Landlord's Right to Sublease from Amendment to Lease Agreement
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and entered into as of May 6, 2014, by and among DAGMAR DOLBY, AS TRUSTEE OF THE DOLBY FAMILY TRUST DATED MAY 7, 1999, DAGMAR DOLBY, AS TRUSTEE OF THE RAY DOLBY 2002 TRUST A DATED APRIL 19, 2002, and DAGMAR DOLBY, AS TRUSTEE OF THE RAY DOLBY 2002 TRUST B DATED APRIL 19, 2002 (collectively, "Landlord"), and DOLBY LABORATORIES, INC., a California corporation ("Tenant").
Landlord's Right to Sublease. Tenant hereby grants to Landlord the option to sublease the following office space at the Premises on the terms and conditions set forth in this Section 10: (a) the office of Ray Dolby, (b) the conference room located on the third (3rd) floor NW (i.e., the former office of Bill Jasper), and (c) the conference room adjacent to the third (3rd) floor NW conference room (collectively, the "Reserved Areas"). If Landlord desires to exercise its option to sublease any of the Reserved Areas, Landlord shall notify Tenant in writing of its exercise (the "Exercise Notice") of such option within one hundred twenty (120) days after Tenant notifies Landlord in writing that Tenant has commenced space planning for the Tenant Buildout Work, which notice shall specifically make reference to the one hundred twenty (120) day period for Landlord to send the Exercise Notice pursuant to this Section 10. If Landlord timely delivers an Exercise Notice to Tenant, Landlord shall sublease all of the Reserved Areas for a period commencing upon the substantial completion of the Tenant Buildout Work (or if the Tenant Buildout Work is completed in phases, upon substantial completion of the Tenant Buildout Work on the third (3rd) floor of the Premises, including the issuance of a temporary certificate of occupancy (or equivalent) for the third (3rd) floor by SFDBI) and expiring on the Extended Expiration Date. The rental rate for any such sublease shall be equal to the sum of the following: (i) the then current Base Rent paid by Tenant for the Premises (on a per-rentable-square-foot basis) and (ii) Fourteen Dollars ($14.00) per rentable square foot per annum to reflect the costs payable by Tenant for the operation and maintenance of the Building (including, without limitation, Additional Charges and Utilities), which amount set forth in this clause (ii) shall be increased by one and one-half percent (1.5%) per annum during each year of the sublease term. During the Construction Period, the Reserved Areas shall receive the same level of Tenant Improvement Work (to the extent applicable) as the remainder of the Premises, subject to Landlord's reasonable approval of the finish work in the Reserved Areas (without derogation of Landlord's rights to approve the Tenant Improvement Work, generally, as provided in the Lease). The right to sublease the Reserved Areas set forth in this Section is personal to Landlord and may not be transferred, sublet or assigned, except to Dagmar Dolby, David Dolby and/or Thomas Dolby. Landlord's rights under this Section shall terminate if Landlord fails to deliver an Exercise Notice in the time period set forth in this Section. Second Amendment to 100 Potrero Lease