine and notify Tenant of any deficiency in
the impound account and Tenant shall pay any deficiency of funds in the impound account not less
than twenty (20) days in advance of the date such insurance premium or installment of premiums is
due and payable. In the event Landlord fails to deliver such timely deficiency determination and
notice to Tenant, then Tenant shall have twenty (20) days from receipt of such notice to remit
payment of such deficiency to Landlord. If Landlord determines that Tenant’s impound account has
accrued an amount in excess of the insurance premiums due and payable, then such excess shall be
credited to Tenant within 30-days following the date of said notice from Landlord.

     Notwithstanding any contribution by Tenant to the cost of insurance premiums as provided
herein, Tenant acknowledges that it has no right to receive any proceeds from any insurance
policies carried by Landlord.

17. DESTRUCTION.

     (a) Casualty. If during the Term of this Lease, any portion of the Premises, access
to the Premises or any part of the Building which is essential to the use of the Premises is
damaged or destroyed and such damage or destruction can, in Landlord’s contractor’s reasonable
estimation, be repaired within 270 days following such damage or destruction, and Landlord receives
insurance proceeds sufficient to restore such damage, then this Lease shall remain in full force
and effect and Landlord shall promptly commence to repair and restore the damage or destruction to
substantially the same condition as existed prior to such damage and shall complete such repair and
restoration with due diligence in compliance with all then existing laws. Notwithstanding the
foregoing, if (1) such damage or destruction cannot, in Landlord’s contractor’s reasonable
estimate, be repaired within 270 days following such damage or destruction; or (2) more than forty
percent (40%) of the Building is damaged or destroyed; or (3) any Mortgagee of the Building will
not allow the application of insurance proceeds for repair and restoration; or (4) the damage or
destruction is not covered in full by Landlord’s Insurance required by Paragraph 16, subject to the
deductible, or (5) the damage or destruction occurs within the last twelve (12) months of the Term
of this Lease or any extension hereof, then Landlord may, in its sole discretion, terminate this
Lease by delivery of notice to Tenant within 30 days of the date Landlord learns of the damage.
Further notwithstanding the foregoing, if (i) such damage or destruction cannot, in Landlord’s
contractor’s reasonable estimate, be repaired within 270 days following such damage or destruction,
or (ii) such damage or destruction is not fully repaired within twelve (12) months following the
date of such damage or destruction, extended to the extent of any delays caused by Tenant and any
delays of force majeure, or (iii) the damage or destruction occurs within the last twelve (12)
months of the Term of this Lease or any extension hereof, then Tenant may, in its sole discretion,
terminate this Lease by delivery of notice to Landlord within 30 days of the date of the damage (if
Tenant is exercising its right to terminate for the reason set forth in clauses (i) or (iii)
above), or within 10 days of the date of the damage (if Tenant is exercising its right to terminate
for the reason set forth in clause (ii) above).

     (b) Rent Abatement. In the event of repair, reconstruction and restoration by
Landlord as herein provided, the rent payable under this Lease shall be abated proportionately to
the extent any portion of the Premises is rendered untenantable during the period of such repair,
reconstruction or restoration; provided that there shall be no abatement of rent if such damage is
the result of Tenant’s negligence or intentional wrongdoing. Tenant shall not be entitled to any
compensation or damages for loss in the use of the whole or any part of the Premises, damage to
Tenant’s personal property and/or any inconvenience or annoyance occasioned by such damage, repair,
reconstruction or restoration.

     (c) Repair or Restoration. If Landlord is obligated to or elects to repair or restore
as herein provided, Landlord shall be obligated to make repair or restoration only to those
portions of the Building and the Premises which were originally provided at Landlord’s expense, and
the repair and restoration of items not provided at Landlord’s expense shall be the obligation of
Tenant. Tenant agrees to coordinate the restoration and repair of those items it is required to
restore or repair with Landlord’s repair and restoration work and in accordance with a work
schedule prepared by Landlord, or Landlord’s contractor. Further, Tenant’s work shall be performed
in accordance with the terms, standards and conditions contained in Paragraph 14 above.

     (d) Waiver. The provisions of California Civil Code Section 1932, Subsection 2, and
Section 1933, Subsection 4, and any other similarly enacted statute or court decision relating to
the abatement or termination of a lease upon destruction of the leased premises, are hereby waived
by Tenant; and the provisions of this Paragraph 17 shall govern in case of such destruction.

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18. CONDEMNATION.

     (a) Definitions. The following definitions shall apply: (1) “Condemnation” and/or
“Taking” means (a) the exercise of any governmental power of eminent domain, whether by legal
proceedings or otherwise by condemnor, or (b) the voluntary sale or transfer by Landlord to any
condemnor either under threat of condemnation or while legal proceedings for condemnation are
proceeding; (2) “Date of Taking” means the date the condemnor has the right to possession of the
property being condemned; (3) “Award” means all compensation, sums or anything of value awarded,
paid or received on a total or partial condemnation; and (4) “Condemnor” means any public or
quasi-public authority, or private corporation or individual, having a power of condemnation.

     (b) Obligations to be Governed by Lease. If during the Term of this Lease there is
any Taking of all or any part of the Premises, the rights and obligations of the parties shall be
determined pursuant to this Lease.

     (c) Total or Partial Taking. If the Premises is taken in its entirety by
condemnation, this Lease shall terminate on the date of Taking. If any portion of the Premises is
taken by condemnation, this Lease shall remain in effect, except that Tenant may elect to terminate
this Lease if the remaining portion of the Premises is rendered unsuitable for Tenant’s continued
use of the Premises. If Tenant elects to terminate this Lease, Tenant must exercise its right to
terminate by giving notice to Landlord within 20 days after receipt of notice of the Taking from
Landlord. If Tenant elects to terminate this Lease, Tenant shall also notify Landlord of the date
of termination, which date shall not be earlier than 30 days nor later than 90 days after Tenant
has notified Landlord of its election to terminate; except that this Lease shall terminate on the
date of Taking if the date of Taking falls on a date before the date of termination as designated
by Tenant. If any portion of the Premises is taken by condemnation and this Lease remains in full
force and effect, on the date of taking the rent shall be reduced by an amount in the same ratio as
the total number of square feet in the portion of the Premises taken bears to the total number of
square feet in the Premises immediately before the Date of Taking. In the case where a portion of
the Premises is taken and the Lease remains in full force and effect, Landlord shall, at its own
cost and expense, to the extent of condemnation proceeds, make all alterations or repairs to the
Building so as to make the portion of the Building not taken a complete architectural unit. Such
work shall not, however, exceed the scope of work done by Landlord in originally constructing the
Building. If severance damages from the condemnor are not available to Landlord in sufficient
amounts to permit such restoration, Landlord may terminate this Lease upon written notice to
Tenant. Rent due and payable hereunder shall be temporarily abated during such restoration period
in proportion to the extent to which there is substantial interference with Tenant’s use of the
Premises, as reasonably determined by Tenant and Landlord. Each party hereby waives the provisions
of Section 1265.130 of the California Code of Civil Procedure and any present or future law
allowing either party to petition the Superior Court to terminate this Lease in the event of a
partial taking of the Building or Premises.

     If the Premises are totally or partially taken by condemnation, Tenant shall not assert any
claim against Landlord or the condemnor for any compensation because of such Taking, and Landlord
shall be entitled to receive the entire amount of the award without any deduction for any estate or
interest of Tenant; provided, however, Tenant shall, so long as the same does not work to reduce
Landlord’s award, have the right to file any claim available to Tenant under applicable law for any
taking of any leasehold improvements paid for by Tenant (which may include any improvements paid
for from any allowance provided by Landlord) and of any trade fixtures and personal property of
Tenant, for interruption in Tenant’s business, and/or for moving and relocation expenses, fees of
consultants, brokers, attorneys and other professionals incurred by Tenant in connection with
moving to another location.

19. ASSIGNMENT OR SUBLEASE.

     Tenant shall not assign or encumber its interest in this Lease or any portion of the Premises
or sublease all or any part of the Premises or allow any other person or entity (except Tenant’s
authorized representatives, employees, invitees, or guests) to occupy or use all or any part of the
Premises without first obtaining Landlord’s consent, which consent shall not be unreasonably
withheld, conditioned or delayed. In addition to any other reasonable grounds upon which Landlord
may withhold its consent, Landlord shall be deemed reasonable in withholding its consent if it
determines in its sole discretion that: (i) the tangible net worth of the proposed assignee or
sublessee, as shown on its most recently published, audited financial statement (or, if no such
statement exists, as certified by its chief financial officer), is not equal to or greater than Two
Hundred Million and No/100 Dollars ($200,000,000.00); (ii) the intended uses of the Premises by the
proposed assignee or sublessee will either (a) constitute a violation of this Lease or any
governmental law, rule, ordinance or regulation governing the Premises or (b) involve the storage,
use or keeping of Hazardous Materials in, on or about the Premises in violation of the terms of
this Lease, or (c) will require an alteration of the Premises in violation of the terms of this
Lease; or (iii) the proposed assignee or sublessee is a tenant of Landlord in the Project or has
negotiated to be a tenant of Landlord in the Project any time in the six (6) months just preceding
Tenant’s request for Landlord’s consent. Any assignment, encumbrance or sublease without
Landlord’s written consent shall be voidable and at Landlord’s election, shall constitute a default
hereunder. Landlord’s waiver or consent to any assignment or subletting shall not relieve Tenant
or any assignee or sublessee from any obligation under this Lease whether or not accrued.

     If Tenant is a partnership, a withdrawal or change, voluntary, involuntary or by operation of
law of any partner, or the dissolution of the partnership, shall be deemed a voluntary assignment.
If Tenant is a corporation, any dissolution, merger, consolidation or other reorganization of
Tenant, or sale or other transfer of a controlling percentage of the capital stock of Tenant, or
the sale of at least 50% of the value of the assets of Tenant shall be deemed a voluntary
assignment. The phrase “controlling percentage” means ownership of and right to vote stock
possessing at least 50% of the total combined voting power of all classes of Tenant’s capital stock
issued, outstanding and entitled to vote for election of directors. The preceding two sentences of
this paragraphs shall not apply to corporations the stock of which is traded through a public
exchange. If Landlord shall consent to any

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assignment or sublease of this Lease, 50% of all sums and other consideration payable to or
for the benefit of the Tenant from its assignees or subtenants in excess of the rent payable by
Tenant to Landlord under this Lease shall be paid to Landlord, as and when such sums are due and
payable.

     If Tenant requests Landlord’s consent to an assignment or sublease, Tenant shall submit to
Landlord, in writing, the name of the proposed assignee or subtenant and the nature and character
of the business of the proposed assignee or subtenant, the term, use, rental rate and all other
material terms and conditions of the proposed assignment or sublease, including, without
limitation, evidence satisfactory to Landlord that the proposed assignee or subtenant satisfies the
financial criteria set forth in the first paragraph of this Paragraph 19, thirty (30) days prior to
the proposed effective date of such assignment or sublease. Tenant shall also submit to Landlord a
processing fee of One Thousand Dollars ($1,000.00) as a condition to Landlord reviewing Tenant’s
proposed assignment or subletting materials. Landlord shall within ten (10) business days after
Landlord’s receipt of such written request and information either (i) consent to or refuse to
consent to such assignment or sublease in writing (but no such consent to an assignment or sublease
shall relieve Tenant or any guarantor of Tenant’s obligations under this Lease of any liability
hereunder), (ii) in the event of a proposed assignment of this Lease or a proposed sublease of the
entire Premises for the entire remaining Term of this Lease, terminate this Lease effective the
first to occur of ninety (90) days following written notice of such termination or the date that
the proposed assignment or proposed sublease would have come into effect. If Landlord should fail
to notify Tenant in writing of its decision within such ten (10) business day period after the
later of the date Landlord is notified in writing of the proposed assignment or sublease or the
date Landlord has received all required information concerning the proposed assignee or subtenant
and the proposed assignment or sublease, Landlord shall be deemed to have refused to consent to
such assignment or sublease, and to have elected to keep this Lease in full force and effect;
provided, however, if Landlord shall be deemed to have refused to consent to such assignment or
sublease as stated in this sentence above, Tenant may deliver to Landlord an additional request for
Landlord’s consent to such assignment or sublease (“Tenant’s Additional Assignment/Subletting
Notice”). In the event Landlord fails to either approve or disapprove such assignment or sublease
in accordance with the terms of this Lease within two (2) business days following Landlord’s
receipt of Tenant’s Additional Assignment/Subletting Notice, Landlord shall be deemed to have
granted its consent to such assignment or sublease. Tenant acknowledges that the Tenant’s
Additional Assignment/Subletting Notice will not be deemed given to Landlord unless the same
contains the following language (in at least 12 point, bold face and all capital letters):
"LANDLORD’S FAILURE TO EITHER APPROVE OR DISAPPROVE SUCH ASSIGNMENT OR SUBLEASE IN ACCORDANCE WITH
THE TERMS OF THIS LEASE WITHIN TWO (2) BUSINESS DAYS FOLLOWING RECEIPT OF THIS NOTICE MAY RESULT IN
LANDLORD BEING DEEMED TO HAVE CONSENTED TO SUCH ASSIGNMENT OR SUBLEASE PURSUANT TO PARAGRAPH 19 OF
THE LEASE”. If Tenant requests Landlord’s consent to any such assignment or sublease, the
assignment shall be on a form reasonably acceptable to Landlord, and Tenant shall pay Landlord,
whether or not consent is ultimately given, any reasonable attorneys’ fees and other costs incurred
in connection with the preparation, review and/or approval of such documentation.

     No interest of Tenant in this Lease shall be assignable by involuntary assignment through
operation of law (including, without limitation, the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary assignment: (a) If
Tenant is or becomes bankrupt or insolvent, makes an assignment for the benefit of creditors, or
institutes proceedings under the Bankruptcy Act in which Tenant is the bankrupt; or if Tenant is a
partnership or consists of more than one person or entity, if any partner of the partnership or
other person or entity is or becomes bankrupt or insolvent, or makes an assignment for the benefit
of creditors; or (b) If a writ of attachment or execution is levied on this Lease; or (c) If in any
proceeding or action to which Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease, in which case this Lease shall not
be treated as an asset of Tenant.

     No assignment or subletting, occupancy or collection of rent from any proposed assignee or
sublessee shall be deemed a waiver on the part of Landlord, or the acceptance of the applicable
assignee or sublessee, as applicable, as Tenant, and no such assignment or subletting shall release
Tenant of Tenant’s obligations under this Lease or alter the primary liability of Tenant to pay
rent and to perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any assignee or sublessee remit directly to Landlord on a monthly basis, all monies
due Tenant by said assignee or sublessee, and each sublease shall provide that if Landlord gives
said sublessee written notice that Tenant is in default under this Lease, said sublessee will
thereafter make all payments due under the sublease directly to or as directed by Landlord, which
payments will be credited against any payments due under this Lease. Tenant hereby irrevocably and
unconditionally assigns to Landlord all rents and other sums payable under any sublease of the
Premises; provided, however, that Landlord hereby grants Tenant a license to collect all such rents
and other sums so long as Tenant is not in default under this Lease. Consent by Landlord to one
assignment or subletting shall not be deemed consent to any subsequent assignment or subletting.
In the event of default by any assignee or sublessee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee or sublessee or successor. Landlord may
consent to subsequent assignments of the Lease or sublettings or amendments or modifications to the
Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and any such actions shall not relieve Tenant of liability
under this Lease; provided, however, the foregoing is not intended to render any such subsequent
assignment or sublease effective, but rather to permit Landlord to execute any counterpart consent
without first confirming that Tenant has consented to such assignment and/or sublease. Tenant
hereby waives (for itself and all persons claiming under Tenant) the provisions of Civil Code
Section 1995.310.

     Notwithstanding the terms of this Paragraph 19, Tenant may effect an assignment or subletting,
without Landlord’s consent, to any parent, subsidiary or affiliate entity which controls, is
controlled by, or is under common control with, Tenant, or to any entity resulting from a merger or
consolidation of Tenant, or to any person or entity

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which acquires all or substantially all of the assets of Tenant’s business as a going concern
(a “Permitted Transferee”), provided that (a) Tenant delivers to Landlord, at least thirty (30)
days prior to such transfer, written notice of same (unless such notice would violate applicable
security laws and Landlord is unwilling to sign a non-disclosure statement), (b) the assignee (if
applicable) assumes in full the obligations of Tenant under this Lease arising after the effective
date of the transfer, and (c) Tenant remains fully liable under this Lease (provided Tenant shall
not be required to continue its existence for the sole purpose of complying with this clause (c) if
this Lease would be Tenant’s only remaining liability and such transfer is not otherwise used as a
subterfuge to avoid Tenant’ obligations hereunder).

20. DEFAULT.

     The occurrence of any of the following shall constitute a default by Tenant under this Lease:
(a) A failure to pay rent or any other charge within five (5) calendar days after receipt of
written notice of such failure from Landlord, provided Landlord shall only be obligated to provide
such a written notice once during any twelve (12) month period and thereafter during such twelve
(12) month period the failure to pay rent or other charge within five (5) calendar days of when due
shall automatically constitute a default by Tenant hereunder; (b) Abandonment of the Premises
(failure to occupy and operate the Premises for thirty (30) consecutive days without paying rent
shall be deemed an abandonment); (c) The making by Tenant of any general assignment for the benefit
of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a
petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the
case of a petition filed against Tenant, the same is dismissed within forty-five (45) days; the
appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets
located at the Premises or of Tenant’s interest in this Lease, or of substantially all of Tenant’s
assets located at the Premises or of Tenant’s interest in this Lease, where possession is not
restored to Tenant within forty-five (45) days; the attachment, execution or other judicial seizure
of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this
Lease where such seizure is not discharged within forty-five (45) days; or if this Lease shall, by
operation of law or otherwise, pass to any person or persons other than Tenant except as provided
in Paragraph 19 herein; (d) The failure of Tenant to timely comply with the provisions of
Paragraph 24 or Paragraph 31 of this Lease regarding, respectively, Subordination and Estoppel
Certificates; or (e) The failure of Tenant to perform any other provision of this Lease within
thirty (30) days following receipt of written request from Landlord, provided, if the nature of
Tenant’s obligation is such that more than thirty (30) days is required for performance, then
Tenant shall not be in default under this clause (e) if Tenant commences performance within such
thirty (30) day period and thereafter diligently prosecutes the same to completion.

21. LANDLORD’S REMEDIES.

     Landlord shall have the remedies described in this Paragraph 21 if Tenant is in default
hereunder. These remedies are not exclusive; they are cumulative and in addition to any remedies
now or later allowed by law (including, without limitation, to the extent the Premises are located
in California, the remedies of Civil Code Section 1951.4 and any successor statute or similar law,
which provides that Landlord may continue this Lease in effect following Tenant’s breach and
abandonment and collect rent as it falls due, if Tenant has the right to sublet or assign, subject
to reasonable limitations).

     Upon any default by Tenant, Landlord may:

     (a) Maintain this Lease in full force and effect and recover the rent and other monetary
charges as they become due, without terminating Tenant’s right to possession irrespective of
whether Tenant shall have abandoned the Premises. If Landlord elects not to terminate this Lease,
Landlord shall have the right to attempt to relet the Premises at such rent and upon conditions,
and for such a term, and to do all acts necessary to maintain or preserve the Premises, as Landlord
deems reasonable and necessary, without being deemed to have elected to terminate this Lease,
including re-entering the Premises to make repairs or to maintain or modify the Premises, and
removing all persons and property from the Premises; such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the account of Tenant. Reletting may be for a
period shorter or longer than the remaining Term of this Lease, and for more or less rent, but
Landlord shall have no obligation to relet at less than prevailing market rental rates. If
reletting occurs, this Lease shall terminate automatically when the new tenant takes possession of
the Premises. Notwithstanding that Landlord fails to elect to terminate the Lease initially,
Landlord at any time thereafter may elect to terminate the Lease by virtue of any previous uncured
default by Tenant. In the event of any such termination, Landlord shall be entitled to recover
from Tenant all damages incurred by Landlord by reason of Tenant’s default, as well as all costs of
reletting, including, without limitation, brokerage commissions and/or finder’s fees, attorneys’
fees, and restoration or remodeling costs.

     (b) Terminate Tenant’s right to possession by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such
event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason
of Tenant’s default including, without limitation thereto, the following: (i) the worth, at the
time of award, of any unpaid rent which had been earned at the time of such termination; plus
(ii) 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 (iii) the worth, at the time of award, of the
amount by which the unpaid rent for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably avoided; plus (iv) any
other amount, and court costs, necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s default or which in the ordinary course of things would be likely to result
there from (including, without limiting the generality of the foregoing, the amount of any
brokerage commissions and/or finder’s fees for a replacement tenant, maintaining the Premises after
such default, and preparing the Premises for reletting); plus (v) 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. As used in (i) and (ii) above,

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the “worth at the time of the award” is computed by allowing interest at the Interest Rate.
As used in (iii) above, the “worth at the time of the award” is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one
percent (1%). Tenant hereby waives for Tenant and all those claiming under Tenant all rights now
or hereafter existing, including, without limitation, any rights under California Code of Civil
Procedure Sections 1174 and 1179 and Civil Code Section 1950.7 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.

     (c) Collect sublease rents (or appoint a receiver to collect such rents) and otherwise perform
Tenant’s obligations at the Premises, it being agreed, however, that neither the filing of a
petition for the appointment of a receiver for Tenant nor the appointment itself shall constitute
an election by Landlord to terminate this Lease.

     (d) Proceed to cure the default at Tenant’s sole cost and expense. If at any time Landlord
pays any sum or incurs any expense as a result of or in connection with curing any default of
Tenant, the amount thereof shall be deemed additional rent hereunder and shall be immediately due
and payable by Tenant to Landlord upon demand.

     (e) Subject to the rights of any third party lenders, retain possession of all Tenant’s
fixtures, furniture, equipment, improvements, additions, and other personal property in the
Premises and, continue during the length of said default, to use same, rent or charge free, until
all defaults are cured; or, upon the termination of this Lease, to require Tenant to forthwith
remove same at Tenant’s sole cost and expense.

     (f) Pursue any and all other legal or equitable remedies as may be available to Landlord by
reason of such default by Tenant.

     The remedies of Landlord, as hereinabove provided, are cumulative and in addition to and not
exclusive of any other remedy of Landlord herein given or which may be permitted by law. The
remedies of Landlord, as hereinabove provided, are subject to the other provisions herein. Nothing
contained in this Paragraph 21 shall constitute a waiver of Landlord’s right to recover damages by
reason of Landlord’s efforts to mitigate the damage to it caused by Tenant’s default; nor shall
anything herein adversely affect Landlord’s right, as in this Lease elsewhere provided, to
indemnification against liability for injury or damage to persons or property occurring prior to
the termination of this Lease.

22. DEFAULT BY LANDLORD.

     Landlord shall not be in default hereunder unless Landlord fails to perform the obligations
required of Landlord within thirty (30) days after written notice by Tenant to Landlord and to any
Mortgagee or Ground Lessor (as defined in Subparagraph 34(m) below) specifying wherein Landlord has
failed to perform such obligation; provided, however, that if the nature of Landlord’s obligation
is such that more than thirty (30) days is required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate
this Lease as a result of Landlord’s default; Tenant’s remedies shall be limited to any other
remedy available at law or in equity; provided, however, notwithstanding anything herein to the
contrary, under no circumstances shall Landlord be liable hereunder to Tenant for any consequential
damages or for loss of business, revenue, income or profits and Tenant hereby waives any and all
claims for any such damages. Except as expressly provided in this Paragraph 22 below, nothing
herein contained shall be interpreted to mean that Tenant is excused from paying rent due hereunder
as a result of any default by Landlord.

     Notwithstanding anything to the contrary contained in this Lease, if Landlord fails to perform
any of its repair and/or maintenance obligations under Paragraph 13(b) of this Lease and does not
cure such default within the time period provided above, then Tenant shall be permitted to perform
such repair and/or maintenance obligation on Landlord’s behalf and at Landlord’s sole cost and
expense, provided Tenant first delivers to Landlord an additional two (2) business days prior
written notice (“Tenant’s Self-Help Notice”) that Tenant will be performing such obligations, and
provided Landlord fails to commence such cure within such additional two (2) business day period.
Tenant acknowledges that Tenant’s Self-Help Notice will not be deemed given to Landlord unless the
same contains the following language (in at least 12 point, bold face and all capital letters):
"LANDLORD’S FAILURE TO PERFORM THE HEREIN DESCRIBED REPAIR AND/OR MAINTENANCE OBLIGATION WITHIN
TWO (2) BUSINESS DAYS FOLLOWING RECEIPT OF THIS LETTER MAY RESULT IN TENANT EXERCISING ITS
SELF-HELP RIGHT PURSUANT TO PARAGRAPH 22 OF THE LEASE”. Any such cure by Tenant of a default by
Landlord under Subparagraph 13(b) above shall be performed in accordance with provisions of
Subparagraph 14(b) of this Lease. Landlord agrees to reimburse Tenant, within thirty (30) days
following Landlord’s receipt of a written statement, for all reasonable and actual costs incurred
by Tenant in performing such obligations on behalf of Landlord. If Landlord fails to pay such
amount prior to the expiration of such thirty (30) day period, Tenant may at its election bring an
arbitration action for damages against Landlord on account thereof (an “Action”) in accordance with
the terms of Rider 2 attached to this Lease. In the event Tenant is able to obtain a monetary
judgment against Landlord from the arbitrator in connection with said Action (the “Judgment”) and
Landlord fails to pay the amount of such Judgment (the “Judgment Amount”) within thirty (30) days
following entry of such Judgment, then and only then shall Tenant have the right to offset the
Judgment Amount against up to fifty percent (50%) of any monthly installment of Basic Rent next due
Landlord and any succeeding monthly installments of Basic Rent until fully satisfied from such
offset.

23. ENTRY OF PREMISES AND PERFORMANCE BY TENANT.

     Landlord and its authorized representatives shall have the right, upon 24-hours advance notice
(emergencies excepted, in which case no prior notice shall be necessary), to enter the Premises at
all reasonable

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times for any of the following purposes without abatement of rent or liability to Tenant:
(a) To determine whether the Premises is in good condition and whether Tenant is complying with its
obligations under this Lease; (b) To do any necessary maintenance and to make any restoration to
the Premises or the Building that Landlord has the right or obligation to perform; (c) To post “for
sale” signs at any time during the Term, to post “for rent” or “for lease” signs during the last
twelve (12) months of the Term, or during any period while Tenant is in default; (d) To show the
Premises to prospective brokers, agents, buyers, tenants or persons interested in an exchange, at
any time during the Term; (e) To repair, maintain or improve the Premises and to erect scaffolding
and protective barricades around and about the Premises but not so as to prevent entry to the
Premises and to do any other act or thing necessary for the safety or preservation of the Premises;
or (f) To discharge Tenant’s obligations hereunder when Tenant has failed to do so in accordance
with the terms of this Lease. So long as Landlord uses its commercially reasonable efforts not to
interfere with Tenant’s operation at the Premises, Landlord shall not be liable in any manner for
any inconvenience, disturbance, loss of business, nuisance or other damage arising of out
Landlord’s entry onto the Premises as provided in this Paragraph 23. Tenant shall not be entitled
to an abatement or reduction of rent if Landlord exercises any rights reserved in this
Paragraph 23. For each of these purposes, Landlord shall at all times have and retain a key with
which to unlock all the doors in, upon and about the Premises. Notwithstanding anything to the
contrary in this Section 23 or elsewhere in the Lease, Landlord hereby acknowledges that
(A) certain portions of the Premises will not be accessible by Landlord due to either (i) the
proprietary nature of the activities occurring therein and/or (ii) applicable rules, regulations
and laws, including those enforced by the FDA, (B) Tenant shall have the right to have an escort
accompany Landlord during any Landlord entry upon the Premises, and (C) all Landlord entries upon
the Premises shall be subject to any laws and/or regulations issued by the FDA and/or any other
applicable governmental authority with jurisdiction over Tenant’s operations at the Premises for
the Specific Use of which Landlord is aware or is made aware of by Tenant.

     All covenants and agreements to be performed by Tenant under any of the terms of this Lease
shall be performed by Tenant at Tenant’s sole cost and expense without any abatement of rent. If
Tenant shall fail to pay any sum of money to any third party which Tenant is obligated to pay under
this Lease or shall fail to perform any other act on its part to be performed hereunder, and such
failure shall continue for twenty (20) days after notice thereof by Landlord (or such other period
as specifically provided herein), Landlord may, without waiving or releasing Tenant from any
obligations of Tenant, but shall not be obligated to, make any such payment or perform any such
other act on Tenant’s part to be made or performed in this Lease, without liability to Tenant for
any loss or damage which might occur to Tenant’s merchandise, fixtures or other property or to
Tenant’s business by reason thereof, and upon completion thereof, Tenant shall pay to Landlord all
sums so paid by Landlord and all necessary incidental costs for making such repairs plus ten
percent (10%) for overhead, upon presentation of a bill therefor. Said bill shall include interest
on all sums so paid by Landlord and all necessary incidental costs for making such repairs at the
Interest Rate, from the date of such payment by Landlord. Tenant covenants to pay any such sums to
Landlord upon demand, and Landlord shall have (in addition to all other rights or remedies of
Landlord) the same rights and remedies in the event of the nonpayment thereof by Tenant as in the
case of default by Tenant in the payment of rent.

24. SUBORDINATION.

     Without the necessity of any additional document being executed by Tenant for the purpose of
effecting a subordination, and unless otherwise elected by Landlord or any Mortgagee (defined
below) with a lien on the Premises or any Ground Lessor (defined below) with respect to the
Premises (or any part thereof), this Lease shall be subject and subordinate at all times to (a) all
ground leases or underlying leases which may now exist or hereafter be executed affecting the
Premises, or the land upon which the Premises is situated, or both, and (b) the lien of any
mortgage or deed of trust which may now exist or hereafter be executed in any amount for which the
Premises, ground leases or underlying leases, or Landlord’s interest or estate in any of said items
is specified as security. Notwithstanding the foregoing, Tenant acknowledges that Landlord shall
have the right to subordinate or cause to be subordinated this Lease to any such ground leases or
underlying leases or any such liens. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any subordination, attorn to and
become the tenant of the successor in interest to Landlord, at the option to such successor in
interest. Tenant covenants and agrees to execute and deliver, upon demand by Landlord and in the
form requested by Landlord any additional documents evidencing the priority or subordination of
this Lease with respect to any such ground lease or underlying leases or the lien of any such
mortgage or deed of trust. Tenant and Landlord each agree to be responsible for its own attorneys’
fees and costs incurred in connection with any negotiation or modification of Landlord’s lender’s
standard subordination agreement form.

     Further notwithstanding the foregoing, Tenant’s obligation to subordinate this Lease and/or to
attorn to any such future Mortgagee or Ground Lessor shall be conditioned upon Landlord, Tenant and
any such future Mortgagee or Ground Lessor entering into a subordination, nondisturbance and
attornment agreement on such future Mortgagee’s or Ground Lessor’s standard form (with commercially
reasonable changes requested by Tenant), providing, among other things, that in the event of any
foreclosure of such lien or conveyance of the Premises in lieu of foreclosure, (A) Tenant will not
be disturbed in its possession of the Premises, so long as Tenant is not in default under this
Lease, and (B) Tenant shall attorn to and recognize such lienholder or purchaser at foreclosure and
their successors and assigns as the “Landlord” under this Lease from and after the date of such
foreclosure or conveyance in lieu of foreclosure.

25. NOTICE.

     Any notice, demand, request, consent, approval or communication desired by either party or
required to be given, shall be in writing and served personally or sent prepaid by commercial
overnight courier or prepaid certified first class mail (return receipt requested), addressed as
set forth in Subparagraphs 1(b) and 1(c). Either party may

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change its address by notification to the other party. Notice shall be deemed to be
communicated seventy-two (72) hours from the time of mailing (if sent via first class mail), or at
the time of service if sent by other than first class mail as provided in this Paragraph 25.

     26. WAIVER.

     No delay or omission in the exercise of any right or remedy by Landlord shall impair such
right or remedy or be construed as a waiver. No act or conduct of Landlord, including, without
limitation, acceptance of the keys to the Premises, shall constitute acceptance of the surrender of
the Premises by Tenant before the expiration of the Term. Only written notice from Landlord to
Tenant shall constitute acceptance of the surrender of the Premises and accomplish termination of
this Lease. Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent to or approval of
any subsequent act by Tenant. Any waiver by Landlord of any default must be in writing and shall
not be a waiver of any other default concerning the same or any other provision of this Lease.

27. LIMITATION OF LIABILITY.

     In consideration of the benefits accruing hereunder, Tenant and all successors and assigns of
Tenant covenant and agree that, in the event of any actual or alleged failure, breach or default
hereunder by Landlord or otherwise pertaining to any obligation of Landlord with respect to the
Building:

     (a) The liability of Landlord and/or any Landlord Indemnified Parties shall be limited solely
and exclusively to Landlord’s interest in the Building;

     (b) No member, partner, officer, director, owner, shareholder or advisor of Landlord shall be
sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction
of the entity in question);

     (c) No service of process shall be made against any member, partner, officer, director, owner,
shareholder or advisor of Landlord (except as may be necessary to secure jurisdiction of the entity
in question);

     (d) No member, partner, officer, director, owner, shareholder or advisor of Landlord shall be
required to answer or otherwise plead to any service of process;

     (e) No judgment may be taken against any member, partner, officer, director, owner,
shareholder or advisor of Landlord;

     (f) Any judgment taken against any member, partner, officer, director, owner, shareholder or
advisor of Landlord may be vacated and set aside at any time after the fact;

     (g) No writ of execution will ever be levied against the assets of any member, partner,
officer, director, owner, shareholder or advisor of Landlord;

     (h) The obligations under this Lease do not constitute personal obligations of any individual
member, partner, officer, director, owner, shareholder or advisor of Landlord, and Tenant shall not
seek recourse against any such persons or entities of Landlord or any of their personal assets for
satisfaction of any liability in respect to this Lease; and

     (i) These covenants and agreements are enforceable both by Landlord and also by any member,
partner, officer, director, owner, shareholder or advisor of Landlord.

     Tenant agrees that each of the foregoing provisions shall be applicable to any covenant or
agreement either expressly contained in this Lease or imposed by statute or at common law.

28. FORCE MAJEURE.

     Neither Landlord nor Tenant shall have any liability whatsoever to each other on account of
(a) the inability or delay of such party in fulfilling any of its obligations under this Lease by
reason of strike, other labor trouble, terrorism, governmental controls in connection with a
national or other public emergency, or shortages of fuel, supplies or labor resulting there from or
any other cause, whether similar or dissimilar to the above, beyond Landlord’s reasonable control;
or (b) any failure or defect in the supply, quantity or character of electricity or water furnished
to the Premises, by reason of any requirement, act or omission of the public utility or others
furnishing the Premises with electricity or water, or for any reason, whether similar or dissimilar
to the above, beyond its reasonable control. If this Lease specifies a time period for performance
of an obligation of Landlord or Tenant, that time period shall be extended by the period of any
delay in such party’s performance caused by any of the events of force majeure described above.
Notwithstanding the foregoing, the provisions of this Paragraph 28 will not operate to excuse
Tenant from prompt payment of rent or Landlord or Tenant from any other payments required under the
provisions of this Lease.

29. PROFESSIONAL FEES.

     (a) If Landlord should engage any professional including, without limitation, attorneys,
appraisers, accountants or environmental or other consultants for the purpose of bringing suit for
possession of the Premises, for the recovery of any sum due under this Lease, or because of the
breach of any provisions of this Lease, or for any other relief against Tenant hereunder, or in the
event of any other litigation between the parties with respect to this

- 18 -

 

Lease, then all reasonable costs and expenses including, without limitation, actual
professional fees such as appraisers’, accountants’, attorneys’ and other consultants’ fee,
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. If Landlord
employs a collection agency to recover delinquent charges, Tenant agrees to pay all collection
agency fees charged to Landlord in addition to rent, late charges, interest and other sums payable
under this Lease.

     (b) If Landlord is named as a defendant in any suit brought against Tenant in connection with
or arising out of Tenant’s occupancy hereunder, Tenant shall pay to Landlord its costs and expenses
incurred in such suit including, without limitation, its actual professional fees incurred,
including, without limitation, appraisers’, accountants’ and attorneys’ fees.

30. EXAMINATION OF LEASE.

     Submission of this instrument for examination or signature by Tenant shall not create a
binding agreement between Landlord and Tenant nor shall it constitute a reservation or option to
lease on the part of Tenant and this instrument shall not be effective as a lease and shall not
create any obligations on the part of Landlord or Tenant until this Lease has been validly executed
first by Tenant and second by Landlord, and delivered Tenant.

31. ESTOPPEL CERTIFICATE.

     (a) Within fifteen (15) days following any written request which Landlord may make from time
to time, Tenant shall execute and deliver to Landlord a statement (“Estoppel Certificate”), in a
form substantially similar to the form of Exhibit E attached hereto or in such other form as
Landlord’s lender or purchaser may reasonably require, certifying: (i) the date of commencement of
this Lease; (ii) the fact that this Lease is unmodified and in full force and effect (or, if there
have been modifications, stating the nature and date of such modifications), (iii) the date to
which the rent and other sums payable under this Lease have been paid; (iv) that there are no
current defaults under this Lease by either Landlord or Tenant except as specified in Tenant’s
statement; and (v) such other matters customarily contained in an estoppel certificate that are
requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this
Paragraph 31 may be relied upon by any Mortgagee, beneficiary, purchaser or prospective purchaser
of the Premises or any interest therein.

     (b) Tenant’s failure to deliver such statement within such time shall be conclusive upon
Tenant (i) that this Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord’s performance, and
(iii) that not more than one (1) month’s rent has been paid in advance. Tenant’s failure to
deliver said statement to Landlord within ten (10) days of receipt shall constitute a default under
this Lease and Landlord shall have the remedies provided in Paragraph 21.

     (c) Tenant hereby irrevocably appoints Landlord as Tenant’s attorney in fact, which
appointment is coupled with an interest, to act in Tenant’s name, place and stead to execute such
Estoppel Certificate on Tenant’s behalf.

32. RULES AND REGULATIONS.

     Tenant shall faithfully observe and comply with the “Rules and Regulations”, a copy of which
is attached hereto and marked Exhibit F, and all reasonable and nondiscriminatory modifications
thereof and additions thereto from time to time put into effect by Landlord. Landlord shall not be
responsible to Tenant for the violations or nonperformance by any other tenant or occupant of the
project of any of said Rules and Regulations.

33. LIENS.

     Tenant shall, within ten (10) days after receiving notice of the filing of any mechanic’s lien
for material or work claimed to have been furnished to the Premises on Tenant’s behalf or at
Tenant’s request, discharge the lien or post a bond equal to the amount of the disputed claim with
a bonding company reasonably satisfactory to Landlord. If Tenant posts a bond, it shall contest
the validity of the lien with all due diligence. Tenant shall indemnify, defend and hold Landlord
harmless from any and all losses and costs incurred by Landlord as a result of any such liens
attributable to Tenant. If Tenant does not discharge any lien or post a bond for such lien within
such ten (10) day period, Landlord may discharge such lien at Tenant’s expense and Tenant shall
promptly reimburse Landlord for all costs incurred by Landlord in discharging such lien including,
without limitation, attorneys’ fees and costs and interest on all sums expended at the Interest
Rate. Tenant shall provide Landlord with not less than ten (10) days written notice of its
intention to have work performed at or materials furnished to the Premises so that Landlord may
post appropriate notices of non-responsibility. Tenant shall pay upon demand Landlord’s attorneys’
fees and other costs incurred in connection with any request by Tenant for any subordination or
clarification of any Landlord lien right arising under this Lease or at law.

34. MISCELLANEOUS PROVISIONS.

     (a) Time of Essence. Time is of the essence of each provision of this Lease.

     (b) Successors. This Lease shall be binding on and inure to the benefit of the
parties and their successors, except as provided in Paragraph 19 herein.

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     (c) Landlord’s Consent. Any consent required by Landlord under this Lease must be
granted in writing and may be withheld by Landlord in its sole and absolute discretion, unless
otherwise expressly provided herein.

     (d) Commissions. Each party represents that it has not had dealings with any real
estate broker, finder or other person with respect to this Lease in any manner, except for the
broker(s) identified in Subparagraph 1(k) above, which broker(s) Landlord agrees to pay a
commission to pursuant to the terms of a separate agreement. If Tenant has dealt with any other
person or real estate broker with respect to leasing or renting the Premises, Tenant shall be
solely responsible for the payment of any fees due said person or firm and Tenant shall hold
Landlord free and harmless and indemnify and defend Landlord from any liabilities, damages or
claims with respect thereto, including attorney’s fees and costs.

     (e) Landlord’s Successors. In the event of a sale or conveyance by Landlord of the
Premises, the same shall operate to release Landlord from any liability under this Lease, and in
such event Landlord’s successor-in-interest shall be solely responsible for all obligations of
Landlord under this Lease.

     (f) Prior Agreement or Amendments. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease, and no prior
agreement or understanding pertaining to any such matter shall be effective for any purpose. No
provisions of this Lease may be amended except by an agreement in writing signed by the parties
hereto or their respective successors-in-interest.

     (g) Recording. Tenant shall not record this Lease or a short form memorandum thereof
without the consent of Landlord. Landlord may record a short form memorandum of this Lease and
Tenant shall execute and acknowledge such form if requested to do so by Landlord.

     (h) Severability. Any provision of this Lease which shall prove to be invalid, void
or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other
provisions of this Lease shall remain in full force and effect.

     (i) No Partnership or Joint Venture. Nothing in this Lease shall be deemed to
constitute Landlord and Tenant as partners or joint venturers. It is the express intent of the
parties hereto that their relationship with regard to this Lease and the Premises be and remain
that of lessor and lessee.

     (j) Interpretation. When required by the context of this Lease, the singular shall
include the plural, and the masculine shall include the feminine and/or neuter. “Party” shall mean
Landlord or Tenant.

     (k) No Light, Air or View Easement. Any diminution or blocking of light, air or view
by any structure which may be erected on lands adjacent to the Building shall in no way affect this
Lease or impose any liability on Landlord.

     (l) Governing Law. This Lease shall be governed by and construed pursuant to the laws
of the State of California.

     (m) Mortgagee Protection. In the event of any default on the part of Landlord, Tenant
will give simultaneous notice consistent with Paragraph 25 to any beneficiary of a deed of trust,
mortgagee, or ground lessor of the Premises (“Mortgagee” or Ground Lessor”), provided Landlord has
provided to Tenant prior written notice of the existence of the same to Tenant.

     (n) WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.

	 	i)	 	Jury Trial Waiver. TO THE EXTENT PERMITTED BY THEN APPLICABLE LAW,
EACH PARTY HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.
EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS PARAGRAPH 34(n)(i) IS SUBJECT IN ITS ENTIRETY TO
PARAGRAPH 34(n)(ii) HEREOF.
	 
	 	ii)	 	Reference Provision. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, UNTIL SUCH TIME (IF AT ALL) AS THE CALIFORNIA LEGISLATURE ENACTS A LAW THAT
WOULD RENDER THE JURY TRIAL WAIVER SET FORTH IN PARAGRAPH 34(n)(i) HEREOF VALID AND
ENFORCEABLE OR FOR ANY OTHER REASON A COURT OF COMPETENT JURISDICTION DETERMINES THAT
THE JURY TRIAL WAIVER SET FORTH IN PARAGRAPH 34(n)(i) HEREOF IS VALID AND ENFORCEABLE,
THE REFERENCE PROVISION CONTAINED IN EXHIBIT J HERETO SHALL APPLY TO ANY SUIT, ACTION
OR PROCEEDING COMMENCED PRIOR TO SUCH TIME IN LIEU OF THE JURY TRIAL WAIVER SET FORTH
IN PARAGRAPH 34(n)(i) HEREOF.

     (o) Intentionally Omitted.

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     (p) Counterparts. This Lease may be executed in one or more counterparts, each of
which shall constitute an original and all of which shall be one and the same agreement.

     (q) Financial Statements. Upon ten (10) days prior written request from Landlord
(which Landlord may make at any time during the Term including in connection with Tenant’s exercise
of any option to extend or other option granted to Tenant in this Lease, but no more often that two
(2) times in any calendar year, other than in the event of a default by Tenant during such calendar
year, the exercise of any option in such calendar year or in connection with Landlord’s prospective
sale or refinancing of the Building, when such limitation shall not apply), Tenant shall deliver to
Landlord (i) a current financial statement of Tenant, and (ii) financial statements of Tenant for
the two (2) years prior to the current financial statement year. Such statements shall be prepared
in accordance with generally acceptable accounting principles and certified as true in all material
respects by Tenant (if Tenant is an individual) or by an authorized officer, member/manager or
general partner of Tenant (if Tenant is a corporation, limited liability company or partnership,
respectively). Notwithstanding the foregoing, to the extent Tenant is a company whose shares of
stock are traded on a nationally recognized stock exchange, Tenant may satisfy the foregoing
financial reporting requirements by delivering or making available its or its corporate parent’s
most recent quarterly and annual reports.

35. LEASE EXECUTION.

     (a) Tenant’s Authority. If Tenant executes this Lease as a partnership or
corporation, then Tenant and the persons and/or entities executing this Lease on behalf of Tenant
represent and warrant that: (a) Tenant is a duly authorized and existing partnership or
corporation, as the case may be, and is qualified to do business in the state in which the Building
is located; (b) such persons and/or entities executing this Lease are duly authorized to execute
and deliver this Lease on Tenant’s behalf in accordance with the Tenant’s partnership agreement (if
Tenant is a partnership), or a duly adopted resolution of Tenant’s board of directors and the
Tenant’s by-laws (if Tenant is a corporation); and (c) this Lease is binding upon Tenant in
accordance with its terms.

     (b) Intentionally Omitted.

36. SECURITY. Subject to Landlord’s reasonable approval, the approval of all applicable
governmental and quasi-governmental authorities, the approval of the Pacific Gateway Owner’s
Association pursuant to the terms of the Project CC&Rs and Tenant’s compliance with the terms of
Paragraph 14 above, Tenant shall have the right, at its sole cost and expense, to secure the
Premises and/or the Building to whatever level it deems reasonably necessary for the protection of
its business. This may specifically include alarms, video surveillance and on-site security
personnel.

37. INCENTIVES. Landlord agrees to use its commercially reasonable efforts to reasonably
assist Tenant in its efforts to procure all available business and economic incentives; provided,
however, the foregoing shall not require Landlord to incur any expenses in connection with such
assistance. All incentives procured by Tenant pursuant to the terms of this Paragraph 37 shall be
for the sole benefit of Tenant.

38. QUIET ENJOYMENT. Tenant shall, subject to the terms and conditions of this Lease and
so long as Tenant is not in default hereunder beyond any applicable cure period, at all times, have
peaceful and quiet enjoyment of the Premises against any person claiming by, through or under
Landlord.

[No Further Text On This Page]

- 21 -

 

     IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	DENDREON CORPORATION,	 	 	 	KNICKERBOCKER PROPERTIES, INC. XLVI,	 	 
	a Delaware corporation	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Greg Schiffman	 	 	 	By:	 	/s/ David Sears	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Greg Schiffman	 	 	 	 	 	Name:	 	David Sears	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	Its:
	 	CFO	 	 	 	 	 	Its:	 	Vice President	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Rick Hamm	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	   	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:	 	Rick Hamm	 	 	 	 	 	 	 	 	 	 
	 

	 	Its:
	 	SVP,
Corporate Development

		 	 	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 	 	 

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RIDER 1

OPTIONS

     This Rider 1 is attached to, made a part of, incorporated into, and amends and supplements,
that certain Standard Industrial Lease dated August 7, 2009 (the “Lease”), by and between
KNICKERBOCKER PROPERTIES, INC. XLVI, a Delaware corporation (“Landlord”), and DENDREON CORPORATION,
a Delaware corporation (“Tenant”). Landlord and Tenant agree that, notwithstanding anything
contained in the Lease to the contrary, the provisions set forth in this Rider 1 will be deemed to
be a part of the Lease and will supersede any contrary provisions in the Lease and shall prevail
and control for all purposes. All references in the Lease and in this Rider 1 to the defined term
“Lease” are to be construed to mean the Lease as amended and supplemented by this Rider 1.
Capitalized terms which are not defined in this Rider 1 have the meanings given to them in the
Lease.

1. OPTIONS TO EXTEND.

     (a) Subject to the terms of this Paragraph 1 and Paragraph 4, entitled “Options,” Landlord
hereby grants to Tenant the option (each, an “Extension Option” and collectively, the “Extension
Options”) to extend the Term of the Lease with respect to the entire Premises for up to
five (5) additional periods of five (5) years (each, an “Option Term” and collectively, the “Option
Terms”), on the same terms, covenants and conditions as provided for in the Lease during the
immediately preceding Term, except that (i) Tenant shall have no further extension rights (other
than as expressly set forth herein), and (ii) Basic Rent shall be established based on ninety-five
percent (95%) of the “fair market rental rate” for the Premises for the applicable Option Term as
defined and determined in accordance with the provisions of this Paragraph 1 below.

     (b) Each Extension Option must be exercised, if at all, by written notice (“Extension Notice”)
delivered by Tenant to Landlord no earlier than the date which is three hundred sixty (360) days,
and no later than the date which is two hundred seventy (270) days, prior to the expiration of the
immediately preceding Term of the Lease.

     (c) The term “fair market rental rate” as used in this Rider 1 shall mean the annual amount
per square foot, projected during the relevant period, that a willing, comparable, non-equity,
renewal tenant (excluding sublease and assignment transactions) would pay, and a willing,
comparable, institutional landlord of a comparable Class “A” quality industrial building located in
the greater South Bay area (“Comparison Area”) would accept, at arm’s length (what Landlord is
accepting in current transactions for the Building or other buildings in the Project may be
considered), for space comparable in size (including the existing mezzanine square footage of
approximately 13,135 square feet of space, whether or not Tenant removes the same during the Term
of the Lease) and quality as the leased area at issue taking into account the age, quality and
layout of the existing improvements in the leased area at issue and taking into account items that
professional real estate brokers customarily consider, including, but not limited to, rental rates,
industrial space availability, tenant size, tenant improvement allowances, operating expenses and
allowance, parking charges, and any other economic matters then being charged by Landlord or
lessors of such similar industrial buildings, however, not taking into account any improvements
exclusively paid for by Tenant (i.e., any improvements paid for with the Allowance shall be deemed
paid for by Landlord and not Tenant). Notwithstanding anything herein to the contrary, in no event
will Basic Rent decrease from that payable in the last year of the immediately previous Lease Term
as a result of the fair market rental rate determination provided for in this Paragraph 1.

     (d) Landlord’s determination of fair market rental rate shall be delivered to Tenant in
writing not later than sixty (60) days following Landlord’s receipt of Tenant’s Extension Notice.
Tenant will have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of
the fair market rental rate within which to accept such fair market rental rate or to object
thereto in writing. Tenant’s failure to object to the fair market rental rate submitted by
Landlord in writing within Tenant’s Review Period will conclusively be deemed Tenant’s approval and
acceptance thereof. If Tenant objects to the fair market rental rate submitted by Landlord within
Tenant’s Review Period, then Landlord and Tenant will attempt in good faith to agree upon such fair
market rental rate using their best good faith efforts. If Landlord and Tenant fail to reach
agreement on such fair market rental rate within fifteen (15) days following the expiration of
Tenant’s Review Period (the “Outside Agreement Date”), then each party’s determination will be
submitted to appraisal in accordance with the provisions below.

     (e) (i) Landlord and Tenant shall each appoint one independent, unaffiliated real estate
broker (referred to herein as an “appraiser” even though only a broker) who has been active over
the five (5) year period ending on the date of such appointment in the leasing of comparable
industrial properties in the Comparison Area. Each such appraiser will be appointed within thirty
(30) days after the Outside Agreement Date.

          (ii) The two (2) appraisers so appointed will within fifteen (15) days of the date of the
appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be
qualified under the same criteria set forth herein above for qualification of the initial two
(2) appraisers.

          (iii) The determination of the appraisers shall be limited solely to the issue of whether
Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) new Basic Rent for the
Premises is the closest to the actual new Basic Rent for the Premises as determined by the
appraisers, taking into account the requirements of Subparagraph 1(c) and this Subparagraph 1(e)
regarding same.

 RIDER 1 

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          (iv) The three (3) appraisers shall within thirty (30) days of the appointment of the third
appraiser reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted new
Basic Rent, and shall notify Landlord and Tenant thereof.

          (v) The decision of the majority of the three (3) appraisers shall be binding upon Landlord
and Tenant and neither party will have the right to reject the determination or undo the exercise
of the Extension Option. The cost of each party’s appraiser shall be the responsibility of the
party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary)
shall be shared equally by Landlord and Tenant.

          (vi) If either Landlord or Tenant fails to appoint an appraiser within the time period in
Subparagraph 1(e)(i) herein above, the appraiser appointed by one of them shall reach a decision,
notify Landlord and Tenant thereof and such appraiser’s decision shall be binding upon Landlord and
Tenant and neither party will have the right to reject the determination or undo the exercise of
the Extension Option.

          (vii) If the two (2) appraisers fail to agree upon and appoint a third appraiser, both
appraisers shall be dismissed and the matter to be decided shall be forthwith submitted to binding
arbitration under the provisions of the American Arbitration Association.

          (viii) In the event that the new Basic Rent is not established prior to the end of the
immediately previous Term of the Lease, the Basic Rent immediately payable at the commencement of
the applicable Option Term shall be the Basic Rent paid by Tenant at the expiration of the
immediately preceding Term. Notwithstanding the above, once the fair market rental is determined
in accordance with this section, the parties shall settle any overpayment or underpayment on the
next Basic Rent payment date falling not less than thirty (30) days after such determination.

2. OPTION TO PURCHASE. Landlord is the owner of that certain real property and all
improvements thereon, including the Building (the “Landlord Property”), described in that certain
form of Agreement of Purchase and Sale and Joint Escrow Instructions, contemplated to be entered
into by and between Landlord, as seller, and Tenant, as buyer (the “Purchase Agreement”), a copy of
which is attached hereto as Schedule 1 and incorporated herein by this reference. Landlord desires
to grant an option to Tenant to acquire the Landlord Property (the “Purchase Option”) and Tenant
hereby accepts said Purchase Option upon the terms and conditions stated herein. Tenant’s Purchase
Option and the acquisition of the Landlord Property by Tenant shall be subject to Paragraph 4 below
and in accordance with the provisions of this Paragraph 2 and the Purchase Agreement.

     (a) The term of the Purchase Option shall commence on the Commencement Date and shall
terminate at 5:00 California time on that date which is thirty (30) days prior to the Purchase
Option Outside Date (defined below) (the “Purchase Option Term”). The Purchase Option must be
exercised, if at all, by written notice delivered by Tenant to Landlord no later than the
expiration of the Purchase Option Term.

     (b) The closing of the sale of the Landlord Property pursuant to this Paragraph 2 shall occur
no later than that date which is thirty-six (36) months following the Commencement Date (the
“Purchase Option Outside Date”), as such date may be extended pursuant to the express terms of the
Purchase Agreement.

     (c) If the Purchase Option is not exercised in accordance with the terms and conditions of
this Paragraph 2 prior to the expiration of the Purchase Option Term, or if the closing of the sale
of the Landlord Property shall not occur on or before the Purchase Option Outside Date (as such
date may be extended pursuant to the express terms of the Purchase Agreement), then the Purchase
Option shall automatically and immediately terminate without notice and, thereafter, Tenant shall
have no interest whatsoever in the Landlord Property pursuant to this Paragraph 2. Tenant
acknowledges that, once terminated, the Purchase Option may not be revived by any subsequent act of
Tenant.

     (d) Tenant shall have the right, at its sole cost and expense, to record a memorandum of
option to purchase, in the form attached hereto as Schedule 3, identifying (i) Tenant’s option to
purchase the Premises (as detailed in this Paragraph 2) and (ii) Tenant’s right of first offer (as
detailed in Paragraph 3 below) (the “Memorandum”).

     (e) Tenant agrees, concurrent with the execution of this Lease, to execute, acknowledge and
deliver to Landlord a “Release of Memorandum,” in the form attached hereto as Schedule 2 and
incorporated herein by this reference. Tenant agrees that Landlord shall be entitled to record the
Release of Memorandum in the event Tenant does not timely exercise either the Purchase Option or
the right of first offer to purchase or either the Purchase Option or the right of first offer to
purchase terminates as provided herein. Tenant agrees, within ten (10) days after receipt of
written request from Landlord, to execute, acknowledge and deliver any other instruments reasonably
required by Landlord or any title company to remove the cloud of the Purchase Option and/or the
right of first offer to purchase from title to the Landlord Property. In the event Tenant
exercises the Purchase Option or the right of first offer to purchase, concurrent with the “Close
of Escrow,” as such term is defined in the applicable Purchase Agreement, Landlord shall return the
original Release of Memorandum to Tenant.

     (e) The Purchase Option shall be exercised by Tenant, if at all, by Tenant delivering, prior
to the expiration of the Purchase Option Term, to “Escrow Holder,” as such term is defined in the
Purchase Agreement, Tenant’s good faith deposit in the amount of $250,000.00 (the “Deposit”) and a
duly executed counterpart of the Purchase Agreement (with a copy to Landlord), dated as of the date
of Tenant’s delivery of the Purchase Agreement to Escrow Holder. Landlord shall then deliver to
Escrow Holder (with a copy to Tenant) a duly executed counterpart of the Purchase Agreement.

 RIDER 1  

-2-

 

     (f) Landlord and Tenant acknowledge and agree that if the closing of the sale of the Landlord
Property pursuant to this Paragraph 2 occurs (i) after the Commencement Date but prior to or on the
first (1st) anniversary of the Commencement Date, then the “Purchase Price”, as such
term is defined in the Purchase Agreement, shall be equal to Nineteen Million Three Hundred Twenty
Thousand and No/100 Dollars ($19,320,000.00), (ii) after the first (1st) anniversary of
the Commencement Date but prior to or on the second (2nd) anniversary of the
Commencement Date, then the “Purchase Price”, as such term is defined in the Purchase Agreement,
shall be equal to Twenty Million Two Hundred Forty Thousand and No/100 Dollars ($20,240,000.00), or
(iii) after the second (2nd) anniversary of the Commencement Date but prior to or on the
third (3rd) anniversary of the Commencement Date, then the “Purchase Price”, as such
term is defined in the Purchase Agreement, shall be equal to Twenty-Two Million Eighty Thousand and
No/100 Dollars ($22,080,000.00).

     (g) Notwithstanding anything in this Lease to the contrary, (i) under no circumstances shall
Tenant be permitted to undertake any invasive, intrusive or destructive investigation, testing or
study of the Landlord Property, including a “Phase II” environmental assessment, without in each
instance first obtaining Landlord’s written consent thereto, which consent Landlord may give,
withhold or condition in Landlord’s sole and absolute discretion, and (ii) if the Purchase
Agreement terminates solely as a result of a default by Landlord (in its capacity as “Seller” under
the Purchase Agreement) thereunder, then Tenant shall maintain the right to subsequently
re-exercise the Purchase Option at a later date subject to and in accordance with the terms of this
Paragraph 2.

     (h) Prior to Tenant’s exercise of the Purchase Option, Tenant shall obtain, at its sole cost
and expense the Title Documents (as defined in the Purchase Agreement). At any time prior to that
date which is ten (10) days prior to Tenant’s exercise of the Purchase Option, Tenant shall have
the right to deliver written notice to Landlord (the “Title Objection Notice”) specifying any title
objections or other matters in the Title Documents to which Tenant objects (collectively, “Title
Objections”). Tenant’s failure to timely deliver a Title Objection Notice shall be deemed to be
Tenant’s approval of all of the exceptions to title and other matters shown in or disclosed by the
Title Documents. Notwithstanding anything to the contrary contained herein, (A) Tenant shall not
be entitled to deliver a Title Objection Notice that is subject to any condition other than the
issuance of a title endorsement as part of the Title Policy (as defined in the Purchase Agreement),
and any title exception or other matter set forth in the Title Documents that is approved subject
to any condition other than the issuance of a title endorsement as part of the Title Policy to be
obtained by Tenant pursuant to the terms of the Purchase Agreement (as applicable, the “Title
Policy”) shall be deemed to be a Title Objection which has been objected to by Tenant and
(B) Tenant shall not be entitled to object to any matters directly or indirectly caused by or
arising through Tenant or any of the other Tenant Parties, including this Lease or any matter
arising through or as a result of occupancy of the Landlord Property by Tenant or any other Tenant
Party pursuant to this Lease. Landlord shall have a period of five (5) Business Days after
Landlord’s receipt of the Title Objection Notice to elect by written notice to Tenant (the “Title
Response Notice”) to either (aa) attempt to remove or cure (by endorsement or otherwise) at or
prior to the Closing (as defined in the Purchase Agreement) some or all of the Title Objections, or
(bb) to advise Tenant that Landlord is unable or unwilling to remove or cure (by endorsement or
otherwise) some or all of the Title Objections. Such election by Landlord shall be at Landlord’s
sole option and discretion; it being understood Landlord has no obligation to remove or cure any
Title Objections (other than as provided in the last sentence of Section 4.1.1 of the Purchase
Agreement as to Excepted Liens (as defined in the Purchase Agreement)). If Landlord fails to
timely deliver to Tenant the Title Response Notice, it shall be conclusively deemed that Landlord
has informed Tenant that Landlord is unable or unwilling to remove or cure any of the Title
Objections. If Landlord advises Tenant in Landlord’s Title Response Notice (or is deemed to have
advised Tenant) that Landlord is unable or unwilling to remove or cure some or all of the Title
Objections, then Tenant must elect to either not exercise its Purchase Option or waive any such
Title Objections; provided, however, if Tenant elects to exercise its Purchase Option
notwithstanding Landlord’s election or deemed election to advise Tenant that Landlord is unable or
unwilling to remove or cure some or all of the Title Objections, then Tenant shall be deemed to
have irrevocably waived any such Title Objections.

     (i) After the date of this Lease and until the later of (A) the expiration of the Purchase
Option Term or (B) the earlier termination of the Purchase Option, (aa) Landlord shall not, without
Tenant’s consent, not to be unreasonably withheld, conditioned or delayed, alienate, lien, encumber
or otherwise transfer all or any portion of the Landlord Property, if the same materially and
adversely affects the value of the Landlord Property following the Closing (as defined in the
Purchase Agreement), and (bb) Landlord shall reasonably cooperate with Tenant (at no out-of-pocket
cost to Landlord) to obtain, and, if necessary, request on behalf of Tenant, an estoppel
certificate from the association pursuant to the terms of the Project CC&Rs and otherwise in a form
reasonably acceptable to both Landlord and Tenant.

3. RIGHT OF FIRST OFFER TO PURCHASE LANDLORD PROPERTY. Subject to the terms of Paragraph 4
below entitled “Options,” and the terms of this Paragraph 3 and provided Tenant occupies and is
operating its business from within the Premises, Landlord hereby grants to Tenant, subject to
applicable laws and regulations, a right of first offer to purchase the Landlord Property following
the third (3rd) anniversary of the Commencement Date and prior to the
fifth (5th) anniversary of the Commencement Date (the “First Offer Term”).

     (a) Procedure for Purchase Offer. Landlord shall notify Tenant (the “First Offer
Notice”) if and when the Landlord Property becomes available for sale to unaffiliated third parties
during the First Offer Term. Pursuant to such First Offer Notice, Landlord shall offer to sell to
Tenant the Landlord Property. The First Offer Notice shall describe the property so offered to
Tenant and shall set forth Landlord’s proposed economic terms and conditions upon which Landlord is
willing to sell such property to Tenant (collectively, the “Purchase Economic Terms”).

     (b) Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right of first
offer to purchase the Landlord Property, then within ten (10) business days of delivery of the
First Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant’s intention to
exercise its right of first offer to purchase with respect to the entire Landlord Property on the
Purchase Economic Terms. Tenant must elect to exercise its right of first offer to

 RIDER 1 

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purchase, if at all, with respect to the entire Landlord Property. Tenant may not elect to
purchase only a portion of the Landlord Property. If Tenant does not so notify Landlord within the
ten (10) business day period, then Landlord shall be free to sell the Landlord Property at any time
within the next succeeding twelve (12) months provided that such sale is on economic terms which
are not less than ninety-five percent (95%) of the Purchase Economic Terms. In the event such sale
is on economic terms which are less than ninety-five percent (95%) of the Purchase Economic Terms,
Landlord shall first re-offer the Landlord Property on such more favorable terms in accordance with
the provisions of this Paragraph 3 above; provided, however, in the event Landlord re-offers the
Landlord Property to Tenant in accordance with the terms of this sentence above, Tenant shall be
obligated to respond to Landlord’s new First Offer Notice within five (5) business days of receipt
of same.

     (c) Purchase Agreement. If Tenant timely exercises Tenant’s right of first offer to
purchase the Landlord Property as set forth herein, Landlord and Tenant shall within ten (10) days
thereafter, execute a purchase agreement upon which Tenant shall agree to purchase the Landlord
Property upon the Purchase Economic Terms and otherwise subject to the terms of this Paragraph 3.
Except as otherwise provided in the Purchase Economic Terms, (i) Tenant shall complete its due
diligence review of the Landlord Property within twenty (20) business days following the date of
the purchase agreement, (ii) the close of escrow under the purchase agreement shall not occur later
than thirty (30) days following the date of the purchase agreement, and (iii) all remaining terms
of the purchase agreement shall be as stated in the purchase agreement, which shall be
substantially in the form of the Purchase Agreement.

4. OPTIONS.

     (a) As used in this Paragraph, the word “Options” means the Extension Options pursuant to
Paragraph 1 herein, the Purchase Option pursuant to Paragraph 2 herein and the right of first offer
to purchase pursuant to Paragraph 3 herein.

     (b) The Options are personal to the original Tenant executing the Lease and any Permitted
Transferee and may be exercised only by the original Tenant executing the Lease or any Permitted
Transferee while occupying the entire Premises and without the intent of thereafter assigning the
Lease or subletting the Premises and may not be exercised or be assigned, voluntarily or
involuntarily, by any person or entity other than the original Tenant executing the Lease or any
Permitted Transferee. The Options are not assignable separate and apart from this Lease, nor may
any Option be separated from the Lease in any manner, either by reservation or otherwise.
Notwithstanding the terms of this clause (b) above, (A) the then remaining Extension Options (but
not the Purchase Option or the above described right of first offer) may be assigned to any
assignee of Tenant’s entire interest under the Lease so long as (i) Landlord consents to the
applicable assignment pursuant to the terms of Paragraph 19 of the Lease, (ii) the original Tenant
expressly acknowledges in writing that it is not being released of any of its liability hereunder
if such assignee exercises all or any of the remaining Extension Options, and (iii) Tenant and such
assignee, as part of the assignment documentation or otherwise, agree in writing that the Basic
Rent applicable during any such remaining Extension Options shall be established based on one
hundred percent (100%) (rather than 95%) of the “fair market rental rate” for the Premises for the
applicable Option Term as defined and determined in accordance with the provisions of Paragraph 1
above, and (B) the Purchase Option may be exercised by (i) a real estate investment trust primarily
focused in the acquisition/ownership of properties leased by pharmaceutical or bio-tech companies
provided Tenant is assigning such rights in connection with a sale/leaseback/lease financing
transaction with such real estate investment trust, or (ii) any other third party buyer designated
by Tenant and approved by Landlord (such approval not to be unreasonably withheld, conditioned or
delayed), so long as all conditions to such exercise specified herein are fully satisfied prior to
the date the Purchase Option is exercised.

     (c) Tenant shall have no right to exercise any Option, notwithstanding any provision of the grant
of the applicable Option to the contrary, and Tenant’s exercise of any Option may be nullified by
Landlord and deemed of no further force or effect, if (i) Tenant shall be in default of any
monetary obligation or material non-monetary obligation under the terms of the Lease as of Tenant’s
exercise of any Option or at any time after the exercise of such Option and prior to the
commencement of the Option event, or (ii) Landlord has given Tenant two (2) or more notices of
monetary default, and Tenant fails to timely cure either or both of the same, during any twelve
(12) consecutive month period.

 RIDER 1 

-4-

 

RIDER 2

ARBITRATION OF DISPUTES

     This Rider 2 is attached to, made a part of, incorporated into, and amends and supplements,
that certain Standard Industrial Lease dated August 7, 2009 (the “Lease”), by and between
KNICKERBOCKER PROPERTIES, INC. XLVI, a Delaware corporation (“Landlord”), and DENDREON CORPORATION,
a Delaware corporation (“Tenant”). Landlord and Tenant agree that, notwithstanding anything
contained in the Lease to the contrary, the provisions set forth in this Rider 2 will be deemed to
be a part of the Lease and will supersede any contrary provisions in the Lease and shall prevail
and control for all purposes. All references in the Lease and in this Rider 2 to the defined term
“Lease” are to be construed to mean the Lease as amended and supplemented by this Rider 2.
Capitalized terms which are not defined in this Rider 2 have the meanings given to them in the
Lease.

     1. ANY “ACTION” (AS DEFINED IN PARAGRAPH 22 OF THE LEASE) BROUGHT BY TENANT SHALL BE SETTLED
BY FINAL AND BINDING ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION (“AAA”), LOCATED AT
SUCH OFFICE AS IS DETERMINED BY THE AAA (OR ANY SUCCESSOR ADDRESS), IN ACCORDANCE WITH THE USUAL
AND THEN-EXISTING COMMERCIAL RULES OR OTHER COMPARABLE RULES AND PROCEDURES OF THE AAA, SUBJECT TO
THE FOLLOWING PROVISIONS:

     (A) THE PARTY SEEKING ARBITRATION SHALL DELIVER A WRITTEN NOTICE OF DEMAND TO RESOLVE DISPUTE
(THE “DEMAND”) TO THE OTHER PARTY AND TO THE AAA. THE DEMAND SHALL INCLUDE A BRIEF STATEMENT OF
SUCH PARTY’S CLAIM, THE AMOUNT THEREOF, AND THE NAME OF THE PROPOSED RETIRED JUDGE FROM THE AAA TO
DECIDE THE DISPUTE (“ARBITRATOR”). WITHIN TEN (10) DAYS AFTER THE EFFECTIVE DATE OF THE DEMAND,
THE OTHER PARTY AGAINST WHOM A DEMAND IS MADE SHALL DELIVER A WRITTEN RESPONSE TO THE DEMANDING
PARTY AND THE AAA. SUCH RESPONSE SHALL INCLUDE A SHORT AND PLAIN STATEMENT OF THE NON-DEMANDING
PARTY’S DEFENSES TO THE CLAIM AND SHALL ALSO STATE WHETHER SUCH PARTY AGREES TO THE ARBITRATOR
CHOSEN BY THE DEMANDING PARTY. IN THE EVENT THE PARTIES CANNOT AGREE UPON AN ARBITRATOR, THEN THE
AAA SHALL SELECT AND NAME A SINGLE ARBITRATOR TO CONDUCT THE HEARINGS.

     (B) IF THE AAA IS NO LONGER IN BUSINESS AND THERE IS NO COMPARABLE SUCCESSOR, THEN THE PARTIES
SHALL AGREE UPON ANOTHER ARBITRATOR. IF THE PARTIES CANNOT AGREE UPON ANOTHER ARBITRATOR, THEN A
SINGLE NEUTRAL ARBITRATOR SHALL BE APPOINTED PURSUANT TO SECTION 1281.6 OF THE CALIFORNIA CODE OF
CIVIL PROCEDURE.

     (C) IF THE CLAIM OR DISPUTE EQUALS OR EXCEEDS THE SUM OF FIFTY THOUSAND DOLLARS ($50,000),
THEN THE PARTIES SHALL BE ENTITLED TO FULL RIGHTS OF DISCOVERY AS SET FORTH IN THE CALIFORNIA CODE
OF CIVIL PROCEDURE (INCLUDING, WITHOUT LIMITATION, C.C.P. § 1283.05) FOR CIVIL ACTIONS TRIED IN THE
SUPERIOR COURTS OF THE STATE OF CALIFORNIA, SUBJECT TO SUCH ORDERS AS MAY BE MADE BY THE AAA. IF
THE DISPUTE BETWEEN THE PARTIES IS LESS THAN FIFTY THOUSAND DOLLARS ($50,000), THEN THERE SHALL BE
NO RIGHT TO DISCOVERY EXCEPT BY STIPULATION OF THE PARTIES OR PURSUANT TO THE DISCRETION OF THE
AAA. IF THE PARTIES CANNOT AGREE AS TO THE AMOUNT IN ISSUE, THE AAA SHALL HOLD A PRELIMINARY
HEARING FOR THE PURPOSE OF DETERMINING WHETHER THE AMOUNT IN ISSUE EQUALS OR EXCEEDS FIFTY THOUSAND
DOLLARS ($50,000).

     (D) THE ARBITRATOR’S POWERS SHALL BE LIMITED AS FOLLOWS: THE ARBITRATOR SHALL FOLLOW THE
SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA, INCLUDING RULES OF EVIDENCE. THE ARBITRATOR SHALL NOT
CONSIDER ANYTHING OUTSIDE THE RECORD UNLESS NOTICE IS GIVEN TO ALL PARTIES WITH THE OPPORTUNITY TO
RESPOND TO SUCH MATTERS. THE ARBITRATOR SHALL HAVE NO POWER TO MODIFY ANY OF THE PROVISIONS OF THE
AGREEMENT AND THE ARBITRATOR’S JURISDICTION IS LIMITED ACCORDINGLY. THE ARBITRATOR SHALL PREPARE
AND SERVE A WRITTEN DECISION WHICH DETERMINES THE DISPUTE, CONTROVERSY, OR CLAIM AND WHICH
DESIGNATES THE PARTY AGAINST WHOSE POSITION THE DECISION IS RENDERED. JUDGMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.

     (E) THE COSTS OF THE RESOLUTION SHALL BE DIVIDED EQUALLY AMONG THE PARTIES INVOLVED IN SUCH
DISPUTE; PROVIDED, HOWEVER, THAT SUCH COSTS, ALONG WITH ALL OTHER COSTS AND EXPENSES, INCLUDING,
WITHOUT LIMITATION, ATTORNEYS’ FEES, SHALL BE SUBJECT TO AWARD, IN FULL OR IN PART, BY THE
ARBITRATOR, IN THE ARBITRATOR’S DISCRETION, TO THE PREVAILING PARTY. UNLESS THE ARBITRATOR SO
AWARDS ATTORNEYS’ FEES, EACH PARTY SHALL BE RESPONSIBLE FOR SUCH PARTY’S OWN ATTORNEYS’ FEES.

     (F) TO THE EXTENT POSSIBLE, THE ARBITRATION HEARINGS SHALL BE CONDUCTED ON CONSECUTIVE DAYS,
EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS, UNTIL THE COMPLETION OF THE CASE.

     (G) IN CONNECTION WITH ANY ARBITRATION PROCEEDINGS COMMENCED HEREUNDER, THE ARBITRATOR AND/OR
ANY PARTY SHALL HAVE THE RIGHT TO JOIN ANY

 RIDER 2 

-1-

 

THIRD PARTIES IN SUCH PROCEEDINGS IN ORDER TO RESOLVE ANY OTHER DISPUTES, THE FACTS OF WHICH
ARE RELATED TO THE MATTERS SUBMITTED FOR ARBITRATION HEREUNDER.

     NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF
THE MATTERS DESCRIBED IN THIS ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS
PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

     THE UNDERSIGNED HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.

	 	 	 	 	 
	 
	 	 

Initials                
             Initials
	 	 

 RIDER 2 

-2-

 

STANDARD INDUSTRIAL LEASE

(NET)

	 	 	 
	LANDLORD:

	 	KNICKERBOCKER PROPERTIES, INC. XLVI
	 
	 	 
	TENANT:

	 	DENDREON CORPORATION
	 
	 	 
	PROJECT:

	 	Pacific Gateway Business Center
	 
	 	 
	CITY, STATE:

	 	Seal Beach, California
	 
	 	 
	DATE:

	 	August 7, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 
	 	 	 	Page
	1.
	 	BASIC LEASE TERMS	 	1
	 
	 	 	 	 
	2.
	 	PREMISES	 	2
	 
	 	 	 	 
	3.
	 	LEASE TERM	 	2
	 
	 	 	 	 
	4.
	 	POSSESSION; CONDITION OF PREMISES	 	2
	 
	 	 	 	 
	5.
	 	RENT	 	3
	 
	 	 	 	 
	6.
	 	PREPAID RENT	 	4
	 
	 	 	 	 
	7.
	 	LETTER OF CREDIT	 	4
	 
	 	 	 	 
	8.
	 	USE OF PREMISES AND PROJECT FACILITIES	 	6
	 
	 	 	 	 
	9.
	 	SURRENDER OF PREMISES; HOLDING OVER	 	7
	 
	 	 	 	 
	10.
	 	SIGNAGE	 	7
	 
	 	 	 	 
	11.
	 	TAXES	 	8
	 
	 	 	 	 
	12.
	 	UTILITIES	 	8
	 
	 	 	 	 
	13.
	 	MAINTENANCE	 	8
	 
	 	 	 	 
	14.
	 	ALTERATIONS	 	10
	 
	 	 	 	 
	15.
	 	RELEASE AND INDEMNITY	 	10
	 
	 	 	 	 
	16.
	 	INSURANCE	 	11
	 
	 	 	 	 
	17.
	 	DESTRUCTION	 	12
	 
	 	 	 	 
	18.
	 	CONDEMNATION	 	13
	 
	 	 	 	 
	19.
	 	ASSIGNMENT OR SUBLEASE	 	13
	 
	 	 	 	 
	20.
	 	DEFAULT	 	15
	 
	 	 	 	 
	21.
	 	LANDLORD'S REMEDIES	 	15
	 
	 	 	 	 
	22.
	 	DEFAULT BY LANDLORD	 	16
	 
	 	 	 	 
	23.
	 	ENTRY OF PREMISES AND PERFORMANCE BY TENANT	 	16
	 
	 	 	 	 
	24.
	 	SUBORDINATION	 	17
	 
	 	 	 	 
	25.
	 	NOTICE	 	17
	 
	 	 	 	 
	26.
	 	WAIVER	 	18
	 
	 	 	 	 
	27.
	 	LIMITATION OF LIABILITY	 	18
	 
	 	 	 	 
	28.
	 	FORCE MAJEURE	 	18
	 
	 	 	 	 
	29.
	 	PROFESSIONAL FEES	 	18
	 
	 	 	 	 
	30.
	 	EXAMINATION OF LEASE	 	19
	 
	 	 	 	 
	31.
	 	ESTOPPEL CERTIFICATE	 	19
	 
	 	 	 	 
	 
	 	 	 	 
	32.
	 	RULES AND REGULATIONS	 	19
	 
	 	 	 	 
	33.
	 	LIENS	 	19
	 
	 	 	 	 
	34.
	 	MISCELLANEOUS PROVISIONS	 	19
	 
	 	 	 	 
	35.
	 	LEASE EXECUTION	 	21
	 
	 	 	 	 
	36.
	 	SECURITY	 	21
	 
	 	 	 	 
	37.
	 	INCENTIVES	 	21

	 	 	 
	EXHIBITS
	 	 
	 
	 	 
	EXHIBIT A:
	 	DEPICTION OF PREMISES
	EXHIBIT B:
	 	DESCRIPTION OF PREMISES LAND
	EXHIBIT C:
	 	WORK LETTER AGREEMENT
	EXHIBIT D:
	 	NOTICE OF LEASE TERM DATES

 (i) 

 

	 	 	 
	 
	 	 	 	Page
	EXHIBIT E:
	 	TENANT ESTOPPEL CERTIFICATE
	EXHIBIT F:
	 	RULES AND REGULATIONS
	EXHIBIT G:
	 	PROJECT SIGNAGE CRITERIA
	EXHIBIT H:
	 	HAZARDOUS MATERIALS ADDENDUM
	EXHIBIT I:
	 	HAZARDOUS MATERIALS QUESTIONNAIRE
	EXHIBIT J:
	 	REFERENCE PROVISION
	EXHIBIT K:
	 	FORM OF LETTER OF CREDIT
	EXHIBIT L:
	 	ENVIRONMENTAL REPORTS
	 
	 	 
	RIDERS
	 	 
	 
	 	 
	RIDER 1:
	 	OPTIONS
	RIDER 2:
	 	ARBITRATION OF DISPUTES

 (ii)exv4w35

Exhibit 4.35

Savings and Profit Sharing Plan

for Employees of First Interstate BancSystem, Inc.

(Amended and Restated Effective January 1, 2008)

Any statements regarding tax matters made herein, including any
attachments, cannot be relied upon by any person to avoid tax
penalties and are not intended to be used or referred to in any
marketing or promotional materials. To the extent this communication
contains a tax statement or tax advice, Holland & Hart LLP does not
and will not impose any limitation on disclosure of the tax
treatment or tax structure of any transactions to which such tax
statement or tax advice relates.

Prepared by

Phone (303) 295-8000 Fax (303) 295-8261 www.hollandhart.com

555 17th Street Suite 3200 Denver, Colorado 80202-3979 Mailing Address P.O. Box 8749 Denver, Colorado 80201-8749

Aspen Billings Boise Boulder Carson City Cheyenne Colorado Springs Denver Denver Tech Center Jackson Hole Las Vegas Reno Salt Lake City Santa Fe Washington, D.C.

 

 

Savings and Profit Sharing Plan for Employees of

First Interstate BancSystem, Inc.

Table of Contents

	 	 	 	 	 	 	 
	ARTICLE 1. DEFINITIONS	 	 	2	 
	1.1
	 	Account	 	 	2	 
	1.2
	 	Administrator	 	 	2	 
	1.3
	 	After-Tax Account	 	 	2	 
	1.4
	 	After-Tax Contributions	 	 	2	 
	1.5
	 	Annual Additions	 	 	2	 
	1.6
	 	Average Contribution Percentage or ACP	 	 	2	 
	1.7
	 	Average Deferral Percentage or ADP	 	 	3	 
	1.8
	 	Before-Tax Account	 	 	3	 
	1.9
	 	Before-Tax Contributions	 	 	3	 
	1.10
	 	Beneficiary	 	 	3	 
	1.11
	 	Break in Service	 	 	3	 
	1.12
	 	Cash-Out Limit	 	 	3	 
	1.13
	 	Catch-Up Before-Tax Contributions	 	 	3	 
	1.14
	 	Catch-Up Roth Contributions	 	 	3	 
	1.15
	 	Code	 	 	4	 
	1.16
	 	Computation Period	 	 	4	 
	1.17
	 	Controlled Group	 	 	4	 
	1.18
	 	Date of Employment	 	 	4	 
	1.19
	 	Date of Reemployment	 	 	4	 
	1.20
	 	Death	 	 	4	 
	1.21
	 	Disability	 	 	4	 
	1.22
	 	Distribution Calendar Year	 	 	4	 
	1.23
	 	Distribution Date	 	 	4	 
	1.24
	 	Effective Date	 	 	5	 
	1.25
	 	Elective Deferrals	 	 	5	 
	1.26
	 	Employee	 	 	5	 
	1.27
	 	Employer	 	 	5	 
	1.28
	 	ERISA	 	 	5	 
	1.29
	 	Excess Aggregate Contributions	 	 	5	 
	1.30
	 	Excess Deferrals	 	 	5	 
	1.31
	 	Five Taxable Year Period	 	 	5	 
	1.32
	 	Highly Compensated Employee	 	 	5	 
	1.33
	 	Hour of Service	 	 	6	 
	1.34
	 	Investment Fund	 	 	7	 
	1.35
	 	Leave of Absence	 	 	7	 
	1.36
	 	Life Expectancy	 	 	7	 
	1.37
	 	Limitation Year	 	 	7	 
	1.38
	 	Matching Account	 	 	7	 
	1.39
	 	Matching Contributions	 	 	7	 

			
	 	 	 
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	1.40
	 	Non-Highly Compensated Employee	 	 	7	 
	1.41
	 	Participant	 	 	7	 
	1.42
	 	Period of Military Duty	 	 	7	 
	1.43
	 	Plan	 	 	8	 
	1.44
	 	Plan Compensation	 	 	8	 
	1.45
	 	Plan Year	 	 	8	 
	1.46
	 	Profit Sharing Account	 	 	8	 
	1.47
	 	Profit Sharing Contributions	 	 	8	 
	1.48
	 	Qualified Matching Contributions or QMACs	 	 	8	 
	1.49
	 	QMAC Account	 	 	8	 
	1.50
	 	Qualified Distribution	 	 	8	 
	1.51
	 	Qualified Nonelective Contributions or QNECs	 	 	9	 
	1.52
	 	QNEC Account	 	 	9	 
	1.53
	 	Regulation	 	 	9	 
	1.54
	 	Required Beginning Date	 	 	9	 
	1.55
	 	Retirement	 	 	9	 
	1.56
	 	Retirement Age	 	 	9	 
	1.57
	 	Rollover Account	 	 	9	 
	1.58
	 	Rollover Contributions	 	 	9	 
	1.59
	 	Roth Account	 	 	9	 
	1.60
	 	Roth Contributions	 	 	9	 
	1.61
	 	Roth Rollover Account	 	 	10	 
	1.62
	 	Section 415 Compensation	 	 	10	 
	1.63
	 	Sponsor	 	 	10	 
	1.64
	 	Spouse	 	 	10	 
	1.65
	 	Stock	 	 	10	 
	1.66
	 	Stock Fund	 	 	10	 
	1.67
	 	Trust Agreement	 	 	10	 
	1.68
	 	Trustee	 	 	11	 
	1.69
	 	Trust Fund	 	 	11	 
	1.70
	 	Valuation Date	 	 	11	 
	1.71
	 	Year of Service	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE 2. ELIGIBILITY AND PARTICIPATION	 	 	12	 
	2.1
	 	Eligibility	 	 	12	 
	2.2
	 	Reinstatement of Participation	 	 	12	 
	2.3
	 	Termination of Participation	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE 3. SERVICE AND VESTING	 	 	14	 
	3.1
	 	Service Counting Method	 	 	14	 
	3.2
	 	Service with Related Employers	 	 	14	 
	3.3
	 	Vested Benefits	 	 	15	 
	3.4
	 	Reinstatement of Vesting Service upon Reemployment	 	 	16	 
	3.5
	 	Forfeitures	 	 	16	 
	3.6
	 	Restoration of Forfeited Amounts upon Reemployment	 	 	16	 
	3.7
	 	Disposition of Forfeitures	 	 	17	 

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
	 	1/2008     ii
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	ARTICLE 4. CONTRIBUTIONS	 	 	18	 
	4.1
	 	Elective Deferrals	 	 	18	 
	4.2
	 	Matching Contributions	 	 	19	 
	4.3
	 	Profit Sharing Contributions	 	 	19	 
	4.4
	 	After-Tax Contributions	 	 	20	 
	4.5
	 	Rollover Contributions	 	 	20	 
	4.6
	 	Timing of Contributions	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE 5. LIMITATIONS; NONDISCRIMINATION TESTS	 	 	22	 
	5.1
	 	Maximum Deductible Contributions	 	 	22	 
	5.2
	 	Elective Deferral Limit	 	 	22	 
	5.3
	 	Average Deferral Percentage Limitations	 	 	23	 
	5.4
	 	Average Contribution Percentage Limitations	 	 	25	 
	5.5
	 	Annual Additions Limitation	 	 	27	 
	5.6
	 	Incorporation by Reference to Limitations	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE 6. DISTRIBUTION OF PLAN BENEFITS	 	 	28	 
	6.1
	 	Distributable Events	 	 	28	 
	6.2
	 	Amount of Plan Benefits	 	 	28	 
	6.3
	 	Form of Distribution	 	 	28	 
	6.4
	 	Timing of Distributions	 	 	30	 
	6.5
	 	Required Minimum Distributions	 	 	30	 
	6.6
	 	Determination of Beneficiary	 	 	33	 
	6.7
	 	Rollover of Plan Distributions	 	 	35	 
	6.8
	 	Qualified Domestic Relations Orders	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE 7. LOANS	 	 	37	 
	7.1
	 	Authorization of Loans	 	 	37	 
	7.2
	 	Eligible Borrower	 	 	37	 
	7.3
	 	Loan Policy	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE 8. WITHDRAWALS	 	 	38	 
	8.1
	 	Hardship Withdrawals	 	 	38	 
	8.2
	 	Other Withdrawals	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE 9. INVESTMENT ELECTIONS	 	 	41	 
	9.1
	 	Selection of Investment Options	 	 	41	 
	9.2
	 	Directed Investments	 	 	41	 
	9.3
	 	Investment Manager	 	 	42	 
	9.4
	 	Valuation	 	 	42	 
	9.5
	 	Distribution and Withdrawals	 	 	43	 
	9.6
	 	Benefit Statements	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE 10. STOCK FUND	 	 	44	 
	10.1
	 	Stock Fund	 	 	44	 
	10.2
	 	Purchase of Shares	 	 	44	 

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
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	10.3
	 	Valuation	 	 	45	 
	10.4
	 	Crediting Stock to Account	 	 	45	 
	10.5
	 	Dividends	 	 	45	 
	10.6
	 	Transfers From Stock Fund	 	 	45	 
	10.7
	 	Distributions, Withdrawals and Loans	 	 	45	 
	10.8
	 	Voting	 	 	45	 
	10.9
	 	Tender Offers	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE 11. APPLICATION FOR BENEFITS	 	 	47	 
	11.1
	 	Applying for Benefits	 	 	47	 
	11.2
	 	Denial of Benefits	 	 	47	 
	11.3
	 	Exhaustion of Remedies; Limitation of Actions	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE 12. ADMINISTRATION OF THE PLAN	 	 	50	 
	12.1
	 	Administrator	 	 	50	 
	12.2
	 	Powers and Duties	 	 	50	 
	12.3
	 	Indemnification	 	 	50	 
	12.4
	 	Compensation and Expenses	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE 13. THE TRUST FUND	 	 	51	 
	13.1
	 	Trustee	 	 	51	 
	13.2
	 	Trust Fund	 	 	51	 
	13.3
	 	Reversion of Assets	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE 14. PLAN FIDUCIARIES	 	 	52	 
	14.1
	 	Fiduciaries	 	 	52	 
	14.2
	 	Bonding Requirements	 	 	52	 
	14.3
	 	Prohibited Transactions	 	 	52	 
	14.4
	 	Fiduciary Responsibilities	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE 15. TOP-HEAVY PROVISIONS	 	 	54	 
	15.1
	 	Top-Heavy Definitions	 	 	54	 
	15.2
	 	Determination of Top-Heavy Status	 	 	54	 
	15.3
	 	Change in Vesting Schedule	 	 	55	 
	15.4
	 	Minimum Contribution	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE 16. AMENDMENT, TERMINATION AND MERGER	 	 	57	 
	16.1
	 	Plan Amendment	 	 	57	 
	16.2
	 	Vesting Amendments	 	 	57	 
	16.3
	 	Plan Termination	 	 	57	 
	16.4
	 	Plan Merger	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE 17. PARTICIPATING EMPLOYERS	 	 	60	 
	17.1
	 	Adoption by Participating Employers	 	 	60	 
	17.2
	 	Participating Employer Required to Use Same Trust Agreements	 	 	60	 
	17.3
	 	Designation of Agent	 	 	60	 

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
	 	1/2008     iv
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	17.4
	 	Employee Transfers	 	 	60	 
	17.5
	 	Participating Employer’s Contribution	 	 	60	 
	17.6
	 	Amendment	 	 	60	 
	17.7
	 	Discontinuance of Participation	 	 	60	 
	17.8
	 	Administrator’s Authority	 	 	61	 
	 
	 	 	 	 	 	 
	ARTICLE 18. GENERAL PROVISIONS	 	 	62	 
	18.1
	 	Interpretation	 	 	62	 
	18.2
	 	Exclusive Benefit of Participants	 	 	62	 
	18.3
	 	Liability for Representations	 	 	62	 
	18.4
	 	Governing Law	 	 	62	 
	18.5
	 	Assignment and Alienation	 	 	62	 
	18.6
	 	Participant Rights	 	 	62	 
	18.7
	 	Effect on Employment Status	 	 	63	 
	18.8
	 	Missing Participants and Beneficiaries	 	 	63	 
	18.9
	 	Incapacity of Participant or Beneficiary	 	 	63	 
	18.10
	 	Waiver; Disclaimer	 	 	64	 

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
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Savings and Profit Sharing Plan for Employees of

First Interstate BancSystem, Inc.

(Amended and Restated Effective January 1, 2008)

Introduction

          First Interstate BancSystem, Inc., a corporation duly organized under the laws of the State of
Montana and having its principal place of business in Billings, Montana (the “Sponsor”), originally
established the Savings Plan for Employees of First Interstate BancSystem of Montana, Inc. (the
“Savings Plan”) effective as of July 1, 1983. The Savings Plan was subsequently amended and
restated effective January 1, 1987. The Employer also established the Profit Sharing Plan for
Employees of First Interstate BancSystem of Montana, Inc. (the “Profit Sharing Plan”) originally
effective as of January 1, 1983. The Profit Sharing Plan was subsequently amended and restated
effective January 1, 1987.

          The Profit Sharing Plan was then merged into the Savings Plan, effective January 1, 1991, and
the Savings Plan was renamed the “Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc.” (the “Plan”).

          The Plan is now amended and restated, effective January 1, 2008, to incorporate all amendments
to the Plan since it was last restated on January 1, 2006, to incorporate a Roth 401(k) feature,
and to make necessary and desirable amendments as provided or permitted by certain recent changes
in the law. This amendment and restatement shall supersede all other restatements of the Plan.

          The purposes of the Plan are to enable employees to share in the profitable operations of the
Sponsor and to provide a convenient way for them to save on a regular and long-term basis for
retirement.

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
	 	01/2008     1
	Prepared by Holland & Hart LLP	 	 

 

 

ARTICLE 1.

DEFINITIONS

          When used in this Plan, the following capitalized terms shall have the meanings set forth
below unless a different meaning is plainly required by the context:

	1.1	 	Account means the separate account maintained for a Participant consisting of all
contributions allocated to the Participant and the income, expenses, gains and losses
allocated thereon. Each Participant’s Account shall consist of subaccounts reflecting the
portion of the Participant’s Account balance derived from the source for which the subaccount
is named, including some or all of the following: After-Tax Account, Before-Tax Account, Roth
Account, Profit Sharing Account, Matching Account, QNEC Account, QMAC Account, Roth Rollover
Account and Rollover Account.
	 
	1.2	 	Administrator means the FIBS Benefits Committee.
	 
	1.3	 	After-Tax Account means the individual subaccount established in the name of each Participant
reflecting his or her After-Tax Contributions, and the net earnings or losses thereon.
	 
	1.4	 	After-Tax Contributions mean the voluntary contributions made by a Participant prior to
January 1, 1989, as described in Section 4.4.
	 
	1.5	 	Annual Additions mean, for each Limitation Year, the sum of—

	 	(a)	 	the contributions by the Employer to this Plan or any other qualified defined
contribution retirement plan sponsored by the Employer that are allocated for the
benefit of a Participant, including forfeitures;
	 
	 	(b)	 	Participant contributions to this Plan or to any other qualified defined
contribution retirement plan sponsored by the Employer (other than contributions made
pursuant to Code Section 414(v)); and
	 
	 	(c)	 	for purposes of the dollar limitation on Annual Additions, any contributions by
the Employer allocated to a medical expense reimbursement account which is established
under Code Section 401(h) for a Participant under any pension or annuity plan, or, in
the case of a Key Employee, any contribution by the Employer allocated on his or her
behalf to a separate account in a funded welfare benefit plan established for the
purpose of providing post-retirement medical benefits.
	 
	 	(d)	 	Notwithstanding anything herein to the contrary, Annual Additions shall not
include any investment earnings allocable to a Participant, Rollover Contributions,
amounts contributed to the Plan as restorative payments or contributions of amounts
previously distributed to former Employees who are reemployed.

	1.6	 	Average Contribution Percentage or ACP means the average of the actual contribution ratios,
calculated separately for each Highly Compensated Employee and each Non-Highly Compensated
Employee, as the ratio of a Participant’s After-Tax Contributions and Matching

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
	 	01/2008     2
	Prepared by Holland & Hart LLP	 	 

 

 

	 	 	Contributions for the applicable Plan Year (plus all or a portion of the QMACs and QNECs, if
any, as determined by the Employer) to the Participant’s Section 415 Compensation.
	 
	1.7	 	Average Deferral Percentage or ADP means the average of the actual deferral ratios,
calculated separately for each Highly Compensated Employee and each Non-Highly Compensated
Employee, as the ratio of a Participant’s Before-Tax Contributions and Roth Contributions for
the applicable Plan Year (plus all or a portion of the QNECs, if any, made with respect to a
Participant for such year and such other amounts that are treated as Before-Tax Contributions
for such year pursuant to Regulations) to the Participant’s Section 415 Compensation.
	 
	1.8	 	Before-Tax Account means the individual subaccount established in the name of the Participant
reflecting his or her Before-Tax Contributions, and the net earnings or losses thereon.
	 
	1.9	 	Before-Tax Contributions mean the contributions to the Trust Fund made by the Employer on
behalf of a Participant pursuant to the Participant’s deferral election under
Section 4.1, which are intended to qualify as pre-tax contributions pursuant to Code
Section 401(k) and shall be credited to the Participant’s Before-Tax Account.
	 
	1.10	 	Beneficiary means any individual, trust, estate, or other recipient properly designated by
the Participant pursuant to the procedures required by the Administrator to receive Death
benefits payable hereunder, on either a primary or contingent basis. For purposes of the
required minimum distributions rules contained in Section 6.5, Designated Beneficiary
means a Beneficiary who qualifies as a “designated beneficiary” within the meaning of Code
Section 401(a)(9)(E) and the related Regulations.
	 
	1.11	 	Break in Service means a Plan Year in which an Employee is credited with 500 or fewer Hours
of Service. An Employee incurs a Break in Service on the last day of the Plan Year in which
he or she has a Break in Service.
	 
	1.12	 	Cash-Out Limit means $5,000, calculated as of the time of distribution, or such other maximum
amount as may be determined from time to time in accordance with the Code. The value of a
Participant’s vested Account for purposes of applying the Cash-Out Limit shall be determined
without regard to that portion of the Account balance that is attributable to Rollover
Contributions (and earnings allocable thereto). If the value of the Participant’s vested
Account as so determined does not exceed the Cash-Out Limit, the Plan shall distribute the
Participant’s entire vested Account in accordance with Section 6.3(a).
	 
	1.13	 	Catch-Up Before-Tax Contributions mean the contributions to the Trust Fund made by the
Employer on behalf of a Participant under Section 4.1(d), which are intended to
qualify as catch-up contributions under Code Section 414(v) and which have been designated as
Before-Tax Contributions.
	 
	1.14	 	Catch-Up Roth Contributions mean the contributions to the Trust Fund made by the Employer on
behalf of a Participant under Section 4.1(d), which are intended to qualify as
catch-up contributions under Code Section 414(v) and which have been designated as Roth
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	1.15	 	Code means the Internal Revenue Code of 1986, as amended.
	 
	1.16	 	Computation Period means, for purposes of determining eligibility to participate in the Plan,
the 12-consecutive month period beginning on his or her Date of Employment. Thereafter, the
Employee’s Computation Period shall be calculated on a Plan Year basis, beginning with the
Plan Year that includes the first anniversary of the Employee’s Date of Employment. For
purposes of determining vesting service, Computation Period means the Plan Year.
	 
	1.17	 	Controlled Group means any group of corporations, trades or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group or a combined
group within the meaning of Code Sections 414(b), (c), (m) and (o), modified for purposes of
Code Section 415 only by Code Section 415(h).
	 
	1.18	 	Date of Employment means the date on which an Employee first performs an Hour of Service.
	 
	1.19	 	Date of Reemployment means the date on which an Employee first completes an Hour of Service
with the Employer after a Break in Service.
	 
	1.20	 	Death means the Participant’s death for which a certificate or declaration of death is
issued, and may include the Participant’s disappearance, as determined in the sole discretion
of the Administrator.
	 
	1.21	 	Disability means a physical or mental injury or disease that causes an Employee to be
permanently incapable of rendering satisfactory service to the Employer, as determined under
the Sponsor’s long-term disability plan.
	 
	1.22	 	Distribution Calendar Year means a calendar year for which a minimum distribution is
required. For distributions beginning before the Participant’s Death, the first Distribution
Calendar Year is the calendar year immediately preceding the calendar year that contains the
Participant’s Required Beginning Date. For distributions beginning after the Participant’s
Death, the first Distribution Calendar Year is the calendar year in which distributions are
required to begin. The required minimum distribution for the Participant’s first Distribution
Calendar Year will be made on or before the Participant’s Required Beginning Date. The
required minimum distribution for other Distribution Calendar Years, including the required
minimum distribution for the Distribution Calendar Year in which the Participant’s Required
Beginning Date occurs, will be made on or before December 31 of that Distribution Calendar
Year.
	 
	1.23	 	Distribution Date means the date of distribution, which shall be as soon as administratively
feasible following:

	 	(a)	 	the business day coinciding with or next following the 15th day of
each calendar month with regard to distributions that include amounts only attributed
to Investment Funds other than from the Stock Fund; and
	 
	 	(b)	 	the business day established by the Administrator following receipt of each
valuation report, to be at least as often as quarterly, for distributions that include
amounts attributable to the Stock Fund.

			
	 	 	 
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	1.24	 	Effective Date means July 1, 1983. The Effective Date of this restatement shall mean
January 1, 2008. The provisions of this restatement shall apply solely to an Employee who
performs an Hour of Service for the Employer on or after January 1, 2008. If an earlier
effective date for a provision in this restated Plan applies, the provision is effective as of
the earlier effective date notwithstanding the general January 1, 2008 effective date of this
restatement.
	 
	1.25	 	Elective Deferrals mean collectively, Before-Tax Contributions and Roth Contributions to the
Trust Fund made by the Employer on behalf of a Participant in accordance with the
Participant’s deferral election under Section 4.1.
	 
	1.26	 	Employee means any individual who is employed by the Employer, excluding:

	 	(a)	 	any individual who is classified as an agent, consultant, independent
contractor or self-employed individual who has entered into an agency, consulting,
independent contractor or other similar arrangement with the Employer, regardless of
whether such person is later determined by a court or governmental agency to have an
employment relationship with the Employer;
	 
	 	(b)	 	leased employees (as defined in Code Section 414(n)); and
	 
	 	(c)	 	any individual who is a nonresident alien and who receives no earned income
from the Employer that constitutes income from sources within the United States.

	1.27	 	Employer means the Sponsor and its successors. Employer shall also include a member of the
Sponsor’s Controlled Group if such member adopts the Plan in accordance with
Article 17.
	 
	1.28	 	ERISA means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.29	 	Excess Aggregate Contributions mean, for any Plan Year, the excess of the aggregate Matching
Contributions and forfeitures, if any, taken into account in computing the ACP of all Highly
Compensated Employees for the Plan Year, over the maximum amount of such contributions
permitted under the ACP test.
	 
	1.30	 	Excess Deferrals mean, for any Plan Year, the excess of the aggregate Elective Deferrals,
QMACs, and QNECs taken into account in computing the ADP of all Highly Compensated Employees
for the Plan Year, over the maximum amount of such contributions permitted under the ADP test.
	 
	1.31	 	Five Taxable Year Period means the period beginning on the first day of the first taxable
year in which a Participant makes a Roth Contribution to his or her Roth Account under this
Plan or, if a Rollover Contribution was made to the Participant’s Roth Rollover Account from
another qualified plan not maintained by the Sponsor, the first day of the first taxable year
for which the Participant made a Roth contribution to such other qualified plan.
	 
	1.32	 	Highly Compensated Employee means any Employee who performed services for the Employer during
the determination year and who –

			
	 	 	 
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	 	(a)	 	was a 5% owner (as defined in Code Section 416(i)) of the Employer at any time
during the determination year or lookback year; or
	 
	 	(b)	 	received Section 415 Compensation from the Employer for the lookback year in
excess of the dollar limit set forth in Code Section 414(q)(1)(B), as adjusted pursuant
to Code Section 415(d).

	 	 	For this purpose, the “determination year” shall mean the Plan Year for which the
determination of whom is a Highly Compensated Employee is being made. “Lookback year” shall
mean the immediately preceding Plan Year. The determination of the Employees who qualify as
Highly Compensated Employees under this Plan shall be made in accordance with the provisions
of Code Section 414(q) and related Regulations.
	 
	1.33	 	Hour of Service means hours computed according to the following rules:

	 	(a)	 	Hour of Service shall include the following:

	 	(1)	 	Paid Duty. Each Employee shall be credited with one
Hour of Service for each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the performance of duties.
	 
	 	(2)	 	Paid Non-Duty. Each Employee shall be credited with
one Hour of Service for each hour for which the Employee is directly or
indirectly paid, or entitled to payment, by the Employer on account of a period
of time during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty, leave of
absence or maternity leave. No more than 501  hours shall be credited under
this subsection for any single continuous period (whether or not such period
occurs in a single Computation Period). Hours under this subsection shall be
calculated and credited pursuant to Regulation Section 2530.200b-2, which is
incorporated herein by this reference.
	 
	 	(3)	 	Back Pay. Each Employee shall be credited with one
Hour of Service for each hour for which back pay is awarded or agreed to,
irrespective of mitigation of damages.

	 	 	 	The Committee shall not credit an Hour of Service under more than one of the
classifications described in subsection (1), (2) or (3).
The Administrator shall determine Hours of Service in accordance with reasonable
standards and policies adopted by it and shall credit Hours of Service in accordance
with Regulation Section 2530.200b-2.
	 
	 	(b)	 	Equivalency. The number of Hours of Service to be credited to an Employee will
be calculated on the basis of actual hours for which the Employee is paid or entitled
to payment. If such actual hours cannot be determined, the number of Hours of Service
will be calculated using 45 Hours of Service for each week during which the Employee
would be required to be credited with at least one Hour of Service under Regulation
Section 2530.200b-2. Different methods of crediting Hours of Service

			
	 	 	 
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	 	 	 	(actual hours or one or more equivalencies) may be specified for different
classifications of Employees, as long as the classifications are reasonable and
consistently applied.
	 
	 	(c)	 	Other. An Employee’s Hours of Service shall be determined on the basis of
records of the Employer; provided, however, that all such determinations shall be
consistent with Regulation Sections 2530.200b-2(b) and (c). Hours of Service shall
also be credited to any individual who is considered an employee of any member of the
Controlled Group.

	1.34	 	Investment Fund means any fund established by the Administrator as an investment medium for
the Trust Fund, including the Stock Fund. The Administrator shall have the discretion to
establish and terminate an Investment Fund as it shall deem appropriate. The Administrator
shall also determine the restrictions, if any, on the investment of a Participant’s Account
(or any portion thereof) in any Investment Fund, provided any such restrictions shall be
applied in a uniform and nondiscriminatory manner.
	 
	1.35	 	Leave of Absence means any absence from work for a Period of Military Duty or an absence of
not over 12 months approved by the Employer in accordance with reasonable, nondiscriminatory
standards and policies consistently applied by the Employer.
	 
	1.36	 	Life Expectancy means life expectancy as computed by use of the Single Life Table in
Regulation Section 1.401(a)(9)-9.
	 
	1.37	 	Limitation Year means the Plan Year. If the Plan is terminated effective as of a date other
than the last day of the Plan Year, the Plan shall be treated as if the Plan was amended to
change its Limitation Year. As a result of this deemed amendment, the Code
Section 415(c)(1)(A) dollar limit shall be prorated under the short Limitation Year rules.
	 
	1.38	 	Matching Account means the individual subaccount established in the name of the Participant
reflecting his or her Matching Contributions, and the net earnings or losses thereon.
	 
	1.39	 	Matching Contributions mean the discretionary contributions to the Trust Fund made by the
Employer under Section 4.2, which shall be credited to the Participant’s Matching
Account.
	 
	1.40	 	Non-Highly Compensated Employee means any individual who at any time during the applicable
Plan Year is a Participant in this Plan and who is not a Highly Compensated Employee.
	 
	1.41	 	Participant means any Employee who has entered the Plan in accordance with the provisions of
Article 2.
	 
	1.42	 	Period of Military Duty means, for an Employee who served as a member of the armed forces of
the United States and who was reemployed by the Employer at a time when the Employee had a
right to reemployment in accordance with seniority rights as protected under Chapter 43 of
Title 38 of the U.S. Code, the period of time from the date the Employee was first absent from
active work for the Employer because of such military duty to the Employee’s reemployment
date.

			
	 	 	 
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	1.43	 	Plan means the Savings and Profit Sharing Plan for Employees of First Interstate BancSystem,
Inc., as of its original effective date, including any subsequent amendments thereto.
	 
	1.44	 	Plan Compensation means the Participant’s base salary actually received by the Participant
from the Employer during any Plan Year, and includes commissions paid to mortgage and real
estate personnel, brokers’ commissions received after June 30, 1999, shift differential pay
and payment for unused leave, but excludes bonuses, overtime and incentive pay. Plan
Compensation shall be determined by including all amounts that would have been paid to the
Employee but for the exclusion from income by reason of Code Sections 125, 132(f)(4),
402(e)(3), 402(h) and 403(b).
	 
	 	 	In no event shall Plan Compensation include any amount in excess of $200,000 as may be
adjusted pursuant to Code Section 401(a)(17)(B). Any such adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which Plan Compensation
is determined (“determination period”) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the Code Section 401(a)(17) limitation will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period and the denominator of which is 12.
	 
	1.45	 	Plan Year means the 12-month period ending on December 31.
	 
	1.46	 	Profit Sharing Account means the individual subaccount established in the name of each
Participant reflecting his or her Profit Sharing Contributions, and the net earnings or losses
thereon.
	 
	1.47	 	Profit Sharing Contributions means the discretionary contributions to the Trust Fund made by
the Employer under Section 4.3, which shall be credited to the Participant’s Profit
Sharing Account.
	 
	1.48	 	Qualified Matching Contributions or QMACs means the contributions to the Trust Fund made by
the Employer on behalf of a Non-Highly Compensated Employee for the purpose of satisfying the
requirements of Section 5.4 and that satisfy the distribution and nonforfeitability
requirements under Code Section 401(k). With respect to any Plan Year, the Employer may make,
in its sole discretion, QMACs to Non-Highly Compensated Employees either (a) in proportion to
the Non-Highly Compensated Employees’ Compensation (b) in a specific dollar amount allocable
to each Non-Highly Compensated Employee, or (c) in a specific dollar amount allocated to less
than all Non-Highly Compensated Employees, allocated first to those Employees with the lowest
ACP; provided, however, that QMACs to a Non-Highly Compensated Employee under this
subsection (c) shall comply with Regulation Section 1.401(m)-2(a)(5)(ii).
	 
	1.49	 	QMAC Account means the individual subaccount established in the name of each Participant
reflecting his or her QMACs, and the net earnings or losses thereon.
	 
	1.50	 	Qualified Distribution means a distribution from a Participant’s Roth Account and/or Roth
Rollover Account that (a) is made on or after the date a Participant turns age 591/2, dies or
becomes disabled (within the meaning of Code Section 72(m)); and (b) is made after the Five
Taxable Year Period.

			
	 	 	 
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	1.51	 	Qualified Nonelective Contributions or QNECs means the contributions (other than QMACs) to
the Trust Fund made by the Employer on behalf of a Non-Highly Compensated Employee for the
purpose of satisfying the requirements of Section 5.3 and that satisfy the applicable
nonforfeitability requirements and distribution restrictions of Code Section 401(k). The
Employer may make QNECs to Non-Highly Compensated Employees (a) in proportion to the
Non-Highly Compensated Employees’ Compensation, (b) in a specific dollar amount allocable to
each Non-Highly Compensated Employee, or (c) in a specific dollar amount allocated to less
than all Non-Highly Compensated Employees, allocated first to those Employees with the lowest
ADP; provided, however, that QNECs to a Non-Highly Compensated Employee under this
subsection (c) shall comply with Regulation Section 1.401(k)-2(a)(6)(iv).
	 
	1.52	 	QNEC Account means the individual subaccount established in the name of the Participant
reflecting his or her QNECs, and the net earnings or losses thereon.
	 
	1.53	 	Regulation means any rule or regulation promulgated by the Department of the Treasury, the
Department of Labor, or their delegates.
	 
	1.54	 	Required Beginning Date means the April 1 of the calendar year following—

	 	(a)	 	in the case of a Participant who is a 5% owner of the Employer (within the
meaning of Code Section 416(i)), the calendar year in which the Participant attains
age 701/2, and
	 
	 	(b)	 	in the case of a Participant who is not a 5% owner of the Employer, the later
of the calendar year in which occurs the Participant’s retirement or the calendar year
in which the Participant attains age 701/2.

	1.55	 	Retirement means a Participant’s severance from employment upon or after attaining his or her
Retirement Age.
	 
	1.56	 	Retirement Age means the Participant’s 55th birthday.
	 
	1.57	 	Rollover Account means the individual subaccount established in the name of an Employee
reflecting his or her Rollover Contributions, and the net earnings or losses thereon.
	 
	1.58	 	Rollover Contributions mean the contributions to the Trust Fund made by an Employee pursuant
to Section 4.5, which shall be credited to his or her Rollover Account.
	 
	1.59	 	Roth Account means the individual subaccount established in the name of a Participant
reflecting his or her Roth Contributions, and the net earnings or losses thereon.
	 
	1.60	 	Roth Contributions mean the contributions to the Trust Fund made by the Employer on behalf of
a Participant pursuant to the Participant’s deferral election under Section 4.1, which
are intended to qualify as after-tax contributions pursuant to Code Section 402A and
applicable Regulations and shall be credited to the Participant’s Roth Account.

			
	 	 	 
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	1.61	 	Roth Rollover Account means the contributions to the Trust Fund made by an Employee, which
are attributable to designated Roth contributions made to another employer’s qualified plan.
	 
	1.62	 	Section 415 Compensation means an Employee’s compensation as defined in Code
Section 415(c)(3) and applicable Regulations and shall include elective contributions made by
the Employer on behalf of the Employee that are excludable from the Employee’s income by
reason of Code Sections 125, 402(e)(3), 402(h), 403(b) and 132(f)(4). Section 415
Compensation shall also include payments for unused leave (such as sick leave or vacation) and
amounts paid by the Employer to Employees who are not currently working for the Employer
because of a Period of Military Duty, but shall exclude payments received by an Employee from
a nonqualified unfunded deferred compensation plan that would have been paid had employment
continued and would have been included in the Employee’s gross income.
	 
	 	 	Section 415 Compensation shall include back pay, within the meaning of Regulation
Section 1.415(c)-2(g)(8), to the extent the back pay represents wages and compensation that
would otherwise be included in this definition. Section 415 Compensation shall also include
compensation paid by the later of 21/2 months after a severance from service or the end of the
Limitation Year that includes the severance from service date, if the payment is:

	 	(a)	 	regular compensation for services performed during regular working hours, or
compensation for services performed outside the regular working hours (such as overtime
or shift differential), commissions, bonuses, or other similar payments; and
	 
	 	(b)	 	absent a severance from service, the payments would have been paid while the
Participant continued in employment with Employer.

	 	 	For purposes of Sections 5.3 and 5.4, the Sponsor may elect to use the
definition of Section 415 Compensation contained herein or any alternative definition
permitted under the Regulations in lieu of this definition.
	 
	1.63	 	Sponsor means First Interstate BancSystem, Inc., a corporation duly organized under the laws
of the State of Montana and having its principal place of business in Billings, Montana, and
any successor thereto.
	 
	1.64	 	Spouse means the legal spouse of the Participant, provided that a former spouse will be
treated as the Spouse and a current spouse will not be treated as the Spouse to the extent
provided under a qualified domestic relations order as described in Code Section 414(p).
	 
	1.65	 	Stock means shares of any classes of preferred or common, voting or nonvoting stock issued by
the Sponsor.
	 
	1.66	 	Stock Fund means the investment option described in Article 10.
	 
	1.67	 	Trust Agreement means any agreement establishing a trust to receive, hold, invest and dispose
of the Trust Fund.

			
	 	 	 
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	1.68	 	Trustee means the individual, individuals, corporation or combination thereof, acting as
trustee under the Trust Agreement at any time of reference.
	 
	1.69	 	Trust Fund means the assets of every kind and description held under the Trust Agreement.
	 
	1.70	 	Valuation Date means the last day of each calendar quarter, and such other date or dates as
the Administrator shall declare for the Plan or for any Account, category of Accounts or
Investment Fund. With respect to each Investment Fund other than the Stock Fund, each
business day that the New York Stock Exchange is open for trading shall also be a Valuation
Date.
	 
	1.71	 	Year of Service means any Computation Period during which an Employee completes at least
1,000 Hours of Service in accordance with the Hours of Service method.

* * * * End of Article 1 * * * *

			
	 	 	 
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ARTICLE 2.

ELIGIBILITY AND PARTICIPATION

	2.1	 	Eligibility.

	 	(a)	 	Participation. An Employee who was eligible to participate in the Plan prior
to the Effective Date of this restatement shall continue to be eligible to participate
in the Plan. Each other Employee shall become a Participant in the Plan on the first
day of the month next following the date the Employee is classified as a regular status
(non-temporary) Employee and is scheduled to work at least 20 hours per week for the
Employer or, if sooner, the first January 1 or July 1 next following the Employee’s
completion of one Year of Service.
	 
	 	(b)	 	Profit Sharing Contributions. A Participant who has satisfied the service
requirements of subsection (a) shall share in the allocation of Profit Sharing
Contributions and forfeitures for the Plan Year, if any, if the Participant is an
Employee of the Employer on the last day of the Plan Year quarter. Notwithstanding the
foregoing, a Participant shall be deemed to satisfy the requirement of this
subsection (b) upon the Participant’s Death, Disability or Retirement during
the quarter.
	 
	 	(c)	 	Suspension of Participation Requirements. If the Plan fails to satisfy the
coverage test of Code Section 410(b) or the benefits, rights and features test of Code
Section 401(a)(4) for any Plan Year, the Plan shall suspend the requirements of
subsection (b) (“allocation requirements”) as follows: Participants who have
the latest severance from employment date during the Plan Year quarter, continuing in
descending order for each Participant who incurred an earlier severance from
employment, from the latest to the earliest severance from employment date during the
Plan Year quarter.
	 
	 	 	 	If two or more Participants have the same severance from employment date, the Plan
will suspend the allocation requirements for all such Participants, irrespective of
whether the Plan can satisfy the coverage test by allocating benefits for fewer than
all such Participants. If the Plan suspends the allocation requirements for a
Participant, that Participant will share in the allocation of Profit Sharing
Contributions and forfeitures, if any, without regard to whether he or she is
employed by the Employer on the last day of the Plan Year quarter.

	2.2	 	Reinstatement of Participation.

	 	(a)	 	Participation After Reemployment. A Participant who has a severance from
employment shall again become a Participant on his or her Date of Reemployment if the
Participant is an Employee. An Employee who has a severance from employment but was
not a Participant in the Plan must satisfy the requirements of Section 2.1(a)
to be eligible to participate in the Plan upon his or her Date of Reemployment.
	 
	 	(b)	 	Reclassification as an Employee. In the event an individual who is not an
Employee becomes an Employee, such individual shall be eligible to make Elective
Deferrals and receive Matching Contributions and Profit Sharing Contributions on the
first day

			
	 	 	 
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of the month following the status change. In applying this subsection (b)
to any Employee, such Employee’s employment with all Controlled Group members shall
be treated as employment with the Employer.

	 	(c)	 	Leave of Absence. Any Employee who is a Participant at the time the Employee
is granted a Leave of Absence shall be eligible to continue to participate in any
contributions during the Employee’s Leave of Absence to the extent of any Plan
Compensation actually paid to the Employee by the Employer during the Leave of Absence.
Contributions, benefits and service credit with respect to a Period of Military Duty
will be provided in accordance with Code Section 414(u), provided the Employee returns
to active employment following discharge from such service within the period that the
Employee’s reemployment rights are protected under such provision. Notwithstanding the
foregoing, the Employee’s Account shall continue to be subject to its proportionate
share of any gains or losses or any other adjustments therein.

	2.3	 	Termination of Participation. A Participant shall cease to be a
Participant as of the date he or she has received a complete distribution of his or her
Account; provided, however, that for purposes of an Employee’s eligibility to receive an
allocation of Employer contributions or make Elective Deferrals, a Participant shall cease to
be a Participant on his or her severance from employment date.

* * * * End of Article 2 * * * *

 
			
	 	 	 
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ARTICLE 3.

SERVICE AND VESTING

	3.1	 	Service Counting Method. For purposes of eligibility and vesting,
all Employees shall be credited with service pursuant to the rules applicable to the Hours of
Service method.
	 
	3.2	 	Service with Related Employers.

	 	(a)	 	Controlled Group. For purposes of determining an Employee’s eligibility and
vesting service, service shall be deemed to include service with a member of the
Sponsor’s Controlled Group, performed during the time that such Controlled Group member
is or was actually under common control with the Sponsor within the meaning of Code
Section 414.
	 
	 	(b)	 	Transfer between Controlled Group Members. In the event an Employee is
transferred between Controlled Group members, the Employee shall retain his or her
accumulated service and eligibility. No such transfer shall effect a severance from
employment with the Employer under the Plan, and the Employer to which the Employee is
transferred shall become obligated with respect to such Employee in the same manner as
was the Employer from whom the Employee was transferred.
	 
	 	(c)	 	Imputed Service. Service with the following companies shall be taken into
account in determining an Employee’s eligibility and vesting service, regardless of
whether such company was a member of the Sponsor’s Controlled Group:

	 	(1)	 	In the case of Employees who were employed by First Citizens
Bank of Bozeman, Montana on January 1, 1995, service shall include Hours of
Service performed for First Citizens Bank of Bozeman, Montana prior to the time
it became a member of the Controlled Group.
	 
	 	(2)	 	In the case of Employees who were employed by First National
Park Bank, N.A. on July 1, 1995, service shall include Hours of Service
performed for First National Park Bank, N.A. prior to the time it became a
member of the Controlled Group.
	 
	 	(3)	 	In the case of Employees who were employed by the Helena,
Montana or Belgrade, Montana branch of First National Bank of Montana on the
date on which substantially all of the operating assets of the bank were
acquired by the Sponsor or a member of the Sponsor’s Controlled Group, service
shall include Hours of Service performed for First National Bank of Montana
prior to such date.
	 
	 	(4)	 	For purposes of determining service for individuals who were
Employees of First Interstate Bank of Wyoming, N.A., First Interstate Bank of
Montana, N.A., Mountain Bank, Security State Bank Shares, Security State Bank
and Trust Company, Equality State Bank, Equality Bankshares and Subsidiaries or
United States National Bank of Red Lodge on the date such organizations first
became members of the Sponsor’s Controlled Group, service previously completed
by such individuals as Employees of such organizations (including

			
	 	 	 
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	 	 	 	service for any affiliated or predecessor entity taken into account for
eligibility purposes in a qualified pension or profit sharing plan
maintained by such organizations) shall be taken into account to the same
extent as service completed for the Employer.
	 
	 	(5)	 	In the case of Employees who were employed by Iowa State Bank
and Trust immediately prior to becoming an Employee of the Employer on
January 1, 2006, service shall include Hours of Service performed for Iowa
State Bank and Trust prior to the time it became a member of the Controlled
Group.
	 
	 	(6)	 	In the case of Employees who were employed by First Western
Bank Sturgis, Sturgis, South Dakota, First Western Bank, Wall, South Dakota or
First Western Data, Inc. on the date in which all of the issued and outstanding
common stock and other equity interests in such entities were acquired by the
Sponsor, service shall include Hours of Service performed for First Western
Bank Sturgis, Sturgis, South Dakota, First Western Bank, Wall, South Dakota or
First Western Data, Inc. prior to such date.

	3.3	 	Vested Benefits. The balance in a Participant’s Account shall become
vested as follows:

	 	(a)	 	Fully Vested Accounts. A Participant shall be 100% vested at all times in the
value of his or her After-Tax Account, Before-Tax Account, Roth Account, QMAC Account,
QNEC Account, Rollover Account and Roth Rollover Account.
	 
	 	(b)	 	Matching and Profit Sharing Accounts.

	 	(1)	 	Participation as of January 1, 2001. A Participant who
was (A) a Participant prior to January 1, 2001, or (B) an Employee on or before
January 1, 2000, and became a Participant on January 1, 2001, after completion
of one Year of Service, or (C) an Employee prior to January 1, 2001, and became
a Participant after that date in accordance with Section 2.1(a), shall
at all times be 100% vested in his or her Matching Account and Profit Sharing
Account.
	 
	 	(2)	 	i_Tech Corporation. Employees: (A) who are employed by
the Sponsor on December 31, 2008, (B) who are Participants as of December 31,
2008, and (C) who shall transfer employment to i_Tech Corporation as of
January 1, 2009 pursuant to that certain Stock Purchase Agreement among Fiserv,
Inc., Fiserv Solutions, Inc. and First Interstate BancSystem, Inc. dated
December 15, 2008, shall be 100% vested in their Matching Account and Profit
Sharing Account as of December 31, 2008.
	 
	 	(3)	 	General. Participants not described in
subsections (1) or (2) shall be 100% vested in their Matching
Account and Profit Sharing Account upon completion of three Years of Service.

	 	(c)	 	Events Fully Vesting Participant Accounts. Notwithstanding
subsection (b), a Participant’s vested percentage will be 100% upon the
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	 	(1)	 	the Participant’s attainment of Retirement Age while employed
by the Employer,
	 
	 	(2)	 	the Participant suffers a Disability while employed by the
Employer, or
	 
	 	(3)	 	the Death of the Participant while employed by the Employer,
including the Participant’s Death while on a Period of Military Duty.

	3.4	 	Reinstatement of Vesting Service upon Reemployment.

	 	(a)	 	An Employee who has less than 5 consecutive Breaks in Service shall receive
credit for vesting purposes for all Years of Service completed prior to the Employee’s
Breaks in Service.
	 
	 	(b)	 	If a Participant incurs 5 consecutive Breaks in Service, Years of Service
occurring after the 5 consecutive Breaks in Service shall not be counted in order to
increase the Participant’s vested percentage with respect to Employer contributions
earned prior to the 5 consecutive Breaks in Service.

	3.5	 	Forfeitures. If a Participant has a severance from service before
fully vesting in his or her Matching Account and/or Profit Sharing Account and subsequently
receives a distribution of the entire vested portion of his or her Account (which may be
nothing if the Participant is 0% vested), or incurs 5 consecutive Breaks in Service, the
non-vested portion of the Participant’s Account shall be forfeited and applied in accordance
with Section 3.7. Such forfeiture shall take place on the earlier of –

	 	(a)	 	the Participant’s severance from service if the Participant is 0% vested;
	 
	 	(b)	 	the date the Participant receives a distribution of his or her vested Account;
or
	 
	 	(c)	 	the last day of the Plan Year in which the Participant first incurs 5
consecutive Breaks in Service.

	3.6	 	Restoration of Forfeited Amounts upon Reemployment. If a Participant
is rehired, amounts previously forfeited, if any, shall be treated as follows:

	 	(a)	 	Restoration On Date of Reemployment. If the Participant is rehired prior to
the occurrence of 5 consecutive Breaks in Service and forfeited his or her Account in
accordance with Section 3.5(a), the previously forfeited amounts shall be
restored to the Participant’s Account as of his or her Date of Reemployment.
	 
	 	(b)	 	Restoration If Distribution Repaid. If the Participant is rehired prior to the
occurrence of 5 consecutive Breaks in Service and forfeited his or her non-vested
Account in accordance with Section 3.5(b), such Participant shall be given the
opportunity to recontribute the full amount of the prior distribution from the Plan.
If the Participant recontributes the full amount of the prior distribution before the
date that is 5 years after the Participant’s Date of Reemployment, the previously
forfeited amounts shall be restored to his or her Account without interest. If a
Participant fails to contribute the full amount of the prior distribution, any
previously forfeited amounts which would otherwise be restored pursuant to this section
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	 	 	 	restored. Participants shall not be permitted to repay only a portion of a previous
distribution.

	 	(c)	 	No Restoration. If the Participant is rehired after 5 consecutive Breaks in
Service, no portion of the Participant’s non-vested Account shall be restored and the
Participant’s vested Account, if any, shall be maintained as a separate, fully vested
Account.
	 
	 	(d)	 	Source of Restored Amounts. Forfeited amounts to be restored for any Plan Year
may be restored from forfeitures as of the last day of a Plan Year, from additional
Employer contributions for such Plan Year, from Trust Fund income, or from a
combination of these methods, as determined in the Administrator’s sole discretion.

	3.7	 	Disposition of Forfeitures. Forfeitures arising during a Plan Year
that are not used to restore a Participant’s Account as of the last day of such Plan Year may
be used for any of the following purposes: (a) to reduce Employer contributions for the Plan
Year and (b) to pay the reasonable expenses of administering the Plan. The determination of
the disposition of forfeitures shall be made by the Administrator in its sole discretion.
Forfeitures under the Plan shall be available as provided under this Section 3.7
without regard to which Employer contributed such assets.

* * * * End of Article 3 * * * *

			
	 	 	 
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ARTICLE 4.

CONTRIBUTIONS

	4.1	 	Elective Deferrals. A Participant may elect to have the Employer
contribute to the Trust Fund a percentage of the Participant’s Plan Compensation for any Plan
Year subject to the limitations described in Section 5.2. The percentage specified
shall not be less than one percent (1%) and shall be in whole percentages only. Elections
shall be made at such times and in such manner in accordance with a uniform policy to be
established by the Administrator. For contributions made on or after January 1, 2008, the
Participant shall specify whether the Elective Deferrals made pursuant to this
Section 4.1 are Before-Tax Contributions or Roth Contributions. Participants shall be
permitted to change the designation of future Elective Deferrals on a prospective basis. If
the Participant fails to designate, the Plan shall treat all Elective Deferrals as Before-Tax
Contributions. Elective Deferrals shall also be subject to the following rules:

	 	(a)	 	Source of Elective Deferrals. The amount each Participant receives from the
Employer as Plan Compensation shall be reduced by the amount that the Participant
elected to have the Administrator contribute to the Trust Fund as Elective Deferrals
pursuant to this Section 4.1. Amounts contributed to the Participant’s Account
pursuant to this section shall for all purposes be deemed to be Employer contributions.
	 
	 	(b)	 	Method of Election. Participants may elect to make Elective Deferrals in one
of the following methods:

	 	(1)	 	Affirmative Election. Participants may affirmatively
elect to make Elective Deferrals in such manner as approved by the
Administrator and, for contributions made on or after January 1, 2008, shall
designate whether such Elective Deferrals constitute Before-Tax Contributions
or Roth Contributions. Participants may also change existing elections or
reduce their election to zero.
	 
	 	(2)	 	Automatic Election. Each Employee who becomes a
Participant will be deemed to have elected to make Elective Deferrals equal to
4% of Plan Compensation, and will be deemed to have elected that the Employer
reduce the Participant’s Plan Compensation by an equivalent amount for such
purpose, effective the first day of the month following the Participant’s Date
of Employment or on the Participant’s Date of Reemployment. In addition, the
Participant will be deemed to have designated that such Elective Deferrals
constitute Before-Tax Contributions; provided, however, that no Before-Tax
Contribution (or corresponding reduction in Plan Compensation) shall be deemed
to have been authorized under this subsection (b)(2) if the Participant
affirmatively elects, in such manner as approved by the Administrator, to make
an Elective Deferral Contribution in accordance with subsection (1) no
later than the Friday next preceding the applicable payday.

	 	(c)	 	Roth Contributions. For purposes of calculating the Five Taxable Year Period
with regard to Roth Contributions, the Administrator shall maintain a record of the

			
	 	 	 
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	 	 	 	Participant’s Roth Contributions (exclusive of earnings) in accordance with Code
Section 72 and the date the Participant first made a Roth Contribution under the
Plan.
	 
	 	(d)	 	Catch-Up Contributions. Catch-Up Before-Tax Contributions and Catch-Up Roth
Contributions are Elective Deferrals made to the Plan by an Employee who is eligible to
make catch-up contributions in accordance with, and subject to the limitations of, Code
Section 414(v). Employees are eligible to make Catch-Up Roth Contributions and
Catch-Up Before-Tax Contributions at any time during the Plan Year if they are eligible
to participate in the Plan in accordance with Section 2.1 and if they will
attain age 50 before the close of the Plan Year. Catch-Up Roth Contributions and
Catch-Up Before-Tax Contributions shall be made at such times and in such manner as
shall be determined in accordance with a uniform policy to be established by the
Administrator and shall not be taken into account for purposes of the provisions of the
Plan implementing the required limitations of Code Sections 402(g) and 415. The Plan
shall not be treated as failing to satisfy the provisions of the Plan implementing the
requirements of Code Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416, as
applicable, by reason of the making of Catch-Up Roth Contributions or Catch-Up
Before-Tax Contributions. If a Participant fails to designate whether catch-up
contributions are Catch-Up Roth Contributions or Catch-Up Before-Tax Contributions, the
Plan shall treat such contributions as Catch-Up Before-Tax Contributions.

	4.2	 	Matching Contributions. Each Employer shall make a Matching
Contribution to the Plan on behalf of each eligible Participant equal to 125% of the first 4%
of Plan Compensation contributed by a Participant to the Plan as Elective Deferrals. Matching
Contributions shall be contributed to the Plan on a payroll-by-payroll basis. Notwithstanding
the foregoing, the Employer may, at the end of the Plan Year or as soon as administratively
practicable, make “true-up” Matching Contributions to the Account of any Participant who
deferred for such Plan Year the maximum amount of Elective Deferrals permitted but who has not
received the maximum Matching Contribution to which the Participant was otherwise entitled.
	 
	4.3	 	Profit Sharing Contributions.

	 	(a)	 	Discretionary Profit Sharing Contributions. The Employer may make
contributions to the Plan in such amounts as the Employer may determine, in its sole
discretion, in any Plan Year.
	 
	 	(b)	 	Profits. Payment of Profit Sharing Contributions shall not be contingent on
the existence of current or accumulated profits of the Employer.
	 
	 	(c)	 	Allocation. Profit Sharing Contributions, if any, shall be allocated to each
Participant, including a Participant on a Period of Military Duty, as of the last day
of each Plan Year quarter, who is employed or on a Period of Military Duty on the last
day of the quarter (or who Retired, died or incurred a Disability during the quarter)
in the proportion that the Plan Compensation of each Participant for that quarter bears
to the total Plan Compensation of all Participants for that quarter. For purposes of
this subsection (c) only, Plan Compensation for a Participant on a Period of
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	 	 	 	shall be the amount of such Participant’s regular compensation in effect at the time
the Period of Military Duty commences.

	4.4	 	After-Tax Contributions. Effective January 1, 1989, After-Tax
Contributions are not permitted. Prior to January 1, 1989, Participants were allowed to
contribute a specified percentage of their Plan Compensation to the Plan as an after-tax
contribution.
	 
	4.5	 	Rollover Contributions.

	 	(a)	 	Acceptance of Rollovers. Subject to subsection (b) and approval by the
Administrator, the Trustee may accept on behalf of any Employee, whether or not that
Employee is then eligible to be a Participant, an eligible Rollover Contribution from
an employees’ trust described in Code Section 401(a) and exempt from taxation under
Code Section 501(a) (whether the Employee receives the distribution from such plan as a
participant or a spousal beneficiary), an annuity plan described in Code Section 403(a)
or a conduit individual retirement account described in Code Section 408. Rollover
Contributions must be received by the Trustee on or before the 60th day after the day
on which the Participant receives or is deemed to receive the distribution unless such
rollover is a direct rollover of an eligible rollover distribution.
	 
	 	 	 	Prior to accepting a Rollover Contribution, the Administrator may require the
Employee to establish and/or provide an opinion of counsel that the amounts to be
rolled over meet the requirements of this subsection (a). The amount so
transferred shall be held in a separate account in the name of the Employee and
treated as a part of the Employee’s Account balance for all purposes except for
determining whether the Account balance exceeds the Cash-Out Limit.
	 
	 	(b)	 	Special Rules for Rollovers of Roth Contributions. The Administrator may
accept a direct rollover of an eligible rollover distribution from a designated Roth
account from another plan qualified under Code Section 401(a) but shall not accept an
eligible rollover distribution from a Roth IRA, a designated Roth account from a plan
qualified under Code Section 403(b), or through a participant rollover within 60 days
of receiving a distribution from a plan qualified under Code Section 401(a).
	 
	 	 	 	Prior to accepting a direct rollover of an eligible rollover distribution from a
designated Roth account, the Administrator shall require the transferring plan to
provide a statement indicating the first year of the Five Taxable Year Period and
the portion of the distribution that is attributable to designated Roth
contributions (exclusive of earnings) under Code Section 72, or alternatively, that
the distribution is a Qualified Distribution.

	4.6	 	Timing of Contributions.

	 	(a)	 	Employer Contributions. Employer Contributions, other than Elective Deferrals,
shall be paid by the Employer to the Trustee not later than the due date of the
Employer’s federal income tax return for the year (including extensions), or within
such period as may be designated from time to time by the Code as the period within
which such contributions may be deducted from income tax for the year.

			
	 	 	 
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	 	(b)	 	Elective Deferrals. Elective Deferrals shall be paid by the Employer to the
Trustee as soon as reasonably segregated from the Employer’s general assets, but in any
event, no later than the 15th business day of the month following the month in which
such amounts would otherwise have been payable to the Participants in cash, or such
other maximum time period permitted by ERISA or the Code.

* * * * End of Article 4 * * * *

			
	 	 	 
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ARTICLE 5.

LIMITATIONS; NONDISCRIMINATION TESTS

	5.1	 	Maximum Deductible Contributions. Employer contributions for each
Plan Year shall be limited to the maximum amount deductible under Code Section 404 for the
Employer’s tax year in which the Plan Year ends. If Employer contributions exceed the
deductible contribution limit in any Plan Year, the Employer may instruct the Trustee to
return the excess, non-deductible contribution in accordance with Section 13.3(b).
	 
	5.2	 	Elective Deferral Limit. Notwithstanding Section 4.1, the
following limitation on Elective Deferrals shall apply.

	 	(a)	 	General Rule. A Participant’s Elective Deferrals for a calendar year shall not
exceed the Code Section 402(g) limit on elective deferrals, as may be adjusted pursuant
to Code Section 402(g)(4) (“Elective Deferral Limit”). If the Administrator determines
a Participant’s Elective Deferrals for a calendar year would exceed the Elective
Deferral Limit, the Administrator shall suspend the Participant’s Elective Deferrals
until the following January 1. If a Participant makes elective deferrals to another
cash or deferred arrangement, or contributes under a simplified employee pension cash
or deferred arrangement, Code Section 403(b) annuity, Code Section 457 plan, or
Code Section 501(c)(18) plan (irrespective of whether the Employer maintains the other
plan), and the Participant’s contributions exceed the Elective Deferral Limit, the
Participant shall have the right to provide the Administrator with a written claim for
the amount that exceeds the Elective Deferral Limit made for a calendar year. The
Participant shall submit the claim no later than the March 31 following the close of
the calendar year and the claim shall specify the amount of the excess.
	 
	 	(b)	 	Distribution of Excess Amount. If, after the close of a calendar year, the
Administrator determines a Participant’s Elective Deferrals exceed the Elective
Deferral Limit or if the Administrator receives a timely claim as described in
subsection (a), it shall distribute the excess amount or the amount of the
claim no later than April 15 of the calendar year following the calendar year in which
the excess occurred, or if later, the calendar year in which the excess amount was
discovered. If the Administrator distributes the excess amount by the appropriate
April 15, it may make the distribution irrespective of any other provision under this
Plan or the Code.
	 
	 	(c)	 	Distribution of Before-Tax Contributions and Roth Contributions. The
Participant may elect, under procedures established by the Administrator, whether
distribution of amounts exceeding the Elective Deferral Limit shall first be made from
the Participant’s Before-Tax Contributions, Roth Contributions or a combination of both
to the extent such contributions were made during the Plan Year in which the excess
occurred. If no election is made, the Administrator shall distribute excess amounts
pro rata, based on the amount of Before-Tax Contributions and Roth Contributions made
during the Plan Year in which the excess occurred. A distribution from the
Participant’s Roth Account under this Section 5.2 shall not be treated as a
Qualified Distribution.
	 
	 	(d)	 	Determination of Allocable Income or Loss. The Administrator shall adjust
amounts to be distributed under this Section 5.2 for income or loss up to the
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	 	 	 	distribution. The Administrator may use any reasonable method for computing the
income or loss allocable to such amounts, provided that the method does not violate
Code Section 401(a)(4) and is used consistently for allocating income or loss to
Participant Accounts and for all corrective distributions under the Plan for the
Plan Year.

	5.3	 	Average Deferral Percentage Limitations.

	 	(a)	 	General Rule. For each Plan Year, the ADP for Participants who are Highly
Compensated Employees and the ADP for Participants who are Non-Highly Compensated
Employees must satisfy either of the following ADP tests:

	 	(1)	 	The ADP for eligible Highly Compensated Employees for any Plan
Year shall not exceed the ADP for eligible Non-Highly Compensated Employees
multiplied by 1.25; or
	 
	 	(2)	 	The ADP for eligible Highly Compensated Employees for any Plan
Year shall not exceed the ADP for eligible Non-Highly Compensated Employees
multiplied by 2, provided that the ADP for eligible Highly Compensated
Employees for such year is not more than two percentage points higher than the
ADP for eligible Non-Highly Compensated Employees for such year.

	 	(b)	 	Use of Current Year Data. The ADP for both Highly Compensated Employees and
Non-Highly Compensation Employees shall be calculated using data from the current Plan
Year.
	 
	 	(c)	 	Aggregation of Plans.

	 	(1)	 	The actual deferral ratio shall be determined with respect to
any Participant who is a Highly Compensated Employee for the Plan Year by
aggregating his or her elective deferrals in all plans maintained by all
members of the Controlled Group. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different plan years,
all cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
	 
	 	(2)	 	In the event that this Plan satisfies the requirements of Code
Section 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
only if aggregated with this Plan, then this section shall be applied by
determining the ADP as if all such plans were a single plan. A plan may be
aggregated with this Plan in order to satisfy Code Section 401(k) only if they
have the same plan year.

	 	(d)	 	Calculation of ADP. The ADP for each group is the average of the actual
deferral ratios, calculated separately for each Highly Compensated Employee and
Non-Highly Compensated Employee, by dividing such Participant’s Elective Deferrals for
the applicable Plan Year (plus all or a portion of QNECs, if any, made with respect to
the Participant for such Plan Year) by the Participant’s Section 415 Compensation. For
purposes of this section, Elective Deferrals shall not include: (1) Catch-Up Roth

			
	 	 	 
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	 	 	 	Contributions; (2) Catch-Up Before-Tax Contributions; (3) excess contributions by
Non-Highly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or any other plan maintained by the Employer; and (4) Elective
Deferrals taken into account for the ACP test, provided the ADP test is satisfied
both by excluding and not excluding such Elective Deferrals.

	 	(e)	 	Correcting ADP Failure – Contribution of QNECs. For any Plan Year, the
Employer may, in its discretion, elect to make QNECs to the Plan on behalf of
Non-Highly Compensated Employees to the extent necessary to satisfy the requirements of
this section.
	 
	 	(f)	 	Correcting ADP Failure – Conversion to Catch-Up Contributions. For any Plan
Year, the Employer may elect to convert Elective Deferrals made to the Plan on behalf
of a Highly Compensated Employee to catch-up contributions to the extent necessary to
satisfy the requirements of this section, provided such Highly Compensated Employee is
eligible to make catch-up contributions and has not exceeded the catch-up contribution
limit under Code Section 414(v). Affected Participants may elect, under procedures
established by the Administrator, whether Before-Tax Contributions or Roth
Contributions will be converted to Catch-Up Before-Tax Contributions or Catch-Up Roth
Contributions respectively to the extent such contributions were made for the Plan
Year. If no election is made, the Administrator shall correct the ADP failure under
this subsection pro rata, based on the amount of Before-Tax Contributions and Roth
Contributions made during the Plan Year in which the Excess Deferrals occurred.
	 
	 	(g)	 	Correcting ADP Failure – Refund of Excess Deferrals. This
subsection (g) shall be a correction method that may be used as an alternative
to, or in combination with, subsections (e) and/or (f).

	 	(1)	 	Timing. To the extent administratively practicable,
the refund of Excess Deferrals shall occur within 21/2 months following the Plan
Year in which the excess occurred, but in no event shall such distribution
occur later than 12 months following the Plan Year in which the excess
occurred. If the payments are made more than 21/2 months after the last day of
the Plan Year for which the Excess Deferrals were made, the Employer will be
subject to a 10% excise tax. The amount of the Excess Deferrals that are
distributed with respect to any Highly Compensated Employee for a Plan Year
shall be reduced by any Excess Deferrals that were previously distributed to
the individual for the Plan Year to meet the requirements of any other
limitation imposed by law.
	 
	 	(2)	 	Correction. Refunds of Excess Deferrals will be made
by (A) determining the amount of the total Excess Deferrals that must be
distributed in order to meet the ADP test, and then (B) reducing the dollar
amount of Elective Deferrals of the Highly Compensated Employees with the
highest dollar amount of Elective Deferrals to the level of the Highly
Compensated Employees with the next highest dollar amount of Elective Deferrals
and refunding the excess amount to the affected Highly Compensated Employees.
However, if a lesser reduction, when added to the total amount distributed
under step (B), would

			
	 	 	 
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	 	 	 	equal the amount of the excess, then the lesser amount will be distributed.
If the total amount distributed is less than the total Excess Deferrals,
then step (B) will be repeated as many times as necessary. To the extent an
affected Highly Compensated Employee has not reached the catch-up
contribution limit under the Plan, Excess Deferrals allocated to that Highly
Compensated Employee may be recharacterized by him or her as Catch-Up Roth
Contributions and/or Catch-Up Before-Tax Contributions in accordance with
subsection (3).
	 
	 	(3)	 	Designation. The Participant may elect, under
procedures established by the Administrator, whether distribution of Excess
Deferrals shall be made from the Participant’s Before-Tax Account and/or Roth
Account to the extent such contributions were made for the Plan Year. If no
election is made, the Administrator shall distribute Excess Deferrals pro rata,
based on the amount of Before-Tax Contributions and Roth Contributions made
during the Plan Year in which the Excess Deferrals occurred. A distribution of
Excess Deferrals from the Participant’s Roth Account shall not be treated as a
Qualified Distribution.
	 
	 	(4)	 	Income or Loss. The Administrator shall adjust Excess
Deferrals for any income or loss up to the last day of the Plan Year in which
the excess occurred; provided; however, that prior to January 1, 2008, Excess
Deferrals shall be adjusted for income and loss up to the date of distribution.
The Administrator may use any reasonable method for computing the income or
loss allocable to such Excess Deferrals, provided that the method does not
violate Code Section 401(a)(4) and is used consistently for allocating income
or loss to the Participant Accounts and for all corrective distributions under
the Plan for the Plan Year.

	5.4	 	Average Contribution Percentage Limitations.

	 	(a)	 	General Rule. The aggregate of the Matching Contributions, if any, and any
other contributions which shall be aggregated with such contributions as further
described below, which are credited on behalf of Participants must satisfy one of the
following ACP tests:

	 	(1)	 	The ACP for eligible Highly Compensated Employees for any Plan
Year shall not exceed the ACP for eligible Non-Highly Compensated Employees
multiplied by 1.25;or
	 
	 	(2)	 	The ACP for eligible Highly Compensated Employees for any Plan
Year shall not exceed the ACP for eligible Non-Highly Compensated Employees
multiplied by 2, provided that the ACP for eligible Highly Compensated
Employees for such year is not more than two percentage points higher than the
ACP for eligible Non-Highly Compensated Employees for such year.

	 	(b)	 	Use of Current Year Data. The ACP for both Highly Compensated Employees and
Non-Highly Compensation Employees shall be calculated using data from the current Plan
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	 	(c)	 	Aggregation of Plans.

	 	(1)	 	The actual contribution ratio shall be determined with respect
to any Participant who is a Highly Compensated Employee for the Plan Year by
aggregating matching contributions in all plans maintained by all members of
the Controlled Group. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement.
	 
	 	(2)	 	In the event that this Plan satisfies the requirements of Code
Section 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such sections
only if aggregated with this Plan, then this section shall be applied by
determining the ACP as if all such plans were a single plan. A plan may be
aggregated with this Plan in order to satisfy Code Section 401(m) only if it
has the same plan year.

	 	(d)	 	Calculation of ACP. The ACP for each group is the average of the separate
contribution percentages calculated for each Highly Compensated Employee and each
Non-Highly Compensated Employee. A Participant’s contribution percentage for a Plan
Year is the ratio of the Participant’s aggregate Matching Contributions for the Plan
Year to the Participant’s Section 415 Compensation for the Plan Year. Each
Participant’s contribution percentage shall be calculated to the nearest 100th of 1%.
	 
	 	(e)	 	Correcting ACP Failure – Contribution of QMACs. For any Plan Year, the
Employer may, in its discretion, elect to make QMACs to the Plan on behalf of
Non-Highly Compensated Employees to the extent necessary to satisfy the requirements of
this section.
	 
	 	(f)	 	Correcting ACP Failure – Conversion of Excess Aggregate Contributions. For any
Plan Year, the Employer may, in its discretion, elect to convert Matching Contributions
made to the Plan on behalf of Non-Highly Compensated Employees to QMACs to the extent
necessary to satisfy the requirements of this section.
	 
	 	(g)	 	Correcting ACP Failure – Forfeiture of Excess Aggregate Contributions.
This subsection (g) shall be a correction method that may be used as an
alternative to, or in combination with, subsections (e) and/or (f).

	 	(1)	 	Timing. To the extent administratively practicable,
the forfeiture of Excess Aggregate Contributions, adjusted for earnings, shall
occur within 21/2 months following the Plan Year in which the excess occurred,
but in no event shall such forfeiture occur later than 12 months following the
Plan Year in which the excess occurred. If the forfeitures are made more than
21/2  months after the last day of the Plan Year for which the Excess Aggregate
Contributions were made, the Employer will be subject to a 10% excise tax.
	 
	 	(2)	 	Correction. Corrections of Excess Aggregate
Contributions shall be made by (A) determining the amount of the total Excess
Aggregate Contributions that must be forfeited in order to meet the ACP test,
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	 	 	 	dollar amount of Excess Aggregate Contributions of the Highly Compensated
Employees with the highest dollar amount of Excess Aggregate Contributions
to the level of the Highly Compensated Employees with the next highest
dollar amount of Excess Aggregate Contributions. However, if a lesser
reduction, when added to the total amount forfeited under step (B), would
equal the total amount of the excess, then the lesser amount shall be
forfeited. If the total amount forfeited is less than the total Excess
Aggregate Contributions, then step (B) shall be repeated as many times as
necessary.
	 
	 	(3)	 	Source. Excess Aggregate Contributions will be
distributed from a Highly Compensated Employee’s Matching Account, then
forfeitures, to the extent necessary to effect the required correction.
	 
	 	(4)	 	Income or Loss. The Administrator shall adjust Excess
Aggregate Contributions for any income or loss up to the last day of the Plan
Year in which the excess occurred; provided; however, that prior to January 1,
2008, Excess Aggregate Contributions shall be adjusted for income and loss up
to the date of distribution. The Administrator may use any reasonable method
for computing the income or loss allocable to Excess Aggregate Contributions,
provided that the method does not violate Code Section 401(a)(4) and is used
consistently for allocating income or loss to Participants’ Accounts and for
all corrective distributions under the Plan for the Plan Year.

	5.5	 	Annual Additions Limitation.

	 	(a)	 	General Rule. The maximum Annual Additions credited to any Participant for any
Limitation Year under this Plan, when aggregated with the Annual Additions to any other
qualified defined contribution plan maintained by the Employer or any other member of
the Controlled Group, shall not exceed an amount equal to the lesser of—

	 	(1)	 	100% of the Participant’s Section 415 Compensation for the
Limitation Year, or
	 
	 	(2)	 	$40,000, as adjusted for cost of living increases under Code
Section 415(d).

	 	(b)	 	Excess Annual Additions. Excess Annual Additions allocated to a Participant
shall be corrected through the Employee Plans Compliance Resolution System or such
other correction method allowed by statute, Regulations or regulatory authorities.

	5.6	 	Incorporation by Reference to Limitations. Notwithstanding anything
herein to the contrary, the provisions of this Article 5 shall be applied and
construed in accordance with Code Section 415 and related Regulations, which are incorporated
herein by reference. Maximum use of all transition rules available under Code Section 415
shall be utilized to the extent necessary to adhere to the limitations of this article. To
the extent any provisions of the Plan conflict with Code Section 415 or the applicable
Regulations, Code Section 415 and the applicable Regulations shall govern.

* * * * End of Article 5 * * * *

			
	 	 	 
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ARTICLE 6.

DISTRIBUTION OF PLAN BENEFITS

	6.1	 	Distributable Events. A Participant’s Account shall be distributable
upon Retirement, Disability, Death or severance from employment with the Employer for reasons
other than Retirement, Disability or Death. Effective January 1, 2009, a Participant on
qualified military service (within the meaning of Code Section 414(u)) for more than 30 days
shall be considered terminated from employment for purposes of taking a distribution of his or
her Account; provided, however, that such Participant shall be prohibited from making Elective
Deferrals or other Employee contributions to the Plan for a six-month period beginning on the
date of the distribution.
	 
	6.2	 	Amount of Plan Benefits. Upon the occurrence of a distributable
event, the Participant (or his or her Beneficiary) shall become entitled to the vested value
of the Account determined as of the Valuation Date immediately preceding the Distribution
Date.
	 
	6.3	 	Form of Distribution. Upon the occurrence of a distributable event,
distribution shall be in one of the following forms. If the value of the Participant’s vested
Account exceeds the Cash-Out Limit, the Administrator shall not distribute the Account without
the written consent of the Participant:

	 	(a)	 	Automatic Cash-Out. If the Participant’s vested Account does not exceed
$1,000, the Administrator shall direct that such amount be paid to the Participant in a
lump sum payment of cash unless otherwise elected by the Participant. If the
Participant’s vested Account exceeds $1,000 but does not exceed the Cash-Out Limit, the
Administrator shall direct that such amount be paid to an individual retirement account
designated by the Administrator unless otherwise elected by the Participant. All
distributions under this subsection (a) shall be paid as soon as
administratively practicable following the distributable event.
	 
	 	(b)	 	In General.

	 	(1)	 	Normal Form of Distribution. The Participant’s vested
Account shall be distributed in a lump sum payment in cash, unless the
Participant is eligible to and affirmatively elects an optional form of
payment.
	 
	 	(2)	 	Optional Forms. Participants who terminate employment
on account of Retirement, Death or Disability (and Beneficiaries of such
Participants) may elect to receive their vested Accounts in installment
payments; provided, however, that any installment payments attributable to
amounts in the Stock Fund shall only be made on a Distribution Date applicable
to the Stock Fund. At the time a Participant or Beneficiary elects installment
payments, he or she must elect which of the following methods shall govern the
amount of each payment:

	 	(A)	 	Fixed Period Method. Under this method, a
fixed number of annual installments must be elected and the amount of
each installment shall equal the quotient obtained by dividing the
vested Account at the beginning of the Plan Year by the number of
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	 	 	 	installments remaining (including the installment being calculated).
So long as the amount of any installment payment made under this
subsection equals or exceeds the amount of the distribution
processing fee, the Participant or Beneficiary may elect to receive
each annual installment:

	 	(i)	 	in a single payment each Plan
Year;
	 
	 	(ii)	 	in 4 equal quarterly payments
each Plan Year; or
	 
	 	(iii)	 	in 12 equal monthly payments
each Plan Year.

	 	(B)	 	Fixed Amount Method. Under this method, the
amount of each annual, quarterly or monthly installment shall be a
single fixed dollar amount elected by the Participant or Beneficiary,
which shall not exceed the Applicable Percentage of the vested Account
at the time the series of installments commence. The “Applicable
Percentage” shall be 10%, 2.5% or 0.83% in the case of an annual,
quarterly or monthly distribution respectively. The installment shall
be paid to the Participant or Beneficiary:

	 	(i)	 	with regard to annual
installments, in a single payment each Plan Year;
	 
	 	(ii)	 	with regard to quarterly
installments, in 4 equal quarterly payments each Plan Year; or
	 
	 	(iii)	 	with regard to monthly
installments, in 12 equal monthly payments each Plan Year.

	 	 	 	If the aggregate amount of installment payments under this
subsection (B) does not satisfy the minimum required
distribution rules of Section 6.5, the Administrator shall
cause the Trustee to distribute the difference to the Participant or
Beneficiary within the time required by that section.
	 
	 	(C)	 	Minimum Distribution Method. If distribution
of the Participant’s vested Account begins during a calendar year in
which a minimum distribution is required under Section 6.5, the
Participant or Beneficiary may elect to receive an amount each year
that is equal to the required minimum distribution for the year, which
such amount may be distributed in an annual payment or quarterly or
monthly payments.

	 	(3)	 	Additional Payments; Change in Optional Form. A
Participant or Beneficiary may elect to withdraw an additional amount by
delivering to the Administrator a completed election form no later than the
last day of the month preceding the Distribution date. A Participant may also
elect to change the method of distribution of future installment payments by
making a

			
	 	 	 
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new election in accordance with this subsection (b)(2) or by
electing a lump sum distribution of his or her remaining Account balance.

	6.4	 	Timing of Distributions.

	 	(a)	 	Distribution Date. The total amount that a Participant is entitled to receive
under this Article 6 shall be distributed as follows:

	 	(1)	 	If the amount does not exceed the Cash-Out Limit, the
Administrator shall direct the Trustee to distribute the vested Account in
accordance with Section 6.3(a).
	 
	 	(2)	 	If the amount exceeds the Cash-Out Limit, the Participant may
elect any Distribution Date to have his or her vested Account paid to him or
her. If the Participant does not make an affirmative election to defer receipt
of his or her Account or to roll his or her Account to an eligible retirement
plan (as defined in Section 6.7(c)), the Participant’s entire vested
Account shall be paid to him or her in a lump sum payment of cash on the
Distribution Date following the date the Participant reaches age 62.
	 
	 	 	 	Unless the Participant elects otherwise and subject to Section 6.5,
distributions must begin not later than the sixtieth 60th day after the
latest of the close of the Plan Year in which: (A) the Participant attains
Retirement Age; (B) the Participant reaches his or her 10th anniversary of
the year in which the Participant began participation in the Plan; or
(C) the Participant terminates employment with the Employer; provided,
however, that if the amount of the distribution cannot be ascertained or if
it is not possible to make such payment on the applicable Distribution Date
because the Administrator is unable to locate the Participant after making
reasonable efforts to do so, in accordance with Regulation
Section 1.401(a)-14(d), a payment retroactive to such Distribution Date may
be made no later than 60 days after the earliest date on which the amount of
such payment can be ascertained or the date on which the Participant is
located, whichever applies.

	 	(b)	 	Benefit Notice. The Administrator shall provide a benefit notice to the
Participant not earlier than 180 days before the Participant’s benefit starting date.
The notice shall explain the optional methods of distribution from the Plan, including
the material features and relative values of those methods, the Participant’s right to
defer distribution until the Participant attains his or her Required Beginning Date,
the consequences of the Participant’s failure to defer and the Participant’s right to
consider whether to elect a distribution for a period of at least 30 days. Such
distribution may commence fewer than 30 days after the benefit notice is given,
provided that the Participant, after receiving the notice, affirmatively elects a
distribution.

	6.5	 	Required Minimum Distributions. For purposes of determining required
minimum distributions for calendar years beginning with the 2003 calendar year, all
distributions made under this Plan shall be determined and made in accordance with Code
Section 401(a)(9) and the related Regulations, including the minimum incidental death benefit
requirement of Code

			
	 	 	 
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	 	 	Section 401(a)(9)(G) and Regulation Section 1.401(a)(9)-2. The requirements of this section
shall take precedence over any provisions of the Plan that are inconsistent with Code
Section 401(a)(9).

	 	(a)	 	Distributions Beginning During Participant’s Lifetime. The Participant’s
Account shall be distributed, or begin to be distributed, to the Participant no later
than the Participant’s Required Beginning Date.

	 	(1)	 	Amount of Distributions. During the Participant’s
lifetime, the minimum amount that will be distributed for each Distribution
Calendar Year is the lesser of:

	 	(A)	 	the quotient obtained by dividing the
Participant’s vested Account by the distribution period in the Uniform
Lifetime Table set forth in Regulation Section 1.401(a)(9)-9, using the
Participant’s age as of the Participant’s birthday in the Distribution
Calendar Year; or
	 
	 	(B)	 	if the Participant’s sole Designated
Beneficiary for the Distribution Calendar Year is the Participant’s
Spouse, the quotient obtained by dividing the Participant’s vested
Account by the number in the Joint and Last Survivor Table set forth in
Regulation Section 1.401(a)(9)-9, using the Participant’s and Spouse’s
attained ages as of the Participant’s and Spouse’s birthdays in the
Distribution Calendar Year.

	 	(2)	 	Required Minimum Distributions Through Year of
Participant’s Death. Required minimum distributions during the
Participant’s lifetime shall begin with the first Distribution Calendar Year
and end with the Distribution Calendar Year that includes the Participant’s
date of Death.

	 	(b)	 	Distributions on or after Required Beginning Date. If the Participant dies on
or after his or her Required Beginning Date, the Participant’s Account shall be
distributed as follows:

	 	(1)	 	Participant Survived by Designated Beneficiary. The
minimum amount that shall be distributed for each Distribution Calendar Year
after the year of the Participant’s Death is the quotient obtained by dividing
the Participant’s Account by the longer of the remaining Life Expectancy of the
Participant or the remaining Life Expectancy of the Participant’s Designated
Beneficiary, determined as follows:

	 	(A)	 	The Participant’s remaining Life Expectancy is
calculated using the age of the Participant in the year of Death,
reduced by 1 for each subsequent year.
	 
	 	(B)	 	If the Participant’s sole Designated
Beneficiary is the Participant’s Spouse, the remaining Life Expectancy
of the Spouse is calculated for each Distribution Calendar Year after
the year of the Participant’s Death using the Spouse’s age as of the
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	 	 	 	For Distribution Calendar Years after the year of the Spouse’s Death,
the remaining Life Expectancy of the Spouse is calculated using the
age of the Spouse as of the Spouse’s birthday in the calendar year of
the Spouse’s Death, reduced by 1 for each subsequent calendar year.
	 
	 	(C)	 	If the Participant’s Spouse is not the
Participant’s sole Designated Beneficiary, the Designated Beneficiary’s
remaining Life Expectancy is calculated using the age of the Designated
Beneficiary in the year following the year of the Participant’s Death,
reduced by 1 for each subsequent year.

	 	(2)	 	No Designated Beneficiary. If there is no Designated
Beneficiary as of September 30 of the year after the year of the Participant’s
Death, the minimum amount that shall be distributed for each Distribution
Calendar Year after the year of the Participant’s Death is the quotient
obtained by dividing the Participant’s Account by the Participant’s remaining
Life Expectancy calculated using the age of the Participant in the year of
Death, reduced by 1 for each subsequent year.

	 	(c)	 	Death Prior to Required Beginning Date.

	 	(1)	 	Timing of Distribution. If the Participant dies prior
to his or her Required Beginning Date, the Participant’s Account shall be
distributed, or begin to be distributed, no later than as follows:

	 	(A)	 	Spouse is Sole Beneficiary. If the
Participant’s Spouse is the Participant’s sole Designated Beneficiary,
distribution to the Spouse shall begin by December 31 of the calendar
year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant
would have attained age 701/2, if later. If the Spouse dies after the
Participant but before distributions to the Spouse begin,
subsections (b)(1)(B) and (b)(1)(C) shall apply as if
the surviving Spouse were the Participant.
	 
	 	(B)	 	Spouse is Not Sole Beneficiary. If the
Participant’s Spouse is not the Participant’s sole Designated
Beneficiary, distribution to the Designated Beneficiary shall begin by
December 31 of the calendar year immediately following the calendar
year in which the Participant died.
	 
	 	(C)	 	No Designated Beneficiary. If there is no
Designated Beneficiary as of September 30 of the year following the
year of the Participant’s Death, the Participant’s vested Account
balance shall be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant’s Death.

	 	(2)	 	Amount of Distributions. If the Participant dies prior
to his or her Required Beginning Date, the amount required to be distributed
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	 	(A)	 	Designated Beneficiary. If there is a
Designated Beneficiary, the minimum amount that shall be distributed
for each Distribution Calendar Year after the year of the Participant’s
Death is the quotient obtained by dividing the remaining Account
balance by the remaining Life Expectancy of the Participant’s
Designated Beneficiary.
	 
	 	(B)	 	Election of 5 Year Rule. A Designated
Beneficiary may elect no later than September 30 of the calendar year
in which distribution would be required to begin under
subsection (c)(1) to receive the Participant’s entire Account
no later than December 31 of the calendar year containing the
5th anniversary of the Participant’s death.
	 
	 	(C)	 	No Designated Beneficiary. If there is no
Designated Beneficiary as of September 30 of the year following the
year of the Participant’s Death, distribution of the Participant’s
entire interest shall be completed by December 31 of the calendar year
containing the 5th anniversary of the Participant’s Death.

	6.6	 	Determination of Beneficiary. Each Participant shall have the right
to designate a Beneficiary on the forms prescribed for such designation by the Administrator
and in accordance with the following rules:

	 	(a)	 	Spouse as Beneficiary; Consent. In all cases, the Participant’s Beneficiary
shall be the Participant’s Spouse, unless the Beneficiary is otherwise determined
pursuant to subsection (d), or the Participant elects to name a different
Beneficiary and the election is consented to by the Participant’s Spouse. The Spouse’s
consent must be in writing, must acknowledge the effect of the election, must be
witnessed by a Plan representative or a notary public, and must meet one of the
following requirements:

	 	(1)	 	the consent must name a specific Beneficiary that cannot be
changed without the additional consent of the Spouse in a form meeting the
requirements of this section;
	 
	 	(2)	 	the consent must specifically provide that the Participant may
change the designation of a Beneficiary without any further consent by the
Spouse, and the Spouse must acknowledge in the consent that he or she is giving
up the right to limit his or her consent to a specific Beneficiary; or
	 
	 	(3)	 	the consent must specifically provide that the Participant may
change the designation of a Beneficiary, with such change being limited to a
change among certain Beneficiaries, without any further consent by the Spouse,
and the Spouse must acknowledge in the consent that he or she is giving up the
right to limit his or her consent to a specific Beneficiary.

	 	(b)	 	Exceptions. A Spouse’s consent shall not be required if it is established to
the satisfaction of the Administrator that the required consent cannot be obtained
because: (1) the Participant does not have a Spouse, (2) the Spouse cannot be located,
(3) the Participant is legally separated from his or her Spouse (or has been abandoned

			
	 	 	 
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	 	 	 	within the meaning of applicable state law by his or her Spouse) and the Participant
has a court order to that effect, or (4) other circumstances exist under which the
Secretary of the Treasury shall excuse the consent requirement. A valid election
made by the Participant may be revoked by the Participant in writing without the
consent of the Spouse at any time. Any new election must comply with the
requirements of this Section 6.6. A consent by a former Spouse shall not be
applicable to a new Spouse.
	 
	 	(c)	 	Presumed Designation of Beneficiary. If there is no Beneficiary designated, no
Beneficiary living at the time of a Participant’s Death, or if the Beneficiary
disclaims any benefit under the Plan in a written notice submitted to the
Administrator, the Administrator shall designate the Spouse as the Beneficiary. If
there is no Spouse, or if the Spouse consents in accordance with the requirements of
subsection (a), the Administrator shall designate as the Beneficiary, in order
of priority, (1) the Participant’s issue, by representation (as defined by applicable
state law); (2) the Participant’s surviving parents, in equal shares; and (3) the
Participant’s estate or a trustee of a trust named as the beneficiary of the residue of
the Participant’s estate. Persons who are legally adopted shall be treated for all
purposes as the children of their adoptive parents. The Administrator may rely upon
the personal representative or administrator of the Participant’s estate or the trustee
of a trust named as the beneficiary of the residue of the Participant’s estate. The
Administrator’s determination of the persons who qualify as a Beneficiary under the
Plan shall be binding on all interested parties.
	 
	 	(d)	 	Effect of Dissolution of Marriage. Dissolution of marriage shall terminate the
Participant’s Beneficiary designation, or presumed designation, of the Participant’s
former Spouse as the Participant’s Beneficiary.

	 	(1)	 	If, prior to payment of benefits upon the Participant’s Death,
documentation of the Participant’s dissolution of marriage, as issued by a
court of competent jurisdiction, is received and accepted by the Administrator,
the Administrator shall deem the Participant’s former Spouse to have
predeceased the Participant, and no heirs or other Beneficiaries of the
Participant’s former Spouse shall receive benefits as a Beneficiary, unless
such heirs are specifically designated in the Participant’s Beneficiary
designation under the Plan.
	 
	 	(2)	 	Subsection (1) shall not apply if, prior to
distribution of the Participant’s vested Account, either of the following
occurs:

	 	(A)	 	The Participant delivers to the Administrator a
properly completed Beneficiary designation dated after the date of the
dissolution of marriage that designates the Participant’s former Spouse
as a Beneficiary.
	 
	 	(B)	 	The Plan receives a qualified domestic
relations order directing that the Participant’s former Spouse be
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In the event of a dispute with respect to the determination of Beneficiaries as a
result of the operation of this subsection (d), the Administrator may
solicit a court of competent jurisdiction for a determination of a rightful
Beneficiary. If such request is made to a court, the Trustee shall retain within
the Plan or transfer to the court the portion of the Participant’s vested Account in
dispute until the rendering of a final determination by the court. The decision of
the Administrator shall be final and binding on all interested parties, and the
Administrator shall be under no duty to investigate further the intent of the
Participant with respect to the designation of any Beneficiary.

	6.7	 	Rollover of Plan Distributions. Notwithstanding anything herein to
the contrary that would limit a Distributee’s election under this Section 6.7, a
Distributee may elect to have all or any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee. The election regarding
a direct rollover shall be made at the time and in the manner prescribed by the Administrator.
For purposes of this Section 6.7 only:

	 	(a)	 	Distributee means a Participant, former Participant, a Beneficiary who is the
Spouse of a Participant or former Participant, or an “alternate payee” as defined under
Code Section 414(p). Effective January 1, 2007, Distributee shall also mean a
non-Spouse Beneficiary of a Participant or former Participant.
	 
	 	(b)	 	Eligible Rollover Distribution means any distribution of all or any portion of
the balance to the credit of the Distributee. However, an Eligible Rollover
Distribution shall not include: (1) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made for the
life (or life expectancy) of the Distributee or the joint lives (or joint life
expectancies) of the Distributee and the Distributee’s Beneficiary; (2) any
distribution that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for a specified period of 10 years or more; (3) any
distribution to the extent the distribution is required under Code Section 401(a)(9);
(4) any portion of any distribution that is not includible in gross income, as
determined without regard to the exclusion for net unrealized appreciation of employer
securities; or (5) any amount that is distributed on account of hardship.
	 
	 	(c)	 	Eligible Retirement Plan means: (1) an individual retirement account described
in Code Section 408; (2) an individual retirement annuity described in Code
Section 408(b); (3) an annuity plan described in Code Section 403(a); (4) an annuity
contract described in Code Section 403(b); (5) a qualified trust described in Code
Section 401(a) that accepts rollover contributions; and (6) an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision of a state, or any
agency or instrumentality of a state or political subdivision of a state and which
agrees to separately account for amounts transferred into such plan from the Plan.
Effective January 1, 2007, for Distributees who are non-Spouse Beneficiaries, Eligible
Retirement Plan shall mean an individual retirement account only.

	6.8	 	Qualified Domestic Relations Orders. A qualified domestic relations
order is any judgment, decree, or order (including approval of a property settlement
agreement) which creates or recognizes the existence of an alternate payee’s right to receive
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	 	 	the benefits of a Participant hereunder pursuant to a state’s domestic relations law
relating to the provision of child support, alimony payments, or marital property rights to
a Spouse, former Spouse, child or other dependent of such individual; provided, however,
that such order meets the requirements of Code Section 414(p).

	 	(a)	 	Determination of Qualification. The Administrator shall establish reasonable
written procedures to determine the qualified status of a domestic relations order and
to administer distributions made pursuant to such order in a manner consistent with the
requirements of Code Section 414(p).
	 
	 	(b)	 	Timing of Distribution. Notwithstanding anything herein to the contrary, the
distribution of all or the portion of a Participant’s vested Account that is assigned
to an alternate payee under a qualified domestic relations order may commence as soon
as administratively practicable and prior to the Participant’s severance from service
with the Employer if such payments are made on or after the date on which the
Administrator determines that the domestic relations order pertaining to the alternate
payee is a qualified domestic relations order; provided, however, that if the amount of
the Participant’s vested Account to be distributed to the alternate payee exceeds the
Cash-Out Limit, the Administrator shall not, without the prior written consent of the
alternate payee, commence the distribution of the amount to be distributed to the
alternate payee prior to the Participant’s “earliest retirement age” as that term is
defined in Code Section 414(p)(4).

* * * * End of Article 6 * * * *

			
	 	 	 
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ARTICLE 7.

LOANS

	7.1	 	Authorization of Loans. The Administrator shall have the right to
direct the Trustee to make a loan to an Eligible Borrower (as defined in Section 7.2)
upon receiving a request for such a loan. All loans shall be subject to the approval of the
Administrator, and such approval shall be granted or withheld in a uniform and
nondiscriminatory manner and in accordance with such rules and regulations not in conflict
with the provisions of this Article 7 as the Administrator may adopt.
	 
	7.2	 	Eligible Borrower. For purposes of this Article 7 only, the
term Eligible Borrower shall mean any active or former Participant or any Beneficiary under
the Plan.
	 
	7.3	 	Loan Policy. The Administrator shall adopt a loan policy pursuant to
which an Eligible Borrower may request a loan.

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ARTICLE 8.

WITHDRAWALS

	8.1	 	Hardship Withdrawals. A Participant who is an active Employee of the
Employer at the time the request for a hardship distribution is made, may receive a hardship
distribution of Matching Contributions, Profit Sharing Contributions and Elective Deferrals
(less earnings attributable to such Elective Deferrals credited to the Participant’s Account
after December 31, 1988). A Participant must make a request to the Administrator for a
hardship distribution in accordance with the procedures authorized by the Administrator. The
Administrator shall grant such a request only to the extent the distribution is made on
account of an immediate and heavy financial need of the Participant and the distribution is
necessary to satisfy that financial need. If the Administrator denies the request for a
hardship distribution, such denial shall be subject to the provisions of Section 11.2.

	 	(a)	 	Immediate and Heavy Financial Need. A distribution shall be deemed to be
necessary to satisfy the immediate and heavy financial need of the Participant only if
the distribution is made on account of any one of the following:

	 	(1)	 	expenses for medical care that would be deductible under Code
Section 213(d) (determined without regard to whether the expenses exceed 7.5%
of adjusted gross income);
	 
	 	(2)	 	payment of tuition, related educational fees and room and board
expenses, for the next 12 months of post-secondary education for the
Participant, the Participant’s Spouse, children, or dependents (as defined in
Code Section 152, without regard to Code Sections 152(b)(1), (b)(2) and
(d)(1)(B));
	 
	 	(3)	 	costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
	 
	 	(4)	 	payments needed to prevent either the eviction of the
Participant from his or her principal residence or the foreclosure on the
mortgage of the Participant’s principal residence;
	 
	 	(5)	 	payments for burial or funeral expenses of the Participant’s
deceased parent, Spouse, children or dependents (as defined in Code
Section 152, without regard to Code Section 152(d)(1)(B));
	 
	 	(6)	 	expenses for the repair of damage to the Participant’s
principal residence that would qualify for the casualty deduction under Code
Section 165 (determined without regard to whether the loss exceeds 10% of
adjusted gross income); or
	 
	 	(7)	 	such other reasons as deemed by the Regulations to satisfy an
immediate and heavy financial need of the Participant under the “safe harbor”
standard.

	 	(b)	 	Satisfaction of Need. Any hardship distribution from the Plan shall be deemed
to meet the requirement that the distribution is necessary to satisfy that financial
need if:

	 	(1)	 	the distribution does not exceed the amount of the immediate
and heavy financial need of the Participant;

			
	 	 	 
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	 	(2)	 	the Participant obtains all distributions (other than the
hardship distribution) and all nontaxable loans available under all qualified
plans of the Employer before receiving a hardship distribution; and
	 
	 	(3)	 	the Participant’s Elective Deferrals to all qualified plans of
the Employer are suspended for 6 months following the date the Participant
receives the hardship distribution.

	 	(c)	 	Designation. The Participant may elect in accordance with reasonable
procedures established by the Administrator whether Roth Contributions shall be used to
fund the hardship distribution and, if so, the amount of Roth Contributions that will
be used. If no such election is made, the Administrator shall fund the hardship
distribution pro rata, based on the value of the Participant’s Roth Account compared to
the value of all other Accounts.

	8.2	 	Other Withdrawals. A Participant may request any of the following
types of withdrawals by filing an election with the Administrator. The Administrator may
require that a request for a withdrawal be submitted within a certain period of time prior to
a Distribution date so that the withdrawal may be made as soon as administratively possible
after such Distribution date. The Administrator shall notify the Trustee of the total dollar
amount that may be withdrawn under subsections (a) through (d), as applicable,
and the Trustee shall disburse the requested amount, less any required federal income tax
withholding, directly to the Participant as soon as administratively practicable following the
applicable Distribution date.

	 	(a)	 	After-Tax Account Withdrawal. An active or terminated Participant may request
a partial or total withdrawal of his or her After-Tax Account as of any Distribution
Date.
	 
	 	(b)	 	Rollover Account Withdrawal. An active or terminated Participant may request a
partial or total withdrawal of his or her Rollover Account and/or Roth Rollover Account
as of any Distribution Date.
	 
	 	(c)	 	Age 591/2 Withdrawal. An active or terminated Participant who is at least
age 591/2 may request a partial or total withdrawal of his or her vested Account as of
any Distribution Date. The Participant may also elect in accordance with reasonable
procedures established by the Administrator whether Roth Contributions shall be used to
fund the age 591/2 withdrawal and, if so, the amount of Roth Contributions that will be
used. If no such election is made, the Administrator shall fund the age 591/2 withdrawal
pro rata, based on the value of the Participant’s Roth Account compared to the value of
all other Accounts.
	 
	 	(d)	 	Withdrawal of Matching and/or Profit Sharing Contributions. Each active
Participant may request a partial or total withdrawal of the vested portion of his or
her Matching Account and/or Profit Sharing Account prior to the termination of
employment as of any November 15 so long as any one of the following conditions are
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	 	(1)	 	the withdrawal is made after the active Participant has been
participating in the Plan for 5 or more years; or
	 
	 	(2)	 	the withdrawal is from Matching Contributions and/or Profit
Sharing Contributions that have been in the Trust Fund for at least 2 years.

* * * * End of Article 8 * * * *

			
	 	 	 
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ARTICLE 9.

INVESTMENT ELECTIONS

	9.1	 	Selection of Investment Options. The Administrator shall from time
to time establish all such rules and procedures that it determines to be necessary or
appropriate for the proper administration of the investment options available to Participants
and shall also determine the different investment choices available for investment by
Participants. The Administrator is authorized to engage, and rely upon, qualified investment
advisors in selecting the investment choices to be made available under the Plan. To the
extent the Administrator eliminates any investment options, provides new investment options or
otherwise modifies the investment options that are available for investment under the Plan,
the Administrator may impose such limitations, including the suspension of Participant
directed investments and other benefits, rights and features under the Plan, as it deems
necessary or appropriate for the proper administration of the investment options that are
available to Participants. None of the Administrator, the Trustee, the Sponsor or the
Employer shall be liable for investments made in compliance with a Participant’s directions
and they shall be under no duty or obligation to review or evaluate such investment directions
by any Participant. Each Participant shall assume all risk connected with any decrease in the
value of any funds in which his or her Account is invested. Neither the Administrator nor the
Trustee shall be bound to comply with any investment direction delivered to it if, in its sole
discretion, such investment might adversely affect the tax qualification of the Plan or might
otherwise be in violation of any applicable law.
	 
	9.2	 	Directed Investments.

	 	(a)	 	Participant Instructions. Subject to Article 10, a Participant shall,
by providing appropriate instructions to the Administrator, or its representative, be
entitled to direct the Trustee as to the percentage of any future contributions, and
any contributions previously allocated to his or her Account, in increments of one
percent, to be invested in one or more of the types of investments made available for
investment by Participants as determined by the Administrator.
	 
	 	(b)	 	Trustee Investment Pursuant to Instructions. As soon as administratively
practicable, the Trustee shall invest the applicable portions of the contributions that
have been made on behalf of Participants, and the earnings and losses thereon, in
accordance with all proper investment instructions received from Participants. To the
extent that a Participant does not direct the investment of the amounts that are
credited to his or her Account, or the applicable portion thereof, his or her Account
shall be invested by the Trustee in the default investment option as designated by the
Administrator. A Participant’s investment instructions shall remain in effect until
such time as is administratively practicable following the Trustee’s receipt of a
Participant’s proper request changing or revoking the Participant’s instructions then
in effect pursuant to this section.
	 
	 	(c)	 	Allocation of Investment Gains and Losses. Subject to Article 10, as
of each Valuation Date, the allocable portion of the income, expense and all realized
and unrealized gains and losses attributable to the portion of each Participant’s
Account which has been invested at the Participant’s direction in a particular
investment shall be allocated by the Administrator directly for the benefit of the
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	 	 	 	such Account was maintained during the Plan Year. Any allocation of any increase or
decrease in the net worth of the Participant’s Account shall be adjusted to reflect
the effect of distributions, transfers, withdrawals, contributions, and all other
transactions relating to such Account since the immediately preceding Valuation Date
in accordance with generally accepted valuation methods consistently followed and
uniformly applied. Any expense incurred in connection with the Participant’s
investment option shall be charged against the Participant’s Account unless
otherwise paid by the Employer.

	 	(d)	 	ERISA Section 404(c). This Plan is intended to satisfy the requirements of
ERISA Section 404(c) relating to participant directed investment plans, and each
Participant assumes all risk associated with any decrease in value resulting from
Participant investment decisions.

	9.3	 	Investment Manager. The power of the Trustee to direct, control or
manage the investments of the Trust may be delegated to one or more investment managers
appointed by the Administrator or Sponsor. Any such investment manager, if appointed, must
acknowledge in writing that he or she is a fiduciary with respect to the Trust and shall then
have the power to manage, acquire, or dispose of any asset of the Trust. An investment
manager must be a person who is (a) registered as an investment advisor under the Investment
Advisors Act of 1940; (b) a bank, as defined in that Act; or (c) an insurance company
qualified to perform such services under the laws of more than one state. If an investment
manager has been appointed, the Trustee shall neither be liable for acts or omissions of such
investment manager nor be under any obligation to invest or otherwise manage any asset of the
Trust. The Trustee shall not be liable for any act or omission of the investment manager in
carrying out such responsibility except to the extent the Trustee violated its fiduciary
obligations with respect to such designation, the establishment or implementation of the
procedures for the designation of an investment manager, or continuing the designation.
	 
	9.4	 	Valuation.

	 	(a)	 	Allocation of Expenses. As of each Valuation Date, the Administrator, with the
assistance of the Trustee, shall determine the fair market value of the Trust Fund
after first deducting any expenses that have not been paid by the Employer or
Participant. Unless paid by the Employer, all reasonable costs and expenses incurred
in connection with the general administration of the Plan and Trust shall be chargeable
to the Trust Fund. Administrative expenses incurred in connection with the processing
of any loan, distribution or withdrawal shall be charged to the Participant’s or
Beneficiary’s Account from which the loan or distribution is made.
	 
	 	(b)	 	Allocation of Earnings and Losses. As of each Valuation Date, the
Administrator, with the assistance of the Trustee, shall allocate the net earnings and
gains or losses of each Investment Fund, except the Stock Fund, since the preceding
Valuation Date to each Participant’s Account in the same proportion that the value of
the Participant’s Account invested in such Investment Fund bears to the total value of
all Accounts invested in such Investment Fund; and, for this purpose, the Administrator
shall adopt uniform rules that conform to generally accepted account practices. The
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	 	 	 	such that the interest on a Participant’s loan is credited solely to such
Participant’s Account.

	9.5	 	Distribution and Withdrawals. In the case of any cash distribution
or withdrawal under Article 6 or Article 8, to the extent administratively
feasible, such distribution or withdrawal shall be funded by a pro rata liquidation or partial
liquidation of the assets in which the Participant’s Account is invested, including the Stock
Fund.
	 
	9.6	 	Benefit Statements. The Administrator shall furnish on a quarterly
basis or upon a Participant’s written request, a statement to each Participant and Beneficiary
of the net earnings or losses credited to or charged against his or her Account, the amount of
any annual contributions and forfeitures allocated to such Account, and the total vested and
nonvested value of such Account.

* * * * End of Article 9 * * * *

			
	 	 	 
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ARTICLE 10.

STOCK FUND

	10.1	 	Stock Fund. Participants may be permitted to invest a portion of
their Account balance in shares of the Sponsor’s stock (the “Stock Fund”). Notwithstanding
anything contrary in this Plan, the Stock Fund shall be governed by the provisions of this
Article 10.
	 
	10.2	 	Purchase of Shares. Shares of stock (the “Stock”) available for
purposes of the Plan shall be purchased from the Sponsor or from such other person or persons
by the Trustee at such time or times as the Administrator may in its sole discretion
determine. Stock may or may not be available for purchase in any given Plan Year.

	 	(a)	 	Eligibility. The Administrator, in its sole discretion, may limit the class of
Participants who shall be eligible to request the purchase of Stock at the time of any
offering thereof, to those who are active Employees of the Employer and are
Participants in the Plan.
	 
	 	(b)	 	Offer to Purchase. The Administrator, in its discretion, may set a limit for
the minimum number of shares that a Participant must purchase in any offering. In the
event Participants request to purchase Stock in an amount that exceeds the number of
shares available to purchase, the shares available will be allocated on a proportionate
basis with each Participant receiving the number of shares equal to the number of
shares available multiplied by a fraction, the numerator of which is the number of
shares such Participant requested, and the denominator of which is the total number of
shares requested by all Participants.
	 
	 	(c)	 	Purchase Price. The purchase price shall be the fair market value of the
Stock. In the case of a transaction between the Plan and the Sponsor or another party
in interest, the fair market value of the Stock shall be determined as of the date of
the transaction. In all other cases, the fair market value of the Stock shall be
determined as of the most recent Valuation Date.
	 
	 	(d)	 	Maximum Investment in Stock Fund. Effective as of July 1, 2007, the maximum
investment in the Stock Fund by each Participant shall, at the time of the
Participant’s election, in no event exceed 25% of the Participant’s Account balance
less the amount in the Participant’s Rollover Account and Roth Rollover Account.
Participants who are invested in the Stock Fund in excess of the 25% maximum limit as
of July 1, 2007, may continue to hold the amount of Stock in excess of the 25% maximum
after July 1, 2007, but shall not be eligible to purchase additional shares of Stock
unless and until their investment in the Stock Fund is less than 25%.
	 
	 	(e)	 	Participant Election. If available, eligible Participants may purchase Stock
by electing to transfer assets from other Investment Funds to the Stock Fund; provided,
however, that a Participant may not use assets purchased with Rollover Contributions to
purchase Stock. The effective date of any Stock purchases and the process and timing
for such purchases shall be in accordance with uniform procedures established by the
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	10.3	 	Valuation. Promptly after each Valuation Date, the Administrator
shall cause a valuation to be made with regard to the Stock Fund as of such date. Stock shall
be valued at fair market value, which, for so long as the Stock is not traded on any national
or regional stock exchange, shall be determined by the Administrator in consultation with an
independent appraiser meeting the requirements of Code Sections 170(a)(1) and 401(a)(28).
	 
	10.4	 	Crediting Stock to Account. As of the end of each calendar quarter,
each Participant Account shall be credited with the fair market value of the Stock, adjusted
for appreciation or depreciation as determined by an independent financial appraisal firm.
	 
	10.5	 	Dividends. As of the end of each calendar quarter, any cash
dividend declared during that calendar quarter shall be invested on the Participant’s behalf
in accordance with the Participant’s current investment elections in effect.
	 
	10.6	 	Transfers From Stock Fund. A Participant may transfer Stock from
the Stock Fund to one or more other Investment Funds based upon the equivalent fair market
value of the Stock determined in accordance with Section 10.3. All transfers of Stock
from the Stock Fund to one or more other Investment Funds must be requested in writing and
delivered to the Administrator no later than the last day of the month preceding the
Distribution date in which such transfer shall be effective.
	 
	10.7	 	Distributions, Withdrawals and Loans. In the event of a request for
a distribution, loan or withdrawal, Stock used as the source of the distribution, withdrawal
or loan shall be converted to cash on the applicable Distribution date, based on the fair
market value of the Stock determined in accordance with Section 10.3. Loan repayments
shall not be re-invested in Stock, but shall be invested over the current investment election
then in effect.
	 
	10.8	 	Voting.

	 	(a)	 	Prior to each meeting of stockholders of the Sponsor, each Participant will be
given any proxy materials relating to the meeting, together with a form to be delivered
to the Trustee, that sets forth the Participant’s instructions as to the manner of
voting the Stock then held by the Trustee under the Plan to the extent of the
Participant’s proportionate interest therein. The Trustee shall vote the Stock in
accordance with such instructions.
	 
	 	(b)	 	If, within such reasonable period of time prior to a stockholders’ meeting as
may be specified by the Trustee, no instructions have been received by the Trustee from
a Participant, the Trustee shall vote such shares, in person or by proxy, in accordance
with the voting instructions received from a majority of the Participants for which it
holds Stock.

	10.9	 	Tender Offers. As soon as practicable after being informed of the
commencement of a tender offer or exchange offer (“Offer”) for Stock, the Sponsor shall use
reasonable best efforts to cause each Participant, whose Account has credited to it any shares
of Stock, to be advised in writing of the terms of the Offer, together with forms by which the
Participant may instruct the Trustee, or revoke such instruction, to tender shares credited to
his or her Account, to the extent permitted under the terms of any such Offer. The Trustee
shall follow the directions of each Participant but the Trustee shall not tender such Stock
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	 	 	instructions were received. The number of shares of Stock with respect to which a
Participant may provide instructions shall be the total number of shares of Stock credited
to the Participant’s Account, whether or not such shares are vested, as of the last
Valuation Date for which an appraisal has been issued before the month during which the
Offer commenced or such other date which may be designated by the Sponsor, in its sole
discretion, as it deems appropriate for reasons of administrative convenience. The giving
of the instructions to the Trustee to tender shares and the tender thereof shall not be
deemed a withdrawal or suspension from the Plan or a forfeiture of any portion of the
Participant’s interest in the Plan. Any securities received by the Trustee as a result of a
tender of shares of Stock hereunder shall be held, and any cash so received shall be
invested in short-term investments, for the account of each Participant with respect to whom
shares of Stock were tendered pending any reinvestment by the Trustee, as it may deem
appropriate, consistent with the purposes of the Plan, or in any investment option of the
Plan as the Participant may direct under the terms of the Plan.

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ARTICLE 11.

APPLICATION FOR BENEFITS

	11.1	 	Applying for Benefits. If the value of a Participant’s Account
exceeds the Cash-Out Limit, the Participant’s benefit shall not be distributed prior to the
Participant’s 62nd birthday without his or her consent. With respect to any such Participant,
the Participant’s consent shall be valid only if the Participant is provided with information
regarding his or her right to, and the effect of, a distribution (including the taxation of
such distribution and its qualification for rollover treatment) within the time period, and
under the circumstances, required by applicable Regulations. The Administrator shall
establish such additional rules and procedures that it determines to be necessary or
appropriate for the proper payment of Plan benefits.
	 
	11.2	 	Denial of Benefits. The following claims procedures are applicable
to claims filed under the Plan:

	 	(a)	 	Filing a Claim. All claims shall be filed in writing by the Participant,
Beneficiary or the authorized representative of the Participant or Beneficiary (the
“claimant”) and shall be made in accordance with reasonable procedures established by
the Administrator. For purposes of this section, a request for an in-service
withdrawal shall be considered a claim.
	 
	 	(b)	 	Review of Claim. The Administrator shall review all materials and shall decide
whether to approve or deny the claim. If a claim is denied in whole or in part, the
Administrator shall provide written notice of denial to the claimant within a
reasonable period of time no later than 90 days after the Administrator receives a
claim, unless special circumstances require an extension of time for processing the
claim. If an extension is required, the Administrator shall notify the claimant in
writing before the end of the 90-day period and indicate the special circumstances
requiring an extension of time and the date by which the Administrator expects to
render a decision on the claim. The extension shall not exceed an additional 90 days.
The notice of denial shall be written in a manner calculated to be understood by the
claimant and shall include the following:

	 	(1)	 	the specific reasons for the adverse determination;
	 
	 	(2)	 	specific references to pertinent Plan provisions on which the
adverse determination is based;
	 
	 	(3)	 	a description of any additional material or information
necessary for the claimant to perfect his or her claim and the reason why such
material or information is necessary; and
	 
	 	(4)	 	a description of the Plan’s review procedures and time limits
applicable to such procedures, including a statement of the claimant’s right to
bring a civil action under ERISA Section 502(a) following an adverse
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	 	(c)	 	Appeal Process. If the claimant wishes a review of the denied claim, the
claimant shall be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claimant’s
claim for benefits. The claimant may submit to the Administrator in writing any
issues, documents, records, comments or other information he or she may have regarding
his or her claim for benefits under the Plan. Such request for an appeal must be made
by the claimant in writing within 60 days after receipt of notice that his or her claim
has been denied by the Administrator.
	 
	 	 	 	A document, record or other information shall be considered “relevant” to a claim if
such document, record or other information (1) was relied upon in making the benefit
determination, (2) was submitted, considered or generated in the course of making
the benefit determination, without regard to whether such document, record or other
information was relied upon in making the benefit determination, or (3) demonstrates
compliance with the administrative processes and safeguards required to ensure and
to verify that benefit claim determinations are made in accordance with the Plan and
that, where appropriate, the Plan provisions have been applied consistently with
respect to similarly situated claimants.
	 
	 	(d)	 	Review of Appeal. The Administrator shall make its decision on review solely
on the basis of the written record, including documents and written materials submitted
by the claimant. The Administrator shall make a decision on the review within a
reasonable period of time, not later than 60 days after the Administrator receives the
claimant’s written request for review unless special circumstances require additional
time for review of the claim. If an extension is required, the Administrator shall
notify the claimant in writing before the end of the 60-day period and indicate the
special circumstances requiring an extension of time and the date by which the
Administrator expects to render a decision on the claim. The extension shall not
exceed an additional 60 days. The decision on review will be written in a manner
calculated to be understood by the claimant. If the claim is denied, the written
notice shall include the following:

	 	(1)	 	the specific reasons for the adverse determination;
	 
	 	(2)	 	specific references to pertinent Plan provisions on which the
adverse determination is based;
	 
	 	(3)	 	a statement that the claimant shall be entitled, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant to the claimant’s claim for benefits (as
“relevant” is defined in this section); and
	 
	 	(4)	 	a statement of the claimant’s right to bring a civil action
under ERISA Section 502(a).

	 	(e)	 	Administrator’s Full Discretion. The Administrator, claims administrator and
appeals administrator, as described above, shall have full discretion and power to
decide all claims and reviews of denied claims, including determining eligibility,
status and the rights of all individuals under the Plan and construing any and all
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of the Plan. Following the approval of a claim for benefits, the Administrator
shall have the authority to construe and administer the Plan in a manner that is
consistent with the payment of benefits in accordance with the approved claim.

	 	(f)	 	Electronic Notification. Any notification from the Administrator, claims
administrator or appeals administrator to the claimant under this section may be made
electronically, provided that such notification complies with Department of Labor
Regulation Sections 2520.104b-1(c)(1)(i), (iii), and (iv).

	11.3	 	Exhaustion of Remedies; Limitation of Actions. In the event of any
dispute over benefits under this Plan, all remedies available to the disputing individual
under this Article 11 must be exhausted before legal recourse of any type is sought.
No legal action at law or in equity may be filed against the Plan, the Sponsor, any
Participating Employer, the Administrator or its delegate relating to any dispute over
benefits under this Plan more than one year after the Administrator or its delegate has made a
final decision under the claims review process described in this article.

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ARTICLE 12.

ADMINISTRATION OF THE PLAN

	12.1	 	Administrator. The Administrator shall be the FIBS Benefits
Committee and the “named fiduciary,” as that term is defined in ERISA. Any individual serving
on the FIBS Benefits Committee shall be deemed to have resigned as a member of the
Administrator upon termination of employment or resignation from service with the Employer.
The Sponsor shall be entitled to remove the Administrator at any time, with or without cause.
	 
	12.2	 	Powers and Duties. The Administrator shall administer the Plan in
accordance with its terms, and shall have all powers necessary to carry out the provisions of
the Plan not otherwise reserved to the Sponsor. The powers and duties of the Administrator
shall be those defined in the FIBS Benefits Committee Charter, as may be amended from time to
time. All other powers and duties not set forth in the Charter shall be deemed to have been
reserved by the Sponsor.
	 
	12.3	 	Indemnification. To the extent permitted by ERISA, the Sponsor
agrees to indemnify and defend to the fullest extent permitted by law all persons who are,
were, or may be employees of the Employer against any liabilities, damages, costs and expenses
(including attorney’s fees and amounts paid in settlement of any claim approved by the
Employer) occasioned by their occupying or having occupied an administrative position in
connection with the Plan, except when due to their willful misconduct or gross negligence.
	 
	12.4	 	Compensation and Expenses. No employee shall be compensated for his
or her services performed in connection with the administration of the Plan. However, all
reasonable expenses of employees incurred in connection with the administration of the Plan
shall be paid from the Trust Fund unless otherwise paid by the Employer. Until otherwise
paid, the Trust Fund shall at all times be liable for the payment of all administrative
expenses, and the election of the Employer to pay any such expense shall not be construed as
creating any such liability on the part of the Employer.

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ARTICLE 13.

THE TRUST FUND

	13.1	 	Trustee. The Sponsor shall select a Trustee to hold, invest and
distribute any assets of the Plan which are held in the Trust Fund in accordance with the
terms of the Trust Agreement which shall be executed by the Sponsor or Administrator and the
Trustee under such terms and conditions, not in contravention of the provisions of this Plan,
as the Sponsor or Administrator and the Trustee may elect. The fiduciary responsibilities of
the Trustee shall be as set forth in the Trust Agreement. The Sponsor or the Administrator
may change the Trustee and the Trust Agreement at any time, provided that no amendment which
affects the duties or responsibilities of the Trustee shall be effective without the consent
of the Trustee.
	 
	13.2	 	Trust Fund. The Trust Fund shall be used only to pay benefits as
provided in the Plan and such other payments as directed by the Administrator. All reasonable
and necessary expenses incurred in the administration of the Plan and Trust Fund shall be paid
from the Trust Fund to the extent that such costs and expenses are not paid by the Employer.
	 
	13.3	 	Reversion of Assets. No assets of the Trust Fund shall revert to,
or be used or enjoyed by, the Employer or any successor of the Employer, nor shall any such
funds or assets be used other than for the benefit of Participants or Beneficiaries,
excepting:

	 	(a)	 	Mistake of Fact. In the event the Administrator determines that the Employer
has contributed any amount under Article 4 to the Trustee by mistake of fact,
the Administrator shall direct the Trustee in writing to return to the Employer, within
one year after the payment of the contribution, the lesser of the amount actually
contributed by such mistake of fact or its then current value.
	 
	 	(b)	 	Deductibility. All contributions hereunder are made on the condition that they
are deductible under Code Section 404. If any portion of an Employer contribution
under Article 4 for a Plan Year is not deductible, to the extent that the
deduction is disallowed, the Administrator shall direct the Trustee to return the
lesser of such amount or its then current value to the Employer within one year
following the disallowance of the deduction.
	 
	 	(c)	 	Termination. After satisfaction of all fixed and contingent liabilities or
obligations to persons entitled to benefits upon termination of the Plan, any fund or
property remaining in the Trust Fund shall revert to the Employer, provided such
reversion does not contravene any provision of law.

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ARTICLE 14.

PLAN FIDUCIARIES

	14.1	 	Fiduciaries. The named fiduciary with respect to the Plan and Trust
Fund shall be the Administrator. To the extent the Trustee exercises discretionary authority,
responsibility or control with respect to management of the Plan or Plan assets or
administration of the Plan, such Trustee shall be a Plan fiduciary. Any Investment Manager
appointed as provided in Section 9.3 shall be a Plan fiduciary with respect to the
Plan and Trust Fund, but shall not be a named fiduciary. The fiduciaries of the Plan and
Trust Fund shall have only those powers, duties, responsibilities and obligations as are
specifically provided for by the Plan and Trust Agreement.
	 
	14.2	 	Bonding Requirements. Each of the Plan fiduciaries shall be bonded
to the extent required by ERISA. Such bond shall provide protection to the Plan and Trust
Fund against loss by reason of direct or indirect acts of fraud or dishonesty on the part of
the Plan fiduciaries, their employees, owners or agents.
	 
	14.3	 	Prohibited Transactions. Except as otherwise permitted by
applicable law, no fiduciary shall engage in, or cause the Plan to engage in, a prohibited
transaction as defined in Code Section 4975 and ERISA Section 406 and the related Regulations.
	 
	14.4	 	Fiduciary Responsibilities.

	 	(a)	 	Administrator. The Administrator shall have responsibility and authority to
control the operation and administration of the Plan as further set forth in
Article 12.
	 
	 	(b)	 	Trustee. The Trustee shall hold the assets of the Trust Fund in trust and
shall be responsible for all functions specifically assigned to it by the Plan and
Trust Agreement. The Trustee shall have exclusive responsibility for the management
and control of that portion, if any, of the Trust Fund which is not made subject to the
management and control of an Investment Manager, a Participant or the Administrator.
The Trustee shall have no other responsibilities unless otherwise provided in the Trust
Agreement. To the extent that the Trust Fund or any portion thereof is subject to the
management and control of an Investment Manager, the Participant or the Administrator,
the Trustee (1) shall not have exclusive management and control over the Trust Fund;
(2) shall not invest or otherwise manage and control that portion of the Trust Fund;
and (3) shall take investment action only upon the instructions of such Investment
Manager or the Administrator properly given as herein provided. Purchase and sale
orders may be placed by such Investment Manager directly with brokers and dealers
without the intervention of the Trustee and, in such event, the Trustee’s sole
obligation shall be to make payment for purchased securities and deliver those that
have been sold when advised of the transaction. The Trustee shall have no liability to
any person for any action taken or omitted in accordance with any directions given by
such Investment Manager herein, or for the failure of such Investment Manager to give
such directions.
	 
	 	(c)	 	Sponsor. The Sponsor shall be responsible for all functions assigned or
reserved to it under the Plan and Trust Agreement. Any authority so assigned or
reserved to the Sponsor shall be exercised by resolution of its duly authorized
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	 	 	 	shall become effective with respect to the Trustee only with its consent and upon
written notice to the Trustee. By way of illustration, and not by limitation, the
Sponsor shall have authority and responsibility for (1) the designation of named
fiduciaries; (2) the appointment, removal and replacement of the Trustee; and
(3) the exercise of all fiduciary functions provided in the Plan and Trust Agreement
or necessary to the operation of the Plan, except any functions that have been
delegated to other fiduciaries or to an Investment Manager. Not as Plan fiduciary,
but rather as “settlor” of the Plan, by way of illustration, and not by limitation,
the Sponsor shall have authority and responsibility for (1) the design of the Plan;
(2) the qualification under applicable law of the Plan and Trust Agreement, and any
amendments thereto; and (3) the funding of the Plan with respect to its Employees.

This section is intended to allocate to each fiduciary the individual responsibility for the
prudent execution of the functions assigned to it, and no responsibilities shall be shared
by two or more fiduciaries unless such sharing is provided by a specific provision of the
Plan and Trust Agreement. Whenever one fiduciary is required to follow the directions of
another fiduciary, the responsibility of the fiduciary giving the directions shall be deemed
its sole responsibility, and the responsibility of the fiduciary receiving those directions
shall be to follow them insofar as such instructions are on their face proper under
applicable law. A fiduciary may employ one or more persons to render advice concerning
responsibility such fiduciary has been allocated under the Plan and Trust Agreement. To the
extent that fiduciary responsibilities are allocated to an Investment Manager, such
responsibilities are deemed allocated solely to the Investment Manager alone, to be
exercised by the Investment Manager alone and not in conjunction with any fiduciary, and the
Trustee shall be under no obligation to manage any asset of the Trust Fund that are managed
by the Investment Manager.

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ARTICLE 15.

TOP-HEAVY PROVISIONS

	15.1	 	Top-Heavy Definitions. For purposes of this article, the following
terms shall have the following meanings.

	 	(a)	 	Determination Date means the last day of the preceding Plan Year or, in the
case of the first Plan Year, the last day of such Plan Year.
	 
	 	(b)	 	Key Employee means any Employee or former Employee (including a deceased
Employee) who, at any time during the Plan Year that includes the Determination Date,
was (1) an officer of the Employer having Section 415 Compensation greater than
$130,000 (as may be adjusted under Code Section 416(i)(1)); (2) a 5% owner of the
Employer; or (3) a 1% owner of the Employer having Section 415 Compensation from the
Employer of more than $150,000 without application of the Code Section 401(a)(17)
limitation. The determination of who is a Key Employee shall be made in accordance
with Code Section 416(i)(1) and related Regulations.
	 
	 	(c)	 	Non-Key Employee means any Participant who is an Employee on the last day of
the Plan Year and who is not a Key Employee, regardless of the Hours of Service or Plan
Compensation earned by such Employee during the Plan Year.
	 
	 	(d)	 	Permissive Aggregation Group means the Required Aggregation Group combined with
any other plan maintained by the Employer, provided that the resulting combination
group would continue to satisfy the requirements of Code Sections 401(a)(4) and 410
once such other plan is taken into account. The Administrator shall determine which
plan or plans maintained by the Employer shall be taken into account in determining the
Permissive Aggregation Group.
	 
	 	(e)	 	Required Aggregation Group means (1) each plan of the Employer in which a Key
Employee is a participant, and (2) each other plan of the Employer that enables any
plan described in clause (1) to meet the requirements of Code Section 401(a)(4) or 410.

	15.2	 	Determination of Top-Heavy Status.

	 	(a)	 	Top-Heavy Percentage. This Plan shall be deemed to be a “Top-Heavy Plan”
within the meaning of Code Section 416(g) if, as of the Determination Date, either the
aggregate of the Accounts of Key Employees under the Plan exceeds 60% of the aggregate
of the Accounts of all Employees under the Plan, or the Plan is part of a Required or
Permissive Aggregation Group and the Required or Permissive Aggregation Group is
determined to be a Top-Heavy Plan after application of the same test. This Plan shall
not be considered a Top-Heavy Plan for any Plan Year in which the Plan is a part of a
Required or Permissive Aggregation Group that is not a Top-Heavy Plan.
	 
	 	(b)	 	Determination Percentage. The top-heavy determination percentage shall be
derived by the Administrator as of the Determination Date by dividing (1) the sum of
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	 	 	 	cumulative accrued benefits for Key Employees under a defined contribution or
defined benefit plan that is part of a Required or Permissive Aggregation Group) by
(2) a similar sum determined for all Employees. For purposes of determining the
Account of any Employee (or the present value of the cumulative accrued benefit for
any Employee in a defined contribution or defined benefit plan), such Accounts or
present value shall be increased by the aggregate distributions made with respect to
the Employee under the Plan and any plan aggregated with the Plan under Code Section
416(g)(2) during the one-year period ending on the Determination Date. The
preceding sentence shall also apply to distributions under a terminated plan which,
had it not been terminated, would have been aggregated with the Plan under Code
Section 416(g)(2)(A)(i). In the case of a distribution made for a reason other than
severance from employment, Death or Disability, this provision shall be applied by
substituting “five-year period” for “one-year period.”

	 	(c)	 	Look-Back Period. If any Employee is a Non-Key Employee for any Plan Year, but
was a Key Employee for any prior Plan Year, such Employee’s Accounts (and the present
value of the cumulative accrued benefit for any such Employee in a defined contribution
or defined benefit plan) shall not be taken into account for purposes of determining
whether this Plan is a Top-Heavy Plan. If an Employee has not performed any services
for the Employer at any time during the one-year period ending on the Determination
Date, such Employee’s Accounts (and the present value of the cumulative accrued benefit
for any such Employee in a defined contribution or defined benefit plan) shall not be
taken into account for the purposes of determining whether the Plan is a Top-Heavy
Plan.

	15.3	 	Change in Vesting Schedule. To the extent the vesting provisions of
Section 3.3 are not more generous, if this Plan is deemed a Top-Heavy Plan for a Plan
Year, then the vesting schedule under the Plan shall be at least as generous as the following
schedule, or if more generous, the vesting schedule set forth in Section 3.3.

	 	 	 	 	 
	            Years of Service	 	Vested Percentage
	 
	Less than 2 years
	 	 	0	%
	2 years and less than 3 years
	 	 	20	%
	3 years and less than 4 years
	 	 	40	%
	4 years and less than 5 years
	 	 	60	%
	5 years and less than 6 years
	 	 	80	%
	6 years or more
	 	 	100	%

	15.4	 	Minimum Contribution.

	 	(a)	 	Amount of Contribution. For any Plan Year in which the Plan is a Top-Heavy
Plan, the Employer shall contribute to the Account of each Non-Key Employee an amount
equal to (1) the lesser of 3% of the Non-Key Employee’s Section 415 Compensation or the
largest percentage of Section 415 Compensation contributed on behalf of any Key
Employee for such Plan Year (determining such largest percentage by taking into account
all contributions including the contributions for such Plan Year made by the Employer
pursuant to a Participant’s election for such Plan Year to such Key Employee’s Account)
minus (2) any Employer contribution for such Plan Year for such Non-Key Employee that
may have been made as of the Determination Date (but

			
	 	 	 
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	 	 	 	excluding contributions for such Plan Year made by the Employer pursuant to a
Participant’s election).

	(b)	 	Coordination with Other Plan. If any Participant in this Plan is also covered
by another defined contribution plan or defined benefit plan sponsored by the Employer,
then for each year this Plan is a Top-Heavy Plan, the Participant’s receipt of a
minimum guaranteed benefit under the other defined contribution plan or the defined
benefit plan in accordance with Code Section 416(c)(1) shall satisfy the minimum
contribution requirement.

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ARTICLE 16.

AMENDMENT, TERMINATION AND MERGER

	16.1	 	Plan Amendment.

	 	(a)	 	Sponsor and Administrator Power to Amend. The Sponsor shall have the right to
amend this Plan at any time and from time to time. The Sponsor also grants the
Administrator, on behalf of the Sponsor, the right to amend the Plan at any time and
from time to time if such amendment is necessary to retain the Plan’s qualified status
under Code Section 401(a) or to comply with ERISA or if, in the judgment of the
Administrator, such amendment will not result in any material increase in the benefits
provided under or the cost of maintaining the Plan. Any such amendment may be made
retroactively effective to the extent permitted by applicable law.
	 
	 	(b)	 	Limitation to Scope of Amendments. Except to the extent required to qualify
this Plan and the Trust Agreement under Code Sections 401(a) and 501, or as a condition
of continued qualification, no amendment shall be made which would have any of the
following effects:

	 	(1)	 	deprive any Participant or Beneficiary of the right to receive
any benefits attributable to service before the amendment to which such
individual may be entitled; or
	 
	 	(2)	 	permit any part of the Trust Fund to revert to the Employer or
permit any part of the Trust Fund, other than such part as may be required to
pay taxes or administration expenses, to be used for or diverted for any
purpose other than the exclusive benefit of Participants or their
Beneficiaries.

	16.2	 	Vesting Amendments. In the event the Sponsor shall adopt an
amendment changing the vesting schedule described in Section 3.3, or any other
amendment that directly or indirectly affects the computation of a Participant’s vested
Account, any Participant who has completed at least three Years of Service may elect to have
his or her vested Account determined in accordance with the vesting schedule in effect
immediately prior to the effective date of the amendment. Any such election must be in
writing and be filed with the Administrator by the latest of (a) 60 days after the amendment
is adopted, (b) 60 days after the amendment becomes effective, or (c) 60 days after written
notice of the amendment is issued to the Participant by the Administrator. The Participant
must have completed the required three Years of Service by the latest date on which an
election may be filed hereunder. Notwithstanding the foregoing, effective for amendments
adopted after August 9, 2006 and with respect to benefits accrued as of the later of the
adoption or effective date of such amendment, the vested percentage of each Participant shall
be the greater of the vested percentage under the old vesting schedule or the vested
percentage under the new vesting schedule.
	 
	16.3	 	Plan Termination.

	 	(a)	 	Sponsor Rights. Although the Sponsor expects to continue the Plan and the
contributions to the Trust Fund indefinitely, the Sponsor may terminate the Plan and
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	 	(b)	 	Participating Employers. Although each Participating Employer expects to
continue participating in the Plan and making contributions to the Trust Fund
indefinitely, a Participating Employer may withdraw from the Plan and discontinue
further contributions to the Trust Fund in accordance with Article 17. The
liability of a Participating Employer to contribute to the Trust Fund shall
automatically terminate upon its being legally dissolved. Any such withdrawal from the
Plan by a Participating Employer shall not affect the continuation of the Plan by any
other Participating Employer.
	 
	 	(c)	 	Partial Termination. In the event of the partial termination of the Plan, the
rights of each Participant affected by such termination to the amounts credited to his
or her Account as of the date of such termination shall be vested. Such amounts shall
be distributed in accordance with the provisions of this Plan.
	 
	 	(d)	 	Trust Fund. Upon the termination of the Plan or the complete discontinuance of
contributions to the Trust Fund, the Administrator shall notify the Trustee of such
event in writing. The Trust Fund shall continue until all funds are distributed in
accordance with the terms of the Plan. All provisions of the Plan and Trust Agreement
shall remain in force, other than the provisions relating to Employer contributions,
until all funds are distributed from the Trust Fund in accordance with
Article 6. Each affected Participant shall be fully vested in his or her
Account as of the date of such termination or discontinuance.
	 
	 	(e)	 	Allocation of Forfeiture Account. Any funds held in the Plan’s forfeiture
account at the time of the termination of the Plan or discontinuance of contributions
shall be applied as set forth in Section 3.7 to the extent such allocation does
not exceed the limits of Article 5.
	 
	 	(f)	 	Trustee Fees. The Trustee’s fees and expenses of administering the Trust Fund
and other expenses incident to the termination of the Trust Fund and distribution of
Plan assets shall be paid from the Trust Fund unless otherwise paid by the Employer.
Until otherwise paid, the Trust Fund shall at all times remain solely liable for the
payment of all fees and expenses incurred with regard to implementing the termination.

	16.4	 	Plan Merger.

	 	(a)	 	Transfer of Assets. This Plan shall not be merged into, or consolidated with,
nor shall any assets or liabilities be transferred to, any pension or retirement plan
under circumstances resulting in a transfer of assets or liabilities from this Plan to
any other plan unless immediately after any such merger, consolidation or transfer,
each Participant would (if the Plan then terminated) receive a benefit after the
merger, consolidation or transfer equal to or greater than the benefit he or she would
have been entitled to receive immediately before such merger, consolidation or transfer
(if the Plan had then terminated). Subject to the foregoing and the applicable
requirements of Code Section 411(d)(6), the Administrator may, in its discretion,
direct the Trustee to (1) transfer all or a specified portion of the Trust Fund to any
other trust forming part of another qualified plan or (2) accept a transfer to the
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	 	 	 	qualified plan. Any transfer of assets to another trust shall be in complete
satisfaction of all liabilities relating to the amounts so transferred.

	 	(b)	 	Distributions. Subject to an election by the Administrator to transfer the
Accounts of any affected Participant to another trust forming part of a qualified plan
as provided in subsection (a), the Administrator may, in its discretion, permit
in a uniform and nondiscriminatory manner the Accounts of affected Participants to be
distributed, as provided in Article 6, in connection with a corporate
transaction that results in the Participant’s severance from employment as permitted in
accordance with Code Section 401(k).

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ARTICLE 17.

PARTICIPATING EMPLOYERS

	7.1	 	Adoption by Participating Employers. Notwithstanding anything
herein to the contrary, any Employer that adopts this Plan shall participate in the Plan by
entering into a participation agreement with the Sponsor and shall be a “Participating
Employer” effective as of the date of the applicable participation agreement. Subject to such
Participating Employer’s right to withdraw from the Plan, the Participating Employer has no
power or obligation to amend or consent to any amendment made by the Sponsor, and agrees to be
bound by all the provisions, conditions, and limitations of the Plan, as amended from time to
time, as fully as if the Participating Employer was an original party to the Plan.
	 
	7.2	 	Participating Employer Required to Use Same Trust Agreements. Each
Participating Employer shall agree to utilize the Trustee designated from time to time by the
Sponsor under the Trust and shall be subject to the terms and conditions of the Trust
Agreement.
	 
	7.3	 	Designation of Agent. Each Participating Employer shall be deemed
to be a part of this Plan; provided, however, that with respect to all of its relations with
the Trustee and Administrator for the purpose of this Plan, each Participating Employer, by
entering into a participation agreement with the Sponsor, irrevocably designates the Sponsor
as its agent.
	 
	7.4	 	Employee Transfers. In the event of a transfer of an Employee
between Participating Employers, the transferred Employee shall retain his or her accumulated
service and eligibility. No such transfer shall effect a severance from employment hereunder,
and the Employer to which the Employee is transferred shall thereupon become obligated
hereunder with respect to such Employee in the same manner as was the Employer from whom the
Employee was transferred.
	 
	7.5	 	Participating Employer’s Contribution. All contributions made by a
Participating Employer, as provided for in this Plan, may be determined separately by each
Participating Employer, and shall be allocated only among the Participants eligible to share
in those contributions. On the basis of the information furnished by the Administrator, the
Trustee shall keep separate books and records concerning the affairs of each Participating
Employer hereunder and as to the accounts and credits of the Employees of each Participating
Employer.
	 
	7.6	 	Amendment. By entering into a participation agreement with the
Sponsor, each Participating Employer grants to the Sponsor the right to amend the Plan at any
time without the consent of such Participating Employer.
	 
	7.7	 	Discontinuance of Participation. A Participating Employer, by
action of its governing body, may withdraw from the Plan upon at least 60 days’ prior notice,
in writing, to the Administrator (the effective date of such withdrawal being the “withdrawal
date”), and shall cease to be a Participating Employer for all purposes of the Plan as of the
withdrawal date. The Administrator may remove a Participating Employer from the Plan upon at
least 60 days’ prior written notice to the Participating Employer (the effective date of such
withdrawal being the “removal date”), and such Participating Employer shall cease to
participate in the Plan as of the removal date. A Participating Employer shall be deemed to
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	 	 	withdraw from the Plan in the event of its complete discontinuance of contributions, or,
unless the Sponsor otherwise directs, it ceases to be a member of the Sponsor’s Controlled
Group. Upon the withdrawal or removal of a Participating Employer, the Administrator shall
determine whether a partial termination has occurred with respect to the Participating
Employer’s affected Employees. In the event that the Administrator determines a partial
termination has occurred, the actions specified in Section 16.3 shall be taken as of
the withdrawal or removal date, as applicable, but with respect only to Participants who are
employed by such Participating Employer, and who, upon such withdrawal or removal, are
neither transferred to nor continued in employment with any other Participating Employer.

	17.8	 	Administrator’s Authority. The Administrator shall have authority
to make any and all necessary rules or regulations, binding upon all Participating Employers
and all Participants, to effectuate the purpose of this Plan.

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ARTICLE 18.

GENERAL PROVISIONS

	18.1	 	Interpretation.

	 	(a)	 	Consistency. If any provision of this Plan or the Trust Agreement may be
susceptible to more than one interpretation, the interpretation that shall always be
given to such provision shall be consistent with this Plan and the Trust Agreement
being an employees’ plan and trust agreement within the meaning of Code Sections 401(a)
and 501, or as replaced by any sections of like intent and purpose.
	 
	 	(b)	 	Severability. In case any provisions of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the remaining
provisions of this Plan, and this Plan shall be construed and enforced as if said
illegal or invalid provisions had never been inserted herein.
	 
	 	(c)	 	Number and Gender. Unless the context otherwise requires, words denoting the
singular number may, and where necessary shall, be construed as denoting the plural
number, and pronouns in the masculine gender include the feminine gender and pronouns
in the neuter gender include the masculine and feminine gender.
	 
	 	(d)	 	Descriptive Headings. The headings of the Plan are inserted for convenience of
reference only and shall have no bearing upon the meaning of the provisions hereof.

	18.2	 	Exclusive Benefit of Participants. Employer contributions under the
Plan shall be irrevocably made for the exclusive benefit of the Participants and their
Beneficiaries and no part of said contributions or earnings thereon shall in any event revert
to the Employer, except as otherwise provided herein.
	 
	18.3	 	Liability for Representations. The Employer, the Administrator and
the Trustee shall be discharged from any liability in acting upon any representations by any
individual of any fact affecting his or her status under this Plan or upon any notice,
request, consent, letter, telegram, or other document believed by them, or any of them, to be
genuine, and to have been signed or sent by the proper person.
	 
	18.4	 	Governing Law. The Plan shall be construed, regulated and
administered under the laws of the State of Montana, except that if any such laws are
superseded by any applicable federal law or statute, such federal law or statute shall apply.
	 
	18.5	 	Assignment and Alienation. The Trust Fund is established for the
purpose of providing for the support of the Participants upon their Retirement and for the
support of their families. Except in the case of any (a) federal tax lien, (b) qualified
domestic relations order under Section 6.8, (c) breach of a Participant’s Fiduciary
obligations to the Plan, or (d) any other event described in Code Section 401(a)(13) and
related Regulations, no right or interest of any individual in any part of the Trust Fund
shall be transferable or assignable or be subject to alienation, anticipation, or encumbrance,
and no such right or interest shall be subject to garnishment, attachment, execution, or levy
of any kind.
	 
	18.6	 	Participant Rights. The sole rights of a Participant under this
Plan shall be to have this Plan administered according to its provisions, to receive whatever
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	 	 	entitled to hereunder, and, subject to any Spousal Death benefit requirements, to name the
Beneficiary to receive any Death benefits to which such person may be entitled.

	18.7	 	Effect on Employment Status. The adoption and maintenance of this
Plan shall not be construed as creating any contract of employment between the Employer and
any Employee. This Plan shall not affect the right of the Employer to deal with its Employees
in all respects, including their hiring, discharge, compensation, and conditions of
employment. No individual shall be discharged, fired, suspended, expelled, disciplined, or
discriminated against for exercising any right under this Plan or for giving information or
testimony in any inquiry or proceeding relating to the Plan’s administration.
	 
	18.8	 	Missing Participants and Beneficiaries. An individual for whom
benefits are being held by the Trustee shall keep the Administrator notified of his or her
current mailing address. The Administrator, the Trustee and the Employer shall be discharged
from any liability resulting from the failure to pay benefits as they become due if the
Administrator has notified the individual at his or her last address of record. If benefits
are to be paid to an individual who cannot be located, the Administrator may take either or
none of the following actions, at its discretion:

	 	(a)	 	Forfeiture. The individual’s Account shall be forfeited and applied as set
forth in Section 3.7. If the individual is later located, the vested portion
of the Account will be reinstated and distributed in accordance with the terms of the
Plan.
	 
	 	(b)	 	Distribution to Established Account. The Administrator may direct the Trustee
to distribute the Account by establishing an individually-designated account for the
lost Participant (for example, a savings account or individual retirement account), by
purchasing an annuity for the individual, by transferring the account on behalf of such
individual to an ongoing plan of the Employer, or by any other method deemed proper by
the Administrator.

	18.9	 	Incapacity of Participant or Beneficiary. If any Participant or
Beneficiary entitled to receive a distribution under this Plan is, as determined by the
Administrator in a uniform and nondiscriminatory manner, unable to apply such distributions to
his or her own best interest, whether because of illness, accident or other incapacity
(mental, physical or legal), the Administrator may, in its discretion, direct the Trustee to
make distributions in one or more of the following ways:

	 	(a)	 	directly to the Participant or Beneficiary;
	 
	 	(b)	 	to the duly appointed legal guardian or conservator of the Participant or
Beneficiary;
	 
	 	(c)	 	to the Spouse of the Participant or Beneficiary;
	 
	 	(d)	 	to a custodian under any applicable Uniform Gifts to Minors Act or Uniform
Transfers to Minors Act;
	 
	 	(e)	 	to an adult relative or friend of the Participant or Beneficiary, or to one
residing with the Participant or Beneficiary, pursuant to appropriate legal appointment
(including durable power of attorney) for the benefit of the Participant or
Beneficiary.

			
	 	 	 
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	 	 	Any such payment shall be a distribution for the account of such Participant or Beneficiary
and shall, to the extent thereof, be a complete discharge of any liability under the Plan to
such Participant or Beneficiary. The Administrator’s reliance on the written instrument of
agency governing a relationship between the Participant or Beneficiary entitled to
distribution and the person to whom the Administrator directs distribution shall be fully
protected as though the Administrator made such distribution directly to the Participant or
Beneficiary as a competent person. In the absence of actual knowledge to the contrary, the
Administrator may assume that the instrument of agency was validly executed, that the
Participant or Beneficiary was competent at the time of execution and that at the time of
reliance, the agency has not been amended or terminated. The decision of the Administrator
shall be final and binding on all interested parties, and the Administrator shall be under
no duty to see to the proper application of the funds.
	 
	18.10	 	Waiver; Disclaimer. A Beneficiary shall be permitted to waive or
disclaim his or her benefits under this Plan.

* * * * End of Article 18 * * * *

			
	 	 	 
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     The Sponsor has caused the Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc. to be executed in the name of and on behalf of the Sponsor on this 31st day of
December, 2008, effective as of January 1, 2008.

	 	 	 	 	 	 	 
	 	 	First Interstate BancSystem, Inc.	 	 
	 	 	Sponsor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ RAMONA DOLL
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	HR Director
 

	 	 

			
	 	 	 
	Savings and Profit Sharing Plan for Employees of First Interstate BancSystem, Inc.
	 	01/2008     65
	Prepared by Holland & Hart LLP

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