Document:

Exhibit 10.27

 

 

 

 

 

 

 

LEASE

 

 

 

BETWEEN

 

 

 

JAMBOREE CENTER 4 LLC

 

 

 

AND

 

 

 

ACACIA RESEARCH CORPORATION

 

 

 

 

 

 

 

 

 

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LEASE

(Short Form)

 

THIS LEASE is made
as of June 7, 2019, by and between JAMBOREE CENTER 4 LLC, a Delaware limited liability company, hereafter called “Landlord,”
and ACACIA RESEARCH CORPORATION, a Delaware corporation, hereafter called “Tenant.”

 

ARTICLE 1. BASIC
LEASE PROVISIONS

 

Each reference in this
Lease to the “Basic Lease Provisions” shall mean and refer to the following collective terms, the application
of which shall be governed by the provisions in the remaining Articles of this Lease.

 

		1.	Tenant’s Trade Name: N/A

 

		2.	Premises:	Suite No. 550
		 	Address of Building:	4 Park Plaza, Irvine, CA
92614
		 	Project Description:	Jamboree Center
		 	(The Premises are more particularly
described in Section 2.1).

 

		3.	Use of Premises: General office and for no other use.

 

		4.	Commencement Date: August 1, 2019

 

		5.	Lease Term: 60 months, plus such additional days as may be required to cause this Lease
to expire on the final day of the calendar month.

 

		6.	Basic Rent:

 

	Months of Term

or Period	Monthly Rate Per Rentable

Square Foot	Monthly Basic Rent (rounded to

the nearest dollar)
	1 to 12	$3.15	$26,123.00
	13 to 24	$3.29	$27,284.00
	25 to 36	$3.44	$28,528.00
	37 to 48	$3.59	$29,772.00
	49 to 60	$3.75	$31,099.00

 

Notwithstanding the above schedule
of Basic Rent to the contrary, as long as Tenant is not in Default (as defined in Section 14.1) under this Lease, Tenant shall
be entitled to an abatement of one (1) full calendar month of Basic Rent in the amount of $26,123.00 (the “Abated Basic
Rent”) for the first full calendar month of the Term (the “Abatement Period”). In the event Tenant
Defaults at any time during the Term, all Abated Basic Rent shall immediately become due and payable. The payment by Tenant of
the Abated Basic Rent in the event of a Default shall not limit or affect any of Landlord’s other rights, pursuant to this
Lease or at law or in equity. Only Basic Rent shall be abated during the Abatement Period and all other additional rent and other
costs and charges specified in this Lease shall remain as due and payable pursuant to the provisions of this Lease.

 

 

 

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		7.	Property Tax Base: The Property Taxes per rentable square foot incurred by Landlord and
attributable to the twelve month period ending June 30, 2020 (the “Base Year”).
		 	 
		 	Project Cost Base: The
Project Costs per rentable square foot incurred by Landlord and attributable to the Base Year.
		 	 
		 	Expense Recovery Period:
Every twelve month period during the Term (or portion thereof during the first and last Lease years) ending June 30.

 

		8.	Floor Area of Premises: approximately 8,293 rentable square feet (Landlord and Tenant stipulate
and agree that the Floor Area of Premises is correct).
		 	 
		 	Floor Area of Building: approximately 409,411 rentable square feet

 

		9.	Security Deposit: $34,209.00

 

		10.	Broker(s): Irvine Management Company (“Landlord’s Broker”) is the
agent of Landlord exclusively and Rand Partners (“Tenant’s Broker”) is the agent of Tenant exclusively.

 

		11.	Parking: 28 parking passes in accordance with the provisions set forth in Exhibit F
to this Lease.

 

		12.	Address for Payments and Notices:

 

	LANDLORD	TENANT
	 	 
	
        Payment Registration Address:

         

        Email tenantportal@irvinecompany.com to

        request an account for
        the Tenant Payment Portal.
	
        ACACIA RESEARCH CORPORATION

        4 Park Plaza, Suite 550

        Irvine, CA 92614

	 	 
	
        Notice Address:

         

        THE IRVINE COMPANY LLC

        5 Park Plaza, Suite 100

        Irvine, CA 92614

        Attn: Property Manager
	 
	 	 
	
        with a copy of notices to:

         

        THE IRVINE COMPANY LLC

        550 Newport Center Drive

        Newport Beach, CA 92660

        Attn:    Senior
Vice President, Property

                     Operations Irvine Office Properties
	 

 

 

 

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		13.	List of Lease Exhibits (all exhibits, riders and addenda attached to this Lease are hereby
incorporated into and made a part of this Lease):

 

	 	Exhibit A	Description of Premises
	 	Exhibit B	Operating Expenses
	 	Exhibit C	Utilities and Services
	 	Exhibit D	Tenant’s Insurance
	 	Exhibit E	Rules and Regulations
	 	Exhibit F	Parking
	 	Exhibit G	Additional Provisions

 

ARTICLE 2. PREMISES

 

2.1.        
LEASED PREMISES. Landlord leases to Tenant and Tenant leases from Landlord the Premises shown in Exhibit A (the
“Premises”), containing approximately the floor area set forth in Item 8 of the Basic Lease Provisions (the
“Floor Area”). The Premises are located in the building identified in Item 2 of the Basic Lease Provisions (the
“Building”), which is a portion of the project described in Item 2 (the “Project”).

 

2.2.        
ACCEPTANCE OF PREMISES. Tenant acknowledges that neither Landlord nor any representative of Landlord has made any representation
or warranty with respect to the Premises, the Building or the Project or the suitability or fitness of either for any purpose,
except as set forth in this Lease. The taking of possession or use of the Premises by Tenant for any purpose other than construction
shall conclusively establish that the Premises and the Building were in satisfactory condition and in conformity with the provisions
of this Lease in all respects. Following Landlord’s substantial completion of the ReadyNow improvements in the Premises,
Tenant shall accept such improvements in their existing condition, and shall waive any right or claim against Landlord arising
out of the condition of the Premises. Nothing contained in this Section 2.2 shall affect the commencement of the Term or the
obligation of Tenant to pay rent.

 

ARTICLE 3. TERM

 

3.1.        
GENERAL. The term of this Lease (“Term”) shall commence on the date as set forth in Item 4 of the
Basic Lease Provisions (the “Commencement Date”) and shall end upon the expiration of the period set forth in
Item 5 of the Basic Lease Provisions (“Expiration Date”).

 

3.2.        
DELAY IN POSSESSION. If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on
or before the Commencement Date set forth in Item 4 of the Basic Lease Provisions, this Lease shall not be void or voidable nor
shall Landlord be liable to Tenant for any resulting loss or damage.

 

ARTICLE 4. RENT AND
OPERATING EXPENSES

 

4.1.        
BASIC RENT. From and after the Commencement Date, Tenant shall pay to Landlord without deduction or offset a Basic Rent
for the Premises in the total amount shown (including subsequent adjustments, if any) in Item 6 of the Basic Lease Provisions (the
“Basic Rent”). If the Commencement Date is other than the first day of a calendar month, any rental adjustment
shown in Item 6 shall be deemed to occur on the first day of the next calendar month following the specified monthly anniversary
of the Commencement Date. The Basic Rent shall be due and payable in advance commencing on the Commencement Date and continuing
thereafter on the first day of each successive calendar month of the Term, as prorated for any partial month. No demand, notice
or invoice shall be required. An installment in the amount of 1 full month’s Basic Rent at the initial rate specified in
Item 6 of the Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant’s execution of this Lease.

 

 

 

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4.2.        
OPERATING EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses in accordance with Exhibit B
of this Lease.

 

4.3.        
SECURITY DEPOSIT. Concurrently with Tenant’s delivery of this Lease, Tenant shall deposit with Landlord the sum,
if any, stated in Item 9 of the Basic Lease Provisions (the “Security Deposit”), to be held by Landlord as security
for the full and faithful performance of Tenant’s obligations under this Lease, to pay any rental sums, including without
limitation such additional rent as may be owing under any provision hereof, and to maintain the Premises as required by this Lease.
Upon any breach of the foregoing obligations by Tenant, Landlord may apply all or part of the Security Deposit as full or partial
compensation. If any portion of the Security Deposit is so applied, Tenant shall within 5 days after written demand by Landlord
deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount. Landlord shall not be
required to keep this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security
Deposit. In no event may Tenant utilize all or any portion of the Security Deposit as a payment toward any rental sum due under
this Lease. Any unapplied balance of the Security Deposit shall be returned to Tenant or, at Landlord’s option, to the last
assignee of Tenant’s interest in this Lease within 30 days following the termination of this Lease and Tenant’s vacation
of the Premises. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor
laws now or hereafter in effect.

 

ARTICLE 5. USES

 

5.1.        
USE. Tenant shall use the Premises only for the purposes stated in Item 3 of the Basic Lease Provisions and for no other
use whatsoever. Tenant shall not do or permit anything to be done in or about the Premises which will in any way interfere with
the rights or quiet enjoyment of other occupants of the Building or the Project, or use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant permit any nuisance in the Premises or the Project. Tenant shall comply at its expense with
all present and future laws, ordinances and requirements of all governmental authorities that pertain to Tenant or its use of the
Premises, and with all energy usage reporting requirements of Landlord. Pursuant to California Civil Code § 1938, Landlord
hereby states that the Premises have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil
Code § 55.52(a)(3)). Pursuant to Section 1938 of the California Civil Code, Landlord hereby provides the following notification
to Tenant: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises
comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require
a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining
a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the
lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment
of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction related
accessibility standards within the premises.” If Tenant requests to perform a CASp inspection of the Premises, Tenant shall,
at its cost, retain a CASp approved by Landlord (provided that Landlord may designate the CASp, at Landlord’s option) to
perform the inspection of the Premises at a time agreed upon by the parties. Tenant shall provide Landlord with a copy of any report
or certificate issued by the CASp (the “CASp Report”) and Tenant shall, at its cost, promptly complete any modifications
necessary to correct violations of construction related accessibility standards identified in the CASp Report, notwithstanding
anything to the contrary in this Lease. Tenant agrees to keep the information in the CASp Report confidential except as necessary
for the Tenant to complete such modifications.

 

5.2.        
SIGNS. Landlord shall affix and maintain a sign (restricted solely to Tenant’s name as set forth herein or such
other name as Landlord may consent to in writing) adjacent to the entry door of the Premises, together with a directory strip listing
Tenant’s name as set forth herein in the lobby directory of the Building. Tenant shall not place or allow to be placed any
other sign, decoration or advertising matter of any kind that is visible from the exterior of the Premises.

 

5.3.        
HAZARDOUS MATERIALS. Tenant shall not generate, handle, store or dispose of hazardous or toxic materials (as such materials
may be identified in any federal, state or local law or regulation) in the Premises or Project without the prior written consent
of Landlord. Tenant acknowledges that it has read, understands and, if applicable, shall comply with the provisions of Exhibit H
to this Lease, if that Exhibit is attached.

 

 

 

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ARTICLE 6. LANDLORD
SERVICES

 

6.1.        
UTILITIES AND SERVICES. Landlord and Tenant shall be responsible to furnish those utilities and services to the Premises
to the extent provided in Exhibit C, subject to the conditions and payment obligations and standards set forth in this
Lease. Landlord’s failure to furnish, or any interruption, diminishment or termination of, services due to the application
of laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence
of an event of force majeure (defined in Section 20.8) shall not render Landlord liable to Tenant, constitute a constructive
eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement.

 

6.2.        
OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term, Landlord shall operate all Common Areas within the Building
and the Project. The term “Common Areas” shall mean all areas within the Building, Project and other buildings
in the Project which are not held for exclusive use by persons entitled to occupy space.

 

6.3.        
USE OF COMMON AREAS. The occupancy by Tenant of the Premises shall include the use of the Common Areas in common with
Landlord and with all others for whose convenience and use the Common Areas may be provided by Landlord, subject, however, to compliance
with Rules and Regulations described in Article 17 below. Landlord shall at all times during the Term have exclusive control
of the Common Areas, and may restrain or permit any use or occupancy. Landlord may temporarily close any portion of the Common
Areas for repairs, remodeling and/or alterations, to prevent a public dedication or the accrual of prescriptive rights, or for
any other reasonable purpose.

 

ARTICLE 7. REPAIRS
AND MAINTENANCE

 

7.1.        
TENANT’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Tenant at its sole expense shall make all repairs
necessary to keep the Premises and all improvements and fixtures therein in good condition and repair. Tenant’s maintenance
obligation shall include without limitation all appliances, interior glass, doors, door closures, hardware, fixtures, electrical,
plumbing, fire extinguisher equipment and other equipment installed in the Premises, together with any supplemental HVAC equipment
servicing only the Premises. Should Landlord or its management agent agree to make a repair on behalf of Tenant and at Tenant’s
request, Tenant shall promptly reimburse Landlord as additional rent for all reasonable costs incurred (including the standard
supervision fee) upon submission of an invoice.

 

7.2.        
LANDLORD’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Landlord shall provide service, maintenance
and repair with respect to the heating, ventilating and air conditioning (“HVAC”) equipment of the Building
(exclusive of any supplemental HVAC equipment servicing only the Premises) and shall maintain in good repair the Common Areas,
roof, foundations, footings, the exterior surfaces of the exterior walls of the Building (including exterior glass), and the structural,
electrical, mechanical and plumbing systems of the Building (including elevators, if any, serving the Building), except to the
extent provided in Section 7.1 above. Notwithstanding any provision of the California Civil Code or any similar or successor
laws to the contrary, Tenant understands that it shall not make repairs at Landlord’s expense or by rental offset. Except
as provided in Section 11.1 and Article 12 below, 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
to any portion of the Building, including repairs to the Premises, nor shall any related activity by Landlord constitute an actual
or constructive eviction. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and
Sections 1941 and 1942 of the California Civil Code, or any similar or successor laws now or hereafter in effect.

 

 

 

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7.3.        
ALTERATIONS. Tenant shall make no alterations, additions, decorations, or improvements (collectively referred to as
“Alterations”) to the Premises without the prior written consent of Landlord. Landlord may impose, as a condition
to its consent, any requirements that Landlord in its discretion may deem reasonable or desirable. Tenant shall use Landlord’s
designated mechanical and electrical contractors, obtain all required permits for the Alterations and shall perform the work in
compliance with all applicable laws, regulations and ordinances with contractors reasonably acceptable to Landlord. Landlord shall
be entitled to a supervision fee in the amount of 5% of the cost of the Alterations. Landlord may elect to cause its architect
to review Tenant’s architectural plans, and the reasonable cost of that review shall be reimbursed by Tenant. Should the
Alterations proposed by Tenant and consented to by Landlord change the floor plan of the Premises, then Tenant shall, at its expense,
furnish Landlord with as-built drawings and CAD disks compatible with Landlord’s systems. Unless Landlord otherwise agrees
in writing, all Alterations affixed to the Premises, including without limitation all Tenant Improvements constructed pursuant
to the Work Letter (except as otherwise provided in the Work Letter), but excluding moveable trade fixtures and furniture, shall
become the property of Landlord and shall be surrendered with the Premises at the end of the Term, except that Landlord may, by
notice to Tenant given at the time of Landlord’s approval, require Tenant to remove by the Expiration Date or sooner termination
date of this Lease, all or any Alterations (including without limitation any Tenant Improvements constructed pursuant to the Work
Letter) installed either by Tenant or by Landlord at Tenant’s request (collectively, the “Required Removables”).
In connection with its removal of Required Removables, Tenant shall repair any damage to the Premises arising from that removal
and shall restore the affected area to its pre-existing condition, reasonable wear and tear excepted.

 

7.4.        
MECHANIC’S LIENS. Tenant shall keep the Premises free from any liens arising out of any work performed, materials
furnished, or obligations incurred by or for Tenant. In the event that Tenant shall not, within 15 days following the imposition
of any lien, cause the lien to be released of record by payment or posting of a proper bond in accordance with California Civil
Code Section 8424 or any successor statute, Landlord shall have, in addition to all other available remedies, the right to
cause the lien to be released by any means it deems proper, including payment of or defense against the claim giving rise to the
lien. All expenses so incurred by Landlord shall be reimbursed by Tenant promptly following Landlord’s demand. Tenant shall
give Landlord no less than 20 days’ prior notice in writing before commencing construction of any kind on the Premises.

 

7.5.         
ENTRY AND INSPECTION. Landlord shall at all reasonable times and with reasonable prior verbal notice, except in emergencies
or to provide Building services, have the right to enter the Premises to inspect them, to supply services in accordance with this
Lease, to make repairs and renovations as reasonably deemed necessary by Landlord, and to submit the Premises to prospective or
actual purchasers or encumbrance holders (or, during the final twelve months of the Term or when an uncured Default exists, to
prospective tenants), all without being deemed to have caused an eviction of Tenant and without abatement of rent except as provided
elsewhere in this Lease.

 

ARTICLE 8. SPACE
PLANNING AND SUBSTITUTION

 

Landlord shall have
the right, upon providing not less than 45 days written notice, to move Tenant to other space of comparable size in the Building
or in the Project. The new space shall be provided with improvements of comparable quality to those within the Premises. Landlord
shall pay the reasonable out-of-pocket costs to relocate and reconnect Tenant’s personal property and equipment within the
new space. Landlord shall also reimburse Tenant for such other reasonable out-of-pocket costs that Tenant may incur in connection
with the relocation. Within 10 days following request by Landlord, Tenant shall execute an amendment to this Lease prepared by
Landlord to memorialize the relocation.

 

 

 

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ARTICLE 9. ASSIGNMENT
AND SUBLETTING

 

9.1.        
RIGHTS OF PARTIES. Tenant shall not, directly or indirectly, assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “Transfer”)
without the prior written consent of Landlord, which consent shall not be unreasonably withheld if Landlord does not exercise its
recapture rights. Tenant agrees that it is not unreasonable for Landlord to withhold consent to a Transfer to a proposed assignee
or subtenant who is an existing tenant or occupant of the Building or Project or to a prospective tenant with whom Landlord or
Landlord’s affiliate has been actively negotiating. Within 30 days after receipt of executed copies of the transfer documentation
and such other information as Landlord may request, Landlord shall either: (a) consent to the Transfer by execution of a consent
agreement in a form reasonably designated by Landlord; (b) refuse to consent to the Transfer; or (c) recapture the portion
of the Premises that Tenant is proposing to Transfer. Tenant hereby waives the provisions of Section 1995.310 of the California
Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation,
any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable laws, on
behalf of the proposed transferee. In no event shall any Transfer release or relieve Tenant from any obligation under this Lease,
as same may be amended. Tenant shall pay Landlord a review fee of $1,000.00 for Landlord’s review of any requested Transfer.
Tenant shall pay Landlord, as additional Rent, 50% of all rent and other consideration which Tenant receives as a result of a Transfer
that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer. If Tenant is
in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a
credit against Rent in the amount of Tenant’s share of payments received by Landlord.

 

9.2.        
PERMITTED TRANSFER. Notwithstanding the foregoing, Tenant may assign this Lease to a successor to Tenant by merger,
consolidation or the purchase of substantially all of Tenant’s assets, or assign this Lease or sublet all or a portion of
the Premises to an Affiliate (defined below), without the consent of Landlord, provided that all of the following conditions are
satisfied (a “Permitted Transfer”): (i) Tenant is not then in Default hereunder; (ii) Tenant gives
Landlord written notice prior to such Permitted Transfer; and (iii) the successor entity resulting from any merger or consolidation
of Tenant or the sale of all or substantially all of the assets of Tenant, has a net worth at the time of the Permitted Transfer
that is at least equal to the net worth of Tenant immediately before the Permitted Transfer. “Affiliate” shall
mean an entity controlled by, controlling or under common control with Tenant.

 

ARTICLE 10. INSURANCE
AND INDEMNITY

 

10.1.      
TENANT’S INSURANCE. Tenant, at its sole cost and expense, shall provide and maintain in effect the insurance described
in Exhibit D. Evidence of that insurance must be delivered to Landlord prior to the Commencement Date.

 

10.2.      
TENANT’S INDEMNITY. To the fullest extent permitted by law, but subject to Section 10.4 below, Tenant shall
defend, indemnify and hold harmless Landlord and Landlord’s agents, employees, lenders, and affiliates, from and against
any and all negligence, claims, liabilities, damages, costs or expenses arising either before or after the Commencement Date which
arise from or are caused by Tenant’s use or occupancy of the Premises, the Building or the Common Areas of the Project, or
from the conduct of Tenant’s business, or from any activity, work, or thing done, permitted or suffered by Tenant or Tenant’s
agents, employees, subtenants, vendors, contractors, invitees or licensees in or about the Premises, the Building or the Common
Areas of the Project, or from any Default in the performance of any obligation on Tenant’s part to be performed under this
Lease, or from any act, omission or negligence on the part of Tenant or Tenant’s agents, employees, subtenants, vendors,
contractors, invitees or licensees. Landlord may, at its option, require Tenant to assume Landlord’s defense in any action
covered by this Section 10.2 through counsel reasonably satisfactory to Landlord. Notwithstanding the foregoing, Tenant shall
not be obligated to indemnify Landlord against any liability or expense to the extent it is ultimately determined that the same
was caused by the sole negligence or willful misconduct of Landlord, its agents, contractors or employees.

 

 

 

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10.3.      
LANDLORD’S NONLIABILITY. Landlord shall not be liable to Tenant, its employees, agents and invitees, and Tenant
hereby waives all claims against Landlord, its employees and agents for loss of or damage to any property, or any injury to any
person, resulting from any condition including, but not limited to, acts or omissions (criminal or otherwise) of third parties
and/or other tenants of the Project, or their agents, employees or invitees, fire, explosion, falling plaster, steam, gas, electricity,
water or rain which may leak or flow from or into any part of the Premises or from the breakage, leakage, obstruction or other
defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical works or other fixtures in the Building,
whether the damage or injury results from conditions arising in the Premises or in other portions of the Building, regardless of
the negligence of Landlord, its agents or any and all affiliates of Landlord in connection with the foregoing. Notwithstanding
anything to the contrary contained in this Lease, in no event shall Landlord be liable for Tenant’s loss or interruption
of business or income (including without limitation, Tenant’s consequential damages, lost profits or opportunity costs),
or for interference with light or other similar intangible interests.

 

10.4.      
WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives all rights of recovery against the other on account of
loss and damage occasioned to the property of such waiving party to the extent that the waiving party is entitled to proceeds for
such loss and damage under any property insurance policies carried or otherwise required to be carried by this Lease.

 

ARTICLE 11. DAMAGE
OR DESTRUCTION

 

11.1.      
RESTORATION.

 

(a            
If the Building of which the Premises are a part is damaged as the result of an event of casualty, then subject to the
provisions below, Landlord shall repair that damage as soon as reasonably possible unless Landlord reasonably determines that:
(i) the Premises have been materially damaged and there is less than 1 year of the Term remaining on the date of the casualty;
(ii) any Mortgagee (defined in Section 13.1) requires that the insurance proceeds be applied to the payment of the mortgage
debt; or (iii) proceeds necessary to pay the full cost of the repair are not available from Landlord’s insurance, including
without limitation earthquake insurance. Should Landlord elect not to repair the damage for one of the preceding reasons, Landlord
shall so notify Tenant in the “Casualty Notice” (as defined below), and this Lease shall terminate as of the date
of delivery of that notice.

 

(b)          
As soon as reasonably practicable following the casualty event but not later than 60 days thereafter, Landlord shall notify
Tenant in writing (“Casualty Notice”) of Landlord’s election, if applicable, to terminate this Lease.
If this Lease is not so terminated, the Casualty Notice shall set forth the anticipated period for repairing the casualty damage.
If the anticipated repair period exceeds 270 days and if the damage is so extensive as to reasonably prevent Tenant’s substantial
use and enjoyment of the Premises, then either party may elect to terminate this Lease by written notice to the other within 10
days following delivery of the Casualty Notice.

 

(c)          
In the event that neither Landlord nor Tenant terminates this Lease pursuant to Section 11.1(b), Landlord shall repair
all material damage to the Premises or the Building as soon as reasonably possible and this Lease shall continue in effect for
the remainder of the Term. Upon notice from Landlord, Tenant shall assign or endorse over to Landlord (or to any party designated
by Landlord) all property insurance proceeds payable to Tenant under Tenant’s insurance with respect to any Alterations.
Within 15 days of demand, Tenant shall also pay Landlord for any additional excess costs that are determined during the performance
of the repairs to such Alterations.

 

(d)          
From and after the casualty event, the rental to be paid under this Lease shall be abated in the same proportion that the
Floor Area of the Premises that is rendered unusable by the damage from time to time bears to the total Floor Area of the Premises.

 

 

 

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(e)          
Notwithstanding the provisions of subsections (a), (b) and (c) of this Section 11.1, but subject to Section 10.4,
the cost of any repairs shall be borne by Tenant, and Tenant shall not be entitled to rental abatement or termination rights, if
the damage is due to the fault or neglect of Tenant or its employees, subtenants, contractors, invitees or representatives.

 

11.2.     
LEASE GOVERNS. Tenant agrees that the provisions of this Lease, including without limitation Section 11.1, shall
govern any damage or destruction and shall accordingly supersede any contrary statute or rule of law.

 

ARTICLE 12. EMINENT
DOMAIN

 

Either party may terminate
this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a “Taking”). Landlord shall also have the right to terminate this
Lease if there is a Taking of any portion of the Building or Project which would have a material adverse effect on Landlord’s
ability to profitably operate the remainder of the Building. The termination shall be effective as of the effective date of any
order granting possession to, or vesting legal title in, the condemning authority. All compensation awarded for a Taking shall
be the property of Landlord. Tenant agrees that the provisions of this Lease shall govern any Taking and shall accordingly supersede
any contrary statute or rule of law.

 

ARTICLE 13. SUBORDINATION;
ESTOPPEL CERTIFICATE

 

13.1.     
SUBORDINATION. Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s)
or other lien(s) now or subsequently arising upon the Premises, the Building or the Project, and to renewals, modifications, refinancings
and extensions thereof (collectively referred to as a “Mortgage”). The party having the benefit of a Mortgage
shall be referred to as a “Mortgagee.” This clause shall be self-operative, but upon request from a Mortgagee,
Tenant shall execute a commercially reasonable subordination and attornment agreement in favor of the Mortgagee, provided such
agreement provides a non-disturbance covenant benefitting Tenant. Alternatively, a Mortgagee shall have the right at any time to
subordinate its Mortgage to this Lease. Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s
interest in this Lease in the event of a foreclosure of any mortgage. Tenant agrees that any purchaser at a foreclosure sale or
lender taking title under a deed in lieu of foreclosure shall not be responsible for any act or omission of a prior landlord, shall
not be subject to any offsets or defenses Tenant may have against a prior landlord, and shall not be liable for the return of the
Security Deposit not actually recovered by such purchaser nor bound by any rent paid in advance of the calendar month in which
the transfer of title occurred; provided that the foregoing shall not release the applicable prior landlord from any liability
for those obligations. Tenant acknowledges that Landlord’s Mortgagees and their successors-in-interest are intended third
party beneficiaries of this Section 13.1.

 

13.2.      
ESTOPPEL CERTIFICATE. Tenant shall, within 10 days after receipt of a written request from Landlord, execute and deliver
a commercially reasonable estoppel certificate in favor of those parties as are reasonably requested by Landlord (including a Mortgagee
or a prospective purchaser of the Building or the Project).

 

ARTICLE 14. DEFAULTS
AND REMEDIES

 

14.1.      
TENANT’S DEFAULTS. In addition to any other event of default set forth in this Lease, the occurrence of any one
or more of the following events shall constitute a “Default” by Tenant:

 

(a)           
The failure by Tenant to make any payment of Rent required to be made by Tenant, as and when due, where the failure continues
for a period of 3 days after written notice from Landlord to Tenant. The term “Rent” as used in this Lease shall
be deemed to mean the Basic Rent and all other sums, including but not limited to parking charges, required to be paid by Tenant
to Landlord pursuant to the terms of this Lease.

 

 

 

    	 	10	 

     

    

 

(b)           
Except where a specific time period is otherwise set forth for Tenant’s performance in this Lease (in which event
the failure to perform by Tenant within such time period shall be a Default), the failure or inability by Tenant to observe or
perform any of the covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in any
other subsection of this Section 14.1, where the failure continues for a period of 30 days after written notice from Landlord
to Tenant.

 

The notice periods
provided herein are in lieu of, and not in addition to, any notice periods provided by law, and Landlord shall not be required
to give any additional notice under California Code of Civil Procedure Section 1161, or any successor statute, in order to
be entitled to commence an unlawful detainer proceeding.

 

14.2.      
LANDLORD’S REMEDIES.

 

(a)           
Upon the occurrence of any Default by Tenant, then in addition to any other remedies available to Landlord, Landlord may
exercise the following remedies:

 

(i)           
Landlord may terminate Tenant’s right to possession of the Premises by any lawful means, in which case this Lease
shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. Such termination shall not affect
any accrued obligations of Tenant under this Lease. Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from Tenant:

 

(1)           
The worth at the time of award of the unpaid Rent which had been earned at the time of termination;

 

(2)           
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 loss that Tenant proves could have been reasonably avoided;

 

(3)           
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 loss that Tenant proves could be reasonably avoided;

 

(4)           
Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which in the ordinary course of things would be likely to result from Tenant’s
default, including, but not limited to, the cost of recovering possession of the Premises, commissions and other expenses of reletting,
including necessary repair, renovation, improvement and alteration of the Premises for a new tenant, reasonable attorneys’
fees, and any other reasonable costs; and

 

(5)           
At Landlord’s election, all other amounts in addition to or in lieu of the foregoing as may be permitted by law. Any
sum, other than Basic Rent, shall be computed on the basis of the average monthly amount accruing during the 24 month period immediately
prior to Default, except that if it becomes necessary to compute such rental before the 24 month period has occurred, then the
computation shall be on the basis of the average monthly amount during the shorter period. As used in subparagraphs (1) and (2)
above, the “worth at the time of award” shall be computed by allowing interest at the rate of 10% per annum. As used
in subparagraph (3) above, the “worth at the time of award” shall be computed by discounting the amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

 

(ii)           
Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s
breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable
limitations).

 

 

 

    	 	11	 

     

    

 

(b)          
The various rights and remedies reserved to Landlord in this Lease or otherwise shall be cumulative and, except as otherwise
provided by California law, Landlord may pursue any or all of its rights and remedies at the same time. No delay or omission of
Landlord to exercise any right or remedy shall be construed as a waiver of the right or remedy or of any breach or Default by Tenant.
The acceptance by Landlord of rent shall not be a (i) waiver of any preceding breach or Default by Tenant of any provision
of this Lease, other than the failure of Tenant to pay the particular rent accepted, regardless of Landlord’s knowledge of
the preceding breach or Default at the time of acceptance of rent, or (ii) a waiver of Landlord’s right to exercise
any remedy available to Landlord by virtue of the breach or Default. No payment by Tenant or receipt by Landlord of a lesser amount
than the rent required by this Lease shall be deemed to be other than a partial payment on account of the earliest due stipulated
rent, nor shall any endorsement or statement on any check or letter be deemed an accord and satisfaction and Landlord shall accept
the check or payment without prejudice to Landlord’s right to recover the balance of the rent or pursue any other remedy
available to it. Tenant hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure
Section 1174 or 1179, or under any successor statute, in the event this Lease is terminated by reason of any Default by Tenant.
No act or thing done by Landlord or Landlord’s agents during the Term shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Landlord.

 

14.3.      
LATE PAYMENTS. Any Rent due under this Lease that is not paid to Landlord within 5 days of the date when due shall bear
interest at the maximum rate permitted by law from the date due until fully paid and if any Rent due from Tenant shall not be received
by Landlord or Landlord’s designee within 5 days after the date due, then Tenant shall pay to Landlord, in addition to the
interest, a late charge for each delinquent payment equal to the greater of (i) 5% of that delinquent payment or (ii) $100.00.

 

14.4.      
DEFAULT BY LANDLORD. Landlord shall not be deemed to be in default in the performance of any obligation under this Lease
unless and until it has failed to perform the obligation within 30 days after written notice by Tenant to Landlord specifying in
reasonable detail the nature and extent of the failure; provided, however, that if the nature of Landlord’s obligation is
such that more than 30 days are required for its performance, then Landlord shall not be deemed to be in default if it commences
performance within the 30 day period and thereafter diligently pursues the cure to completion.

 

14.5.      
EXPENSES AND LEGAL FEES. Should either Landlord or Tenant bring any action in connection with this Lease, the prevailing
party shall be entitled to recover as a part of the action its reasonable attorneys’ fees, and all other reasonable costs.
The prevailing party for the purpose of this paragraph shall be determined by the trier of the facts.

 

14.6.      
WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

 

(a)           
LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT
TO ITS RIGHT TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.

 

(b)          
In the event that the jury waiver provisions of Section 14.6(a) are not enforceable under California law, then, unless
otherwise agreed to by the parties, the provisions of this Section 14.6(b) shall apply. Landlord and Tenant agree that any
disputes arising in connection with this Lease (including but not limited to a determination of any and all of the issues in such
dispute, whether of fact or of law) shall be resolved (and a decision shall be rendered) by way of a general reference as provided
for in Part 2, Title 8, Chapter 6 (§§ 638 et. seq.) of the California Code of Civil Procedure, or
any successor California statute governing resolution of disputes by a court appointed referee. Nothing within this Section 14.6
shall apply to an unlawful detainer action.

 

 

 

    	 	12	 

     

    

 

14.7.      
SATISFACTION OF JUDGMENT. The obligations of Landlord do not constitute the personal obligations of the individual partners,
trustees, directors, officers, members or shareholders of Landlord or its constituent partners or members. Should Tenant recover
a money judgment against Landlord, such judgment shall be satisfied only from the interest of Landlord in the Project and out of
the rent or other income from such property receivable by Landlord, and no action for any deficiency may be sought or obtained
by Tenant.

 

ARTICLE 15. END OF
TERM

 

15.1.     
HOLDING OVER. If Tenant holds over for any period after the Expiration Date (or earlier termination of the Term), such
tenancy shall constitute a tenancy at sufferance only and possession shall be subject to all of the terms of this Lease, except
that the monthly rental shall be 200% of the total monthly rental for the month immediately preceding the date of termination.
The acceptance by Landlord of monthly hold-over rental in a lesser amount shall not constitute a waiver of Landlord’s right
to recover the full amount due unless otherwise agreed in writing by Landlord. If Tenant fails to surrender the Premises upon the
expiration of this Lease despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or
liability, including without limitation, any claims made by any succeeding tenant relating to such failure to surrender. The foregoing
provisions of this Section 15.1 are in addition to and do not affect Landlord’s right of re-entry or any other rights
of Landlord under this Lease or at law.

 

15.2.      
SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the Expiration Date or upon any earlier termination of this Lease,
Tenant shall quit and surrender possession of the Premises to Landlord in as good order, condition and repair as when received
or as hereafter may be improved by Landlord or Tenant, reasonable wear and tear and repairs which are Landlord’s obligation
excepted, and shall remove or fund to Landlord the cost of removing all wallpapering, voice and/or data transmission cabling installed
by or for Tenant and Required Removables, together with all personal property and debris, and shall perform all work required under
Section 7.3 of this Lease. If Tenant shall fail to comply with the provisions of this Section 15.2, Landlord may effect
the removal and/or make any repairs, and the cost to Landlord shall be additional rent payable by Tenant upon demand.

 

ARTICLE 16. PAYMENTS
AND NOTICES

 

All sums payable by
Tenant to Landlord shall be paid, without deduction or offset, in lawful money of the United States to Landlord at its address
set forth in Item 12 of the Basic Lease Provisions, or at any other place as Landlord may designate in writing. Unless this Lease
expressly provides otherwise, all payments shall be due and payable within 5 days after demand. All payments requiring proration
shall be prorated on the basis of the number of days in the pertinent calendar month or year, as applicable. Any notice, election,
demand, consent or approval to be given or other document to be delivered by either party to the other may be delivered to the
other party, at the address set forth in Item 12 of the Basic Lease Provisions, by personal service or by any courier or “overnight”
express mailing service. Either party may, by written notice to the other, served in the manner provided in this Article, designate
a different address. The refusal to accept delivery of a notice, or the inability to deliver the notice (whether due to a change
of address for which notice was not duly given or other good reason), shall be deemed delivery and receipt of the notice as of
the date of attempted delivery.

 

ARTICLE 17. RULES
AND REGULATIONS

 

Tenant agrees to comply
with the Rules and Regulations attached as Exhibit E, and any reasonable and nondiscriminatory amendments, modifications
and/or additions as may be adopted by Landlord from time to time.

 

 

 

    	 	13	 

     

    

 

ARTICLE 18. BROKER’S
COMMISSION

 

The parties recognize
as the broker(s) who negotiated this Lease the firm(s) whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions,
and agree that Landlord shall be responsible for the payment of brokerage commissions to those broker(s) unless otherwise provided
in this Lease. Tenant agrees to indemnify and hold Landlord harmless from any cost, expense or liability (including reasonable
attorneys’ fees) for any compensation, commissions or charges claimed by any other real estate broker or agent employed or
claiming to represent or to have been employed by Tenant in connection with the negotiation of this Lease.

 

ARTICLE 19. TRANSFER
OF LANDLORD’S INTEREST

 

Landlord shall have
the right to transfer and assign, in whole or in part, all of its ownership interest, rights and obligations in the Building, Project
or Lease, including the Security Deposit, and upon transfer Landlord shall be released from any further obligations hereunder,
and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations and the return
of any Security Deposit.

 

ARTICLE 20. INTERPRETATION

 

20.1.      
NUMBER. Whenever the context of this Lease requires, the words “Landlord” and “Tenant” shall
include the plural as well as the singular.

 

20.2.      
JOINT AND SEVERAL LIABILITY. If more than one person or entity is named as Tenant, the obligations imposed upon each
shall be joint and several and the act of or notice from, or notice or refund to, or the signature of, any one or more of them
shall be binding on all of them with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.

 

20.3.      
SUCCESSORS. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either
party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

 

20.4.      
TIME OF ESSENCE. Time is of the essence with respect to the performance of every provision of this Lease in which time
of performance is a factor.

 

20.5.      
CONTROLLING LAW/VENUE. This Lease shall be governed by and interpreted in accordance with the laws of the State of California.

 

20.6.      
SEVERABILITY. If any term or provision of this Lease, the deletion of which would not adversely affect the receipt of
any material benefit by either party or the deletion of which is consented to by the party adversely affected, shall be held invalid
or unenforceable to any extent, the remainder of this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

 

20.7.      
WAIVER. One or more waivers by Landlord or Tenant of any breach of any term, covenant or condition contained in this
Lease shall not be a waiver of any subsequent breach of the same or any other term, covenant or condition. Consent to any act by
one of the parties shall not be deemed to render unnecessary the obtaining of that party’s consent to any subsequent act.
No breach of this Lease shall be deemed to have been waived unless the waiver is in a writing signed by the waiving party.

 

 

 

    	 	14	 

     

    

 

20.8.      
INABILITY TO PERFORM. In the event that either party shall be delayed or hindered in or prevented from the performance
of any work or in performing any act required under this Lease by reason of any cause beyond the reasonable control of that party,
then the performance of the work or the doing of the act shall be excused for the period of the delay and the time for performance
shall be extended for a period equivalent to the period of the delay. The provisions of this Section 20.8 shall not operate
to excuse Tenant from the prompt payment of Rent.

 

20.9.     
ENTIRE AGREEMENT. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements
and understandings related to the Premises. This Lease may be modified only by a written agreement signed by Landlord and Tenant.

 

20.10.    
QUIET ENJOYMENT. Upon the observance and performance of all the covenants, terms and conditions on Tenant’s part
to be observed and performed, and subject to the other provisions of this Lease, Tenant shall have the right of quiet enjoyment
and use of the Premises for the Term without hindrance or interruption by Landlord or any other person claiming by or through Landlord.

 

20.11.   
SURVIVAL. All covenants of Landlord or Tenant which reasonably would be intended to survive the expiration or sooner
termination of this Lease, including without limitation any warranty or indemnity hereunder, shall so survive and continue to be
binding upon and inure to the benefit of the respective parties and their successors and assigns.

 

ARTICLE 21. EXECUTION

 

21.1.      
COUNTERPARTS; DIGITAL SIGNATURES. 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. The parties agree to accept a digital image (including but not
limited to an image in the form of a PDF, JPEG, GIF file, or other e-signature) of this Lease, if applicable, reflecting the execution
of one or both of the parties, as a true and correct original.

 

21.2.      
CORPORATE AND PARTNERSHIP AUTHORITY. Tenant represents and warrants to Landlord, and agrees, that each individual executing
this Lease on behalf of Tenant is authorized to do so on behalf of Tenant.

 

21.3.      
EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of this Lease to Tenant shall be for examination purposes only,
and shall not constitute an offer to or option for Tenant to lease the Premises unless and until Landlord has executed and delivered
this Lease to Tenant.

 

21.4.     
BROKER DISCLOSURE. By the execution of this Lease, each of Landlord and Tenant hereby acknowledge and confirm (a) receipt
of a copy of a Disclosure Regarding Real Estate Agency Relationship conforming to the requirements of California Civil Code 2079.16,
and (b) the agency relationships specified in Item 10 of the Basic Lease Provisions, which acknowledgement and confirmation
is expressly made for the benefit of Tenant’s Broker identified in Item 10 of the Basic Lease Provisions. If there is no
Tenant’s Broker so identified in Item 10 of the Basic Lease Provisions, then such acknowledgement and confirmation is expressly
made for the benefit of Landlord’s Broker. By the execution of this Lease, Landlord and Tenant are executing the confirmation
of the agency relationships set forth in Item 10 of the Basic Lease Provisions.

 

 

 

    	 	15	 

     

    

 

ARTICLE 22. MISCELLANEOUS

 

22.1.      
MORTGAGEE PROTECTION. No act or failure to act on the part of Landlord which would otherwise entitle Tenant to be relieved
of its obligations hereunder or to terminate this Lease shall result in such a release or termination unless (a) Tenant has
given notice by registered or certified mail to any Mortgagee of a Mortgage covering the Building whose address has been furnished
to Tenant and (b) such Mortgagee is afforded a reasonable opportunity to cure the default by Landlord. Tenant shall comply
with any written directions by any Mortgagee to pay Rent due hereunder directly to such Mortgagee without determining whether a
default exists under such Mortgagee’s Mortgage.

 

22.2.      
SDN LIST. Tenant hereby represents and warrants that neither Tenant nor any officer, director, employee, partner, member
or other principal of Tenant (collectively, “Tenant Parties”) is listed as a Specially Designated National and
Blocked Person (“SDN”) on the list of such persons and entities issued by the U.S. Treasury Office of Foreign
Assets Control (OFAC). In the event Tenant or any Tenant Party is or becomes listed as an SDN, Tenant shall be deemed in breach
of this Lease and Landlord shall have the right to terminate this Lease immediately upon written notice to Tenant.

 

	
        LANDLORD:

         

        JAMBOREE CENTER 4 LLC,

        a Delaware limited liability company

         

         

        By: /s/ Steven M. Case                                                         

        Steven M. Case

        Executive Vice President

        Office Properties

         

         

        By: /s/ Christopher J. Popma                                                

        Christopher J. Popma

        Regional Vice President, Operations

        Office Properties
	
        TENANT:

         

        ACACIA RESEARCH CORPORATION,

        a Delaware corporation

         

         

        By: /s/ Marc W. Booth                                                  

        Printed Name: Marc W. Booth

        Title: Vice President & Chief IP Officer

         

         

         

        By: /s/ Jennifer Graff                                                      

        Printed Name: Jennifer Graff

        Title: Corporate Secretary

 

 

 

 

 

 

 

 

    	 	16	 

     

    

 

 

 

 

 

    	 	A-1	 

     

    

 

EXHIBIT B

 

Operating Expenses and Taxes

(Base Year)

 

(a)       Commencing
12 months following the Commencement Date, Tenant shall pay Landlord, as additional rent, for Tenant’s Share of the amount,
if any, by which “Project Costs” (defined below) for each Expense Recovery Period during the Term exceed Project
Costs for the Project Cost Base and the amount, if any, by which “Property Taxes” (defined below) for each Expense
Recovery Period during the Term exceed Property Taxes for the Property Tax Base. Property Taxes and Project Costs are mutually
exclusive and may be billed separately or in combination as determined by Landlord. “Tenant’s Share” shall
mean that portion of any Operating Expenses determined by multiplying the cost of such item by a fraction, the numerator of which
is the Floor Area and the denominator of which is the total rentable square footage, as determined from time to time by Landlord,
of (i) the Floor Area of the Building as defined in Item 8 of the Basic Lease Provisions, for expenses determined by Landlord
to benefit or relate substantially to the Building rather than the entire Project, or (ii) all or some of the buildings in
the Project, for expenses determined by Landlord to benefit or relate substantially to all or some of the buildings in the Project
rather than any specific building. Tenant acknowledges Landlord’s rights to make changes or additions to the Building and/or
Project from time to time, in which event the total rentable square footage within the Building and/or Project may be adjusted.
For convenience of reference, Property Taxes and Project Costs may sometimes be collectively referred to as “Operating
Expenses.”

 

(b)       Commencing
prior to the start of the first full “Expense Recovery Period” of the Lease (as defined in Item 7 of the Basic
Lease Provisions) following the Base Year, and prior to the start of each full or partial Expense Recovery Period thereafter, Landlord
shall give Tenant a written estimate of the amount of Tenant’s Share of Project Costs and Property Taxes for the Expense
Recovery Period or portion thereof. Commencing 12 months following the Commencement Date, Tenant shall pay the estimated amounts
to Landlord in equal monthly installments, in advance, with Basic Rent. Landlord may from time to time change the Expense Recovery
Period to reflect a calendar year or a new fiscal year of Landlord, as applicable, in which event Tenant’s share of Operating
Expenses shall be equitably prorated for any partial year. From time to time during an Expense Recovery Period, Landlord may revise
the estimate based on increases in any of the Operating Expenses.

 

(c)       Within
180 days after the end of each Expense Recovery Period, Landlord shall furnish to Tenant a statement setting forth the actual or
prorated Property Taxes and Project Costs attributable to that period, and the parties shall within 30 days thereafter make any
payment or allowance necessary to adjust Tenant’s estimated payments, if any, to Tenant’s actual Tenant’s Share
as shown by the annual statement. If actual Property Taxes or Project Costs allocable to Tenant during any Expense Recovery Period
are less than the Property Tax Base or the Project Cost Base, respectively, Landlord shall not be required to pay that differential
to Tenant, although Landlord shall refund any applicable estimated payments collected from Tenant. Should Tenant fail to object
in writing to Landlord’s determination of actual Operating Expenses within 60 days following delivery of Landlord’s
expense statement, Landlord’s determination of actual Operating Expenses for the applicable Expense Recovery Period shall
be conclusive and binding on Tenant.

 

(d)       Even
though the Lease has terminated and the Tenant has vacated the Premises, when the final determination is made of Tenant’s
share of Property Taxes and Project Costs for the Expense Recovery Period in which the Lease terminates, Tenant shall upon notice
pay the entire increase due over the estimated expenses paid; conversely, any overpayment made in the event expenses decrease shall
be rebated by Landlord to Tenant.

 

 

 

    	 	B-1	 

     

    

 

(e)       The
term “Project Costs” shall include all charges and expenses pertaining to the operation, management, maintenance
and repair of the Building and the Project, together with all appurtenant Common Areas (as defined in Section 6.2), and shall
include the following charges by way of illustration but not limitation: water and sewer charges; insurance premiums and deductibles
and/or reasonable premium equivalents and deductible equivalents should Landlord elect to self-insure any risk that Landlord is
authorized to insure hereunder; license, permit, and inspection fees; heat; light; power; janitorial services; the cost of equipping,
staffing and operating an on-site and/or off-site management office for the Building and Project; all labor and labor-related costs
for personnel applicable to the Building and Project, including both Landlord’s personnel and outside personnel; a commercially
reasonable Landlord overhead/management fee; reasonable fees for consulting services; access control/security costs, inclusive
of the reasonable cost of improvements made to enhance access control systems and procedures; repairs; air conditioning; supplies;
materials; equipment; tools; tenant services; programs instituted to comply with transportation management requirements; any expense
incurred pursuant to Sections 6.1, 6.2, 7.2, and Exhibits C and F below; costs incurred (capital or otherwise) on
a regular recurring basis every 3 or more years for normal maintenance projects (e.g., parking lot slurry coat or replacement of
lobby, corridor and elevator cab carpets and coverings); and the amortized cost of capital improvements (as distinguished from
replacement parts or components installed in the ordinary course of business) which are intended to reduce other operating costs
or increases thereof, or upgrade Building and/or Project security, or which are required to bring the Building and/or Project into
compliance with applicable laws and building codes. Landlord shall amortize the cost of capital improvements on a straight-line
basis over the lesser of the Payback Period (as defined below) or the useful life of the capital improvement as reasonably determined
by Landlord. Any amortized Project Costs item may include, at Landlord’s option, an actual or imputed interest rate that
Landlord would reasonably be required to pay to finance the cost of the item, applied on the unamortized balance. “Payback
Period” shall mean the reasonably estimated period of time that it takes for the cost savings, if any, resulting from
a capital improvement item to equal the total cost of the capital improvement. It is understood that Project Costs shall include
competitive charges for direct services provided by any subsidiary or division of Landlord. If any Project Costs are applicable
to one or more buildings or properties in addition to the Building, then that cost shall be equitably prorated and apportioned
among the Building and such other buildings or properties. The term “Property Taxes” as used herein shall include
the following: (i) all real estate taxes or personal property taxes, as such property taxes may be increased from time to
time due to a reassessment or otherwise; and (ii) other taxes, charges and assessments which are levied with respect to this
Lease or to the Building and/or the Project, and any improvements, fixtures and equipment and other property of Landlord located
in the Building and/or the Project, except that general net income and franchise taxes imposed against Landlord shall be excluded;
and (iii) any tax, surcharge or assessment which shall be levied in addition to or in lieu of real estate or personal property
taxes; and (iv) costs and expenses incurred in contesting the amount or validity of any Property Tax by appropriate proceedings.
A copy of Landlord’s unaudited statement of expenses shall be made available to Tenant upon request. The Project Costs, inclusive
of those for the Base Year, shall be extrapolated by Landlord to reflect at least 95% occupancy of the rentable area of the Building.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	B-2	 

     

    

 

EXHIBIT C

 

UTILITIES AND SERVICES

 

The following standards
for utilities and services shall be in effect at the Building. Landlord reserves the right to adopt nondiscriminatory modifications
and additions to these standards. In the case of any conflict between these standards and the Lease, the Lease shall be controlling.
Subject to all of the provisions of the Lease, the following shall apply:

 

1.       Landlord
shall make available to the Premises during the hours of 8:00 a.m. to 6:00 p.m., Monday through Friday, and upon request, from
8:00 a.m. to 1:00 p.m. on Saturday (“Building Hours”), generally recognized national holidays excepted, reasonable
HVAC services. Subject to the provisions set forth below, Landlord shall also furnish the Building with elevator service (if applicable),
reasonable amounts of electric current for normal lighting by Landlord’s standard overhead fluorescent and incandescent fixtures
and for the operation of office equipment consistent in type and quantity with that utilized by typical office tenants of the Building
and Project, and water for lavatory purposes. Tenant will not, without the prior written consent of Landlord, connect any apparatus,
machine or device with water pipes or electric current (except through existing electrical outlets in the Premises) for the purpose
of using electric current or water.

 

2.       Upon
written request from Tenant delivered to Landlord at least 24 hours prior to the period for which service is requested, but during
normal business hours, Landlord will provide any of the foregoing building services to Tenant at such times when such services
are not otherwise available. Tenant agrees to pay Landlord for those after-hour services at rates that Landlord may establish from
time to time. If Tenant requires electric current in excess of that which Landlord is obligated to furnish under this Exhibit C,
Tenant shall first obtain the consent of Landlord, and Landlord may cause an electric current meter to be installed in the Premises
to measure the amount of electric current consumed. The cost of installation, maintenance and repair of the meter shall be paid
for by Tenant, and Tenant shall reimburse Landlord promptly upon demand for all electric current consumed for any special power
use as shown by the meter.

 

3.       Landlord
shall furnish water for drinking, personal hygiene and lavatory purposes only.

 

4.       In
the event that any utility service to the Premises is separately metered or billed to Tenant, Tenant shall pay all charges for
that utility service to the Premises and the cost of furnishing the utility to tenant suites shall be excluded from the Operating
Expenses as to which reimbursement from Tenant is required in the Lease.

 

5.       Landlord
shall provide janitorial services 5 days per week, equivalent to that furnished in comparable buildings, and window washing as
reasonably required; provided, however, that Tenant shall pay for any additional or unusual janitorial services.

 

6.       Tenant
shall have access to the Building 24 hours per day, 7 days per week, 52 weeks per year; provided that Landlord may install access
control systems as it deems advisable for the Building. Landlord may impose a reasonable charge for access control cards and/or
keys issued to Tenant.

 

7.       The
costs of operating, maintaining and repairing any supplemental air conditioning unit serving only the Premises shall be borne solely
by Tenant. Such installation shall be subject to Landlord’s prior written approval, at Tenant’s sole expense and shall
include installation of a separate meter for the operation of the unit. Landlord may require Tenant to remove at Lease expiration
any such unit installed by or for Tenant and to repair any resulting damage to the Premises or Building.

 

 

 

 

    	 	C-1	 

     

    

 

EXHIBIT D

 

TENANT’S INSURANCE

 

The following requirements
for Tenant’s insurance shall be in effect during the Term, and Tenant shall also cause any subtenant to comply with the requirements.
Landlord reserves the right to adopt reasonable nondiscriminatory modifications and additions to these requirements.

 

1.       Tenant
shall maintain, at its sole cost and expense, during the entire Term: (i) commercial general liability insurance with respect
to the Premises and the operations of Tenant in, on or about the Premises, on a policy form that is at least as broad as Insurance
Service Office (ISO) CGL 00 01 (if alcoholic beverages are sold on the Premises, liquor liability shall be explicitly covered),
which policy(ies) shall be written on an “occurrence” basis and for not less than $2,000,000 combined single limit
per occurrence for bodily injury, death, and property damage liability; (ii) workers’ compensation insurance coverage
as required by law, together with employers’ liability insurance coverage of at least $1,000,000 each accident and each disease;
(iii) with respect to Alterations constructed by Tenant under this Lease, builder’s risk insurance, in an amount equal
to the replacement cost of the work; and (iv) insurance against fire, vandalism, malicious mischief and such other additional
perils as may be included in a standard “special form” policy, insuring all Alterations, trade fixtures, furnishings,
equipment and items of personal property in the Premises, in an amount equal to not less than 90% of their replacement cost (with
replacement cost endorsement), which policy shall also include business interruption coverage in an amount sufficient to cover
1 year of loss. In no event shall the limits of any policy be considered as limiting the liability of Tenant under this Lease.

 

2.       All
policies of insurance required to be carried by Tenant pursuant to this Exhibit D shall be written by insurance companies
authorized to do business in the State of California and with a general policyholder rating of not less than “A-” and
financial rating of not less than “VIII” in the most current Best’s Insurance Report. The deductible or other
retained limit under any policy carried by Tenant shall be commercially reasonable, and Tenant shall be responsible for payment
of such deductible or retained limit with waiver of subrogation in favor of Landlord. Any insurance required of Tenant may be furnished
by Tenant under any blanket policy carried by it or under a separate policy. A certificate of insurance, certifying that the policy
has been issued, provides the coverage required by this Exhibit and contains the required provisions, together with endorsements
acceptable to Landlord evidencing the waiver of subrogation and additional insured provisions required below, shall be delivered
to Landlord prior to the date Tenant is given the right of possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days prior to the expiration of the coverage. In the event
of a loss covered by any policy under which Landlord is an additional insured, Landlord shall be entitled to review a copy of such
policy.

 

3.       Tenant’s
commercial general liability insurance shall contain a provision that the policy shall be primary to and noncontributory with any
policies carried by Landlord, together with a provision including Landlord, The Irvine Company LLC, and any other parties in interest
designated by Landlord as additional insureds. Tenant’s policies described in Subsections 1 (ii), (iii) and (iv) above shall
each contain a waiver by the insurer of any right to subrogation against Landlord, its agents, employees, contractors and representatives.
Tenant also waives its right of recovery for any deductible or retained limit under same policies enumerated above. All of Tenant’s
policies shall contain a provision that the insurer will not cancel or change the coverage provided by the policy without first
giving Landlord 30 days prior written notice. Tenant shall also name Landlord as an additional insured on any excess or umbrella
liability insurance policy carried by Tenant.

 

NOTICE TO TENANT: IN ACCORDANCE WITH
THE TERMS OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR TO BEING
AFFORDED ACCESS TO THE PREMISES.

 

 

 

    	 	D-1	 

     

    

 

EXHIBIT E

 

RULES AND REGULATIONS

 

The following Rules
and Regulations shall be in effect at the Building. Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time. In the case of any conflict between these regulations and the Lease, the Lease shall be controlling.

 

1.       The
sidewalks, halls, passages, elevators, stairways, and other common areas shall not be obstructed by Tenant or used by it for storage,
for depositing items, or for any purpose other than for ingress to and egress from the Premises. Should Tenant have access to any
balcony or patio area, Tenant shall not place any furniture other personal property in such area without the prior written approval
of Landlord.

 

2.       Neither
Tenant nor any employee or contractor of Tenant shall go upon the roof of the Building without the prior written consent of Landlord.

 

3.       Tenant
shall, at its expense, be required to utilize the third party contractor designated by Landlord for the Building to provide any
telephone wiring services from the minimum point of entry of the telephone cable in the Building to the Premises.

 

4.       No
antenna or satellite dish shall be installed by Tenant without the prior written agreement of Landlord.

 

5.       The
sashes, sash doors, windows, glass lights, solar film and/or screen, and any lights or skylights that reflect or admit light into
the halls or other places of the Building shall not be covered or obstructed. If Landlord, by a notice in writing to Tenant, shall
object to any curtain, blind, tinting, shade or screen attached to, or hung in, or used in connection with, any window or door
of the Premises, the use of that curtain, blind, tinting, shade or screen shall be immediately discontinued and removed by Tenant.
Interior of the Premises visible from the exterior must be maintained in a visually professional manner and consistent with a first
class office building. Tenant shall not place any unsightly items (as determined by Landlord in its reasonable discretion) along
the exterior glass line of the Premises including, but not limited to, boxes, and electrical and data cords. No awnings shall be
permitted on any part of the Premises.

 

6.       The
installation and location of any unusually heavy equipment in the Premises, including without limitation file storage units, safes
and electronic data processing equipment, shall require the prior written approval of Landlord. The moving of large or heavy objects
shall occur only between those hours as may be designated by, and only upon previous notice to, Landlord. No freight, furniture
or bulky matter of any description shall be received into or moved out of the lobby of the Building or carried in any elevator
other than the freight elevator (if available) designated by Landlord unless approved in writing by Landlord.

 

7.       Any
pipes or tubing used by Tenant to transmit water to an appliance or device in the Premises must be made of copper or stainless
steel, and in no event shall plastic tubing be used for that purpose.

 

8.       Tenant
shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent
shall not be unreasonably withheld. Upon the termination of its tenancy, Tenant shall deliver to Landlord all the keys to offices,
rooms and toilet rooms and all access cards which shall have been furnished to Tenant or which Tenant shall have had made.

 

9.       Tenant
shall not install equipment requiring electrical or air conditioning service in excess of that to be provided by Landlord under
the Lease without prior written approval from Landlord.

 

 

 

    	 	E-1	 

     

    

 

10.       Tenant
shall not use space heaters within the Premises.

 

11.       Tenant
shall not do or permit anything to be done in the Premises, or bring or keep anything in the Premises, which shall in any way increase
the insurance on the Building, or on the property kept in the Building, or interfere with the rights of other tenants, or conflict
with any government rule or regulation.

 

12.       Tenant
shall not use or keep any foul or noxious gas or substance in the Premises.

 

13.       Tenant
shall not permit the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the
Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business with
other tenants.

 

14.       Tenant
shall not permit any pets or animals in or about the Building. Bona fide service animals are permitted provided such service animals
are pre-approved by Landlord, remain under the direct control of the individual they serve at all times, and do not disturb or
threaten others.

 

15.       Neither
Tenant nor its employees, agents, contractors, invitees or licensees shall bring any firearm, whether loaded or unloaded, into
the Project at any time.

 

16.       Smoking
tobacco, including via personal vaporizers or other electronic cigarettes, anywhere within the Premises, Building or Project is
strictly prohibited except that smoking tobacco may be permitted outside the Building and within the Project only in areas designated
by Landlord. Smoking, vaping, distributing, growing or manufacturing marijuana or any marijuana derivative anywhere within the
Premises, Building or Project is strictly prohibited.

 

17.       Tenant
shall not install an aquarium of any size in the Premises unless otherwise approved by Landlord.

 

18.       Tenant
shall not utilize any name selected by Landlord from time to time for the Building and/or the Project as any part of Tenant’s
corporate or trade name. Landlord shall have the right to change the name, number or designation of the Building or Project without
liability to Tenant. Tenant shall not use any picture of the Building in its advertising, stationery or in any other manner.

 

19.       Tenant
shall, upon request by Landlord, supply Landlord with the names and telephone numbers of personnel designated by Tenant to be contacted
on an after-hours basis should circumstances warrant.

 

20.       Landlord
may from time to time grant tenants individual and temporary variances from these Rules, provided that any variance does not have
a material adverse effect on the use and enjoyment of the Premises by Tenant.

 

 

 

    	 	E-2	 

     

    

 

21.       Fitness
Center Rules. Tenant shall cause its employees (whether members or prospective members of the Fitness Center) to comply with
the following Fitness Center rules and regulations (subject to change from time to time as Landlord may solely determine):

 

(a)       Membership
in the Fitness Center is open to the tenants of Landlord or its affiliates only. No guests will be permitted to use the Fitness
Center without the prior written approval of Landlord or Landlord’s representative.

 

(b)       Fitness
Center users are not allowed to be in the Fitness Center other than the hours designated by Landlord from time to time. Landlord
shall have the right to alter the hours of use of the Fitness Center, at Landlord’s sole discretion.

 

(c)       All
Fitness Center users must execute Landlord’s Waiver of Liability prior to use of the Fitness Center and agree to all terms
and conditions outlined therein.

 

(d)       Individual
membership and guest keycards to the Fitness Center shall not be shared and shall only be used by the individual to whom such keycard
was issued. Failure to abide by this rule may result in immediate termination of such Fitness Center user’s right to use
the Fitness Center.

 

(e)       All
Fitness Center users and approved guests must have a pre-authorized keycard to enter the Fitness Center. A pre-authorized keycard
shall not be issued to a prospective Fitness Center user until receipt by Landlord of Landlord’s initial fee, if any, for
use of the Fitness Center by such Fitness Center user(s).

 

(f)       Use
of the Fitness Center is a privilege and not a right. Failure to follow gym rules or to act inappropriately while using the facilities
shall result in termination of Tenant’s Fitness Center privileges.

 

 

 

 

 

 

 

 

 

 

 

    	 	E-3	 

     

    

 

EXHIBIT F

 

PARKING

 

The following parking
regulations shall be in effect at the Building In the case of any conflict between these regulations and the Lease, the Lease shall
be controlling.

 

1.       Landlord
agrees to maintain, or cause to be maintained, an automobile parking area (“Parking Area”) in reasonable proximity
to the Building for the benefit and use of the visitors and patrons and, except as otherwise provided, employees of Tenant, and
other tenants and occupants of the Building. Landlord shall have the right to determine the nature and extent of the automobile
Parking Area, and of making such changes to the Parking Area from time to time which in its opinion are desirable. Landlord shall
not be liable for any damage to motor vehicles of visitors or employees, for any loss of property from within those motor vehicles,
or for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by the sole active negligence
or willful misconduct of Landlord. Landlord shall also have the right to establish, and from time to time amend, and to enforce
against all users of the Parking Area all reasonable rules and regulations (including the designation of areas for employee parking)
as Landlord may deem necessary and advisable for the proper and efficient operation and maintenance of the Parking Area.

 

2.       Landlord
may, if it deems advisable in its sole discretion, charge for parking and may establish for the Parking Area a system or systems
of permit parking for Tenant, its employees and its visitors. In no event shall Tenant or its employees park in reserved stalls
leased to other tenants or in stalls within designated visitor parking zones, nor shall Tenant or its employees utilize more than
the number of Parking Passes (defined below) allotted in this Lease to Tenant. Tenant shall, upon request of Landlord from time
to time, furnish Landlord with a list of its employees’ names and of Tenant’s and its employees’ vehicle license
numbers. Parking access devices, if applicable, shall not be transferable. Landlord may impose a reasonable fee for access devices
and a replacement charge for devices which are lost or stolen. Each access device shall be returned to Landlord promptly following
the Expiration Date or sooner termination of this Lease.

 

3.       Washing,
waxing, cleaning or servicing of vehicles, or the parking of any vehicle on an overnight basis, in the Parking Area (other than
emergency services) by any parker or his or her agents or employees is prohibited unless otherwise authorized by Landlord.

 

4.       It
is understood that the employees of Tenant and the other tenants of Landlord within the Building and Project shall not be permitted
to park their automobiles in the portions of the Parking Area which may from time to time be designated for patrons of the Building
and/or Project. Tenant may purchase from Landlord for the Term of this Lease, all or a portion of the total number of parking passes
set forth in Item 11 of the Basic Lease Provisions (the “Parking Passes”) for unreserved parking. During the
initial 60 month Lease Term only, the monthly charge for the Parking Passes shall be $55.00 per Parking Pass per month. Thereafter,
the parking charges shall be at Landlord’s scheduled parking rates from time to time. Should any monthly parking charge not
be paid within 5 days following the date due, then a late charge shall be payable by Tenant equal to the greater of (i) 5%
of the delinquent installment or (ii) $100.00, which late charge shall be separate and in addition to any late charge that
may be assessed pursuant to Section 14.3 of the Lease for other than delinquent monthly parking charges.

 

5.       Landlord
shall be entitled to pass on to Tenant its proportionate share of any charges or parking surcharge or transportation management
costs levied by any governmental agency and Tenant shall cooperate in any voluntary or mandated transportation management programs.

 

6.       Tenant
shall not assign or sublet any of the Parking Passes, either voluntarily or by operation of law, without the prior written consent
of Landlord, except in connection with an authorized assignment of this Lease or subletting of the Premises.

 

 

 

    	 	F-1	 

     

    

 

EXHIBIT G

 

ADDITIONAL PROVISIONS

 

1.       FITNESS
CENTER. Subject to the provisions of this Section, so long as Tenant is not in Default under this Lease, and provided Tenant’s
employees execute Landlord’s standard waiver of liability form and pay the applicable one time or monthly fee, if any, then
Tenant’s employees (the “Fitness Center Users”) shall be entitled to use the fitness center and the shower
facility located at the Project (collectively, the “Fitness Center”). No separate charges shall be assessed
to Fitness Center Users for the use of the Fitness Center (with the exception of towel/laundry fees, if any) during the initial
Term of this Lease, provided, however, that the costs of operating, maintaining and repairing the Fitness Center shall be included
as part of Operating Expenses. The use of the Fitness Center shall be subject to the reasonable rules and regulations (including
rules regarding hours of use) established from time to time by Landlord. Landlord and Tenant acknowledge that the use of the Fitness
Center by the Fitness Center Users shall be at their own risk and that the terms and provisions of Section 10.2 of this Lease
shall apply to Tenant and the Fitness Center User’s use of the Fitness Center. Tenant acknowledges that the provisions of
this Section shall not be deemed to be a representation by Landlord that Landlord shall continuously maintain the Fitness Center
(or any other fitness facility) throughout the Term of this Lease, and Landlord shall have the right, at Landlord’s sole
discretion, to expand, contract, eliminate or otherwise modify the Fitness Center. No expansion, contraction, elimination or modification
of the Fitness Center, and no termination of Tenant’s or the Fitness Center Users’ rights to the Fitness Center shall
entitle Tenant to an abatement or reduction in Basic Rent constitute a constructive eviction, or result in an event of default
by Landlord under this Lease. Landlord reserves the right to reasonably limit, restrain, or condition the use of the Fitness Center
by tenants of the Building (including Tenant’s Fitness Center Users) if Landlord reasonably determines that their use of
the Fitness Center has a disproportionate and/or inequitable impact on the ability of other tenants to use the Fitness Center.
Tenant hereby voluntarily releases, discharges, waives and relinquishes any and all actions or causes of action for personal injury
or property damage occurring to Tenant or its employees or agents arising as a result of the use of the Fitness Center, or any
activities incidental thereto, wherever or however the same may occur, and further agrees that Tenant will not prosecute any claim
for personal injury or property damage against Landlord or any of its officers, agents, servants or employees for any said causes
of action. It is the intention of Tenant with respect to the Fitness Center to exempt and relieve Landlord from liability for personal
injury or property damage caused by negligence. Tenant’s right to use the Fitness Center shall belong solely to Tenant and
may not be transferred or assigned without Landlord’s prior written consent, which may be withheld by Landlord in Landlord’s
sole discretion.

 

2.       CONFERENCE
CENTER. Landlord currently provides a conference center (the “Conference Center”) in the Project capable
of accommodating groups of people for use by Project tenants (including Tenant) on a reserved basis. Tenant shall, subject to availability,
have the use of the Conference Center subject to Landlord’s procedures and charges, if any. The use of the Conference Center
shall be subject to the reasonable rules and regulations (including rules regarding hours of use and priorities for the tenants
of the particular building in which a Conference Center is located, set up and clean up charges, etc.) established from time to
time by Landlord for the Conference Center. Landlord and Tenant acknowledge that the terms and provisions of Section 10.2
of this Lease shall apply to Tenant’s use of the Conference Center. Further, Landlord shall have no liability whatsoever
with respect to the existence, condition or availability of any Conference Center nor shall Landlord have any obligation whatsoever
to enforce or make reservations thereof, and Tenant hereby expressly waives all claims against Landlord with respect to the same.
No expansion, contraction, elimination, unavailability or modification of the Conference Center, and no termination of or interference
with Tenant’s rights to the Conference Center, shall entitle Tenant to an abatement or reduction in rent or constitute a
constructive eviction or an event of default by Landlord under this Lease.

 

3.       MOVING
ALLOWANCE. In consideration of the execution of this Lease by Tenant, Landlord shall reimburse Tenant the actual out-of-pocket
expenses incurred by Tenant in connection with Tenant’s move to the Premises, which expenses shall include furniture, fixtures
and equipment, and telecommunications and cabling costs (“Moving Allowance”). Tenant agrees that all such expenses
shall be supported by paid invoices, and the total thereof shall not to exceed $65,000.00. The reimbursement shall be paid by Landlord
within 30 days following receipt of those invoices, but in no event sooner than the Commencement Date of the Lease. Tenant agrees
that any portion of the Moving Allowance not utilized by Tenant, as evidenced in third party invoices submitted to Landlord within
60 days of the Commencement Date, shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit or payment
for such savings.

 

 

 

    	 	G-1fdef-ex41_136.htm

Exhibit 4.1

Description of First Defiance Financial Corp. Capital Stock

As of December 31, 2019, First Defiance Financial Corp., an Ohio corporation (“First Defiance,” the “Company,” “we,” or “our”), had one class of securities registered pursuant to Section 12 of the U.S. Securities Exchange Act of 1934, as amended: Common Stock, par value $0.01 per share (“Common Shares”). 

  Effective as of the closing of First Defiance’s merger with United Community Financial Corp. (the “Merger”) on January 31, 2020, First Defiance’s Amended and Restated Articles of Incorporation (the “Articles”) were adopted.  The Articles authorize 80,000,000 shares of capital stock, consisting of 75,000,000 Common Shares, and 5,000,000 shares of preferred stock, $0.01 par value (“Preferred Shares”). First Defiance has no Preferred Shares issued or outstanding.

The following summary is subject to, and qualified in its entirety by reference to, the Articles, and First Defiance’s Amended and Restated Code of Regulations, as amended on the date of the Merger (the “Regulations”), as well as the applicable provisions of Chapters 1701, 1704 and 1707 of the Ohio Revised Code. For a complete description of the terms and provisions of our Common Shares, refer to the Articles and the Regulations, both of which are filed as exhibits to First Defiance’s Annual Report on Form 10-K.

Common Shares

Voting Rights

Holders of Common Shares are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders. Our Common Shares do not have cumulative voting rights for the election of directors. Unless otherwise provided in the Articles or the Regulations, a majority of votes cast by shareholders at a meeting is sufficient to pass on any matter before the shareholders.

Board of Directors

Our Board of Directors (“Board”) is divided into three classes (Class I, Class II and Class III), elected for staggered three-year terms. Our Regulations provide that the Board consist of 13 directors: (i) Donald Hileman, John Bookmyer and five other persons who served as directors of First Defiance or First Federal Bank of the Midwest immediately prior to the effective time of the Merger (the “First Defiance related directors”) and (ii) Gary Small, Richard Schiraldi, and four other persons who served as directors of United Community Financial Corp. or Home Savings Bank immediately prior to the effective time of the Merger (the “UCFC related directors”). If, prior to the second anniversary of the “succession date” (as defined in the Regulations), which will be between January 1, 2021, and June 30, 2021, any of the initial Class I, II or III directors ceases to serve as a director for any reason or does not stand for reelection, the vacancy will be filled by 

the Board with an individual selected by the UCFC related directors (if such director was a UCFC related director) or the First Defiance related directors (if such director was a First Defiance related director) in good faith in a manner intended to preserve the principles of representation in the Regulations, provided that such individual is reasonably agreeable to the Governance and Nominating Committee of the Board in accordance with the good faith execution of its duties.

Dividends

The Board may, at any regular or special meeting, declare dividends on our outstanding capital stock. Dividends may be paid in cash, in property or in our capital stock. 

First Defiance’s ability to pay dividends to its shareholders is primarily dependent on its receipt of dividends from First Federal Bank of the Midwest (“First Federal”) and its other subsidiaries.  The Federal Reserve expects First Defiance to serve as a source of strength for First Federal and may require First Defiance to retain capital for further investment in First Federal, rather than pay dividends to First Defiance shareholders. Payment of dividends by First Defiance or First Federal may be restricted at any time at the discretion of its applicable regulatory authorities if they deem such dividends to constitute an unsafe or unsound practice.  These provisions could have the effect of limiting First Defiance's ability to pay dividends on its common shares. 

First Federal must have the approval of the Ohio Division of Financial Institutions if the payment of a cash dividend in any year would cause the total dividends for that year to exceed the total of First Federal’s net income for the current year and the retained net income of First Federal for the preceding two years.  Payments of dividends by First Federal may be restricted at any time at the discretion of First Federal’s governing regulatory authorities if such regulatory authorities deem such dividends to constitute unsafe and/or unsound banking practices or if necessary to maintain adequate capital.

The Federal Reserve Board has issued a policy statement with regard to the payment of cash dividends by financial holding companies and other bank holding companies. The policy statement provides that, as a matter of prudent banking, a financial holding company or a bank holding company should not maintain a rate of cash dividends on common stock unless its net income available to common shareholders over the past year has been sufficient to fully fund the dividends, and the prospective rate of earnings retention appears to be consistent with the financial holding company’s or bank holding company’s capital needs, asset quality and overall financial condition. Accordingly, a financial holding company or a bank holding company should not pay dividends that exceed its net income or can only be funded in ways that weaken the financial holding company's or bank holding company’s financial health, such as by borrowing. In addition, First Defiance may not pay dividends that would cause First Defiance to fail to satisfy the capital adequacy regulations applicable to bank holding companies which qualify as financial holding companies, including having a capital conservation buffer that is greater than 2.5%.

No Preemptive Rights

No shareholder of the Company shall have, as a matter of right, the preemptive right to purchase or subscribe for shares of any class, now or hereafter authorized, or to purchase or subscribe for securities or other obligations convertible into or exchangeable for such shares or which by warrants or otherwise entitle the holders thereof to subscribe for or purchase any such shares.

Share Repurchases by the Company

We have the right, but not the obligation, to repurchase our common shares from our shareholders.

Preferred Shares

Our 5,000,000 authorized but unissued preferred shares are typically referred to as “blank check” preferred shares. This term refers to preferred shares for which the rights and restrictions are determined by the board of directors of a corporation at the time the preferred shares are issued. Under our Articles, our Board has the authority, without any further shareholder vote or action, to issue the preferred shares in one or more series, from time to time, with full or limited voting power, or without voting power, and with all designations, preferences and relative, participating, optional or other special rights and privileges of, and qualifications, limitations or restrictions upon, the preferred shares, as may be provided in the amendment or amendments to our Articles adopted by our Board. The authority of our Board includes, but is not limited to, the determination or fixing of the following with respect to a particular series of preferred shares: the distinctive serial designation and the number of shares constituting such series; the voting rights, full, conditional or limited, of shares of such series; the dividend rates or the amount of dividends to be paid on the shares of such series, whether dividends shall be cumulative and, if so, from which date or dates, the payment date or dates for dividends, and the participating or other special rights, if any, with respect to dividends; the amount or amounts payable upon the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Company; whether the shares of such series shall be entitled to the benefits of a sinking or retirement fund to be applied to the purchase or redemption of such shares, and, if so entitled, the amount of such fund and the manner of its application, including the price or prices at which such shares may be redeemed or purchased through the application of such funds; whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Company and, if so convertible or exchangeable, the conversion price or prices, or the rates or rates of exchange, and the adjustments thereof, if any, at which such conversion or exchange may be made, and any other terms and conditions of such conversion or exchange; the price or other consideration for which the shares of such series shall be issued; restrictions, if any, on the issuance of shares of the same series or any other class or series; and whether the shares of such series shall be redeemable and, if so, the 

price or prices at which, and the terms and conditions upon which such shares may be redeemed; and such other rights, preferences and limitations as shall not be inconsistent with our Articles, our Regulations or Ohio law.

Transfer Agent and Registrar

The transfer agent and registrar for our common shares is Broadridge Financial Solutions, Inc.

Listing

Our common shares are listed on the NASDAQ Global Market under the symbol “FDEF.”

Ohio Anti-takeover Statutes

Certain state laws make a change in control of an Ohio corporation more difficult, even if desired by the holders of a majority of the corporation’s shares. Provided below is a summary of the Ohio anti-takeover statutes.

Ohio Revised Code Section 1701.831 is a “control share acquisition” statute. The control share acquisition statute provides, in essence, that any person acquiring shares of an “issuing public corporation” (which First Defiance meets by definition) in any of the following three ownership ranges must seek and obtain shareholder approval of the acquisition transaction that first puts such ownership within each such range: (i) one-fifth or more but less than one-third; (ii) one-third or more but less than a majority; and (iii) a majority or more.

The control share acquisition statute applies not only to traditional offers but also to open market purchases, privately-negotiated transactions and original issuances by an Ohio corporation, whether friendly or unfriendly. The procedural requirements of the control share acquisition statute could render approval of any control share acquisition difficult because it must be authorized at a special meeting of shareholders, for which the statutorily prescribed form of notice has been given and at which the statutorily prescribed quorum is present, by the affirmative vote of the majority of the voting power of the corporation in the election of directors represented at the meeting and by a majority of the portion of such voting power, excluding the voting power of interested shares.

A corporation may elect not to be covered by the provisions of the control share acquisition statute by the adoption of an appropriate amendment to its articles of incorporation or its regulations. We have not adopted such an amendment. Our Articles, as currently in effect, provide that Section 1701.831 of the Ohio Revised Code applies to control share acquisitions of shares of First Defiance.

Ohio Revised Code Chapter 1704 is a “merger moratorium” statute. The merger moratorium statute provides that, unless a corporation’s articles of incorporation otherwise provide, an “issuing public corporation” (which First Defiance meets by definition) may not 

engage in a “Chapter 1704 transaction” for three years following the date on which a person acquires more than 10% of the voting power in the election of directors of the issuing corporation, unless the Chapter 1704 transaction is approved by the corporation’s board of directors prior to such transaction. A person who acquires such voting power is an “interested shareholder,” and “Chapter 1704 transactions” involve a broad range of transactions, including mergers, consolidations, combinations, liquidations, recapitalizations and other transactions between an issuing public corporation and an interested shareholder if such transactions involve at least 5% of the aggregate fair market value of the assets or shares of the issuing public corporation or assets representing at least 10% of its earning power or income. After the initial three-year moratorium, Chapter 1704 prohibits such transactions absent approval by disinterested shareholders or the transaction meeting certain statutorily defined fair price provisions.

A corporation may elect not to be covered by the provisions of Ohio Revised Code Chapter 1704 by the adoption of an appropriate amendment to its articles of incorporation. We have not adopted such an amendment. Our Articles, as currently in effect, provide that Ohio Revised Code Chapter 1704 applies to First Defiance.

Ohio also has enacted Ohio Revised Code Section 1707.043, which provides that a person who announces a control bid with respect to an Ohio corporation that has issued and outstanding shares listed on a national securities exchange (which First Defiance does with our common shares) must disgorge profits realized by that person upon the sale of any equity securities within 18 months of the announcement.

In addition, Section 1701.59 of the Ohio Revised Code provides that, in determining what a director reasonably believes to be in the best interests of the corporation, such director may consider, in addition to the interests of the corporation’s shareholders, any of the interests of the corporation’s employees, suppliers, creditors and customers, the economy of the State of Ohio and the United States, community and societal considerations and the long-term as well as the short-term interests in the corporation and its shareholders, including the possibility that these interests may be best served by the continued independence of the corporation.

The overall effect of the statutes described above may be to render more difficult or discourage the removal of incumbent management of an Ohio corporation or the assumption of effective control of an Ohio corporation by other persons.

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