Document:

exhibit10-1.htm

Exhibit 10.1

 

UNIT EXCHANGE AGREEMENT

by and among

MAJEED S. NAMI PERSONAL ENDOWMENT TRUST, and

MAJEED S. NAMI IRREVOCABLE TRUST

as the “Nami Parties”

and

VANGUARD NATURAL GAS, LLC, and

VANGUARD NATURAL RESOURCES, LLC

for the transfer of the common units of Vanguard Natural Resources, LLC

held by the Nami Parties in exchange for the Membership Units of

 

TRUST ENERGY COMPANY, LLC

and

ARIANA ENERGY, LLC

 

and by

MAJEED S. NAMI

VINLAND ENERGY OPERATIONS, LLC

VINLAND ENERGY GATHERING, LLC

and

VINLAND ENERGY, LLC

for the limited purposes provided herein

Dated as of February 21, 2012

  

  

  

 

 

UNIT EXCHANGE AGREEMENT

 

THIS UNIT EXCHANGE AGREEMENT (this “Agreement”), dated as of February 21, 2012 (the “Execution Date”), and effective as of the Effective Date (as defined herein) is by and among Majeed S. Nami Personal Endowment Trust, (“Endowment”); Majeed S. Nami Irrevocable Trust, (“Trust” and with Endowment the “Nami Parties”); Majeed S. Nami, individually (“Nami”); Vinland Energy, LLC, Vinland Energy Operations, LLC and Vinland Energy Gathering, LLC (collectively “Vinland”); Vanguard Natural Gas, LLC, a Kentucky limited liability company (“VNG”) and Vanguard Natural Resources, LLC a Delaware limited liability company (“VNR” and with VNG, the “Vanguard Entities”).  The Nami Parties and the Vanguard Parties are referred to collectively herein as the “Parties,” and each is individually referenced as a “Party.”  Capitalized terms not otherwise defined shall have the meanings assigned to such terms in Article X.

WITNESSETH:

WHEREAS, Endowment presently owns 896,555 Common Units of VNR (the “Endowment Common Units”);

WHEREAS, Trust presently owns 1,032,015 Common Units of VNR (the “Trust Common Units”);

WHEREAS, VNR owns 100% of the membership interests of VNG;

WHEREAS, VNG owns 100% of the membership interests of Trust Energy Company, LLC (“TEC”) (the “TEC Membership Interests”);

WHEREAS, VNG owns 100% of the membership interests of Ariana Energy, LLC (“AE”) (the “AE Membership Interests”);

WHEREAS, Endowment and Trust desire to convey a cumulative total of 1,900,000 of their Common Units in VNR to exchange for a conveyance by VNG of all of the TEC Membership Interests and the AE Membership Interests, as provided herein;

WHEREAS, VNR believes it is in the best interest of itself and VNG for VNG to convey the TEC and AE Membership Interests, all on the terms and conditions provided herein.

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the Parties hereby agree as follows:

 

  

  

  

ARTICLE I

 

SALE AND PURCHASE

 

Section 1.1   Agreement to Exchange.

 

(a) In consideration of the premises, covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency is hereby acknowledged, on the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement:

 

(i) Endowment shall sell, assign, transfer, convey and deliver to VNR, and VNR shall accept from Endowment all 896,555 of the Endowment Common Units;

 

(ii) Trust shall sell, assign, transfer, convey and deliver to VNR and VNR shall accept from Trust 1,003,445 of the Trust Common Units;

 

(iii) VNG shall sell, assign, transfer, convey and deliver to Endowment and Trust, and Endowment and Trust shall purchase and accept (subject to a ratable allocation as between Endowment and Trust), 100.00% of the TEC Membership Interests and 100.00% of the AE Membership Interests;

 

in each case free and clear of any pledges, restrictions on transfer, proxies, voting or other similar agreements, liens, claims, charges, mortgages, security interests or other legal or equitable encumbrances, limitations or restrictions of any nature whatsoever (“Encumbrances”), except for (1) restrictions on transfer arising under applicable securities Laws, (2) the applicable terms and conditions of the current Organizational Documents of each of VNR, TEC and AE, and (3) Encumbrances that result from the actions of the recipient of any interests transferred pursuant to this Agreement.

(b) The closing of the sales and purchases set forth in Section 1.1(a) (the “Closing”) shall take place at 10:00 a.m. (Eastern Time) at the offices of Wyatt, Tarrant & Combs LLP in Lexington, Kentucky or at such other place as the Parties shall agree in writing, on a date to be specified by the Parties, which shall be the later of (i) the second Business Day following the satisfaction or (to the extent permitted by Law) waiver by the party or parties entitled to the benefits thereof of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing and (ii) the Outside Date (as defined herein).  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.”

 

(c) Each of the Nami Parties hereby agrees that effective simultaneously upon consummation of the Closing and the delivery by VNG of the TEC Member Bill of Sale (as defined herein) and the AE Member Bill of Sale (as defined herein) to each of the Nami Parties, the Nami Parties will assume and agree to pay, perform and discharge when due all of VNG’s obligations, duties and liabilities under the TEC and AE Organizational Documents from and after the Effective Date.  At the time of Closing, VNG will cause each of the Nami Parties to be admitted as the member of TEC and AE effective as of the Effective Date with the full right of participation in the management of the business and affairs of TEC and AE, and to exercise the rights and powers of a member of TEC and AE, and as of the Effective Date VNG will cease to be the member of TEC and AE and will cease to have or exercise any right or power as a member of TEC and AE.  The assignment and transfer of the TEC and AE Membership Interests, the admission of each of the Nami Parties as a member of TEC and AE, and VNG ceasing to be a member of TEC and AE, will not dissolve TEC or AE, and each of TEC and AE will continue without dissolution subsequent to the Closing.

 

Section 1.2   Deliveries at Closing.

 

(a) Prior to Closing, the Parties shall take the following actions, and at the Closing, the Parties shall make, or stand ready to make, the following deliveries and to take the following further actions:

 

(i) Transfer of TEC and AE Membership Interests.  VNG will execute and deliver to Endowment and Trust, respectively, the TEC Member Bill of Sale and the AE Member Bill of Sale, evidencing the assignment, transfer and delivery to Endowment and Trust of the relevant Membership Interests of TEC and AE.

 

(ii) Transfer of the VNR Common Units to VNR.  At the Closing, Endowment and Trust will deliver to VNR the certificates representing the respective Common Units of VNR being sold by sold by each of Endowment and Trust, in each case with the unit certificates properly completed and duly executed.  At the Closing, Endowment and Trust will deliver to VNR a properly completed and duly executed Transfer Application with respect to their respective Common Units being conveyed hereunder.

 

(iii) Settlement and Release Agreement.  At the Closing the Parties, Vinland and its subsidiaries, TEC and AE shall deliver fully executed counterparts of the Settlement and Release Agreement (as defined herein) which, in addition to the releases contained therein, also fully and completely terminates the Service Agreements (as defined herein).

 

(iv) Release of Guarantees.  At the Closing, VNR, VNG, TEC and AE shall provide such documents as may be necessary to fully and finally release all Guarantees as defined herein.

 

(v) FIRPTA Certificates.  Each of the Nami Parties will deliver to VNG and VNG will deliver to each Nami Party a certificate of such Party meeting the requirements of Treasury Regulation Section 1.1445-2(b)(2) certifying that such Party is not a “foreign person” within the meaning of Section 1445 of the Code, duly executed by such Party.

 

(vi) Closing Certificates.  The officers’ certificates contemplated by Section 6.2(c) and Section 6.3(c), in each case, executed by a duly authorized executive officer of each of the relevant Party.

 

(vii) Lien Releases.  At the Closing, VNR and VNG shall deliver fully-executed, effective and recordable releases for all recorded liens or other Encumbrances (other than Permitted Liens) created by VNR, VNG, TEC and/or AE since April 18, 2007 affecting the Oil and Gas Properties or other assets of TEC and/or AE, including any liens associated with the Vanguard Credit Agreement.

 

  

  

  

ARTICLE II                                

 

REPRESENTATIONS AND WARRANTIES OF VNR

 

As of the Execution Date, and also as of the Closing Date (except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date), VNR hereby represents and warrants to each of the Nami Parties as follows:

 

Section 2.1   Organization.

 

(a) VNR is a limited liability company, duly formed, validly existing and in good standing under the Laws of Delaware.

 

(b) VNR has all requisite legal and corporate or other entity power and authority, as the case may be, to own, lease and operate its properties and to conduct its businesses as currently owned and conducted, is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it requires it to so qualify.  VNR has made available to each of the Nami Parties true and complete copies of the Organizational Documents of VNR, as in effect on the Execution Date.

 

Section 2.2   Validity of Agreement; Authorization.  Except as provided in Schedule 2.2, VNR has or on the Closing Date and at the time of Closing will have (with respect to all other Transaction Documents to which it is a party), full power and authority to enter into this Agreement and the other Transaction Documents to which it is party and to perform its obligations hereunder and thereunder and to comply with the terms and conditions hereunder and thereunder. The execution and delivery of this Agreement and such other Transaction Documents and the performance by VNR of its obligations hereunder and thereunder have or will have been duly authorized by the Board of Directors or other governing body of VNR and, except as provided in Schedule 2.2, no other proceedings on the part of VNR are necessary to authorize such execution, delivery and performance. This Agreement and the other Transaction Documents to which VNR is party have been (in the case of this Agreement), or will be at the Closing (in the case of such other Transaction Documents), duly executed and delivered by VNR and constitutes (in the case of this Agreement), or will constitute at the Closing (in the case of such other Transaction Document) VNR’s valid and binding obligation enforceable against VNR in accordance with its terms.

 

Section 2.3   No Conflict or Violation.  Except as set forth in Schedule 2.3, the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party does not and will not: (a) violate or conflict with any provision of the Organizational Documents of VNR; (b) violate any applicable provision of law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation (“Law”) of any Governmental Authority binding on VNR; (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which any of VNR is a party or by which it is bound or to which any of their respective properties or assets are subject; (d) result in the creation or imposition of any Encumbrances, limitations or restrictions upon any of the properties or assets of VNR; or (e) result in the cancellation, modification, revocation or suspension of any consent, license, permit, certificate, franchise, authorization, registration or filing with any Governmental Authority of VNR, except in the case of clauses (c) and (d), as is resolved by any consent or waiver of Citibank pursuant to the Vanguard Credit Agreement (“Vanguard Citibank  Lien Release”) to permit the transactions contemplated by this Agreement, which is to be obtained by VNR in accordance with the terms of such Vanguard Credit Agreement prior to Closing.

 

Section 2.4   Consents and Approvals.  Except for (i) the Vanguard Citibank Lien Release and (ii) as disclosed on Schedule 2.4, VNG’s execution and delivery of this Agreement or the other Transaction Documents to it is party or performance of its obligations hereunder or thereunder, does not require the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Person, by VNG.

 

Section 2.5   Litigation.  There are no Legal Proceedings pending or, to the Knowledge of VNR threatened, against or involving VNR which individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair VNR’s ability to perform its obligations under this Agreement, and there is no order, judgment, injunction or decree of any Governmental Authority outstanding against VNR that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair VNR’s ability to perform its obligations under this Agreement.  “Legal Proceeding” shall mean any judicial or administrative, suits, proceedings (public or private), claims, investigations or proceedings before any Governmental Authority or arbitral actions.

 

Section 2.6   Regulatory Matters.

 

(a) VNR is not a “public utility company,” “holding company” or “subsidiary” or “affiliate” of a holding company as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

 

(b) VNR is not an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 2.7   Solvency.  VNR is, and immediately after giving effect to the transactions contemplated by this Agreement and the Transaction Documents will be Solvent. For purposes of this Section 2.7, “Solvent” means, with respect to the applicable party on any date of determination, that on such date (a) the fair value of the property of such party is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such party that would constitute liabilities under GAAP, (b) the present fair equivalent value of the assets of such party is not less than the amount that will be required to pay its debts as they become absolute and matured, taking into account the possibility of refinancing such obligations and selling assets, (c) such party does not intend to, and does not believe that it will, incur debts or liabilities beyond such party’s ability to pay such debts as they mature taking into account the possibility of refinancing such obligations and selling assets, and (d) such party is not engaged in business or a transaction, and does not intend to engage in business or a transaction, for which such party’s property remaining after such transaction would constitute unreasonably small capital.

 

Section 2.8   Brokers.  Subject to Schedule 2.8, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated hereby based upon arrangements made by or on behalf of VNR.

 

Section 2.9 VNR Status.  VNR is not an employee benefit plan or other organization exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign corporation or other foreign Person, or a regulated investment company within the meaning of Section 851 of the Code.

 

  

  

  

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF

ENDOWMENT, TRUST, NAMI AND VINLAND

As of the Execution Date, and also as of the Closing Date (except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date), each of Endowment, Trust, Nami and Vinland hereby represents and warrants to VNG and VNR as follows:

 

Section 3.1   Organization.

 

(i) Endowment is an irrevocable trust, established under agreement dated January 11, 2007, governed by the Laws of Delaware.

 

(ii) Trust is an irrevocable trust, established under agreement dated January 11, 2007, governed by the Laws of Delaware.

 

(b) Each of Endowment and Trust has all requisite legal and corporate or other entity power and authority, as the case may be, to own, lease and operate its properties and to conduct its businesses as currently owned and conducted, is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it requires it to so qualify.  Each of the Nami Parties has made available to VNR and VNG true and complete copies of the Organizational Documents of each Nami Party, as in effect on the Execution Date.

 

Section 3.2   Validity of Agreement; Authorization.  Each of the Nami Parties has or on the Closing Date and at the time of Closing will have (with respect to all other Transaction Documents to which it is a party), full power and authority to enter into this Agreement and the other Transaction Documents to which it is party and to perform its obligations hereunder and thereunder and to comply with the terms and conditions hereunder and thereunder. The execution and delivery of this Agreement and such other Transaction Documents and the performance by the Nami Parties of their obligations hereunder and thereunder have or will have been duly authorized by the Board of Directors, Trustee or other governing body of each of the Nami Parties, and no other proceedings on the part of any of the Nami Parties are necessary to authorize such execution, delivery and performance. This Agreement and the other Transaction Documents to which any of the Nami Parties is party have been (in the case of this Agreement), or will be at the Closing (in the case of such other Transaction Documents), duly executed and delivered by each of the Nami Parties that is a party thereto, as applicable, and constitute (in the case of this Agreement), or will constitute at the Closing (in the case of such other Transaction Document) such Nami Party’s valid and binding obligation enforceable against each such Nami Party in accordance with its terms.

 

Section 3.3   No Conflict or Violation.  Except as set forth in Schedule 3.3, the execution, delivery and performance of this Agreement and the other Transaction Documents to which each of the Nami Parties is a party does not and will not: (a) violate or conflict with any provision of the Organizational Documents of any Nami Party; (b) violate any applicable Law of any Governmental Authority binding on any Nami Party; (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which any of the Nami Parties is a party or by which any of them in such capacities is bound or to which any of their respective properties or assets are subject; (d) result in the creation or imposition of any Encumbrances, limitations or restrictions upon any of the properties or assets of any of the Nami Parties; or (e) result in the cancellation, modification, revocation or suspension of any consent, license, permit, certificate, franchise, authorization, registration or filing with any Governmental Authority of any of the Nami Parties), except in the case of clauses (c) and (d), as is resolved by any action, consent or waiver of Citibank pursuant to the Vinland Credit Agreement to permit the transactions contemplated by this Agreement the “Vinland Citibank Consent”, which is to be obtained by each of the Nami Parties in accordance with the terms of the Vinland Credit Agreement prior to Closing.

 

Section 3.4   Consents and Approvals.  Except for (i) the Vinland Citibank Consent or (ii) as disclosed on Schedule 3.4, the Nami Parties’ ability to perform their obligations under this Agreement, the Nami Parties’ execution and delivery of this Agreement or the other Transaction Documents to which any of the Nami Parties is party or performance of their respective obligations hereunder or thereunder, does not require the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Person, by any of the Nami Parties.

 

Section 3.5   Ownership of Common Units.  Endowment and Trust are the sole record and beneficial owners of, and have valid title to, their respective Common Units being conveyed hereunder, free and clear of any Encumbrances as of the Closing except for restrictions on transfer arising under applicable securities Laws, matters described on Schedule 3.5, if any, and applicable terms and conditions of the VNR Organizational Documents.  The Common Units have been duly authorized and validly issued in accordance with VNR’S Organizational Documents and are fully paid.  Other than this Agreement there are no outstanding options, warrants or similar rights to purchase or acquire from Endowment or Trust any of the VNR Units.

 

Section 3.6   Litigation.  There are no Legal Proceedings pending or, to the Knowledge of the Nami Parties threatened, against or involving the Nami Parties that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair such Nami Party’s ability to perform its obligations under this Agreement, and there is no order, judgment, injunction or decree of any Governmental Authority outstanding against any of the Nami Parties that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair such Nami Party’s ability to perform its obligations under this Agreement.

 

Section 3.7   Regulatory Matters.

 

(a) None of the Nami Parties is a “public utility company,” “holding company” or “subsidiary” or “affiliate” of a holding company as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

 

(b) None of the Nami Parties is an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 3.8   Solvency.  Each of the Nami Parties is, and immediately after giving effect to the transactions contemplated by this Agreement and the Transaction Documents will be Solvent. For purposes of this Section 3.8, “Solvent” means, with respect to the applicable party on any date of determination, that on such date (a) the fair value of the property of such party is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such party that would constitute liabilities under GAAP, (b) the present fair equivalent value of the assets of such party is not less than the amount that will be required to pay its debts as they become absolute and matured, taking into account the possibility of refinancing such obligations and selling assets, (c) such party does not intend to, and does not believe that it will, incur debts or liabilities beyond such party’s ability to pay such debts as they mature taking into account the possibility of refinancing such obligations and selling assets, and (d) such party is not engaged in business or a transaction, and does not intend to engage in business or a transaction, for which such party’s property remaining after such transaction would constitute unreasonably small capital.

 

Section 3.9   Brokers.  Subject to Schedule 3.9, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated hereby based upon arrangements made by or on behalf of any Nami Party.

 

Section 3.10   Parties Status.  None of the Nami Parties is an employee benefit plan or other organization exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign corporation or other foreign Person, or a regulated investment company within the meaning of Section 851 of the Code.

 

Section 3.11   Knowledge of the Nami Parties; Disclaimer of Additional Representations.  The Nami Parties acknowledge that Vinland Energy Operations, LLC, an Entity connected to Nami, has managed the properties owned by the Operating Entities and, as such, they have had sufficient access to information regarding the operations of the properties owned by the Operating Entities, including the relevant books and records, to enable them to thoroughly evaluate the operations of the properties owned by the Operating Entities and the risks associated therewith.  The Nami Parties further acknowledge that in making their decision to enter into this Agreement and consummate the transactions contemplated by this Agreement, the Nami Parties have relied solely on the basis of their own knowledge and experience, their own independent investigation and the express representations, warranties, covenants and agreements set forth in this Agreement. ACCORDINGLY, EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV, NEITHER VNR NOR VNG MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE OPERATING ENTITIES, OR ANY OF THEIR RESPECTIVE ASSETS, LIABILITIES OR OPERATIONS.

 

Section 3.12   Securities Matters.  The Nami Parties understand that the Membership Interests of TEC and AE have not been registered under any applicable securities law.  The Membership Interests of TEC and AE will only be sold or otherwise disposed of by the Nami Parties pursuant to an exemption under the Securities Act and in compliance with any other applicable securities laws. Each of the Nami Parties is an "accredited investor" (within the meaning of Rule 501(a) under the Securities Act) and is acquiring the Membership Interests of TEC and AE only for its own account and not for the account of others, for investment purposes and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof.  Each of the Nami Parties has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the transactions contemplated by this Agreement.  Each of the Nami Parties is familiar with the operations of the properties owned by the Operating Entities and the many risks inherent in the operation of the business of the Operating Entities.

 

  

  

  

 

ARTICLE IV                                

 

REPRESENTATIONS AND WARRANTIES OF VNG

 AND VNR RELATING TO VNG, TEC AND AE

As of the Execution Date, and also as of the Closing Date (except to the extent that any statement is specifically limited by the terms thereof to the date of this Agreement or another specified date), VNR and VNG hereby make the following representations and warranties to the Nami Parties.  In no event however, will VNR or VNG make any warranty or representation regarding (i) any matter, fact or circumstance disclosed in the VNR SEC Reports, (ii) any matter, fact or circumstance of which any of the Nami Parties has Knowledge or (iii) any matter, fact or circumstance that is or was the subject of any obligations performed or to be performed by Vinland or any affiliate under the Service Agreements.

 

Section 4.1   Organization.  VNG and each of the Operating Entities (i) is a corporation, limited partnership or limited liability company, as the case may be, duly incorporated or formed, as the case may be, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, (ii) has all requisite legal and corporate or other entity power and authority, as the case may be, to own, lease and operate its properties and to conduct its businesses as currently owned and conducted, (iii) has all material governmental licenses, authorizations, permits, consents and approvals required to own, lease and operate its properties and to conduct its businesses as currently owned and conducted, and (iv) is duly qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of its properties requires it to so qualify.

 

Section 4.2   No Conflict or Violation.  VNG’s execution, delivery and performance of this Agreement and the Transaction Documents to which VNG is party does not and will not: (a) violate or conflict with any provision of the Organizational Documents of VNG or either of the Operating Entities; (b) violate any Law of any Governmental Authority binding on VNG or either of the Operating Entities; (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which VNG or either of the Operating Entities is a party or by which any of them is bound or to which any of their respective properties or assets is subject; (d) result in the creation or imposition of any Encumbrance upon the TEC or AE Membership Interests or any of the properties or assets of either of the Operating Entities; or (e) result in the cancellation, modification, revocation or suspension of any consent, license, permit, certificate, franchise, authorization, registration or filing with any Governmental Authority of either of the Operating Entities, except in the case of clauses (c) and (d) as will be resolved by obtaining the Vanguard Citibank Lien Release.

 

Section 4.3   Consents and Approvals.  Except for the Vanguard Citibank Lien Release, the execution and delivery of this Agreement or the other Transaction Documents to which VNG is a party or the performance of its obligations hereunder or thereunder, does not and will not require the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Person.

 

Section 4.4   TEC and AE Capitalization, Membership Interests.

 

(a) As of the Execution Date, no TEC or AE Membership Interests were subject to issuance upon the vesting of outstanding phantom interests.

 

(b) Except as set forth in the current Organizational Documents of each of TEC and AE, there are no preemptive or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of any of the TEC or AE Membership Interests.  There are no outstanding options, warrants or similar rights to purchase or acquire any TEC or AE Membership Interests.  Neither TEC nor AE has any outstanding bonds, debentures, notes or other obligation the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the membership of TEC or AE.

 

Section 4.5   Subsidiaries; Equity Interests; Business of TEC or AE.  Neither TEC nor AE has any Subsidiaries, and neither owns, directly or indirectly, any shares of capital stock, voting rights or other equity interests or investments in any other Person.  Neither TEC nor AE nor VNG for TEC or AE has any obligation or rights to acquire by any means, directly or indirectly, any capital stock, voting rights, equity interests or investments in another Person.  Except for Encumbrances set forth on Schedule 4.5 or those that exist under the Vanguard Credit Agreement, VNG directly owns, all of the issued and outstanding TEC and AE Membership Interests free and clear of any Encumbrances except for restrictions on transfer arising under applicable securities Laws, matters described on Schedule 4.5, if any, and applicable terms and conditions of the TEC and AE Organizational Documents.  The Oil and Gas Properties of TEC and AE are the only such interests owned by VNR, VNG or any direct or indirect Subsidiary of either in Kentucky and/or Tennessee.

 

Section 4.6 Controls.  

 

(a) No member or manager of TEC or AE has received or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or claim, regarding the accounting or auditing practices procedures, methodologies or methods of the Operating Entities or their respective internal accounting controls relating to periods after January 1, 2007, including any material complaint, allegation, assertion or claim that any of the Operating Entities has engaged in questionable accounting or auditing practices, and (ii) no attorney representing the Operating Entities, whether or not employed by the Operating Entities, has reported evidence of a material violation of securities Laws or breach of fiduciary duty, relating to periods after January 1, 2007, by the officers, directors, employees or agents of any of the Operating Entities to the manager(s) or member(s) of the Operating Entities.

 

Section 4.7   Absence of Certain Changes or Events.  Except as set forth on Schedule 4.7 since January 1, 2011, to the Knowledge of VNG, (a) the business of the Operating Entities has been conducted in the ordinary course of business consistent with past practices, (b) there has not been or occurred any event or condition that has had or could reasonably be expected to have a Material Adverse Effect, and (c) the Operating Entities have not suffered any damage, destruction or other casualty loss (whether or not covered by insurance) to their properties or assets that are material to the business of the Operating Entities.

 

Section 4.8 Tax Matters. 

 

(a) For purposes of this Agreement, “Tax Returns” shall mean returns, reports, exhibits, schedules, information statements, declaration, claim for refund, and other documentation (including any additional or supporting material) filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax or provided to any Tax authority, including any amendments thereto.  For purposes of this Agreement, “Tax” or “Taxes” shall mean any and all federal, state, local, foreign and other taxes, levies, fees, imposts and duties of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs duties.

 

(b) Except as disclosed on Schedule 4.8(b), to the Knowledge of VNG,  (i) each of the Operating Entities has timely filed (or joined in the filing of) all Tax Returns required by applicable Law to be filed (taking into account any extensions of time within which to file) by or with respect to each of the Operating Entities; (ii) all such Tax Returns were true, correct and complete in all material respects and all material Taxes have been paid in full; (iii) there is no action, suit, proceeding, investigation, audit, dispute or claim concerning any Taxes of the Operating Entities either claimed or raised by any Tax authority in writing; (iv) none of the Operating Entities has any outstanding request for any extension of time within which to pay its Taxes or file its Tax Returns; (v) there are no outstanding waivers or extensions of any applicable statute of limitations for the assessment or collection of any Taxes of any of Operating Entities; (vi) neither Operating Entity is a party to, or is bound by, any Tax allocation, Tax indemnity, Tax sharing, or similar agreement or arrangement that imposes liability on Operating Entity for the Taxes of another Person; (vii) each of the Operating Entities that is a partnership for federal income Tax purposes has made, or shall be eligible to make, an election pursuant to Section 754 of the Code; (viii) each of the Operating Entities has withheld and paid all Taxes required to be withheld by such Operating Entity in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party; (ix) no material liens for Taxes exist with respect to any of the Operating Entities’ assets, except for statutory liens for Taxes not yet due and payable or that are being contested in good faith and reserved for in accordance with GAAP; and (x) neither Operating Entity has engaged in a transaction that would be reportable by or with respect to any Operating Entity under Treas. Reg. §1.6011-4 or any predecessor thereto.

 

Section 4.9   Absence Of Undisclosed Liabilities.  Except as disclosed on Schedule 4.9, none of the Operating Entities has any indebtedness or liability, absolute or contingent, which is not shown on the TEC Balance Sheet or the AE Balance Sheet that would be required by GAAP to be set forth on the TEC Balance Sheet or the AE Balance Sheet, except those that have been incurred in the ordinary conduct of the business of the Operating Entities between the dates of the TEC Balance Sheet and the AE Balance Sheet and the Closing Date.

 

Section 4.10   Regulatory Matters.

 

(a) None of the Operating Entities is a “public utility company,” “holding company” or “subsidiary” or “affiliate” of a holding company as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

 

(b) None of the Operating Entities is an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

Section 4.11 Books And Records; Other Information.  

 

(a) The minute books and other similar records of the Operating Entities as to periods after April 18, 2007, contain true and correct copies of all actions taken at all meetings of such entity’s equity holders, Board of Directors or other governing body, and all written consents executed in lieu of any such meetings.  Complete copies of all such minute books and other similar records have been made available to the Nami Parties.

 

(b) Since April 18, 2007, the Operating Entities have (i) made and kept books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; and (ii) maintained systems of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) access to assets is permitted only in accordance with management’s general or specific authorization; and (C) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

Section 4.12 Employees; Employee Plans.  

 

(a) None of the Operating Entities currently has any employees, and, except as set forth on Schedule 4.12(a), since April 18, 2007, none of the Operating Entities has had any employees.

 

(b) Except as disclosed on Schedule 4.12(b), the Operating Entities do not sponsor, maintain or contribute to or have an obligation (secondary, contingent or otherwise) to contribute to and, at no time since April 18, 2007, have sponsored, maintained or contributed to or had an obligation to contribute to, any Employee Plans.

 

Section 4.13   Properties, Oil and Gas Matters.

 

(a) For purposes of this Agreement, “Oil and Gas Agreements” means the following types of agreements or contracts to which either of the Operating Entities is a party, whether as an original party, by succession or assignment or otherwise with respect to the Oil and Gas Properties forming the basis for the reserves reflected in the Reserve Report: oil and gas leases, farm-in and farm-out agreements, agreements providing for an overriding royalty interest, agreements providing for a royalty interest, agreements providing for a net profits interest, crude oil or natural gas sales or purchase contracts, joint operating agreements, unit operating agreements, unit agreements, field equipment leases, and agreements restricting any of the Operating Entities’ ability to operate, obtain, explore for or develop interests in a particular geographic area.  Complete copies of all such Oil and Gas Agreements have been made available to the Nami Parties.

 

(b) VNG has furnished to the Nami Parties an internal reserve report containing estimates of the oil and gas reserves that are owned by the Operating Entities as of December 31, 2010 prepared by VNG (the “Reserve Report”).  With respect to the proved reserves reflected in the Reserve Report, the Reserve Report conforms in all material respects to the guidelines with respect thereto of the SEC. Except for changes (including changes in Hydrocarbon commodity prices) generally affecting the oil and gas industry and normal depletion by production, to the Knowledge of VNG there has been no material change in respect of the matters addressed in the Reserve Report.

 

(c) Except for goods and other property sold, used or otherwise disposed of since the date of the Reserve Report in the ordinary course of business as of the date hereof, to the Knowledge of VNG, the Operating Entities own or have valid leases or contractual rights to, all material equipment and other personal property used or necessary for use in the operation of their respective Oil and Gas Properties forming the basis for the reserves reflected in the Reserve Report in the manner in which such properties were operated as of the date hereof.

 

(d) To the Knowledge of VNG, all material proceeds from the sale of Hydrocarbons produced from the Oil and Gas Properties of the Operating Entities are being received by them in a timely manner and are not being held in suspense for any reason.

 

(e) To the Knowledge of VNG and except for any applicable royalty owner reserve or suspense accounts, the Operating Entities have paid all material royalties, overriding royalties and other burdens on production due by the Operating Entities on or before the Effective Date with respect to their respective Oil and Gas Properties forming the basis for the reserves reflected in the Reserve Report.

 

(f) Except as set forth in Schedule 4.13(e) and to the Knowledge of VNG, none of the material Oil and Gas Properties of the Operating Entities forming the basis for the reserves reflected in the Reserve Report is subject to any preferential purchase, consent or similar right that would become operative as a result of the transactions contemplated by this Agreement.

 

(g) Except as set forth in Schedule 4.13(e), none of the Oil and Gas Properties of the Operating Entities forming the basis for the reserves reflected in the Reserve Report are subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Code.

 

(h) None of the Operating Entities has received any material advance, take-or-pay or other similar payments that entitle purchasers of production from the Oil and Gas Properties forming the basis for the reserves reflected in the Reserve Report to receive deliveries of Hydrocarbons without paying therefore, and, on a net basis, Operating Entities are neither underproduced nor overproduced, in either case, to any material extent, under gas balancing or similar arrangements, except as set forth in Schedule 4.13(g).

 

Section 4.14   Environmental Matters.  Except as set forth in Schedule 4.14 and except as would not reasonably be expected to have a Material Adverse Effect:

 

(a) To the Knowledge of VNG, each of the Operating Entities has obtained all material permits, licenses, franchise authorities, consents and approvals, made all material filings and maintained all material data, documentation and records necessary for owning and operating its assets and business as it is presently conducted under all applicable Environmental Laws, and all such permits, licenses, franchises, authorities, consents, approvals and filings remain in full force and effect, and are issued in the correct entity’s name, and there are no circumstances existing that could reasonably be expected to result in such permits, licenses, franchises, authorities, consents, approvals and filings being revoked or not renewed or in pending applications for such permits, licenses, franchises, authorities, consents, approvals and filings being denied.

 

(b) VNG has made available to the Nami Parties all internal and external environmental assessments, reports, audits and studies and all correspondence on environmental matters relating to the Operating Entities’ properties, assets, and operations that are reasonably expected to have a material impact that are known to them to be in the possession, custody, or control of or otherwise reasonably available to VNG.

 

(c) Notwithstanding anything to the contrary contained elsewhere in this Agreement, no statement or representation is made in this Agreement regarding any compliance or failure to comply with, or any actual or contingent liability under, or claims, demands, actions, proceedings, lawsuits or investigations with respect to any Environmental Law, except as set forth in this Section 4.14.

 

Section 4.15   Derivative Transactions and Hedging.  Since April 18, 2007, none of the Operating Entities has entered into any commodity or financial hedging positions affecting any of the Operating Entities pursuant to which the Operating Entities has outstanding rights or obligations (collectively, “Derivative Transactions”).

 

Section 4.16 Material Contracts.  

 

(a) As of the date of this Agreement, except for (i) contracts filed as an exhibit to or incorporated by reference in a VNR SEC Report filed prior to the Execution Date, (ii) contracts related to properties or operations that have been, or are under contract to be, purchased or sold or otherwise disposed of or are in the process of being purchased or sold or otherwise disposed of to the extent such sales and/or dispositions have been disclosed in VNR SEC Reports, or (iii) as otherwise set forth on Schedule 4.16(a), none of the Operating Entities is a party to or bound by any contract (whether written or oral) that is:

 

(i) Any contract that would be a  “material contract” as to VNR (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC);

 

(ii) a loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture or other binding commitment other than the Vanguard Credit Agreement;

 

(iii) a contract that purports to limit materially the right of any of the Operating Entities to engage or compete in any line of business in which any of the Operating Entities is engaged or to compete with any person or operate in any location;

 

(iv) a contract that creates a partnership or joint venture or similar arrangement (other than a joint operating agreement entered into in the ordinary course of business) with respect to any significant portion of the business of the Operating Entities taken as a whole;

 

(v) a settlement or similar agreement with any Governmental Authority or order or consent of a Governmental Authority involving future performance by any of the Operating Entities that is material to the Operating Entities taken as a whole;

 

(vi) an executory contract which includes the acquisition or sale of assets (whether by merger, sale of stock, sale of assets or otherwise).

 

All contracts of the type described in this Section 4.16(a) together with the contracts for the sale of Hydrocarbons produced from any of the Operating Entities’ Oil and Gas Properties described in the Reserve Report that are not terminable on 90 days or less notice without payment by either of the Operating Entities of any material penalty and are set forth on Schedule 4.16(a), are referred to herein as the “Operating Entities Material Contracts.”

(b) Other than as a result of the expiration or termination of any Operating Entities Material Contract in accordance with its terms and except as would not have either individually or in the aggregate a Material Adverse Effect, (i) each Operating Entities Material Contract is valid and binding on each of the Operating Entities that is a party thereto, as applicable, and is in full force and effect and enforceable in accordance with its terms against such Operating Entity and, to the Knowledge of VNG, is valid and binding on the other party or parties thereto, and in full force and effect and enforceable against such other parties thereto, (ii)  each of the Operating Entities has performed all material obligations required to be performed by it to date under each Operating Entities Material Contract, and (iii) to the Knowledge of VNG, none of the Operating Entities has received notice of, and VNG has no Knowledge of the existence of any event or condition which constitutes, or, after notice or lapse of time or both, would constitute, a material default on the part of any of the Operating Entities or of any other party under any such Operating Entities Material Contract.

 

Section 4.17   Litigation.  Except as set forth on Schedule 4.17, there are no Legal Proceedings pending or, to the Knowledge of VNG, threatened, against or involving the Operating Entities.  Except as set forth on Schedule 4.17, there is no order, judgment, injunction or decree of any Governmental Authority outstanding against any of the Operating Entities that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transactions contemplated by this Agreement or to impair VNG’s ability to perform its obligations under this Agreement.

 

Section 4.18  Balance Sheets.  

 

(a) The balance sheet attached hereto as Exhibit A relating to TEC (the “TEC Balance Sheet”) is, to the Knowledge of VNR and VNG, a true and correct statement of:

 

(i) all amounts owed as of December 31, 2011, by TEC to any Person, including all long term, short term, revolving, intercompany, vendor or trade creditor obligations (other than those represented by the Vanguard Credit Agreement) and including all amounts due to land owners, or other interest owners including suspense amounts;

 

(ii) all accounts receivable and amounts owed to TEC as of December 31, 2011; and

 

(iii) all cash and cash equivalents as of December 31, 2011 held in suspense for landowners or other interest owners.  For avoidance of doubt, all cash and equivalents and all accounts receivable and amounts owed to TEC as of December 31, 2011, less any sums held in suspense and any accounts payable (including without limitation trade and vendor claims) or liabilities associated with periods prior to the Effective Date, will be distributed to VNG on or before the Closing Date.

 

(b) The balance sheet attached hereto as Exhibit B relating to AE (the “AE Balance Sheet”) is, to the Knowledge of VNR and VNG, a true and correct statement of:

 

(i) all amounts owed as of December 31, 2011, by AE to any Person, including all long term, short term, revolving, intercompany, vendor or trade creditor obligations (other than those represented by the Vanguard Credit Agreement) and including all amounts due to land owners, or other interest owners including suspense amounts;

 

(ii) all accounts receivable and amounts owed to AE as of December 31, 2011; and

 

(iii) all cash and cash equivalents as of December 31, 2011 held in suspense for landowners or other interest owners.  For avoidance of doubt, all cash and equivalents and all accounts receivable and amounts owed to AE as of December 31, 2011, less any sums held in suspense and all accounts payable (including without limitation trade and vendor claims) or liabilities associated with periods prior to the Effective Date, will be distributed to VNG on or before the Closing Date.

 

Section 4.19   Brokers.  No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated hereby based upon arrangements made by or on behalf of VNG.

 

Section 4.20   VNG Status.  VNG is not an employee benefit plan or other organization exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign corporation or other foreign Person, or a regulated investment company within the meaning of Section 851 of the Code.

 

  

  

  

ARTICLE V                                

 

COVENANTS

 

Section 5.1   Conduct of Business.

 

(a) Except as required under applicable Law or by any Governmental Authority or to the extent the Nami Parties otherwise consents in writing (which consent shall not be unreasonably withheld), during the period from the Execution Date to the Closing Date, VNG shall not, and VNR shall not permit, any action to prevent the Operating Entities from:

 

(i) conducting their activities in the ordinary course of business consistent with past practice;

 

(ii) using commercially reasonable efforts to preserve intact their goodwill and relationships with customers, suppliers and others having business dealings with them with respect thereto;

 

(iii) complying in all material respects with all applicable Laws relating to them;

 

(iv) using commercially reasonable efforts to maintain in full force without interruption their present insurance policies, or comparable insurance coverage; and

 

(v) promptly notifying the Nami Parties of any material change in the condition or business or any material litigation or proceedings (including arbitration and other dispute resolution proceedings) or material government complaints, investigations, inquiries or hearings (or communications indicating that the same may be contemplated) or any material developments in any such litigation, proceedings, complaints, investigations, inquiries or hearings.

 

(b) Without limiting the generality of the foregoing, and except as contemplated by this Agreement, or as required by applicable Law or by any Governmental Authority, prior to the Closing Date, without the prior written consent of the Nami Entities (which consent shall not be unreasonably withheld), VNG shall not permit the Operating Entities to:

 

(i) modify, amend or voluntarily terminate, prior to the expiration date thereof, any Material Contract or waive any material default by, or release, settle or compromise any material claim against, any other party thereto, other than as may be required in connection with  obligations of VNG and VNR to the Nami Parties under this Agreement;

 

(ii) make any change in their Organizational Documents;

 

(iii) make any material change in their Tax methods, principles or elections;

 

(iv) increase the compensation or benefits (except for normal increases in the ordinary course of business consistent with past practice) of any director, officer or employee of any Operating Entity or (B) establish any new employee benefit plan, contract or arrangement for employees of any such entities;

 

(v) enter into any joint venture or similar arrangement with a third party;

 

(vi) settle any claims, demands, lawsuits or state or federal regulatory proceedings for damages to the extent such settlements in the aggregate assess damages in excess of $50,000 (other than claims, demands, lawsuits or proceedings to the extent insured (net of deductibles), reserved against in the Operating Entities’ financial statements or covered by an indemnity obligation not subject to dispute or adjustment from a solvent indemnitor) or (B) settle any claims, demands, lawsuits or state or federal regulatory proceedings seeking an injunction or other equitable relief; or

 

(vii) make any material change to its financial reporting and accounting methods other than as required by a change in GAAP.

 

Section 5.2 Access To Properties And Records.  

 

(a) VNG and VNR shall use all commercially reasonable efforts to facilitate each of the Operating Entities (i) affording to the Nami Parties and their accountants, counsel, financial advisors and other representatives (collectively “Nami Parties”), upon reasonable advance notice to the Operating Entities reasonable access during normal business hours throughout the period commencing on the Execution Date and ending on the Closing Date (or the earlier termination of this Agreement pursuant to Article VII hereof) to all personnel, offices, books, contracts, and records of Operating Entities and their agents, including legal representatives, accountants and environmental and engineering consultants, and (ii) during such period, furnishing promptly to the Nami Parties all financial and operating data and all other information concerning the business, properties, liabilities and personnel of any of the Operating Entities that the Nami Parties may reasonably request.

 

(b) Subject to the execution of a mutually agreeable confidentiality agreement, VNG and VNR shall use all commercially reasonably efforts to facilitate each of the Operating Entities (i) affording to the Nami Parties and their accountants, counsel, financial advisors and other representatives upon reasonable advance notice to VNG, reasonable access during normal business hours throughout the period commencing on the Execution Date and ending on the Closing Date (or the earlier termination of this Agreement pursuant to Article VII hereof) to all personnel, offices, books, contracts, and records of each of the Operating Entities and their agents, including legal representatives, accountants and environmental and engineering consultants, and (ii) during such period, furnishing promptly to Seller all financial and operating data and all other information concerning the business, properties, liabilities and personnel of any of the Operating Entities as Seller may reasonably request.

 

Section 5.3   Consents And Approvals.

 

(a) VNR and VNG shall each use all commercially reasonable efforts to obtain, and will use all commercially reasonable efforts to facilitate the Operating Entities being able to obtain, or assist the Nami Parties in obtaining, as appropriate, prior to the Closing Date (or the earlier termination of this Agreement pursuant to Article VII hereof), all necessary consents, licenses or permits from Governmental Authorities (including operator permits), waivers, orders, authorizations and approvals of all Governmental Authorities and of all other Persons required in connection with the execution and delivery of, and performance by such Party of its obligations under, this Agreement (including obtaining the Vanguard Citibank Lien Release), and will cooperate fully with the Nami Parties in promptly seeking to obtain all such authorizations, consents, licenses, permits, orders, waivers and approvals, giving such notices, and making such filings.

 

(b) The Parties agree to cooperate with each other and use reasonable best efforts to contest and resist, any Legal Proceeding, and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent of any Governmental Authority that is in effect and that restricts, prevents or prohibits the consummation of the transactions contemplated by this Agreement.

 

Section 5.4   Further Assurances.  Upon the request of any Party at any time on or after the Closing Date, each of the other Parties will promptly execute and deliver, such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as the requesting Party or its counsel may reasonably request in order to perfect title of each relevant Party, and its successors and assigns to the Member Interests and the Common Units or otherwise to effectuate the purposes of this Agreement.

 

Section 5.5   Commercially Reasonable Efforts.  Upon the terms and subject to the conditions of this Agreement, each of the Parties will use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with applicable Law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby.

 

Section 5.6 Notice Of Certain Events.  

 

(a) Each Party shall give to the other Parties written notice (a “Notification”) promptly upon a matter, fact or circumstance that constitutes a Breach by the notifying Party becoming within the Knowledge of the notifying Party, specifying with particularity such Breach.  Except as provided in this Agreement, such Notification will not modify or otherwise affect in any manner the representations, warranties, agreements, obligations or covenants of the Parties or the conditions to the obligations of the Parties under this Agreement and will not be deemed to amend any Schedules hereto or to cure any related breaches of the representations, warranties, agreements, obligations or covenants contained in this Agreement.

 

(b) Each Party shall give to the other Parties written notice (also a “Notification”) promptly upon:

 

(i) a matter, fact or circumstance that constitutes a Breach by the other Parties becoming within the Knowledge of the notifying Party, specifying with particularity such Breach, provided such Notification will not affect any representation or warranty of the other Parties, or the notifying parties right to rely thereon;

 

(ii) receiving any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

 

(iii) receiving any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; or

 

(iv) within the Knowledge of the notifying Party any Legal Proceedings are commenced that would be reasonably expected to prevent or materially delay the consummation of the transactions contemplated by this Agreement or materially impair the notifying Party’s ability to perform its obligations under this Agreement.

 

Section 5.7 Tax Covenants. 

 

(a) For all tax periods that begin before the Effective Date and end on or before the Effective Date (the “Pre-Effective Date Period”), VNG shall prepare and timely file all Tax Returns for the Operating Entities (each of the foregoing, a “Pre-Effective Date Period Return”).  Each such Pre-Effective Date Period Return shall be prepared in a manner consistent with past practice, except as otherwise required by applicable Tax Law.  VNG shall be responsible for the cost and expense of preparing and filing all Pre-Effective Date Period Returns.

 

(b) For all tax periods that end after the Effective Date (the “Post-Effective Date Period”), the Nami Parties shall cause the Operating Entities to prepare and timely file all Tax Returns for the Operating Entities (each of the foregoing, a “Post-Effective Date Period Return”).  The Operating Entities shall be responsible for the cost and expense of preparing and filing all Post-Effective Date Period Returns.

 

(c) After the Closing Date, the Parties shall make available to each other, as reasonably requested, and to any taxing authority, which is legally permitted to receive pursuant to its subpoena power or its equivalent, all information, records or documents relating to Tax liabilities or potential Tax liabilities of the Operating Entities for all periods prior to or including the Effective Date and shall preserve all such information, records and documents until the expiration of any applicable statute of limitations for assessment or refund of Taxes, including any extensions, tollings or suspensions thereof.  After the Closing Date, the Parties shall cooperate fully as and to the extent reasonably requested by the other, in connection with the filing of Operating Entity Tax Returns pursuant to this Section 5.7 and any audit, litigation, appeal, hearing or other proceeding with respect to Operating Entity Taxes.  Such cooperation shall include providing the information, records and documents described above and any other books, records and information appropriate to the preparation or review of an Operating Entity Tax Return and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided.

 

(d) Any sales tax, use tax, real property transfer tax, documentary stamp tax, transfer tax, motor vehicle tax, registration tax or similar tax or recording expense or other charge, expense or fee attributable to, imposed upon or arising directly from the consummation of the transactions contemplated hereby (collectively, the “Transfer Taxes”) shall be paid one half each by VNG and the Nami Parties.  The Nami Parties shall file all Tax Returns with respect to such Transfer Taxes, charges, expenses and fees, and if requested by the Nami Parties, VNG shall execute and deliver such certificates or forms as may be necessary and appropriate for the Nami Parties to establish an exemption from (or otherwise reduce) such Transfer Taxes, charges, expenses and fees.  The Nami Parties will use reasonable best efforts to provide such Tax Returns to VNG at least ten days prior to the due date for such Tax Returns.  Upon the filing of Tax Returns in connection with Transfer Taxes, the Nami Parties shall provide VNG with evidence satisfactory to VNG that such Transfer Taxes have been filed and paid.

 

Section 5.8   Vanguard Credit Agreement.  If required by the Vanguard Credit Agreement, VNG and VNR will use commercially reasonable efforts to obtain the written consent to, and/or waivers of default or amendment of the Vanguard Credit Agreement in connection with, the transactions contemplated by this Agreement from the Administrative Agent named in, and the required other lenders party to the Vanguard Credit Agreement. VNG and/or VNR shall pay any fee required by the Vanguard Lenders to be paid in order to secure the Vanguard Citibank Lien Release.

 

Section 5.9   Vinland Credit Agreement.  The Nami Parties will use commercially reasonable efforts to obtain the written consent to, lien releases, and/or waivers of default or amendment of the Vinland Credit Agreement to facilitate and in connection with, the transactions contemplated by this Agreement from the Administrative Agent named in, and the required other lenders party to the Vanguard Credit Agreement.  The Nami Parties shall pay any fee required to be paid in order to secure the Vinland Citibank Consent.

 

Section 5.10 Books and Records; Financial Statements; Litigation Support.  

 

(a) The Nami Parties shall provide VNG and VNR access to the accounting books and records relating to the Operating Entities to the extent reasonably necessary to enable them to prepare financial statements of in such forms and covering such periods as may be required by any applicable securities laws to be filed with the SEC by VNR or VNG in connection with or as a consequence of the transactions contemplated by this Agreement.

 

(b) In the event and for so long as any Party actively is contesting or defending against any third-party Legal Proceeding in connection with (i) the transactions contemplated by this Agreement or (ii) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving the Operating Entities, each of the other Parties will cooperate with it and its counsel in the contest or defense, make available their personnel, and provide such testimony and access to their books and records as shall be reasonably requested and necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending Party; provided, however, that nothing in this Section 5.10(b) shall limit in any respect any rights a Party may have with respect to discovery or the production of documents or other information in connection with any such litigation.

 

Section 5.11   Migration of Records; Information.  From and after the Closing Date, as soon as reasonably practicable VNR and VNG shall or shall cause the Operating Entities to transfer to the Nami Parties all books, records and information, including copies of all maps, surveys, drawings, technical data, geographical and engineering data, programs, customer lists, business plans, marketing studies, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form, including electronic form, whether or not specifically listed herein, related to the business, assets or operations of the Operating Entities (collectively, the “Operating Entities Records”) to the extent any such Operating Entities Records are in the possession of any of the VNR or VNG Parties following the Closing.  Specifically, and without limiting the foregoing, VNR and VNG shall, and shall cause their Affiliates to, as soon as reasonably practicable following the Closing Date, transfer all property or oil and gas related information related to Operating Entity stored in any VNG’s or VNR’s software, including information related to project data management, well log analysis, mapping, cross-sections, seismic integration and interpretation, production and reservoir analysis, and 3D visualization Notwithstanding the foregoing in this Section 5.11,  VNR and VNG may retain copies of all books, records and information necessary to fulfill their obligations regarding SEC filings and taxes and for any other proper purpose.

 

Section 5.12  Payments with respect to Pre-Effective Date Revenues. The Nami Parties will ensure that all proceeds, income or revenues attributable to the operation of the Oil and Gas Properties for any period prior to the Effective Date received by TEC or AE from time to time will be paid to VNG promptly after receipt, but in no event later than the end of the calendar month following the month in which such proceeds, income or revenues are received. Such payments will be reduced by (i) all expenses, including but not limited to severance taxes, operating expenses and transportation expenses, paid by TEC or AE to third parties after the Effective Date that are attributable to the operation of the Oil and Gas Properties during December, 2011, calculated in accordance with historical practice and (ii) unbilled gathering and processing costs to be paid by TEC or AE to third parties after the Effective Date that accrue after November 1, 2011 and prior to December 31, 2011 and that are attributable to the operation of the Oil and Gas Properties.

 

Section 5.13 VNR Quarterly Distribution.  Endowment and Trust shall each receive from VNR the regular, quarterly distribution for the Common Units being sold hereunder attributable to the quarter ending December 31, 2011, having a record date of February 5, 2012. Endowment and Trust shall not receive from VNR any further distributions attributable to the Common Units being sold hereunder.

 

  

  

  

ARTICLE VI                                

 

CONDITIONS TO CLOSING

 

Section 6.1   Shared Conditions to the Parties’ Obligations.  The obligation of the Parties to proceed with the Closing contemplated hereby is subject to the satisfaction on or prior to the Closing Date of all of the following conditions, any one or more of which may be waived, in whole or in part, by a written waiver executed by the waiving Party or Parties:

 

(a) No Order.  No preliminary or permanent injunction or other order issued by any Governmental Authority that declares this Agreement or any of the Transaction Documents invalid or unenforceable in any respect or that prohibits, restrains or enjoins the consummation of the transactions contemplated hereby or thereby shall be in effect; and no action or other proceeding before any Governmental Authority shall be pending or have been threatened that seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or any of the Transaction Documents or that challenges the validity or enforceability of this Agreement or any of the Transaction Documents; provided that all Parties shall have used commercially reasonable efforts to have any such preliminary or permanent injunction or other order lifted or to contest any action or other proceeding before any Governmental Authority and such preliminary or permanent injunction or other order has not been lifted within 30 days after the entry thereof (or if earlier on the Closing Date) or such action or other proceeding is still pending 30 days following the commencement thereof (or if earlier on the Closing Date).

 

Section 6.2   Conditions to Nami Parties’ Obligations.  The obligations of the Nami Parties to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived in writing by the Nami Parties in its sole discretion:

 

(a) Receipt Of Documents.  VNG and VNR shall have delivered, or be standing ready to deliver, to the Nami Parties the items specified in Section 1.2 to be delivered by them, in each case duly executed and dated the Closing Date.

 

(b) No Material Adverse Effect.  Since the date hereof there shall not have occurred a Material Adverse Effect with regard to the Operating Entities.

 

(c) MAE Certificates.  The Nami Parties shall have received a certificate, dated as of the Closing Date, of an executive officer of each of VNR and VNG certifying that to the Knowledge of VNR and VNG no Material Adverse Effect has occurred with regard to the Operating entities.

 

(d) Representations and Warranties of VNG and VNR.  All representations and warranties made by VNG and VNR in this Agreement shall be true and correct in all material respects on and as of the date hereof and, except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date, on the Closing Date as if again made by VNR and VNG on and as of the Closing Date.

 

(e) Performance of VNR and VNG’s’ Obligations.  VNG and VNR shall have performed in all material respects all agreements, obligations and covenants required under this Agreement to be performed by them on or before the Closing Date, and the Nami Parties shall have received a certificate dated the Closing Date and signed by an executive officer of each of VNR and VNG certifying to the matters set forth in this Section 6.2.

 

(f) Consents and Approvals.  All consents, waivers, authorizations and approvals set forth on Schedule 2.3 (No Conflict or Violation), Schedule 2.4 (Consents and Approvals), or Schedule 3.3 (No Conflict or Violation), shall have been duly obtained, shall contain terms reasonably satisfactory to the Nami Parties and shall be in full force and effect on the Closing Date and copies thereof shall have been provided to the Nami Parties at Closing.

 

(g) Vanguard Citibank Lien Release.  VNR and VNG shall have obtained the Vanguard Citibank Lien Release.

 

(h) Vinland Citibank Consent.  The Nami Parties shall have obtained the Vinland Citibank Consent.

 

Section 6.3   Conditions to Obligations of VNR and VNG.  The obligations of the VNR and VNG to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived in writing by VNR and VNG in their sole discretion:

 

(a) Receipt of Common Units.  The Nami Parties shall deliver or stand ready to deliver the Common Units to VNR, and the items specified in Section 1.2 to be delivered by them, in each case duly executed and dated the Closing Date.

 

(b) Representations and Warranties of Nami Parties.  All representations and warranties made by the Nami Parties in this Agreement shall be true and correct in all material respects on and as of the date hereof and, except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date, on the Closing Date as if again made by the Nami Parties on and as of the Closing Date.

 

(c) Performance of the Nami Parties’ Obligations.  The Nami Parties shall have performed in all material respects all agreements, obligations and covenants required under this Agreement to be performed by them on or before the Closing Date, and VNR and VNG shall have received a certificate dated the Closing Date and signed by an executive officer of each of the Nami Parties certifying to the matters set forth in this Section 6.3(c).

 

(d) Consents and Approvals.  All consents, waivers, authorizations and approvals set forth on Schedule 2.3 (No Conflict or Violation), Schedule 2.4 (Consents and Approvals), Schedule 3.4 (Consents and Approvals), shall have been duly obtained, shall contain terms reasonably satisfactory to the VNR and VNG and shall be in full force and effect on the Closing Date and copies thereof shall have been provided to VNR and VNG at Closing.

 

(e) Receipt of Documents.  The Nami Parties shall have delivered to the VNR and VNG, as applicable, the items specified in Section 1.2, in each case duly executed and dated the Closing Date.

 

(f) Vanguard Citibank Lien Release.  VNR and VNG shall have obtained the Vanguard Citibank Lien Release.

 

(g) Vinland Citibank Consent.  The Nami Parties shall have obtained the Vinland Citibank Consent.

 

  

  

  

ARTICLE VII                                

 

TERMINATION

 

Section 7.1   Methods Of Termination.  This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time before the Closing:

 

(a) by the mutual written agreement of the Parties;

 

(b) by written notice from VNR and VNG to the Nami Parties specifying with particularity the applicable Breach, if Nami Parties have committed a Breach, and such Breach would result in the failure of any condition to Closing set forth in Section 6.3(c); provided, if such Breach is curable through the exercise of commercially reasonable efforts, then VNR and VNG may only terminate this Agreement if such Breach is not cured by the Nami Parties, within thirty (30) days after the receipt by a party of a Notification provided pursuant to Section 9.4 specifying with particularity such Breach; provided, further, that any right of the Nami Parties, to cure a Breach will terminate on the Outside Date;

 

(c) by written notice from the Nami Parties to VNR and/or VNG specifying with particularity the applicable Breach, if VNR and/or VNG have committed a Breach, and such Breach would result in the failure of any condition to Closing set forth in Section 6.3(b); provided, if such Breach is curable through the exercise of commercially reasonable efforts, then the Nami Parties may only terminate this Agreement if such Breach is not cured by VNR and/or VNC, as applicable, within thirty (30) days after the receipt of a Notification provided pursuant to Section 9.4 specifying with particularity such Breach; provided, further, that any right of VNR and/or VNG, as applicable, to cure a Breach will terminate on the Outside Date;

 

(d) by written notice from either the Nami Parties or VNR and/or VNG to the other Party, if any condition to the terminating Party’s obligation to proceed with the Closing is not satisfied on or before the Outside Date, or if satisfied prior thereto, does not remain satisfied on the Closing Date, and non-satisfaction of such condition was not the result of the other Party’s Breach, provided that no Party whose Breach has resulted in a condition to such Party’s obligation to proceed with Closing not being satisfied will have the right to terminate this Agreement under this Section 7.1(d);

 

(e) by written notice from the Nami Parties to VNR and/or VNG, if after the date of this Agreement a Material Adverse Effect has occurred and is continuing;

 

(f) by written notice from the Nami Parties to VNR and/or VNG upon the occurrence of any of the following actions by Operating Entities, unless the Nami Parties consent in writing within twenty Business Days from the receipt of written notice from the VNG and/or VNR of the intent of the Operating Entities to effect such event:

 

(i) the issuance, delivery, sale, pledge or disposition of any (A) equity securities or partnership units of any class, (B) debt securities having the right to vote on any matters on which holders of capital stock or members or partners of the same issuer may vote or (C) securities convertible into or exercisable for, or any rights, warrants, calls or options to acquire, any such securities;

 

(ii) the creation, incurrence, guarantee or assumption any new indebtedness for borrowed money in excess of $50,000 in the aggregate;

 

(iii) the acquisition of any material properties or assets in excess of $50,000 in the aggregate;

 

(iv) the making of any capital expenditures in excess of $ 50,000 in addition to the amounts of capital expenditures that were included in the 2011 budget;

 

(v) the entering into of any leases of real property, other than renewals of existing leases in the ordinary course of business, the net present value (calculated at the weighted average interest rate on the Partnership’s indebtedness) of which exceeds $50,000; and

 

(vi) the sale of any assets with proceeds to the Operating Entities in excess of $50,000 in the aggregate.

 

Any of the foregoing actions that are consented to by the Nami entities pursuant to this Section 7.1(f) shall not be the basis for the Nami Entities to assert either that VNG and/or VNR have committed a Breach for any purpose under this Agreement, or that any condition to Closing would fail or has failed as a result of such action.

Section 7.2   Effect Of Termination.  The following provisions shall apply in event of a termination of this Agreement:

 

(a) If the Nami Parties have the right to terminate this Agreement pursuant to Section 7.1 (c) or (f) and VNG and/or VNR does not have the right to terminate this Agreement, then the Nami Parties may elect either to (i) specifically enforce the covenants and obligations of VNG and/or VNR under this Agreement, or (ii) terminate this Agreement.

 

(b) If VNR or VNG has the right to terminate this Agreement pursuant to Section 7.1(b) or (d) and the Nami Parties do not have the right to terminate this Agreement, then VNR and/or VNG may elect either to (i) specifically enforce the covenants and obligations of the Nami Parties under this Agreement or (ii) terminate this Agreement.

 

(c) In the event of termination of this Agreement pursuant to Section 7.1 hereof, this Agreement shall become void and there shall be no other liability hereunder on the part of VNR, VNG or the Nami Parties (or their respective officers or directors).

 

(d) Each of the Parties hereto acknowledges and agrees that in the event that the other Party has the right to terminate this Agreement then the other Party shall be entitled as an election of remedies, and instead of terminating this Agreement, to seek an injunction or injunctions to prevent Breach by the acknowledging Party, and to specifically enforce the covenants and obligations of the acknowledging Party to be performed at Closing, in any courts of the Commonwealth of Kentucky, and in the federal courts of the United States of America, in each case located in Fayette County, Kentucky.

 

  

  

  

ARTICLE VIII                                           

 

SURVIVAL; INDEMNIFICATION

 

Section 8.1  Survival. 

 

(a) The representations, warranties and covenants of the Nami Parties, Nami and Vinland as applicable, contained herein or in any certificates or other documents delivered pursuant to this Agreement on the Closing Date shall survive the Closing for the period of the relevant statute of limitation.

 

(b) The representations, warranties and covenants of VNR and VNG contained herein or in any certificates or documents delivered pursuant to this Agreement or the Closing shall survive for the period of the relevant statute of limitation, provided that the representations and warranties of VNR and VNG contained in Article IV of this Agreement, or any representations and warranties of VNR and VNG related to the representations and warranties contained in Article IV which are made in any certificates or documents delivered pursuant to this Agreement or the Closing, shall survive the Closing for a period of eighteen (18) months and shall thereupon expire.

 

Section 8.2  Indemnification Coverage.  

 

(a) From and after the Closing, the Nami Parties, Nami and Vinland, jointly and severally, shall indemnify and defend, save and hold VNR and VNG and each of their respective officers, directors, employees and agents (collectively, the “Vanguard Indemnified Parties”) harmless if any such Vanguard Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys’, consultants’ and experts’ fees), claim or cause of action (each, a “Loss,” and collectively, “Losses”) arising out of, relating to or resulting from:

 

(i) any breach or inaccuracy in any representation or warranty by the Nami Parties contained in this Agreement or any certificates or other documents delivered by any Nami Party pursuant to this Agreement at the Closing;

 

(ii) any failure by the Nami Parties to perform or observe any term, provision, covenant, or agreement on the part of the Nami Parties to be performed or observed under this Agreement or any other Transaction Documents;

 

(iii) Taxes of any of the Nami Parties and all Taxes (or nonpayment thereof) of the Operating Entities that are attributable to any period following the Effective Date;

 

(iv) any claim or demand for reimbursement or an accounting from Vinland against VNR or VNG relating to Vinland’s past operation of the Oil and Gas Properties or its business dealings with VNR, VNG or the Operating Entities;

 

(v) that certain litigation styled Asher Land and Mineral, Ltd. v. Nami Resources Company, LLC, Commonwealth of Kentucky, Bell Circuit Court, Civil Action No. 06-CI-0566 or otherwise in connection with the matters asserted by the plaintiff in such litigation; and

 

(vi) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of the Nami Parties or any of their Affiliates.

 

(b) From and after the Closing, VNR and VNG shall jointly and severally indemnify and defend, save and hold the Nami Parties, Nami and Vinland together with their respective officers, directors, employees and agents, including the Operating Entities, (collectively, the “Nami Indemnified Parties”) harmless if any such Nami Indemnified Party shall suffer any Loss arising out of, relating to or resulting from:

 

(i) any breach or inaccuracy in any representation or warranty by VNR or VNG contained in this Agreement or any certificates or other documents delivered by VNR or VNG pursuant to this Agreement at the Closing;

 

(ii) any failure by VNR or VNG to perform or observe any term, provision, covenant, or agreement on the part of VNR or VNG to be performed or observed under this Agreement;

 

(iii) any broker or other Person claiming to be entitled to an investment banker’s, financial advisor’s, broker’s, finder’s or similar fee or commission in respect of the execution of this Agreement or the consummation of the transactions contemplated hereby, by reason of the claiming Person acting at the request of VNR, VNG or any of their respective Affiliates;

 

(iv) all Taxes (or nonpayment thereof) of the Operating Entities that are attributable to the period commencing April 18, 2007 and ending on the Effective Date ; and

 

(c) The amount of any Losses suffered by a Vanguard Indemnified Party or a Nami Indemnified Party, as the case may be (such party seeking indemnification pursuant to this Article, the “Indemnified Party,” and the other party, the “Indemnifying Party”), shall be reduced by any third-party insurance benefits or third party recoveries actually received by the Indemnified Party with respect to such Loss (net of costs incurred to recover such insurance benefits and third party recoveries, deductibles, and retro premiums).  To the extent an Indemnified Party suffers Losses for which the Indemnifying Party is liable for indemnification, the Indemnified Party shall submit a claim to collect any amounts available under third-party insurance coverage and from other third parties reasonably liable for any Loss suffered by the Indemnified Party.

 

(d) The maximum aggregate liability of VNR and VNG for all claims under Section 8.2(b)(i) of this Agreement with respect to the breach of representations or warranties made or described in Article IV of this Agreement shall be no greater than $5,000,000. No party shall be liable for Losses for the breach of its respective representations and warranties under this Agreement unless and until, and then only to the extent that, the aggregate amount of all such Losses shall exceed the sum of $1,000,000.

 

(e) No claim may be asserted nor may any action be commenced against any Party for breach or inaccuracy of any representation or breach of a warranty, unless written notice of such claim or action is received by the other Party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or action on or prior to the date on which the representation or warranty on which such claim or action is based ceases to survive as set forth in Section8.1.

 

(f) No Indemnified Party shall be entitled under this Agreement to multiple recoveries for the same Losses.

 

(g) If the Closing occurs, no Indemnified Party is entitled to indemnification or any other recovery under this Agreement with respect to any breach or inaccuracy in any representation or warranty of an Indemnifying Party (A) that would have given the Indemnified Party a right to terminate this Agreement under Section 8.1 of this Agreement, and (B) of which the Indemnified Party had Knowledge before the Closing.

 

Section 8.3   Procedures.  Any Indemnified Party shall notify the Indemnifying Party (with reasonable detail) promptly after it becomes aware of facts supporting a claim or action for which indemnification is provided under this Article VIII, and shall provide to the Indemnifying Party as soon as practicable thereafter all reasonably available information and documentation necessary to support and verify any Losses associated with such claim or action.  The failure to so notify or provide information to the Indemnifying Party shall not relieve the Indemnifying Party of any liability that it may have to any Indemnified Party, except to the extent that the Indemnifying Party demonstrates that it has been materially prejudiced by the Indemnified Party’s failure to give such notice, in which case the Indemnifying Party shall be relieved from its obligations hereunder to the extent of such material prejudice.  The Indemnifying Party shall participate in and defend, contest or otherwise protect the Indemnified Party against any such claim or action by counsel of the Indemnifying Party’s choice at its sole cost and expense; provided, however, that the Indemnifying Party shall not make any settlement or compromise without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed) unless the sole relief provided is monetary damages that are paid in full by the Indemnifying Party, there is no admission or statement of fault or culpability on the part of the Indemnified Party and there is an unconditional release of the Indemnified Party from all liability on any claims that are the subject of such claim or action.  The Indemnified Party shall use commercially reasonable efforts upon the reasonable request of the Indemnifying Party to cooperate with and assist the Indemnifying Party in defending, contesting, or otherwise protecting the Indemnified Party against any suit, action, investigation, claim, or proceeding in connection with which a claim for indemnification is made.  The Indemnified Party shall have the right, but not the obligation, to participate at its own expense in the defense thereof by counsel of the Indemnified Party’s choice; provided, however, that the Indemnifying Party shall pay the fees and expenses of separate counsel for the Indemnified Party if (a) the Indemnifying Party has agreed to pay such fees and expenses, or (b) counsel for the Indemnifying Party reasonably determines that representation of both the Indemnifying Party and the Indemnified Party by the same counsel would create a conflict of interest.  If the Indemnifying Party fails timely to defend, contest or otherwise protect against such suit, action, investigation, claim or proceeding, the Indemnified Party shall have the right to do so, including, without limitation, the right to make any compromise or settlement thereof, and the Indemnified Party shall be entitled to recover the entire cost thereof from the Indemnifying Party, including, without limitation, reasonable attorneys’ fees, disbursements and amounts paid as the result of such suit, action, investigation, claim or proceeding.

 

Section 8.4   No Speculative Damages.  In no event shall any Party be liable for (and the term Losses shall exclude) any Loss that results from any untrue representation or warranty in this Agreement or a breach by any Party of any provision of this Agreement or the other Transaction Documents or related hereto or thereto that is not within the reasonable contemplation of the Parties as of the date hereof as a probable and reasonably foreseeable result of that untruth or breach. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE LIABLE UNDER THIS AGREEMENT FOR ANY EXEMPLARY, PUNITIVE, REMOTE, CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES (OTHER THAN TO THE EXTENT SUCH DAMAGES MAY BE PAYABLE TO A THIRD PARTY BY REASON OF A LOSS SUBJECT TO INDEMNIFICATION) OR LOSS OF PROFITS SUFFERED BY A PARTY TO THIS AGREEMENT.

 

Section 8.5   Compliance With Express Negligence Rule.  TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RELEASES, DISCLAIMERS, LIMITATIONS ON LIABILITY, AND INDEMNITIES IN THIS AGREEMENT, INCLUDING THOSE IN THIS ARTICLE VIII, SHALL APPLY EVEN IN THE EVENT OF THE SOLE, JOINT, AND/OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF THE PARTY WHOSE LIABILITY IS RELEASED, DISCLAIMED, LIMITED, OR INDEMNIFIED.

 

Section 8.6   Remedy.  The Parties agree that equitable relief for matters arising under this Agreement after Closing is only available to the extent provided for in Section 7.2 or in Section 9.10.  Except for actions involving fraud or intentional misrepresentation, and for equitable relief as provided in the preceding sentence, from and after the Closing the sole remedy of a Party in connection with matters arising under this Agreement shall, in each case, be indemnification under and as set forth in this Article VIII.

 

Section 8.7   Tax Treatment Of Indemnity Payments.  Each Party, to the extent permitted by applicable Law, agrees to treat any payments made pursuant to this Article VIII as adjustments to the Purchase Price for all federal and state income and franchise Tax purposes.

 

  

  

  

ARTICLE IX                                

 

MISCELLANEOUS PROVISIONS

 

Section 9.1   Publicity.  On or prior to the Closing Date, no Party shall, nor shall it permit its Affiliates to, issue or cause the publication of any press release or other announcement with respect to this Agreement or the transactions contemplated hereby without the consent of the other Parties.  Each Party hereby agrees to the form of press releases announcing this transaction exchanged prior to the Execution Date.  Notwithstanding the foregoing, in the event any such press release or announcement is required by Law or stock exchange rule to be made by the Party proposing to issue the same, such Party may issue or cause publication thereof without consent of the other Parties, but shall use its commercially reasonable efforts to consult in good faith with the other Parties prior to such issuance or publication.

 

Section 9.2   Successors And Assigns; Third-Party Beneficiaries.  This Agreement shall inure to the benefit of, and be binding upon, the Parties and their respective successors and permitted assigns; provided, however, that no Party shall assign or delegate any of its rights or obligations created under this Agreement without the prior written consent of the other Parties.  Except as expressly contemplated herein, nothing in this Agreement shall confer upon any Person not a party to this Agreement, or the legal representatives of such Person, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement.

 

Section 9.3   Fees And Expenses.  Except as otherwise expressly provided in this Agreement, all legal, accounting, financial advisory and other fees, costs and expenses of a Party incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such fees, costs or expenses.

 

Section 9.4   Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made if delivered personally or sent by overnight courier or sent by facsimile (with evidence of confirmation of receipt) to the Parties at the following addresses:

 

(a) If to VNG, to:

Vanguard Natural Gas LLC

5847 San Felipe, Suite 3000

Houston, Texas 77057

Facsimile:  (832) 327-2260

Attention:  Scott W. Smith

with a copy which shall not constitute notice to:

J. Patrick Doherty

Doherty & Doherty LLP

1717 St. James Place

Suite 520

Houston, Texas 77056

Facsimile:  (713) 572-1001

(b) If to VNR:

Vanguard Natural Gas LLC

5847 San Felipe, Suite 3000

Houston, Texas 77057

Facsimile:  (832) 327-2260

Attention:  Scott W. Smith

with a copy which shall not constitute notice to:

J. Patrick Doherty

Doherty & Doherty LLP

1717 St. James Place

Suite 520

Houston, Texas 77056

Facsimile:  (713) 572-1001

(c) If to Endowment:

Majeed S. Nami Personal Endowment Trust

2704 Old Rosebud Road, Suite 320

Lexington, Kentucky 40509

Facsimile: (859) 624-9289

Attention: Charles Albright

with a copy which shall not constitute notice to:

Karen J. Greenwell

Wyatt, Tarrant & Combs, LLP

250 West Main Street, Suite 1600

Lexington, KY 40507

(d) If to Trust:

Majeed S. Nami Irrevocable Trust

2704 Old Rosebud Road, Suite 320

Lexington, Kentucky 40509

Facsimile: (859) 624-9289

Attention: Charles Albright

with a copy which shall not constitute notice to:

Karen J. Greenwell

Wyatt, Tarrant & Combs, LLP

250 West Main Street, Suite 1600

Lexington, KY 40507

or to such other Persons or at such other addresses as shall be furnished by any Party by like notice to the other Party, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed.  No change in any of such addresses shall be effective insofar as notices under this Section 9.4 are concerned unless such changed address is located in the United States of America and notice of such change shall have been given to such other Party as provided in this Section 9.4.

 

Section 9.5   Entire Agreement.  This Agreement, together with the Schedules and the Exhibits hereto, and the other Transaction Documents, represent the entire agreement and understanding of the parties with reference to the transactions set forth herein and therein and no representations or warranties have been made in connection herewith and therewith other than those expressly set forth herein or therein.  This Agreement, together with the Schedules and the Exhibits hereto, and the other Transaction Documents, supersede all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter hereof or thereof and all prior drafts of such documents, all of which are merged into such documents.  No prior drafts of such documents and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving such documents.

 

Section 9.6   Waivers and Amendments.  The Nami Parties or VNR and VNG may, by written notice to the other Party: (a) extend the time for the performance of any of the obligations or other actions of the other Party; (b) waive any inaccuracies in the representations or warranties of the other Party contained in this Agreement or in any document delivered pursuant to this Agreement by the other Party; (c) waive compliance with any of the covenants of the other Party contained in this Agreement; (d) waive performance of any of the obligations of the other Party created under this Agreement; or (e) waive fulfillment of any of the conditions to its own obligations under this Agreement or in any documents delivered pursuant to this Agreement by the other Party.  The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach, whether or not similar, unless such waiver specifically states that it is to be construed as a continuing waiver.  This Agreement may be amended, modified or supplemented only by a written instrument executed by the Parties.

 

Section 9.7   Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the Parties shall negotiate in good faith to modify this Agreement to include a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

 

Section 9.8   Titles and Headings.  The Article and Section headings and any table of contents contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

Section 9.9   Signatures And Counterparts.  Facsimile or electronic transmission of any signed original document and/or retransmission of any signed facsimile or electronic transmission shall be the same as delivery of an original.  At the request of any Party, the other Parties will confirm facsimile or electronic transmission by signing a duplicate original document.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

 

Section 9.10   Enforcement Of The Agreement; Damages.  Each of the Parties hereto acknowledges and agrees that in the event any covenant or obligation of the acknowledging Party to be performed after Closing is not performed in accordance with the specific terms of this Agreement or is otherwise breached, then the other Party shall be entitled to an injunction or injunctions to prevent such non-performance or breach and to specifically enforce the covenants and obligations of the acknowledging Party to be performed after Closing, in any courts of the Commonwealth of Kentucky and in the federal courts of the United States of America located in Fayette County, Kentucky, in addition to any other remedy to which it may be entitled for such non-performance or breach.

 

Section 9.11   Governing Law.  This Agreement shall be governed by and construed in accordance with the internal and substantive Laws of the Commonwealth of Kentucky and without regard to any conflicts of Laws concepts that would apply the substantive Law of some other jurisdiction.

 

Section 9.12   Disclosure.  Certain information set forth in the Schedules is included solely for informational purposes, is not an admission of liability with respect to the matters covered by the information, and may not be required to be disclosed pursuant to this Agreement.  Disclosure of any item in any section of the Schedules shall serve to qualify the correspondingly numbered representation and warranty or covenant in this Agreement to the extent specified therein and any other representation and warranty or covenant only to the extent the applicability of such disclosure to such other representation and warranty or covenant is reasonably apparent to the non-disclosing party.  The specification of any dollar amount in the representations and warranties contained in this Agreement or the inclusion of any specific item in the Schedules is not intended to imply that such amounts (or higher or lower amounts) or specific item are or are not material, and no party shall use the fact of the setting of such amounts or the fact of the inclusion of any such item in the Schedules in any dispute or controversy between the Parties as to whether any obligation, item, or matter not described herein or included in a Schedule is or is not material for purposes of this Agreement.

 

Section 9.13   Consent To Jurisdiction.  To the fullest extent permitted by applicable Law, the Parties hereby irrevocably submit to the jurisdiction of the courts of the Commonwealth of Kentucky and of the federal courts of the United States of America located in Fayette County, Kentucky over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby, and each Party irrevocably agrees that all claims in respect of such dispute or proceeding shall be heard and determined in such courts.  The Parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the venue of any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby brought in such court or any defense of inconvenient forum for the maintenance of such dispute.  Each Party agrees that a judgment in any dispute heard in the venue specified by this section may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.

 

Section 9.14   Waiver of Trial by Jury.  Each of the Parties hereby irrevocably waives, to the fullest extent permitted by Law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

Section 9.15   Construction.  Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) references to Schedules and Exhibits refer to the Schedules and Exhibits attached to this Agreement, each of which is made a part hereof for all purposes; (d) the terms “include”, “includes”, “including” and words of like import shall be deemed to be followed by the words “without limitation”; (e) the terms “hereof,” “herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement; and (f) references to money refer to legal currency of the United States of America. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

 

  

  

  

ARTICLE X                                

 

DEFINITIONS

 

For purposes of this Agreement, the term:

Section 10.1   “AE” has the meaning assigned to such term in the recitals.

 

Section 10.2   “AE Balance Sheet” has the meaning assigned to that term in Section 4.18(b).

 

Section 10.3   “AE Member Bill of Sale” means the assignment and bill of sale for the AE Membership Interests in the form attached hereto as Exhibit C.

 

Section 10.4   “AE Membership Interests” has the meaning assigned to such term in the recitals.

 

Section 10.5   “Affiliate” or “Affiliates” of a Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first-mentioned Person.

 

Section 10.6   “Agreement” has the meaning assigned to such term in the Preamble.

 

Section 10.7   “Breach” means any matter, fact or circumstance that constitutes a breach by a Party of any representation, warranty, agreement, obligation, or covenant of such Party contained in this Agreement.

 

Section 10.8   “Business Day” means any day of the year on which national banking institutions in Kentucky are open to the public for conducting business and are not required or authorized to close.

 

Section 10.9   “Closing” has the meaning assigned to such term in Section 1.1(b).

 

Section 10.10   “Closing Date” has the meaning assigned to such term in Section 1.1(b).

 

Section 10.11   “Code” means the Internal Revenue Code of 1986, as amended.

 

Section 10.12   “Common Units” has the meaning assigned to such term in the Recitals.

 

Section 10.13   “Derivative Transactions” has the meaning assigned to such term in Section 4.15.

 

Section 10.14   “Effective Date” means January 1 2012.

 

Section 10.15   “Employee Plans” means any “employee benefit plan,” as defined under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or any other bonus, pension, stock/unit option, stock/unit purchase, benefit, welfare, profit-sharing, retirement, disability, vacation, severance, hospitalization, insurance, incentive, deferred compensation and other similar fringe or employee benefit plans, funds, programs or arrangement, whether written or oral.

 

Section 10.16   “Encumbrances” has the meaning assigned to such term in Section 1.1(a).

 

Section 10.17   “Endowment” has the meaning assigned to such term in the preamble.

 

Section 10.18   “Endowment Common Units” has the meaning assigned to such term in the recitals.

 

Section 10.19   “Environmental Laws” means collectively, all applicable federal, state and local laws (including common law), ordinances, rules and regulations relating to the prevention of pollution, remediation of contamination or restoration of environmental quality, protection of human health or the environment (including natural resources), or workplace health and safety, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., the Clean Air Act, 42 U.S.C. § 7401, et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., the Oil Pollution Act of 1990, 33 U.S.C.§ 2701, et seq., the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629, the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001 et seq., the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j, and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; in each case, as amended and the regulations promulgated pursuant thereto and as each is in effect on the date of this Agreement.

 

Section 10.20   “ERISA” has the meaning assigned to such term in the definition of “Employee Plans.”

 

Section 10.21   “ERISA Affiliate” has the meaning assigned to such term in Section 2.12(a).

 

Section 10.22   “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Section 10.23   “Execution Date” has the meaning assigned to such term in the preamble.

 

Section 10.24   “GAAP” means generally accepted accounting principles at the time.

 

Section 10.25   “Governmental Authority” means any foreign, federal, tribal, state or local government, court, agency or commission or other governmental or regulatory body or authority or of any arbitrator.

 

Section 10.26   “Guarantees” means (i) any guarantees, pledges, mortgages or other similar undertakings made by Nami or any person or entity affiliated with him, including Vinland and its subsidiaries and Nami Resources Company, L.L.C. in connection with or for the benefit of VNR, VNG, or any of their Affiliates or Subsidiaries and (ii) any guarantees, pledges, mortgages or other similar undertakings made by VNR, VNG, or any person or entity affiliated with them in connection with or for the benefit of TEC, AE or any of their Affiliates.

 

Section 10.27   “Hazardous Material” shall mean any substance that, by its nature or its use, is regulated or as to which liability might arise under any Environmental Law including any:  (a) chemical, product, material, substance or waste defined as or included in the definition of “hazardous substance,” “hazardous material,” “hazardous waste,” “restricted hazardous waste,” “extremely hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” toxic substance,” “toxic pollutant,” “contaminant,” “pollutant,” or words of similar meaning or import found in any Environmental Law; (b) petroleum hydrocarbons, petroleum products, petroleum substances, natural gas, crude oil, or any components, fractions, or derivatives thereof; and (c) asbestos containing materials, polychlorinated biphenyls, radioactive materials, urea formaldehyde foam insulation, or radon gas.

 

Section 10.28   “Hydrocarbons” means oil, condensate, gas, coal bed methane, coal mine methane casing head gas and other liquid or gaseous hydrocarbons, including natural gas liquids and other separated gas or oil components.

 

Section 10.29   “Indemnified Party” has the meaning assigned to such term in Section 8.2(c).

 

Section 10.30     “Knowledge” means, with respect to the knowledge of any Nami Party, Nami or Vinland, the actual knowledge of the relevant party, if the relevant party is an individual, or any current officer, manager, director or member of the managerial staff of the relevant party, without duty of inquiry if the relevant party is an entity.

 

Section 10.31   “Knowledge of VNG” or “Knowledge of VNR” means matters, facts or circumstances that Scott Smith, Richard Robert or Britt Pence are aware of (without a duty of inquiry) either because such matters, facts or circumstances were disclosed to them or otherwise brought to their attention in their capacities as members of management of VNR and VNG.

 

Section 10.32   “Law” has the meaning assigned to such term in Section 2.3.

 

Section 10.33   “Legal Proceeding” has the meaning assigned to such term in Section 2.

 

Section 10.34   “Loss” or “Losses” has the meaning assigned to such term in Section 8.2(a).

 

Section 10.35   “Material Adverse Effect” means any change, effect, event or occurrence with respect to the condition (financial or otherwise), assets, properties, business, operations or results of operations of VNR, VNG or the Operating Entities, that is material and adverse to the Operating Entities, taken as a whole, or material and adverse to VNR, VNG, or that materially and adversely affects the ability of the VNR or VNG to consummate the transactions contemplated hereby; it being understood that none of the following shall be deemed to constitute a Material Adverse Effect: any effect resulting from (a) entering into, or the announcement of the transactions contemplated by, this Agreement, (b) changes in oil and gas prices, including changes in price differentials, (c) changes in general economic conditions in the industry in which any of the Operating Entities operates, or (d) changes in the United States or global economy as a whole, unless in the case of clauses (b) - (d) above such change has a disproportionately adverse effect on the Operating Entities, VNR, or VNG relative to other participants in the industry or industries in which VNR, VNG and the Operating Entities operate.

 

Section 10.36   “Member Interests” has the meaning assigned to such term in the Recitals.

 

Section 10.37   “Nami Indemnified Parties” has the meaning assigned to such term in Section 8.2(b).

 

Section 10.38   “Nami Parties” has the meaning assigned to such term on the Preamble.

 

Section 10.39    “Notification” has the meaning assigned to such term in Sections 5.6(a) and (b).

 

Section 10.40   “Oil and Gas Agreements” has the meaning assigned to such term in Section 4.14(a).

 

Section 10.41   “Oil and Gas Properties” means all interests in and rights with respect to oil, gas, mineral, and similar properties of any kind and nature, including working, leasehold and mineral interests and operating rights and royalties, overriding royalties, production payments, net profit interests and other non-working interests and non-operating interests (including all oil and gas leases, operating agreements, unitization and pooling agreements and orders, division orders, transfer orders, mineral deeds, royalty deeds, and in each case, interests thereunder), surface interests, fee interests, reversionary interests, reservations, and concessions.  Without limitation, Oil and Gas Properties shall include all oil and gas wells of the Operating Entities listed and described on Exhibit D.

 

Section 10.42   “Operating Entities” means AE and TEC.

 

Section 10.43   “Operating Entities Records” has the meaning assigned to such term in Section 5.11.

 

Section 10.44   “Operating Entity Material Contracts” has the meaning assigned to such term in Section 4.17(a).

 

Section 10.45   “Organizational Documents” means with respect to any entity, the certificate of incorporation, by-laws, certificate of formation, limited liability company operating agreement, partnership or limited partnership agreement or other formation and/or governing documents of such entity.

 

Section 10.46   “Outside Date” means March 31, 2012.

 

Section 10.47   “Parties” or “Party” has the meaning assigned to such term in the Preamble.

 

Section 10.48   “Permitted Encumbrances” means:

 

(a) to the extent waived prior to Closing, preferential purchase rights and rights of first refusal;

 

(b) inchoate mechanics’ and materialmens’ liens and other liens arising by operation of law in the ordinary course of business for amounts not yet delinquent and liens for Taxes or assessments that are not yet delinquent or, in all instances, if delinquent, that are being contested in good faith in the ordinary course of business and for which adequate reserves have been established by the party responsible for payment thereof;

 

(c) liens arising under operating agreements or sales, processing, gathering, storage and transportation contracts securing amounts not yet delinquent, or if delinquent, that are being contested in good faith in the ordinary course of business and for which adequate reserves have been established by the party responsible for payment thereof;

 

(d) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations, to the extent (a) shown of record in the jurisdiction where located and (b) valid and enforceable in accordance with the terms thereof;

 

(e) rights reserved to or vested in any governmental, statutory, municipal or public authority to control or regulate any of the Partnership Entities’ properties or assets in any manner and all applicable laws, rules and orders of any Governmental Authority;

 

(f) all other liens, charges, encumbrances, defects and irregularities that are not such as to materially interfere with the operation, value or use of the property or asset affected; and

 

(g) such filings made with, or notices to, the Bureau of Ocean Energy Management, Regulation, and Enforcement and any other applicable Governmental Authority, as are customarily made after the transactions contemplated by this Agreement.

 

Section 10.49   “Person” means an individual, corporation, association, trust, limited liability company, limited partnership, limited liability partnership, partnership, incorporated organization, other entity or group (as defined in Section 13(d)(3) of the Exchange Act).

 

Section 10.50   “Plan Liability” means any and all liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the continuation coverage requirements of Section 601 et. seq. of ERISA and Section 4980B of the Code, or (v) any other provision of ERISA or the Code.

 

Section 10.51     “Pre-Effective Date Period” has the meaning assigned to such term in Section 5.7(b).

 

Section 10.52   “Pre-Effective Date Period Return” has the meaning assigned to such term in Section 5.7(b).

 

Section 10.53   “Proceeding” has the meaning assigned to such term in Section 6.9(a).

 

Section 10.54   “Release” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing into the indoor or outdoor environment.

 

Section 10.55   “Reserve Report” has the meaning assigned to such term in Section 4.13(b).

 

Section 10.56   “Rights-of-Way” has the meaning assigned to such term in Section 3.15(l).

 

Section 10.57   “SEC” means the Securities and Exchange Commission.

 

Section 10.58   "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

 

Section 10.59 “Service Agreements” means the Gathering and Compression Agreements, Management Services Agreement, Operating Agreements, Participation Agreement, and Well Services Agreements, all effective as of January 5, 2007, as subsequently amended or modified, by and between any of VNR, VNG, AE, TEC, and Vinland (including all of its subsidiaries, whether or not they are parties to this Agreement).

 

Section 10.60 “Settlement and Release Agreement” the agreement attached hereto as Exhibit E.

 

Section 10.61   “Solvent” has the meaning assigned to such term in Section 2.7 or 3.8, as the case may be.

 

Section 10.62   “Straddle Period” has the meaning assigned to such term in Section 5.7(a).

 

Section 10.63   “Straddle Period Return” has the meaning assigned to such term in Section 5.7(a).

 

Section 10.64   “Subject Common Units” has the meaning assigned to such term in the Recitals.

 

Section 10.65   “Subsidiary” when used with respect to any Party means any corporation or other organization of which such Party directly or indirectly owns at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization.

 

Section 10.66   “Tax” or “Taxes” has the meaning assigned to such term in Section 4.8(a).

 

Section 10.67   “Tax Law” means the Internal Revenue Code, as amended, and the other tax statutes and regulations of the United States of America and the State of Kentucky.

 

Section 10.68   “Tax Returns” has the meaning assigned to such term in Section 4.8(a).

 

Section 10.69   “TEC” has the meaning assigned to such term in the Recitals.

 

Section 10.70   “TEC Balance Sheet” has the meaning assigned to that term in Section 4.18(a).

 

Section 10.71   “TEC Membership Interests” has the meaning assigned to such term in the Recitals.

 

Section 10.72 “TEC Member Interests Bill of Sale” means the assignment and bill of sale for the TEC Membership Interests in the form attached hereto as Exhibit F.

 

Section 10.73   “Transaction Documents” means this Agreement and the other agreements, contracts, documents, instruments and certificates provided for in this Agreement to be entered into by one or more of the parties hereto or any of their Affiliates in connection with the transactions contemplated by this Agreement.

 

Section 10.74   “Transfer Agent” has the meaning assigned to such term in Section 1.2(a)(ii).

 

Section 10.75  “Transfer Taxes” has the meaning assigned to such term in Section 5.7(d).

 

Section 10.76   “Trust” has the meaning assigned to such term in the Preamble.

 

Section 10.77   “Trust Common Units” has the meaning assigned to such term in the Recitals.  

 

Section 10.78   “Vanguard Citibank Lien Release” has the meaning assigned to such term in Section 2.3.

 

Section 10.79 “Vanguard Credit Agreement” means the credit agreement by and between VNR and Citibank N.A., as administrative agent and letter of credit issuer and the lender party thereto, existing as of the date of this Agreement.

 

Section 10.80   “Vanguard Indemnified Parties” has the meaning assigned to such term in Section 8.2(a).

 

Section 10.81    “Vinland Citibank Consent” has the meaning assigned to such term in Section 3.3.

 

Section 10.82   “Vinland Credit Agreement” means the credit agreement and borrowing facility between Citibank and Vinland or other borrowing facility between Citibank and Nami or Nami Parties that results in a lien on or against the Common Units, existing as of the date of this Agreement.

 

Section 10.83   “VNG” has the meaning assigned to such term in the Preamble.

 

Section 10.84   “VNR” has the meaning assigned to such term in the Preamble.

 

Section 10.85  "VNR Board" shall mean the board of directors of VNR.

 

Section 10.86  “VNR SEC Reports” means 10K and 10Q, and other relevant filings made by VNR with the SEC.

 

  

  

  

 

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK;

SIGNATURE PAGES IMMEDIATELY FOLLOW]

 

 

  

  

  

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

NAMI PARTIES:

 

MAJEED S. NAMI PERSONAL

 

ENDOWMENT TRUST

 

By: /s/ Ariana Saiedj Nami

 

Name: Ariana Saiedj Nami

 

Title: Trustee

 

MAJEED S. NAMI IRREVOCABLE TRUST

 

By: /s/ Ariana Saiedj Nami

 

Name: Ariana Saiedj Nami

 

Title: Trustee

 

 

VINLAND ENERGY, LLC

 

By:  Commonwealth Energy, LLC

 

By:           /s/ Charles Albright                                                                

 

Name:     Charles Albright                                                                

 

Title:       CFO                                                      

 

 

VINLAND ENERGY OPERATIONS, LLC

 

By:  Commonwealth Energy, LLC

 

By:           /s/ Charles Albright                                                                

 

Name:     Charles Albright                                                                

 

Title:       CFO                                                      

 

  

  

  

 

VINLAND ENERGY GATHERING, LLC

 

By:  Commonwealth Energy, LLC

 

By:           /s/ Charles Albright                                                                           

 

Name:     Charles Albright                                                                           

 

Title:       CFO                                                      

 

 

/s/ Majeed S. Nami                                                      

Majeed S. Nami, Individually

 

  

  

  

 

 

VANGUARD PARTIES:

 

VANGUARD NATURAL RESOURCES, LLC

 

By: /s/ Scott W. Smith

 

       Scott W. Smith, President

 

VANGUARD NATURAL GAS, LLC

 

By:  Vanguard Natural Resources, LLC, its Sole Member

 

By: /s/ Scott W. Smith

 

       Scott W. Smith, PresidentEXB 10.8 - Lease Agreement

Exhibit 10.8

OFFICE LEASE
Between 
WELLS REIT II -PASADENA CORPORATE PARK, LP,
a Delaware limited partnership,
and
GREEN DOT CORPORATION,
 a Delaware corporation 

3465 EAST FOOTHILL BOULEVARD, PASADENA, CALIFORNIA 

TABLE OF CONTENTS

	
				
	 
	 
	Page No.

	 
	 
	 

	ARTICLE 1
	Premises and Term
	1
	

	ARTICLE 2
	Base Rent
	2
	

	ARTICLE 3
	Additional Rent
	3
	

	ARTICLE 4
	Use and Rules
	11
	

	ARTICLE 5
	Services and Utilities
	12
	

	ARTICLE 6
	Alterations and Liens
	14
	

	ARTICLE 7
	Repairs and Maintenance
	15
	

	ARTICLE 8
	Casualty Damage
	16
	

	ARTICLE 9
	Insurance, Subrogation, and Waiver of Claims
	17
	

	ARTICLE 10
	Condemnation
	19
	

	ARTICLE 11
	Return of Possession
	19
	

	ARTICLE 12
	Holding Over
	20
	

	ARTICLE 13
	No Waiver
	20
	

	ARTICLE 14
	Attorneys' Fees and Arbitration
	21
	

	ARTICLE 15
	Personal Property Taxes, Rent Taxes and Other Taxes
	21
	

	ARTICLE 16
	Subordination, Attornment and Mortgagee Protection
	21
	

	ARTICLE 17
	Estoppel Certificate
	22
	

	ARTICLE 18
	Assignment and Subletting
	23
	

	ARTICLE 19
	Rights Reserved By Landlord
	25
	

	ARTICLE 20
	Landlord's Remedies
	26
	

	ARTICLE 21
	Landlord Default: Tenant Self Help and Offset Rights
	29
	

	ARTICLE 22
	Conveyance by Landlord and Liability
	30
	

	ARTICLE 23
	Indemnification
	31
	

	ARTICLE 24
	Safety and Security Devices, Services and Programs
	32
	

	ARTICLE 25
	Communications and Computer Lines
	32
	

	ARTICLE 26
	Hazardous Materials
	33
	

	ARTICLE 27
	Roof Rights
	34
	

	ARTICLE 28
	Notices
	35
	

	ARTICLE 29
	Real Estate Brokers
	36
	

	ARTICLE 30
	Letter of Credit
	36
	

	ARTICLE 31
	Exculpatory Provisions
	38
	

	ARTICLE 32
	Mortgagee's Consent
	38
	

	ARTICLE 33
	Miscellaneous
	38
	

	ARTICLE 34
	Entire Agreement
	41
	

	ARTICLE 35
	Parking
	41
	

	ARTICLE 36
	Generator
	42
	

	ARTICLE 37
	Termination Option
	42
	

	ARTICLE 38
	Right of First Offer
	43
	

	ARTICLE 39
	Exclusivity
	44
	

	
			
	RIDER ONE
	RULES APPLICABLE TO 3465 BUILDING
	 

	EXHIBIT A
	FLOOR PLANS
	 

	EXHIBIT B
	WORKLETTER AGREEMENT
	 

	EXHIBIT C
	RENEWAL OPTION
	 

	EXHIBIT D
	COMMENCEMENT DATE CONFIRMATION
	 

	EXHIBIT E
	LOCATION OF TENANT'S RESERVED PARKING SPACES
	 

	EXHIBIT F
	PARKING SITE PLAN
	 

	EXHIBIT G
	COMPLEX RULES
	 

	EXHIBIT H
	INITIAL APPROVED LETTER OF CREDIT
	 

List of Defined Terms

	
			
	Additional Allowance
	4
	

	Additional Rent
	11
	

	Affiliate
	24
	

	Alterations
	14
	

	Arbitration Request
	1
	

	Architect
	1
	

	Base Rent
	2
	

	Base Year
	3
	

	Building
	1
	

	Capital Event
	4
	

	Claims
	31
	

	Commencement Date
	1
	

	Competitive Activities
	45
	

	Completed Application for Payment
	4
	

	Complex
	8
	

	Construction Allowance
	4
	

	Controllable Expenses
	9
	

	CSVCP
	34
	

	Current Market Price
	1
	

	Default
	27
	

	Default Rate
	29
	

	Drawing Criteria
	2
	

	Early Occupancy Period
	1
	

	Estimates
	1
	

	Exclusive Conditions
	44
	

	Expiration Date
	1
	

	Extension Option
	1
	

	Extension Term
	1
	

	First Event
	4
	

	Force Majeure Delays
	39
	

	Hazardous Materials
	34
	

	Holder
	22
	

	Holidays
	12
	

	HVAC Unit
	35
	

	Landlord
	1
	

	Landlord Delay
	3
	

	Landlord Delay Day
	3
	

	Law
	39
	

	Lease Month
	3
	

	Lease Year
	3
	

	Letter of Credit
	36
	

	Line Problems
	33
	

	Lines
	32
	

	Mortgage
	22
	

	MSDS
	34
	

	Offer Notice
	43
	

	Offer Space
	43
	

	Offset Exercise Notice
	30
	

	Operating Expenses
	4
	

	Permit
	2
	

List of Defined Terms

	
			
	Permitted Occupant
	25
	

	Permitted Transfer
	24
	

	Permitted Transferee
	24
	

	Person
	40
	

	Premises
	1
	

	Primary Business
	45
	

	Prime Rate
	27
	

	Property
	1
	

	Rent
	11
	

	Restoration Requirement
	34
	

	Restricted Actions
	45
	

	Rules
	12
	

	Satellite Dish
	35
	

	Secure Areas
	26
	

	Site Plan
	8
	

	Space Planning Allowance
	5
	

	Statement
	10
	

	Subject Space
	23
	

	Substantial Completion
	3
	

	Substantially Completed
	3
	

	Systems and Equipment
	1
	

	Tangible Net Worth
	25
	

	Taxes
	3
	

	Tenant
	1
	

	Tenant Competitor
	45
	

	Tenant Work
	14
	

	Tenant's Prorate Share
	4
	

	Term
	1
	

	Termination Date
	43
	

	Termination Notice
	43
	

	Termination Fee
	43
	

	Termination Option
	43
	

	Total Construction Costs
	3
	

	Transfer Premium
	23
	

	Transferee
	23
	

	Transfers
	23
	

	Work
	2
	

	Working Drawings
	2
	

	Workletter
	1
	

OFFICE LEASE 
THIS LEASE is made as of the 5 day of December, 2011, between WELLS REIT 11-PASADENA CORPORATE PARK, LP, a Delaware limited partnership ("Landlord"), and GREEN DOT CORPORATION, a Delaware corporation ("Tenant"). 
WITNESSETH: 
ARTICLE 1 
Premises and Term 
(A)    Premises, Building and Property. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord all leasable space ("Premises") in the building commonly known as 3465 East Foothill Boulevard, Pasadena, California (the "Building"), subject to the terms of this Lease. The term "Property" shall mean the Building, and any common or public areas or facilities, easements, corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, skywalks, parking garages and lots, and any and all other structures or facilities operated or maintained in connection with or for the benefit of the Building, and all parcels or tracts of land on which all or any portion of the Building or any of the other foregoing items are located, and any fixtures, machinery, equipment, apparatus, Systems and Equipment, furniture and other personal property located thereon or therein and used in connection therewith owned or leased by Landlord. "Systems and Equipment" shall mean any plant, machinery, transformers, duct work, cable, wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air conditioning and humidity or any other services or utilities, or comprising or serving as any component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm, security, or fire/life/safety systems or equipment, or any other mechanical, electrical, electronic, computer or other systems or equipment serving more than one tenant at the Property.
(B)    Commencement Date. Landlord shall tender possession of the Premises to Tenant upon the full execution of this Lease and Landlord's receipt of the items listed in 1(D) below. The "Commencement Date" shall be November 1, 2012, subject to delay as provided in Section 1(C) below. Tenant may commence business operations in all or any portion of the Premises prior to the Commencement Date in the event that Tenant Substantially Completes the Work (as those terms are defined in the workletter attached hereto as Exhibit B ("Worldetter"» in such portion of the Premises prior to the Commencement Date (such period between the date Tenant commences business operations in all or any portion of the Premises and the Commencement Date is herein called the "Early Occupancy Period"). During the Early Occupancy Period, Tenant shall observe and perform all the requirements of this Lease other than the requirement to pay Base Rent, Taxes and Operating Expenses; furthermore, Tenant shall be responsible for janitorial and utility costs during the Early Occupancy Period. In the event that Tenant commences business operations in a portion of the Premises while construction continues in other portions of the Premises, Landlord shall bill Tenant, and Tenant shall pay, for Tenant's utility usage based on Landlord's reasonable estimates of Tenant's usage in the portion of the Premises being used and occupied by Tenant. The "Term" of this Lease shall be one hundred twenty (120) months, commencing on the Commencement Date and ending at 5:00 p.m. local time on the last day of the 120th full calendar month following the Commencement Date ("Expiration Date"), subject to adjustment and earlier termination as provided herein. Landlord and Tenant agree that for purposes of this Lease the rentable area of the Premises is approximately one hundred forty-one thousand five hundred forty (141,540) square feet. Measurements have been made in accordance with the Standard Method for Measuring Office Buildings, ANSI/BOMA Z65.1-1996.
(C)    Term Commencement; Delay in Commencement Date. 

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(i)    Within a commercially reasonable time following Lease execution, Tenant shall provide to Landlord a preliminary project schedule relating to Tenant's Work. Thereafter, Tenant shall provide updates to the project schedule within a commercially reasonable time after such updates occur. The Commencement Date set forth in Section 1(B) shall be delayed by one (1) day for each day of delay in the completion of the Work that is caused by any Force Majeure Delay (as provided in Section 33(J), below) or Landlord Delay Days (as provided in Section 7 of the Workletter).
     (ii)    In addition, the Commencement Date set forth in Section 1(B) may be extended on a day for day basis due to government delay beyond the time period that normally prevailed for obtaining the building permits for Tenant's Work (the "Permit") at the time this Lease was negotiated, provided: (1) Tenant submits a complete application for all necessary permits no later than April 15, 2012, and (2) Tenant diligently pursues the Permit thereafter. Changes to the plans or other modifications to Tenant's initial permit application that delay permit issuance shall not delay the Commencement Date. Tenant may only extend the Commencement Date for up to ninety (90) days as a result of delay in receiving the Permit. 
(iii)    In addition, the Commencement Date set forth in Section 1(B) shall be delayed to the extent that Landlord fails to timely deliver to Tenant possession of the Premises for any reason, including but not limited to holding over by prior occupants, except to the extent that Tenant, its contractors, agents or employees in any way contribute to such failure and only to the extent that Landlord's failure to timely deliver actually delays Tenant's construction. 
(iv)    Landlord and Tenant shall execute a Commencement Date Confirmation substantially in the form of Exhibit D promptly following the Commencement Date.
(D)    Required Tenant Deliveries. Landlord will not be obligated to deliver possession of the Premises to Tenant until Landlord has received from Tenant all of the following: (i) this Lease fully executed by Tenant; (ii) the Letter of Credit; and (iii) executed copies of policies of insurance or certificates thereof as required under Article 9 of this Lease. Failure to timely deliver any of the foregoing shall not defer the Commencement Date or impair Tenant's obligation to pay Rent.
     (E)    Acceptance. Tenant has inspected the Premises, Property, Systems and Equipment and agrees to accept the same "as is" without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements and no representations respecting the condition of the Premises or the Property have been made to Tenant by or on behalf of Landlord, except as expressly provided herein or in the Workletter. 
ARTICLE 2
Base Rent
Tenant shall pay Landlord Base Rent ("Base Rent") of:
	
					
	Time Period
	Annual
Amount
	 
	Monthly
Amount
	 

	 
	 
	 
	 
	 

	Lease Year 1
	$3,024,000.00
	*
	$252,000.00
	*

	Lease Year 2
	$3,114,720.00
	*
	$259,560.00
	*

	Lease Year 3
	$3,784,026.60
	 
	$315,335.55
	 

	Lease Year 4
	$3,897,547.32
	 
	$324,795.61
	 

	Lease Year 5
	$4,014,473.64
	 
	$334,539.47
	 

	Lease Year 6
	$4,134,907.80
	 
	$344,575.65
	 

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	Lease Year 7
	$4,258,954.92
	 
	$354,912.91
	 

	Lease Year 8
	$4,386,723.48
	 
	$365,560.29
	 

	Lease Year 9
	$4,518,325.08
	 
	$376,527.09
	 

	Lease Year 10
	$4,653,874.80
	 
	$387,822.90
	 

in advance on or before the first day of each calendar month during the Term. If the Term commences on a day other than the first day of a calendar month, or ends on a day other than the last day of a calendar month, then the Base Rent for such month shall be prorated on the basis of the number of days in that month. Rent shall be paid without any prior demand or notice therefor and without any deduction or set off, except as provided in this Lease. As used herein, the term "Lease Month" shall mean each calendar month during the Term (and if the Commencement Date does not occur on the first day of a calendar month, the period from the Commencement Date to the first day of the next calendar month shall be included in the first Lease Month for purposes of determining the duration of the Term and the monthly Base Rent rate applicable for such partial month) and the term "Lease Year" shall mean each consecutive period of twelve (12) Lease Months. 
* Base Rent shall be calculated based on 120,000 square feet during the first twenty-four (24) months of the Term, rather than 141,540 feet. 
ARTICLE 3 
Additional Rent 
(A)    Taxes. Tenant shall pay Landlord Tenant's Prorata Share of Taxes in excess of Taxes for calendar year 2013 (the ("Base Year"). "Taxes" shall mean (1) taxes, assessments and governmental charges or fees, whether federal, state, county or municipal, and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, imposed upon or with respect to the Building and the Property and all of the real estate taxes and assessments imposed on the land and improvements comprising the Building and the Property; and (2) any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 ("Proposition 13 XE "Proposition 13") was adopted by the voters of the State of California in the June 1978 election and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Taxes shall also include any governmental or private assessments or the contribution by the Building or such projects towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies; (3) any other taxes and assessments (including non-governmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Expenses) now or hereafter attributable to the Property (or its operation). Landlord reserves the right to bill Tenant directly, rather than include in "Taxes," the amount of taxes attributable to any above-standard improvements constructed by or for Tenant in the Premises. However, "Taxes" shall not include: Landlord's gross receipts taxes for the Complex, personal and corporate income taxes, inheritance and estate taxes, other business taxes and assessments, franchise, gift and transfer taxes, penalties or interest for late payment, and all other Taxes relating to a period payable or assessed outside the term of the Lease; provided that if an income or excise tax is levied by any governmental entity in lieu of or as a substitute for ad valorem real estate taxes (in whole or in part), then any such tax or excise shall constitute and be included within the term "Taxes." Taxes shall include the costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Property. Tenant waives all rights to protest or appeal the

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appraised value of the Premises and the Property; however, if Landlord is not already contesting taxes, at Tenant's request, Landlord shall contest taxes for the Building if it is commercially reasonable to do so. If Taxes for any period during the Tenn or any extension thereof, shall be increased after payment thereof by Landlord for any reason, Tenant shall pay Landlord upon demand Tenant's Prorata Share of such increased Taxes. Notwithstanding the foregoing, if any Taxes shall be paid based on assessments or bills by a governmental or municipal authority using a fiscal year other than a calendar year, Landlord may elect to average the assessments or bills for the subject calendar year, based on the number of months of such calendar year included in each such assessment or bill. "Tenant's Prorata Share" of Taxes and Operating Expenses relating solely to the Building (and not the Complex, as that tenn is defined below) shall be the rentable area of the Premises divided by the rentable area of the Building (i.e., 100%). Tenant's Prorata Share of Taxes and Operating Expenses relating to the Complex shall be the rentable area of the Premises divided by the rentable area of the Complex (i.e., 57.51%), which percentage, notwithstanding anything to the contrary set forth in this Lease, shall not increase for any reason during the Term. 
Notwithstanding the foregoing, in the event of any transfer, sale, other change in ownership, major alterations or modifications (except for alterations or modifications performed at Tenant's request, unless the same are pursuant to the Workletter or required by applicable Laws in effect on the Commencement Date), or refinancing (in each case, a "Capital Event") at the Building, Property and/or the Complex that causes the Property to be reassessed during the first five (5) Lease Years, then Tenant shall not be required to pay any portion of the increase in Taxes attributable to the first Capital Event that occurs during such five (5) year period ("First Event"), and, for purposes of calculating Tenant's Prorata Share of Taxes during the Initial Term, the amount of any such increase shall be added to the amount of Taxes for the Base Year as if such First Event had occurred during the Base Year. Thereafter, Tenant shall be fully responsible for any increase in Taxes attributable to the First Event. The Proposition 13 protection afforded to Tenant by this paragraph only applies to the First Event (if any) during said five (5) year period; this paragraph shall not be applicable to any subsequent Capital Events after the First Event during said five (5) year period (if any). Furthermore, upon notice to Tenant, Landlord may purchase the Proposition 13 protection provided by this paragraph and thereby cause Tenant to be responsible to pay Tenant's full share of Taxes pursuant to the preceding paragraph as if this paragraph did not exist by paying to Tenant the present value of Tenant's tax savings under this paragraph, discounted to present value at an interest rate of 6% per annum. 
(B)    Operating Expenses. Tenant shall pay Landlord Tenant's Prorata Share of Operating Expenses in excess of Operating Expenses for the Base Year. "Operating Expenses" shall mean all expenses of every kind (other than Taxes) which are paid, incurred or accrued for, by or on behalf of Landlord during any calendar year any portion of which occurs during the Term (subject to proration as provided in Section 3(D), below), in connection with the management, repair, maintenance and operation of the Property and the Complex of which the Property is a part, including without limitation, any amounts paid for: (a) utilities for the common areas of the Complex, including but not limited to electricity, power, gas, steam, chilled water, oil or other fuel, water, sewer, lighting, heating, air conditioning and ventilating (including, without limitation, taxes on utility usage) it being understood that all utility costs for the Premises shall not be included in Operating Expenses but rather shall be separately paid for by Tenant, (b) permits, licenses and certificates necessary to operate and manage the Property or for the operation of any governmentally mandated transportation to or from the Property, (c) insurance applicable to the Property, but not limited to the amount of coverage Landlord is required to provide under this Lease, (d) supplies, tools, equipment and materials used in the operation, repair and maintenance of the Property including, without limitation, costs of the maintenance, operation, and repair of the HV AC systems serving the Building, exclusive of systems which serve only a particular tenant's space, (e) accounting, legal, inspection, and consulting services, (f) expenses incurred by Landlord in connection with the development, implementation and provision of security measures for the Complex,

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(g) management fees of not more than three percent (3%) of the gross revenues of the Building, amounts payable under management agreements, and the fair rental value of any office space provided for a management office no greater than 2,000 rentable square feet of space, (h) wages, salaries and other compensation and benefits for all persons engaged in the operation, maintenance or security of, or transportation to or from, the Property, and employer's Social Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such wages, salaries, compensation and benefits, provided that such wages and benefits for persons who do not work full time at the Building shall be prorated based on time spent working on Building matters, (i) payments under any easement, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs in any planned development (to the best of Landlord's knowledge, none of the foregoing are existing as of the date of Lease execution other than as reflected on the public record), (j) operation, repair, and maintenance of all Systems and Equipment and components thereof (including replacement of components); janitorial service for the common areas of the Complex, it being understood that all janitorial costs for the Premises shall not be included in Operating Expenses but rather shall be separately paid for by Tenant; alarm and security service; elevator maintenance; cleaning of common area walks, parking facilities and Property walls; replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other common or public areas or facilities; maintenance and replacement of shrubs, trees, grass, sod and other landscaped items, irrigation systems, drainage facilities, fences, curbs, and walkways; re-paving and re-striping parking facilities; and roof repairs; (k) all expenses incurred and costs associated with the operation and maintenance of building amenities; (l) costs of service contracts; (m) special assessments, fees, and other charges and costs for transit, transit encouragement, traffic reduction programs, or any similar purpose; (n) any carbon tax, carbon credit, or other so-called carbon offset cost payable by Landlord with respect to Building operations, whether pursuant to a cap and trade carbon emission system or otherwise; and (o) costs incurred by Landlord in connection with any environmental initiative and/or operations & maintenance plan implemented by Landlord at the Property whether or not such initiatives are mandated by law including, without limitation, costs to: install water efficient irrigation, plumbing and fixtures; reduce heat islands; control stormwater; reduce chemical emissions; manage refrigerants; optimize energy performance and increase efficiencies; store and collect recyclables; promote usage of recycled content; and implement sustainable purchasing and waste management policies. Notwithstanding the foregoing, Operating Expenses shall not include: 
(i)    Capital Expenditures - costs of items considered capital repairs, replacements, improvements and equipment under generally accepted accounting principles consistently applied or otherwise, except those: (a) made to reduce Operating Expenses, provided that Tenant's prior written approval of cost-saving Operating Expenses shall be required, such approval not to be unreasonably withheld, or (b) to comply with any Laws or other governmental requirements enacted or the scope of which is expanded after the Commencement Date; provided, all such permitted capital expenditures (together with reasonable financing charges) shall be amortized for purposes of this Lease over their useful lives;
     (ii)    Corporate Overhead - All costs associated with the operation of the business of the entity which constitutes Landlord or Landlord's affiliated organizations or Landlord's managing agent (as distinguished from the costs of the operations of the Complex) including, but not limited to, any entity's general corporate overhead, legal, risk management or other departmental costs of off-site personnel, corporate and/or partnership accounting and legal costs, asset management fees, administrative fees, placement/recruiting expenses for employees whether they are assigned to the Complex or not, all costs associated with start-up or move of a management office due to sale of the Building, change of management companies or leasing company; 

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(iii)    Leasing - Any cost relating to the marketing, solicitation, negotIatIon and execution of leases of space in the Complex, including without limitation, promotional and advertising expenses (including, without limitation) real estate licenses and other industry certifications, health/sports club dues, employee parking and transportation charges, tickets to special events, commissions, finders fees, and referral fees, all expenses relating to the negotiation and preparation of any lease, license, sublease or other such document, costs of design, plans, permits, licenses, inspection, utilities for tenant spaces, construction and clean up of tenant improvements to the Premises or the premises of other tenants or other occupants, the amount of any allowances or credits paid to or granted to tenants or other occupants of the Complex; 
(iv)    Executive / Unrelated Salaries - Wages, salaries, fees, fringe benefits, and any other form of compensation paid to any executive employee of Landlord and!or Landlord's managing agent above the grade of Building Manager as such term is commonly understood in the property management industry, provided, however, all wages, salaries and other compensation otherwise allowed to be included in Operating Expenses shall also exclude any portion of such costs related to any employee's time devoted to other efforts unrelated to the maintenance and operation of the Complex; 
(v)    Competitively Bid/Arms Length Transactions - Any amount paid by Landlord or Landlord's managing agent to a subsidiary or affiliate of Landlord or Landlord's managing agent, or to any party as a result of a non-competitive selection process where it was practicable to solicit mUltiple bids, for management or other services to the Complex, or for supplies or other materials, to the extent the cost of such services, supplies, or materials exceed the cost that would have been paid had the services, supplies or materials been provided by parties unaffiliated with the Landlord or Landlord's managing agent on a competitive basis by reputable, professional firms customarily engaged in providing such services, but this subsection shall not limit Landlord's ability to include in Operating Expenses a 3% management fee in accordance with Section 3(B)(g) above; 
(vi)    Financing / Ground Lease - Mortgage payments, debt costs or other financing charges, costs of defending any lawsuits, costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord's interests in the Complex, bad debt loss, rent loss or any reserves thereof, any rental payments and related costs pursuant to any ground lease of land underlying all or any portion of the Complex; 
(vii)    Parking Charges - Any parking charges, either actual or not, for the Landlord's and!or Landlord's managing agent's management, engineering, maintenance, security, parking or other vendor personnel; 
(viii)    Building Defects - Any costs incurred in connection with the original design, construction, and clean-up of the Complex or any major changes to same, including but not limited to, additions or deletions of floors, renovations of the common areas (except as otherwise expressly permitted under this Section 3(B)), correction of defects in design and!or construction of the Complex including defective equipment; 
(ix)    Other Capital - Rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment, the cost of which if purchased would be excluded from Operating Expenses as a capital cost, excepting from this exclusion equipment not affixed to the Complex which is used in providing janitorial or similar services and, further

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excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition or other short term need in the Complex; 
(x)    Building Codes/ADA - Any cost incurred in connection with upgrading the Complex to comply with insurance requirements, life safety codes, ordinances, statutes, or other laws in effect prior to the Commencement Date, including without limitation the Americans With Disabilities Act (or similar laws, statutes, ordinances or rules imposed by the State, County, City, or other agency where the Complex is located), including penalties or damages incurred as a result of non-compliance; 
(xi)    Hazardous Material - Any cost or expense related to monitoring, testing, removal, cleaning, abatement or remediation of any Hazardous Materials (as defined in Article 26 below), including toxic mold, in or about the Complex or real property, and including, without limitation, hazardous substances in the ground water or soil, except to the extent the same were caused by Tenant, Tenant's subtenants, assignees or any Permitted Occupant (as that term is defined in Section 18(G) below), or their employees, agents or contractors; 
(xii)    Telecommunications - Any cost incurred in connection with modifying, removing, upgrading, replacing, repairing or maintaining the Complex's telecommunication systems, including the purchase, installation and operation of any informational displays in the Complex's elevators or lobbies; 
(xiii)    Reimbursements - Any cost of any service or items sold or provided to tenants or other occupants for which Landlord or Landlord's managing agent has been or is entitled to be reimbursed by such tenants or other occupants for such service other than via an operating expense provision or has been or is entitled to be reimbursed by insurance or otherwise compensated by parties other than tenants of the Complex, to include replacement of any item covered by a warranty;
(xiv)    Benefits to Others - Expenses in connection with services or other benefits which are provided to another tenant or occupant of the Complex and which are not available to Tenant; 
(xv)    Other Taxes - Landlord's gross receipts taxes for the Complex, personal and corporate income taxes, inheritance and estate taxes, other business taxes and assessments, franchise, gift and transfer taxes, and all other Real Estate Taxes relating to a period payable or assessed outside the term of the Lease; 
(xvi)    Special Assessment - Special assessments or special taxes initiated as a means of financing improvements to the Complex and the surrounding areas thereof to the extent requested by Landlord, as opposed to special assessments imposed by a governmental authority not at Landlord's request; 
(xvii)    Advertising/Promotion/Gifts - All advertising and promotional costs including any form of entertainment expenses, dining expenses, any costs relating to tenant or vendor relation programs including flowers, gifts, luncheons, parties, and other social events but excluding any cost associated with life safety information or education services which are provided to the tenants of the Complex; 
(xviii)    Fines & Penalties - Any fines, costs, late charges, liquidated damages, penalties, tax penalties or related interest charges, imposed on Landlord or Landlord's managing agent

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except as a result of late payment or other act or omission by Tenant, Tenant's agents, employees, or any Permitted Occupant; 
(xix)    Contributions - Any costs, fees, dues, contributions or similar expenses for political or charitable organizations; 
(xx)    Art - Costs, other than those incurred in ordinary maintenance and repair, for sculptures, paintings, fountains or other objects of art or the display of such items; 
(xxi)    Concessionaires - Any compensation or benefits paid to or provided to clerks, attendants or other persons in commercial concessions operated by or on behalf of the Landlord; 
(xxii)    Insurance - (i) The cost of any insurance coverage, whether or not required by any Holder which is related, in whole or in part, to (a) property or casualty insurance coverage in amounts greater than the replacement cost of the Property, or (b) lease enhancement insurance or other credit enhancement-related insurance; or (ii) any increase in the cost of Landlord's insurance caused by a specific use of another tenant or by Landlord; and 
(xxiii)    Reserves - Any reserves of any kind. 
(xxiv)    Environmental Certification - If the Building and/or the Complex does not have such certifications as of the Commencement Date, any expenses incurred by the Landlord in connection with its plans or efforts to obtain or renew any form of certification for energy efficiency or environmental responsibility from organizations or governmental agencies such as the United States Green Building Council's Leadership in Energy and Environmental Design (LEED) certification, Energy Star, Green Globes, etc., including, without limitation, consulting fees, legal fees, architectural, design and/or engineering fees and submission fees. However, nothing in this subsection shall prohibit Landlord from passing through capital expenditures permitted by Subsection 3(B)(i) above. 
(xxv)    Encroachments - Costs incurred by Landlord to correct encroachments of improvements located at the Property that encroach onto neighboring property as well as costs to correct neighboring encroachments of other owners' improvements on to the Property. 
The Property is part of a complex of buildings located at 3453, 3455, 3465 & 3475 East Foothill Boulevard, Pasadena, California ("Complex") which is shown on the Site Plan attached hereto as Exhibit F and incorporated herein by this reference ("Site Plan"). Tenant acknowledges that Operating Expenses include operation and maintenance costs for such Complex. In the event that certain Taxes or Operating Expenses relate solely to a particular building or buildings or the parcel(s) on which such building or buildings is located, Landlord shall allocate such Taxes and Operating Expenses to such building(s) and parcel(s) and Tenant shall not be obligated to pay any such Taxes and Operating Expenses allocated solely to any building other than the Building and/or solely to any parcel other than the parcel on which the Building is located. 
Notwithstanding anything to the contrary set forth in this Lease: 
(aa) Gross Up Adjustment. If the Complex is not at least one hundred percent (100%) occupied with occupants paying full rent during all or any portion of the Base Year or any calendar year thereafter, Landlord shall make an appropriate adjustment to those Operating Expenses which vary with occupancy for such year (including, without limitation, management fees) to determine what the Complex Operating Expenses would have been for such year if the Complex had been one hundred percent (100%) occupied

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with occupants paying full rent during such year. Such gross up adjustments shall be made by Landlord by increasing only the variable portion of those costs which actually vary based upon the level of occupancy of the Complex. 
(bb) Base Year Equivalency. In the event Landlord incurs costs associated with or relating to Operating Expenses which were not part of Operating Expenses during Tenant's entire Base Year or expenses associated with increased levels or frequency of such services and such new or increased costs are within Landlord's control, then such Operating Expenses that are within Landlord's control for the Base Year shall be increased, including being grossed up to one hundred percent (100%) level, by the reasonably estimated amount of such costs as if such costs had been incurred and included in Operating Expenses during the entire Base Year. The purpose of this provision is to result in an "apples to apples" comparison between the Base Year and all subsequent calendar years with respect to Operating Expenses that are within Landlord's control. Landlord shall purchase insurance policies for the Complex at a market-competitive cost. 
(cc) Real Estate Tax Adjustments. If the Complex is not fully assessed in the Base Year and any subsequent calendar year, then the Landlord shall adjust the subject year's Taxes to reflect what such year's Taxes would have been had the Complex been fully completed and assessed for tax purposes. For purposes of calculating Tenant's Prorata Share of Taxes, the Taxes incurred during the Base Year and any subsequent year shall be calculated without regard to any Proposition 8 reduction in Taxes for the Base Year and/or any subsequent year. As a result, Landlord and Tenant acknowledge that the amounts of Taxes used in calculations of the base year and in each year for which Tenant's Prorata Share is determined may be greater than actual amounts, but shall, nonetheless, be the amounts used to determine Tenant's Prorata Share. Furthermore, tax refunds under Proposition 8 shall not be deducted from Taxes nor refunded to Tenant, but rather shall be the sole property of Landlord. Landlord and Tenant acknowledge that the preceding sentence is not intended to in any way affect (1) the inclusion in Taxes of the statutory two percent (2%) annual increase in Taxes (as such statutory increase may be modified by subsequent legislation), or (2) the inclusion or exclusion of Taxes pursuant to the terms of Proposition 13, which shall be governed pursuant to the terms of Section 3(A) above. 
(dd) Other Adjustments. (I) Net Expenses - Operating Expenses and Taxes shall be "net" only and shall therefore be reduced by all cash discounts, trade discounts, quantity discounts, rebates, refunds, credits, or other amounts received by Landlord or Landlord's managing agent, including any such related amounts from tenants of the Complex other than pursuant to tax and operating expense recovery provisions such as this, for its purchase of or provision of any goods, utilities, or services; (II) Partial Year - Operating Expenses that cover a period of time not entirely within the Tenn shall be prorated based on the actual number of days in the year; (III) Duplicate Charges - Landlord shall not (i) profit by including items in Operating Expenses and/or Taxes that are otherwise also charged separately to others, or (ii) collect Operating Expenses and/or Taxes from Tenant and all other tenants and/or occupants in the Complex in an amount in excess of what Landlord actually incurred for the items included in Operating Expenses and/or Taxes; and (IV) Consistency. Landlord's calculation of Taxes and Operating Expenses shall be consistently applied to the extent Taxes and Operating Expenses are within Landlord's control. 
(ee) Controllable Operating Expenses. Beginning with the first calendar year following the Base Year, Controllable Expenses (as hereinafter defined) shall not increase by more than four percent (4.0%) over the prior calendar year's Controllable Expenses, determined on a compounded and cumulative basis from the Base Year). "Controllable Expenses" shall mean all Operating Expenses other than union labor costs, insurance costs, all governmentally mandated costs and expenses (including all taxes of any kind, to the extent such taxes are included in Building Operating Expenses), utility costs, and insurance deductibles. 

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(C)    Manner of Payment. Tenant's Prorata Share of Taxes and Operating Expenses shall be paid in the following manner: 
(i)    Landlord may reasonably estimate in advance the amounts Tenant shall owe for Tenant's Prorata Share of Taxes and Operating Expenses for any full or partial calendar year of the Term. In such event, Tenant shall pay such estimated amounts, on a monthly basis in installments equal to one-twelfth of the annual estimate, on or before the first day of each calendar month, together with Tenant's payment of Base Rent. Such estimate may be reasonably adjusted from time to time by Landlord, but may never exceed the 4% cap on Controllable Operating Expenses. 
(ii)    Within one hundred twenty (120) days after the end of each calendar year, Landlord shall provide a statement (the "Statement") to Tenant showing: (a) Tenant's Prorata Share of the amount of actual Taxes and Operating Expenses for such calendar year, with a listing of amounts for major categories of Operating Expenses, (b) any amount paid by Tenant towards Tenant's Prorata Share of Taxes and Operating Expenses during such calendar year on an estimated basis, and (c) any revised estimate of Tenant's obligations for Tenant's Prorata Share of Taxes and Operating Expenses for the current calendar year. 
(iii)    If the Statement shows that Tenant's estimated payments were less than Tenant's actual obligations for Tenant's Prorata Share of Taxes and Operating Expenses for such year, Tenant shall pay the difference. If the Statement shows an increase in Tenant's estimated payments for the current calendar year, Tenant shall pay the difference between the new and former estimates, for the period from January 1 of the current calendar year through the month in which the Statement is sent. Tenant shall make such payments within thirty (30) days after Landlord sends the Statement. 
(iv)    If the Statement shows that Tenant's estimated payments exceeded Tenant's actual obligations for Tenant's Prorata Share of Taxes and Operating Expenses, Tenant shall receive a credit for the difference against payments of Rent next due. If the Term shall have expired and no further Rent shall be due, Tenant shall receive a refund of such difference, within thirty (30) days after Landlord sends the Statement. 
(v)    So long as Tenant's obligations hereunder are not materially adversely affected thereby, Landlord reserves the right to reasonably change, from time to time, the manner or timing of the foregoing payments. In lieu of providing one Statement covering Tenant's Prorata Share of Taxes and Operating Expenses, Landlord may provide separate statements, at the same or different times. No delay by Landlord in providing the Statement (or separate statements) shall be deemed a default by Landlord or a waiver of Landlord's right to require payment of Tenant's obligations for actual or estimated Taxes or Operating Expenses. 
(D)    Proration. If the Term commences other than on January 1, or ends other than on December 31, Tenant's obligations to pay estimated and actual amounts towards Tenant's Prorata Share of Taxes and Operating Expenses for such fIrst or final calendar years shall be prorated to reflect the portion of such years included in the Term. Such proration shall be made by mUltiplying the total estimated or actual (as the case may be) amount of Tenant's Prorata Share of Taxes and Operating Expenses, for such calendar years, by a fraction, the numerator of which shall be the number of days of the Term during such calendar year, and the denominator of which shall be three hundred and sixty-fIve (365). 
(E)    Landlord's Records. Landlord shall maintain records respecting Taxes and Operating Expenses and determine the same in accordance with sound accounting and management practices,

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consistently applied. Taxes and Operating Expenses shall be calculated on a full accrual basis. Landlord reserves the right to change to a cash system of accounting and, in such event, Landlord shall make reasonable and appropriate accrual adjustments to ensure that each calendar year includes substantially the same recurring items. Provided no monetary Default then exists, after receiving an annual Statement and giving Landlord thirty (30) days prior written notice thereof, Tenant may inspect or audit Landlord's records relating to Taxes and Operating Expenses for the period of time covered by such Statement and for the prior year in accordance with the following provisions. If Tenant fails to object to the calculation of Taxes and/or Operating Expenses on an annual Statement within two (2) years after the Statement has been delivered to Tenant or if Tenant fails to conclude its audit or inspection within one hundred twenty 
(120) days after objecting to the same (provided that Landlord makes its records available to Tenant as set forth in this Section 3(E), and provided that such time period shall be extended in the event of any actual or threatened litigation and/or arbitration relating to any disputed Taxes and/or Operating Expenses), then Tenant shall have waived its right to object to the calculation of Taxes and Operating Expenses set forth on such Statement and the calculation of Taxes and Operating Expenses set forth on such Statement shall be final, but subject to Tenant's right to audit the prior year as set forth in the preceding sentence. Tenant's audit or inspection shall be conducted at the Complex or at another office maintained by Landlord in the Los Angeles, California area, shall not unreasonably interfere with the conduct of Landlord's business, and shall be conducted only between 8:00 a.m. and 6:00 p.m. Tenant shall pay the cost of such audit or inspection unless the total Taxes and/or Operating Expenses for the period in question is determined to be in error by more than 4% in the aggregate, in which case Landlord shall pay the audit cost. Tenant may not conduct an inspection or have an audit performed more than once during any calendar year. If such inspection or audit reveals that an error was made in the Taxes and/or Operating Expenses previously charged to Tenant, then Landlord shall refund to Tenant any overpayment of such costs, or Tenant shall pay to Landlord any underpayment of such costs, as the case may be, within thirty (30) days after notification thereof. Tenant shall maintain the results of each such audit or inspection confidential (and shall not disclose it to any person or entity other than its legal and financial consultants, who will also keep it confidential, or as required by any Laws or in connection with any dispute or litigation relating to this Lease) and shall not be permitted to use any third party to perform such audit or inspection other than an independent firm: (1) that is not compensated on a contingency fee basis or in any other manner that is dependent upon the results of such audit or inspection (and Tenant shall certify the same to Landlord in writing as to any particular firm upon receipt of written request from Landlord), and (2) that agrees with Tenant to maintain the 'results of such audit or inspection confidential (and shall not disclose it to any person or entity other than as required by any Laws or in connection with any dispute or litigation relating to this Lease). Nothing in this section shall be construed to limit, suspend, or abate Tenant's obligation to pay Rent when due, including Additional Rent.
 (F)    Rent and Other Charges. "Additional Rent" means Tenant's Prorata Share of Taxes and Tenant's Prorata Share of Operating Expenses. Base Rent, Additional Rent and any other amounts which Tenant is or becomes obligated to pay Landlord under this Lease or other agreement entered in connection herewith, are sometimes herein referred to collectively as "Rent," and all remedies applicable to the non-payment of Rent shall be applicable thereto. Rent shall be paid at any office maintained by Landlord or its agent at the Property or at such other place as Landlord may designate. 
ARTICLE 4 
Use and Rules 
Tenant shall use the Premises for general office use and other legally permitted uses, consistent with a first class suburban office building campus, and for no other purpose whatsoever, in compliance with all applicable Laws and all covenants, conditions and restrictions of record applicable to Tenant's use or occupancy of the Premises, and without unreasonably disturbing or interfering with any other tenant or occupant of the Complex, subject to Tenant's parking rights under Article 35 below, including, but not

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limited to, any requirements of changes to the Building related to or affected by Tenant's acts, occupancy or use of or alterations to the Premises but any such changes to the base building portions of the Building, the Systems and Equipment, and/or what would be considered common area portions of the Building if the Building were a multi-tenant building, shall be performed by Landlord and the same shall be included in Operating Expenses to the extent the same are allowed pursuant to Article 3 above, and in no event shall any such costs for any year subsequent to the Base Year be added to the Base Year pursuant to Section (3)(bb) above). Notwithstanding the preceding sentence, Tenant shall be responsible at Tenant's expense for such compliance and changes if such compliance and/or changes are required by Tenant's alterations to the Premises and/or Tenant's use of the Premises for other than general office use. Tenant shall not use the Premises in any manner so as to cause a cancellation of Landlord's insurance policies or an increase in the premiums thereunder, unless Tenant pays for any such increase in premiums. To the extent that the same do not conflict with the terms of this Lease, Tenant shall comply with, and shall cause its Permitted Transferees, Permitted Occupants, invitees, employees, contractors and agents to comply with, all rules set forth in Rider One attached hereto (the "Rules"). Landlord shall have the right to reasonably amend such Rules and supplement the same with other reasonable Rules (not expressly inconsistent with this Lease) relating to the Property, or the promotion of safety, care, cleanliness or good order therein, and all such amendments or new Rules shall be binding upon Tenant after five (5) days' notice thereof to Tenant to the extent that the same do not conflict with the terms of this Lease. All Rules shall be applied on a non-discriminatory basis, but nothing herein shall be construed to give Tenant or any other Person any claim, demand or cause of action against Landlord arising out of the violation of such Rules by any other tenant, occupant, or visitor of the Property, or out of the enforcement or waiver of the Rules by Landlord in any particular instance; provided that Landlord shall use commercially reasonable efforts comparable to those that would be used by other landlords of comparable buildings in the vicinity of the Building, to secure compliance by other tenants of the Complex with the Rules. 
ARTICLE 5 
Services and Utilities
Landlord shall provide the following services and utilities (the cost of which shall be included in Operating Expenses unless otherwise stated herein). Except in cases of emergency where no prior notice is required, Landlord shall be required to provide prior notice as described in the last paragraph of Article 28 of this Lease (and subject to the last paragraph of Article 19 of this Lease) in order to enter the Premises in order to provide services under this Article 5.
     (A)    Landlord shall repair and replace, at Tenant's expense, all electric lighting bulbs, tubes, ballasts, and starters. 
(B)    Heat and air-conditioning at such temperatures and in such amounts as are standard for comparable buildings in the vicinity of the Building from 7:00 a.m. until 7:00 p.m. Monday through Friday and 8:00 a.m. until I :00 p.m. on Saturday, except on Holidays. "Holidays" shall mean all federally observed holidays, including New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Veterans' Day, Thanksgiving Day, and Christmas Day. Tenant may operate supplemental HV AC installed and paid for by Tenant in accordance with the requirements of this Lease twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year. 
(C)    Water for drinking, lavatory and toilet purposes. 
(D)    At Tenant's expense (i.e., not included in Operating Expenses), customary office cleaning and trash removal service Monday through Friday or Sunday through Thursday, excluding Holidays, consistent with standards for comparable buildings in the Building's submarket. Except with respect to any space in addition to the Premises which Tenant leases in the Complex and which comprises less than an entire building, at Tenant's option Tenant shall provide at Tenant's expense customary office 

cleaning and trash removal service Monday through Friday or Sunday through Thursday, excluding Holidays, consistent with standards for comparable buildings in the Building's submarket. 

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(E)    Operatorless passenger elevator service twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year. One of such elevators may be a "swing" elevator for use also as a freight elevator. 
(F)    Access to the Premises twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year. 
(G)    If reasonable and feasible, Landlord shall provide extra utilities or services requested by Tenant provided the request does not involve modifications or additions to existing Systems and Equipment. Tenant shall pay for extra utilities or services at rates set by Landlord in its reasonable discretion consistent with charges for similar extra utilities or services at comparable buildings in the Building'S submarket, provided that Tenant may elect, in Tenant's sole discretion, to obtain such utilities and/or services directly from a provider instead of from Landlord, and Landlord shall not be entitled to charge Tenant for any such utilities and/or services. Payment shall be due at the same time as Base Rent or, if billed separately, shall be due within thirty (30) days after billing. If Tenant shall fail to make any payment for additional services, Landlord may, without notice to Tenant and in addition to all other remedies available to Landlord, discontinue the additional services. Landlord may install and operate meters or any other reasonable system for monitoring or estimating any services or utilities used by Tenant in excess of those required to be provided by Landlord under this Article (including a system for Landlord's engineer to reasonably estimate any such excess usage). If such system indicates such excess services or utilities, Tenant shall pay Landlord's reasonable charges for installing and operating such system and any supplementary air-conditioning, ventilation, heat, electrical or other systems or equipment (or adjustments or modifications to the existing Systems and Equipment), and Landlord's reasonable charges for such amount of excess services or utilities used by Tenant. Notwithstanding the foregoing, Landlord may impose a reasonable charge for any extra utilities and services, including, without limitation, air conditioning, electricity, and water, provided by Landlord by reason of: (i) any use of the Premises at any time other than the hours set forth above; (ii) any utilities or services beyond what Landlord agrees herein to furnish; or (iii) special electrical, cooling and ventilating needs created by Tenant's telephone equipment, computer, electronic data processing equipment, copying equipment, illuminated signage (if permitted hereunder) and other such equipment or uses. Landlord, at its option, may require installation of metering devices at Tenant's expense for the purpose of metering Tenant's utility consumption. Notwithstanding anything to the contrary set forth herein, Landlord hereby represents and warrants that all charges by Landlord pursuant to this Section shall be based solely upon Landlord's actual cost and expense without mark-up, profit or accelerated depreciation, provided, however, that Tenant shall be required to pay Landlord as additional Rent Seven Dollars ($7.00) per hour of after-hours HVAC time to compensate for additional wear and tear on the Property's HV AC equipment. 
(H)    All electricity used by Tenant in the Premises shall not be included in Operating Expenses and instead shall be paid by Tenant by a separate charge billed by the applicable utility company and payable directly by Tenant. Electrical service to the Premises may be furnished by one or more companies providing electrical generation, transmission and distribution services, and the cost of electricity may consist of several different components or separate charges for such services, such as generation, distribution and stranded cost charges. In the event Tenant elects, in Tenant's sole discretion, to have Landlord provide electrical services to the 3465 Building, Landlord shall have the exclusive right (i) to choose the company or companies to provide electrical service to the Property and the Premises, (ii) to aggregate the electrical service for the Property and the Premises with other buildings or properties, (iii) to purchase electrical service through an agent, broker or buyer's group, and (iv) to change the electrical service provider or manner of purchasing electrical service from time to time. In the event Tenant elects, in Tenant's sole discretion, to contract directly for electrical services to the 3465 Building,

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Tenant shall have the exclusive right (i) to choose the company or companies to provide electrical service to the 3465 Building, (ii) to purchase electrical service through an agent, broker or buyer's group, and (iii) to change the electrical service provider or manner of purchasing electrical service from time to time. 
(I)    Landlord shall use reasonable efforts to restore any service required of it that becomes unavailable; however, such unavailability shall not render Landlord liable for any damages caused thereby, be a constructive eviction of Tenant, constitute a breach of any implied warranty, or, except as provided in the next sentence, entitle Tenant to any abatement of Tenant's obligations hereunder. If, however, Tenant is prevented from using the Premises because of the unavailability of any service to be provided by Landlord hereunder for a period of three (3) consecutive business days following Landlord's receipt from Tenant of a written notice regarding such unavailability and such unavailability is within Landlord's reasonable control and is not caused by or through Tenant or by an accident, breakage or repairs, strikes, lockouts or other labor disturbance or labor dispute of any character, governmental regulation, moratorium or other governmental action or inaction, inability despite the exercise of reasonable diligence to obtain electricity, water or fuel, service interruptions or any other unavailability of utilities resulting from causes beyond Landlord's control including, without limitation, any utility service provider initiated "brown out" or "blackout", then Tenant shall, as its exclusive remedy be entitled to a reasonable abatement of Rent for each consecutive day (after such three (3) business day period) that Tenant is so prevented from using the Premises. 
ARTICLE 6 
Alterations and Liens 
Tenant shall not make any Alterations ("Alterations" or "Tenant Work") without the prior written consent of Landlord, which consent shall not be withheld provided Tenant's proposed Alterations meet the Drawing Criteria (defined in the Workletter). Before entering the Property, any contractor engaged by Tenant must provide Landlord a certificate of insurance proving that such contractor satisfies or exceeds Landlord's standard insurance requirements. Landlord may impose the following requirements as the sole conditions to such consent: the submission of plans and specifications for Landlord's prior written approval (which shall not be unreasonably withheld, conditioned or delayed); obtaining necessary permits; either Tenant or Tenant's contractor obtaining insurance as required by Section (9)(B)(vii) below as well as CGL and worker's compensation insurance; prior approval (which shall not be unreasonably withheld, conditioned or delayed) of general contractors (provided that the following contractors are hereby approved by Landlord: Corporate Contractors, Pinnacle Contractors, Howard Building Corporation, Phoenix Contractors); receipt of contractor and subcontractor lien waivers; affidavits listing all contractors, subcontractors and suppliers; Tenant's use of commercially reasonable efforts without the expenditure of any money to ensure the ability of Tenant's contractors to work in harmony with other contractors at the Complex without picketing or any other adverse consequences; affidavits from engineers reasonably acceptable to Landlord stating that the Tenant Work will not adversely affect the Systems and Equipment or the structure of the Property (to the extent reasonably necessary to show that the Alterations meet the Drawing Criteria); and requirements as to the manner and times in which such Tenant Work shall be done (provided there shall be no requirements as to the manner and times in which such Tenant Work shall be done with respect to the 3465 Building). All Tenant Work shall be performed in a good and workmanlike manner in accordance with approved plans and specifications (to the extent plan approval is required) and all materials used shall be of a quality comparable to or better than those in the Premises and Property. To the extent such Alterations or Tenant Work would impact the Systems and Equipment, the structure of the Property, or the exterior of the Building, Tenant shall reimburse Landlord for all third party out of pocket costs actually, reasonably incurred by Landlord reviewing Tenant's plans and specifications relating to such Alterations or Tenant Work. Consent or supervision by Landlord shall not be deemed a warranty as to the adequacy of the design, workmanship or quality of materials, and Landlord hereby expressly disclaims any responsibility

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or liability for the same. Landlord shall under no circumstances have any obligation to repair, maintain or replace any portion of the Tenant Work. Notwithstanding anything to the contrary set forth herein, Tenant shall not be required to obtain Landlord's prior consent with respect to any strictly cosmetic work performed within the Premises by Tenant, such as the installation of wall coverings or floor coverings, and/or any Alterations which (i) do not materially adversely affect the Building's structure and/or the Building's Systems and Equipment, and (ii) do not cost in excess of Seventy-Five Thousand ($75,000).
     Tenant shall keep the Property and Premises free from any mechanic's, materialman's or similar liens or other such encumbrances in connection with any Tenant Work on or respecting the Premises not performed by or at the request of Landlord, and shall indemnify and hold Landlord harmless from and against any claims, liabilities, judgments, or costs (including reasonable attorneys' fees) arising out of the same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any Tenant Work (or such additional time as may be necessary under applicable Laws), to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility. If Tenant fails, within 20 days after the date of the filing of the lien, to discharge such lien, Landlord may, but shall not be required or expected to, remove such lien in such manner as Landlord may, in its sole discretion, determine, and the full cost thereof, together with all Landlord's fees and costs, including attorney fees, shall be due and payable by Tenant to Landlord immediately upon Tenant's receipt of Landlord's notice therefor. The amount so paid shall be deemed additional Rent under this Lease payable upon demand, without limitation as to other remedies available to Landlord under this Lease. Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord's title to the Property or Premises to any lien or encumbrance whether claimed by operation of law or express or implied contract. Any claim to a lien or encumbrance upon the Property or Premises arising in connection with any Tenant Work on or respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord's option shall attach only against Tenant's interest in the Premises and shall in all respects be subordinate to Landlord's title to the Property and Premises. 
After the Commencement Date, construction in the Premises by Tenant shall comply with the Building's environmental and energy efficiency initiatives in effect at the time of construction. Such initiatives may include, but shall not be limited to, usage of low VOC construction materials (including, without limitation, low VOC paint and carpet); energy efficient lighting (and controls), equipment, and appliances; HV AC efficiencies; water use reduction; CFC reduction; recycling; construction waste management; usage of locally manufactured materials; usage of rapidly renewable materials; and usage of recycled materials.
 All contractors and subcontractors shall be required to procure and maintain insurance against such risks, in such amounts, and with such companies as Landlord may reasonably require consistent with Article 9 of this Lease. Certificates of such insurance, with paid receipts therefor, must be received by Landlord before any work is commenced. All contracts between Tenant and a contractor must explicitly require the contractor to (a) name Landlord and Landlord's agents as additional insureds and (b) indemnify and hold harmless Landlord and Landlord's agents. 
ARTICLE 7 
Repairs and Maintenance
Landlord shall repair and maintain the Premises, Property, and the Systems and Equipment in good condition, working order and repair, consistent with first class suburban office building standards for the submarket in which the Building is located, the cost of which shall be included in Operating Expenses to the extent allowed pursuant to Article 3 above. However, Tenant shall indemnify Landlord and pay for any repairs, maintenance and replacements to areas of the Property caused by the gross negligence or misconduct of Tenant or its employees, agents, contractors, or visitors (notwithstanding

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anything to the contrary contained in this Lease). Except in cases of emergency where no prior notice is required, Landlord shall be required to provide prior notice as described in the last paragraph of Article 28 of this Lease (and subject to the last paragraph of Article 19 of this Lease) n order to enter the Premises in order to provide repair and maintenance under this Article 7. 
ARTICLE 8 
Casualty Damage 
Subject to Article 6 and the remainder of this Article 8, Landlord shall use available insurance proceeds to restore the Premises, parking areas of the Complex, or any common areas of the Property providing access thereto which are damaged by fire or other casualty during the Term. Such restoration shall be to substantially the condition prior to the casualty, except for modifications required by zoning and building codes and other Laws or by any Holder, any other modifications to the common areas deemed desirable by Landlord (provided access to the Premises and parking are not materially impaired), and except that Landlord shall not be required to repair or replace any of Tenant's furniture, furnishings, fixtures or equipment, or any alterations or improvements in excess of any work performed or paid for by Landlord under the terms, covenants and conditions of any separate agreement therefor signed by the parties hereto. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof. However, Landlord shall allow Tenant a proportionate abatement of Rent during the time and to the extent the Premises (or any portion thereof) are unfit for occupancy for the purposes permitted under this Lease and/or the parking rights granted to Tenant pursuant to this Lease are materially adversely affected by such casualty and the Premises (or any portion thereof) are not occupied by Tenant as a result thereof (unless Tenant or its employees or agents intentionally caused the damage). Notwithstanding the foregoing, Landlord may terminate this Lease by giving Tenant written notice of termination within sixty (60) days after the date of damage (such termination notice to include a termination date providing at least ninety (90) days for Tenant to vacate the Premises), if the Property shall be damaged by fire or other casualty such that: (a) repairs to the Premises and access thereto cannot reasonably be completed within two hundred seventy (270) days after the casualty without the payment of overtime or other premiums, (b) more than twenty-five percent (25%) of the Premises is affected by the damage and fewer than twenty-four (24) months remain in the Term, or any material damage occurs to the Premises during the last twelve (12) months of the Term (unless Tenant exercises an available renewal option), or (c) any Holder shall require that the insurance proceeds or any portion thereof be used to retire the Mortgage debt (or shall terminate the ground lease, as the case may be), or the damage is not fully covered by Landlord's insurance policies (excluding the deductible). Tenant shall have the option to terminate this Lease in the event that (x) Landlord informs Tenant that repairs to the Premises, parking areas, and access thereto cannot be substantially completed within two hundred seventy (270) days of the casualty, (y) repairs to the Premises, parking areas and access thereto are not in fact substantially completed within two hundred seventy (270) days of the casualty, or (z) any material damage occurs to the Premises during the last twelve (12) months of the Term. If Tenant elects to terminate pursuant to clause (x) in the preceding sentence, Tenant must do so, if at all, within fifteen (15) days of Tenant's receipt of Landlord's notice informing that repairs cannot be completed within 270 days. Tenant acknowledges that this Article represents the entire agreement between the parties respecting casualty damage to the Premises or the Property. Tenant hereby waives the provisions of Section 1932(2) and 1933(4) of the California Civil Code and any other applicable law providing for termination of a hiring upon destruction of the thing hired, which are superseded by this Article 8. In the event of any termination under this Article 8, Landlord shall promptly return to Tenant the Letter of Credit, provided that, if applicable, Landlord may draw upon the Letter of Credit to the extent Landlord is permitted to do so under this Lease before Landlord returns the Letter of Credit. 

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ARTICLE 9 
Insurance. Subrogation. and Waiver of Claims 
(A)    Tenant shall not conduct any activity, or place any equipment or other item in or about the Premises, the Building or the Property, which will in any way increase the rate of property insurance or other insurance on the Property unless Tenant pays such increase. If any increase in the rate of property or other insurance is due to any activity, equipment or other item of Tenant, then (whether or not Landlord has consented to such activity, equipment or other item) Tenant shall have the option to either (i) pay as additional rent due hereunder the amount of such increase or (ii) discontinue such activity or remove such equipment or other item. The statement of any applicable insurance company or insurance rating organization (or other organization exercising similar functions in connection with the prevention of fIre or the correction of hazardous conditions) that an increase is due to any such activity, equipment or other item shall be conclusive evidence thereof. 
(B)    Throughout the Term, Tenant shall obtain and maintain the following insurance coverages written with companies with an A.M. Best A-, X or better rating and S&P rating of at least A-: 
(i)    Commercial General Liability ("CGL") insurance (written on an occurrence basis) with limits not less than One Million Dollars ($1,000,000) combined single limit per occurrence, Two Million Dollar ($2,000,000) annual general aggregate (on a per location basis), Two Million Dollars ($2,000,000) products/completed operations aggregate, One Million Dollars ($1,000,000) personal and advertising injury liability, Fifty Thousand Dollars ($50,000) fIre damage legal liability, and Five Thousand Dollars ($5,000) medical payments. CGL insurance shall be written on a current ISO occurrence form (or a substitute form providing equivalent or broader coverage) and shall cover liability arising from Premises, operations, independent contractors, products-completed operations, personal injury, advertising injury and liability assumed under an insured contract. 
(ii)    Workers Compensation insurance as required by the applicable state law, and Employers Liability insurance with limits not less than One Million Dollars ($1,000,000) for each accident, One Million Dollars ($1,000,000) disease policy limit, and One Million Dollars ($1,000,000) disease each employee. 
(iii)    Commercial Auto Liability insurance (if applicable) covering automobiles owned, hired or used by Tenant in carrying on its business with limits not less than One Million Dollars ($1,000,000) combined single limit for each accident. 
(iv)    Umbrella/Excess Insurance coverage on a follow form basis in excess of the CGL, Employers Liability and Commercial Auto Policy with limits not less than Five Million Dollars ($5,000,000) per occurrence and Five Million Dollars ($5,000,000) annual aggregate. 
(v)    Special Form Property Insurance covering Tenant's property, furniture, furnishings, fixtures, improvements, and equipment located at the Building. If Tenant is responsible for any machinery, Tenant shall maintain boiler and machinery insurance. 
(vi)    Business Interruption and Extra Expenses insurance in amounts typically carried by prudent tenants engaged in similar operations, but in no event in an amount less than double the annual Base Rent then in effect. Such insurance shall reimburse Tenant for direct and indirect loss of earnings and extra expense attributable to all perils insured against. 

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(vii)    Builder's Risk (or Building Constructions) insurance during the course of construction of any Alteration, including during the performance of Tenant's Work and until completion thereof. Notwithstanding anything to the contrary set forth herein, Tenant shall not be obligated to carry the insurance described in this subsection if such insurance is carried by Tenant's contractor. Such insurance shall be on a form covering Landlord, Landlord's architects, Landlord's contractor or subcontractors (to the extent applicable), Tenant and Tenant's contractors, as their interest may appear, against loss or damage by fire, vandalism, and malicious mischief and other such risks as are customarily covered by the so-called "broad form extended coverage endorsement" upon all Alterations or Tenant's Work in place and all materials stored at the Premises, and all materials, equipment, supplies and temporary structures of all kinds incident to Alterations or Tenant's Work and builder's machinery, tools and equipment, all while forming a part of, or on the Premises, or when adjacent thereto, while on drives, sidewalks, streets or alleys, all on a completed value basis for the full insurable value at all times. Said Builder's Risk Insurance shall contain an express waiver of any right of subrogation by the insurer against Landlord, its agents, employees and contractors. 
(C)    Landlord and Landlord's agents shall be endorsed on each policy as additional insureds as it pertains to the CGL, Umbrella, and Auto policy, and coverage shall be primary and noncontributory. Landlord shall be a loss payee on the Property policy in respect of Tenant's improvements to the extent that Landlord is responsible for the repair and replacement of same under this Lease. All insurance shall (1) contain an endorsement that such policy shall remain in full force and effect notwithstanding that the insured may have waived its right of action against any party prior to the occurrence of a loss (Tenant hereby waiving its right of action and recovery against and releasing Landlord and Landlord's Representatives from any and all liabilities, claims and losses for which they may otherwise be liable to the extent Tenant is covered by insurance carried or required to be carried under this Lease); (2) provide that the insurer thereunder waives all right of recovery by way of subrogation against Landlord and Landlord's representatives in connection with any loss or damage covered by such policy (and Tenant shall provide evidence of such waiver); and (3) be acceptable in form and content to Landlord. Tenant shall cause its insurance carrier to provide Landlord with 30 days advance notice (10 days for non-payment of premium) of any cancellation, failure to renew, reduction of amount of insurance or change in Tenant's insurance coverage if it is reasonable and customary for an office tenant in the Building'S submarket to obtain such an undertaking from its insurance carrier. In the event Tenant's insurance carrier will not agree to provide Landlord advance notice as aforesaid, then Tenant shall give Landlord notice of cancellation, failure to renew, reduction of amount of insurance, or change of Tenant's insurance coverage no later than two (2) business days after Tenant learns of such cancellation, failure to renew, reduction of amount of insurance, or change of coverage. After the expiration of the initial Term, Landlord reserves the right from time to time to reasonably require higher minimum amounts or different types of insurance consistent with market requirements of similar properties in the vicinity of the Complex. Tenant shall deliver an ACORD 25 certificate or its equivalent with respect to all liability and personal property insurance and an ACORD 28 certificate or its equivalent with respect to all commercial property insurance and receipts evidencing payment therefor (and, upon request, copies of all required insurance policies, including endorsements and declarations) to Landlord on or before the Commencement Date and at least annually thereafter. If Tenant fails to provide evidence of insurance required to be provided by Tenant hereunder, prior to commencement of the Lease Term and thereafter within thirty (30) days following Landlord's request during the Term (and in any event within thirty (30) days prior to the expiration date of any such coverage, any other cure or grace period provided in this Lease not being applicable hereto), Landlord shall be authorized (but not required) after ten (10) days' prior notice to procure such coverage in the amount stated with all costs thereof to be chargeable to Tenant and payable as additional rent upon written invoice therefor. 

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(D)    Landlord agrees to carry and maintain special form property insurance (with replacement cost coverage) covering the Building and Landlord's property therein in an amount required by its insurance company to avoid the application of any coinsurance provision. Landlord hereby waives its right of recovery against Tenant and releases Tenant from any and all liabilities, claims and losses for which Tenant may otherwise be liable to the extent Landlord receives proceeds from its property insurance therefor. Landlord shall secure a waiver of subrogation endorsement from its insurance carrier. Landlord also agrees to carry and maintain commercial general liability insurance in limits it reasonably deems appropriate (but in no event less than the limits required by Tenant above). Landlord may elect to carry such other additional insurance or higher limits as it reasonably deems appropriate. Tenant acknowledges that Landlord shall not carry insurance on, and shall not be responsible for damage to, Tenant's personal property or any Alterations (including Tenant's Work), and that Landlord shall not carry insurance against, or be responsible for any loss suffered by Tenant due to, interruption of Tenant's business. 
ARTICLE 10 
Condemnation 
If (a) the whole or any material part of the Premises, parking areas of the Complex, or the Property shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose; (b) any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises or the Property, or (c) Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, then Landlord shall have the option to terminate this Lease upon ninety (90) days' notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking, condemnation, reconfiguration, vacation, deed or other instrument. Tenant shall have reciprocal termination rights if the whole or any material part of the Premises or the parking areas of the Complex is permanently taken or if access to the Premises is permanently and materially impaired. Landlord shall be entitled to receive the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant's personal property and of fixtures belonging to Tenant and removable by Tenant upon expiration of the Term and for moving expenses (so long as such claim does not diminish the award available to Landlord or any Holder, and such claim is payable separately to Tenant). All Rent shall be apportioned as of the date of such termination, or the date of such taking, whichever shall first occur. Rent shall be proportionately abated if any part of the Premises shall be taken and this Lease shall not be so terminated. In the event of any termination under this Article 10, Landlord shall promptly return to Tenant the Letter of Credit, provided that, if applicable, Landlord may draw upon the Letter of Credit to the extent Landlord is permitted to do so under this Lease before Landlord returns the Letter of Credit. Tenant hereby waives any provision of California law that conflicts with the foregoing provisions of this Article 10 including, without limitation, Sections 1265.110-1265.160 of the California Code of Civil Procedure. 
ARTICLE 11 
Return of Possession 
At the expiration or earlier termination of this Lease or Tenant's right of possession of the Premises, Tenant shall surrender possession of the Premises in the condition required under Article 7, ordinary wear and tear excepted, and shall surrender all keys, any key cards, and any parking stickers or cards, to Landlord, and advise Landlord as to the combination of any locks or vaults then remaining in the Premises, and shall remove all trade fixtures and personal property. All improvements, fixtures and other items permanently affixed to the Premises (except trade fixtures and personal property belonging to Tenant), whether installed by Tenant or Landlord, shall be Landlord's property and shall remain upon the Premises, all without compensation, allowance or credit to Tenant. However, by giving Tenant notice at

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the time Landlord approves any particular Tenant Work or Alterations pursuant to Article 6, above, Landlord may require Tenant to promptly remove any or all such Tenant Work and/or Alterations as are designated in such notice and restore the Premises to the condition prior to the installation of such items; provided Landlord shall not require removal of standard and customary office improvements. In no event shall Landlord be entitled to require removal of Tenant's initial improvements installed pursuant to the Workletter except as otherwise expressly provided herein with respect to Tenant's generator improvements. If Tenant shall fail to perform any repairs or restoration, or fail to remove any items from the Premises or the Property required hereunder, Landlord may do so, and Tenant shall pay Landlord the cost thereof upon demand. Any and all property that may be removed from the Premises or the Property by Landlord pursuant to any provisions of this Lease or any Law, to which Tenant is or may be entitled, may be handled, removed or stored in a commercial warehouse or otherwise by Landlord at Tenant's risk, cost or expense, and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all expenses incurred in any removal and all storage charges as long as the same is in Landlord's possession or under Landlord's control. Any property, which is not removed from the Premises or which is not retaken from storage by Tenant within thirty (30) days after expiration or earlier termination of this Lease or of Tenant's right to possession of the Premises, shall, at Landlord's option, be conclusively presumed to have been abandoned and thus to have been conveyed by Tenant to Landlord as if by bill of sale without payment by Landlord. 
ARTICLE 12
Holding Over 
Unless Landlord expressly agrees otherwise in writing, if Tenant shall retain possession of the Premises or any part thereof after expiration or earlier termination of this Lease, then during the first thirty (30) days of such holdover Tenant shall pay Landlord one hundred fifty percent (150%) of the amount of Rent then applicable (or the highest amount permitted by Law, whichever shall be less) on a per month basis without reduction for partial months during the holdover and thereafter Tenant shall pay two hundred percent (200%) of the amount of Rent then applicable (or the highest amount permitted by Law, whichever shall be less) on a per month basis without reduction for partial months during the holdover. Landlord shall diligently seek to mitigate such damages. In no event shall Tenant be responsible for consequential damages as a result of such holding over. The foregoing provisions shall not serve as permission for Tenant to holdover, nor serve to extend the Term (although Tenant shall remain bound to comply with all provisions of this Lease until Tenant vacates the Premises, and shall be subject to the provisions of Article 11). The provisions of this Article do not waive Landlord's right of re-entry or right to regain possession by actions at law or in equity or any other rights hereunder, and any receipt of payment by Landlord shall not be deemed a consent by Landlord to Tenant's remaining in possession or be construed as creating or renewing any lease or right of tenancy between Landlord and Tenant. Tenant expressly waives Tenant's rights (if any) under Sections 1941 and 1945 of the California Civil Code and similar laws. 
ARTICLE 13 
No Waiver 
No provision of this Lease will be deemed waived by either party unless expressly waived in writing signed by the waiving party. No waiver shall be implied by delay or any other act or omission of either party. No waiver by either party of any provision of this Lease shall be deemed a waiver of such provision with respect to any subsequent matter relating to such provision, and Landlord's consent or approval respecting any action by Tenant shall not constitute a waiver of the requirement for obtaining Landlord's consent or approval respecting any subsequent action. Acceptance of Rent by Landlord shall not constitute a waiver of any breach by Tenant of any term or provision of this Lease. No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord's right to receive the

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full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the full amount due. The acceptance of Rent or of the performance of any other term or provision from any Person other than Tenant, including any Transferee, shall not constitute a waiver of Landlord's right to approve any Transfer. 
ARTICLE 14
Attorneys' Fees and Arbitration
In the event of any actual or threatened litigation between the parties, the prevailing party shall be entitled to obtain, as part of the judgment, all reasonable attorneys' fees, costs and expenses incurred in connection with such litigation, except as may be limited by applicable Law. In the interest of obtaining a speedier and less costly hearing of any dispute, Landlord and Tenant each agree that, in the event of any dispute or claim arising out of or relating to this Lease, SUCH DISPUTE OR CLAIM SHALL BE RESOLVED BY SUBMISSION TO FINAL AND BINDING ARBITRATION BEFORE JAMS IN LOS ANGELES COUNTY, CALIFORNIA, PURSUANT TO THE JAMS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES. BOTH PARTIES FURTHER AGREE THAT THE ARBITRATION SHALL BE CONDUCTED BEFORE A SINGLE JAMS ARBITRATOR WHO IS A RETIRED CALIFORNIA OR FEDERAL JUDGE OR JUSTICE. BY AGREEING TO ARBITRATE, YOU WAIVE ANY RIGHT YOU HAVE TO A COURT OR JURY TRIAL. The parties further agree that, upon application of the prevailing party, any Judge of the Superior Court of the State of California, for the County of Los Angeles, may enter a judgment based on the final arbitration award issued by the JAMS arbitrator, and you expressly agree to submit to the jurisdiction of this Court for such a purpose. 
ARTICLE 15
Personal Property Taxes. Rent Taxes and Other Taxes
Tenant shall pay prior to delinquency all taxes, charges or other governmental impositions assessed against or levied upon Tenant's fixtures, furnishings, equipment and personal property located in the Premises, and any Tenant Work to the Premises which is deemed to be personal property by any governmental agency or subdivision thereof. Whenever possible, Tenant shall cause all such items to be assessed and billed separately from the property-of Landlord. In the event any such items shall be assessed and billed with the property of Landlord, Tenant shall pay Landlord its share of such taxes, charges or other governmental impositions within thirty (30) days after Landlord delivers a statement and a copy of the assessment or other documentation showing the amount of such impositions applicable to Tenant's property. Tenant shall pay any rent tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax on Rent or services provided herein or otherwise respecting this Lease. 
ARTICLE 16
Subordination, Attornment and Mortgagee Protection
This Lease is subject and subordinate to all Mortgages now or hereafter placed upon the Property, and all other encumbrances and matters of public record applicable to the Property. Landlord hereby represents and warrants that there are no Mortgages affecting the Property as of the date of full execution and delivery of this Lease. If any foreclosure proceedings are initiated by any Holder or a deed in lieu is granted (or if any ground lease is terminated), Tenant agrees to attorn and pay Rent to any Holder which is a successor to Landlord hereunder or a purchaser at a foreclosure sale and to execute and deliver any instruments necessary or appropriate to evidence or effectuate such attornment (provided such Holder or purchaser shall agree to not disturb Tenant's occupancy, so long as Tenant does not default and fail to cure within the time permitted hereunder). "Holder" shall mean the holder of any Mortgage at the time

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in question, and where such Mortgage is a ground lease, such term shall refer to the ground lessor. "Mortgage" shall mean all mortgages, deeds of trust, ground leases and other such encumbrances now or hereafter placed upon the Property or any part thereof and all renewals, modifications, consolidations, replacements or extensions thereof. Any Holder may elect to make this Lease prior to the lien of its Mortgage, by written notice to Tenant, and if the Holder of any prior Mortgage shall require, this Lease shall be prior to any subordinate Mortgage. Tenant shall execute such documentation as Landlord may reasonably request from time to time, in order to confirm the matters set forth in this Article in recordable form. In the event of any default on the part of Landlord, arising out of or accruing under the Lease, whereby the validity or the continued existence of the Lease might be impaired or terminated by Tenant, or Tenant might have a claim for partial or total eviction, Tenant shall not pursue any of its rights with respect to such default or claim, and no notice of termination of the Lease as a result of such default shall be effective, unless and until Tenant has given written notice of such default or claim to the applicable Holder (but such notice shall only be required if Tenant has been provided with the correct notice address for such Holder) and granted to such Holder the same period of time granted to Landlord under the Lease to cure or to undertake the elimination of the basis for such default or claim; it being expressly understood that (a) if such default or claim cannot reasonably be cured within such cure period, such Holder shall have such additional period of time to cure same as it reasonably determines is necessary, so long as it continues to pursue such cure with reasonable diligence, and (b) such Holder's right to cure any such default or claim shall not be deemed to create any obligation for such Holder to cure or to undertake the elimination of any such default or claim. 
Notwithstanding anything to the contrary set forth in this Lease, in the event Landlord obtains a Mortgage from a Holder, then Tenant's duty to subordinate this Lease and Tenant's obligation to be bound by this Article 16 shall be conditioned on Tenant and such Holder executing a commercially reasonable non-disturbance agreement on a form reasonably approved by Tenant, such approval not to be unreasonably withheld, conditioned or delayed. Any such non-disturbance agreement must recognize Tenant's self-help and offset rights under Article 21 below with respect to payment of the Construction Allowance and brokerage commissions. Any such non-disturbance agreement shall be in recordable form and may be recorded at Tenant's election and expense. 
ARTICLE 17
Estoppel Certificate
Tenant shall from time to time, within fifteen (15) days after written request from Landlord, execute, acknowledge and deliver a certificate affirming that (to the extent the same is true), except as otherwise expressly stated in the certificate, (A) this Lease is unmodified and in full force and effect; (B) to Tenant's knowledge, Landlord is not in default hereunder; (C) Tenant is in possession of the Premises; (D) Tenant has no off-sets or defenses to the performance of its obligations under this Lease except as expressly set forth in this Lease; (E) that the Premises have been completed in accordance with the terms, covenants and conditions hereof or the Workletter, that Tenant has accepted the Premises and the condition thereof and of all improvements thereto and has no claims against Landlord or any other party with respect thereto; (F) the amount of any unpaid Construction Allowance, Additional Allowance, and Space Planning Allowance (if any). The certificate shall also confirm the dates to which the Rent has been paid in advance and the amount of any Security Deposit. The certificate may be relied upon by Landlord, its Holder(s), insurance carriers, auditors, rating agencies, and prospective purchasers. 

Landlord shall from time to time, within fifteen (15) days after written request from Tenant, execute, acknowledge and deliver a certificate affirming that (to the extent the same is true), except as otherwise expressly stated in the certificate, (A) this Lease is unmodified and in full force and effect; and (B) to Landlord's knowledge, Tenant is not in default hereunder; and , (C) the amount of any unpaid Construction Allowance, Additional Allowance, and Space Planning Allowance (if any). The certificate shall also confirm the dates to which the Rent has been paid in advance and the amount of any Security

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Deposit. The certificate may be relied upon by Tenant, its insurance carriers, auditors, rating agencies, and prospective purchasers.
 ARTICLE 18
Assignment and Subletting
(A)    Transfers. Except as expressly provided in this Article 18, Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld (as further described below): (i) assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, by operation of law or otherwise, (ii) sublet the Premises or any part thereof, or (iii) permit the occupancy of the Premises by any Person other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to collectively as "Transfers" and any Person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a "Transferee"). If Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which notice shall include: (a) the proposed effective date (which shall not be less than thirty (30) nor more than one hundred and eighty (180) days after Tenant's notice), (b) the portion of the Premises to be Transferred (herein called the "Subject Space"), (c) the terms of the proposed Transfer and the consideration therefor, the name and address of the proposed Transferee, and a copy of all documentation pertaining to the proposed Transfer, and (d) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof. Any Transfer made without complying with this Article shall, at Landlord's option, be null, void and of no effect, or shall constitute a Default under this Lease. Whether or not Landlord shall grant consent, Tenant shall pay Landlord's actual costs, not to exceed $3000 to compensate Landlord for its review and processing expenses. Tenant hereby waives Tenant's rights (if any) under Section 1995.310 of the California Civil Code. The use of the Premises by Tenant's subsidiaries and affiliates shall not be deemed a Transfer. 
(B)    Approval. Landlord will not unreasonably withhold its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in Tenant's notice. The parties hereby agree that it shall be reasonable under this Lease and under any applicable Law for Landlord to withhold consent to any proposed Transfer where one or more of the following applies: (i) the Transferee is of a character or reputation or engaged in a business which is not consistent with the Class A quality of the Property or other comparable properties in the vicinity of the Property including, without limitation, any business that sells pornographic, obscene, or other so-called adult products or services, (ii) the Transferee intends to use the Subject Space for purposes which are not permitted under this Lease, (iii) the Subject Space or adjacent leasable space is not code compliant with appropriate means of ingress and egress to passenger elevator, restroom and other common facilities suitable for normal renting purposes, (iv) the Transferee is either a government (or agency or instrumentality thereof), (v) the proposed Transferee does not have a reasonable financial condition in relation to the obligations to be assumed in connection with the Transfer, (vi) Tenant has committed and failed to cure a Default at the time Tenant requests consent to the proposed Transfer, or (vii) such a Transfer would violate any term, condition, covenant, or agreement of the Landlord involving the Property or any other tenant's lease within it. If Landlord wrongfully withholds its consent to any Transfer, Tenant's sole and exclusive remedy therefor shall be to seek specific performance of Landlord's obligation to consent to such Transfer. 
(C)    Transfer Premium. If Landlord consents to a sublease, Tenant shall pay Landlord fifty percent (50%) of any Transfer Premium derived by Tenant from such sublease. "Transfer Premium" shall mean all rent, additional rent or other consideration paid by the sublessee in excess of the Rent payable by Tenant under this Lease (on a monthly basis during the Term, and on a per rentable square foot basis, if less than all of the Premises is transferred), after first deducting therefrom all the reasonable expenses incurred by Tenant for any changes, alterations and improvements made to the Premises and any other economic concessions or services provided to the sublessee (including rental abatement), plus any customary brokerage commissions and legal fees paid in connection with the sublease, if acceptable 

written evidence of such expenditures is provided in advance to Landlord. The Transfer Premium due 

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Landlord hereunder shall be paid within ten (10) days after Tenant receives any Transfer Premium from the Transferee. 
(D)    Recapture. Intentionally deleted. 
(E)    Terms of Consent. If Landlord consents to a Transfer: (a) any Transfer shall be made only if, and shall not be effective until, the Transferee shall execute, acknowledge and deliver to Landlord an agreement in fonn and substance reasonably satisfactory to Landlord whereby the Transferee shall agree to be bound by and assume the obligations of this Lease on the part of Tenant to be performed or observed, (b) the terms, covenants and conditions of this Lease, including among other things, Tenant's (or any Transferee's) liability for the Subject Space, shall in no way be deemed to have been waived or modified and the original named Tenant (and any Transferee, as the case may be) shall remain fully liable for the payment of Rent and Additional Rent and for the other obligations of this Lease on the part of Tenant to be performed or observed, (c) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (d) no Transferee shall succeed to any rights provided in this Lease or any amendment hereto to extend the Tenn of this Lease, expand the Premises, or lease additional space, any such rights being deemed personal to Tenant, (e) Tenant shall deliver to Landlord promptly after execution, an original executed copy of all documentation pertaining to the Transfer in a form reasonably acceptable to Landlord, and (f) Tenant shall furnish upon Landlord's request a complete statement, certified by an officer of Tenant setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall within thirty (30) days after demand pay the deficiency, and if understated by more than five percent (5%), Tenant shall pay Landlord's costs of such audit. Any sublease hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any sublease, Landlord shall have the right to: (i) treat such sublease as canceled and repossess the Subject Space by any lawful means, or (ii) require that such subtenant attorn to and recognize Landlord as its landlord under any such sublease. If Tenant shall Default and fail to cure within the time permitted for cure under Section 20(A), Landlord is hereby irrevocably authorized, as Tenant's agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease) until such Default is cured. 
(F)    Permitted Transfers. Notwithstanding Section 18(A), Tenant may Transfer all or part of its interest in this Lease or all or part of the Premises (a "Permitted Transfer") to the following types of entities (a "Permitted Transferee") without the written consent of Landlord: (i) any Person which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Tenant (an "Affiliate"); (ii) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities, so long as (a) Tenant's obligations hereunder are assumed by the entity surviving such merger or created by such consolidation; and (b) the Net Worth of the surviving or created entity is not less than the Net Worth of Tenant as of the date hereof or the date of the merger or consolidation (whichever is less); or (iii) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant's assets if such entity's Net Worth after such acquisition is not less than the Net Worth of Tenant as of the date hereof or the date of the acquisition (whichever is less). Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant shall remain liable for the performance of all of the obligations of Tenant hereunder, or if Tenant no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Tenant 

hereunder. Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease and the use of the Premises by the Permitted Transferee for any use other than the use permitted by Article 4 above may not violate any other agreements affecting the Premises or the Building. No later 

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than ten (10) days after the effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with (x) copies of the instrument effecting the Permitted Transfer, (y) documentation establishing Tenant's satisfaction of the requirements set forth above applicable to any such Permitted Transfer, and (z) evidence of insurance as required under this Lease with respect to the Permitted Transferee. The occurrence of a Permitted Transfer shall not waive Landlord's rights as to any subsequent Transfers. "Net Worth" means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied. Any subsequent Transfer by a Permitted Transferee shall be subject to the terms of this Article 18. 
(G)    Permitted Occupants. Notwithstanding anything to the contrary contained above in this Article 18, Landlord acknowledges and agrees that Tenant may allow any person or company which is a client or customer of Tenant or which is providing service to Tenant to occupy up to twenty-five percent (25%) of the Premises during Tenant's occupancy without such occupancy being deemed a Transfer, as long as no new demising walls are constructed to accomplish such occupancy, no rent is being paid in connection with such occupancy, such occupancy is not pursuant to any sublease or license agreement, and as long as such relationship was not created as a subterfuge to avoid the obligations set forth in this Article 18. Any such occupant may be referred to in this Lease as a "Permitted Occupant". Tenant may not permit any new person or company to become a Permitted Occupant while Tenant is in Default under this Lease. Landlord shall owe no duty to any such Permitted Occupant beyond what Landlord owes to Tenant's employees and/or invitees. Without limitation, no such Permitted Occupant shall be entitled to signage rights. Tenant shall provide Landlord at least five (5) days before occupancy the name of each person and/or entity who will occupy a portion of the Premises pursuant to this Section for more than thirty (30) days. Tenant's insurance, indemnity, and other obligations under this Lease shall cover all Tenant's Permitted Occupants and their employees, agents, and invitees as if they were Tenant's employees. For purposes of this Lease (and not for purposes of employment law applicable to Tenant), persons who work for Tenant on an independent contractor basis rather than W-2 employees shall be considered Tenant's employees, not "Permitted Occupants" subject to the limitations in this Subsection (G). 
ARTICLE 19
Rights Reserved By Landlord
Except as expressly provided herein, Landlord reserves the following rights: 
(A)    To install and maintain signs on the exterior and interior of the Complex or any part thereof, provided that Landlord shall not install any signage on the exterior or interior of the 3465 Building other than solely for the purpose of supporting the common building use and safety and as required by Law, and specifically excluding business or advertising signage; retain at all times, and use in appropriate instances, keys to all doors within and into the Premises; and have access for Landlord and other tenants o.f the Property to any mail chutes located on the Premises according to the rules of the United States Postal Service. 
(B)    To enter the Premises upon not less than forty-eight (48) hours prior notice (except in the event of emergency) at reasonable hours to show the Premises to current and prospective mortgage lenders, ground lessors, insurers, and prospective purchasers, and sale and finance brokers, and during the final year of the Term (or sooner if Tenant is in material monetary Default or abandons the Premises), to tenants and leasing brokers; provided that Tenant shall have the right to designate certain areas of the Premises as secure areas ("Secure Areas") should Tenant require such areas for the purpose of securing certain valuable property or confidential information. Landlord may not enter such Secure Areas except 

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in the case of emergency or in the event of a Landlord inspection, in which case Landlord shall provide Tenant with five (5) days' prior written notice of the specific date and time of such Landlord inspection (except 5 day notice shall not be required in the event of an emergency in a Secure Area provided Landlord first attempts to access the Secured Area in question in coordination with Tenant as time allows under the circumstances); provided that Landlord shall not be required to provide for any Secure Areas janitorial service or other service that requires Landlord access (and Tenant shall not be entitled to a credit against Operating Expenses therefor), unless Tenant provides such access.
     (C)    In case of fire, invasion, insurrection, riot, civil disorder, public excitement or other dangerous condition, or threat thereof: to temporarily limit or prevent access to the Property or any part thereof, shut down elevator service, activate elevator emergency controls, or otherwise take such action or preventative measures deemed necessary by Landlord for the safety of tenants or other occupants of the Property or the protection of the Property and other property located thereon or therein. 
(D)    To decorate and to make alterations, additions and improvements, structural or otherwise, in or to the Property or any part thereof, and to any adjacent building, structure, parking facility, land, street or alley (including without limitation changes and reductions in parking facilities and other public areas and the installation of kiosks, planters, sculptures, displays, and other structures, facilities, amenities and features therein, and changes for the purpose of connection with or entrance into or use of the Property in conjunction with any adjoining or adjacent building or buildings, now existing or hereafter constructed). In connection with such matters, or with any other repairs, maintenance, improvements or alterations, in or about the Property, Landlord may erect scaffolding and other structures reasonably required, and during such operations may, upon reasonable prior notice to Tenant, enter upon the Premises at reasonable hours and take into and upon or through the Premises, all materials required to make such repairs, maintenance, alterations or improvements, and may temporarily close public entry ways, other public areas, restrooms, stairways or corridors and Tenant agrees to pay Landlord for overtime and similar expenses incurred if such work is done other than during ordinary business hours at Tenant's request. 
(E)    To take any other action which Landlord deems reasonable in connection with the operation, maintenance, marketing, or preservation of the Property. 
(F)    To approve the weight, size, and location of safes or other heavy equipment or articles, which articles may be moved in, about, or out of the Property or the Premises at Tenant's sole risk and responsibility. 
In connection with entering the Premises to exercise any of the foregoing rights, Landlord shall: (a) provide reasonable advance written or oral notice to Tenant's on-site manager or other appropriate person (except in emergencies), and (b) take reasonable steps to minimize any interference with Tenant's business. Exercise of any of the foregoing rights shall not constitute a constructive eviction or entitle Tenant to abatement of Rent, damages or other claims of any kind. Landlord shall have a copy of all keys to all doors within and into the Premises. Tenant shall have the right to change locks or keys and to provide copies for the Landlord. In the event that Landlord attempts to access the Premises to perform any of its obligations under this Lease, but is unable to access the Premises due to Landlord's inability to reach the Tenant to provide reasonable advance written or oral notice before entering the Premises, then Landlord shall be granted any additional time reasonably necessary to perform such obligations before being considered in breach of this Lease. 
ARTICLE 20
Landlord's Remedies
(A)    Default. The occurrence of anyone or more of the following events shall constitute a "Default" by Tenant, which if not cured within any applicable time permitted for cure below, shall give

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rise to Landlord's remedies set forth in Paragraph (B), below: (i) failure by Tenant to make when due any payment of Rent, unless such failure is cured within seven (7) days after notice; or (ii) failure by Tenant to observe or perform any of the terms or conditions of this Lease or the Rules attached to this Lease (as same may be updated from time to time pursuant to the terms and conditions of this Lease) to be observed or performed by Tenant other than the payment of Rent, or as provided below, unless such failure is cured within thirty (30) days after notice, or such shorter period expressly provided elsewhere in this Lease (provided, if the nature of Tenant's failure is such that more time is reasonably required in order to cure, Tenant shall not be in Default if Tenant commences to cure within such period and thereafter diligently continues to cure such failure to completion, and further provided that Tenant shall use good faith efforts to cure as soon as reasonably practicable given the totality of the circumstances); (iii) (a) making by Tenant of any general assignment for the benefit of creditors, (b) filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any Law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days), (c) appointment of a trustee or receiver to take possession of substantially all of Tenant's assets located on the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days, (d) attachment, execution or other judicial seizure of substantially all of Tenant's assets located on the Premises or of Tenant's interest in this Lease, or (e) Tenant's admission in writing of its inability to pay its debts as they mature; (iv) any material misrepresentation or omission in any financial statements or other materials provided by Tenant that Tenant knew was false when delivered to Landlord; or (v) any material misrepresentation or omission in any financial statements provided in connection with any Transfer under Article 18, unless such financial statements are audited by a reputable firm of certified public accountants, and further provided that Tenant shall not be in default hereunder by virtue of a third party's financial statements unless Tenant knowingly provides Landlord false information. The notice and cure periods provided herein are in lieu of, and not in addition to, any notice and cure periods provided by Law. 
(B)    Remedies. If a Default occurs and is not cured within any applicable time permitted under Paragraph (A), then in addition to Landlord's rights and remedies under law including, without limitation, the rights and remedies contained in California Code of Civil Procedure Section 1161.1 and California Civil Code 1951.2, Landlord shall have the rights and remedies hereinafter set forth, each of which shall be distinct, separate and cumulative with and in addition to any other right or remedy allowed under any Law (including, without limitation, specific performance) or other provisions of this Lease, any and all of which may be exercised with or without further notice and with or without demand whatsoever, concurrently or successively, and at such time or times and in such order as Landlord may from time to time determine: 
(i)    Terminate this Lease by giving Tenant written notice thereof, in which event Tenant shall pay to Landlord the sum of (a) all Rent accrued hereunder through the date of termination, (b) all amounts due under Section 20(D), and (c) an amount equal to (1) the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at a per annum rate equal to the "Prime Rate" on the date this Lease is terminated minus one percent, minus (2) the then present fair rental value of the Premises for such period, similarly discounted. The "Prime Rate" of interest shall be the "Prime Rate" as published in the "Money Rates" section of The Wall Street Journal from time to time. In the event The Wall Street Journal no longer publishes a Prime Rate of interest, Landlord shall select a comparable equivalent. For purposes of computing the amount of Rent herein that would have accrued after the time of award, Tenant's Prorata Share of Taxes and Operating Expenses shall be projected based upon the average rate of increase, if any, in such items from the Commencement Date through the time of award. 
(ii)    Terminate Tenant's right to possess the Premises without terminating this Lease by giving written notice thereof to Tenant, in which event Tenant shall pay to Landlord (a) all 

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Rent accrued hereunder to the date of termination of possession, (b) all amounts due from time to time under Section 20(D), and (c) all Rent and other net sums required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises during such period, after deducting all costs incurred by Landlord in reletting the Premises. If Landlord elects to proceed under this Section 20(B)(ii), Landlord may remove all of Tenant's property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby. Landlord shall use reasonable efforts to relet the Premises on such terms as Landlord in its sole discretion may determine (including a term different from the Term, rental concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be obligated to relet the Premises before leasing other portions of the Building and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord's leasing criteria. Landlord shall not be liable for, nor shall Tenant's obligations hereunder be diminished because of, Landlord's failure to relet the Premises or to collect rent due for such reletting. Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder. Reentry by Landlord in the Premises shall not affect Tenant's obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord's waiting until the expiration of the Term. Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 20(B)(ii). If Landlord elects to proceed under this Section 20(B)(ii), it may at any time elect to terminate this Lease under Section 20(B)(i). 
The lessor (Landlord) has the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has right to sublet or assign, subject only to reasonable limitations). 
(C)    Mitigation of Damages. If Landlord terminates this Lease or Tenant's right to possession of all or any part of the Premises, Landlord shall use reasonable efforts to mitigate Landlord's damages to the extent required by Law and Tenant shall be entitled to submit proof of such failure to mitigate as a defense to Landlord's claims hereunder. 
(D)    Payment by Tenant. Upon any uncured Default, Tenant shall pay to Landlord all costs actually incurred by Landlord (including court costs and reasonable attorneys' fees and expenses) in (i) obtaining possession of the Premises, (ii) removing and storing Tenant's or any other occupant's property, (iii) repairing, restoring, or otherwise putting the Premises into a vanilla box condition suitable for lease, (iv) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions and other costs incidental to such reletting), (v) performing Tenant's obligations which Tenant failed to perform, and (vi) enforcing or advising Landlord of its rights, remedies, and recourses arising out of the Default. 
(E)    Late Charges and Interest. Tenant shall pay, as additional Rent, a service charge of Two Hundred Dollars ($200.00) for bookkeeping and administrative expenses if Rent is not received within seven (7) days after its due date. In addition, any Rent paid more than seven (7) days after it is due shall accrue interest from the due date at the Default Rate until payment is received by Landlord, provided that Landlord shall waive service charge and interest on one (1) occasion each year in the event that Tenant makes the missed payment within seven (7) days after written notice to Tenant that the same is past due. The "Default Rate" of interest shall be the Prime Rate of interest (defined above) plus ten percent (10%). Such service charge and interest payments shall not be deemed consent by Landlord to late payments, nor a waiver of Landlord's right to insist upon timely payments at any time, nor a waiver of 

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any remedies to which Landlord is entitled as a result of the late payment of Rent. The exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from exercising any other remedies in the future. 
(F)    Landlord Action. In addition to Landlord's other rights and remedies, if any failure by Tenant to satisfy its obligations under this Lease materially adversely affects the Building or Complex or endangers the health or safety of the occupants of the Complex, and Tenant fails to contest in good faith or commence to cure such failure within five (5) days after receipt of a second written notice of such failure from Landlord (i.e. in addition to the notice and cure rights provided in Section 20(A)) and thereafter diligently continue to cure to completion, provided that no second notice shall be required and Landlord may act immediately in the event of an emergency that requires immediate action, then Landlord shall be entitled to (but shall not be obligated to) exercise self-help and perform such actions as are necessary to cure Tenant's failure. If Landlord properly exercises its self-help rights pursuant to the preceding sentence, Tenant shall reimburse Landlord for reasonable out of pocket costs incurred by Landlord to cure Tenant's failure, within thirty (30) days after Tenant's receipt of an invoice therefor and evidence to substantiate Landlord's out of pocket costs. If Tenant does not reimburse Landlord within such thirty (30) day period, then: (a) past due amounts shall bear interest at the Default Rate, (b) Tenant shall reimburse Landlord for Landlord's reasonable attorneys' fees and collection costs related to the self-help matter and Landlord's collection of costs for same, and (c) Landlord may withhold and offset such sums and interest from and against any amounts that Landlord may otherwise be required to pay under this Lease to Tenant and such withholding and offset shall not constitute a default or breach of this Lease by Landlord. Any good faith dispute under this Section 20(F) may be submitted to arbitration as provided in Article 14 above. 
(G)    Other Matters. No act or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant's right to possession, or accept a surrender of the Premises, nor shall the same operate to release Tenant in whole or in part from any of Tenant's obligations hereunder, unless express written notice of such intention is sent by Landlord or its agent to Tenant. Neither Landlord nor Tenant shall be liable under any circumstances for any damages by reason of loss of profits, business interruption, or other consequential damages. 
(H)    Waiver of Reinstatement. Tenant hereby waives all rights under California Code of Civil Procedure Sections 1174 and 1179 and California Civil Code Section 3275 providing for relief from forfeiture and any other right now or hereafter existing to redeem the Premises or reinstate this Lease after termination pursuant to this Section 13 or by order or judgment of any court or by any legal process. 
ARTICLE 21
Landlord Default; Tenant Self Help and Offset Rights
(A)    If Landlord shall fail to perform any term or provision under this Lease required to be performed by Landlord, Landlord shall not be deemed to be in default hereunder nor subject to any claims for damages of any kind, unless such failure shall have continued for a period of thirty (30) days after written notice thereof by Tenant, or such shorter period expressly provided elsewhere in this Lease (provided, if the nature of Landlord's failure is such that more time is reasonably required in order to cure, Landlord shall not be in default if Landlord commences to cure within such period and thereafter diligently continues to cure such failure to completion, and further provided that Landlord shall use good faith efforts to cure as soon as reasonably practicable given the totality of the circumstances. If Landlord shall fail to cure within the times permitted for cure herein, Landlord shall be subject to such remedies as may be available to Tenant (subject to the other provisions of this Lease); provided, in recognition that Landlord must receive timely payments of Rent and operate the Property, Tenant shall have no right of self-help to perform repairs or any other obligation of Landlord, and shall have no right to withhold, set-off, or abate Rent, except as otherwise expressly provided in this Lease. Without limitation of the 

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preceding sentence, Tenant hereby waives Tenant's rights (if any) under Section 1932, Subdivision 1, and Section 1942 of the California Civil Code, Section 431.70 of the California Code of Civil Procedure, and similar laws. 
(B)    Notwithstanding the foregoing Section 21(A), if any failure by Landlord to satisfy its obligations under this Lease materially adversely affects the use of the Premises or endangers the health or safety of the occupants of the Premises, and Landlord fails to contest in good faith or commence to cure such failure within five (5) days after receipt of a second written notice of such failure from Tenant (Le. in addition to the notice and cure rights provided in the preceding paragraph) and thereafter diligently continue to cure to completion, provided that no second notice shall be required and Tenant may act immediately in the event of an emergency that requires immediate action, then Tenant shall be entitled to (but shall not be obligated to) exercise self-help and perform such actions as are necessary to cure Landlord's failure. If Tenant properly exercises its self-help rights pursuant to the preceding sentence, Landlord shall reimburse Tenant for reasonable out of pocket costs incurred by Tenant to cure Landlord's failure, within thirty (30) days after Landlord's receipt of an invoice therefor and evidence to substantiate Tenant's out of pocket costs. If Landlord does not reimburse Tenant within such thirty (30) day period, then: (a) past due amounts shall bear interest at the Default Rate, (b) Landlord shall reimburse Tenant for Tenant's reasonable attorneys' fees and collection costs related to the self-help matter and Tenant's collection of costs for same, and (c) Tenant may withhold and offset such sums and interest from and against any amounts that Tenant may otherwise be required to pay under this Lease as Rent, and such withholding and offset shall not constitute a Default or breach of this Lease. Any good faith dispute under this Section 21 (B) may be submitted to arbitration as provided in Article 14 above. 
(C)    Further notwithstanding the foregoing Section 21(A), if (i) Landlord defaults in Landlord's obligation to pay the Construction Allowance pursuant to the Workletter, or any portion thereof, within five (5) days after the date the same is due pursuant to the Workletter, or (ii) Landlord defaults in Landlord's obligation to pay Tenant's broker pursuant to their separate written agreement after notice of such failure and seven (7) days to cure, then provided no material monetary Default exists Tenant shall have the right to give Landlord a second written notice ("Offset Exercise Notice") requesting payment of such unpaid amounts. In the event that Landlord fails to contest in good faith or fully pay such amounts within five (5) business days after such Offset Exercise Notice is provided to Landlord, then: (x) such unpaid amounts shall bear interest at the Default Rate, (y) Landlord shall reimburse Tenant for Tenant's reasonable attorneys' fees and collection costs related to Tenant's collection of costs for same, and (z) Tenant may withhold and offset such sums and interest from and against any amounts that Tenant may otherwise be required to pay under this Lease as Rent, and such withholding and offset shall not constitute a Default or breach of this Lease. Any good faith dispute under this Section 21 (C) may be submitted to arbitration as provided in Article 14 above. 
ARTICLE 22
Conveyance by Landlord and Liability
In case Landlord or any successor owner of the Property shall conveyor otherwise dispose of the Property, or the portion thereof in which the Premises are located, to another Person (and nothing herein shall be construed to restrict or prevent such conveyance or disposition), such other Person shall thereupon be and become "Landlord" hereunder and shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord which first arise after the date of conveyance, including the return of any Security Deposit, and Landlord or such successor owner shall, from and after the date of conveyance, be free of all liabilities and obligations hereunder not then incurred. The liability of Landlord to Tenant for any default by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration, or any other matter relating to the Property or the Premises, shall be limited to the interest of Landlord in the Complex. Tenant agrees to look solely to Landlord's interest in the Complex for the recovery of any

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judgment against Landlord and Landlord shall not be personally liable for any such judgment or deficiency after execution thereon. The limitations of liability contained in this Article shall apply equally and inure to the benefit of Landlord's present and future members, managers, partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, legal representatives, heirs, successors and assigns, directors, trustees, shareholders, agents and employees, and their respective partners, legal representatives, heirs, successors and assigns. Under no circumstances shall any present or future shareholder, officer or director of Landlord (if Landlord is a corporation), general or limited partner of Landlord (if Landlord is a partnership), manager or member of Landlord (if Landlord is a limited liability company), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust) have any liability for the performance of Landlord's obligations under the Lease. 
ARTICLE 23
Indemnification
Except to the extent arising from the intentional misconduct or negligent acts of Landlord or Landlord's agents or employees, Tenant shall defend, indemnify and hold harmless Landlord and Landlord's agents and employees from and against any and all claims, demands, liabilities, damages, judgments, orders, decrees, actions, proceedings, fines, penalties, costs and expenses, including without limitation, court costs and reasonable attorneys' fees ("Claims") arising from or relating to any loss of life, damage or injury to person or property occurring while such person or property is within the Premises, or caused by or in connection with any violation of this Lease or use of the Premises or the Property by, or any other act or omission of, Tenant, any Permitted Occupant, or any of their respective agents, employees, contractors or guests. Without limiting the generality of the foregoing, Tenant specifically acknowledges that the indemnity undertaking herein shall apply to claims in connection with or arising out of any "Work" by Tenant, the installation, maintenance, use or removal of any "Lines" located in or serving the Premises as described in Article 25, Tenant's generator and fuel tank, and the transportation, use, storage, maintenance, generation, manufacturing, handling, disposal, release or discharge of any "Hazardous Material" as described in Article 26 (whether or not any of such matters shall have been theretofore approved by Landlord), except to the extent that any of the same arises from the intentional misconduct or negligent acts of Landlord or Landlord's agents or employees. Provided, further, to the extent any damage or repair obligation is covered by insurance obtained by Landlord as part of Operating Expenses, but is not covered by insurance obtained by Tenant, then Tenant shall be relieved of its indemnity obligation up to the amount of the insurance proceeds which Landlord is entitled to receive. 
Except to the extent arising from the intentional misconduct or negligent acts of Tenant or Tenant's agents or employees, Landlord shall defend, indemnify and hold harmless Tenant and Tenant's agents and employees from and against any and all Claims arising from or relating to any loss of life, damage or injury to person or property occurring while such person or property is outside of the Premises but otherwise within the Complex, or caused by or in connection with any violation of this Lease or use of the Premises or the Complex by, or any other act or omission of, Landlord, or any of Landlord's agents, employees, contractors or guests. Landlord further agrees to indemnify and hold harmless Tenant and Tenant's agents and employees from Claims arising from the presence in the Premises, the Building and/or the Complex of Hazardous Materials to the extent required by Article 26 below. Provided, further, to the extent any damage or repair obligation is covered by insurance required to be carried by Tenant pursuant to the terms of this Lease then Landlord shall be relieved of its indemnity obligation up to the amount of the insurance proceeds which Tenant is entitled to receive. 
If either party breaches this agreement by its failure to carry required insurance, such failure shall automatically be deemed to be a covenant and agreement by Landlord or Tenant, respectively, to self-insure to the full extent of such required coverage, with full waiver of subrogation. 

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The obligations assumed herein shall survive the expiration or sooner termination of this Lease. The foregoing indemnity shall be in addition to, and shall not be in discharge of or in substitution for, any of the insurance requirements or any other indemnity provisions of this Lease. 
ARTICLE 24
Safety and Security Devices. Services and Programs
Landlord shall provide security in the Complex's common areas (including parking areas, loading areas, walkways and other exterior and adjacent area) during normal business hours. Notwithstanding the preceding sentence, the parties acknowledge that safety and security devices, services and programs provided by Landlord, if any, while intended to deter crime and ensure safety, may not in given instances prevent theft or other criminal acts, or ensure safety of persons or property. The risk that any safety or security device, service or program may not be effective, or may malfunction, or be circumvented by a criminal, is assumed by Tenant with respect to Tenant's property and interests, and Tenant shall obtain insurance coverage to the extent Tenant desires protection against such criminal acts and other losses, as further described in Article 9. Tenant agrees to cooperate in any reasonable safety or security program developed by Landlord or required by Law. 
Landlord and Tenant recognize the risk of domestic or international threats or acts of violence, terrorism, and war which may require additional security measures in the day-to-day operation of the Property. To promote the health, safety and welfare of the Building's tenants, Tenant agrees to cooperate in any security measures instituted by Landlord or recommended by governmental officials in response to this risk. Tenant shall participate in evacuation drills performed by Landlord from time to time. Expenses incurred by Landlord in connection with the development, implementation and provision of security measures shall be included in Operating Expenses to the extent permitted under Article 3 above. The exercise of security measures by the Landlord and the resulting interruption of service to, or cessation or diminution of Tenant's business, if any, shall not be deemed to be an eviction or disturbance of Tenant's use and possession of the Premises, or any part thereof, or render Landlord liable to Tenant for any resulting damages or relieve Tenant from Tenant's obligations under this Lease. Tenant may install Tenant's own security system at the Building, provided Tenant's system is compatible with Landlord's security and other Building systems. 
ARTICLE 25
Communications and Computer Lines
Tenant may install, maintain, replace, remove or use any communications or computer wires, cables and related electronic signal transmission devices (collectively the "Lines") at the Property in or serving the Premises, provided: (a) Tenant shall (i) obtain Landlord's prior written consent (not to be unreasonably withheld and provided no consent shall be necessary in the 3465 Building), (ii) use an experienced and qualified contractor approved in writing by Landlord (and before entering the Property, any such contractor must provide Landlord a certificate of insurance proving that such contractor satisfies or exceeds Landlord's standard insurance requirements), and (iii) comply with all of the other provisions of Article 6; (b) any such installation, maintenance, replacement, removal or use shall comply with all Laws applicable thereto and good work practices, and shall not interfere with the use of any then existing Lines at the Property; (c) if Tenant at any time uses any equipment that may create an electromagnetic field exceeding the normal insulation ratings of ordinary twisted pair riser cable or cause radiation higher than normal background radiation, the Lines therefor (including riser cables) shall be appropriately insulated to prevent such excessive electromagnetic fields or radiation; (d) Tenant's rights shall be subject to the rights of any regulated telephone company; and (e) Tenant shall pay all costs in connection with Tenant's Lines. Landlord reserves the right to require that Tenant remove any Lines located in or serving

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the Premises which are installed in violation of these provisions, or which are at any time in violation of any Laws or represent a dangerous condition. 

Landlord may (but shall not have the obligation to): (i) install new Lines at the Property and (ii) reasonably direct, monitor or supervise the installation, maintenance, replacement and removal of, the allocation and periodic re-allocation of available space (if any) for, and the allocation of excess capacity (if any) on, any Lines now or hereafter installed at the Property by Landlord, Tenant or any other party (but Landlord shall have no right to monitor or control the information transmitted through such Lines). Such rights shall not be in limitation of other rights that may be available to Landlord by Law or otherwise. 
Except to the extent arising from the intentional misconduct or negligent acts of Landlord or Landlord's agents or employees, Landlord shall have no liability for damages arising from, and Landlord does not warrant that the Tenant's use of any Lines will be free from the following (collectively called "Line Problems"): (x) any eavesdropping or wire-tapping by unauthorized parties, (y) any failure of any Lines to satisfy Tenant's requirements, or (z) any shortages, failures, variations, interruptions, disconnections, loss or damage caused by the installation, maintenance, replacement, use or removal of Lines by or for other tenants or occupants at the Property, by any failure of the environmental conditions or the power supply for the Property to conform to any requirements for the Lines or any associated equipment, or any other problems associated with any Lines by any other cause. Under no circumstances shall any Line Problems be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant for abatement of Rent, or relieve Tenant from performance of Tenant's obligations under this Lease. Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damage arising from any Line Problems. 
ARTICLE 26
Hazardous Materials
To Landlord's knowledge, the Complex does not contain any "Hazardous Material" (as defined below) on the date that Landlord tenders possession of the Premises to Tenant. In the event Hazardous Material is discovered at the Complex and the same was not released, discharged or disposed of by Tenant, Tenant's subtenants, assignees or any Permitted Occupant, or their employees, agents or contractors, then Landlord at no cost to Tenant shall immediately, properly and in compliance with applicable Laws clean up and remove the Hazardous Material and any other affected property and clean or replace any affected personal property (whether or not owned by Landlord), to the extent required by Law, and Landlord shall indemnify Tenant from all losses, costs, damages, claims and expenses reasonably incurred by Tenant as a result of such Hazardous Material. 
Tenant shall not transport, use, store, maintain, generate, manufacture, handle, dispose, release or discharge any "Hazardous Material" (as defined below) upon or about the Property, or permit Tenant's employees, agents, contractors, and other occupants of the Premises to engage in such activities upon or about the Property. However, the foregoing provisions shall not prohibit the transportation to and from, and use, storage, maintenance and handling within, the Premises of substances customarily used in offices provided: (a) such substances shall be used and maintained only in such quantities as are reasonably necessary for such permitted use of the Premises, strictly in accordance with applicable Law and the manufacturers' instructions therefor, (b) such substances shall not be disposed of, released or discharged on the Property, and shall be transported to and from the Premises in compliance with all applicable Laws, (c) if any applicable Law or Landlord's trash removal contractor requires that any such substances be disposed of separately from ordinary trash, Tenant shall make arrangements at Tenant's expense for such disposal directly with a qualified and licensed disposal company at a lawful disposal site (subject to scheduling and approval by Landlord), and shall ensure that disposal occurs frequently enough to prevent unnecessary storage of such substances in the Premises, and (d) any remaining such substances shall be

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completely, properly and lawfully removed from the Property upon expiration or earlier termination of this Lease. 
Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or other regulatory action taken or threatened by any governmental or regulatory authority with respect to the presence of any Hazardous Material on the Premises or the migration thereof from or to other property, (ii) any demand or claim made or threatened by any party against Tenant or the Premises relating to any loss or injury resulting from any Hazardous Material, (iii) any release, discharge or non-routine, improper or unlawful disposal or transportation of any Hazardous Material on or from the Premises, and (iv) any matter where Tenant is required by Law to give a notice to any governmental or regulatory authority respecting any Hazardous Material on the Premises. Landlord shall have the right (but not the obligation) to join and participate as a party in any legal proceedings or actions affecting the Premises initiated in connection with any environmental, health or safety Law. At such times as Landlord may reasonably request, Tenant shall provide Landlord with a written list identifying any Hazardous Material then used, stored, or maintained upon the Premises, the use and approximate quantity of each such material, a copy of any material safety data sheet ("MSDS") issued by the manufacturer therefor, written information concerning the removal, transportation and disposal of the same, and such other information as Landlord may reasonably require or as may be required by Law. The term "Hazardous Material" for purposes hereof shall mean any chemical, substance, material or waste or component thereof which is now or hereafter listed, defined or regulated as a hazardous or toxic chemical, substance, material or waste or component thereof by any federal, state or local governing or regulatory body having jurisdiction, or which would trigger any employee or community "right-to-know" requirements adopted by any such body, or for which any such body has adopted any requirements for the preparation or distribution of an MSDS. 
If any Hazardous Material is introduced, released, discharged or disposed of by Tenant or any Permitted Occupant, or their employees, agents or contractors, on or about the Property in violation of the foregoing provisions, Tenant shall immediately, properly, in compliance with applicable Laws, and at Tenant's expense remedy the violation and remediate the Hazardous Materials (including cleaning, replacing and restoring affected property) to levels that protect human health and the environment as such levels are determined by the California Environmental Protection Agency (including pursuant to the California State Voluntary Cleanup Program ("CSVCP'') or other appropriate federal, state or local agencies; provided that in no event shall Tenant be responsible for any cleaning, replacing, restoring or remediating the Property or any personal property to a condition better than the condition existing immediately prior to the introduction of such Hazardous Material by Tenant or any Permitted Occupant, or their employees, agents .or contractors) nor shall Tenant be required hereunder (but may be independently required under applicable Law and may otherwise voluntarily elect) to engage any California governmental agency to oversee the remediation process (including under the CSVCP) (collectively, the "Restoration Requirement"). To the extent required by applicable Laws or the Restoration Requirement, such clean up and removal work shall include, without limitation, any testing, investigation, and the preparation and implementation of any remedial action plan required by any governmental body having jurisdiction. If Tenant shall fail to comply with the provisions of this Article within five (5) days after written notice by Landlord, or such shorter time as may be required by Law or in order to minimize any hazard to Persons or property, Landlord may (but shall not be obligated to) arrange for such compliance directly or as Tenant's agent through contractors or other parties selected by Landlord, at Tenant's expense (without limiting Landlord's other remedies under this Lease or applicable Law). 
ARTICLE 27
Roof Rights
During the Term (as it may be extended), Tenant shall have the exclusive right to install and maintain, on the roof of the 3465 Building, satellite dishes, television antennas, related receiving

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equipment, related cable connections and any and all other related equipment (collectively, "Satellite Dish") required in connection with Tenant's communications and data transmission network, and supplementary HV AC equipment and all related equipment (collectively, "HVAC Unit"), provided that Tenant must comply with the Workletter or Article 6 in connection with Tenant's installation of any HV AC Unit or Satellite Dish. Subject to the preceding phrase, Tenant shall have the right to use the risers (and to install additional risers if necessary), shafts and conduits of the 3465 Building. Furthermore, (a) the location and general appearance of such Satellite Dish and HVAC Unit shall be reasonably acceptable to Landlord to the extent that the same is visible from Foothill Boulevard and provided that any location and/or general appearance requirements imposed by Landlord do not interfere with the functionality of the Satellite Dish and/or HV AC Unit, (b) no such Satellite Dish or HVAC Unit shall be affixed to the roof of the Building by any device which penetrates the roof, unless Tenant fIrst obtains Landlord's written approval, and Landlord shall have the right to approve in advance Tenant's mounting of the same, (c) Tenant shall pay for any and all costs and expenses in connection with the installation, operation, maintenance, insurance, use and removal ofthe Satellite Dish and the HV AC Unit, but in no event shall Tenant be obligated to pay Landlord any additional rental for that portion of the roof of the Building on which the Satellite Dish and the HV AC Unit shall be located, and provided that in no event shall Tenant be obligated to remove the HV AC Unit if the HV AC Unit is in good working order; (d) installation, operation and removal of each Satellite Dish and HV AC Unit shall be performed in such manner as is necessary in order to preserve Landlord's roof warranty; (e) Tenant shall have secured the approval of all applicable governmental authorities and all permits required by governmental authorities having jurisdiction over such approvals and permits for the Satellite Dish and the HV AC Unit, and shall provide copies of such approvals and permits to Landlord, prior to commencing any work with respect to such Satellite Dish and the HV AC Unit; and (f) use of riser space shall be shared with the providers of services to the Building. Upon the termination of this Lease Tenant shall, at Tenant's sole cost and expense, remove said Satellite Dish and all related equipment and wiring and repair any damage to the roof or risers of the Building caused as a result of such use or removal. Any required structural reinforcement shall be made at Tenant's sole cost. Upon at least thirty (30) days prior written notice, Tenant at Tenant's expense shall temporarily remove any or all of its rooftop equipment as necessary in order to permit Landlord to make roof repairs to the extent such repairs are necessary. Landlord will not be liable to Tenant or to any other person whomsoever for any injury to person or damage to property, arising out of any use of the roof or any other portion of the Building in connection with the Satellite Dish or HV AC Unit and Tenant hereby indemnifies Landlord from any and all liability thereof. 
ARTICLE 28
Notices
Except as expressly provided to the contrary in this Lease, every notice or other communication to be given by either party to the other with respect hereto shall be in writing and shall be effective when served personally or by reputable national air courier service, or United States certifIed mail, return receipt requested, postage prepaid, addressed, if to Tenant, at the Premises, Attn: Chief Executive Officer, with a copy to the Premises, Attn: General Counsel, and if to Landlord, c/o Wells Real Estate Funds, 6200 The Comers Parkway, Norcross, GA 30092, Attn: Asset Manager -West Region, with a copy to Wells Real Estate Funds, 6200 The Comers Parkway, Norcross, GA 30092, Attn: Director of Property Management Operations, or such other address or addresses as Tenant or Landlord may from time to time designate by notice given as above provided. Every notice or other communication hereunder shall be deemed to have been given as of the third business day following the date of such mailing (or as of any earlier date evidenced by a receipt from such national air courier service or the United States Postal Service) or immediately if personally delivered. Notices not sent in accordance with the foregoing shall be of no force or effect until received by the foregoing parties at such addresses required herein. 

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Tenant shall provide Landlord with the name(s) of individual(s) authorized to make requests of Landlord for services and to deal with Landlord's property manager with regard to day to day operations. If Tenant fails to provide such names, Landlord may comply with written or oral requests by any officer or employee of Tenant. Tenant shall not authorize more than three (3) individuals for each floor on which the Premises are located. 
ARTICLE 29
Real Estate Brokers
Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than CB Richard Ellis and UGL Equis Services, whose commissions shall be paid by Landlord pursuant to their separate written agreement. Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys' fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through, or under the indemnifying party. 
ARTICLE 30
Letter of Credit
Upon Tenant's execution and submission of this Lease, Tenant shall deliver to Landlord a clean, unconditional, irrevocable letter of credit that conforms to the requirements of this Article ("Letter of Credit"). The Letter of Credit shall serve as security for the prompt, full and faithful performance by Tenant of the terms, covenants and conditions of this Lease. In the event that Tenant is in Default hereunder and fails to cure within any applicable time permitted under this Lease, Landlord may use or apply the whole or any part of the Letter of Credit proceeds for the payment of Tenant's obligations hereunder. The use or application of the Letter of Credit proceeds or any portion thereof shall not prevent Landlord from exercising any other right or remedy provided hereunder or under any Law and shall not be construed as liquidated damages. In no event shall the Letter of Credit be considered an advance payment of Rent, and in no event shall Tenant be entitled to use the Letter of Credit for the payment of Rent. Landlord shall have the right to transfer the Letter of Credit to any purchaser of the Property. Upon such transfer, Tenant shall look solely to such purchaser for return of the Letter of Credit and Landlord shall be relieved of any liability with respect to the Letter of Credit. 
The Letter of Credit shall be: (a) in form and substance satisfactory to Landlord in its reasonable discretion (with the following criteria at a minimum); (b) at all times in the stated face amount of not less than Two Million Five Hundred Thousand Dollars ($2,500,000.00) (which amount is subject to reduction as provided below) and shall on its face state that multiple and partial draws are permitted and either (i) that partial draws will not cause a corresponding reduction in the stated face amount of the Letter of Credit or (ii) that, within five (5) business days after any such partial draw, the issuer will notify Landlord in writing that the Letter of Credit will not be reinstated to its full amount in which event Landlord shall have the right to immediately draw on the remainder of the Letter of Credit (it being understood that the Letter of Credit shall at all times be not less than the total Letter of Credit amount as so required); (c) issued by a commercial bank acceptable to Landlord from time to time with a banking office in the Pasadena or Los Angeles, California area, for the account of Tenant and its permitted successors and assigns under this Lease; (d) made payable to, and expressly transferable and assignable one or more times at no charge by, the owner from time to time of the Building or its lender (which transfer/assignment shall be conditioned only upon the execution of a reasonable and customary written document in connection therewith), whether or not the original account party of the Letter of Credit continues to be the Tenant under this Lease by virtue of a change in name or structure, merger, assignment, transfer or otherwise; (e) payable at sight upon presentment to a Los Angeles or Pasadena, California branch of the issuer of a simple sight draft stating only that Landlord is permitted to draw on

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the Letter of Credit under the terms of the Lease and setting forth the amount that Landlord is drawing; (f) of a term not less than one year and shall on its face state that the same shall be renewed automatically, without the need for any further written notice or amendment, for successive minimum one year periods, unless the issuer notifies Landlord in writing, at least sixty (60) days prior to the expiration date thereof, that such issuer has elected not to renew the Letter of Credit (which will thereafter entitle Landlord to draw on the Letter of Credit); and (g) at least thirty (30) days prior to the then current expiration date of such Letter of Credit, either (1) renewed (or automatically and unconditionally extended) from time to time through the sixtieth (60th) day after the expiration of the Lease Tenn, or (2) replaced by Tenant with another Letter of Credit meeting the requirements of this Article. Tenant shall cooperate with Landlord to effect any modifications, transfers or replacements of the Letter of Credit requested by Landlord in order to assure that Landlord is at all times fully secured by a valid Letter of Credit that may be drawn upon by Landlord, its successors and assigns. Notwithstanding anything in this Lease to the contrary, any cure or grace period provided in connection with a Default shall not apply to any of the foregoing requirements of the Letter of Credit and, specifically, if any of the aforesaid requirements are not complied with timely, then an immediate Default shall occur and Landlord shall have the right to immediately draw upon the Letter of Credit without notice to Tenant. Each Letter of Credit shall be issued by a commercial bank that has a credit rating with respect to certificates of deposit, short term deposits or commercial paper of at least A-2 (or equivalent) by Moody's Investor Service, Inc., or at least P-2 (or equivalent) by Standard & Poor's Corporation and shall be otherwise acceptable to Landlord in Landlord's reasonable discretion, provided that the letter of credit attached hereto as Exhibit H shall be deemed acceptable to Landlord as of the date of execution of this Lease. If the issuer's credit rating is reduced below A -2 (or equivalent) by Moody's Investors Service, Inc. or below P-2 (or equivalent) by Standard & Poor's Corporation, or if the financial condition of such issuer changes in any other materially adverse way, then Landlord shall have the right to require that Tenant obtain from a different issuer a substitute Letter of Credit that complies in all respects with the requirements of this Article and Tenant's failure to obtain such substitute Letter of Credit within twenty (20) days following Landlord's written demand therefor (with no other notice or cure or grace period being applicable thereto, notwithstanding anything in this Lease to the contrary) shall entitle Landlord to immediately draw upon the then existing Letter of Credit in whole or in part, without notice to Tenant. In the event the issuer of any Letter of Credit held by Landlord is insolvent or is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation, or any successor or similar entity, or if a trustee, receiver or liquidator is appointed for the issuer, then, effective as of the date of such occurrence, said Letter of Credit shall be deemed to not meet the requirements of this Article and, within twenty (20) days thereof, Tenant shall replace such Letter of Credit with other collateral acceptable to Landlord in its reasonable discretion (and Tenant's failure to do so shall, notwithstanding anything in this Lease to the contrary, constitute a Default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid twenty (20) day period). Any failure or refusal of the issuer to honor the Letter of Credit shall be at Tenant's sole risk and shall not relieve Tenant of its obligations hereunder. 
Notwithstanding the foregoing, on each anniversary of the Commencement Date (each such anniversary is herein called a "Reduction Date") provided that within the twelve months preceding a Reduction Date Tenant has timely made eleven (11) out of twelve (12) Base Rent, Tax and Operating Expense payments (and further provided that the one (1) excluded late payment per year is fully paid by Tenant within fifteen (15) days of its due date), then Tenant shall be entitled to reduce the amount of the Letter of Credit by Five Hundred Thousand Dollars ($500,000) for that year. This process shall continue until the required Letter of Credit amount is $0 and thereafter no Letter of Credit shall be required. Furthermore, in the event that Tenant is not entitled to a reduction under this paragraph in the first year after the Commencement Date, but then Tenant becomes current in payments and Tenant is entitled to a reduction in each of the next consecutive four (4) years, then Tenant may reduce the amount of the Letter of Credit to $0 as of the fifth anniversary of the Commencement Date. Each year on or about the Reduction Date, at the request of Tenant or the issuing bank, Landlord shall confirm in writing on such

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form as is reasonably required by the issuing bank whether Tenant has complied with the foregoing requirements of this paragraph during the preceding twelve (12) month period. Tenant and Landlord acknowledge and agree that their rights and remedies with respect to the Letter of Credit shall be as provided in this Lease and each of Landlord and Tenant hereby waive Section 1950.7 of the California Civil Code and any and all other similar laws now existing or hereafter enacted 
ARTICLE 31
Exculpatory Provisions
It is expressly understood and agreed by and between the parties hereto, anything herein to the contrary notwithstanding, that each and all of the representations, warranties, covenants, undertakings, and agreements herein made on the part of Landlord while in form purporting to be the representations, warranties, covenants, undertakings, and agreements of Landlord are nevertheless each and every one of them made and intended, not as personal representations, warranties, covenants, undertakings, and agreements by Landlord or for the purpose or with the intention of binding Landlord personally, but are made and intended for the purpose only of subjecting Landlord's interest in the Complex to the terms of the Lease. The liability of Landlord to Tenant for any default by Landlord under the Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration, or any other matter relating to the Property or the Premises, shall be limited to the interest of Landlord in the Complex. Tenant agrees to look solely to Landlord's interest in the Complex for the recovery of any judgment against Landlord, and Landlord shall not be personally liable for any such judgment or deficiency after execution thereon. The limitations of liability contained in this provision shall apply equally and inure to the benefit of Landlord's present and future partners, beneficiaries, officers, directors, trustees, members, managers, shareholders, agents and employees, and their respective partners, members, shareholders, legal representatives, heirs, successors and assigns. Under no circumstances shall any present or future shareholder, officer or director of Landlord (if Landlord is a corporation), general or limited partner of Landlord (if Landlord is a partnership), manager or member of Landlord (if Landlord is a limited liability company), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust) have any liability for the performance of Landlord's obligations under the Lease. 
ARTICLE 32
Mortgagee's Consent
Intentionally deleted.
ARTICLE 33
Miscellaneous
(A)    Binding Upon Parties. Each of the terms, covenants and conditions of this Lease shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, executors, administrators, guardians, custodians, successors and assigns, subject to the provisions of Article 18 respecting Transfers; and all references herein to Landlord and Tenant shall be deemed to include all such parties. The term "Landlord" as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean only the owner or owners of the Property at the time in question. 
(B)    No Recording. Landlord and Tenant agree that in no event and under no circumstances shall this Lease be recorded. A short-form memorandum of Lease (which shall include, among other things, a description of Tenant's exclusivity rights granted pursuant to this Lease) shall be executed by 

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Landlord at Tenant's request and may be recorded by Tenant against the Building at Tenant's sole election and expense. If a memorandum is recorded, Tenant shall upon the expiration or earlier termination of this Lease, at Landlord's request, deliver to Landlord a fully executed quitclaim and release agreement in recordable form wherein Tenant terminates the memorandum. 
(C)    Governing Law. This Lease shall be construed in accordance with the Laws of the State of California. 
(D)    Survival. All obligations or rights of either party arising during or attributable to the period ending upon expiration or earlier termination of this Lease shall survive such expiration or earlier termination. 
(E)    Quiet Enjoyment. Landlord agrees that, if Tenant timely pays the Rent and performs the terms, covenants and conditions hereunder, and subject to all other terms, covenants and conditions of this Lease, Tenant shall hold and enjoy the Premises during the Term, free of lawful claims by any Person acting by or through Landlord. 
(F)    Light and Air. This Lease does not grant any legal rights to "light and air" outside the Premises nor any particular view or cityscape visible from the Premises. 
(G)    Time of Essence. Time is of the essence of this Lease and each and all of its provisions. 
(H)    Severability. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provisions. 
(I)    Joint and Several. If Tenant is comprised of more than one party, each such party shall be jointly and severally liable for Tenant's obligations under this Lease. 
(J)    Force Majeure. Notwithstanding anything in this Lease to the contrary, neither party shall be chargeable with, or liable to the other for, anything or in any amount for any failure to perform or delay caused by any of the following ("Force Majeure Delays"): fIre; earthquake; explosion; flood; hurricane; the elements; act of God or the public enemy; war, terrorist act or acts, invasion; insurrection; rebellion; or riots; provided, however, lack of funds shall not be deemed a Force Majeure Delay nor may any Force Majeure Delay be used to excuse Tenant from its obligation to pay Rent. The Commencement Date may be postponed by a number of days equal to the number of days that Tenant's completion of the Work is actually delayed by a Force Majeure Delay provided Tenant gives Landlord written notice of each such Force Majeure Delay within five (5) business days after the commencement of the occurrence of such Force Majeure Delay and Tenant takes reasonable measures to alleviate or work around such Force Majeure Delay. 
(K)    Pronouns. Any pronoun used in place of a noun shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and each of their respective successors, executors, administrators, assigns, according to the context hereof. 
(L)    Captions and Severability. The captions of the Articles, Sections and Paragraphs of this Lease are for convenience only and shall in no way modify any provision of this Lease. If any term or provision of this Lease shall be found invalid, void, illegal, or unenforceable by a court of competent jurisdiction, it shall not affect, impair or invalidate any other term or provision hereof. 
(M)    Definitions. "Law" shall mean all federal, state, county and local governmental and municipal laws, statutes, ordinances, rules, regulations, codes, decrees, and orders, as well as applicable decisions by courts in the State of California and by federal courts applying California law. "Person" shall mean an individual, trust, partnership, joint venture, association, corporation, and any other entity. 
(N)    Prohibited Party Transactions. Tenant represents and warrants to Landlord that (1) Tenant is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, "Specially Designated 

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National," "Blocked Person," or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (2) Tenant is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation. Tenant agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, 'losses, risks, liabilities, and expenses (including reasonable attorney's fees and costs) arising or related to any breach of the foregoing representation and warranty. 
(O)    Signage. Tenant shall be entitled to Building-standard lobby directory signage for Tenant's name and the names of Tenant's subtenants and their employees. Tenant may install Tenant identification in the elevator lobby and the entrance to Tenant's Premises on any full floor occupied by Tenant, subject to Landlord's prior written approval, not to be unreasonably withheld, conditioned or delayed. Subject to the terms of this Article 33 and prior receipt of all necessary approvals, Tenant shall have the exclusive right to install and maintain exterior Building signage on the 3465 Building displaying Tenant's name at exterior location(s) approved in advance by Landlord, such approval not to be unreasonably withheld, conditioned or delayed. Tenant shall also have naming rights for the 3465 Building. Tenant shall be solely responsible for obtaining and complying with all necessary approvals for the exterior signage. All such exterior signage and the method and manner of installation of the exterior signage (including the contractor who will perform the installation) shall be subject to Landlord's prior written approval, not to be unreasonably withheld, conditioned or delayed. Tenant shall be solely responsible for all costs associated with the exterior sign's fabrication, installation, maintenance, operation, and illumination (including installation of an electric meter), provided that a portion of the Construction Allowance may be used to pay for the initial installation and metering. Tenant shall maintain the exterior signage in a first class, sightly manner. At no cost to Landlord, Landlord shall cooperate with Tenant in its effort to obtain all required governmental approvals and permits in connection with Tenant's exterior signage. Tenant's signage rights and Building naming rights under this Section 33(0) shall terminate in the event Tenant ever leases less than all leasable space in the Building, provided that in no event shall any Transfer, Permitted Transfer and/or permitted occupancy pursuant to Section 18(G), above, cause Tenant to lose any signage rights and/or Building naming rights under this Section 33(0). In the event Tenant leases less than the entire Building, then at Tenant's expense, Landlord shall provide Tenant Building standard lobby directory signage and on multi-tenant floors, elevator lobby directional and suite entry signage. 
(P)    Access. Landlord shall provide a card key (or similar type of) access system to provide access to the Building at times other than normal building hours. A reasonable number of access cards or other means of access shall be provided to Tenant upon commencement of the Term at no cost to Tenant; Landlord may charge Tenant a reasonable fee for replacement and new cards. Such access cards shall be issued by Landlord to the specific individuals that are designated by Tenant. Tenant shall not permit anyone, except for Tenant's employees, permitted subtenants and assigns, and authorized guests, to enter the Building at times other than normal building hours. 
(Q)    Landlord Bankruptcy Proceeding. In the event that the obligations of Landlord under this Lease are not performed during the pendency of a bankruptcy or insolvency proceeding involving the Landlord as the debtor, or following the rejection of this Lease in accordance with Section 365 of the United States Bankruptcy Code, then notwithstanding any provision of this Lease to the contrary, and in addition to any and all other remedies permitted by this Lease and/or by applicable Laws Tenant shall have the right to set off against Rents next due and owing under this Lease (a) any and all damages caused by such non-performance of Landlord's obligations under this Lease by Landlord, debtor-in-possession, or the bankruptcy trustee, and (b) any and all damages caused by the non-performance of Landlord's obligations under this Lease following any rejection of this Lease in accordance with Section 365 of the United States Bankruptcy Code. 

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ARTICLE 34
Entire Agreement
This Lease, together with Rider One and the Exhibits attached hereto (each of which is hereby incorporated into this Lease), contains all the terms, covenants and conditions between Landlord and Tenant relative to the matters set forth herein and no prior agreement or understanding pertaining to the same shall be of any force or effect. Without limitation, Tenant hereby acknowledges and agrees that Landlord's leasing agents and field personnel are only authorized to show the Premises and negotiate termns, covenants and conditions for leases subject to Landlord's final approval, and are not authorized to bind Landlord to any agreements, representations, understandings or obligations with respect to the condition of the Premises or the Property, the suitability of the same for Tenant's business, or any other matter, and no agreement, representation, understanding or obligation not expressly contained herein shall be of any effect. Neither this Lease, nor any Rider or Exhibit referred to above may be modified, except in writing signed by both parties. 
ARTICLE 35
Parking
Parking shall be available in the parking areas depicted on the Site Plan. Except as otherwise provided in this Article, surface and garage parking for Tenant and its employees and visitors shall be on an unassigned basis, with Landlord and other tenants at the Property (if any), and their employees and visitors, and other Persons to whom Landlord shall grant the right or who shall otherwise have the right to use the same, all subject to Landlord's rules, as the same may be reasonably amended or supplemented. Notwithstanding the foregoing to the contrary, Landlord reserves the right to assign specific spaces, to maintain one or more "executive parking areas" containing reserved spaces, and to reserve spaces for visitors, small cars, carpoolers, handicapped individuals, and other tenants, visitors of tenants or other Persons; Tenant and Tenant's employees, independent contractors and visitors shall not park in any such assigned or reserved spaces unless the same are designated for the use of Tenant and Tenant's employees, independent contractors and visitors (it being understood that Tenant's 4 per 1,000 parking discussed below is inclusive of such assigned and reserved spaces). Landlord may restrict or prohibit full size vans and other large vehicles. Landlord shall not charge rent for unreserved parking spaces during the initial Term. However, Landlord may charge rent for reserved parking spaces, which rent shall be subject to increase from time to time. Throughout the Term (as it may be extended), Tenant shall be entitled to four (4) parking passes for every 1,000 square feet in the Premises, which parking passes may be designated by a sticker, hang tag, or other identification provided by Landlord to Complex office tenants as an Operating Expense. As part of this 4 per 1,000 allocation, Tenant shall have the right to lease thirty-five (35) reserved parking spaces in the location designated on Exhibit E as Tenant's Reserved Parking Spaces at an initial cost of Forty Dollars ($40.00) per stall per month, subject to increase from time to time, but not more than once per calendar year, throughout the Term (as it may be extended), provided that in no event shall such costs increase by more than four percent (4%) over the costs for the prior calendar year. After execution of this Lease: (a) Landlord shall not amend an existing lease or execute a new lease that grants any other office tenant of the Complex parking rights greater than 4 spaces per 1,000 square feet leased; (b) Landlord shall not amend an existing retail lease to increase the retail tenant's parking rights beyond that which is currently allowed, except as required by Law, (c) Landlord shall not execute a new retail lease that grants the new retail tenant parking in excess of that which is required by law, and (d) in the event Landlord converts office space at the Complex to retail or Landlord converts parking space at the Complex to retail space, Landlord may only grant such new retail 4 parking spaces per 1,000 square feet leased. 
In case of any violation of these provisions or Landlord's rules, Landlord may refuse to permit the violator to park, and may tow away the vehicle owned or driven by the violator from the Property

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without liability whatsoever, at such violator's risk and expense. It is Landlord's policy to tow any vehicle found at the Property that has already received three (3) or more parking violations at the Property. Landlord reserves the right to temporarily close all or a portion of the parking areas or facilities in order to make repairs or perform maintenance services, or to alter, modify, re-stripe or renovate the same, or if required by casualty, strike, condemnation, act of God, Law or governmental requirement, or any other reason beyond Landlord's reasonable control. In the event access is denied for any reason, any parking charges shall be abated to the extent access is denied, as Tenant's sole recourse, provided that the foregoing is not intended to nullify, and Tenant shall have, any and all of the remedies relating to parking set forth in this Lease, including, without limitation Articles 8 and 10 and this Article 35. 
Notwithstanding the foregoing, if Tenant is prevented from using or unable to use its allotment of parking passes and a parking shortage exists at the Complex for eight (8) days or more in any thirty (30) day period, then at Tenant's request Landlord and Tenant shall select a mutually agreeable parking vendor to investigate the situation and prepare a report within fifteen (15) days. If remedial action is warranted based on the report, Landlord shall implement one or more possible solutions until such time as enough parking is available to satisfy Tenant's parking needs at the Complex, not to exceed Tenant's 4 per 1000 pass allocation. Possible solutions that Landlord may implement include the following, or such other solution(s) as the parties may mutually agree: (i) valet assist parking; (ii) valet assist tandem parking; (iii) install a gate to restrict access to certain parking areas; and/or (iv) identify and obtain offsite parking contiguous to the Complex. If the foregoing solutions do not alleviate the problem (or earlier if Landlord elects), as an additional remedy available to Tenant, Landlord shall mark ninety percent (90%) of Tenant's allocated spaces as spaces intended for Tenant. If any or all of these remedies are implemented, it shall be at Landlord's sole cost and expense. In the event that Landlord defaults in its obligations under this Article 35, Tenant shall have the right to seek the remedy of specific performance, and Landlord hereby consents to the issuance by any court of competent jurisdiction of an order of specific performance of Landlord's obligations under this Article 35. 
The current parking areas are depicted on the Site Plan attached as Exhibit F to this Lease. In the event that in the future Tenant leases basement space in the 3475 East Foothill Building, Landlord shall not be required to provide 4 parking passes per 1,000 square feet with respect to such basement space. 
ARTICLE 36
Generator
Provided that Tenant, at Tenant's sole cost and expense, obtains and maintains all necessary permits, licenses and approvals, Tenant shall be permitted to install and maintain, at Tenant's sole cost and expense, a back up generator and fuel tank at a location approved in advance by Landlord (in Landlord's reasonable discretion) in compliance with all the requirements of this Lease. In compliance with all Laws and Landlord's reasonable requirements, and at Tenant's sole cost and expense, Tenant shall install and maintain the generator, fuel tank, fuel lines, conduits, wires and other like items between the generator and the Building. If (and only if) Tenant has not properly maintained the generator, the generator is not in good working condition, or the fuel tank is leaking or otherwise in need of replacement, then Landlord may require Tenant at Tenant's sole cost and expense to remove the generator, fuel tank, fuel lines, conduits, wiring, and all related improvements and restore damage caused thereby at the expiration or earlier termination of the Term, notwithstanding anything to the contrary contained herein. Landlord shall have the right to approve the location of and method and manner of installation of Tenant's generator and fuel tank, which approval shall not be unreasonably, withheld, conditioned or delayed. 
ARTICLE 37
Termination Option

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Provided: (a) this Lease is then in full force and effect and (b) Tenant is not in Default under this Lease beyond all applicable notice and cure periods, Tenant shall have the right, at Tenant's option, to terminate this Lease ("Termination Option") effective on the last day of the sixth Lease Year (i.e., October 31, 2018) ("Termination Date"). The Termination Option shall be exercised, if at all, by Tenant by giving written notice of the exercise to Landlord (''Termination Notice") no later than the last day of the fifth Lease Year (i.e., October 31, 2017). It shall be a condition to the exercise of Tenant's Termination Option that Tenant pay to Landlord a termination fee ("Termination Fee") in an amount equal to the sum of Landlord's unamortized (i) brokerage commissions payable by Landlord to CB Richard Ellis and UGL Equis Services pursuant to Article 29 above and the separate written agreement(s) referenced therein, (ii) Construction Allowance and Additional Allowance (but not including any unused portion of the Construction Allowance forfeited pursuant to Section 10 of the Workletter), and (iii) rent abatement (i.e. the difference between the rent payable under Article 2 above during the first two (2) years based on 120,000 feet and the amount that would have been payable had the correct square footage of 141,540 been utilized to calculate Base Rent due), all amortized over the initial term of this Lease with six percent (6%) per annum interest. 100% of the Termination Fee shall be payable contemporaneously with Tenant's transmittal to Landlord of the Termination Notice. At Tenant's request, Landlord will provide information necessary to calculate the Termination Fee. 
Provided Tenant properly and timely exercises the Termination Option and timely and properly pays Landlord the Termination Fee, then this Lease shall terminate effective as of the Termination Date, as if said Termination Date were set forth in this Lease as the Expiration Date of the Term of the Lease. Tenant shall vacate and deliver possession of the Premises to Landlord in the manner set forth in this Lease on or before 11 :59 p.m. on the Termination Date. Tenant shall also pay to Landlord on or before the Termination Date, and be responsible for, all sums due under this Lease which accrue under this Lease on or prior to the Termination Date. Tenant's rights under this Article are personal to the Tenant named in this Lease and any Permitted Transferee. 
ARTICLE 38
Right of First Offer
Subject to existing as of the date of this Lease renewal or expansion options of other tenants, and provided no Default then exists, Landlord shall, prior to offering the same to any party (other than the then current tenant therein), first offer to lease to Tenant any space of five thousand (5,000) rentable square feet or larger that Landlord desires to make available for lease in either the 3465 E. Foothill Boulevard or 3475 East Foothill Boulevard Building then owned by Landlord or any affiliate of Landlord (the "Offer Space"); such offer shall be in writing and specify the lease terms for the Offer Space, which lease terms shall be appropriate for an arms-length transaction, including the rent to be paid for the Offer Space and the date on which the Offer Space shall be included in the Premises (the "Offer Notice"). Tenant shall notify Landlord in writing whether Tenant elects to lease the entire Offer Space on the terms set forth in the Offer Notice, within ten (10) business days after Landlord delivers to Tenant the Offer Notice. If Tenant timely elects to lease the Offer Space, then Landlord and Tenant shall execute an amendment to this Lease, effective as of the date the Offer Space is to be included in the Premises, on the terms set forth in the Offer Notice and, to the extent not inconsistent with the Offer Notice terms, the terms of this Lease; however, Tenant shall accept the Offer Space in an "AS-IS" condition and Landlord shall not provide to Tenant any allowances (e.g., Construction Allowance, Space Planning Allowance, Additional Allowance, and the like) or other tenant inducements except as specifically provided in the Offer Notice. The Rules set forth in Exhibit G attached hereto shall apply to any such Offer Space leased by Tenant. 
If Tenant fails or is unable to timely exercise its right hereunder, then such right shall lapse, time being of the essence with respect to the exercise thereof (it being understood that Tenant's right hereunder is a one-time right only with respect to any particular Offer Space), and Landlord may lease all or a

43

portion of the Offer Space to third parties on such terms as Landlord may elect, although Landlord must re-offer the space to Tenant (A) in the event that Landlord's new deal terms are 5% or more lower on a net effective basis than Landlord's offer to Tenant and (B) if a lease for the Offer Space is not executed with a third party within one hundred twenty (120) days after the expiration of the ten (10) business day period set forth in the preceding paragraph. Tenant may not exercise its right of first offer if a Default exists or if Tenant and/or any Permitted Transferee is not then occupying the entire Premises. In no event shall Landlord be obligated to pay a commission with respect to any space leased by Tenant under this Article other than to Tenant's designated broker who is actively involved in negotiations on Tenant's behalf at the time and Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys' fees, and other liability for commissions or other compensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party. 
Notwithstanding the foregoing, if an Offer Notice is given during the first two (2) years of the initial Term and Tenant desires to lease the Offer Space, then the terms for the lease of the Offer Space shall be the same terms as provided in this Lease with respect to the Premises, except that the Construction Allowance, Additional Allowance, and Space Planning Allowance shall be prorated on a straight line basis over the initial Term and Tenant shall only be entitled to the unamortized amount, prorated to the commencement date of the inclusion of the Offer Space in the Premises. 
Tenant's right of first offer rights shall terminate if (a) the Lease or Tenant's right to possession of the Premises is terminated, or (b) other than a Permitted Transfer, Tenant assigns any of its interest in the Lease or sublets any portion of the Premises. 
ARTICLE 39
Exclusivity
Subject to rights existing as of the date of this Lease in existing leases and other agreements, and with respect to the Building and any part of the Complex owned by Landlord, throughout the Term (as same may be extended), so long as (1) Tenant is the above-named Tenant, (2) Tenant is leasing, subleasing, or is otherwise responsible either directly or indirectly for the payment of Rent for all leasable space in the 3465 Building, and (3) the Lease has not been terminated (the foregoing 1, 2 and 3 are herein called the "Exclusive Conditions"), Landlord agrees not to: (i) enter into any lease of space or other occupancy agreement at the Complex for a term that will commence during the Term (as the same may be extended including any potential renewal terms) with any Tenant Competitor (as such term is defined below); (ii) consent to any assignment, sublease or other occupancy agreement at the Complex for a term that will commence during the Term (as the same may be extended including any potential renewal terms) to (A) any Tenant Competitor or (B) any other entity whose Primary Business in the space at the Complex is Competitive Activities (as defined below), provided that in each case (A) and (B) Landlord shall only be required to withhold its consent in the event (x) Landlord has sole discretion authority to withhold consent under the applicable lease; (y) the applicable lease prohibits assignment or sublease to a Tenant Competitor or use for Competitive Activities; or (z) it would be deemed reasonable under the applicable lease for Landlord to withhold consent to the proposed assignment or sublease to a Tenant Competitor or an entity whose Primary Business in the space would be Competitive Activities; (iii) provide exterior signage rights to any Tenant Competitor; or (iv) enter into any lease of space or other occupancy agreement at the Complex for a term that will commence during the Term (as the same may be extended including any potential renewal tenus) in which Competitive Activities are permitted to occur as the Primary Business (the actions described in clauses (i) through (iv) herein, collectively, the "Restricted Actions"). For purposes of this Article, "Tenant Competitor" shall mean any person or entity which, at the time the Restricted Action is proposed to occur, has more than fifty percent (50%) of its business (i.e., its "Primary Business") attributable to Competitive Activities, including, without limitation, Netspend, InComm, UniRush, AccountNow, PreCash and Blackhawk Network (or any of their respective affiliates). As used herein, the term "Competitive Activities" shall mean the issuance, sale, 

44

distribution, marketing, or servicing of prepaid debit cards. Notwithstanding the foregoing, the parties agree that the foregoing requirements shall not be deemed violated should the Competitive Activities occur incidentally to the occupant's Primary Business activities in the space which are not Competitive Activities (for purposes of example only, if H&R Block occupied the space and offered a prepaid card as a refund disbursement device incidentally to its main business of preparing tax returns, it would not violate the provisions of clause (iv) above). 
Landlord shall not be in default hereunder in the event that any of the foregoing Tenant Competitors merges with, is acquired by, acquires, is the assignee of, or is a subtenant of another tenant of the Complex where Landlord does not have authority to prevent same or authority to withhold consent to same. So long as the Exclusive Conditions are met, any new lease of space or other occupancy agreement entered into by Landlord after the date of this Lease relating to any buildings in the Complex shall contain a provision prohibiting during the Term of this Lease assignment and sublease to a Tenant Competitor, exterior signage rights for a Tenant Competitor, and use for Competitive Activities as its Primary Business at the Complex. In the event another tenant or occupant of the Complex engages in Competitive Activities as its Primary Business at the Complex or displays exterior Tenant Competitor signage despite the prohibition in such tenant's lease or occupancy agreement, Landlord shall promptly and diligently use commercially reasonable efforts to cause such tenant or occupant to cease the prohibited activity. In the event that Landlord violates its agreement set forth in this Article 39, Tenant shall have all remedies which it may have under this Lease or at Law, including without limitation the remedy of specific performance and Landlord hereby consents to the issuance by any court of competent jurisdiction of an order of specific performance of Landlord's obligations under this Article 39; provided, however, that Tenant shall not be entitled to terminate this Lease as a result of any such violation. 

45

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the day and year first above written. 
	
	
	LANDLORD

	 

	Wells REIT II - Pasadena Corporate Park, LP,

	a Delaware limited partnership

	 

	By: Wells REIT II - Pasadena Corporate Park, LLC, a Delaware limited liability company, its general partner

	 

	By: Wells Operating Partnership II, LP, a Delaware limited partnership, it's sole member

	 

	By: Wells Real Estate Investment Trust II, Inc.,
a Maryland corporation, it's general partner

	 

	By: /s/ Rendall D. Fretz

	Name: Rendall D. Fretz

	Its: Sr. Vice President

	 

	TENANT

	 

	Green Dot Corporation,

	a Delaware corporation

	 

	By: /s/ Steve Streit

	Name: Steve Streit

	Its: CEO

46

RIDER ONE 
RULES APPLICABLE TO 3465 BUILDING 
A. General Rules and Regulations. The following rules and regulations govern the use of the 3465 Building. Except to the extent the rules and regulations conflict with the terms of the Lease, Tenant will be bound by such rules and regulations and agrees to cause Tenant's employees, subtenants, assignees, contractors, suppliers, customers and invitees to observe the same.
		
	1.
	Except as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice may be installed or displayed on any part of the outside of the Building or the Complex without the prior written consent of Landlord. Landlord will have the right to remove, at Tenant's expense and without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls are to be printed, painted, affixed or inscribed at the expense of Tenant. 

		
	2.
	If Landlord reasonably objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the Premises, or placed on any windowsill, which is visible from the exterior of the Premises, Tenant will immediately discontinue such use. 

		
	3.
	Tenant will not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators, or stairways of common areas of the Complex. Such common area halls, passages, exits, entrances, elevators and stairways are not open to the general public, but are open, subject to reasonable regulations, to Tenant's business invitees. Landlord will in all cases retain the right to control and prevent access thereto of all persons whose presence in the reasonable judgment of Landlord would be prejudicial to the safety, character, reputation and interest of the Complex and its tenants, provided that nothing herein contained will be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are. engaged in illegal or unlawful activities. 

		
	4.
	Except as provided in the Lease, Tenant will not obtain for use on the Premises ice, drinking water, food, food vendors, beverage, towel or other similar services or accept barbering or boot blacking service upon the Premises, except at such reasonable hours and under such reasonable regulations as may be fixed by Landlord. Landlord expressly reserves the right to absolutely prohibit solicitation, canvassing, distribution of handbills or any other written material, peddling, sales and displays of products, goods and wares in all portions of the Complex except as may be expressly permitted under the Lease. Landlord reserves the right to restrict and regulate the use of the common areas of the Complex by invitees of tenants providing services to tenants on a periodic or daily basis including food and beverage vendors. Such restrictions may include limitations on time, place, manner and duration of access to a tenant's premises for such purposes. Without limiting the foregoing, Landlord may require that such parties use service elevators, halls, passageways and stairways for such purposes to preserve access within the Building for tenants and the general public. 

		
	5.
	Landlord reserves the right to require tenants to periodically provide Landlord with a written list of any and all business invitees which periodically or regularly provide goods and services to such tenants at the premises. Landlord reserves the right to preclude all vendors from entering or conducting business within the Building and the Complex if such vendors are not listed on a tenant's list of requested vendors.

		
	6.
	Intentionally Omitted. 

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	7.
	The directory of the Building will be provided exclusively for the display of the name and location of tenants and subtenants only and Landlord reserves the right to exclude any other names therefrom. 

		
	8.
	Unless Tenant is providing its own janitorial service, Tenant will not cause any unnecessary labor by carelessness or indifference to the good order and cleanliness of the Premises. 

		
	9.
	Tenant shall furnish Landlord with one set of keys to each entry door lock in the Premises. Tenant shall not alter any lock or install any new additional lock or bolt on any door of the Premises without providing a new set of keys to Landlord. Tenant, upon the termination of its tenancy, will deliver to Landlord the keys to all doors which have been furnished to Tenant, and in the event of loss of any keys so furnished, will pay Landlord therefor. 

		
	10.
	Intentionally Omitted.

		
	11.
	Intentionally Omitted. 

		
	12.
	Tenant will not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Landlord will have the right to reasonably prescribe the weight, size and position of all safes, heavy equipment, files, materials, furniture or other property brought into the Building or require appropriate structural reinforcement for such items in connection with Landlord's review of Tenant's plans and specifications for the Tenant Improvements or any Alterations which are subject to Landlord's approval as provided in the Lease. Heavy objects will, if considered necessary by Landlord, stand on such platforms as determined by Landlord to be necessary to properly distribute the weight, which platforms will be provided at Tenant's expense. Tenant will be responsible for all structural engineering required to determine structural load, as well as the expense thereof. Landlord will not be responsible for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property will be repaired at the expense of Tenant. 

		
	13.
	Intentionally Omitted. 

		
	14.
	To prevent fire hazards, the use of space heaters is prohibited. 

		
	15.
	Tenant agrees to comply with any governmental energy-saving rules, laws or regulations. 

		
	16.
	Intentionally Omitted. 

		
	17.
	Intentionally Omitted.

		
	18.
	The toilet rooms, toilets, urinals, wash bowls and other apparatus will not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from any violation of this rule will be borne by the tenant who, or whose employees or invitees, break this rule. 

		
	19.
	Tenant will not sell, or permit the sale at retail of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the Premises. Tenant will not use the Premises for any business or activity other than that specifically provided for in this Lease. Tenant will not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises without first having obtained Landlord's prior written consent, which consent Landlord may withhold in its sole and absolute discretion. 

		
	20.
	Except as provided in the Lease and/or any separate license agreement, without the prior approval of Landlord, Tenant will not install any radio or television antenna, loudspeaker, satellite dishes

R1-2

or other devices on the roof(s) or exterior walls of the Building or the Complex. Tenant will not interfere with radio or television broadcasting or reception from or in the Complex or elsewhere. 
		
	21.
	Except for the ordinary hanging of pictures and wall decorations, Tenant will not mark, drive nails, screw or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof, except in accordance with the provisions of the Lease pertaining to alterations. Landlord reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Tenant shall repair any damage resulting from noncompliance with this rule. 

		
	22.
	Tenant will not install, maintain or operate upon the Premises any vending machines without the written consent of Landlord which shall not be unreasonably withheld or delayed. 

		
	23.
	Landlord reserves the right to exclude or expel from the Complex any person who, in Landlord's judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Building. 

		
	24.
	Tenant will store all its trash and garbage within its Premises or in other facilities provided by Landlord. Tenant will not place in any trash box or receptacle any material which cannot be disposed ofin the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal is to be made in accordance with directions issued from time to time by Landlord. 

		
	25.
	The Premises will not be used for lodging or for manufacturing of any kind, nor shall the Premises be used for any improper, immoral or objectionable purpose. 

		
	26.
	Neither Tenant nor any of its employees, agents, customers and invitees may use in any space or in the public halls of the Building or the Complex any hand truck except those equipped with rubber tires and side guards or such other material-handling equipment as Landlord may approve. Tenant will not bring any other vehicles of any kind into the Building. 

		
	27.
	Tenant agrees to comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 

		
	28.
	Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed. 

		
	29.
	To the extent Landlord reasonably deems it necessary to exercise exclusive control over any portions of the Common Areas for the mutual benefit of the tenants in the Complex, Landlord may do so subject to reasonable, non-discriminatory additional rules and regulations. 

		
	30.
	Landlord may prohibit smoking in the Building and may require Tenant and any of its employees, agents, clients, customers, invitees and guests who desire to smoke, to smoke within designated smoking areas within the Complex. 

		
	31.
	Tenant's requirements will be attended to only upon appropriate application to Landlord's asset management office for the Complex by an authorized individual of Tenant. Employees of Landlord will not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any office without specific instructions from Landlord.

		
	32.
	These Rules and Regulations are in addition to, and will not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease. Landlord may waive anyone or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord will be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Complex. 

R1-3

B. Parking Rules and Regulations. The following rules and regulations govern the use of the parking facilities which serve the Building. Except to the extent that the rules and regulations conflict with the terms of the Lease, Tenant will be bound by such rules and regulations and agrees to cause its employees, subtenants, assignees, contractors, suppliers, customers and invitees to observe the same: 
		
	1.
	Tenant will not permit or allow any vehicles that belong to, or are controlled by, Tenant or Tenant's employees, subtenants, customers or invitees to be loaded, unloaded or parked in areas other than those designated by Landlord for such activities. No vehicles are to be parked in the parking areas other than normally sized passenger automobiles, sport utility vehicles, motorcycles and pick-up trucks. No extended term storage of vehicles is permitted. 

		
	2.
	Vehicles must be parked entirely within painted stall fines of a single parking stall. 

		
	3.
	All directional signs and arrows must be observed. 

		
	4.
	The speed limit within all parking areas shall be five (5) miles per hour. 

		
	5.
	Parking is prohibited: (a) in areas not striped for parking; (b) in aisles or on ramps; (c) where "no parking" signs are posted; and (d) in such other areas as may be reasonably designated from time to time by Landlord or Landlord's parking operator. 

		
	6.
	Landlord reserves the right, without cost or liability to Landlord, to tow any vehicle if such vehicle's audio theft alarm system remains engaged for an unreasonable period of time. 

		
	7.
	Washing, waxing, cleaning or servicing of any vehicle in any area not specifically reserved for such purpose is prohibited. 

		
	8.
	Landlord may refuse to permit any person to park in the parking facilities who violates these rules with unreasonable frequency following written notice to quit, and any violation of these rules shall subject the violator's car following notice of removal, at such car owner's expense. Tenant agrees to use its best efforts to acquaint its employees, subtenants, assignees, contractors, suppliers, customers and invitees with these parking provisions, rules and regulations.

		
	9.
	Parking stickers, access cards, or any other device or form of identifIcation supplied by Landlord as a condition of use of the parking facilities shall remain the property of Landlord. Parking identification devices, if utilized by Landlord, must be displayed as requested and may not be mutilated in any manner. The serial number of the parking identification device may not be obliterated. Parking identification devices, if any, are not transferable and any device in the possession of an unauthorized holder will be void. Landlord reserves the right to refuse the sale of monthly stickers or other parking identification devices to Tenant or any of its agents, employees or representatives who willfully refuse to comply with these rules and regulations and all un-posted city, state or federal ordinances, laws or agreements. 

		
	10.
	Loss or theft of parking identification devices or access cards must be reported to the management office in the Complex immediately, and a lost or stolen report must be fIled by the Tenant or user of such parking identification device or access card at the time. Landlord has the right to exclude any vehicle from the parking facilities that does not have a parking identification device or valid access card. Any parking identification device or access card which is reported lost or stolen and which is subsequently found in the possession of an unauthorized person will be confiscated and the illegal holder will be subject to prosecution. 

		
	11.
	All damage or loss claimed to be the responsibility of Landlord must be reported, itemized in writing and delivered to the management office located within the Complex within ten (10) business days after any claimed damage or loss occurs. Any claim not so made is waived.

R1-4

Landlord is not responsible for damage by water or fire, or for the acts or omissions of others, or for article's left in vehicles. 
		
	12.
	The parking operators, managers or attendants are not authorized to make or allow any exceptions to these rules and regulations, without the express written consent of Landlord. Any exceptions to these rules and regulations made by the parking operators, managers or attendants without the express written consent of Landlord will not be deemed to have been approved by Landlord. 

		
	13.
	Landlord reserves the right, without cost or liability to Landlord, to tow any vehicles which are used or parked in violation of these rules and regulations. 

		
	14.
	Landlord reserves the right from time to time to modify and/or adopt such other reasonable and non-discriminatory rules and regulations for the parking facilities as it deems reasonably necessary for the operation of the parking facilities. 

R1-5

EXHIBIT A
FLOOR PLANS SHOWING PREMISES

see attached

A-1

A-2

A-3

A-4

EXHIBIT B 
TENANT FINISH-WORK: ALLOWANCE
 (Tenant Performs the Work) 
		
	1.
	Acceptance of Premises. Landlord represents and warrants that as of the date Landlord tenders possession of the Premises to Tenant (a) the Building's existing HV AC, mechanical, electrical, plumbing and elevators shall be in good working order and will remain in good working order for a period of one (1) year, other than damage caused by Tenant, and (b) the Building shall be in compliance with all applicable Laws including, without limitation, applicable federal, state and local building codes and the Americans with Disabilities Act. Subject to the preceding sentence, Tenant accepts the Premises in their "AS-IS" condition on the date that this Lease is entered into. In the event of a breach of the representation and warranty contained in this Section 1, Tenant shall notify Landlord and as Tenant's sole remedy on account of such breach Landlord shall remedy the situation to cause such representation and warranty to be true at Landlord's sole cost and expense. Tenant shall permit Landlord and Landlord's contractors to enter the Premises in order to perform necessary work to remedy any such defects and Tenant releases Landlord from any claim for loss, cost damage or inconvenience caused by Landlord's performance of such work other than any claim of Landlord Delay pursuant to Section 7 of this Workletter, provided that Tenant shall not be required to release or waive any claim for personal injury or property damage caused by the negligence or willful misconduct of Landlord and/or its agents and/or employees.

		
	2.
	Working Drawings. 

(a)Preparation and Delivery. Tenant shall provide to Landlord for its approval final working drawings, prepared by SAA (whom Landlord hereby approves) or another design consultant selected by Tenant and reasonably acceptable to Landlord (the "Architect"), of all improvements that Tenant proposes to install in the Premises; such working drawings shall include the partition layout, ceiling plan, electrical outlets and switches, telephone outlets, drawings for any modifications to the mechanical and plumbing systems of the Building, and detailed plans and specifications for the construction of the improvements called for under this Exhibit in accordance with all applicable Laws. 
(b)Approval Process. Landlord shall notify Tenant whether it approves of the submitted working drawings within ten (10) business days after Tenant's submission thereof; provided that Landlord may only disapprove the working drawings to the extent that they fail to meet the Drawing Criteria (as defined in Section 3 of this Workletter). If Landlord disapproves of such working drawings for failure to meet the Drawing Criteria, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three (3) business days after such notice, revise such working drawings in accordance with Landlord's objections and submit the revised working drawings to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted working drawings within five (5) business days after its receipt thereof; provided that Landlord may only disapprove the working drawings to the extent that they fail to meet the Drawing Criteria. This process shall be repeated until the working drawings have been finally approved by Tenant and Landlord. 
		
	3.
	Landlord's Approval; Performance of Work. If any of Tenant's proposed construction work will materially affect the Building's structure or the Building's Systems and Equipment, then the working drawings pertaining thereto must be approved by the Building's engineer. Landlord's approval of such working drawings shall not be withheld, provided that (a) they comply with all Laws, (b) the improvements depicted thereon do not materially adversely affect (in the reasonable

B-1

discretion of Landlord) the Building's structure, the Building's Systems and Equipment or the exterior appearance of the Building, and (c) such working drawings are sufficiently detailed to allow construction of the improvements in a good and workmanlike manner (collectively, the "Drawing Criteria"). As used herein, "Working Drawings" shall mean the final working drawings approved by Landlord, as amended from time to time by any approved changes thereto, and "Work" shall mean all improvements to be constructed in accordance with and as indicated on the Working Drawings, together with any work required by governmental authorities to be made to other areas of the Building as a result of the improvements indicated by the Working Drawings. Without limiting the generality of the foregoing, except to the extent that the same is Landlord's responsibility because Landlord failed to deliver the Premises in the condition required pursuant to Section 1 above, as part of the Work Tenant shall, at Tenant's expense, install and maintain fire extinguishers and other fire protection devices as may be required with respect to Tenant's use of the Premises or Tenant's Work. Landlord's approval of the Working Drawings shall not be a representation or warranty of Landlord that such drawings are adequate for any use or comply with any Law, but shall merely be the consent of Landlord thereto. Tenant shall, at Landlord's request, sign the Working Drawings to evidence its review and approval thereof. After the Working Drawings have been approved, Tenant shall cause the Work to be performed in accordance with the Working Drawings. 
		
	4.
	Contractors; Performance of Work. The Work shall be performed only by licensed contractors and subcontractors selected by Tenant. Landlord shall have the right to approve Tenant's general contractor, such approval not to be unreasonably withheld, conditioned or delayed. Landlord hereby pre-approves the following general contractors: Corporate Contractors, Pinnacle Contractors, Howard Building Corporation, Phoenix Contractors. All contractors and subcontractors shall be required to procure and maintain insurance against such risks, in such amounts, and with such companies as Landlord may reasonably require consistent with Article 9 of the Lease. Certificates of such insurance, with paid receipts therefor, must be received by Landlord before the Work is commenced. The general contractor and each subcontractor must name Landlord, Landlord's property management company, and Tenant as additional insureds on such contractor's insurance maintained in connection with the construction of the Work. The Work shall be performed in a good and workmanlike manner free of defects and shall conform with the Working Drawings. 

		
	5.
	Construction Contract. Tenant shall enter into a construction contract with the general contractor described in Section 4 above. 

		
	6.
	Change Orders. Tenant may initiate changes in the Work. Each such change must receive the prior written approval of Landlord, such approval not to be withheld except to the extent such change fails to meet the Drawing Criteria. Any delay to Tenant's construction caused by a Tenant change shall not constitute a Force Majeure Delay or a Landlord Delay, nor shall it otherwise delay the Commencement Date, notwithstanding anything to the contrary contained in this Lease, including (without limitation) in the event a change by Tenant (a) causes a Permit delay, (b) results in a delay due to unavailability of materials, or (c) causes a ·revision to Tenant's construction schedule, except to the extent in each case such delay is due to Landlord's work that was either not performed as required or performed incorrectly. Tenant shall, upon completion of the Work, furnish Landlord with an accurate architectural "as-built" plan of the Work as constructed (in CAD format), which plan shall be incorporated into this Exhibit B by this reference for all purposes. If Tenant requests any changes to the Work described in the Working Drawings, then such increased costs and any additional design costs incurred in connection therewith as the result of any such change shall be added to the Total Construction Costs. 

		
	7.
	Definitions. As used herein "Substantial Completion," "Substantially Completed," and any derivations thereof mean the Work in the Premises is substantially completed to the extent 

B-2

necessary to obtain a certificate of occupancy (or its legal equivalent), materially in accordance with the Working Drawings. Substantial Completion shall have occurred even though minor details of construction, decoration, and mechanical adjustments remain to be completed. The term "Landlord Delay" shall mean any actual delay in the completion of the Work that is caused by: (a) Landlord's failure to give authorizations or approvals in the time frame required by this Lease; (b) the interference of Landlord, its agents or contractors without good cause ("good cause" being defined as Landlord acting in accordance with Landlord's rights under this Lease or Tenant being in violation of applicable Laws or in breach of this Lease or the Rules) with the completion of the Work or the failure or refusal of any such party without good cause to permit Tenant, its agents or contractors, priority access to and priority use of the 3465 Building or any 3465 Building facilities or services, including freight elevators, passenger elevators, and loading docks, which access and use are required for the orderly and continuous performance of the work necessary to complete the Work in accordance with this Lease and requirements of Law; (c) delay attributable to Landlord's failure to allow Tenant access to the Complex and/or the Premises during the construction period except as a result of casualty or condemnation; (d) delay by Landlord in administering and paying when due the Construction Allowance, the Additional Allowance and/or the Space Planning Allowance as required by Sections 10, 11 and 12 below (in which case, in addition to such delay being deemed a Landlord Delay, Tenant shall have the right to stop the construction of the Work); or (e) failure of Landlord to deliver the Premises in the condition required by Section 1 of this Workletter and such failure prohibits Tenant from proceeding with the Work. For any such occurrence to constitute a Landlord Delay, Tenant must give Landlord notice of the alleged Landlord Delay, which notice must conspicuously state that a Landlord Delay is being alleged by Tenant, within five (5) business days of the date Tenant first obtains knowledge of the commencement of the occurrence of the alleged Landlord Delay, and if Landlord fails to cure such occurrence within five (5) business days after receipt of Tenant's notice, then each day after the commencement of such Landlord Delay shall be a "Landlord Delay Day" until the delay is remedied, it being understood that if Landlord in good faith disputes the existence of any alleged Landlord Delay, then Landlord and Tenant shall make a good faith effort to agree as to whether or not a Landlord Delay exists, and if an agreement cannot be reached, then such dispute shall be settled by arbitration pursuant to Article 14 of the Lease and the Work shall proceed even though the fmal determination of the date of occurrence of the Commencement Date pursuant to such arbitration may occur after the Commencement Date occurs. 
		
	8.
	Walk-Through: Punchlist. When Tenant considers the Work in the Premises to be Substantially Completed, Tenant will notify Landlord and within three (3) business days thereafter, Landlord's representative and Tenant's representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items that are necessary for final completion of the Work. Neither Landlord's representative nor Tenant's representative shall unreasonably withhold his or her agreement on punchlist items. Tenant shall use reasonable efforts to cause the contractor performing the Work to complete all punchlist items within 30 days after agreement thereon.

		
	9.
	Total Construction Costs. The entire cost of performing the Work (including design of the Work and preparation of the Working Drawings, costs of construction labor and materials, additional janitorial services, general tenant signage, related taxes and insurance costs, all of which costs are herein collectively called the "Total Construction Costs") in excess of the Construction Allowance, Additional Allowance and Space Planning Allowance (hereinafter defined) shall be paid by Tenant. Prior to commencing construction, Tenant shall provide to Landlord a preliminary project budget relating to Tenant's Work. Thereafter, Tenant shall provide updates to the project budget within a commercially reasonable time after such updates occur. In the event that the amount of the Total Construction Costs is estimated to exceed the 

B-3

Construction Allowance, then each disbursement of the Construction Allowance shall be made pari passu with Tenant's payment, from Tenant's own funds, of the excess of the Total Construction Costs minus the Construction Allowance relative to such disbursement. For example, if the budgeted Total Construction Costs are $100 and the Construction Allowance is $80, each disbursement (draw) shall be paid 80% by Landlord and 20% by Tenant. If the Total Construction Costs ultimately are less than the amount of the Construction Allowance and, as a result of Tenant's pari passu payments, Tenant has not received the full amount of the Construction Allowance to which Tenant would otherwise be entitled, then Landlord shall reimburse Tenant for amounts advanced by Tenant, up to the full amount of the Construction Allowance, in accordance with Section 10 below.
		
	10.
	Construction Allowance. Landlord shall provide to Tenant a construction allowance of Forty Dollars ($40.00) per rentable square foot in the Premises (i.e., $5,661,600.00) (the "Construction Allowance") to be applied toward the Total Construction Costs, as adjusted for any changes to the Work. Landlord shall pay to Tenant or directly to Tenant's contractors the Construction Allowance in multiple disbursements (but not more than once in any calendar month) following the receipt by Landlord of the following items: (a) a request for payment, (b) fInal or partial lien waivers, as the case may be, from all persons performing work or supplying or fabricating materials for the Work, fully executed, acknowledged and in recordable form, (c) the Architect's certifIcation that the Work for which reimbursement has been requested has been fInally completed, including (with respect to the last application for payment only) any punch-list items, on the appropriate AlA form or another form approved by Landlord, and, with respect to the disbursement of the last 10% of the Construction Allowance, (y) "as built" drawings in both paper and AutoCad format; and (z) the permanent certifIcate of occupancy issued for the Premises (collectively, a "Completed Application for Payment"). Landlord shall pay the amount requested in the applicable Completed Application for Payment to Tenant within thirty (30) days following Tenant's submission of the Completed Application for Payment. If, however, the Completed Application for Payment is incomplete or incorrect, Landlord's payment of such request shall be deferred until thirty (30) days following Landlord's receipt of the Completed Application for Payment. Notwithstanding anything to the contrary contained in this Exhibit, Landlord shall not be obligated to make any disbursement of the Construction Allowance during the pendency of any of the following: (1) Landlord has received written notice of any unpaid, claims relating to any portion of the Work or materials in connection therewith, other than claims which will be paid in full from such disbursement, (2) there is an unbonded lien outstanding against the Building or the Premises or Tenant's interest therein by reason of work done, or claimed to have been done, or materials supplied or specifIcally fabricated, claimed to have been supplied or specifIcally fabricated, to or for Tenant or the Premises, (3) the conditions to the advance of the Construction Allowance are not satisfIed, or (4) a Default by Tenant exists. The Construction Allowance must be used (i.e. work performed and invoices submitted to Landlord) within six (6) years following the Commencement Date or shall be deemed forfeited with no further obligation by Landlord with respect thereto.

		
	11.
	Additional Allowance. In addition to the Construction Allowance, Landlord shall provide Tenant an Additional Allowance ("Additional Allowance") in the amount of Ten Dollars ($10.00) per rentable square foot in the Premises (i.e., $1,415,400.00). The Additional Allowance is to be used by Tenant for purchase of furniture, fIxtures and equipment for the Premises; technology for the Premises, and Tenant's expenses of moving in to the Premises, but may also be used by Tenant for other tenant improvement work in the Premises including, without limitation, payment of the Total Construction Costs. Any unused Additional Allowance may be used to pay for additional tenant improvements to the Premises provided that the Additional Allowance must be used (i.e. work performed and invoices submitted to Landlord) within six (6) years following the Commencement Date or shall be deemed forfeited with no 

B-4

further obligation by Landlord with respect thereto. The Additional Allowance shall be paid in the same manner as provided above for the Construction Allowance.
		
	12.
	Space Planning Allowance. In addition to the Construction Allowance and Additional Allowance, Landlord will pay or reimburse Tenant for the payment to Tenant's architect for one (1) space plan of the Premises and two (2) revisions to same, not to exceed an amount equal to $0.10 per rentable square foot of the Premises in total ("Space Planning Allowance").

		
	13.
	Construction Management. No construction management fee is payable in connection with the Work, provided that Tenant shall reimburse Landlord within thirty (30) days of request for third party out of pocket costs reasonably incurred by Landlord reviewing the portion of Tenant's plans relating to the portion of the Work which would impact the Systems and Equipment, the structure of the Property, or the exterior of the Building.

		
	14.
	Construction Representatives. Landlord's and Tenant's representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other: 

	
			
	Landlord's Representative:
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	Telephone:
	 

	 
	Telecopy:
	 

	
			
	Tenant's Representative:
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	Telephone:
	 

	 
	Telecopy:
	 

		
	15.
	Bond. Notwithstanding anything to the contrary set forth in the Lease, Tenant shall not be required to obtain or provide any completion or performance bond in connection with any construction, alteration, or improvement work performed by or on behalf of Tenant.

		
	16.
	Docks. Dumpsters and Elevators. Tenant shall have access to the Building's loading dock and the Building's freight elevators free of charge during Tenant's design and construction of the Work, furniture installation and move into the Premises. Landlord shall provide, free of charge, dock space at the Building for a dumpster during Tenant's design and construction of the Work, furniture installation and move into the Premises. In addition, Tenant's consultants, contractors, subcontractors and vendors shall receive free parking during the design and construction of the Work, furniture installation, and move-in to the Premises. 

		
	17.
	Existing Furniture. Without need for further Bill of Sale, Landlord hereby sells and conveys to Tenant all existing furniture in the Premises presently owned by Landlord in its current "as is" condition without representation or warranty, provided that Landlord represents and warrants that Landlord is the absolute owner of such furniture with power and authority to convey clear title to same to Tenant. 

B-5

EXHIBIT C 
OPTION TO EXTEND 
Tenant is hereby granted two (2) options (each an "Extension Option") to extend the term of the Lease with respect to the entire Premises for consecutive periods of five (5) Lease Years each (each an "Extension Term"). Each Extension Option may be exercised only by giving Landlord written notice thereof no earlier than eighteen (18) months and no later than twelve (12) months prior to the commencement of the Extension Tenn. Tenant may not exercise an Extension Option if Tenant is in default under the Lease beyond the expiration of any applicable cure period at the date of said notice. Upon exercise of an Extension Option, all references in the Lease to the Term shall be deemed to be references to the Tenn as extended pursuant to the Extension Option. 
Each Extension Term shall be on the same terms, covenants and conditions as are contained in the Lease, except that (i) no additional extension option shall be conferred by the exercise of an Extension Option, (ii) Base Rent applicable to the·Premises for an Extension Term shall be determined as provided below, (iii) any initial rent abatement, concession or allowance which are in the nature of economic concessions or inducements shall not be applicable to any Extension Term, and (iv) Tenant shall pay to Landlord Tenant's Prorata Share of Operating Expenses and Taxes in excess of Operating Expenses and Taxes for an updated base year applicable to each Extension Term, instead of the calendar year 2013. 
Base Rent per annum per rentable square foot of the Premises for each Extension Term shall be one hundred percent (100%) of the Current Market Rate for lease terms commencing on or about the date of conunencement of the Extension Tenn. The term "Current Market Rate" means the then true fair market rental rate per rentable square foot for recent, non-equity, non-expansion office lease transactions of comparable size, quality and location taking into consideration rental abatement, tenant improvement allowance, brokerage commissions (taking into consideration the existing improvements) and any other tenant inducements then given to new tenants in comparable class office space. 
Within thirty (30) days after receipt of Tenant's notice to extend Landlord shall deliver to Tenant written notice of the Current Market Rate and shall advise Tenant of the required adjustment to Base Rent, if any. 
Tenant shall, within fifteen (15) days after receipt of Landlord's notice, notify Landlord in writing whether Tenant (a) accepts Landlord's determination of the Current Market Rate; (b) rejects Landlord's determination of the Current Market Rate, or ( c) requests that the Current Market Rate be determined by an arbitration ("Arbitration Request"). If Tenant rejects Landlord's determination, Tenant's exercise of the Extension Option granted herein shall be deemed revoked and of no further force of effect. If Tenant requests that the Current Market Rate be determined by arbitration, Landlord and Tenant, within ten (10) days after the date of the Arbitration Request, shall each simultaneously submit to the other, in a sealed envelope, its good faith estimate of the Current Market Rate (collectively referred to as the "Estimates"). If the higher of such Estimates is not more than one hundred five percent (105%) of the lower of such Estimates, then Current Market Rate shall be the average of the two Estimates. If the Current Market Rate is not resolved by the exchange of Estimates, Landlord and Tenant, within seven (7) days after the exchange of Estimates, shall each select a broker to determine which of the two Estimates most closely reflects the Current Market Rate. Each broker so selected shall have had at least ten (10) years' experience as an office leasing broker working in the same submarket in which the Building is located, with current working knowledge of current office rental rates and practices in such submarket. Upon selection, Landlord's and Tenant's brokers shall work together in good faith to agree upon which of the two Estimates most closely reflects the Current Market Rate. The Estimate chosen by such brokers shall be binding on both Landlord and Tenant as the Current Market Rate. If either Landlord or Tenant fails to appoint a broker within the seven day period referred to above, the broker appointed by the other party

C-1

shall be the sole arbitrator for the purposes hereof. If the two brokers cannot agree upon which of the two Estimates most closely reflects the Current Market Rate within the twenty (20) days after their appointment, then, within ten (10) days after the expiration of such twenty (20) day period, the two (2) brokers shall select a third broker meeting the aforementioned criteria. Once the third broker has been selected as provided for above, then, as soon thereafter as practicable but in any case within fourteen (14) days, the third broker shall make his determination of which of the two Estimates most closely reflects the Current Market Rate and such Estimate shall be binding on both Landlord and Tenant as the Current Market Rate. The parties shall share equally in the costs of the third broker. Any fees of any broker, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such broker, counsel or expert. In the event that the Current Market Rate has not been determined by the commencement date of the Extension Term at issue, Tenant shall pay the most recent Base Rent set forth in the Lease until such time as the Current Market Rate has been determined. Upon such determination, Base Rent shall be retroactively adjusted. If such adjustment results in an underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of such underpayment within thirty (30) days after the determination thereof. If such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall credit such overpayment against the next installment of Base Rent due under the Lease and, to the extent necessary, any subsequent installments until the entire amount of such overpayment has been credited against Base Rent. 
Tenant must timely exercise the Extension Option or the Extension Option shall terminate. Tenant's exercise of the Extension Option shall not operate to cure any default by Tenant of any of the terms or provisions in the Lease, nor to extinguish or impair any rights or remedies of Landlord arising by virtue of such default. If the Lease or Tenant's right to possession of the Premises shall terminate in any manner whatsoever before Tenant shall exercise the Extension Option, or if Tenant shall have subleased or assigned all or any portion of the Premises to any party other than a Permitted Transferee, then immediately upon such termination, sublease or assignment, the Extension Option shall simultaneously terminate and become null and void. The Extension Option is personal to the Tenant named in this Lease and any Permitted Transferee. 

C-2

EXHIBIT D
COMMENCEMENT DATE CONFIRMATION 

Landlord:        Wells REIT II -Pasadena Corporate Park, LP 
Tenant:        Green Dot Corporation 

This Commencement Date Confirmation is made by Landlord and Tenant pursuant to that certain Lease dated as of ___ __, 2011 (the "Lease") for certain premises in the building commonly known as3465 E. Foothill Boulevard, Pasadena, California (the "Premises"). This Confirmation is made pursuant to Article 1 of the Lease. 
1.Lease Commencement Date, Termination Date. Landlord and Tenant hereby agree that the Commencement Date of the Lease is ___ __, 20_, and the Termination Date of the Lease is _____. 20_, 
2.Acceptance of Premises. Tenant has inspected the Premises and affirms that the Premises are acceptable in all respects in its current "as is" condition except for ______________________________________________________________________________  The amount of Construction Allowance remaining to be paid is $_____________ The amount of Space Planning Allowance remaining to be paid is $,_________, The amount of Additional Allowance remaining to be paid is $_______. 
3.Incorporation. This Confirmation is incorporated into the Lease, and forms an integral part thereof. This ConfIrmation shall be construed and interpreted in accordance with the terms of the Lease for all purposes. 

	
			
	LANDLORD:
	 
	TENANT:

	 
	 
	 

	WELLS REIT II-Pasadena Corporate Park, LP
	 
	Green Dot Corporation

	a Delaware limited partnership
	 
	a Delaware corporation

	 
	 
	 

	By: Wells REIT II -Pasadena Corporate Park, LLC
	 
	By: Steven W. Streit

	a Delaware limited liability company, its general partner
	 
	Its: /s/ Steven W. Streit

	 
	 
	 

	By: Wells REIT Operating Partnership II, LP
	 
	 

	a Delaware limited partnership, its sole member
	 
	 

	 
	 
	 

	By: Wells Real Estate Investment Trust II, Inc.
	 
	 

	a Maryland corporation, its general partner
	 
	 

	 
	 
	 

	By: _______________
	 
	 

	Its: _______________
	 
	 

D-1

EXHIBIT E 
LOCATION OF TENANT'S RESERVED PARKING SPACES 
To be agreed upon by Landlord and Tenant. 

E-1

EXHIBIT F 
SITE PLAN 

F-1

EXHIBIT G 

COMPLEX RULES (APPLICABLE IF TENANT LEASES SPACE IN THE COMPLEX OTHER
THAN THE 3465 BUILDING) 
A. General Rules and Regulations. The following rules and regulations govern the use of the Complex and its common areas. Except to the extent the rules and regulations conflict with the terms of the Lease, Tenant will be bound by such rules and regulations and agrees to cause Tenant's employees, subtenants, assignees, contractors, suppliers, customers and invitees to observe the same. 
		
	1.
	Except as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice may be installed or displayed on any part of the outside or inside of the Building or the Complex without the prior written consent of Landlord. Landlord will have the right to remove, at Tenant's expense and without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls are to be printed, painted, affixed or inscribed at the expense of Tenant and under the direction of Landlord by a person or company designated or approved by Landlord. 

		
	2.
	If Landlord reasonably objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the Premises, or placed on any windowsill, which is visible from the exterior of the Premises, Tenant will immediately discontinue such use. Tenant agrees not to place anything against or near glass partitions or doors or windows which may appear unsightly from outside the Premises including from within any interior common areas. 

		
	3.
	Tenant will not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators, or stairways of common areas of the Complex. Such common area halls, passages, exits, entrances, elevators and stairways are not open to the general public, but are open, subject to reasonable regulations, to Tenant's business invitees. Landlord will in all cases retain the right to control and prevent access thereto of all persons whose presence in the reasonable judgment of Landlord would be prejudicial to the safety, character, reputation and interest of the Complex and its tenants, provided that nothing herein contained will be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are. engaged in illegal or unlawful activities. No tenant and no employee or invitee of any tenant will go upon the roof of the Building without prior notice to Landlord and approval by Landlord. 

		
	4.
	Except as provided in the Lease, Tenant will not obtain for use on the Premises ice, drinking water, food, food vendors, beverage, towel or other similar services or accept barbering or boot blacking service upon the Premises, except at such reasonable hours and under such reasonable regulations as may be fixed by Landlord. Landlord expressly reserves the right to absolutely prohibit solicitation, canvassing, distribution of handbills or any other written material, peddling, sales and displays of products, goods and wares in all portions of the Complex except as may be expressly permitted under the Lease. Landlord reserves the right to restrict and regulate the use of the common areas of the Complex and Building by invitees of tenants providing services to tenants on a periodic or daily basis including food and beverage vendors. Such restrictions may include limitations on time, place, manner and duration of access to a tenant's premises for such purposes. Without limiting the foregoing, Landlord may require that such parties use service elevators, halls, passageways and stairways for such purposes to preserve access within the Building for tenants and the general public. 

G-1

		
	5.
	Landlord reserves the right to require tenants to periodically provide Landlord with a written list of any and all business invitees which periodically or regularly provide goods and services to such tenants at the premises. Landlord reserves the right to preclude all vendors from entering or conducting business within the Building and the Complex if such vendors are not listed on a tenant's list of requested vendors.

		
	6.
	Landlord reserves the right to exclude from the Building between the hours of 6 p.m. and 8 a.m. the following business day, or such other hours as may be reasonably established from time to time by Landlord, and on Sundays and legal holidays, any person unless that person is known to the person or employee in charge of the Building or has a pass or is properly identified. Tenant will be responsible for all persons for whom it requests passes and will be liable to Landlord, for all acts of such persons. Landlord will not be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. Landlord reserves the right to prevent access to the Building in case of invasion, mob, riot, public excitement or other commotion by closing the doors or by other appropriate action. 

		
	7.
	The directory of the Building will be provided exclusively for the display of the name and location of tenants and subtenants only and Landlord reserves the right to exclude any other names therefrom.

		
	8.
	All cleaning and janitorial services for the Complex and the Premises will be provided exclusively through Landlord, and except with the written consent of Landlord, no person or persons other than those approved by Landlord will be employed by Tenant or permitted to enter the Complex for the purpose of cleaning the same. Tenant will not cause any unnecessary labor by carelessness or indifference to the good order and cleanliness of the Premises.

		
	9.
	Tenant shall furnish Landlord with one set of keys to each entry door lock in the Premises. Tenant shall not alter any lock or install any new additional lock or bolt on any door of the Premises without providing a new set of keys to Landlord. Tenant, upon the termination of its tenancy, will deliver to Landlord the keys to all doors which have been furnished to Tenant, and in the event of loss of any keys so furnished, will pay Landlord therefor. 

		
	10.
	If Tenant requires telegraphic, telephonic, burglar alarm, satellite dishes, antennae or similar services, it will first obtain Landlord's approval, and comply with, Landlord's reasonable rules and requirements applicable to such services, which may include separate licensing by, and fees paid to, Landlord. 

		
	11.
	Freight elevator(s) will be available for use by all tenants in the Building, subject to such reasonable scheduling as Landlord, in its discretion, deems appropriate. No equipment, materials, furniture, packages, supplies, merchandise or other property will be received in the Building or carried in the elevators except between such hours and in such elevators as may be reasonably designated by Landlord, provided Tenant's daily transportation of Tenant's business file boxes in the ordinary course of its business shall be permitted with Tenant to use reasonable efforts not to tie up use of any elevators for unnecessary periods of time for loading and unloading during ordinary business hours. Tenant's initial move in and subsequent deliveries of bulky items, such as furniture, safes and similar items will, unless otherwise agreed in writing by Landlord, be made during the hours of 6:00 p.m. to 6:00 am. or on Saturday or Sunday. Deliveries during normal office hours shall be limited to normal office supplies and other small items and transportation of Tenant's business file boxes in the ordinary course of its business. No deliveries will be made which unreasonably impede or interfere with other tenants or the operation of the Building. 

		
	12.
	Tenant will not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Landlord will have the right to reasonably prescribe the weight, size and position of all safes, heavy equipment, files,

G-2

materials, furniture or other property brought into the Building or require appropriate structural reinforcement for such items in connection with Landlord's review of Tenant's plans and specifications for the Tenant Improvements or any Alterations which are subject to Landlord's approval as provided in the Lease. Heavy objects will, if considered necessary by Landlord, stand on such platforms as determined by Landlord to be necessary to properly distribute the weight, which platforms will be provided at Tenant's expense. Business machines and mechanical equipment belonging to Tenant, which cause noise or vibration that may be transmitted to the structure of the Building or to any space therein to such a degree as to be objectionable to any tenants in the Building or Landlord, are to be placed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other devises sufficient to eliminate noise or vibration. Tenant will be responsible for all structural engineering required to determine structural load, as well as the expense thereof. The persons employed to move such equipment in or out of the Building must be reasonably acceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property will be repaired at the expense ofTen ant.
		
	13.
	Tenant will not use or permit to be used in the Premises any noxious gas or substance, or permit or allow the Premises to be used in a manner such that noises, odors or vibrations emanate from the Premises in a manner that would be unduly offensive to a reasonable occupant of the bUilding. Tenant will not bring into or keep in or about the Premises any birds or animals other than service animals.

		
	14.
	14. Tenant will not use any method of heating or air conditioning other than that supplied by Landlord without Landlord's prior written consent not to be unreasonably withheld. 

		
	15.
	Tenant will not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to assure the most effective operation of the Building's heating and air conditioning and to comply with any governmental energy-saving rules, laws or regulations of which Tenant has actual notice. 

		
	16.
	Landlord reserves the right, exercisable without notice and without liability to Tenant, to change the name and street address of the Building. Without the prior written consent of Landlord, which Landlord may deny with or without cause, Tenant will not use the name, photograph or likeness of the Building or the Complex in connection with or in promoting or advertising the business ofTen ant except as Tenant's address. 

		
	17.
	Tenant will close and lock the doors of its Premises and entirely shut off all water faucets or other water apparatus, and lighting or gas before Tenant and its employees leave the Premises. Tenant will be responsible for any damage or injuries sustained by other tenants or occupants of the Building or by Landlord for noncompliance with this rule. 

		
	18.
	The toilet rooms, toilets, urinals, wash bowls and other apparatus will not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from any violation of this rule will be borne by the tenant who, or whose employees or invitees, break this rule. 

		
	19.
	Tenant will not sell, or permit the sale at retail of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the Premises. Tenant will not use the Premises for any business or activity other than that specifically provided for in this Lease. Tenant will not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises without first having obtained Landlord's prior written consent, which consent Landlord may withhold in its sole and absolute discretion. 

G-3

		
	20.
	Except as provided in the Lease and/or any separate license agreement, without the prior approval of Landlord, Tenant will not install any radio or television antenna, loudspeaker, satellite dishes or other devices on the roof(s) or exterior walls of the Building or the Complex. Tenant will not interfere with radio or television broadcasting or reception from or in the Complex or elsewhere. 

		
	21.
	Except for the ordinary hanging of pictures and wall decorations, Tenant will not mark, drive nails, screw or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof, except in accordance with the provisions of the Lease pertaining to alterations. Landlord reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Tenant will not cut or bore holes for wires. Tenant shall repair any damage resulting from noncompliance with this rule. 

		
	22.
	Tenant will not install, maintain or operate upon the Premises any vending machines without the written consent of Landlord which shall not be unreasonably withheld or delayed. 

		
	23.
	Landlord reserves the right to exclude or expel from the Complex any person who, in Landlord's judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Building. 

		
	24.
	Tenant will store all its trash and garbage within its Premises or in other facilities provided by Landlord. Tenant will not place in any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal is to be made in accordance with directions issued from time to time by Landlord. 

		
	25.
	The Premises will not be used for lodging or for manufacturing of any kind, nor shall the Premises be used for any improper, immoral or objectionable purpose. 

		
	26.
	Neither Tenant nor any of its employees, agents, customers and invitees may use in any space or in the public halls of the Building or the Complex any hand truck except those equipped with rubber tires and side guards or such other material-handling equipment as Landlord may approve. Tenant will not bring any other vehicles of any kind into the Building. 

		
	27.
	Tenant agrees to comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 

		
	28.
	Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed. 

		
	29.
	To the extent Landlord reasonably deems it necessary to exercise exclusive control over any portions of the Common Areas for the mutual benefit of the tenants in the Building or the Complex, Landlord may do so subject to reasonable, non-discriminatory additional rules and regulations. 

		
	30.
	Landlord may prohibit smoking in the Building and may require Tenant and any of its employees, agents, clients, customers, invitees and guests who desire to smoke, to smoke within designated smoking areas within the Complex. 

		
	31.
	Tenant's requirements will be attended to only upon appropriate application to Landlord's asset management offIce for the Complex by an authorized individual of Tenant. Employees of Landlord will not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any office without specific instructions from Landlord. 

		
	32.
	These Rules and Regulations are in addition to, and will not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease. Landlord may waive anyone or more of these Rules and Regulations for the benefit of Tenant or

G-4

any other tenant, but no such waiver by Landlord will be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Complex. 
Landlord reserves the right to make such other and reasonable and non-discriminatory Rules and Regulations as, in its judgment, may from time to time be needed for safety and security, for care and cleanliness of the Complex and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations herein above stated and any additional reasonable and non-discriminatory rules and regulations which are adopted. Tenant is responsible for the observance of all of the foregoing rules by Tenant's employees, agents, clients, customers, invitees and guests. 

G-5

EXHIBIT H 

INITIAL APPROVED LETTER OF CREDIT 

See attached. 

	
			
	[Wells Fargo Bank, NA Letterhead]
	 
	Wells Fargo Bank. N.A. 
U. S. Trade Services 
Standby Letters of Credit
MAC A0195-212
One Front Street, 21st Floor
San Francisco. California 94111
Phone: 1(800) 798'2815 Option 1
E·Mail: sftrade@wellsfargo.com

	 
	 
	 

Irrevocable Standby Letter Of Credit 
	
		
	Number:
	IS0004368

	Issue Date:
	November 29, 2011

	
			
	BENEFICIARY
	 
	APPLICANT

	WELLS REIT II - PASADENA CORPORATE PARK, LP
	 
	GREEN DOT CORPORATION

	C/O WELLS REAL ESTATE FUNDS
	 
	605 EAST HUNTINGTON DRIVE

	ATTN: ASSET MANAGER - WEST REGION
	 
	MONROVIA, CALIFORNIA 91016

	6200 THE CORNERS PARKWAY
	 
	 

	NORCROSS, GEORGIA 30092
	 
	 

LETTER OF CREDIT ISSUE AM0UNT       USD 2.500,000.00           EXPIRY DATE DECEMBER 31,2012 
LADIES ANDGENTLEMEN: 

LADIES AND GENTLEMEN: 
At the request and for the account of the above referenced applicant, we hereby issue our Irrevocable Standby Letter of Credit in your favor in the amount of Two Million Five Hundred Thousand and NO/ 00 United States Dollars (US$2.500,000.00) available with us at our above office by payment against presentation of the following documents: 
1.A draft drawn on us at sight marked "Drawn under Wells Fargo Bank, N.A. Standby Letter of Credit No. lS0004368." 
2.The original of this Standby Letter of Credit and any amendments thereto. 
3.Beneficiary's signed and dated statement worded as follows (with the instructions in brackets therein ·complied. with): 
"The undersigned, an authorized representative of the beneficiary of Wells Fargo Bank Letter of Credit No. IS0004368 certifies Beneficiary is permitted to draw on the Letter of Credit in the amount of US$ (insert amount) pursuant to and in connection with that certain Lease dated [insert date) between Wells REIT II -Pasadena Corporate Park, LP and lor its successors and assigns ("Landlord") and Green Dot Corporation, a Delaware corporation ("Tenant") (as such lease may be amended. restated or replaced)." 
Multiple and partial drawing(s) are permitted under this Letter of Credit; provided, however, that the total amount of any payment(s) made under this Letter of Credit will not exceed the total amount available under this Letter of Credit. In the event of partial drawings. Wells Fargo Bank, NA shall endorse the Original of this Letter of Credit and return it to the beneficiary unless it is fully drawn upon. 

	
			
	 
	Page 1 of 5
	 

	Each page of this multipage document is an integral part
of this Irrevocable Standby Letter of Credit Number 150004368
	 
	 

	
			
	[Wells Fargo Bank, NA Letterhead]
	 
	 

	 
	 
	 

This Letter of Credit expires at our above office on December 31,2012. It is a condition of this Letter of credit that such expiration date shall be deemed automatically extended, without written amendment, for one year periods to December 31 in each succeeding calendar year, unless at least sixty (60) days prior to such expiration date we send written notice to you at your address above by overnight courier or registered mail that we elect not to extend the expiration date of this Letter of Credit beyond the date specified in such notice. In no event shall this letter of Credit be extended beyond December 31, 2022 which wIll be considered the final expiration date. Any reference to a final expiration date does not imply that we are obligated to extend the expiration date beyond the initial or any extended date thereof. A copy of such notice of non-extension will also be sent to: 
Wells REIT 11-Pasadena Corporate Park, LP 
C/O Wells Real Estate Funds 
6200 The Comers Par1<way 
Attn: Asset Manager - West Region 
Norcross, Georgia 30092 
Upon our sending you such notice of the non-extension of the expiration date of this Letter of Credit, you may draw under this Letter of Credit. on or before the Expiration Date specified in such notice, by presentation of the following documents to us at our above address: 
1.A draft drawn onus at sight marked "Drawn under Wells Fargo Bank, NA Standby Letter of Credit No. 1S0004368."
2.The original of this Standby Letter of Credit and any amendments thereto.
3.Your signed and dated statement worded as follows (with the instructions in brackets therein complied with): 
"The undersigned. an authorized representative of the beneficiary of Wells Fargo Bank, NA. letter of Credit No: IS0004368 hereby certifies that it has received notification from Wells Fargo Bank, NA that this letter of credit will not be extended past its current expiration date. The undersigned further certifies that as of the date of this statement. it has not received a letter of credit or other instrument acceptable to it as a replacement." 
If any instructions aCcompanying a drawing under this Letter of Credit request that payment is to be made by transfer to an account with us or at another bank, we and/or such other bank may rely on an account number specified in such instructions as that of the beneficiary's without any further validation. 
The amount available.to be drawn upon under this Letter of Credit may be decreased by means of one or more amendments to this Letter of Credit prepared by us upon our receipt at our above office of Beneficiary's signed and dated written request or authorization for such decrease (any such request or authorization, a "Decrease Authorization"). Any Decrease Authorization must quote this Letter of Credit by number, indicate the amount by which this Letter of Credit can be or is to be decreased, and indicate that the person signing the Decrease Authorization is authorized to sign such an authorization (or similar documents) for the Beneficiary.  Any 'Decrease Authorization received by us at our above office will be considered as your request for, or consent to, the decrease amendment to this Letter of Credit which we prepare. 
This Letter of Credit is transferable one or more times, but in each instance only to a single transferee and only in the full amount available to be drawn under the Letter of Credit at the time of such transfer. Any such transfer may be effected only through Wells Fargo Bank, NA and only upon presentation to us at our  preSentation office specified herein of a duly executed transfer request in the form attached hereto as 

	
			
	 
	Page 2 of 5
	 

	Each page of this multipage document is an integral part
of this Irrevocable Standby Letter of Credit Number 150004368
	 
	 

	
			
	[Wells Fargo Bank, NA Letterhead]
	 
	 

	 
	 
	 

Exhibit A, with instructions therein in brackets complied with, together with the original of this Letter of Credit and any amendments thereto. Any transfer fee is payable by Applicant and payment thereof shall not be a condition of transfer. Each transfer shall be evidenced by our endorsement on the reverse or the original of this Letter of Credit, and we shall deliver such original to the transferee, The transferee's name shall automatically be substituted for that of the beneficiary wherever such beneficiary's name appears within this Standby Letter of Credit. All charges in connection-with any transfer of this Letter of Credit are, for the Applicant's account. 
We are subject to various laws, regulations and executive and judicial orders (including economic sanctions, embargoes, anti-boycott. anti-money laundering. anti-terrorism, and anti-drug trafficking laws and regulations) of the U.S, and other countries that are enforceable under applicable law, We will not be liable for our failure to make, or our delay in making, payment under this Letter of Credit or for any other action we take or do not take, or any disclosure we make. under or in connection with this Letter of Credit [(including. without limitation. any refusal to transfer this Letter of Credit)] that is required by such laws, regulations, or orders, 
We hereby engage with you that each draft drawn under and in Compliance with the terms and conditions of this Letter of Credit will be duly honored if presented together with the documents specified in this Letter of Credit at our office located at One Front Street, 21st Floor MAC A0195-212, San Francisco, CA, 94111. Attention: US Trade Services - Standby Letters of Credit on or before the above stated expiry date, or any extended expiry date if applicable. 
Drawings may be presented to us at our above office by hand delivery or delivered to us by U.S. Postal Service mail, registered mail or certified mail or by express courier or overnight courier. Drawings may also be presented to us by facsimile transmission to facsimile number 415-975-6284 (each such drawing, a "Fax Drawing"); provided. however, that a Fax Drawing will not be effectively presented until you confirm by telephone our receipt of such Fax Drawing by calling us at telephone number 1-800-798--2815 (option 1). If you present a Fax Drawing under this Letter of Credit you do not need to present the original of any drawing documents, and if we receive any such original drawing documents they will not be examined by us. In the event of a full or final drawing the original Letter of Credit must be returned to us by overnight courier.
This Irrevocable Standby Letter of Credit sets forth in full the terms of our undertaking. This undertaking is independent of and shall not in any way be modified, amended, amplified or incorporated by reference to any document, contract or agreement referenced herein other than the stipulated ICC rules and governing laws. 
Except as otherwise expressly stated herein, this Standby Letter of Credit is subject to the International Standby Practice 1998. International Chamber of Commerce Publication No. 590.
Very Truly Yours,
WELLS FARGO BANK, N.A.

By: /s/ James B. Singh, Vice President
The original Letter of Credit contains an embossed seal over the Authorized Signature. 

	
			
	 
	Page 3 of 5
	 

	Each page of this multipage document is an integral part
of this Irrevocable Standby Letter of Credit Number 150004368
	 
	 

	
			
	[Wells Fargo Bank, NA Letterhead]
	 
	 

	 
	 
	 

Please direct any written correspondence or inquiries regarding this Letter of Credit; always quoting our reference number, to Wells Fargo Bank, National Association, Attn: U.S. Standby Trade Services 
	
					
	at either
	 
	 
	or
	 

	 
	One Front Street
	 
	 
	401 Linden Street

	 
	MAC A0195-212
	 
	 
	MAC D4004-017

	 
	San Francisco, CA 94111
	 
	 
	Winston-Salem, NC 27101

	 
	 
	 
	 
	 

	Phone inquiries regarding this credit should be directed to our Standby Customer Connection Professionals

	 
	 
	 
	 
	 

	 
	1-800-798-2815 Option 1
	 
	 
	1-800-776-3862 Option 2

	(Hours of Operation: 8:00 a.m. PT to 5:00 p.m. PT)
	 
	(Hours of Operation: 8:00 a.m. EST to 5:30 p.m, EST)

	
			
	 
	Page 4 of 5
	 

	Each page of this multipage document is an integral part
of this Irrevocable Standby Letter of Credit Number 150004368
	 
	 

	
			
	[Wells Fargo Bank, NA Letterhead]
	 
	 

	 
	 
	 

Exhibit A to Wells Fargo Bank, NA
Irrevocable Letter of Credit 
No. 1S0004368 
TO: 
WELlS FARGO BANK, N. A 
Northern California Trade Services Division 
One Front Street, 21st Floor 
San Francisco, California 94111 
Date: __________ 

LETTER OF CREDIT INFORMATION Wells Fargo Bank, N. A Letter of Credit No.: IS0004368 
For value received, the undersigned beneficiary of·the above described Letter of Credit (the "Transferor") hereby irrevocably assigns and transfers all its rights under the Letter of Credit as heretofore and hereafter amended, extended or increased (the "Credit") to the following transferee (the "Transferee"): 
Name of Transferee 
Address 
By this transfer all of our rights in the Credit are transferred to the Transferee, and the Transferee shall have sole rights as beneficiary under the Credit, including, but not limited to, sole rights relating to any amendments, whether increases or extensions or other amendments, and whether such amendments are now existing or hereafter made. 
ADVICE OF FUTURE AMENDMENTS: You are hereby irrevocably instructed to advise future amendment(s) of the Credit to the Transferee without the Transferor's consent or notice to the Transferor. 
Enclosed are the original of the Credit and the original of all amendments to this date. Please notify the Transferee of this transfer and of the terms and conditions of th.e Credit as transferred. This transfer will not become effective until the Transferee is so notified. 
TRANSFEROR'S SIGNATURE GUARANTEED BY: 
[Bank's Name] 

By: 

Printed Name: 

	
			
	 
	Page 5 of 5
	 

	Each page of this multipage document is an integral part
of this Irrevocable Standby Letter of Credit Number 150004368

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