OFFICE LEASE

KILROY REALTY
DEL MAR CORPORATE CENTER

KILROY REALTY, L.P.,
a Delaware limited partnership, as Landlord,
and
ZOGENIX, INC.,
a Delaware corporation, as Tenant.

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TABLE OF CONTENTS

ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1
ARTICLE 2
LEASE TERM; OPTION TERM(S)
2
ARTICLE 3
BASE RENT
4
ARTICLE 4
ADDITIONAL RENT
5
ARTICLE 5
USE OF PREMISES
6
ARTICLE 6
SERVICES AND UTILITIES
6
ARTICLE 7
REPAIRS
7
ARTICLE 8
ADDITIONS AND ALTERATIONS
8
ARTICLE 9
COVENANT AGAINST LIENS
9
ARTICLE 10
INDEMNIFICATION AND INSURANCE
9
ARTICLE 11
DAMAGE AND DESTRUCTION
11
ARTICLE 12
NONWAIVER
12
ARTICLE 13
CONDEMNATION
12
ARTICLE 14
ASSIGNMENT AND SUBLETTING
12
ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
14
ARTICLE 16
HOLDING OVER
14
ARTICLE 17
ESTOPPEL CERTIFICATES
15
ARTICLE 18
SUBORDINATION
15
ARTICLE 19
DEFAULTS; REMEDIES
15
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
17
ARTICLE 21
SECURITY DEPOSIT
17
ARTICLE 22
SUBSTITUTION OF OTHER PREMISES
17
ARTICLE 23
SIGNS
17
ARTICLE 24
COMPLIANCE WITH LAW
18
ARTICLE 25
LATE CHARGES
18
ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
19
ARTICLE 27
ENTRY BY LANDLORD
19
ARTICLE 28
TENANT PARKING
19
ARTICLE 29
MISCELLANEOUS PROVISIONS
19

(i)

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INDEX
 
Page (s)
 
 
Abatement Event
7

Accountant
5

Additional Notice
7

Additional Rent
5

Alterations
8

Applicable Laws
19

Audit Period
5

Award
4

Bank Prime Loan
19

Base Building
8

Base Rent
4

Base Year
Exhibit C

BOMA
1

Brokers
22

Building
1

Building Common Areas,
1

Building Hours
6

Business Hours
6

Casualty
11

CC&Rs
6

Common Areas
1

Comparable Area
4

Comparable Buildings
4

Comparable Deals
3

Comparable Term
3

Control,
14

Cosmetic Alterations
8

Demising Work
Exhibit B

Direct Expenses
Exhibit C

Energy Disclosure Requirements
24

Estimate
Exhibit C

Estimate Statement
Exhibit C

Estimated Excess
5

Excess
Exhibit C

Exercise Notice
3

Expense Year
Exhibit C

First Base Rent Abatement
5

First Base Rent Abatement Period
5

Force Majeure
21

Holidays
6

HVAC
6

Identification Requirements
22

Initial Notice
7

Intention to Transfer Notice
13

Interest Rate
19

Landlord
1

Landlord Parties
9

Landlord Repair Notice
11

Landlord Response Date
3

Landlord Response Notice
3

Landlord's Option Rent Calculation
3

Lease
1

Lease Commencement Date
2

Lease Expiration Date
2

Lease Month
2

Lease Term
1

(ii)

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Lease Year
2

Lines
22

Market Rent
3

Net Worth
14

Neutral Arbitrator
4

Notices
21

Operating Expenses
Exhibit C

Option Rent
3

Option Term
3

Option Tenant Improvement Allowance
3

Original Improvements
10

Original Tenant
3

Other Improvements
23

Outside Agreement Date
4

Second Base Rent Abatement
4

Second Base Rent Abatement Period
4

Penetrating Work
24

Permitted Transferee
14

Permitted Transferee Assignee
14

Permitted Use
2

Premises
1

Project Common Areas,
1

Project,
1

Proposition 13
Exhibit C

Renovations
22

Rent.
5

Reserved Parking Passes
20

Rules and Regulations
6

Security Deposit
17

Sensor Areas
23

Statement
Exhibit C

Subject Space
13

Summary
1

Tax Expenses
Exhibit C

TCCs
1

Tenant
1

Tenant Delay
3

Tenant Energy Use Disclosure
24

Tenant Parties
9

Tenant's Option Rent Calculation
4

Tenant's Share
Exhibit C

Third Base Rent Abatement
4

Third Base Rent Abatement Period
4

Third Party Contractor
11

Transfer
13

Transfer Premium
13

Transferee
13

Transfers
13

Water Sensors
23

Work Letter
1

 
 
EXHIBIT A -OUTLINE OF PREMISES
 
EXHIBIT B -WORK LEITER
 
EXHIBIT C -OPERATING EXPENSE DEFINITIONS AND CALCULATION PROCEDURES
 
EXHIBIT D -RULES AND REGULATIONS
 
EXHIBIT E -FORM OF TENANTS ESTOPPEL CERTIFICATE EXHIBIT F -NOTICE OF LEASE TERM
DATES
 
EXHIBIT G -OUTLINE OF TENANT PARKING
 

(iii)

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DEL MAR CORPORATE CENTER

OFFICE LEASE

This Office Lease (the "Lease"), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the "Summary"), below, is made by and
between KILROY REALTY, L.P., a Delaware limited partnership ("Landlord"), and
ZOGENIX, INC., a Delaware corporation ("Tenant").
SUMMARY OF BASIC LEASE INFORMATION
 
TERMS OF LEASE
DESCRIPTION
 
 
 
1.
Date:
June 25, 2014.
2.
Premises:
(Article 1)
 
 
2.1    Building:
That certain six (6)-story, "Class-A" office building (the "Building"), located
at 12400 High Bluff Drive, San Diego, California 92130, which Building contains
208,961 rentable (193,766 usable) square feet of space.
 
2.2    Premises:
17,361 rentable (approximately 15,920 usable) square feet of space located on
the sixth (6th) floor of the Building and commonly known as Suite 650, as
further depicted on Exhibit A to the Office Lease.
 
2.2    Premises:
The Building is the principal component of an office project known as "Del Mar
Corporate Centre," as further set forth in Section 1.1.2 of this Lease.
 
 
 
3.
Lease Term
(Article 2):
 
 
3.1    Length of Term:
Approximately five (5) years and four (4) months.
 
3.2    Lease Commencement Date:
The later to occur of the date upon which the Premises is "Ready for Occupancy,"
as that term is set forth in Section 5.1 of the Work Letter attached as Exhibit
B to the Lease, or December 1, 2014.
 
3.3    Lease Expiration Date:
The last day of the calendar month in which the sixty-fourth (641h) monthly
anniversary of the Lease Commencement Date occurrs; provided, however, to the
extent the Lease Commencement Date occurs on the first day of a calendar month,
then the Lease Expiration Date shall be the day immediately preceding the
sixty-fourth (64th) monthly anniversary of the Lease Commencement Date.
 
3.4    Option Term(s):
One (1) five (5)-year option(s) to renew, as more particularly set forth in
Section 2.2 of this Lease.
 
 
 
4.
Base Rent
(Article 3):
 

Lease Month
Annualized
Base Rent*
Monthly
Installment
of Base Rent*
Monthly
Rental Rate
per Rentable
Square Foot*
 
 
 
 
1-12
$885,411.00
$73,784.25
$4.25
 
 
 
 
13-24
$914,186.88
$76,182.24
$4.39**
 
 
 
 
25-36
$943,897.92
$78,658.16
$4.53°
 
 
 
 
37-48
$974,574.60
$81,214.55
$4.68**
 
 
 
 
49-60
$1,006,248.24
$83,854.02
$4.83**
 
 
 
 
61-64
$1,038,951.36
$86,579.28
$4.99**

*
The initial Monthly Installment of Base Rent amount was calculated by
multiplying the initial Monthly Rental Rate per Rentable Square Foot amount by
the number of rentable square feet of space in the Premises, and the initial
Annual

Base Rent amount was calculated by multiplying the initial Monthly Installment
of Base Rent amount by twelve (12).
In all subsequent Base Rent payment periods during the Lease Term commencing on
the first (151) day of the full
calendar month that is Lease Month 13, the calculation of each Monthly
Installment of Base Rent amount reflects an annual increase of three and 25/100
percent (3.25%) and each Annual Base Rent amount was calculated by multiplying
the corresponding Monthly Installment of Base Rent amount by twelve (12).
0 Subject to the terms set forth in Section 3.2 below, the Base Rent
attributable to the four (4) month period commencing on the first (1st) day of
the second (2nd) full calendar month of the Lease Term and ending on the last
day of the fifth (5th) full calendar month of the Lease Term shall be abated by
one hundred percent (100%). In addition, subject to the terms set forth in
Section 3.2 below, the Base Rent attributable to the sixth (6th) full calendar
month of the Lease Term (i.e., a one (1) month period) shall be abated by fifty
percent (50%). Abatement applicable to months 7 and 8 see section 3.2.

Summary P-1

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** The amounts identified in the column entitled "Monthly Rental Rate per
Rentable Square Foot" are rounded amounts and are provided for informational
purposes only.
5.
Base Year
(Article 4 and Exhibit C):
Calendar year 2015; provided, however, electricity is separately metered and
directly paid by Tenant to the applicable utility provider or, at Landlord's
option, to Landlord.
 
 
 
6.
Tenant's Share
Approximately 8.3082%
 
(Article 4 and Exhibit C):
 
 
 
 
7.
Permitted Use (Article 5):
Tenant shall use the Premises solely for general office use and uses incidental
thereto (the "Permitted Use"); provided,
 
 
however, that notwithstanding anything to the contrary set forth
 
 
hereinabove, and as more particularly set forth in the Lease,
 
 
Tenant shall be responsible for operating and maintaining the
 
 
Premises pursuant to, and in no event may Tenant's Permitted
 
 
Use violate, (A) Landlord's "Rules and Regulations," as that
 
 
term is set forth in Article 5 of this Lease, (B) all "Applicable
 
 
Laws," as that term is set forth in Article 24 of this Lease,
 
 
(C) all applicable zoning, building codes and the "CC&Rs," as
 
 
that term is set forth in Article 5 of this Lease, and (D) first­
 
 
class office standards in the market in which the Project is
 
 
located.
 
 
 
8.
Security Deposit
 
 
(Article 21):
$86,579.28.
 
 
 
9.
Parking Pass Ratio (Article 28):
Five (5) unreserved parking passes for every 1,000 usable square feet of the
Premises, of which six (6) passes shall each be
 
 
for the use of a reserved parking space, subject to Article 28.
 
 
 
10.
Address of Tenant
Zogenix, Inc.
 
(Section 29.16):
12400 High Bluff Drive, Suite 650
 
 
San Diego, California 92130
 
 
Attention: Roger L. Hawley, CEO
 
 
Telephone Number: (858) 436-3385
 
 
E-mail: rhawley@Zogenix.com
 
 
(Prior to Lease Commencement Date)
 
and
Zogenix, Inc.
 
 
12400 High Bluff, Suite 650
 
 
San Diego, California 92207
 
 
Attention: Roger L. Hawley, CEO
 
 
Telephone Number: (858) 436-3385
 
 
E-mail: rhawley@Zogenix.com
 
 
(After Lease Commencement Date)
 
 
 
11.
Address of Landlord
 
 
(Section 29.16):
Kilroy Realty, L.P.
 
 
c/o Kilroy Realty Corporation
 
 
12200 West Olympic Boulevard, Suite 200
 
 
Los Angeles, California 90064
 
 
Attention: Legal Department
 
 
with copies to:
 
 
Kilroy Realty Corporation
 
 
12200 West Olympic Boulevard, Suite 200
 
 
Los Angeles, California 90064
 
 
Attention: Mr. John Fucci
 
 
 
12.
Broker(s)
(Section 29.20):
 

Summary P-2

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Representing Tenant:
Representing Landlord:
 
Patrick Rohan
CBRE, Inc.
 
Cushman and Wakefield of San Diego, Inc.
4365 Executive Drive, Suite 1600
 
4747 Executive Drive, Suite 900
San Diego, California 92121
 
San Diego, California 92121
 
 
 
 
13.
Improvement Allowance
(Article 2 of Exhibit B):
$22.00 per rentable square foot of the Premises for a total of
$381,942.00.

Summary P-3

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ARTICLE 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1    Premises. Building, Project and Common Areas.
1.1.1    The Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 2.2 of the Summary (the
"Premises"). The outline of the Premises is set forth in Exhibit A attached
hereto and the Premises has approximately the number of rentable square feet as
set forth in Section 2.2 of the Summary. The parties hereto agree that the lease
of the Premises is upon and subject to the terms, covenants and conditions (the
"TCCs") herein set forth, and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of such TCCs by it
to be kept and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A
is to show the approximate location of the Premises in the "Building," as that
term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to
constitute an agreement, representation or warranty as to the construction of
the Premises, the precise area thereof or the specific location of the "Common
Areas," as that term is defined in Section 1.1.3, below, or the elements thereof
or of the access ways to the Premises or the "Project," as that term is defined
in Section 1.1.2, below. Except as specifically set forth in this Lease and in
the Work Letter attached hereto as Exhibit B (the "Work Letter"), Tenant shall
accept the Premises in its existing "as-is" condition and Landlord shall not be
obligated to provide or pay for any improvement work or services related to the
improvement of the Premises. Tenant also acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty regarding the
condition of the Premises, the Building or the Project or with respect to the
suitability of any of the foregoing for the conduct of Tenant's business, except
as specifically set forth in this Lease and the Work Letter. The taking of
possession of the Premises by Tenant shall conclusively establish that the
Premises and the Building were at such time in good and sanitary order,
condition and repair.
1.1.2    The Building and the Project. The Premises is a part of the building
set forth in Section 2.1 of the Summary (the "Building"). The Building is the
principal component of an office project known as "Del Mar Corporate Centre."
The term "Project," as used in this Lease, shall mean (i) the Building and the
Common Areas, (ii) the land (which is improved with landscaping, parking
structures and/or facilities and other improvements) upon which the Building,
parking facilities and the Common Areas are located, and (iii) at Landlord's
discretion, any additional real property, areas, land, buildings or other
improvements added thereto.
1.1.3    Common Areas. Tenant shall have the non-exclusive right to use in
common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "Common Areas"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas" (as both of those terms are
defined below). The term "Project Common Areas," as used in this Lease, shall
mean the portion of the Project designated as such by Landlord. The term
"Building Common Areas," as used in this Lease, shall mean the portions of the
Common Areas located within the Building designated as such by Landlord. The
manner in which the Common Areas are maintained and operated shall be at the
sole discretion of Landlord and the use thereof shall be subject to such rules,
regulations and restrictions as Landlord may make from time to time, provided
that such rules, regulations and restrictions do not unreasonably interfere with
the rights granted to Tenant under this Lease and the permitted use granted
under Article 5, below. Landlord reserves the right to close temporarily, make
alterations or additions to, or change the location of elements of the Project
and the Common Areas; provided that no such changes shall be permitted which
materially reduce Tenant's rights or access hereunder. Except when and where
Tenant's right of access is specifically excluded in this Lease, Tenant shall
have the right of access to the Premises, the Building, and the Project parking
facility twenty-four (24) hours per day, seven (7) days per week during the
"Lease Term," as that term is defined in Article 2, Section 2.1, below.
1.2    Verification of Rentable Sq uare Feet of Premises and Building. For
purposes of this Lease, "rentable square feet" and "usable square feet" shall be
calculated pursuant to the Office Buildings: Standard Methods of Measurement and
Calculating Rentable Area - 2010 (Method A) , and its accompanying guidelines
(collectively, "BOMA"); provided, however, in no event shall the rentable square
feet for the Premises, for purposes of this Lease, total an amount which is more
or less than twenty-five (25) square feet of the anticipated square footage
identified in Section 2.2 of the Summary. Within thirty (30) days after
completion of the "Demising Work" (as that term is defined in Section 1.2 of
this Work Letter), Landlord's space planner/architect shall measure the rentable
and usable square feet of the Premises. The determination of Landlord's space
planner/architect shall be conclusive and binding upon the parties. In the event
that Landlord's space planner/architect determines that the amounts thereof
shall be different from those set forth in this Lease (subject to the maximum
value limits pursuant to the first sentence), all amounts, percentages and
figures appearing or referred to in this Lease based upon such incorrect amount
(including, without limitation, the amount of the "Rent" and any "Security
Deposit,'' as those terms are defined in Section 4.1 and Article 21 of this
Lease, respectively, and any improvement allowance as set forth in Article 1 of
Exhibit B) shall be modified in accordance with such determination. If such
determination is made, it will be confirmed in writing by Landlord to Tenant.
1.3    Right of First Refusal. Landlord hereby grants to the Tenant originally
named herein (the "Original Tenant") and its "Permitted Transferees" (as that
term is defined in Section 14.8 of this Lease), an ongoing right of first
refusal during the initial Lease Term only, with respect to the remaining
contiguous space on the sixth (61h) floor of the Building containing
approximately 15,784 rentable square feet of space and commonly known as Suite
600 (the "First Refusal Space").
1.3.l    Procedure for Lease.
1.3.1.1    Procedure for Offer. Landlord shall notify Tenant (the "First Refusal
Notice") from time-to-time when and if Landlord receives a "bona-fide
third-party offer" for the First Refusal Space. Pursuant to such First Refusal
Notice, Landlord shall offer to lease to Tenant the applicable First Refusal
Space. The First Refusal Notice shall describe the First Refusal Space, and the
lease term, rent and other fundamental economic terms and conditions upon which
Landlord proposes to lease such First Refusal Space pursuant to the bona-fide
third-party offer. For purposes of this Section 1.3.a "bona-fide third-party
offer" shall mean an ofter or a counter-offer received by Landlord to lease
first Kefusal Space from an unaffiliated and qualified third party which
Landlord would otherwise be willing to accept (but for Tenant's superior rights
hereunder). For purposes of example only, the following would each constitute a
bona-fide third-party offer:

1.3.1.1.1    Landlord receives a request for proposal from an unaffiliated and
qualified third

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party. Landlord responds to the request for proposal with a lease proposal and
subsequently receives a written bona-fide counter proposal from the unaffiliated
and qualified third party.

1.3.1.1.2    Landlord receives a written offer to lease from an unaffiliated and
qualified third party. Landlord responds to the offer with a written counter
offer and subsequently receives a bona-fide counter to Landlord's counter offer
from the unaffiliated and qualified third party.
1.3.1.2    Procedure for Acceptance. If Tenant wishes to exercise Tenant's right
of first refusal with respect to the First Refusal Space described in the First
Refusal Notice, then within seven (7) days of delivery of the First Refusal
Notice to Tenant (the "Election Period"), Tenant shall deliver to Landlord
written notice (an "Election Notice") of Tenant's exercise of its right of first
refusal with respect to all of the First Refusal Space described in the First
Refusal Notice at the rent, for the term and upon the other fundamental economic
terms and conditions contained in such First Refusal Notice, including, but not
limited to rental concessions and improvement allowances. If Tenant does not so
notify Landlord within such Election Period of Tenant's exercise of its first
refusal right, or Tenant affirmatively elects not to exercise such first refusal
right (either of the foregoing being referred to herein as a "First Refusal
Rejection"), then Landlord shall be free to negotiate and enter into a lease for
the First Refusal Space to anyone whom it desires on any terms it desires.
Notwithstanding the foregoing, Tenant's ongoing right of first refusal shall
commence only following the expiration or earlier termination of any existing
lease of the First Refusal Space (or portion thereof), including any renewal,
extension or expansion rights set forth in such leases, regardless of whether
such renewal, extension or expansion rights are executed strictly in accordance
with their terms, or pursuant to a lease amendment or a new lease, and such
right of first refusal shall further be subordinate to (A) all rights of the
then-existing tenants in the First Refusal Space (i.e., at the time any
applicable First Refusal Notice is delivered (or would otherwise be scheduled to
be delivered)), (B) all rights of first offer, first refusal, expansion or other
similar rights with respect to such First Refusal Space granted to AMN
Healthcare, Inc., and Relational Investors LLC, and (C) all rights of extension
(regardless of whether such renewal, extension or expansion rights are executed
strictly in accordance with their terms, or pursuant to a lease amendment or a
new lease), first offer, first refusal, expansion or other similar rights with
respect to such First Offer Space contained in Landlord's lease with AMN
Healthcare, Inc., and/or in any "Intervening Lease," as that term is defined
below (each, a "ROFR Superior Right Holder"). For purposes hereof, an
"Intervening Lease" shall mean any lease to a third-party of First Refusal Space
identified in a particular First Refusal Notice following Tenant's election (or
deemed election) not to exercise its right to lease such space pursuant to the
terms of Section 1.3 of this Lease.
1.3.2    Amendment to Lease. If Tenant timely exercises Tenant's right of first
refusal to lease First Refusal Space as set forth herein, Landlord and Tenant
shall within thirty (30) days thereafter execute an amendment to this Lease (the
"First Refusal Space Amendment") for such First Refusal Space upon the terms set
forth in the First Refusal Notice, including, but not limited to rent (the
"First Refusal Space Rent"), but otherwise upon the TCCs set forth in this Lease
and this Section 1.3. Notwithstanding the foregoing, Landlord may, at its sole
option, require that a separate lease be executed by Landlord and Tenant in
connection with Tenant's lease of the First Refusal Space, in which event such
lease (the "First Refusal Space Lease") shall be on the same TCCs as this Lease,
except as provided in this Section 1.3 and specifically in this Lease to the
contrary. The First Refusal Space Lease, if applicable, shall be executed by
Landlord and Tenant within thirty
(30) days following Tenant's exercise of its right to lease the First Refusal
Space. Notwithstanding the foregoing documentation obligations, Landlord and
Tenant hereby acknowledge and agree that Tenant's timely delivery of the
Election Notice shall, in and of itself, conclusively establish Tenant's
obligation to lease the subject First Refusal Space on the express TCCs set
forth in the corresponding First Refusal Notice.
1.3.3    No Defaults; Required Financial Condition of Tenant. The rights
contained in this Section 1.3 shall be personal to the Original Tenant and its
Permitted Transferees and may only be exercised by the Original Tenant or a
Permitted Transferee (and not any other assignee, sublessee or other transferee
of the Original Tenant's interest in this Lease) if the Original Tenant and/or a
Permitted Transferee occupies not less than the entire then existing Premises.
The right to lease the First Refusal Space as provided in this Section 1.3 may
not be exercised if, as of the date Tenant attempts to exercise its right of
first refusal with respect to the First Refusal Space described in the First
Refusal Notice, or as of the scheduled date of delivery of such First Refusal
Space to Tenant, (A) Tenant is in default pursuant to the terms of this Lease
(beyond the applicable notice and cure periods), and (B) Tenant has previously
been in default under this Lease (beyond the applicable notice and cure periods)
during the previous twenty-four (24) month period.
1.3.4    First Refusal Space Commencement Date; Construction in First Refusal
Space. The commencement date for the First Refusal Space shall be the applicable
date specified inthe applicable First Refusal Notice (the "First Refusal Space
Commencement Date") and the term of Tenant's lease of such First Refusal Space
shall expire on the applicable date set forth in the First Refusal Notice (the
"First Refusal Space Expiration Date"). The term of Tenant's occupancy of the
First Refusal Space shall be referred to herein as a "First Refusal Space Lease
Term." Except as otherwise expressly identified in the First Refusal Notice,
Tenant shall take the First Refusal Space in its "as is" condition, and the
construction of improvements in the First Refusal Space shall comply with the
terms of Article 8 of this Lease.
1.3.5    Termination of First Refusal Right. Tenant's right of first refusal set
forth in this Section 1.3 shall apply to any extension of the Lease Term (as
defined below) as provided in Section 2.2.

ARTICLE 2

LEASE TERM; OPTION TERMS
2.1    Initial Lease Term. The TCCs and provisions of this Lease shall be
effective as of the date of this Lease. The term of this Lease (the "Lease
Term") shall be as set forth in Section 3.1 of the Summary, shall commence on
the date set forth in Section 3.2 of the Summary (the "Lease Commencement
Date"), and shall terminate on the date set forth in Section 3.3 of the Summary
(the "Lease Expiration Date") unless this Lease is sooner terminated as
hereinafter provided.
Tenant hereby acknowledges that the Premises are currently occupied by another
tenant of the Building. If Landlord is unable for any reason to deliver
possession of the Premises to Tenant on any specific date, then Landlord shall
not be subject to any liability for its failure to do so, and such failure shall
not affect the validity of this Lease or the obligations of Tenant hereunder.
For purposes of this Lease, the term "Lease Year" shall mean each consecutive
twelve (12) calendar month period during the Lease Term; provided, however, that
the first Lease Year shall commence on the Lease Commencement Date and end on
the last day of the month in which the first anniversary of the Lease

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Commencement Date occurs (or if the Lease Commencement Date is the first day of
a calendar month, then the first Lease Year shall commence on the Lease
Commencement Date and end on the day immediately preceding the first anniversary
of the Lease Commencement Date), and the second and each succeeding Lease Year
shall commence on the first day of the next calendar month; and further provided
that the last Lease Year shall end on the Lease Expiration Date. For purposes of
this Lease, the term "Lease Month" shall mean each succeeding calendar month
during the Lease Term; provided that the first Lease Month shall commence on the
Lease Commencement Date and shall end on the last day of the first full calendar
month of the Lease Term and that the last Lease Month shall expire on the Lease
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a notice in the form as set forth in Exhibit F, attached hereto, as a
confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) days of receipt thereof.
2.2
Option Term.

2.2.l Option Right. Landlord hereby grants the tenant originally named herein
(the "Original Tenant") and its "Permitted Transferee Assignee," as that term is
set forth in Section 14.8 of this Lease, one (1) option to extend the Lease Term
for the entire Premises by a period of five (5) years (the "Option Term"). Such
option shall be exercisable only by "Notice" (as that term is defmed in Section
29.16 of this Lease) delivered by Tenant to Landlord as provided below, provided
that, as of the date of delivery of such Notice, (i) Tenant is not then in
economic or material, non-economic default under this Lease (beyond the
applicable notice and cure periods), (ii) Tenant has not been in economic or
material, non­ economic default under this Lease (beyond the applicable notice
and cure periods) more than once during the prior twelve (12) month period or
more than two (2) times during the prior Lease Term, and (iii) there has been no
material adverse change in Tenant's financial condition during the prior
twenty-four (24)-month period. Upon the proper exercise of such option to extend
(and provided that, at Landlord's election, as of the end of the Lease Term, (A)
Tenant is not in economic or material, non­ economic default under this Lease
(beyond the applicable notice and cure periods), (B) Tenant has not been in
economic or material, non-economic default under this Lease (beyond the
applicable notice and cure periods) more than once during the prior twelve (12)
month period or more than two (2) times during the prior Lease Term, and (C)
there has been no material adverse change in Tenant's financial condition during
the prior twenty-four (24)-month period), then the Lease Term, as it applies to
the entire Premises, shall be extended for a period of five (5) years. The
rights contained in this Section 2.2 shall only be exercised by the Original
Tenant or its Permitted Transferee Assignee (and not any other assignee,
sublessee or other transferee of the Original Tenant's interest in this Lease)
if Original Tenant and/or its Permitted Transferee Assignee is in occupancy of
the entire then-existing Premises.
2.2.2    Option Rent. The Rent payable by Tenant during the Option Term (the
"Option Rent") shall be equal to the "Market Rent" as set forth below. For
purposes of this Lease, the term "Market Rent" shall mean rent (including
additional rent, and considering (x) any "base year" or "expense stop"
applicable thereto, as well as (y) the inclusion of any utility expenses as a
part thereof), including all escalations, at which tenants, as of the
commencement of the term are, pursuant to transactions completed within the
twelve (12) months prior to the first day of the Option Term, provided that
timing adjustments shall be made to reflect any changes in the Market Rent
following the date of any particular Comparable Deal up to the date of the
commencement of the Option Term, leasing non-sublease, non-encumbered,
non-synthetic, non-equity, non­ expansion space (unless such space was leased
pursuant to a definition of "fair market" comparable to the definition of Market
Rent) comparable in size, location and quality to the Premises for a "Comparable
Term," as that term is defined in this Section 2.2.2 (the "Comparable Deals"),
which comparable space is located in the "Comparable Buildings," as that term is
defined in this Section 2.2.2, giving appropriate consideration to the annual
rental rates per rentable square foot, the standard of measurement by which the
rentable square footage is measured, the ratio of rentable square feet to usable
square feet, and taking into consideration only, and granting only, the
following concessions (provided that the rent payable in Comparable Deals in
which the terms of such Comparable Deals are determined by use of a discounted
fair market rate formula shall be equitably increased in order that such
Comparable Deals will not reflect a discounted rate): (a) rental abatement
concessions, if any, being granted such tenants in connection with such
comparable spaces; (b) landlord improvements or allowances provided or to be
provided for such comparable space, taking into account the value of the
existing improvements in the Premises, such value to be based upon the age,
quality and layout of the improvements and the extent to which the same could be
utilized by general office users as contrasted with this specific Tenant, (c)
Proposition 13 protection, and (d) all other monetary concessions, if any, being
granted such tenants in connection with such comparable space; provided,
however, that notwithstanding anything to the contrary herein, no consideration
shall be given to the (I) any period of rental abatement, if any, granted to
tenants in Comparable Deals in connection with the design, permitting and
construction of improvements, or (II) fact that Landlord is or is not required
to pay a real estate brokerage commission in connection with the applicable term
or the fact that the Comparable Deals do or do not involve the payment of real
estate brokerage commissions. The term "Comparable Term" shall refer to the
length of the lease term, without consideration of options to extend such term,
for the space in question. In addition, the determination of the Market Rent
shall include a determination as to whether, and if so to what extent, Tenant
must provide Landlord with financial security, such as a letter of credit or
guaranty, for Tenant's rent obligations during any Option Term. Such
determination shall be made by reviewing the extent of financial security then
generally being imposed in Comparable Deals upon tenants of comparable financial
condition and credit history to the then existing financial condition and credit
history of Tenant (with appropriate adjustments to account for differences in
the then­ existing financial condition of Tenant and such other tenants). If in
determining the Market Rent, Tenant is entitled to a improvement or comparable
allowance for the improvement of the Premises (the "Option Term Improvement
Allowance"), Landlord may, at Landlord's sole option, elect any or a portion of
the following: (A) to grant some or all of the Option Term Improvement Allowance
to Tenant in the form as described aboye (i.e., as an improvement allowance),
and/or (B) to reduce the rental rate component of the Market Rent to be an
effective rental rate which takes into consideration that Tenant will not
receive the total dollar value of such excess Option Term Improvement Allowance
(in which case the Option Term Improvement Allowance eYidenced in the effective
rental rate shall not be granted to Tenant). The term "Comparable Buildings"
shall mean the Building, and other first-class institutionally-owned office
buildings which are comparable to the Building in terms of tenant mix, age
(based upon the date of completion of construction or major renovation as to the
building containing the portion of the Premises in question), quality of
construction, level of services and amenities (including the type ( e.g.,
surface, covered, subterranean) and amount of parking), size and appearance, and
are located in the "Comparable Area," which is "Del Mar Heights."
2.2.3    Exercise of Option. The option contained in this Section 2.2 shall be
exercised by Tenant, if at all, only in the manner set forth in this Section
2.2.3. Tenant shall deliver notice (the "Exercise Notice") to Landlord not more
than twelve (12) months nor less than nine (9) months prior to the expiration of
the initial Lease Term, stating that Tenant is exercising its option.
Concurrently with such Exercise Notice, Tenant shall deliver to Landlord
Tenant's calculation of the Market Rent (the "Tenant's Option Rent
Calculation"). Landlord shall deliver notice (the "Landlord Response Notice") to
Tenant on or before the date which is thirty (30) days after Landlord's receipt
of the Exercise Notice and Tenant's Option Rent Calculation (the "Landlord
Response Date"), stating that (A) Landlord is accepting Tenant's Option Rent
Calculation as the Market Rent, or (B) rejecting Tenant's Option Rent
Calculation and setting forth Landlord's calculation of the Market Rent (the
"Landlord's Option Rent Calculation"). Within ten (10) business days of its
receipt of the Landlord Response Notice, Tenant may, at its option, accept the
Market Rent contained in the Landlord's Option Rent

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Calculation. If Tenant does not affirmatively accept or Tenant rejects the
Market Rent specified in the Landlord's Option Rent Calculation, the parties
shall follow the procedure set forth in Section 2.2.4 below, and the Market Rent
shall be determined in accordance with the terms of Section 2.2.4 below.
2.2.4    Determination of Market Rent. In the event Tenant objects or is deemed
to have objected to the Market Rent, Landlord and Tenant shall attempt to agree
upon the Market Rent using reasonable good-faith efforts. If Landlord and Tenant
fail to reach agreement within thirty (30) days following Tenant's objection or
deemed objection to the Landlord's Option Rent Calculation (the "Outside
Agreement Date"), then, within two (2) business days following such Outside
Agreement Date, (x) Landlord may reestablish the Landlord's Option Rent
Calculation by delivering written notice thereof to Tenant, and (y) Tenant may
reestablish the Tenant's Option Rent Calculation by delivering written notice
thereof to Landlord. If Landlord and Tenant thereafter fail to reach agreement
within seven (7) business days of the Outside Agreement Date, then in connection
with the Option Rent, Landlord's Option Rent Calculation and Tenant's Option
Rent Calculation, each as most recently delivered to the other party pursuant to
the TCCs of this Section 2.2, shall be submitted to the "Neutral Arbitrator," as
that term is defined in Section 2.2.4.1 of this Lease, pursuant to the TCCs of
this Section 2.2.4. The submittals shall be made concurrently with the selection
of the Neutral Arbitrator pursuant to this Section 2.2.4 and shall be submitted
to arbitration in accordance with Section 2.2.4.1 through 2.2.4.5 of this Lease,
but subject to the conditions, when appropriate, of Section 2.2.3.
2.2.4.l Landlord and Tenant shall mutually, reasonably appoint one (1)
arbitrator who shall by profession be a real estate broker, appraiser or
attorney who shall have been active over the five (5) year period ending on the
date of such appointment in the leasing (or appraisal, as the case may be) of
first-class institutionally-owned, mid-rise commercial properties in the
Comparable Area (the "Neutral Arbitrator"). The determination of the Neutral
Arbitrator shall be limited solely to the issue of whether Landlord's Option
Rent Calculation or Tenant's Option Rent Calculation, each as submitted to the
Neutral Arbitrator pursuant to Section 2.2.4, above, is the closest to the
actual Market Rent as determined by such Neutral Arbitrator, taking into account
the requirements of Section 2.2.2 of this Lease. Such Neutral Arbitrator shall
be appointed within fifteen (15) days after the applicable Outside Agreement
Date. Neither the Landlord nor Tenant may, directly or indirectly, consult with
the Neutral Arbitrator prior to, or subsequent to, his or her appearance. The
Neutral Arbitrator shall be retained via an engagement letter jointly prepared
by Landlord's counsel and Tenant's counsel.
2.2.4.2    The Neutral Arbitrator shall, within thirty (30) days of his/her
appointment, reach a decision as to Market Rent and determine whether the
Landlord's Option Rent Calculation or Tenant's Option Rent Calculation, each as
submitted to the Neutral Arbitrator pursuant to Section 2.2.4, above, is closest
to Market Rent as determined by such Neutral Arbitrator and simultaneously
publish a ruling ("Award") indicating whether Landlord's Option Rent Calculation
or Tenant's Option Rent Calculation is closest to the Market Rent as determined
by such Neutral Arbitrator. Following notification of the Award, the Landlord's
Option Rent Calculation or Tenant's Option Rent Calculation, whichever is
selected by the Neutral Arbitrator as being closest to Market Rent, shall become
the then applicable Option Rent.
2.2.4.3
The Award issued by such Neutral Arbitrator shall be binding upon Landlord and
Tenant.

2.2.4.4    If Landlord and Tenant fail to appoint the Neutral Arbitrator within
fifteen (15) days after the applicable Outside Agreement Date, either party may
petition the presiding judge of the Superior Court of San Diego County to
appoint such Neutral Arbitrator subject to the criteria in Section 2.2.4.1 of
this Lease, or if he or she refuses to act, either party may petition any judge
having jurisdiction over the parties to appoint such Neutral Arbitrator.
2.2.4.5
The cost of arbitration shall be paid by Landlord and Tenant equally.

ARTICLE 3

BASE RENT
3.1    In General. Tenant shall pay, without prior notice or demand, to Landlord
or Landlord's agent at the management office of the Project, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by a check for currency which, at the time of payment, is legal tender
for private or public debts in the United States of America, base rent ("Base
Rent") as set forth in Section 4 of the Summary, payable in equal monthly
installments as set forth in Section 4 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever in accordance with Section 4 of the Summary,
any increases in Base Rent shall occur on the first day of the applicable Lease
Month. The parties acknowledge, however, that Tenant shall pay Base Rent for
each "calendar month" of the Lease Term (or a prorated portion of a ''calendar
month", as applicable), even though the first "Lease Month" may pertain to a
period longer than one (1) calendar month. The Base Rent for the first month of
the Lease Term and the Base Rent for the forty-ninth full month of the Lease
Term shall be paid at the time of Tenant's execution of this Lease. If any
payment of Rent is for a period which is shorter than one month, the Rent for
any such fractional month shall accrue on a daily basis during such fractional
month and shall total an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in such fractional month and the
denominator of which is the actual number of days occurring in such calendar
month, and (ii) the then-applicable Monthly Installment of Base Rent. All other
payments or adjustments required to be made under the TCCs of this Lease that
require proration on a time basis shall be prorated on the same basis.
3.2
Abated Base Rent. Provided that no event of default is occurring during the four
(4) month period commencing on the first (151) day of the second (2nd) full
calendar month of the Lease Term and ending on the last day of the fifth (5th)
full calendar month of the Lease Term (the "First Base Rent Abatement Period"),
Tenant shall not be obligated to pay any Base Rent otherwise attributable to the
Premises during such First Base Rent Abatement Period (the "First Base Rent
Abatement"). In addition, provided that no event of default is occurring during
the sixth (6th) month of the Lease Term (the "Second Base Rent Abatement
Period"), Tenant shall not be obligated to pay fifty percent (50%) of the Base
Rent otherwise attributable to the Premises during such Second Base Rent
Abatement Period (the "Second Base Rent Abatement"). Furthermore, provided that
no event of default is occurring during the two (2) month period commencing on
the first (1st) day of the seventh (7th ) full calendar month of the Lease Term
and ending on the last day of the eighth (8th) full calendar month of the Lease
Term (the "Third Base Rent Abatement Period"), Tenant shall not be obligated to
pay Base Rent otherwise attributable to 4,213 rentable square feet of the
Premises during such Third Base Rent Abatement Period (the "Third Base Rent
Abatement"). The First Base Rent Abatement Period, the Second Base Rent
Abatement Period and the Third Base Rent Abatement Period shall be referred to
collectively as the "Base Rent

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Abatement Period". The First Base Rent Abatement, the Second Base Rent Abatement
and the Third Base Rent Abatement shall be referred to collectively as the "Base
Rent Abatement". Landlord and Tenant acknowledge that the aggregate amount of
the First Base Rent Abatement, Second Base Rent Abatement, and Third Base Rent
Abatement equals Three Hundred Sixty-Seven Thousand Eight Hundred Thirty-Nine
and 63/100 Dollars ($367,839.63) (i.e., $73,784.25 per month during Lease Months
2 - 5, $36,892.13 per month during Lease Month 6, and $17,905.25 per month
during Lease Months 7 - 8). Tenant acknowledges and agrees that during such Base
Rent Abatement Period, such abatement of Base Rent for the Premises shall have
no effect on the calculation of any future increases in Base Rent or Direct
Expenses payable by Tenant pursuant to the terms of this Lease, which increases
shall be calculated without regard to such Base Rent Abatement. Additionally,
Tenant shall be obligated to pay all "Additional Rent" (as that term is defined
in Section 4.1 of this Lease) during the Base Rent Abatement Period. Tenant
acknowledges and agrees that the foregoing Base Rent Abatement has been granted
to Tenant as additional consideration for entering into this Lease, and for
agreeing to pay the Base Rent and perform the terms and conditions otherwise
required under this Lease. If Tenant shall be in default under this Lease and
shall fail to cure such default within the notice and cure period, if any,
permitted for cure pursuant to this Lease, or if this Lease, is terminated for
any reason other than Landlord's breach of this Lease, then the dollar amount of
the unapplied portion of the Base Rent Abatement as of the date of such default
or termination, as the case may be, shall be converted to a credit to be applied
to the Base Rent applicable at the end of the Lease Term and Tenant shall
immediately be obligated to begin paying Base Rent for the Premises in full. The
foregoing Base Rent Abatement right set forth in this Section shall be personal
to the Original Tenant and shall only apply to the extent that the Original
Tenant (and not any assignee, or any sublessee or other transferee of the
Original Tenant's interest in this Lease) is the Tenant under this Lease during
such Base Rent Abatement Period.
ARTICLE 4

ADDITIONAL RENT
4.1    In General. In addition to paying the Base Rent specified in Article 3 of
this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct Expenses,"
as those terms are defined in Sections 1.1.6 and 1.1.2, respectively, of Exhibit
C attached to this Lease. Such payments by Tenant, together with any and all
other amounts payable by Tenant to Landlord pursuant to the TCCs of this Lease,
are hereinafter collectively referred to as the "Additional Rent," and the Base
Rent and the Additional Rent are herein collectively referred to as "Rent." All
amounts due under this Article 4 and Exhibit C as Additional Rent shall be
payable for the same periods and in the same manner as the Base Rent; provided,
however, the parties hereby acknowledge that the first monthly installment of
Tenant's Share of any "Estimated Excess," as that term is set forth in, and
pursuant to the terms and conditions of, Section 1 . 3.2 of Exhibit C, shall
first be due and payable for the calendar month occurring immediately following
the expiration of the Base Year. Without limitation on other obligations of
Tenant which survive the expiration of the Lease Term, the obligations of Tenant
to pay the Additional Rent provided for in this Article 4 and Exhibit C shall
survive the expiration of the Lease Term.
4.2
Taxes and Other Charges for Which Tenant Is Directly Responsible.

4.2.l     Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment, furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.2.2    If the improvements in the Premises, whether installed and/or paid for
by Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which improvements conforming to
Landlord's "building standard" in other space in the Building are assessed, then
the Tax Expenses levied against Landlord or the property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 4.2.1,
above.
4.2.3    Notwithstanding any contrary provision herein, Tenant shall pay prior
to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.
4.3    Landlord's Records. Upon Tenant's written request given not more than
ninety (90) days after Tenant's receipt of a "Statement" (as that term is
defined in Section 1.3.1 of Exhibit C) for a particular Expense Year, and
provided that Tenant is not then in default under this Lease beyond the
applicable notice and cure period provided in this Lease, specifically
including, but not limited to, the timely payment of Additional Rent (whether or
not a component thereof is the subject of the audit contemplated herein),
Landlord shall furnish Tenant with such reasonable supporting documentation
pertaining to the calculation of the "Excess" (as that term is defined in
Section 1.3 of Exhibit C) set forth in the Statement as Tenant may reasonably
request. Landlord shall provide said documentation pertaining to the relevant
Excess to Tenant within sixty (60) days after Tenant's written request therefor.
Within one hundred eighty (180) days after receipt of a Statement by Tenant (the
"Audit Period"), if Tenant disputes the amount of the Excess set forth in the
Statement, an independent certified public accountant (which accountant (A) is a
member of a certified public accounting firm which has previous experience in
auditing financial operating records of landlords of office buildings, (B) shall
not already be providing primary accounting and/or lease administration services
to Tenant and shall not have provided primary accounting and/or lease
administration services to Tenant in the past three (3) years, (C) is not
working on a contingency fee basis [i.e., Tenant must be billed based on the
actual time and materials that are incurred by the certified public accounting
firm in the performance of the audit], and (D) shall not currently or in the
future be providing accounting and/or lease administration services to another
tenant in the Building and/or the Project in connection with a review or audit
by such other tenant of similar expense records), designated and paid for by
Tenant, may, after reasonable notice to Landlord and at reasonable times, audit
Landlord's records with respect to the Excess set forth in the Statement at
Landlord's corporate offices, provided that (z) Tenant is not then in default
under this Lease (beyond the applicable notice and cure periods provided under
this Lease), (il)Tenant has paid all amounts required to be paid under the
applicable "Estimate Statement" (as that term is defined in Section

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1.3.2 of Exhibit C) and Statement, and (iii) a copy of the audit agreement
between Tenant and its particular certified public accounting firm has been
delivered to Landlord prior to the commencement of the audit. In connection with
such audit, Tenant and Tenant's certified public accounting firm must agree in
advance to follow Landlord's reasonable rules and procedures regarding an audit
of the aforementioned Landlord records, and shall execute a commercially
reasonable confidentiality agreement regarding such audit. Any audit report
prepared by Tenant's certified public accounting firm shall be delivered
concurrently to Landlord and Tenant within the Audit Period. Tenant's failure to
audit the amount of the Excess set forth in any Statement within the Audit
Period shall be deemed to be Tenant's approval of such Statement and Tenant,
thereafter, waives the right or ability to audit the amounts set forth in such
Statement. If after such audit, Tenant still disputes such Excess, an audit to
determine the proper amount shall be made, at Tenant's expense, by an
independent certified public accountant (the "Accountant") mutually and
reasonably selected by Landlord and Tenant; provided that if such audit by the
Accountant proves that the Direct Expenses in the subject Expense Year were
overstated by more than five percent (5%), then the cost of the Accountant and
the cost of such audit shall be paid for by Landlord. Tenant hereby acknowledges
that Tenant's sole right to audit Landlord's records and to contest the amount
of Direct Expenses payable by Tenant shall be as set forth in this Section 4.3,
and Tenant hereby waives any and all other rights pursuant to applicable law to
audit such records and/'or to contest the amount of Direct Expenses payable by
Tenant.

ARTICLE 5

USE OF PREMISES

Tenant shall use the Premises solely for the "Permitted Use," as that term is
defined in Section 7 of the Summary, and Tenant shall not use or permit the
Premises to be used for any other purpose or purposes whatsoever without the
prior written consent of Landlord, which may be withheld in Landlord's sole and
absolute discretion. Tenant shall not allow occupancy density of use of the
Premises which is greater than the total number of parking passes granted to
Tenant under this Lease (i.e., as more particularly set forth in Section 9 of
the Summary). Tenant further covenants and agrees that it shall not use, or
suffer or permit any person or persons to use, the Premises or any part thereof
for any use or purpose contrary to the rules and regulations promulgated by
Landlord from time to time ("Rules and Regulations"), the current set of which
(as of the date of this Lease) is attached to this Lease as Exhibit D; or in
violation of the laws of the United States of America, the State of California,
or the ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the
Building, or in a manner otherwise inconsistent with the character of the
Project as a first-class office building Project. Tenant shall faithfully
observe and comply with the Rules and Regulations. Tenant shall comply with all
recorded covenants, conditions, and restrictions currently affecting the
Project. Additionally, Tenant acknowledges that the Project may be subject to
any future covenants, conditions and restrictions (the "CC&Rs") which Landlord,
in Landlord's discretion, deems reasonably necessary or desirable, and Tenant
agrees that this Lease shall be subject and subordinate to such CC&Rs and Tenant
shall promptly recognize such CC&Rs by executing a commercially reasonable form
of recognition, so long as such CC&Rs do not diminish Tenant's rights under this
Lease and/or increase Tenant's obligations or costs under this Lease so as to
have more than a de minimus impact on such foregoing obligations and rights.

ARTICLE 6

SERVICES AND UTILITIES
6.1    Standard Tenant Services. Landlord shall provide the following services
on all days (unless otherwise stated below) during the Lease Term.
6.1.1    Subject to reasonable changes implemented by Landlord and all
governmental rules, regulations and guidelines applicable thereto, Landlord
shall provide heating, Ventilation and air conditioning ("BVAC") when necessary
for normal comfort for normal office use in the Premises from 7:00 A.M. to 6:00
P.M. Monday through Friday, and from 9:00 A.M. to 1:00 P.M. on Saturday
(collectively, the "Building Hours"), except for the date of observation of New
Year's Day, President's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day and, at Landlord's discretion, other locally or
nationally recognized holidays (collectively, the "Holidays"). The daily time
periods identified hereinabove are sometimes referred to as the "Business
Hours."
6.1.2    Subject to the other terms of this Lease, Landlord shall provide
adequate electrical wiring and facilities and power for normal general office
use as determined by Landlord. Tenant will design Tenant's electrical system
serving any equipment producing nonlinear electrical loads to accommodate such
nonlinear electrical loads, including, but not limited to, oversizing neutral
conductors, derating transformers and/or providing power-line filters.
Engineering plans shall include a calculation of Tenant's fully connected
electrical design load with and without demand factors and shall indicate the
number of watts of unmetered and submetered loads. Notwithstanding any provision
to the contrary contained in this Lease, Tenant shall pay directly to the
utility company pursuant to the utility company's separate meters (or to
Landlord in the event Landlord provides submeters instead of the utility
company's meters), the cost of all electricity, gas, water and sewer services
provided to and/or consumed in the Premises (including normal and excess
consumption and including the cost of electricity to operate the HVAC air
handlers), which electricity, gas, water and sewer services shall be separately
metered (as described above or otherwise equitably allocated and directly
charged by Landlord to Tenant and other tenants of the Building). Tenant shall
pay such cost (including the cost of such meters or submeters) within ten (10)
days after demand and as Additional Rent under this Lease (and not as part of
the Operating Expenses). Landlord shall designate the electricity utility
provider from time to time; provided, however, (i) in connection with any such
voluntary designation by Landlord, any associated capital expenditures shall
only be included in Operating Expenses to the extent permitted pursuant to item
(xiii) of Section 1.1.4 of Exhibit C, and (ii) in the event that Tenant incurs
third party fees and expenses in connection with the foregoing, Landlord shall
reimburse Tenant to the extent such fees and expenses exceed Two Hundred Fifty
and No/100 Dollars ($250.00).
6.1.3    As part of Operating Expenses, Landlord shall replace lamps, starters
and ballasts for Building standard lighting fixtures within the Premises. In
addition, Tenant shall bear the cost of replacement of lamps, starters and
ballasts for non-Building standard lighting fixtures within the Premises.
6.1.4
Landlord shall provide city water from the regular Building outlets for
drinking, lavatory and toilet purposes.

6.1.5    Landlord shall provide a level of janitorial services five (5) days per
week in a manner consistent

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with Comparable Buildings, except the date of observation of the Holidays, in
and about the Premises and window washing services in a manner consistent with
the Comparable Buildings.
6.1.6    Landlord shall provide nonexclusive, non-attended automatic passenger
elevator service during the Building Hours, and shall have at least one elevator
available at all other times. Landlord shall provide nonexclusive freight
eleYator service subject to scheduling by Landlord.
Tenant shall cooperate fully with Landlord at all times and abide by all
regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.
6.2    Overstandard Tenant Use. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or increase the water
normally furnished for the Premises by Landlord pursuant to the terms of Section
6.1 of this Lease. If such consent is when Landlord shall have the right to
require installation of supplementary air conditioning units or other facilities
in the Premises, including supplementary or additional metering devices, and the
cost thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water,
electricity, heat or air conditioning in excess of that supplied by Landlord
pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, upon
billing, the cost of such excess consumption, the cost of the installation,
operation, and maintenance of equipment which is installed in order to supply
such excess consumption, and the cost of the increased wear and tear on existing
equipment caused by such excess consumption; and Landlord may install devices to
separately meter any increased use and in such event Tenant shall pay the
increased cost directly to Landlord, including the cost of such additional
metering devices. Tenant's use of electricity shall never exceed the capacity of
the feeders to the Project or the risers or wiring installation, and subject to
the terms of Section 29.26, below, Tenant shall not install or use or permit the
installation or use of any computer or electronic data processing equipment in
the Premises, without the prior written consent of Landlord. If Tenant desires
to use heat, ventilation or air conditioning during hours other than those for
which Landlord is obligated to supply such utilities pursuant to the terms of
Section 6.1 of this Lease, Tenant shall give Landlord such prior notice, if any,
as Landlord shall from time to time establish as appropriate, of Tenant's
desired use in order to supply such utilities, and Landlord shall supply such
utilities to Tenant at such hourly cost to Tenant (which shall be treated as
Additional Rent) as Landlord shall from time to time establish. Landlord and
Tenant acknowledge and agree that Landlord's prevailing rate as of the date of
this Lease for Tenant's use of the HVAC during hours other than those for which
Landlord is obligated to supply such utilities pursuant to the terms of Section
6.1 of this Lease is $50.00 per hour for the Premises.
6.3    Interruption of Use. Subject to Section 6.4 below, Tenant agrees that
Landlord shall not be liable for damages, by abatement of Rent or otherwise, for
failure to furnish or delay in furnishing any service (including telephone and
telecommunication services), or for any diminution in the quality or quantity
thereof, when such failure or delay or diminution is occasioned, in whole or in
part, by breakage, repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Building or Project after reasonable effort to do so, by
any riot or other dangerous condition, emergency, accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other cause
beyond Landlord's reasonable control; and such failures or delays or diminution
shall never be deemed to constitute an eviction or disturbance of Tenant's use
and possession of the Premises or relieve Tenant from paying Rent or performing
any of its obligations under this Lease. Furthermore, Landlord shall not be
liable under any circumstances for a loss of, or injury to, property or for
injury to, or interference with, Tenant's business, including, without
limitation, loss of profits, however occurring, through or in connection with or
incidental to a failure to furnish any of the services or utilities as set forth
in this Article 6.
6.4    Abatement Event. If (i) Landlord fails to perform the obligations
required of Landlord under the TCCs of this Lease, (ii) such failure causes all
or a portion of the Premises to be untenantable and unusable by Tenant, and
(iii) such failure relates to (A) the nonfunctioning of the heat, ventilation,
and air conditioning system in the Premises, the electricity in the Premises,
the nonfunctioning of the elevator service to the Premises, or (B) a failure to
provide access to the Premises, Tenant shall give Landlord notice (the "Initial
Notice"), specifying such failure to perform by Landlord (the "Abatement
Event"). If Landlord has not cured such Abatement Event within five (5) business
days after the receipt of the Initial Notice, Tenant may deliver an additional
notice to Landlord (the "Additional Notice"), specifying such Abatement Event
and Tenant's intention to abate the payment of Rent under this Lease. If
Landlord does not cure such Abatement Event within three (3) business days of
receipt of the Additional Notice, Tenant may, upon written notice to Landlord,
immediately abate Rent payable under this Lease for that portion of the Premises
rendered untenantable and not used by Tenant, for the period beginning on the
date three (3) business days after the Initial Notice to the earlier of the date
Landlord cures such Abatement Event or the date Tenant recommences the use of
such portion of the Premises. Such right to abate Rent shall be Tenant's sole
and exclusive remedy at law or in equity for an Abatement Event. Except as
provided in this Section 6.4, nothing contained herein shall be interpreted to
mean that Tenant is excused from paying Rent due hereunder.

ARTICLE 7

REPAIRS
Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures, equipment, interior window coverings, and furnishings
therein, and the floor or floors of the Building on which the Premises is
located, in good order, repair and condition at all times during the Lease Term.
In addition, Tenant shall, at Tenant's own expense, but under the supervision
and subject to the prior approval of Landlord, and within any reasonable period
of time specified by Landlord, promptly and adequately repair all damage to the
Premises and replace or repair all damaged, broken, or worn fixtures and
appurtenances, except for damage caused by ordinary wear and tear or beyond the
reasonable control of Tenant; provided however, that, at Landlord's option, or
if Tenant fails to make such repairs, Landlord may, after written notice to
Tenant and Tenant's failure to repair ·within five (5) days thereafter (unless
more than five (5) business days is required to effectuate such repair, in which
case Tenant shall have the time reasonably required to complete the repair, so
long as Tenant commences the repair during the five (5) business day period and
diligently completes such repair), but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a
percentage of the cost thereof (to be uniformly established for the Building
and/or the Project) sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from Landlord's involvement
with such repairs and replacements forthwith upon being billed for same.
Notwithstanding the foregoing, Landlord shall be responsible for repairs to the
exterior walls, foundation and roof of the Building, the structural portions of
the floors of the Building, the systems and equipment of the Building, and any
resultant damage to the extent caused by Landlord in performing the

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foregoing repairs, except to the extent that such repairs are required due to
the negligence or willful misconduct of Tenant; provided, however, that if such
repairs are due to the negligence or willful misconduct of Tenant, Landlord
shall nevertheless make such repairs at Tenant's expense, or, if covered by
Landlord's insurance, Tenant shall only be obligated to pay any deductible in
connection therewith. Landlord may, but shall not be required to, enter the
Premises at all reasonable times to make such repairs, alterations, improvements
or additions to the Premises or to the Project or to any equipment located in
the Project as Landlord shall desire or deem necessary or as Landlord may be
required to do by governmental or quasi-governmental authority or court order or
decree; provided, however, except for (i) emergencies, (ii) repairs,
alterations, improvements or additions required by governmental or
quasi-governmental authorities or court order or decree, or (iii) repairs which
are the obligation of Tenant hereunder, any such entry into the Premises by
Landlord shall be performed in a manner so as not to materially interfere with
Tenant's use of, or access to, the Premises; provided that, with respect to
items (ii) and (iii) above, Landlord shall use commercially reasonable efforts
to not materially interfere with Tenant's use of, or access to, the Premises.
Tenant hereby waives any and all rights under and benefits of subsection l of
Section 1932 and Sections 1941 and 1942 of the California Civil Code or under
any similar law, statute, or ordinance now or hereafter in effect.

ARTICLE 8

ADDITIONS AND ALTERATIONS
8.1    Landlord' s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, the
"Alterations"} without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
fifteen (15) business days prior to the commencement thereof, and which consent
shall not be unreasonably withheld by Landlord, provided it shall be deemed
reasonable for Landlord to withhold its consent to any Alteration which
adversely affects the structural portions or the systems or equipment of the
Building or is visible from the exterior of the Building. Notwithstanding the
foregoing, Tenant shall be permitted to make Alterations following ten (10)
business days notice to Landlord, but without Landlord's prior consent, to the
extent that such Alterations do not (i) adversely affect the systems and
equipment of the Building, exterior appearance of the Building, or structural
aspects of the Building, (ii) adversely affect the value of the Premises or
Building, (iii) require a building or construction permit, or (iv) cost more
than Twenty Thousand and 00/100 Dollars ($20,000.00) for a particular job of
work (the "Cosmetic Alterations"). The construction of the initial improvements
to the Premises shall be governed by the terms of the Work Letter and not the
terms of this Article 8. Landlord may impose, as a condition of its consent to
any and all Alterations or repairs of the Premises or about the Premises, such
requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors reasonably approved by Landlord, and any removal
and/or restoration obligations required to be performed pursuant to the TCCs of
Section 8. 4 of this Lease. If Landlord shall give its consent, the consent
shall be deemed conditioned upon Tenant acquiring a permit to do the work from
appropriate governmental agencies, the furnishing of a copy of such permit to
Landlord prior to the commencement of the work, and the compliance by Tenant
with all conditions of said permit in a prompt and expeditious manner. If such
Alterations will involve the use of or disturb hazardous materials or substances
existing in the Premises, Tenant shall comply with Landlord's rules and
regulations concerning such hazardous materials or substances. Tenant shall
construct such Alterations and perform such repairs in a good and workmanlike
manner, in conformance with any and all applicable federal, state, county or
municipal laws, rules and regulations and pursuant to a valid building permit,
issued by the city in which the Building is located (or other applicable
governmental authority), all in conformance with Landlord's construction rules
and regulations; provided, however, that prior to commencing to construct any
Alteration, Tenant shall meet with Landlord to discuss Landlord's design
parameters and code compliance issues. In the event Tenant performs any
Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then
Landlord shall, at Tenant's expense, make such changes to the Base Building.
Since all or a portion of the Project is or may become in the future certified
under the LEED (as that term is defined in Section U .4 of Exhibit C) rating
system (or other applicable certification standard) (all in Landlord's sole and
absolute discretion), Tenant expressly acknowledges and agrees that without
limitation as to other grounds for Landlord withholding its consent to any
proposed Alteration, Landlord shall have the right to withhold its consent to
any proposed Alteration in the event that such Alteration is not compatible with
such certification or recertification of the Project under such LEED rating
system (or other applicable certification standard). The "Base Building" shall
include the structural portions of the Building, and the public restrooms,
elevators, exit stairwells and the systems and equipment located in the internal
core of the Building on the floor or floors on which the Premises is located. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner so as not to obstruct access to the Project or any
portion thereof, by any other tenant of the Project. and so as not to obstruct
the business of Landlord or other tenants in the Project Tenant shall retain any
union trades to the extent designated by Landlord. Further, Tenant shall not use
(and upon notice from Landlord shall cease using) contractors, services,
workmen, labor, materials or equipment that, in Landlord's reasonable judgment,
would disturb labor harmony with the workforce or trades engaged in performing
other work, labor or services in or about the Building or the Common Areas. In
addition to Tenant's obligations under Article 9 of this Lease, upon completion
of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of San Diego in accordance with
Section 8182 of the Chil Code of the State of California or any successor
statute, and as a condition precedent to the enforceability and validity of
Landlord's consent, Tenant shall deliver to the management office for the
Project a reproducible copy of the "as built" and CAD drawings of the
Alterations, to the extent applicable, as well as all permits, approvals and
other documents issued by any governmental agency in connection with the
Alterations.
8.2    Payment for Improvements. With respect to payments to be made to Tenant's
contractors for any Alterations, Tenant shall (i) comply with Landlord's
commercially reasonable requirements for final lien releases and waivers in
connection with Tenant's payment for work to contractors, and (ii) sign
Landlord's commercially reasonable standard contractor's rules and regulations.
In addition, in connection with all Alterations, Tenant shall reimburse Landlord
for Landlord's reasonable, actual, out-of-pocket costs and expenses actually
incurred in connection with Landlord's review of such work.
8.3    Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's Risk" insurance in an amount reasonably approved
by Landlord covering the construction of such Alterations, and such other
insurance as Landlord may reasonably require, it being understood and agreed
that all of such Alterations shall be insured by Tenant pursuant to Article 10
of this Lease immediately upon completion thereof. In addition, Landlord may, in
its reasonable discretion, require Tenant to obtain a lien and completion bond
or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.
8.4    Landlord's Property. Landlord and Tenant hereby acknowledge and agree
that (i) all Alterations, improvements,

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fixtures, equipment and/or appurtenances which may be installed or placed in or
about the Premises (excluding Tenant's removable trade fixtures, furniture or
non-affixed office equipment), from time to time, shall be at the sole cost of
Tenant and shall be and become part of the Premises and the property of
Landlord, and (ii) the "Improvements" (as that term is defined in Section 1.3 of
the Work Letter} to be constructed in the Premises pursuant to the TCCs of the
Work Letter shall, upon completion of the same, be and become a part of the
Premises and the property of Landlord. Furthermore, Landlord may, by written
notice to Tenant prior to the end of the Lease Term, or given following any
earlier termination of this Lease, require Tenant, at Tenant's expense, to
remove any Alterations or improvements in the Premises (but excluding the
Improvements), and to repair any damage to the Premises and Building caused by
such removal and return the affected portion of the Premises to a building
standard improved condition as determined by Landlord; provided, however, if, in
connection with its notice to Landlord with respect to any such Alterations or
Cosmetic Alterations, (x) Tenant requests Landlord's decision with regard to the
removal of such Alterations or Cosmetic Alterations, and (y) Landlord thereafter
agrees in writing to waive the removal requirement with regard to such
Alterations or Cosmetic Alterations, then Tenant shall not be required to so
remove such Alterations or Cosmetic Alterations ; provided further, however,
that if Tenant requests such a determination from Landlord and Landlord, within
ten (10) business days following Landlord 's receipt of such request from Tenant
with respect to Alterations or Cosmetic Alterations, fails to address the
removal requirement with regard to such Alterations or Cosmetic Alterations,
Landlord shall be deemed to have agreed to waive the removal requirement with
regard to such Alterations or Cosmetic Alterations. IfTenant fails to complete
such removal and/or to repair any damage caused by the removal of any
Alterations or improvements in the Premises, and/or to return the affected
portion of the Premises to a building standard improved condition as determined
by Landlord, then at Landlord's option, either (A) Tenant shall be deemed to be
holding over in the Premises and Rent shall continue to accrue in accordance
with the terms of Article 16, below, until such work shall be completed, and/or
(B) Landlord may do so and may charge the cost thereof to Tenant. Tenant hereby
protects, defends, indemnifies and holds Landlord harmless from any liability,
cost, obligation, expense or claim of lien in any manner relating to the
installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.

ARTICLE 9

COVENANT AGAINST LIENS
Tenant shall keep the Project and Premises free from any liens or encumbrances
arising out of the work performed, materials furnished or obligations incurred
by or on behalf of Tenant, and shall protect, defend, indemnify and hold
Landlord harmless from and against any claims, liabilities, judgments or costs
(including, without limitation, reasonable attorneys' fees and costs) arising
out of same or in connection therewith. Tenant shall give Landlord notice at
least twenty (20) days prior to the commencement of any such work on the
Premises (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. Tenant shall remove any such lien or encumbrance by bond or
otherwise within five (5) days after notice by Landlord, and if Tenant shall
fail to do so, Landlord may pay the amount necessary to remove such lien or
encumbrance, without being responsible for investigating the validity thereof.
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 Building or Premises to any liens or
encumbrances whether claimed by operation of law or express or implied contract.
Any claim to a lien or encumbrance upon the Building or Premises arising in
connection with any such work 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 Project, Building and Premises.

ARTICLE 10

INDEMNIFICATION AND INSURANCE

I0.1 Indemnification and Waiver. Tenant hereby assumes all risk of damage to
property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, and independent contractors
(collectively, "Landlord Parties") shall not be liable for, and are hereby
released from any responsibility for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant or
by other persons claiming through Tenant. Tenant shall indemnify, defend,
protect, and hold harmless the Landlord Parties from and against any and all
loss, cost, damage, expense and liability (including without limitation court
costs and reasonable attorneys' fees) incurred in connection with or arising
from: (a) any causes in, on or about the Premises; (b) the use or occupancy of
the Premises by Tenant or any person claiming under Tenant; (c) any activity,
work, or thing done, or permitted or suffered by Tenant in or about the
Premises; (d) any acts, omission, or negligence of Tenant or any person claiming
under Tenant, or the contractors, agents, employees, invitees, or visitors of
Tenant or any such person, in, on or about the Project (collectively, "Tenant
Parties"); (e) any breach, violation, or non-performance by Tenant or any person
claiming under Tenant or the employees, agents, contractors, invitees, or
visitors of Tenant or any such person of any term, covenant, or provision of
this Lease or any law, ordinance, or governmental requirement of any kind; (t)
any injury or damage to the person, property, or business of Tenant, its
employees, agents, contractors, invitees, visitors, or any other person entering
upon the Premises under the express or implied invitation of Tenant; or (g) the
placement of any personal property or other items within the Premises. However,
notwithstanding the foregoing, Tenant shall not be required to indemnify and/or
hold Landlord harmless from any loss, cost, liability, damage or expense,
including, but not limited to, penalties, fines, attorneys' fees or costs
(collectively, "Claims"), to any person, property or entity to the extent
resulting from the negligence or willful misconduct of Landlord or its agents,
contractors, or employees. Should Landlord be named as a defendant in any suit
brought against Tenant in connection with or arising out of Tenant's occupancy
of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
appraisers', accountants' and attorneys' fees. Further, Tenant's agreement to
indemnify Landlord pursuant to this Section l0.1 is not intended and shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant's indemnification obligations; nor
shall they supersede any inconsistent agreement of the parties set forth in any
other provision of this Lease. The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination.
10.2    Tenant's Compliance With Landlord's Fire and Casualty Insurance. Tenant
shall, at Tenant's expense, comply with Landlord's insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use
of the

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Premises causes any increase in the premium for such insurance policies then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3    Tenant's Insurance. Throughout the Lease Term, Tenant shall maintain the
following coverages in the following amounts. The required evidence of coverage
must be delivered to Landlord on or before the date required under Section
10.4(D sub-sections (x) and (y}, or Section 10.4CTI) below (as applicable). Such
policies shall be for a term of at least one (1) year, or the length of the
remaining term of this Lease, whichever is less.
10.3.l Commercial General Liability Insurance (not including products liability
insurance), including Broad Form contractual liability covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) based upon or arising out of Tenant's operations, occupancy
or maintenance of the Project and all areas appurtenant thereto. Such insurance
shall be written on an "occurrence" basis. Landlord and any other party the
Landlord so specifies that has a material financial interest in the Project,
including Landlord 's managing agent, ground lessor and/or lender, if any, shall
be named as additional insureds as their interests may appear using Insurance
Service Organization's form CG2011 or a comparable form approved by Landlord.
Tenant shall provide an endorsement or policy excerpt showing that Tenant's
coverage is primary and any insurance carried by Landlord shall be excess and
non-contributing . The coverage shall also be extended to include damage caused
by heat, smoke or fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or organizations. This
policy shall include coverage for all liabilities assumed under this Lease as an
insured contract for the performance of all of Tenant's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Tenant nor relieve Tenant of any obligation hereunder. Limits of
liability insurance shall not be less than the following; provided, however,
such limits may be achieved through the use of an Umbrella/Excess Policy:

Bodily Injury and
$5,000,000 each occurrence
Property Damage Liability
$5,000,000 each occurrence
Personal Injury and Advertising Liability
$1,000,000.00
 
 
Tenant Legal Liability/Damage to Rented
 
Premises Liability
 

10.3.2 Property Insurance covering (i) all office furniture, personal property,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant's business
personal property on the Premises installed by, for, or at the expense of
Tenant, (ii) the Improvements, and any other improvements which exist in the
Premises as of the Lease Commencement Date (excluding the Base Building) (the
"Original Improvements"), and (iii) all Alterations performed inthe Premises.
Such insurance shall be written on a Special Form basis, for the full
replacement cost value (subject to reasonable deductible amounts), without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include coverage for
(a) all perils included in the CP 10 30 04 02 Coverage Special Form, (b) water
damage from any cause whatsoever occurring within the Building, including, but
not limited to, sprinkler leakage, bursting, leaking or stoppage of any pipes,
explosion, roof leakage, and backup or overflow from sewers or drains (as
opposed to natural hazard-type t1ood insurance), and (c) terrorism (to the
extent such terrorism insurance is available as a result of the Terrorism Risk
Insurance Act of 2002 (Pub. L. 107-297, 116 Stat. 2322), the Terrorism Risk
Insurance Program Reauthorization Act of 2005 (Pub. 1. 109-144), and the
Terrorism Risk Insurance Program Reauthorization Act of 2007 (Pub. L. 110-160,
121 Stat. 183), any successor statute or regulation, or is otherwise available
at commercially reasonable rates).
10.3.2.1    Increase in Project's Property Insurance. Tenant shall pay for any
increase in the premiums for the property insurance of the Project if said
increase is caused by Tenant's acts, omissions, use or occupancy of the
Premises.
10.3.2.2    Property Damage. Tenant shall use the proceeds from any such
insurance for the replacement of personal property, trade fixtures,
Improvements, Original Improvements and Alterations.
10.3.2.3    No Representation of Adequate Coverage. Landlord makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Tenant's property, business operations or
obligations under this Lease.
10.3.2.4    Property Insurance Subrogation. Landlord and Tenant intend that
their respective property loss risks shall be borne by insurance carriers to the
extent above provided (and, in the case of Tenant, by an insurance carrier
satisfying the requirements of Section 10.4(i) below), and Landlord and Tenant
hereby agree to look solely to, and seek recovery only from, their respective
insurance carriers in the ev·ent of a property loss to the extent that such
coverage is agreed to be provided hereunder. The parties each hereby waive all
rights and claims against each other for such losses, and waive all rights of
subrogation of their respective insurers. Landlord and Tenant hereby represent
and warrant that their respective "all risk" property insurance policies include
a waiver of (i) subrogation by the insurers, and (ii) all rights based upon an
assignment from its insured, against Landlord and/or any of the Landlord Parties
or Tenant and/or any of the Tenant Parties (as the case may be) in connection
with any property loss risk thereby insured against. Tenant will cause all
subtenants and licensees of the Premises claiming by, under, or through Tenant
to execute and deliver to Landlord a waiver of claims similar to the waiver in
this Section 10.3.2.4 and to obtain such waiver of subrogation rights
endorsements. If either party hereto fails to maintain the waivers set forth in
items (i) and (ii) above, the party not maintaining the requisite waivers shall
indemnify, defend, protect, and hold harmless the other party for, from and
against any and all claims, losses, costs, damages, expenses and liabilities
(including, without limitation, court costs and reasonable attorneys' fees)
arising out of, resulting from, or relating to, such failure.
10.3.3    Business Income Interruption for one year (1) plus Extra Expense
insurance in such amounts as will reimburse Tenant for actual direct or indirect
loss of earnings attributable to the risks outlined in Section 10.3.2 above.
10.3.4    Worker's Compensation or other similar insurance pursuant to all
applicable state and local statutes and regulations, and Employer's Liability
with minimum limits of not less than $1,000,000 each accident/employee/disease.

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10.3.5    Commercial Automobile Liability Insurance covering all Owned (if any),
Hired, or Non-owned vehicles with limits not less than $1,000,000 combined
single limit for bodily injury and property damage.
10.4    Form of Policies. The minimum limits of policies of insurance required
of Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) be issued by an insurance company having an
AM Best rating of not less than A-, VII (or to the extent AM Best ratings are no
longer available, then a similar rating from another comparable rating agency),
or which is otherwise acceptable to Landlord and legally authorized to do
business in the State of California, (ii) be in form and content reasonably
acceptable to Landlord and complying with the requirements of Section 10.3
(including, Sections 10.3.1 through 10.3.5), and (iii) Tenant shall not do or
permit to be done anything which invalidates the required insurance policies.
Tenant shall deliver said policy or policies or certificates thereof and
applicable endorsements which meet the requirements of this Article 10 to
Landlord on or before (I) the earlier to occur of: (x) the Lease Commencement
Date, and (y) the date Tenant and/or its employees, contractors and/or agents
first enter the Premises for occupancy, construction of improvements,
alterations, or any other move-in activities, and (II) five (5) business days
after the renewal of such policies. In the event Tenant shall fail to procure
such insurance, or to deliver such policies or certificates and applicable
endorsements, Landlord may, at its option, after written notice to Tenant and
Tenant's failure to obtain such insurance within five (5) days thereafter,
procure such policies for the account of Tenant and the sole benefit of
Landlord, and the cost thereof shall be paid to Landlord after delivery to
Tenant of bills therefor.
10.5    Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, at Tenant's sole cost and expense, increased amounts of
the insurance required to be carried by Tenant pursuant to this Article 10 and
such other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant's operations therein, as may be reasonably
requested by Landlord.
10.6    Third-Party Contractors. Tenant shall obtain and deliver to Landlord,
Third Party Contractor's certificates of insurance and applicable endorsements
at least seven (7) business days prior to the commencement of work in or about
the Premises by any vendor or any other third-party contractor (collectively, a
"Third Party Contractor"). All such insurance shall (a) name Landlord as an
additional insured under such party's liability policies as required by Section
10.3.1 above and this Section 10.6, (b) provide a waiver of subrogation in favor
of Landlord under such Third Party Contractor's commercial general liability
insurance, (c) be primary and any insurance carried by Landlord shall be excess
and non-contributing, and (d) comply with Landlord's minimum insurance
requirements.

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1    Repair of Damage to Premises by Landlord. If the Base Building or any
Common Areas serving or providing access to the Premises shall be damaged by a
fire or any other casualty (collectively, a "Casualty"), Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the Casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided access to the Premises and any common restrooms
serving the Premises shall not be materially impaired. Tenant shall promptly
notify Landlord upon the occurrence of any damage to the Premises resulting from
a Casualty, and Tenant shall promptly inform its insurance carrier of any such
damage. Upon notice (the "Landlord Repair Notice") to Tenant from Landlord,
Tenant shall assign to Landlord (or to any party designated by Landlord) all
insurance proceeds payable to Tenant under Tenant's insurance required to be
carried under Section 10.3 of this Lease, and Landlord shall repair any injury
or damage to the Improvements and the Original Improvements installed in the
Premises and shall return such Improvements and the Original Improvements to
their original condition; provided that if the cost of such repair by Landlord
exceeds the amount of insurance proceeds received by Landlord from Tenant's
insurance carrier, as assigned by Tenant, the cost of such repairs shall be paid
by Tenant to Landlord prior to Landlord's repair of the damage. In the event
that Landlord does not deliver the Landlord Repair Notice within sixty (60) days
following the date the Casualty becomes known to Landlord, Tenant shall, at its
sole cost and expense, repair any injury or damage to the Improvements and the
Original Improvements installed in the Premises and shall return such
Improvements and Original Improvements to their original condition. Whether or
not Landlord delivers a Landlord Repair Notice, Tenant shall, prior to the
commencement of construction, submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. 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; provided however, that if such Casualty shall have
damaged the Premises or Common Areas necessary to Tenant's occupancy, and if
such damage is not the result of the willful misconduct of Tenant or Tenant's
employees, contractors, licensees, or invitees, Landlord shall allow Tenant a
proportionate abatement of Rent, during the time and to the extent the Premises
are unfit for occupancy for the purposes permitted under this Lease, and not
occupied by Tenant as a result thereof. In the event that Landlord shall not
deliver the Landlord Repair Notice, Tenant's right to rent abatement pursuant to
the preceding sentence shall terminate as of the date which is reasonably
determined by Landlord to be the date Tenant should have completed repairs to
the Premises assuming Tenant used reasonable due diligence in connection
therewith.
11.2    Landlord's Option to Repair. Notwithstanding the terms of Section 11. l
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of discovery
of the damage, such notice to include a termination date giving Tenant sixty
(60) days to vacate the Premises, but Landlord may so elect only if the Building
or Project shall be damaged by Casualty, whether or not the Premises is
affected, and one or more of the following conditions is present: (i) in
Landlord's reasonable judgment, repairs cannot reasonably be completed within
one hundred eighty (180) days after the date of discovery of the damage (when
such repairs are made without the payment of overtime or other premiums); (ii)
the holder of any mortgage on the Building or Project or ground lessor with
respect to the Building or Project 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; (iii) the damage is not fully covered by
Landlord's insurance policies; (iv) Landlord decides to rebuild the Building or
Common Areas so that they will be substantially different structurally or
architecturally; (v) the damage occurs during the last twelve (12) months of the
Lease Term; or (vi) any owner of any other portion of the Project, other than
Landlord, does not intend to repair the damage to such portion of

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the Project. Upon any such termination of this Lease pursuant to this Section
11.2, Tenant shall pay the Base Rent and Additional Rent, properly apportioned
up to such date of termination, and both parties hereto shall thereafter be
freed and discharged of all further obligations hereunder, except as provided
for in provisions of this Lease which by their terms survive the expiration or
earlier termination of the Lease Tenn.
11.3    Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or the Project, and any statute or regulation of the
state in which the Building is located, including, without limitation, Sections
1932(2) and 1933(4) of the California Civil Code, with respect to any rights or
obligations concerning damage or destruction in the absence of an express
agreement between the parties, and any other statute or regulation, now or
hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building or the Project.

ARTICLE 12

NONWAIVER
No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy on account of the violation of such provision,
even if such violation shall continue or be repeated subsequently, any waiver by
Landlord of any provision of this Lease may only be in writing, and no express
waiver shall affect any provision other than the one specified in such waiver
and that one only for the time and in the manner specifically stated. No receipt
of monies by Landlord from Tenant after the termination of this Lease shall in
any way alter the length of the Lease Term or of Tenant's right of possession
hereunder or after the giving of any notice shall reinstate, continue or extend
the Lease Term or affect any notice given Tenant prior to the receipt of such
monies, it being agreed that after the service of notice or the commencement of
a suit or after final judgment for possession of the Premises, Landlord may
receive and collect any Rent due, and the payment of said Rent shall not waive
or affect said notice, suit or judgment.

ARTICLE 13

CONDEMNATION
If the whole or any material part of the Premises, Building or Project shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or yacated by such authority in
such manner as to require the use, reconstruction or remodeling of any part of
the Premises, Building or Project, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the applicable authority. Tenant
shall not because of such taking assert any claim against Landlord or the
authority for any compensation because of such taking and Landlord shall be
entitled to 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 fixtures belonging to Tenant and
removable by Tenant upon expiration of the Lease Term pursuant to the terms of
this Lease, and for moving expenses, so long as such claims do not diminish the
award available to Landlord, its ground lessor with respect to the Building or
Project or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination. Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of The California Code of Civil Procedure.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1    Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person or entity to whom any Transfer is
made or sought to be made is hereinafter sometimes referred to as a
"Transferee"). In connection with any such Transfer contemplated by Tenant,
Tenant shall submit a written request for consent notice to Landlord, together
with any information reasonably required by Landlord which will enable Landlord
to determine (i) the financial responsibility, character, and reputation of the
proposed Transferee, (ii) the nature of such Transferee's business, (iii) the
proposed use of the applicable portion of the Premises (w:hich applicable
portion of the Premises to which the proposed Transfer relates shall be known as
the "Subject Space"), and (iv) any other reasonable consent parameters. Any
Transfer made without Landlord's prior written consent shall, at Landlord's
option, be null, void and of no effect, and shall, at Landlord's option,
constitute a default by Tenant under this Lease. Whether or not Landlord
consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review
and processing fees, as well as any actual, reasonable professional fees
(including, without limitation, attorneys', accountants', architects',
engineers' and consultants' fees) incurred by Landlord, within thirty (30) days
after written request by Landlord, in a combined amount for Landlord's review
and processing fees and the actual reasonable professional fees not to exceed
Two Thousand Five Hundred and No/100 Dollars ($2,500.00) in total for a Transfer
in the ordinary course of business. Landlord and Tenant hereby agree that a
proposed Transfer shall not be considered ''in the ordinary course of business"
if a particular Transfer involves the review of documentation by Landlord for
such particular Transfer on more than two (2) occasions.
14.2    Landlord's Consent. Landlord shall not unreasonably withhold its consent
to any proposed Transfer of the Subject Space to the Transferee on the terms
specified in Tenant's notice pertaining to the particular Transfer and agrees to
provide Tenant with Landlord's written notice of consent or refusal to consent
within ten (10) business days following Landlord's receipt of the Transfer
Notice. Without limitation as to other reasonable grounds for withholding
consent, 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 apply: (i) Transferee is of a
character or reputation or engaged in a business which is not consistent with
the quality of the Building or the Project; (ii) Transferee is not a party of
reasonable financial worth and1or financial stability in light of the
responsibilities to be undertaken in connection with the Transfer on the date
consent is requested;

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(iii) Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease; (iv) Transferee is either a governmental agency or
instrumentality thereof; or (v) the proposed Transfer would cause a violation of
another lease for space in the Project, or would give an occupant of the Project
a right to cancel its lease. Notv.ithstanding anything to the contrary in this
Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent under this Section 14.2 or
otherwise has breached or acted unreasonably under this Article 14, their sole
remedies shall be a declaratory judgment and an injunction for the relief sought
without any monetary damages, and Tenant hereby waives the provisions of Section
1995.310 of the California Civil Code, or any successor statute, and all other
remedies, including, without limitation, any right at law or equity to terminate
this Lease, on its own behalf and, to the extent permitted under all applicable
laws, on behalf of the proposed Transferee. Tenant shall indemnify, defend and
hold harmless Landlord from any and all liability, losses, claims, damages,
costs, expenses, causes of action and proceedings involving any third party or
parties (including without limitation Tenant's proposed subtenant or assignee)
who claim they were damaged by Landlord's wrongful withholding or conditioning
of Landlord's consent.
14.3    Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer (on a per rentable square foot basis if less than all of the Premises
is transferred), after deducting the reasonable expenses incurred by Tenant for
(i) any changes, alterations and improvements to the Premises in connection with
the Transfer, (ii) any free base rent or other economic concessions reasonably
provided to the Transferee, and (iii) any brokerage commissions in connection
with the Transfer. "Transfer Premium" shall also include, but not be limited to,
key money, bonus money or other cash consideration paid by Transferee to Tenant
in connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer. For purposes of calculating any such effective
rent, all such concessions and consideration shall be amortized on a
straight-line basis over the relevant term.
14.4    Landlord's Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, if at any time Tenant contemplates a
Transfer of all or a portion of the Premises for which Landlord's consent is
required, then Tenant shall give Landlord notice ("Intention to Transfer
Notice") of such contemplated Transfer. The Intention to Transfer Notice shall
specify the portion of and amount of rentable square feet of the Premises which
Tenant intends to Transfer (the "Contemplated Transfer Space"), the contemplated
date of commencement of the Contemplated Transfer (the "Contemplated Effective
Date"), and the contemplated length of the term of such contemplated Transfer,
and shall specify that such Intention to Transfer Notice is delivered to
Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to
recapture the Contemplated Transfer Space for the term set forth in the
Intention to Transfer Notice. In the event Tenant delivers an Intention to
Transfer Notice to Landlord, Landlord shall have the option, by giving written
notice (the "Recapture Notice") to Tenant within fifteen (15) days after receipt
of Tenant's written request for consent to such Transfer, to recapture the
Subject Space. Such recapture notice shall cancel and terminate this Lease with
respect to the Contemplated Transfer Space as of the date stated in the
intention to Transter Notice as the effective date of the proposed Transfer
until the last day of the term of the Transfer as set forth in the Intention to
Transfer Notice (or at Landlord's option, shall cause the Transfer to be made to
Landlord or its agent, in which case the parties shall execute the Transfer
documentation promptly thereafter). . In the event of a recapture by Landlord,
if this Lease shall be canceled with respect to less than the entire Premises,
the Rent reserved herein shall be prorated on the basis of the number of
rentable square feet retained by Tenant in proportion to the number of rentable
square feet contained in the Subject Space, and this Lease as so amended shall
continue thereafter in full force and effect, and upon request of either party,
the parties shall execute written confirmation of the same. However, if Landlord
delivers a recapture notice to Tenant, Tenant may, within ten (10) business days
after Tenant's receipt of such recapture notice, deliver written notice to
Landlord indicating that Tenant is rescinding its request for consent to the
proposed transfer, in which case such Transfer shall not be consummated and this
Lease shall remain in full force and effect as to the portion of the Premises
that was the subject of the proposed Transfer. If Landlord declines, or fails to
elect in a timely manner to recapture the Subject Space under this Section 14.4,
then, subject to the other terms of this Article 14, for a period of nine (9)
months (the "Nine Month Period") commencing on the last day of such thirty (30)
day period, Landlord shall not have any right to recapture the Contemplated
Transfer Space with respect to any Transfer made during the Nine Month Period,
provided that any such Transfer is substantially on the terms set forth in the
Intention to Transfer Notice, and provided further that any such Transfer shall
be subject to the remaining terms of this Article 14. If such a Transfer is not
so consummated within the Nine Month Period (or if a Transfer is so consummated,
then upon the expiration of the term of any Transfer of such Contemplated
Transfer Space consummated within such Nine Month Period), Tenant shall again be
required to submit a new Intention to Transfer Notice to Landlord with respect
any contemplated Transfer, as provided above in this Section 14.4.
14.5    Effect of Transfer. If Landlord consents to a Transfer, (i) the TCCs of
this Lease shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or
a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution,
an original executed copy of all documentation pertaining to the Transfer in
form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon
Landlord's request a complete statement, certified by an independent certified
public accountant, or Tenant's chief financial officer, setting forth in detail
the computation of any Transfer Premium Tenant has derived and shall derive from
such Transfer, and (v) no Transfer relating to this Lease or agreement entered
into with respect thereto, whether with or without Landlord's consent, shall
relieve Tenant or any guarantor of the Lease from any liability under this
Lease, including, without limitation, in connection with the Subject Space.
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 two percent (2%), Tenant shall pay Landlord's costs of such audit.
14.6    Additional Transfers. For purposes of this Lease, the term "Transfer"
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of more than fifty percent (50%)
or more of the partners, or transfer of more than fifty percent (50%) or more of
partnership interests, within a twelve (12)-month period, or the dissolution of
the partnership without immediate reconstitution thereof, and (ii) if Tenant is
a closely held corporation (i.e., whose stock is not publicly held and not
traded through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of more than fifty percent (50%) or more of the voting
shares of Tenant (other than to immediate family members by reason of gift or
death), within a twelve (12}-month period, or (C) the sale, mortgage,
hypothecation or pledge of an aggregate of more than fifty percent (50%) or more
of the value of the unencumbered assets of Tenant within a twelve (12)-month
period.
14.7    Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if

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this Lease shall be terminated during the term of any Transfer, Landlord shall
have the right to: (i) treat such Transfer as cancelled and repossess the
Subject Space by any lawful means, or (ii) require that such Transferee attorn
to and recognize Landlord as its landlord under any such Transfer. If Tenant
shall be in default under this Lease, 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. Such Transferee shall rely on any representation by Landlord
that Tenant is in default hereunder, without any need for confirmation thereof
by Tenant. Upon any assignment, the assignee shall assume in writing all
obligations and covenants of Tenant thereafter to be performed or observed under
this Lease. No collection or acceptance of rent by Landlord from any Transferee
shall be deemed a waiver of any provision of this Article 14 or the approval of
any Transferee or a release of Tenant from any obligation under this Lease,
whether theretofore or thereafter accruing. In no event shall Landlord's
enforcement of any provision of this Lease against any Transferee be deemed a
waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person. If Tenant's obligations hereunder have been guaranteed,
Landlord's consent to any Transfer shall not be effective unless the guarantor
also consents to such Transfer.
14.8    Deemed Consent Transfers. Notwithstanding anything to the contrary
contained in this Lease, (A) an assignment or subletting of all or a portion of
the Premises to an affiliate of Tenant (an entity which is controlled by,
controls, or is under common control with, Tenant as of the date of this Lease),
(B) a sale of corporate shares of capital stock in Tenant in connection with an
initial public offering of Tenant's stock on a nationally-recognized stock
exchange, (C) an assignment of the Lease to an entity which acquires all or
substantially all of the stock or assets of Tenant, or (D) an assignment of the
Lease to an entity which is the resulting entity of a merger or consolidation of
Tenant during the Lease Term, shall not be deemed a Transfer requiring
Landlord's consent under this Article 14 (any such assignee or sublessee
described in items (A) through (D) of this Section 14.8 is hereinafter referred
to as a "Permitted Transferee"), provided that (i) Tenant notifies Landlord at
least thirty (30) days prior to the effective date of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such Transfer or Permitted Transferee
as set forth above, (ii) Tenant is not in default, beyond the applicable notice
and cure period, more than once in any previous twelve (12) month period or more
than twice during the entire Lease Term, and such assignment or sublease is not
a subterfuge by Tenant to avoid its obligations under this Lease, (iii) such
Permitted Transferee shall be of a character and reputation consistent with the
quality of the Building, (iv) such Permitted Transferee shall have a tangible
net worth (not including goodwill as an asset) computed in accordance with
generally accepted accounting principles ("Net Worth") at least equal to the
greater of (1) the Net Worth of Original Tenant on the date of this Lease, and
(2) the Net Worth of Tenant on the day immediately preceding the effective date
of such assignment or sublease, (v) no assignment or sublease relating to this
Lease, whether with or without Landlord's consent, shall relieve Tenant from any
liability under this Lease, and (vi) the liability of such Permitted Transferee
under either an assignment or sublease shall be joint and several with Tenant.
An assignee of Tenant's entire interest in this Lease who qualifies as a
Permitted Transferee may also be referred to herein as a "Permitted Transferee
Assignee." "Control," as used in this Section 14.8, shall mean the ownership,
directly or indirectly, of more than fifty percent (50%) of the voting
securities of, or possession of the right to vote, in the ordinary direction of
its affairs, of more than fifty percent (50%) of the voting interest in, any
person or entity.

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
15.1    Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant. whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.
15.2    Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted. Upon such expiration or termination, in addition to Tenant's
obligations under Section 29.26, below, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, business and trade fixtures,
free-standing cabinet work, server and telephone equipment, movable partitions
and other articles of personal property owned by Tenant or installed or placed
by Tenant at its expense in the Premises, and such similar articles of any other
persons claiming under Tenant, as Landlord may, in its sole discretion, require
to be removed, and Tenant shall repair at its own expense all damage to the
Premises and Building resulting from such removal.

ARTICLE 16

HOLDING OVER
If Tenant holds over after the expiration of the Lease Term with the express
written consent of Landlord, such tenancy shall be from month-to-month only, and
shall not constitute a renewal hereof or an extension for any further term, and
in such case Base Rent shall be payable at a monthly rate of one hundred
twenty-five percent (125%) of the Base Rent applicable during the last rental
period of the Lease Term under this Lease. Such month-to-month tenancy shall be
subject to every other applicable term, covenant and agreement contained herein.
If Tenant holds over after the expiration of the Lease Term without the express
written consent of Landlord, such tenancy shall be a tenancy at sufferance, and
shall not constitute a renewal hereof or an extension for any further term, and
in such case daily damages in any action to recover possession of the Premises
shall be calculated at a daily rate equal to the greater of (i) one hundred
fifty percent (150%) of the Base Rent applicable during the last rental period
of the Lease Term under this Lease (calculated on a per diem basis) or (ii) the
fair

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market rental rate for the Premises as of the commencement of such holdover
period . Nothing contained in this Article 16 shall be construed as consent by
Landlord to any holding over by Tenant, and Landlord expressly reserves the
right to require Tenant to vacate and deliver possession of the Premises to
Landlord as provided in this Lease upon the expiration or other termination of
this Lease. The provisions of this Article 16 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant holds over without Landlord's express written consent, and
tenders payment of rent for any period beyond the expiration of the Lease Term
by way of check (whether directly to Landlord, its agents, or to a lock box) or
wire transfer, Tenant acknowledges and agrees that the cashing of such check or
acceptance of such wire shall be considered inadvertent and not be construed as
creating a month-to-month tenancy, provided Landlord refunds such payment to
Tenant promptly upon learning that such check has been cashed or wire transfer
received. Tenant acknowledges that any holding over without Landlord's express
written consent may compromise or otherwise affect Landlord's ability to enter
into new leases with prospective tenants regarding the Premises. Therefore, if
Tenant fails to vacate and deliver the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from and against all claims made by any succeeding tenant founded upon
such failure to vacate and deliver, and any losses suffered by Landlord,
including lost profits, resulting from such failure to vacate and deliver.
Tenant agrees that any proceedings necessary to recover possession of the
Premises, whether before or after expiration of the Lease Term, shall be
considered an action to enforce the terms of this Lease for purposes of the
awarding of any attorney's fees in connection therewith.

ARTICLE 1 7

ESTOPPEL CERTIFICATES
Within ten (10) days following a request in writing by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit E, attached
hereto (or such other form as may be required by any prospective mortgagee or
purchaser of the Project, or any portion thereof), indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested by Landlord or Landlord's mortgagee or
prospective mortgagee. Any such certificate may be relied upon by any
prospective mortgagee or purchaser of all or any portion of the Project. Tenant
shall execute and deliver whatever other instruments may be reasonably required
for such purposes. At any time during the Lease Term, Landlord may require
Tenant to provide Landlord with a current financial statement and financial
statements of the two (2) years prior to the current financial statement year.
Such statements shall be prepared in accordance with generally accepted
accounting principles and, if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant. Failure of Tenant to
timely execute, acknowledge and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception. Notwithstanding the foregoing, in the event that (i)
stock in the entity which constitutes Tenant under this Lease (as opposed to an
entity that "controls" Tenant, as that term is defined in Section 14.8 of this
Lease, or is under common control with Tenant) is publicly traded on a national
stock exchange, and (ii) Tenant has its own, separate and distinct 10K and 10Q
filing requirements (as opposed to joint filings with an entity that controls
Tenant or is under common control with Tenant), then Tenant's obligation to
provide Landlord with a copy of its most recent current financial statement
shall be deemed satisfied.

ARTICLE 18

SUBORDINATION
This Lease shall be subject and subordinate to all present and future ground or
underlying leases of the Building or Project and to the lien of any mortgage,
trust deed or other encumbrances now or hereafter in force against the Building
or Project or any part thereof, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of such mortgages or trust deeds,
unless the holders of such mortgages, trust deeds or other encumbrances, or the
lessors under such ground lease or underlying leases, require in writing that
this Lease be superior thereto. Tenant covenants and agrees in the event any
proceedings are brought for the foreclosure of any such mortgage or deed in lieu
thereof (or if any ground lease is terminated), to attorn, without any
deductions or set-offs whatsoever, to the lienholder or purchaser or any
successors thereto upon any such foreclosure sale or deed in lieu thereof (or to
the ground lessor), if so requested to do so by such purchaser or lienholder or
ground lessor, and to recognize such purchaser or lienholder or ground lessor as
the lessor under this Lease, provided such lienholder or purchaser or ground
lessor shall agree to accept this Lease and not disturb Tenant's occupancy, so
long as Tenant timely pays the rent and observes and performs the TCCs of this
Lease to be observed and performed by Tenant. Landlord's interest herein may be
assigned as security at any time to any lienholder. Tenant shall, within five
(5) days of request by Landlord, execute such further instruments or assurances
as Landlord may reasonably deem necessary to evidence or confirm the
subordination or superiority of this Lease to any such mortgages, trust deeds,
ground leases or underlying leases. Tenant waives the provisions of any current
or future statute, rule or law which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.

ARTICLE 19

DEFAULTS; REMEDIES
19.1    Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:
19.1.1    Any failure by Tenant to pay any Rent or any other charge required to
be paid under this Lease, or any part thereof, when due unless such failure is
cured within five (5) business days after notice; or
19.1.2    Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a thirty (30) day period, Tenant shall
not be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no

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event exceeding a period of time in excess of sixty (60) days after written
notice thereof from Landlord to Tenant; or
19.1.3    To the extent permitted by law, (i) Tenant or any guarantor of this
Lease being placed into receivership or conservatorship, or becoming subject to
similar proceedings under Federal or State law, or (ii) a general assignment by
Tenant or any guarantor of this Lease for the benefit of creditors, or (iii) the
taking of any corporate action in furtherance of bankruptcy or dissolution
whether or not there exists any proceeding under an insolvency or bankruptcy
law, or (iv) the filing by or against Tenant or any guarantor of any proceeding
under an insolvency or bankruptcy law, unless in the case of such a proceeding
filed against Tenant or any guarantor the same is dismissed within sixty (60)
days, or (v) the appointment of a trustee or receiver to take possession of all
or substantially all of the assets of Tenant or any guarantor, unless possession
is restored to Tenant or such guarantor within thirty (30) days, or (vi) any
execution or other judicially authorized seizure of all or substantially all of
Tenant's assets located upon the Premises or of Tenant's interest in this Lease,
unless such seizure is discharged within thirty (30) days; or
19.1.4    Abandonment or Vacation of all or a substantial portion of the
Premises by Tenant; or
19.1.5    The failure by Tenant to observe or perform according to the
provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
continues for more than two (2) business days after notice from Landlord; or
19.1.6    Tenant's failure to occupy the Premises within ninety (90) days after
the Lease Commencement Date.
The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.
19.2    Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1    Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim for damages therefor;
and Landlord may recover from Tenant the following:
19.2.1.1    The worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
19.2.1.2    The worth at the time of award of the amount by which the unpaid
rent which would have
been earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus
19.2.1.3    The worth at the time of award of the amount by which the unpaid
rent for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
19.2.1.4    Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant; and
19.2.1.5    At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Sections 19.2.l(a) and
(Q}, above, the "worth at the time of award" shall be computed by allowing
interest at the Interest Rate. As used in Section 19.2.Hc), above, the "worth at
the time of award" shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
19.2.2    Landlord shall have 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 the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3    Landlord shall at all times have the rights and remedies (which shall
be cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach
of any provision hereof.
19.3    Subleases of Tenant. Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
19.4    Form of Payment After Default. Following the occurrence of an event of
default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether to cure the
default in question or otherwise, be paid in the form of cash, money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by

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other means approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.
19.5    Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall 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 to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
19.6    Landlord Default. Notwithstanding anything to the contrary set forth in
this Lease, Landlord shall be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease if Landlord fails to
perform such obligation within thirty (30) days after the receipt of notice from
Tenant specifying in detail Landlord's failure to perform; provided, however, if
the nature of Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be in default under this
Lease if it shall commence such performance within such thirty (30) day period
and thereafter diligently pursues the same to completion. Upon any such default
by Landlord under this Lease, Tenant may, except as otherwise specifically
provided in this Lease to the contrary, exercise any of its rights provided at
law or in equity. Any award from a court or arbitrator in favor of Tenant
requiring payment by Landlord which is not paid by Landlord within the time
period directed by such award, may be offset by Tenant from Rent next due and
payable under this Lease; provided, however, Tenant may not deduct the amount of
the award against more than fifty percent (50%) of Base Rent next due and owing
(until such time as the entire amount of such judgment is deducted) to the
extent following a foreclosure or a deed-in-lieu of foreclosure.

ARTICLE 20

COVENANT OFQUIET ENJOYMENT
Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all the
other TCCs, provisions and agreements herein contained on the part of Tenant to
be kept, observed and performed, shall, during the Lease Term, peaceably and
quietly have, hold and enjoy the Premises subject to the TCCs, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord. The foregoing covenant is in lieu of any other covenant
express or implied.

ARTICLE 21

SECURITY DEPOSIT
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the ''Security Deposit") in the amount set forth in
Section 8 of the Summary, as security for the faithful performance by Tenant of
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without advance notice to Tenant, but shall not be
required to apply all or any part of the Security Deposit for the payment of any
Rent or any other sum in default and Tenant shall, upon demand therefor, restore
the Security Deposit to its original amount; provided, however, if Landlord
elects to make such an application Landlord shall promptly notify Tenant of the
same in writing, identifying with reasonable specificity the reason therefor.
Any unapplied portion of the Security Deposit shall be returned to Tenant, or,
at Landlord's option, to the last assignee of Tenant's interest hereunder,
within sixty (60) days following the expiration of the Lease Term. Tenant shall
not be entitled to any interest on the Security Deposit. Tenant hereby
irrevocably waives and relinquishes any and all rights, benefits, or
protections, if any, Tenant now has, or in the future may have, under Section
1950.7 of the California Civil Code, any successor statute, and all other
provisions of law, now or hereafter in effect, including, but not limited to,
any provision of law which (i) establishes the time frame by which a landlord
must refund a security deposit under a lease, or (ii) provides that a landlord
may claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by a tenant, or to
clean the subject premises. Tenant acknowledges and agrees that (A) any
statutory time frames for the return of a security deposit are superseded by the
express period identified in this Article 21, above, and (B) rather than be so
limited, Landlord may claim from the Security Deposit (i) any and all sums
expressly identified in this Article 21, above, and (ii) any additional sums
reasonably necessary to compensate Landlord for any and all losses or damages
caused by Tenant's default of this Lease, including, but not limited to, all
damages or rent due upon termination of this Lease pursuant to Section 1951.2 of
the California Civil Code.

ARTICLE 22

INTENTIONALLY OMITTED

ARTICLE 23

SIGNS
23.1    Full Floors. Subject to Landlord's prior written approval, in its sole
discretion, and provided all signs are in keeping with the quality, design and
style of the Building and Project, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator lobby of the
Premises, provided that such signs must not be visible from the exterior of the
Building.
23.2    Multi-Tenant Floors. If other tenants occupy space on the floor on which
the Premises is located, Tenant's identifying signage shall be provided by
Landlord, at Tenant's cost (provided that Tenant may apply Additional
Improvement Allowance, as defined in Section 1.3 of the Work Letter, to pay for
such Tenant signage), and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program.
23.3    Building Directory. A building directory is located in the lobby of the
Building. Tenant shall have the right, at Landlord's sole cost and expense as to
Tenant's initial name strip, to designate one (1) name strip on such directory,
and any subsequent changes to Tenant's name strip shall be at Tenant's sole cost
and expense following Tenant's receipt of Landlord's consent thereto (which

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consent may be withheld in Landlord's sole and absolute discretion).
23.4    Prohibited Signage and Other Items. Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Project or the Common Areas. Any signs, window coverings, or blinds (even if
the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.
23.5    Building Monument Signage. Provided that (i) Tenant is not then in
default of this Lease and has not previously been in default of this Lease and
(ii) the Original Tenant or its Permitted Transferee Assignee then occupies the
entire Premises, then the Original Tenant or its Permitted Transferee Assignee
shall have the non-exclusive right to elect to have installed (in a location
designated by Landlord in Landlord's sole discretion), at Tenant's sole cost and
expense, in accordance with the terms of this Section 23.5 below, one (1)
identity sign (the "Identity Sign") identifying the Original Tenant's or its
Permitted Transferee Assignee's name on one (1) line of the existing Building
monument located at the Building (the "Monument"). Should Tenant comply with the
foregoing conditions and validly exercise its non-exclusive right to cause its
Identity Sign to be displayed on the Monument, the terms and conditions
contained in this Section 23.5 shall apply with respect thereto. The name set
forth on the Identity Sign to be installed on the Monument, if at all, shall in
no event include, identify or otherwise refer to a name which relates to an
entity which is of a character or reputation, or is associated with a political
faction or orientation, which is inconsistent with the quality of the Project,
or which would otherwise reasonably offend a landlord of a Comparable Building
(an "Objectionable Name") and any changes in such name shall be subject to the
terms of this Section 23.5 below and Landlord's prior written approval. The
parties hereby agree that the name "Zogenix, Inc." or any reasonable derivation
thereof, shall not be deemed an Objectionable Name. The graphics, materials,
color, design, lettering, size, quality, specifications and all other aspects of
the Identity Sign shall be subject to the prior written approval of Landlord, in
Landlord's sole discretion, shall be consistent with the identity signs of the
other tenants of the Building and the Project, and shall also comply with and be
subject to all "Applicable Laws" (as defined below), including, but not limited
to, all requirements of the City of San Diego ("City") (and other applicable
governmental authorities); provided, however, that in no event shall the
approval by the City (or other applicable governmental authority) of the
Identity Sign be deemed a condition precedent to the effectiveness of this
Lease. The Identity Sign shall be installed by Landlord, provided that Tenant
shall pay for all costs incurred by Landlord in the installation of the Identity
Sign. Landlord shall maintain and repair the Identity Sign and the Monument in
accordance with Landlord's signage maintenance program, provided that Tenant
shall pay for all costs incurred by Landlord in connection with such maintenance
and repair, prorated based on the number of tenants identified on the Monument.
At the expiration or earlier termination of this Lease (or within five (5) days
following Tenant's receipt of written notice from Landlord that Tenant's rights
to the Identity Sign have terminated as a result of a default by Tenant under
this Lease, beyond any applicable notice and cure period set forth in the Lease
or in accordance with the other terms of this Section 23.5), Tenant shall, at
Tenant's sole cost and expense, cause (a) the Identity Sign to be removed from
the Monument and (b) the Monument to be restored to its condition existing prior
to the installation of the Identity Sign (provided that Landlord shall have the
right to perform such work and charge Tenant all cost therefor). If Tenant fails
to timely remove any Identity Sign and restore the Monument as provided in this
Section 23.5, then Landlord may (but shall not be obligated to) perform such
work at Tenant's sole cost and expense. All costs and expenses incurred by
Landlord in connection with this Section 23.5 shall constitute Rent under this
Lease and shall be paid by Tenant to Landlord within ten (10) days following
Tenant's receipt of an invoice therefor. The signage rights granted to Tenant
under this Section 23.5 are personal to the Original Tenant and any Permitted
Transferee Assignee, and may only be exercised by the Original Tenant or its
Permitted Transferee Assignee (and not any other assignee, or any sublessee or
other transferee of the Original Tenant's interest in this Lease) if the
Original Tenant or its Permitted Transferee Assignee continually occupies the
entire Premises. In no event shall Tenant have any right to install or maintain
any Identity Sign at any time during the Lease Term that Tenant is in default
under this Lease, beyond any applicable notice and cure period set forth in this
Lease.

ARTICLE 24

COMPLIANCE WITH LAW
Landlord shall comply with all Applicable Laws relating to the Base Building,
provided that compliance with such Applicable Laws is not the responsibility of
Tenant under this Lease, and provided further that Landlord's failure to comply
therewith would prohibit Tenant from obtaining or maintaining a certificate of
occupancy for the Premises, or would unreasonably and materially affect the
safety of Tenant's employees or create a significant health hazard for Tenant's
employees. Landlord shall be permitted to include in Operating Expenses any
costs or expenses incurred by Landlord under this Article 24 to the extent not
prohibited by the terms of Section 1.1.4 of Exhibit C. For purposes of Section
1938 of the California Civil Code, Landlord hereby discloses to Tenant, and
Tenant hereby acknowledges, that the Premises have not undergone inspection by a
Certified Access Specialist (CASp). Tenant shall not do anything or suffer
anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or other governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated,
including, without limitation, any such governmental regulations related to
disabled access (collectively, "Applicable Laws"). At its sole cost and expense,
Tenant shall promptly comply with all Applicable Laws (including the making of
any alterations to the Premises required by Applicable Laws). Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations. The judgment
of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant.

ARTICLE 25

LATE CHARGES
If any installment of rent or any other sum due from tenant shall not be
received by Landlord or Landlord's designee when due, then Tenant shall pay to
Landlord a late charge equal to five percent (5%) of the overdue amount plus any
attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent
and/or other charges when due hereunder; provided, however, with regard to the
first such failure in any twelve (12) month period, Landlord will waive such
late charge to the extent Tenant cures such failure within five (5) business
days following Tenant's receipt of written notice from Landlord that the same
was not received when due. The late charge shall be deemed Additional Rent and
the right to require it shall be in addition to all of Landlord's other rights
and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. In addition to the
late charge described above, any

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Rent or other amounts owing hereunder which are not paid within ten (10) days
after the date they are due shall bear interest from the date when due until
paid at the "Interest Rate." For purposes of this Lease, the "Interest Rate"
shall be an annual rate equal to the lesser of
(i) the annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical
Release Publication H.15(519), published weekly (or such other comparable index
as Landlord and Tenant shall reasonably agree upon if such rate ceases to be
published), plus four (4) percentage points, and (ii) the highest rate permitted
by applicable law.

ARTICLE 26

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
All covenants and agreements to be kept or performed by Tenant under this Lease
shall be performed by Tenant at Tenant's sole cost and expense and without any
reduction of Rent. If Tenant shall fail to perform any of its obligations under
this Lease, within a reasonable time after such performance is required by the
terms of this Lease, Landlord may, but shall not be obligated to, after
reasonable prior notice to Tenant, make any such payment or perform any such act
on Tenant's part without waiving its right based upon any default of Tenant and
without releasing Tenant from any obligations hereunder. Except as may be
specifically provided to the contrary in this Lease, Tenant shall pay to
Landlord, within fifteen (15) days after delivery by Landlord to Tenant of
statements therefor: (i) sums equal to expenditures reasonably made and
obligations incurred by Landlord in connection with the remedying by Landlord of
Tenant's defaults pursuant to the provisions of this Article 26; (ii) sums equal
to all losses, costs, liabilities, damages and expenses referred to in Article
10 of this Lease; and (iii) sums equal to all expenditures made and obligations
incurred by Landlord in collecting or attempting to collect the Rent or in
enforcing or attempting to enforce any rights of Landlord under this Lease or
pursuant to law, including, without limitation, all legal fees and other amounts
so expended. Tenant's obligations under this Article 26 shall survive the
expiration or sooner termination of the Lease Term.
ARTICLE 27

ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon reasonable notice
to the Tenant to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants, or to the ground or underlying lessors; (iii) post notices of
non-responsibility; or (iv) alter, improve or repair the Premises or the
Building if necessary to comply with current building codes or other applicable
laws, or for structural alterations, repairs or improvements to the Building.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
may enter the Premises at any time to (A) perform services required of Landlord;
(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Any such entries shall be without the abatement of Rent and shall include the
right to take such reasonable steps as required to accomplish the stated
purposes. Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of the above purposes, Landlord shall at all times have a key
with which to unlock all the doors in the Premises, excluding Tenant's vaults,
safes and special security areas designated in advance by Tenant. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises in
the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.

ARTICLE 28

TENANT PARKING

Tenant shall be entitled to rent, on a monthly basis throughout the Lease Term
commencing on the Lease Commencement Date, the amount of unreserved parking
passes set forth in Section 9 of the Summary, all of which parking passes shall
pertain to the Project parking structure, provided that, subject to the terms
hereof, six (6) of such parking passes shall be reserved contiguous spaces
located in the Project's covered parking structure (the "Reserved Parking
Passes"). The location of the Reserved Parking Passes shall be as set forth on
Exhibit G, subject to relocation to reasonably equivalent spaces in connection
with any reconfiguration, modification, or other improvements to the Building or
Project (and not to accommodate another tenant of the Building) to the extent
Landlord requires in its commercially reasonable judgment. Tenant shall pay to
Landlord (or its designee) for the Reserved Parking Passes on a monthly basis at
the rate identified below, and Tenant's unreserved parking passes shall be
without charge for the initial Lease Term only (excepting only any parking taxes
or other charges imposed by governmental authorities in connection with the use
of such parking). The rate for the Reserved Parking Passes shall be $100.00 per
month per space for the first twenty-four (24) months of the initial Lease Term
and shall thereafter be $150.00 per month per space for the remainder of the
initial Lease Term. In addition to any fees that may be charged to Tenant in
connection with its parking of automobiles in the Project parking structure,
Tenant shall be responsible for the full amount of any taxes imposed by any
governmental authority in connection with the renting of such parking passes by
Tenant or the use of the parking facility by Tenant. Tenant's continued right to
use the parking passes is conditioned upon Tenant abiding by all rules and
regulations which are prescribed from time to time for the orderly operation and
use of the parking facility where the parking passes are located, including any
sticker or other identification system established by Landlord, Tenant's
cooperation in seeing that Tenant's employees and visitors also comply with such
rules and regulations and Tenant not being in default under this Lease. Landlord
specifically reserves the right to change the size, configuration, design,
layout and all other aspects of the Project parking facility at any time and
Tenant acknowledges and agrees that Landlord may, without incurring any
liability to Tenant and without any abatement of Rent under this Lease, from
time to time, temporarily close-off or restrict access to the Project parking
facility for purposes of permitting or facilitating any such construction,
alteration or improvements. Landlord may delegate its responsibilities hereunder
to a parking operator in which case such parking operator shall have all the
rights of control attributed hereby to the Landlord. The parking passes rented
by Tenant pursuant to this Article 28 are provided to Tenant solely for use by
Tenant's own personnel and such passes may not be transferred, assigned,
subleased or otherwise alienated by Tenant without Landlord's prior approval.
Tenant may validate visitor parking by such method or methods as the Landlord
may establish, at the validation rate from time to time generally applicable to
visitor parking, provided that such visitor passes shall be free of charge
during the initial Lease Term only (excepting only any parking taxes or other
charges imposed by govemmental authorities in connection with the use of such
parking).

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ARTICLE 29

MISCELLANEOUS PROVISIONS

29.1    Binding Effect. Subject to all other provisions of this Lease, each of
the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.2    No Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.3    Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (l0) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.
29.4    Transfer of Landlord's Interest. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.
29.5    Prohibition Against Recording or Publication. Neither this Lease, nor
any memorandum, affidavit or other writing with respect thereto, shall be
recorded or otherwise published by Tenant or by anyone acting through, under or
on behalf of Tenant.
29.6    Landlord's Title. Landlord's title is and always shall be paramount to
the title of Tenant. Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.
29.7    Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant's designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its sole discretion, may elect.
29.8    Time of Essence. Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.
29.9    Partial Invalidity. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.10    No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto. Tenant agrees that neither Landlord
nor any agent of Landlord has made any representation or warranty with respect
to the physical condition of the Building, the Project, the land upon which the
Building or the Project are located, or the Premises, or the expenses of
operation of the Premises, the Building or the Project, or any other matter or
thing affecting or related to the Premises, except as herein expressly set forth
in the provisions of this Lease.
29.11    Landlord Exculpation. The liability of Landlord or the Landlord Parties
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 Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the net interest
of Landlord in the Building (following payment of any outstanding liens and/or
mortgages, whether attributable to sales or insurance proceeds or otherwise),
including any insurance or rental proceeds which Landlord receives. Neither
Landlord, nor any of the Landlord Parties shall have any personal liability
therefor, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant. The limitations of liability contained in this Section 29 .11 shall
inure to the benefit of Landlord's and the Landlord Parties' present and future
partners, beneficiaries, officers, directors, trustees, shareholders, agents and
employees, and their respective partners, heirs, successors and assigns. Under
no circumstances shall any present or future partner of Landlord (if Landlord is
a partnership), 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 this Lease. Notwithstanding any contrary provision herein,
neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case,
however occurring.
29.12    Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto (including, without limitation, any confidentiality agreement,
letter of intent, or request for proposal, or similar agreement previously
entered into between Landlord and Tenant in anticipation of this Lease) or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. None of the
terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties

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hereto.
29.13    Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.14    Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant's obligations under Articles 5
and 24 of this Lease (collectively, a "Force Majeure"), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party (with the exception of those time periods in Articles
11 and .Ll..) ,such time period shall be extended by the period of any delay in
such party's performance caused by a Force Majeure.
29.15    Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant's right of occupancy of the Premises after any termination of this
Lease.
29.16    Notices. All notices, demands, statements or communications
(collectively, "Notices") given or required to be given by either party to the
other hereunder shall be in writing, shall be (A) delivered by a nationally
recognized overnight courier, or (B) delivered personally. Any such Notice shall
be delivered (i) to Tenant at the appropriate address set forth in Section 10 of
the Summary, or to such other place as Tenant may from time to time designate in
a Notice to Landlord; or (ii) to Landlord at the addresses set forth in Section
11 of the Summary, or to such other firm or to such other place as Landlord may
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given on the date of receipted delivery, of refusal to accept delivery, or when
delivery is first attempted but cannot be made due to a change of address for
which no Notice was given. If Tenant is notified of the identity and address of
Landlord's mortgagee or ground or underlying lessor, Tenant shall give to such
mortgagee or ground or underlying lessor written notice of any default by
Landlord under the terms of this Lease by registered or certified mail, and such
mortgagee or ground or underlying lessor shall be given a reasonable opportunity
to cure such default prior to Tenant's exercising any remedy available to
Tenant. The party delivering Notice shall use commercially reasonable efforts to
provide a courtesy copy of each such Notice to the receiving party via
electronic mail.
29.17    Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and:, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in California.
29.18    Attorneys' Fees. In the event that either Landlord or Tenant should
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
29.19    Governing Law; WAIVER OF TRIAL BY .JURY. This Lease shall be construed
and enforced in accordance with the laws of the State of California. IN ANY
ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I)
THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II)
SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE
INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.20    Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Landlord shall pay the Brokers pursuant to the terms of
separate commission agreements. Each party agrees to indemnify and defend the
other party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments, costs and expenses (including
without limitation reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of any
dealings with any real estate broker or agent, other than the Brokers, occurring
by, through, or under the indemnifying party.
29.21    Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
29.22    Counterparts. This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.23    Confidentialitv. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.

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29.24    Building Renovations. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant except as specifically set forth herein or in the Work
Letter. However, Tenant hereby acknowledges that Landlord is currently
renovating or may during the Lease Term renovate, improve, alter, or modify
(collectively, the "Renovations") the Project, the Building and/or the Premises
including without limitation the parking structure, common areas, systems and
equipment, roof, and structural portions of the same, which Renovations may
include, without limitation, (i) installing sprinklers in the Building common
areas and tenant spaces, (ii) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, seismic conditions, and building safety and security,
and (iii) installing new floor covering, lighting, and wall coverings in the
Building common areas, and in connection with any Renovations, Landlord may,
among other things, erect scaffolding or other necessary structures in the
Building, limit or eliminate access to portions of the Project, including
portions of the common areas, or perform work in the Building, which work may
create noise, dust or leave debris in the Building. Tenant hereby agrees that
such Renovations and Landlord's actions in connection with such Renovations
shall in no way constitute a constructive eviction of Tenant nor entitle Tenant
to any abatement of Rent. Landlord shall have no responsibility or for any
reason be liable to Tenant for any direct or indirect injury to or interference
with Tenant's business arising from the Renovations, nor shall Tenant be
entitled to any compensation or damages from Landlord for loss of the use of the
whole or any part of the Premises or of Tenant's personal property or
improvements resulting from the Renovations or Landlord's actions in connection
with such Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord's actions.
29.25    No Violation. Tenant hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.26    Communications and Computer Lines. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the "Lines") at the Project in or serving the Premises, provided
that {i) Tenant shall obtain Landlord's prior written consent, use at Tenant's
option either Landlord's designated contractor for provision of cabling and
riser management services (or, if Landlord does not have a designated
contractor, then an experienced
and qualified contractor chosen by Tenant that is reasonably acceptable to
Landlord), and comply with all of the other provisions of Articles 7 and 8 of
this Lease, (ii) an acceptable number of spare Lines and space for additional
Lines shall be maintained for existing and future occupants of the Project, as
determined in Landlord's reasonable opinion, (iii) the Lines therefor (including
riser cables) shall be (x) appropriately insulated to prevent excessive
electromagnetic fields or radiation,
(y) surrounded by a protective conduit reasonably acceptable to Landlord, and
(z) identified in accordance with the "Identification Requirements," as that
term is set forth herein-below, (iv) any new or existing Lines servicing the
Premises shall comply with all applicable governmental laws and regulations, (v)
as a condition to permitting the installation of new Lines, Tenant shall remove
existing Lines located in or serving the Premises and repair any damage in
connection with such removal, and (vi) Tenant shall pay all costs in connection
therewith. All Lines shall be clearly marked with adhesive plastic labels (or
plastic tags attached to such Lines with wire) to show Tenant's name, suite
number, telephone number and the name of the person to contact in the case of an
emergency (A) every four feet (4') outside the Premises (specifically including,
but not limited to, the electrical room risers and other Common Areas), and (B)
at the Lines' termination point(s) (collectively, the "Identification
Requirements"). Upon the expiration of the Lease Term, or immediately following
any earlier termination of this Lease, Tenant shall, at Tenant's sole cost and
expense, remove all Lines installed by Tenant, and repair any damage caused by
such removal. In the event that Tenant fails to complete such removal and/or
fails to repair any damage caused by the removal of any Lines, Landlord may do
so and may charge the cost thereof to Tenant. Landlord reserves the right to
require that Tenant remove any Lines located in or serving the Premises which
are installed in violation of these provisions, or which are at any time (1) are
in violation of any Applicable Laws, (2) are inconsistent with then-existing
industry standards (such as the standards promulgated by the National Fire
Protection Association ( e.g., such organization's "2002 National Electrical
Code")), or (3) otherwise represent a dangerous or potentially dangerous
condition.
29.27
Development of the Project.

29.27.1    Subdivision. Landlord reserves the right to further subdivide all or
a portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision.
29.27.2    The Other Improvements. If portions of the Project or property
adjacent to the Project (collectively, the "Other Improvements") are owned by an
entity other than Landlord, Landlord, at its option, may enter into an agreement
with the owner or owners of any or all of the Other Improvements to provide (i)
for reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and
(iv) for the use or improvement of the Other Improvements and/or the Project in
connection with the improvement, construction, and/or excavation of the Other
Improvements and/or the Project. Nothing contained herein shall be deemed or
construed to limit or otherwise affect Landlord's right to convey all or any
portion of the Project or any other of Landlord's rights described in this
Lease.
29.27.3    Construction of Project and Other Improvements. Tenant acknowledges
that portions of the Project and/or the Other Improvements may be under
construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.
29.28    Hazardous Substances. Tenant shall not cause or permit any hazardous
materials to be generated, produced, brought upon, used, stored, treated or
disposed of in or about the Premises or the Project by Tenant, its agents,
employees, contractors, affiliates, sublessees or invitees. However,
notwithstanding the preceding sentence, Landlord agrees that Tenant may use,
store and properly dispose of commonly available household cleaners and
chemicals to maintain the Premises and Tenant's routine office operations (such
as printer toner and copier toner). At any time following Tenant's receipt of a
request from Landlord, Tenant shall promptly complete a "hazardous materials
questionnaire" using the form then­ provided by Landlord.
29.29    No Discrimination. Tenant covenants by and for itself, its heirs,
executors, administrators and assigns, and all

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persons claiming under or through Tenant, and this Lease is made and accepted
upon and subject to the following
conditions: that there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, sex, religion,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any
person claiming under or through Tenant, establish or permit such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy, of tenants, lessees, sublessees, subtenants
or vendees in the Premises.
29.30    Water Sensors. Tenant shall, at Tenant's sole cost and expense, be
responsible for promptly installing web­ enabled wireless water leak sensor
devices designed to alert the Tenant on a twenty-four (24) hour seven (7) day
per week basis if a water leak is occurring in the Premises (which water sensor
device(s) located in the Premises shall be referred to herein as "Water
Sensors"). The Water Sensors shall be installed in any areas in the Premises
where water is utilized (such as sinks, pipes, faucets, water heaters, coffee
machines, ice machines, water dispensers and water fountains), and in locations
that may be designated from time to time by Landlord (the "Sensor Areas"). In
connection with any Alterations affecting or relating to any Sensor Areas,
Landlord may require Water Sensors to be installed or updated in Landlord's sole
and absolute discretion. With respect to the installation of any such Water
Sensors, Tenant shall obtain Landlord's prior written consent, use an
experienced and qualified contractor reasonably designated by Landlord, and
comply with all of the other provisions of Article 8 of this Lease. Tenant
shall, at Tenant's sole cost and expense, pursuant to Article 7 of this Lease
keep any Water Sensors located in the Premises (whether installed by Tenant or
someone else) in good working order, repair and condition at all times during
the Lease Term and comply with all of the other provisions of Article 7 of this
Lease. Notwiithstanding any provision to the contrary contained herein, Landlord
has neither an obligation to monitor, repair or otherwise maintain the Water
Sensors, nor an obligation to respond to any alerts it may receive from the
Water Sensors or which may be generated from the Water Sensors. Upon the
expiration of the Lease Term, or immediately following any earlier termination
of this Lease, Landlord reserves the right to require Tenant, at Tenant's sole
cost and expense, to remove all Water Sensors installed by Tenant, and repair
any damage caused by such removal; provided, however, if the Landlord does not
require the Tenant to remove the Water Sensors as contemplated by the foregoing,
then Tenant shall leave the Water Sensors in place together with all necessary
user information such that the same may be used by a future occupant of the
Premises (e.g., the Water Sensors shall be unblocked and ready for use by a
third-party).
29.31    Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
29.32    Project or Building Name and Signage. Landlord shall have the right at
any time to change the name of the Project or Building and to install, affix and
maintain any and all signs on the exterior and on the interior of the Project or
Building as Landlord may, in Landlord's sole discretion, desire. Tenant shall
not use the name of the Project or Building or use pictures or illustrations of
the Project or Building in advertising or other publicity or for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, without the prior written consent of Landlord.
29.33    Transportation Management. Tenant shall fully comply with all present
or future programs intended to manage parking, transportation or traffic in and
around the Building, and in connection therewith, Tenant shall take responsible
action for the transportation planning and management of all employees located
at the Premises by working directly with Landlord, any governmental
transportation management organization or any other transportation-related
committees or entities.
29.34    LEED Certification. Landlord may, in Landlord's sole and absolute
discretion, elect to apply to obtain or maintain a LEED certification for the
Project (or portion thereof), or other applicable certification in connection
with Landlord's sustainability practices for the Project (as such sustainability
practices are to be determined by Landlord, in its sole and absolute discretion,
from time to time). In the event that Landlord elects to pursue such an
aforementioned certification, Tenant shall, at Tenant's sole cost and expense,
promptly cooperate with the Landlord's efforts in connection therewith and
provide Landlord with any reasonable documentation it may need in order to
obtain or maintain the aforementioned certification (which cooperation may
include, but shall not be limited to, Tenant complying with certain standards
pertaining to the purchase of materials used in connection with any Alterations
or improvements undertaken by the Tenant in the Project, the sharing of
documentation pertaining to any Alterations or improvements undertaken by Tenant
in the Project with Landlord, and the sharing of Tenant's billing information
pertaining to trash removal and recycling related to Tenant's operations in the
Project).
29.35    Utility Billing Information. In the event that the Tenant is permitted
to contract directly for the provision of electricity, gas and/or water services
to the Premises with the third-party provider thereof (all in Landlord's sole
and absolute discretion), Tenant shall promptly, but in no event more than five
(5) business days following its receipt of each and every invoice for such items
from the applicable provider, provide Landlord with a copy of each such invoice.
Tenant acknowledges that pursuant to California Public Resources Code Section
25402.10 and the regulations adopted pursuant thereto (collectively the "Energy
Disclosure Requirements"}, Landlord may be required to disclose information
concerning Tenant's energy usage at the Building to certain third parties,
including, without limitation, prospective purchasers, lenders and tenants of
the Building (the "Tenant Energy Use Disclosure"). Tenant hereby (A) consents to
all such Tenant Energy Use Disclosures, and (B) acknowledges that Landlord shall
not be required to notify Tenant of any Tenant Energy Use Disclosure. Further,
Tenant hereby releases Landlord from any and all losses, costs, damages,
expenses and liabilities relating to, arising out of and/or resulting from any
Tenant Energy Use Disclosure. The terms of this Section 29.35 shall survive the
expiration or earlier termination of this Lease.
29.36    Green Cleaning/Recycling. To the extent a "green cleaning program"
and/or a recycling program is implemented by Landlord in the Building and/or
Project (each in Landlord's sole and absolute discretion), Tenant shall, at
Tenant's sole cost and expense, comply with the provisions of each of the
foregoing programs (e.g., Tenant shall separate waste appropriately so that it
can be efficiently processed by Landlord's particular recycling contractors). To
the extent Tenant fails to comply with any of Landlord's recycling programs
contemplated by the foregoing, Tenant shall be required to pay any contamination
charges related to such non-compliance.
29.37    Open-Ceiling Plan. In the event that the Premises has an "open ceiling
plan", then Landlord and third parties leasing or otherwise using/managing or
servicing space on the floor immediately above the Premises shall have the right
to install, maintain, repair and replace mechanical, electrical and plumbing
fixtures, devices, piping, ductwork and all other improvements through the floor
above the Premises (which may penetrate through the ceiling of the Premises and
be visible within the Premises during the course of construction and upon
completion thereof) (as applicable, the "Penetrating Work"), as Landlord may
determine in Landlord's sole and absolute discretion and with no approval rights
being afforded to Tenant with respect thereto. Moreover, there shall be no
obligation by Landlord or any such third party to enclose or otherwise screen
any of such Penetrating Work from view within the Premises, whether during the
course of construction or upon completion thereof. Since Tenant is anticipated
to be occupying the Premises at the time the Penetrating Work is being
performed, Landlord agrees that it shall (and shall cause third parties to) use
commercially

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reasonable efforts to perform the Penetrating Work in a manner so as to attempt
to minimize interference with Tenant's use of the Premises; provided, however,
such Penetrating Work may be performed during normal business hours, without any
obligation to pay overtime or other premiums. Tenant hereby acknowledges that,
notwithstanding Tenant's occupancy of the Premises during the performance of any
such Penetrating Work, Tenant hereby agrees that the performance of such
Penetrating Work shall in no way constitute a constructive eviction of Tenant
nor entitle Tenant to any abatement of rent. Neither Landlord nor any of the
Landlord Parties or any third parties performing the Penetrating Work shall be
responsible for any direct or indirect injury to or interference with Tenant's
business arising from the performance of such Penetrating Work, nor shall Tenant
be entitled to any compensation or damages from Landlord or any of the Landlord
Parties or any third parties performing the Penetrating Work for loss of the use
of the whole or any part of the Premises or of Tenant's personal property or
improvements resulting from the performance of the Penetrating Work, or for any
inconvenience or annoyance occasioned by the Penetrating Work. In addition,
Tenant hereby agrees to promptly and diligently cooperate with Landlord and any
of the third parties performing the Penetrating Work in order to facilitate the
applicable party's performance of the particular Penetrating Work in an
efficient and timely manner.

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.

"LANDLORD":
KILROY REALTY, L.P.,
a Delaware limited partnership
By:
Kilroy Realty Corporation, a Maryland corporation, General Partner

By: Brian Galligan    _
Its: SVP

By: John T. Fucci
Its: Sr. Vice President Asset Management

"TENANT":
ZOGENIX, INC.,
a Delaware corporation
By: Roger L. Hawley        
Its: CEO

By: Ann D. Rhoads                      
Its: CFO                  

*NOTE:
If Tenant is a corporation incorporated in a state other than California, then
Tenant shall deliver to Landlord evidence in
a form reasonably acceptable to Landlord that the signatory(ies) is (are)
authorized to execute this Lease.

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EXHIBIT A

DEL MAR CORPORATE CENTER
OUTLINE OF PREMISES

[exhibita.jpg]

EXHIBIT A
-1-

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EXHIBIT B

DEL MAR CORPORATE CENTER

WORK LEITER
This Work Letter shall set forth the terms and conditions relating to the
construction of the improvements in the Premises. This Work Letter is
essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All references in this Work Letter to
Articles or Sections of "this Lease" shall mean the relevant portion of Articles
1 through 29 of the Office Lease to which this Work Letter is attached as
Exhibit B and of which this Work Letter forms a part, and all references in this
Work Letter to Sections of "this Work Letter" shall mean the relevant portion of
Sections 1 through Q of this Work Letter.

ARTICLE 1

LANDLORD WORK IMPROVEMENTS
1.1    Base Building as Constructed by Landlord. Landlord has constructed, at
its sole cost and expense, the "Base Building" (as the term is defined below).
For the purposes hereof, the term "Base Building" shall include the structural
portions of the Building, and the public restrooms, elevators, exit stairwells
and the systems and equipment located in the internal core of the Building on
the floor on which the Premises is located.
1.2    Demising Work. Landlord has established or may establish specifications
for certain Building standard components to be used in the construction of the
"Improvements" (as that term is defined below) in the Premises. The quality of
the Improvements shall be materially consistent with the quality of such
Building standards, provided that Landlord may, at Landlord' s option, require
the Improvements to comply with certain Building standards. Landlord may make
changes to said specifications for Building standards from time to time. As part
of the "Improvements" (as that term is defined in Section 2 .1 below), Landlord,
at its sole cost and expense (separate and apart from the "Improvement
Allowance" defined in Section 1.3 below) shall cause the construction or
installation of installation of one (1) new, Building standard demising wall
(e.g., to the roof with insulation, separation of HVAC and utilities [and
associated controls] and other Building-standard elements) separating the
Premises from the remainder of the floor in which the Premises is located and
perform all other work required to separate the Premises from the remainder of
the floor in which the Premises is located (collectively, the "Demising Work")
in the locations depicted on Exhibit A of this Lease, and provide access
controls in the Premises. The cost of the Demising Work shall be at Landlord's
sole cost and expense. Tenant may not change or alter the Demising Work.
1.3    Improvements. Using Building standard materials, components and finishes,
Landlord shall cause the installation and/or construction of the improvements in
the Premises (the "Improvements") pursuant to that certain space plan attached
to this Lease as Exhibit A (the "Space Plan"). Tenant shall make no changes,
additions or modifications to the Improvements or the Space Plan or require the
installation of any "Non-Conforming Improvements" (as that term is defined in
Article 2 of this Work Letter), without the prior written consent of Landlord,
which consent may be withheld in Landlord's sole discretion if such change or
modification would directly or indirectly delay the "Substantial Completion," as
that term is defined in Section 5.1 of this Work Letter of the Improvements or
impose any additional costs. Notwithstanding the foregoing or any contrary
provision of this Lease, all Improvements shall be deemed Landlord's property
under the terms of this Lease. Notwithstanding any provision to the contrary
contained in this Work Letter, in the event that the cost to construct the
Improvements (which costs shall include a coordination fee in an amount equal to
the product of (i) three percent (3%), and (ii) the total costs of the design
and construction of the Improvements (and, if applicable, the Non-Conforming
Improvements) in consideration for Landlord's supervision of the same) will
exceed a total amount equal to Three Hundred Eighty-One Thousand Nine Hundred
Forty-Two and 00/ 100 Dollars ($381,942.00) (i.e., Twenty-Two and 00/100 Dollars
($22.00) per each of the rentable square feet of the Premises) in the aggregate
(the "Improvement Allowance"), then all such excess costs shall be paid to
Landlord by Tenant in advance within five (5) days following Tenant's receipt of
a request therefor, provided that Tenant may apply up to one (1) month of Base
Rent Abatement (the "Additional Improvement Allowance") (i.e., $73,784.50) for
the cost of any such excess Improvements, computer and telecommunication
cabling, and/or signage. All such funds provided by Tenant shall be disbursed by
Landlord and exhausted prior to disbursement of the Improvement Allowance.
Notwithstanding any provision to the contrary contained in this Lease or this
Work Letter, in no event shall the Landlord be obligated to pay for any costs or
expenses associated with the purchase, installation or maintenance of any
furniture (including, but not limited to, the cost of any reception desks,
credenzas or chairs (whether identified on the Space Plan or not)), provided
that as part of the "Improvements" Landlord's contractor will temporarily
relocate Tenant's furniture to facilitate the installation of carpeting and
painting, but shall not be required to move fixtures, equipment, art, cabling,
audio/visual equipment, access controls, security systems and equipment and
office signage related to Tenant's occupancy of the Premises. In addition, in
the event that the Improvements cost less than the Improvement Allowance (the
"Unused Improvement Allowance"), Tenant may elect, by written notice delivered
to Landlord prior to Substantial Completion, to apply up to Thirty-Four Thousand
Seven Hundred Twenty-Two and 00/100 Dollars ($34,722.00) of any Unused
Improvement Allowance toward the cost of purchasing and installing computer and
telecommunication cabling, and signage (subject to Section 23 of this Lease),
with, in the event the Improvements cost less than the allowance, any remaining
portion reverting to Landlord.

EXHIBIT B
-1-

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ARTICLE 2

OTHER IMPROVEMENTS; IMPROVEMENTS CHANGE

As more particularly set forth in Article I above and subject to all of the
other terms and conditions of this Work Letter, Landlord shall, at Landlord's
sole cost and expense, be responsible for the construction of the Building
standard Improvements identified on the Space Plan and any otherwise
"Non-Conforming Improvements" (as defined below) which Landlord agrees to
include in its construction of the Building-standard Improvements (the
"Additional Improvements"). Notwithstanding anything to the contrary contained
herein including, without limitation, the items identified in the Final Working
Drawings (as that term is defined in Section 3.3, below), Tenant shall be
responsible for the cost of all items not identified on the Space Plan and/or
any items requiring other than Building standard materials, components or
finishes (collectively, the "Non-Conforming Improvements"). In the event Tenant
desires such Non-Conforming Improvements, exclusive of any Additional
Improvements, Tenant shall deliver written notice (the "Change Notice") of the
same to Landlord, setting forth in detail the Non-Conforming Improvements (the
"Improvements Change"). Landlord shall, following receipt of a Change Notice
related to an Improvements Change, either (i) approve the Improvements Change,
or (ii) disapprove the Improvements Change. In the event that Improvements
Change is approved, and incorporated in the Final Working Drawings or the
Improvements, any additional costs which arise in connection with such
Improvements Change, and which are in excess of the Improvement Allowance and
Additional Improvement Allowance, shall be paid by Tenant to Landlord in cash,
in advance, upon Landlord's request (including but not limited to all costs
incurred by Landlord in connection with its review of the Change Notice and any
related documents) (all such costs shall collectively be referred to as the
"Change Amount"). Any such amounts required to be paid by Tenant shall be
disbursed by Landlord prior to any Landlord provided funds for the costs of
construction of the Improvements. In the event Tenant fails to pay the Change
Amount, then Landlord may, at its option, cease work in the Premises until such
time as Landlord receives payment of such portion of the Change Amount (and such
failure to deliver shall be treated as a Tenant Delay, as that term is defined
in Section 5.2 below).

ARTICLE 3

CONSTRUCTION DRAWINGS

3.1    Selection of Architect/Construction Drawings. To the extent deemed
reasonably necessary by Landlord, Landlord shall retain Miller Design (the
"Architect") to prepare the "Construction Drawings," as that term is defined in
this Section 3.1. To the extent deemed reasonably necessary by Landlord,
Landlord shall, in Landlord's sole and absolute discretion, retain the
engineering consultants designated by Landlord (the "Engineers") to prepare all
plans and engineering working drawings relating to the structural, mechanical,
electrical, plumbing, HVAC, life safety, and sprinkler work of the Improvements.
The plans and drawings to be prepared by Architect and the Engineers hereunder
shall be known collectively as the "Construction Drawings." Landlord's review of
the Construction Drawings as set forth in this Section 3, shall be for its sole
purpose and shall not imply Landlord's revie .v of the same, or obligate
Landlord to review the same, for quality, design, Code compliance or other like
matters.
3.2
Intentionally Omitted.

3.3    Final Working Drawings. Within five (5) days following the full execution
and delivery of this Lease by Landlord and Tenant, Tenant shall cooperate and
coordinate with the Architect and the Engineers in order to allow the Architect
and Engineers to complete the architectural and engineering drawings for the
Premises based on the Space Plan, and which drawings shall be consistent with,
and a logical extension of, the Space Plan. The final architectural working
drawings shall be in a form to allow subcontractors to bid on the work and to
obtain all applicable permits (collectively, the "Final Working Drawings").
3.4    Permits. The Final Working Drawings shall be approved by Landlord (the
"Approved Working Drawings") and submitted to the City of San Diego not later
than June 30, 2014 and prior to the commencement of the construction of the
Improvements. Landlord shall submit the Approved Working Drawings to the
appropriate municipal authorities for all applicable building and other permits
necessary to allow "Contractor," as that term is defined in Section 4.1, below,
to commence and fully complete the construction of the Improvements (the
"Permits") No changes, modifications or alterations in the Approved Working
Drawings may be made without the prior written consent of Landlord, provided
that Landlord may withhold its consent, in its sole discretion, to any change in
the Approved Working Drawings if such change would directly or indirectly delay
the Substantial Completion of the Premises, or otherwise materially increase the
costs of the Improvements (unless Tenant agrees to bear such increased cost).
Any such foregoing cost increases shall also be deemed a component of the Change
Amount.
3.5    Electronic Approvals. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter, Landlord may, in Landlord's sole and
absolute discretion, transmit or otherwise deliver any of the approvals required
under this Work Letter via electronic mail to Tenant's representative identified
in Section 5.1of this Work Letter, or by any of the other means identified in
Section 29 .16 of this Lease.

ARTICLE 4

TENANT'S AGENTS

4.1
Contractor. A contractor designated by Landlord ("Contractor") shall construct
the Improvements.

4.2
Intentionally Omitted.

4.3
Construction of Improvements by Contractor under the Supervision of Landlord.

4.3.l Change Amount. Within ten (10) days following a demand therefor from
Landlord, Tenant shall deliver to Landlord cash in the amount of the Change
Amount. The Change Amount shall be disbursed by Landlord towards the costs of
the Improvements, as reasonably determined by Landlord. In the event that any
revisions, changes, or substitutions shall be made to the Construction Drawings
or the Improvements, any additional costs which arise in connection with such
revisions, changes or substitutions or any other additional costs shall be paid
by Tenant to Landlord immediately upon Landlord's request as an addition to the
Change Amount. In addition, if any Non-Conforming Improvements shall require
alterations in the Base Building (as contrasted with the Improvements), and if
Landlord in its

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sole and exclusive discretion agrees to any such alterations, and notifies
Tenant of the need and cost for such alterations, then Tenant shall pay the cost
of such required changes in advance upon receipt of notice thereof. Tenant shall
pay all direct architectural and/or engineering fees in connection therewith,
plus eight percent (8%) of such direct costs for Landlord's servicing and
overhead. In the event that Tenant fails to deliver the Change Amount as
provided in this Section 4.3 .1, then Landlord may, at its option, cease work in
the Premises until such time as Landlord receives payment of the Change Amount
(and such failure to deliver shall be treated as a Tenant delay in accordance
with the terms of Section 5.2 below).
4.3.2    Landlord's Retention of Contractor. Landlord shall independently retain
Contractor to construct the Improvements in accordance with the Approved Working
Drawings and Landlord shall super\'ise the construction by Contractor.
4.3.3    Contractor's Warranties and Guaranties. Landlord hereby assigns to
Tenant all warranties and guaranties by the Contractor relating to the
Improvements, and Tenant hereby waives all claims against Landlord relating to
or arising out of the design and construction of the Improvements and/or
Non-Conforming Improvements.
4.4 Tenant's Agents. Tenant hereby protects, defends, indemnifies and holds
Landlord harmless for any loss, claims, damages or delays arising from the
actions of Tenant's space planner1architect and/or any separate contractors,
subcontractors or consultants on the Premises or in the Building.

ARTICLE 5

COMPLETION OF THE IMPROVEMENTS;

LEASE COMMEN CEMENT DATE

5.1    Ready for Occupancy. The Premises shall be deemed "Ready for Occupancy"
upon the "Substantial Completion" of the Improvements, and Landlord's receipt of
a certificate of occupancy, a temporary certificate of occupancy or its
equivalent for the Premises. For purposes of this Lease, "Substantial
Completion" of the Improvements shall occur upon the completion of construction
of the Improvements in the Premises pursuant to the Approved Working Drawings,
with the exception of any punch list items, and any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant or
under the supervision of Contractor.
5.2    Delay of the Substantial Completion of the Premises. Except as provided
in this Section 5.2, the Lease Commencement Date shall occur as set forth in
Article 2 of the Lease and Section 5.1, above. If there shall be a delay or
there are delays in the Substantial Completion of the Improvements or in the
occurrence of any of the other conditions precedent to the Lease Commencement
Date, as set forth in Article 2 of the Lease, as a direct, indirect, partial, or
total result of (each, a "Tenant Delay"):
5.2.1    Intentionally omitted;
5.2.2
Tenant's failure to timely approve any matter requiring Tenant's approval;

5.2.3
A breach by Tenant of the terms of this Work Letter or the Lease;

5.2.4
Tenant's request for changes in the Improvements;

5.2.5
Any Non-Conforming Improvements;

5.2.6    Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Improvements, as set forth in
the Lease, or which are different from, or not included in, Landlord's Building
standards;

5.2.7    Any failure by Tenant to pay for in cash in advance any costs for
Non-Conforming Improvements (including, without limitation, the Change Amount);

5.2.8
Changes to the base, shell and core work of the Building required by the
Non-Conforming Improvements; or

5.2.9
Any other acts or omissions of Tenant, or its agents, or employees;

then, notwithstanding anything to the contrary set forth in the Lease or this
Work Letter and regardless of the actual date of the Lease Commencement Date,
the Lease Commencement Date shall be deemed to be the date the Substantial
Completion of the Improvements would have occurred if no Tenant delay or delays,
as set forth above, had occurred.

ARTICLE 6

MISCELLANEOUS

6.1    Intentionally Omitted.
6.2    Tenant's Representative. Tenant has designated Beth Miller of Beth Miller
Design as its sole representative with respect to the matters set forth in this
Work Letter (whose e-mail address for the purposes of this Work Letter is
bmiller@mdesign-interiors.com), who, until further notice to Landlord, shall
have full authority and responsibility to act on behalf of the Tenant as
required in this Work Letter.
6.3    Landlord's Representative. Landlord has designated Jake Brehm as "Project
Manager" (whose e-mail address for the purposes of this Work Letter is
jbrehm@kilrovrealtv.com ), who shall be responsible for the implementation of
all Improvements to be performed by Landlord in the Premises. With regard to all
matters involving such Improvements, Tenant shall communicate with the Project
Manager rather than with the Contractor. Landlord shall not be responsible for
any statement, representation or agreement made between Tenant and the
Contractor or any subcontractor. It is hereby expressly acknowledged by Tenant
that such Contra.ctor is not Landlord's agent

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and has no authority whatsoever to enter into agreements on Landlord's behalf or
otherwise bind Landlord. The Project Manager will furnish Tenant with notices of
substantial completion, cost estimates for above standard Improvements,
Landlord's approvals or disapprovals of all documents to be prepared pursuant to
this Work Letter and changes thereto.
6.4    Tenant's Agents. Tenant shall use commercially reasonable efforts to
ensure that any and all contractors, subcontractors, laborers, materialmen and
suppliers maintain labor harmony with the workforce or trades engaged in
performing other work, labor or services in or about the Premises, Building or
the Common Areas.
6.5    Time of the Essence in this Work Letter. Unless otherwise indicated, all
references herein to a "number of days" shall mean and refer to calendar days.
In all instances where Tenant is required to approve or deliver an item, if no
written notice of approval is given or the item is not delivered within the
stated time period, at Landlord's sole option, at the end of such period the
item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.
6.6    Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter, if any default by Tenant under the
Lease or this Work Letter (including, without limitation, any failure by Tenant
to fund in advance the costs for any Non-Conforming Improvements) occurs, then
(i) in addition to all other rights and remedies granted to Landlord pursuant to
the Lease, Landlord shall have the right to cause the cessation of construction
of the Improvements (in which case, Tenant shall be responsible for any delay in
the Substantial Completion of the Improvements and any costs occasioned
thereby), and (ii) all other obligations of Landlord under the terms of the
Lease and this Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of this Lease.
6.2    Tenant's Representative. Tenant has designated Beth Miller of Beth Miller
Design as its sole representative with respect to the matters set forth in this
Work Letter (whose e-mail address for the purposes of this Work Letter is
bmiller@mdesign-interiors.com), who, until further notice to Landlord, shall
have full authority and responsibility to act on behalf of the Tenant as
required in this Work Letter.
6.3    Landlord's Representative. Landlord has designated Jake Brehm as "Project
Manager" (whose e-mail address for the purposes of this Work Letter is
jbrehm@kilrovrealtv.com ), who shall be responsible for the implementation of
all Improvements to be performed by Landlord in the Premises. With regard to all
matters involving such Improvements, Tenant shall communicate with the Project
Manager rather than with the Contractor. Landlord shall not be responsible for
any statement, representation or agreement made between Tenant and the
Contractor or any subcontractor. It is hereby expressly acknowledged by Tenant
that such Contra.ctor is not Landlord's agent and has no authority whatsoever to
enter into agreements on Landlord's behalf or otherwise bind Landlord. The
Project Manager will furnish Tenant with notices of substantial completion, cost
estimates for above standard Improvements, Landlord's approvals or disapprovals
of all documents to be prepared pursuant to this Work Letter and changes
thereto.
6.4    Tenant's Agents. Tenant shall use commercially reasonable efforts to
ensure that any and all contractors, subcontractors, laborers, materialmen and
suppliers maintain labor harmony with the workforce or trades engaged in
performing other work, labor or services in or about the Premises, Building or
the Common Areas.
6.5    Time of the Essence in this Work Letter. Unless otherwise indicated, all
references herein to a "number of days" shall mean and refer to calendar days.
In all instances where Tenant is required to approve or deliver an item, if no
written notice of approval is given or the item is not delivered within the
stated time period, at Landlord's sole option, at the end of such period the
item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.
6.6    Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in the Lease or this Work Letter, if any default by Tenant under the
Lease or this Work Letter (including, without limitation, any failure by Tenant
to fund in advance the costs for any Non-Conforming Improvements) occurs, then
(i) in addition to all other rights and remedies granted to Landlord pursuant to
the Lease, Landlord shall have the right to cause the cessation of construction
of the Improvements (in which case, Tenant shall be responsible for any delay in
the Substantial Completion of the Improvements and any costs occasioned
thereby), and (ii) all other obligations of Landlord under the terms of the
Lease and this Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of this Lease.

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EXHIBIT C

DEL MAR CORPORATE CENTER

OPERATING EXPENSE DEFINITIONS AND CALCULATION PROCEDURES
1.1    Definitions of Key Terms Relating to Additional Rent. As used in this
Exhibit C, the following terms shall have the meanings hereinafter set forth:
1.1.1    "Base Year" shall mean the period set forth in Section 5 of the
Summary.
1.1.2    "Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses"
1.1.3    "Expense Year" shall mean each calendar year in which any portion of
the Lease Term falls, through and including the calendar year in which the Lease
Term expires, provided that Landlord, upon notice to Tenant, may change the
Expense Year once in any five (5) year period to any other twelve (12)
consecutive month period, and, in the event of any such change, Tenant's Share
of Direct Expenses shall be equitably adjusted for any Expense Year involved in
any such change.
1.1.4    "Operating Expenses" shall mean all expenses, costs and amounts of
every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, renovation, restoration or operation of the
Project, or any portion thereof, in accordance with sound real estate management
and accounting practices, consistently applied. Without limiting the generality
of the foregoing, Operating Expenses shall specifically include any and all of
the following: (i) the cost of supplying all utilities (but excluding the cost
of electricity, water and sewer services consumed in the Premises and the
premises of other tenants of the Building and any other buildings in the Project
(since Tenant is separately paying for the cost of electricity, water and sewer
services pursuant to Section 6.1.2 of the Lease)), the cost of operating,
repairing, replacing, maintaining, renovating and restoring the utility,
telephone, mechanical, sanitary, storm drainage, and elevator systems, and the
cost of maintenance and service contracts in connection therewith; (ii) the cost
of licenses, certificates, permits and inspections and the cost of contesting
any governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with a governmentally mandated transportation system
management program or similar program; (iii) the cost of all insurance carried
by Landlord in connection with the Project; (iv) the cost of landscaping,
relamping, and all supplies, tools, equipment and materials used in the
operation, repair and maintenance of the Project, or any portion thereof; (v)
costs incurred in connection with the parking areas servicing the Project; (vi)
fees and other costs, including management fees (which management fees shall not
exceed three percent (3%) of gross rentals from the Project per annum),
consulting fees, legal fees and accounting fees, of all contractors and
consultants in connection with the management, operation, maintenance,
replacement, renovation. repair and restoration of the Project; (vii) subject to
item 1.1.4.13, payments under any equipment rental agreements and the fair
rental value of any management office space; (\iii) subject to item 1.1.4.5,
wages, salaries and other compensation and benefits, including taxes levied
thereon, of all persons (other than persons generally considered to be higher in
rank than the position of "Senior Asset Manager") engaged in the operation,
maintenance and security of the Project; (ix) costs under any instrument
pertaining to the sharing of costs by the Project; (x) operation, repair,
maintenance, renovation , replacement and restoration of all systems and
equipment and components thereof of the Project; (xi) the cost of janitorial,
alarm, security and other services, replacement, renovation, restoration and
repair of wall and floor coverings, ceiling tiles and fixtures in common areas,
maintenance, replacement, renovation, repair and restoration of curbs and
walkways, repair to roofs and re-roofing; (xii) amortization of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Project, or any portion thereof (which amortization
calculation shall include interest at the "Interest Rate," as that term is set
forth in Article 25 of this Lease); (xiii) the cost of capital improvements or
other costs incurred in connection with the Project (A) to the extent the same
are reasonably anticipated to effect economies in the operation or maintenance
of the Project, or any portion thereof,
(B) that are required to comply with conservation programs, (C) which are
replacements or modifications of nonstructural items located in the Common Areas
required to keep the Common Areas in good order or condition, (D) that are
required under any governmental law or regulation by a federal, state or local
governmental agency, except for capital repairs, replacements or other
improvements to remedy a condition existing prior to the Lease Commencement Date
which an applicable governmental authority, if it had knowledge of such
condition prior to the Lease Commencement Date, would have then required to be
remedied pursuant to then-current governmental laws or regulations in their form
existing as of the Lease Commencement Date and pursuant to the then-current
interpretation of such governmental laws or regulations by the applicable
governmental authority as of the Lease Commencement Date, or (E) that relate to
the safety or security of the Project; provided, however, that any capital
expenditure shall be amortized with interest at the Interest Rate over the
shorter of (X) seven (7) years, (Y) its useful life as Landlord shall reasonably
determine in accordance with sound real estate management and accounting
practices consistently applied or (Z) with respect to those items included under
item (A) above, their recovery/payback period as Landlord shall reasonably
determine in accordance with sound real estate management and accounting
practices, consistently applied; (xiv) costs, fees, charges or assessments
imposed by, or resulting from any mandate imposed on Landlord by, any federal,
state or local government for fire and police protection, trash removal,
community services, or other services which do not constitute "Tax Expenses" as
that term is defined in Section 1.1.5.l, below; (xv) payments under any
easement, license, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building and/or the
Project, and (xvi) costs of any additional services not provided to the Building
and/or the Project as of the Lease Commencement Date but which are thereafter
provided by Landlord in connection with its prudent management of the Building
and/or the Project. Notwithstanding the foregoing, for purposes of this Lease,
Operating Expenses shall not, however, include:

1.1.4.1. costs, including marketing costs, legal fees, space planners' fees,
advertising and promotional expenses, and brokerage fees incurred in connection
with the original construction or development, or original or future leasing of
the Project, and costs, including permit, license and inspection costs, incurred
with respect to the installation of improvements made for new tenants initially
occupying space in the Project after the Lease Commencement Date or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space for tenants or other occupants of the Project (excluding, however, such
costs relating to any common areas of the Project or parking facilities);except
as set forth in items (xi), (xii), (xiii), and (xiv) above, depreciation.
interest and principal payments on mortgages and other debt costs, if any,
penalties and interest;

1.1.4.2    costs for which the Landlord is reimbursed by any tenant or occupant
of the Project or by insurance by its carrier or any tenant's carrier or by
anyone else (except to the extent of deductibles), and electric power costs for
which any tenant directly contracts with the local public service company;

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1.1.4.3
any bad debt loss, rent loss, or reserves for bad debts or rent loss;

1.1.4.4    costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord, as the same are
distinguished from the costs of operation of the Project (which shall
specifically include, but not be limited to, accounting costs associated with
the operation of the Project). Costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord include
costs of partnership accounting and legal matters, costs of defending any
lawsuits with any mortgagee (except as the actions of the Tenant may be in
issue), costs of selling, syndicating, financing, mortgaging or hypothecating
any of the Landlord's interest in the Project, and costs incurred in connection
with any disputes between Landlord and its employees, between Landlord and
Project management, or between Landlord and other tenants or occupants, and
Landlord's general corporate overhead and general and administrative expenses;

1.1.4.5    the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-a-vis time spent on matters unrelated to operating and managing the
Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of Senior Asset Manager;

1.1.4.6
amount paid as ground rental for the Project by the Landlord;

1.1.4.7    overhead and profit increment paid to the Landlord or to subsidiaries
or affiliates of the Landlord for services in the Project to the extent the same
exceeds the costs of such services rendered by qualified, first-class
unaffiliated third parties on a competitive basis;

1.1.4.8    any compensation paid to clerks, attendants or other persons in
commercial concessions operated by the Landlord, provided that any compensation
paid to any concierge or parking attendants at the Project shall be includable
as an Operating Expense;

1.1.4.9    rentals and other related expenses incurred in leasing air
conditioning systems, elevators or other equipment which if purchased the cost
of which would be excluded from Operating Expenses as a capital cost, except
equipment not affixed to the Project which is used in providing janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project;

1.1.4.10    all items and services for which Tenant or any other tenant in the
Project reimburses Landlord or which Landlord provides selectively to one or
more tenants (other than Tenant) without reimbursement;

1.1.4.11    costs, other than those incurred in ordinary maintenance and repair,
for sculpture, paintings, fountains or other objects of art;

1.1.4.12
any costs expressly excluded from Operating Expenses elsewhere in this Lease;

1.1.4.13    rent for any office space occupied by Project management personnel
to the extent the size or rental rate of such office space exceeds the size or
fair market rental value of office space occupied by management personnel of the
Comparable Buildings, with adjustment where appropriate for the size of the
applicable project;

1.1.4.14    costs to the extent arising from the gross negligence or willful
misconduct of Landlord or its agents, employees, vendors, contractors, or
providers of materials or services; and

1.1.4.15    costs incurred to comply with laws relating to the removal of
hazardous material (as defined under applicable law) which was in existence in
the Building or on the Project prior to the Lease Commencement Date, and was of
such a nature that a federal, State or municipal governmental authority, if it
had then had knowledge of the presence of such hazardous material, in the state,
and under the conditions that it then existed in the Building or on the Project,
would have then required the removal of such hazardous material or other
remedial or containment action with respect thereto, but only to the extent
those laws were then being actively enforced by the applicable government
authority; and costs incurred to remove, remedy, contain, or treat hazardous
material, which hazardous material is brought into the Building or onto the
Project after the date hereof by Landlord or any other tenant of the Project and
is of such a nature, at that time, that a federal, State or municipal
governmental authority, if it had then had knowledge of the presence of such
hazardous material, in the state, and under the conditions, that it then exists
in the Building or on the Project, would have then required the removal of such
hazardous material or other remedial or containment action with respect thereto,
but only to the extent those laws were then being actively enforced by the
applicable government authority.
If Landlord is not furnishing any particular work or service (the cost of which,
if performed by Landlord, would be included in Operating Expenses) to a tenant
who has undertaken to perform such work or service in lieu of the performance
thereof by Landlord, Operating Expenses shall be deemed to be increased by an
amount equal to the additional Operating Expenses which would reasonably have
been incurred during such period by Landlord if it had at its own expense
furnished such work or service to such tenant. If the Project is not at least
ninety-five percent (95%) occupied during all or a portion of the Base Year or
any Expense Year, Landlord will make an appropriate adjustment to the components
of Operating Expenses for such year to determine the amount of Operating
Expenses that would have been incurred had the Project been ninety-five percent
(95%) occupied; and the amount so determined shall be deemed to have been the
amount of Operating Expenses for such base year and any expense year(s).
Operating Expenses for the Base Year shall not include

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market-wide cost increases (including utility rate increases) due to
extraordinary circumstances, including, but not limited to, Force Majeure,
boycotts, strikes, conservation surcharges, embargoes or shortages, or amortized
costs. In no event shall each of the components of Direct Expenses for any
Expense Year related to utility costs, Tax Expenses, Project services costs or
Project insurance costs be less than each of the corresponding components of
Direct Expenses related to such utility costs, Tax Expenses, Project services
costs and Project insurance costs in the Base Year. Landlord shall not (i) make
a profit by charging items to Operating Expenses that are otherwise also charged
separately to others and (ii) subject to Landlord's right to adjust the
components of Operating Expenses described above in this paragraph, collect
Operating Expenses from Tenant and all other tenants in the Building in an
amount in excess of what Landlord incurs for the items included in Operating
Expenses.
1.1.5
Taxes.

1.1.5.l "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such goverrunental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof (including, without limitation,
the land upon which the Building and the parking structure serving the Building
are located).
1.1.5.2    Tax Expenses shall include, without limitation: {i) Any tax on the
rent, right to rent or other income from the Project, or any portion thereof, or
as against the business of leasing the Project, or any portion thereof;
(ii)    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 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
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, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution 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; {iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax
with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof, (iv) Any
assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Premises; and (v) all of the real estate taxes and assessments imposed upon
or with respect to the Building and all of the real estate taxes and assessments
imposed on the land and improvements comprising the Project.
1.1.5.3    Any costs and expenses (including, without limitation, reasonable
attorneys' fees) incurred in attempting to protest, reduce or minimize Tax
Expenses shall be included in Tax Expenses in the Expense Year such expenses are
paid. Except as set forth in Section 1.1.5.4, below, refunds of Tax Expenses
shall be credited against Tax Expenses and refunded to Tenant regardless of when
received, based on the Expense Year to which the refund is applicable, provided
that in no event shall the amount to be refunded to Tenant for any such Expense
Year exceed the total amount paid by Tenant as an increase in Tax Expenses under
this Exhibit C for such Expense Year. If Tax Expenses for any period during the
Lease Term or any extension thereof are increased after payment thereof for any
reason, including, without limitation, error or reassessment by applicable
governmental or municipal authorities, Tenant shall pay Landlord upon demand
Tenant's Share of any such increased Tax Expenses included by Landlord as
Building Tax Expenses pursuant to the TCCs of this Lease. Notwithstanding
anything to the contrary contained in this Section 1.1.5.3 {except as set forth
in Section 1.1.5.2, above), there shall be excluded from Tax Expenses (i) all
excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes,
and other taxes to the extent applicable to Landlord's general or net income (as
opposed to rents, receipts or income attributable to operations at the Project),
(ii) any items included as Operating Expenses, and {iii) any items paid by
Tenant under Section 4.2 of the Lease. Notwithstanding anything to the contrary
set forth in this Lease, only Landlord may institute proceedings to reduce Tax
Expenses and the filing of any such proceeding by Tenant without Landlord's
consent shall constitute an event of default by Tenant under this Lease.
Notwithstanding the foregoing, Landlord shall not be obligated to file any
application or institute any proceeding seeking a reduction in Tax Expenses.
1.1.6
"Tenant's Share" shall mean the percentage set forth in Section 6 of the
Summary.

1.2    Allocation of Direct Expenses. The parties acknowledge that the Building
is a part of a multi-building project and that the costs and expenses incurred
in connection with the Project (i.e. the Direct Expenses) should be shared
between the tenants of the Building and the tenants of the other buildings in
the Project. Accordingly, as set forth in Section 1.1 above, Direct Expenses
{which consists of Operating Expenses and Tax Expenses) are determined annually
for the Project as a whole, and a portion of the Direct Expenses, which portion
shall be determined by Landlord on an equitable basis, shall be allocated to the
tenants of the Building (as opposed to the tenants of any other buildings in the
Project) and such portion shall be the Direct Expenses for purposes of this
Lease. Such portion of Direct Expenses allocated to the tenants of the Building
shall include all Direct Expenses attributable solely to the Building and an
equitable portion of the Direct Expenses attributable to the Project as a whole.
1.3    Calculation and Payment of Additional Rent. If for any Expense Year
ending or commencing within the Lease Term, Tenant's Share of Direct Expenses
for such Expense Year exceeds Tenant's Share of Direct Expenses applicable to
the Base Year, then Tenant shall pay to Landlord, in the manner set forth in
Section 1.3.1, below, and as Additional Rent, an amount equal to the excess (the
"Excess").
1.3.l Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall
give to Tenant following the end of each Expense Year, a statement (the
"Statement") which shall state in general major categories the Direct Expenses
incurred or accrued for the particular Expense Year, and which shall indicate
the amount of the Excess. Landlord shall use commercially reasonable efforts to
deliver such Statement co Tenant on or before May 1 following the end of the
Expense Year to which such Statement relates. Upon receipt of the Statement for
each Expense Year commencing or ending during the Lease Term, if an Excess is
present, Tenant shall pay, within thirty

EXHIBIT C
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(30) days after receipt of the Statement, the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Excess," as that term is defined in Section 1.3.2, below, and if
Tenant paid more as Estimated Excess than the actual Excess, Tenant shall
receive a credit in the amount of Tenant's overpayment against Rent next due
under this Lease. The failure of Landlord to timely furnish the Statement for
any Expense Year shall not prejudice Landlord or Tenant from enforcing its
rights under this Exhibit C. Even though the Lease Term has expired and Tenant
has vacated the Premises, when the final determination is made of Tenant's Share
of Direct Expenses for the Expense Year in which this Lease terminates, if an
Excess is present, Tenant shall, within thirty (30) days after receipt of the
Statement, pay to Landlord such amount, and if Tenant paid more as Estimated
Excess than the actual Excess, Landlord shf.11, within thirty (30) days, deliver
a check payable to Tenant in the amount of the overpayment. The provisions of
this Section 1.3.1 shall survive the expiration or earlier termination of the
Lease Term. Notwithstanding the immediately preceding sentence, Tenant shall not
be responsible for Tenant's Share of any Direct Expenses attributable to any
Expense Year which are first billed to Tenant more than one (1) calendar years
after the Lease Expiration Date, provided that in any event Tenant shall be
responsible for Tenant's Share of Direct Expenses which (x) were levied by any
governmental authority or by any public utility companies, and (y) Landlord had
not previously received an invoice therefor and which are currently due and
owing (i.e., costs invoiced for the first time regardless of the date when the
work or service relating to this Lease was performed), at any time following the
Lease Expiration Date which are attributable to any Expense Year.
1.3.2 Statement of Estimated Direct Expenses. In addition, Landlord shall
endeavor to give Tenant a yearly expense estimate statement (the "Estimate
Statement") which shall set forth in general major categories Landlord's
reasonable estimate (the "Estimate") of what the total amount of Direct Expenses
for the then-current Expense Year shall be and the estimated excess (the
"Estimated Excess") as calculated by comparing the Direct Expenses for such
Expense Year, which shall be based upon the Estimate, to the amount of Direct
Expenses for the Base Year. The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Additional Rent under this Exhibit C, nor
shall Landlord be prohibited from revising any Estimate Statement or Estimated
Excess theretofore delivered to the extent necessary. Thereafter, Tenant shall
pay, within thirty (30) days after receipt of the Estimate Statement, a fraction
of the Estimated Excess for the then-current Expense Year (reduced by any
amounts paid pursuant to the second to last sentence of this Section 1.3.2).
Such fraction shall have as its numerator the number of months which have
elapsed in such current Expense Year, including the month of such payment, and
twelve (12) as its denominator. Until a new Estimate Statement is furnished
(which Landlord shall have the right to deliver to Tenant at any time), Tenant
shall pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth (1112) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant. Throughout the Lease Term
Landlord shall maintain records with respect to Direct Expenses in accordance
with sound real estate management and accounting practices, consistently
applied.

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EXHIBIT D

DEL MAR CORPORATE CENTER

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1.    Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
2.    All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
3.    Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for comparable
buildings in the Del Mar Heights, California area. Tenant, its employees and
agents must be sure that the doors to the Building are securely closed and
locked when leaving the Premises if it is after the normal hours of business for
the Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other communication, Landlord reserves the right to prevent access to the
Building or the Project during the continuance thereof by any means it deems
appropriate for the safety and protection of life and property.
4.    No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord. All moving activity into or out of
the Building shall be scheduled with Landlord and done only at such time and in
such manner as Landlord designates. Landlord shall have the right to prescribe
the weight, size and position of all safes and other heavy property brought into
the Building and also the times and manner of moving the same in and out of the
Building. Safes and other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage to
any such safe or property in any case. Any damage to any part of the Building,
its contents, occupants or visitors by moving or maintaining any such safe or
other property shall be the sole responsibility and expense of Tenant.
5.    No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
6.    The requirements of Tenant will be attended to only upon application at
the management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
7.    No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
8.    The toilet rooms, urinals, wash bowls and other apparatus shall 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 the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
9.    Tenant shall not overload the floor of the Premises, nor mark, drive nails
or screws, or drill into the partitions, woodwork or drywall (except as
reasonably required to hang cabinets, whiteboards, art, graphs) or in any way
deface the Premises or any part thereof without Landlord's prior written
consent.
10.    Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11.    Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline, explosive material, corrosive material, material
capable of emitting toxic fumes, or other inflammable or combustible fluid
chemical, substitute or material. Tenant shall provide material safety data
sheets for any Hazardous Material used or kept on the Premises.
12.    Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.
13.    Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.

EXHIBIT D
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14.    Tenant shall not bring into or keep within the Project, the Building or
the Premises any firearms, animals, birds, aquariums, or, except in areas
designated by Landlord, bicycles or other vehicles.
15.    No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
16.    The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
17.    Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
18.    Tenant, its employees and agents shall not loiter in or on the entrances,
corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules
or any Common Areas for the purpose of smoking tobacco products or for any other
purpose, nor in any way obstruct such areas, and shall use them only as a means
of ingress and egress for the Premises.
19.    Tenant shall not waste electricity, water or air conditioning and agrees
to cooperate fully with Landlord to ensure the most effective operation of the
Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord.
20.    Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in San Diego,
California without violation of any law or ordinance governing such disposal.
All trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
If the Premises is or becomes infested with vermin as a result of the use or any
misuse or neglect of the Premises by Tenant, its agents, servants, employees,
contractors, visitors or licensees, Tenant shall forthwith, at Tenant's expense,
cause the Premises to be exterminated from time to time to the satisfaction of
Landlord and shall employ such licensed exterminators as shall be approved in
writing in advance by Landlord.
21.    Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22.    Any persons employed by Tenant to do janitorial work shall be subject to
the prior written approval of Landlord, and while in the Building and outside of
the Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
23.    No awnings or other projection shall be attached to the outside walls of
the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard window
coverings. All electrical ceiling fixtures hung in the Premises or spaces along
the perimeter of the Building must be fluorescent and/or of a quality, type,
design and a warm white bulb color approved in advance in writing by Landlord.
Neither the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant's sole cost and
expense. Tenant shall keep its window coverings closed during any period of the
day when the sun is shining directly on the windows of the Premises. Prior to
leaving the Premises for the day, Tenant shall extinguish all lights. Tenant
shall abide by Landlord's regulations concerning the opening and closing of
window coverings which are attached to the windows in the Premises, if any,
which have a view of any interior portion of the Building or Building Common
Areas.
24.    The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
25.    Tenant must comply with requests by the Landlord concerning the informing
of their employees of items of importance to the Landlord.
26.    Tenant must comply with any City of San Diego "NO-SMOKING" ordinances. If
Tenant is required under the ordinance to adopt a written smoking policy, a copy
of said policy shall be on file in the office of the Building. In addition, no
smoking of any substance shall be permitted within the Project except in
specifically designated outdoor areas. Within such designated outdoor areas, all
remnants of consumed cigarettes and related paraphernalia shall be deposited in
ash trays and/or waste receptacles. No cigarettes shall be extinguished and/or
left on the ground or any other surface of the Project. Cigarettes shall be
extinguished only in ashtrays. Furthermore, in no event shall Tenant, its
employees or agents smoke tobacco products or other substances (x) within any
interior areas of the Project, or (y) within two hundred feet (200') of the main
entrance of the Building or the main entrance of any of the adjacent buildings,
or (z) within seventy-five feet (75') of any other entryways into the Building.
27.    Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant desires protection against losses related to such
occurrences. Tenant shall cooperate in any reasonable safety or security program

EXHIBIT D
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developed by Landlord or required by law.
28.
All office equipment of any electrical or mechanical nature shall be placed by
Tenant in the Premises in

settings approved by Landlord, to absorb or prevent any vibration, noise and
annoyance.
29.    Tenant shall not use in any space or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and rubber side guards.
30.    No auction, liquidation, fire sale, going-out-of-business or bankruptcy
sale shall be conducted in the Premises without the prior written consent of
Landlord.
31.    No tenant shall use or permit the use of any portion of the Premises for
living quarters, sleeping apartments or lodging rooms.
32.    Tenant shall not purchase spring water, towels, janitorial or maintenance
or other similar services from any company or persons not approved by Landlord.
Landlord shall approve a sufficient number of sources of such services to
provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its judgment shall consider consistent with the
security and proper operation of the Building.
33.    Tenant shall install and maintain, at Tenant's sole cost and expense, an
adequate, visibly marked and properly operational fire extinguisher next to any
duplicating or photocopying machines or similar heat producing equipment, which
may or may not contain combustible material, in the Premises only if required by
the applicable governmental authority.
Landlord reserves the right at any time to change or rescind any one or more of
these Rules and Regulations, or to make such other and further reasonable Rules
and Regulations as in Landlord's judgment may from time to time be necessary for
the management, safety, care and cleanliness of the Premises, Building, the
Common Areas and the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein; provided,
however, Landlord agrees that the Rules and Regulations shall not be
unreasonably modified or enforced in a manner which will unreasonably interfere
with the normal and customary conduct of Tenant's business. Landlord may waive
any one or more of these Rules and Regulations for the benefit of any particular
tenants, but no such waiver by Landlord shall be construed as a waiver of such
Rules and Regulations in favor of any other tenant, nor prevent Landlord from
thereafter enforcing any such Rules or Regulations against any or all tenants of
the Project. Tenant shall be deemed to have read these Rules and Regulations and
to have agreed to abide by them as a condition of its occupancy of the Premises.

EXHIBIT D
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EXHIBIT E

DEL MAR CORPORATE CENTER

FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease") made and
entered into as of ______________,
20_ by and between as Landlord, and the undersigned as Tenant, for Premises on
the      _ floor(s) of the office building located at     ,     ,
California    , certifies as follows:
1.    Attached hereto as Exhibit A is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.
2.
The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on

-----, and the Lease Term expires on    , and the undersigned has no option to
terminate or cancel the Lease or to purchase all or any part of the Premises,
the Building and/or the Project.
3.    Base Rent became payable on .
4.    The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
5.    Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

6.    Tenant shall not modify the documents contained in Exhibit A without the
prior written consent of Landlord's mortgagee.
7.    All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
________________The current monthly installment of Base Rent is $        _.

8.    All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9.    No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
10.    As of the date hereof: there are no existing defenses or offsets, or, to
the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11.    If Tenant is a corporation or partnership, each individual executing this
Estoppel Certificate on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
12.    There are no actions pending against the undersigned under the bankruptcy
or similar laws of the United States or any state.
13.    Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14.    To the undersigned's knowledge, all improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and has
been accepted by the undersigned and all reimbursements and allowances due to
the undersigned under the Lease in connection with any improvement work have
been paid in full.
The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises is a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at    ___ on the __ day of        _, 20_
"Tenant":
,

a
By:

Its:

By:

Its:

EXHIBIT E
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EXHIBIT F

DEL MAR CORPORATE CENTER

NOTICE OF LEASE TERM DATES
To:         

Re:    Office Lease dated     , 20_ (the "Lease"), by and between     , a
---------- ("Landlord"), and     , a                  ("Tenant"), for
approximately     rentable square feet of space commonly known as Suite     (the
"Premises"), located on the    (    ) floor of that certain office building
located at     (the "Building").
Dear     
Notwithstanding any provision to the contrary contained in the Lease, this
letter is to confirm and agree upon the following:
I.
Tenant has accepted the above-referenced Premises as being delivered in
accordance with the Lease, and there is no deficiency in construction.

2.
The Lease Term shall commence on or has commenced on _____________ ____for a
term of

ending on _            _
3.
Rent commenced to accrue on     , in the amount of     .

4.
Ifthe Lease Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment. Each biUing thereafter shall
be for the full amount of the monthly installment as provided for inthe Lease.

5.    Your rent checks should be made payable to      at                 
6.
The rentable and usable square feet of the Premises are    and     
respectively.

7.
Tenant's Share of Direct Expenses with respect to the Premises is     % of the
Project.

8.
Capitalized terms used herein that are defined in the Lease shall have the same
meaning when used herein. Tenant confirms that the Lease has not been modified
or altered except as set forth herein, and the Lease is in full force and
effect. Landlord and Tenant acknowledge and agree that to each party's actual
knowledge,

neither party is in default or violation of any covenant, provision, obligation,
agreement or condition in the Lease.
If the provisions of this letter correctly set forth our understanding, please
so acknowledge by signing at the place provided below on the enclosed copy of
this letter and returning the same to Landlord.
"Landlord":

a    _    _

By:
Its:     

By:
Its:     

Agreed to and Accepted
as of
, 20 "Tenant":

a     
By:
Its:     

By:
Its:     

EXHIBIT F
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EXHIBIT G
[exhibitg.jpg]

EXHIBIT G
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