EXHIBIT 10.5

MASTER LEASE AGREEMENT

between

FPA GOVERNOR PARK ASSOCIATES, LLC,

as Landlord,

and

TRINITY PROPERTY CONSULTANTS, LLC,

as Tenant

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TABLE OF CONTENTS

 

ARTICLE

          

PAGE

1   BASIC LEASE INFORMATION AND DEFINED TERMS    4   Section 1.1   Basic Lease
Information    4   Section 1.2   Defined Terms    7 2   OCCUPANCY AND USE    7  
Section 2.1   Premises and Term    7   Section 2.2   Leasehold Improvements    7
  Section 2.3   Use    8   Section 2.4   Atrium Space    8   Section 2.5  
Peaceful Enjoyment    8 3   RENT    9   Section 3.1   Rental Payments    9  
Section 3.2   Interest/Late Charge    9   Section 3.3   Consecutive Late
Payments    10   Section 3.4   Security Deposit    10 4   Reserved.    5  
ALTERATIONS, REPAIRS AND TRADE FIXTURES    11   Section 5.1   Alterations,
Improvements and Additions    11   Section 5.2   Maintenance and Repairs    13  
Section 5.3   Trade Fixtures    13   Section 5.4   Surrender of Premises    13 6
  RIGHTS RESERVED BY LANDLORD    14   Section 6.1   Landlord’s Access    14  
Section 6.2   Assignment, Subletting, or Other Transfers by Tenant    14

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  Section 6.3   Assignment by Landlord    15   Section 6.4   Alterations and
Additions by Landlord    15   Section 6.5   Subordination to Mortgages and
Leases    16   Section 6.6   Certificates    16   Section 6.7   Building Rules
   17 7   CONDEMNATION AND CASUALTY    17   Section 7.1   Condemnation    17  
Section 7.2   Casualty Damage    18   Section 7.3   Insurance    18   Section
7.4   Indemnity    20   Section 7.5   Damages from Certain Causes    20 8  
DEFAULT AND REMEDIES    20   Section 8.1   Default by Tenant    20   Section 8.2
  Landlord’s Remedies    22   Section 8.3   Attorney’s Fees and Other Expenses
of Enforcement    23   Section 8.4   Default by Landlord    26 9   MISCELLANEOUS
PROVISIONS    23   Section 9.1   Amendments    23   Section 9.2   Non-Waiver   
24   Section 9.3   Holding Over    24   Section 9.4   Notices    24   Section
9.5   Independent Obligations    25   Section 9.6   Survival    25   Section 9.7
  Other Tenants of Building    25   Section 9.8   Name of Building and Project
   25   Section 9.9   Consent by Landlord    26   Section 9.10   Legal
Interpretation    26   Section 9.11   Entire Agreement    27   Section 9.12  
Tenant’s Authority    27   Section 9.13   Taxes on Tenant’s Property    29  
Section 9.14   Landlord’s Liability    27   Section 9.15   Time of the Essence
   27   Section 9.16   Instruments and Evidence Required to be Submitted to
Landlord    28

 

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  Section 9.17   Counterparts    28   Section 9.18   Recordation    28   Section
9.19   Effective Date    28   Section 9.20   Successors and Assigns    28  
Section 9.21   Joint and Several Liability    28   Section 9.22   Exhibits    29

 

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MASTER LEASE AGREEMENT

THIS MASTER LEASE AGREEMENT (“Lease”) is made and entered into as of the 20th
day of December, 2008, by and between FPA GOVERNOR PARK ASSOCIATES, LLC, a
Delaware limited liability company (“Landlord”), whose address is 4665 MacArthur
Court, Suite 200, Newport Beach, CA 92660 and TRINITY PROPERTY CONSULTANTS, LLC,
a California limited liability company (“Tenant”), whose address is 4665
MacArthur Court, Suite 200, Newport Beach, CA 92660.

ARTICLE 1

BASIC LEASE INFORMATION AND DEFINED TERMS

Section 1.1 Basic Lease Information.

(a) Base Rent. Base Rent shall mean the following:

(i) Until the second anniversary of the Commencement Date, Base Rent shall mean
Eighteen Thousand Seven Hundred Fifty Dollars ($18,750.00) per calendar month
(the “Initial Base Rent”); and then

(ii) From the second anniversary of the Commencement Date through the end of the
Lease Term (the “3rd/4th Year Base Rent”), Base Rent shall be based on a formula
as follows: Base Rent will be an amount each month which, together with the
monthly base rent and other charges actually collected pursuant to leases with
Space Tenants of the space then occupied by Space Tenants in the Premises, shall
equal (i) the amount necessary to achieve a Debt Service Coverage Ratio of 1.30;
plus (ii) an amount necessary to pay on a monthly basis the Unpaid Shortfall
Contribution Return, as defined in Section 11.89 of the Limited Liability
Company Agreement of Landlord’s sole member, FPA/PRIP Governor Park, LLC dated
December 19, 2008, provided, however, in no event will the 3rd/4th Year Base
Rent be less than Eighteen Thousand Seven Hundred Fifty Dollars ($18,750) per
calendar month. The calculation of 3rd/4th Year Base Rent will be circulated to
Tenant on the date which is seventy five (75) days prior to the second
anniversary of the Commencement Date. As used in this Section 1.1(a)(i), the
term “Debt Service Coverage Ratio” shall have the

 

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meaning ascribed to it in that certain Promissory Note Secured by Deed of Trust,
dated December 19, 2008, from Landlord to MIREF Governor Finance, LLC in the
original principal amount of $11,440,000.00, and which is secured by a deed of
trust encumbering the Premises.

(b) Reserved.

(c) Buildings shall mean the office buildings located at 6310 Greenwich Drive,
and 5060 Shoreham Place, San Diego, California located on the Land.

(d) Building Rules shall mean all rules and regulations adopted or modified by
Landlord from time to time for the safety, care, cleanliness, and reputation of
the Building and for the preservation of good order in the Building. The current
Building Rules are attached at Exhibit “B.”

(e) Commencement Date shall mean December 20, 2008.

(f) Common Areas shall mean those areas within the Project devoted to corridors,
elevator foyers, restrooms, lobby areas, meeting rooms, and other similar
facilities provided for the common use or benefit of tenants generally.

(g) Insurance Costs shall mean all costs incurred by Landlord in obtaining
insurance on the Project, including property, liability, and casualty insurance
on the Building, but excluding all insurance costs which Tenant is required to
provide under Section 7.3 below.

(h) Land shall mean the tracts of real property which is described in Exhibit
“A” to this Lease.

(i) Lease Term shall mean a term commencing on the Commencement Date and
continuing for forty-eight (48) months thereafter.

(j) Other Improvements shall mean parking areas, parking garages, plaza areas
and other similar areas related to the buildings located on the Land.

(k) Permitted Use shall mean the use of the Premises for (i) general office
purposes, and (ii) uses which are incidental and related thereto.

 

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(l) Premises shall mean all vacant office space within the Buildings, whether
now vacant or becoming vacant in the future.

(m) Project shall mean, collectively, the Buildings, the Land and the Other
Improvements.

(n) Qualifying Tenants shall mean the Space Tenants and all other tenants (other
than Tenant) leasing space in the Buildings pursuant to leases entered into with
Landlord after the Commencement Date.

(o) Rent shall mean, collectively, the Base Rent; including Insurance Costs and
Taxes, assessments, and charges of any kind payable by the Tenant with respect
to the Premises. Taxes shall be paid pursuant to Section 1.1(r) below. Rent and
Insurance Costs shall be paid in advance in equal monthly installments on the
first day of each month during the Term without any deduction, notice or demand.

(p) Reserved.

(q) Security Deposit shall mean -0- Dollars ($-0-).

(q) Service Areas shall mean those areas within the outside walls of the
Buildings which are used for mechanical rooms, stairs, elevator shafts, flues,
vents, stacks, pipe shafts, risers, raceways, and vertical penetrations (but
shall not include any such areas for the exclusive use of a particular tenant).

(r) Space Leases shall mean all leases, whether now existing or hereafter
entered into, between all tenants (other than Tenant) and Landlord for the lease
of space in the Buildings.

(s) Space Tenants shall mean all tenants (other than Tenant), now or hereafter
leasing space in the Buildings pursuant to leases entered into with Landlord.

(t) Taxes shall mean all taxes and assessments and governmental charges, whether
federal, state, county or municipal, and whether levied or assessed by taxing
districts or authorities presently taxing the Premises or the Project or any
part of either, or by others, subsequently created or otherwise, and any other
taxes and assessments attributable to the Project or its operation together with
any costs incurred by Landlord (including attorneys’ fees and costs of
investigation) relative to any negotiation, contest, or

 

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appeal pursued by Landlord to reduce or prevent an increase in any portion of
the Taxes, regardless of whether any reduction or limitation is obtained. Tenant
shall pay all Taxes to the Landlord, or directly to the taxing authority, if so
instructed by Landlord, at least ten days before they become delinquent, whether
assessed to or payable by the Landlord or the Tenant.

1.2 Defined Terms. Each of the terms defined in Section 1.1 will be used as
defined terms in this Lease (including the Exhibits to this Lease). In addition,
other terms are defined in various sections of this Lease. All words which are
used as defined terms in this Lease are delineated with initial capital letters
and, when delineated with initial capital letters, shall have the meaning
specified in the applicable provision of this Lease in which such term is
defined.

ARTICLE 2

OCCUPANCY AND USE

Section 2.1 Premises and Term. In consideration for the obligation of Tenant to
pay Rent and subject to and upon the terms and conditions stated in this Lease,
Landlord leases to Tenant, and Tenant leases from Landlord, the Premises, the
Common Areas and the Other Improvements for the Lease Term. Tenant shall use
commercially reasonable efforts to cause all currently unoccupied, vacant
portions of the Premises to be leased in the name of Landlord and Landlord shall
refer all inquiries with respect to leasing of space within the Premises to
Tenant; provided, however, that Tenant shall not have the right to execute any
lease on behalf of Landlord or otherwise to bind Landlord. Notwithstanding any
provision of this Lease to the contrary, Tenant agrees that it shall not have
the right to physically occupy any portion of the Premises, except that Tenant
may use any portion of the Premises not under a Space Lease to a Space Tenant as
a management office for the Premises. All Space Leases with Space Tenants shall
be leases between Landlord and Space Tenant, and all rents, income and other
charges thereunder shall be paid to Landlord and Tenant shall have no right or
interest therein. Immediately upon execution of a Space Lease between Landlord
and a Space Tenant, the premises covered by such Space Lease will be removed
from the Premises and shall no longer be subject to this Lease, until such time
as such Space Lease expires and has not been renewed or is terminated and the
space covered by such Space Lease once again becomes vacant.

Section 2.2 Leasehold Improvements. The Premises shall be delivered to Tenant in
an “as is” condition. Tenant has made a complete examination and inspection of
the Premises and accepts the same in its current condition, “as is” and without
recourse to Landlord. Landlord shall have no obligation to provide any leasehold
improvements to the Premises or to repair, decorate, or paint

 

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the Premises. Landlord has made no representations or warranties to Tenant with
respect to the condition of the Premises, the Buildings, or the Project.
Tenant’s occupancy of the Premises shall be deemed an acknowledgment by Tenant
that the Premises are suitable for Tenant’s intended use, and Landlord expressly
disclaims any warranty that the Premises are suitable for Tenant’s intended use.
Landlord does not make any warranties, express or implied, with respect to the
Premises, the Building, or the Project. All implied warranties (including those
of habitability, merchantability, or fitness for a particular purpose) are
expressly negated and waived.

Section 2.3 Use. The Premises may be used only for the Permitted Use specified
in Section 1.1(k) and for no other purposes without the prior written consent of
Landlord. Tenant’s use of the Premises shall be in compliance with the Building
Rules and with all applicable Legal Requirements and Insurance Requirements.
Tenant shall not, even if technically within the Permitted Use, use the Premises
for any purpose which is dangerous to person or property, which creates a
nuisance, which would violate the Building Rules, or which would violate any
applicable Legal Requirement or Insurance Requirement. Tenant shall comply with,
and shall cause any Tenant Related Parties to comply with, all Building Rules
and all Legal Requirements and Insurance Requirements relating to the use,
condition, or occupancy of the Premises. “Insurance Requirements” shall mean all
terms of any insurance policy obtained by Landlord or Tenant covering or
applicable to the Premises or the Project; all requirements for the issuing of
each such insurance policy; and all orders, rules, regulations, and other
requirements of the National Board of Fire Underwriters (or any other bodies
exercising any similar functions) which are applicable to or affect the
Premises, the Building, or the Project or any use or condition of the Premises,
the Building, or the Project. “Legal Requirements” shall mean all laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, permits, licenses, authorizations, and requirements of all
governmental authorities, foreseen or unforeseen, which now or at any time
hereafter may be applicable to the Premises, the Buildings, or the Project,
including (a) the Americans with Disabilities Act, (b) all federal, state, and
local laws, regulations, and ordinances pertaining to air and water quality,
hazardous materials, waste disposal, and other environmental matters; and
(c) all laws, codes, and regulations pertaining to zoning, land use, health, or
safety. “Tenant Related Parties” shall mean Tenant’s officers, partners,
employees, agents, contractors, licensees, concessionaires, customers, and
invitees.

Section 2.4 Reserved.

Section 2.5 Peaceful Enjoyment. Tenant may peacefully occupy the Premises for
the Permitted Use during the Lease Term subject to the terms and provisions of
this Lease and provided that Tenant pays the Rent and performs all of Tenant’s
covenants and agreements contained in this Lease.

 

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ARTICLE 3

RENT

Section 3.1 Rental Payments. Tenant shall pay Rent to Landlord for each month
during the Lease Term as provided in this Lease. Rent shall be due and payable
in advance on the first (1st) day of each month during the Lease Term. If the
Commencement Date is a date other than the first (1st) day of a calendar month,
the Rent for the portion of the calendar month in which the Commencement Date
occurs shall be due and payable on the Commencement Date; and the Rent for such
partial month shall be prorated based upon the number of days from the
Commencement Date to the end of that calendar month. Rent for any partial month
at the end of the Lease Term shall be prorated based upon the number of days
from the beginning of that month to the end of the Lease Term. Rent shall be
payable at the address for Landlord designated in the first (1st) paragraph of
this Lease (or at such other address as may be designated by Landlord from time
to time). Tenant shall pay all Rent under this Lease at the times and in the
manner provided in this Lease, without abatement, notice, demand, counterclaim,
or set-off. Any charges or other sums payable by Tenant to Landlord under the
terms of this Lease shall be considered as additional Rent. No payment by Tenant
or receipt by Landlord of a lesser amount than the total amount of Rent then due
shall be deemed to be other than on account of the earliest past due installment
of Rent required to be paid under this Lease. No endorsement or statement on any
check or in any letter accompanying any check or payment of Rent shall ever be
deemed an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord’s right to recover the balance of the Rent then
due or to pursue any other remedy available under this Lease, at law, or in
equity.

Section 3.2 Interest/Late Charge. In the event that Tenant fails to pay any
monthly Rent installment within five (5) days after the date on which any such
Rent installment becomes due and payable, then (a) Tenant shall also be
obligated to pay interest on such past due amounts at a rate equal to the lesser
of ten percent (10%) per annum or the highest rate of interest permitted by
applicable law and (b) Tenant shall pay a late charge in the amount of four
percent (4%) of the amount of such past due Rent installment, as additional Rent
under this Lease. Should Tenant make a partial payment of past due amounts, the
amount of such partial payment shall be applied first to reduce all accrued and
unpaid interest and late charges, in inverse order of their maturity, and then
to reduce all other past due amounts, in the inverse order of their maturity.
Tenant’s failure to pay any installment of Rent when due may cause Landlord to
incur anticipated costs (including processing and accounting costs), and the
exact amount of these costs is extremely

 

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difficult to ascertain. Therefore, the late charges permitted under this
Section 3.2 shall be liquidated damages for those costs and shall be in addition
to and shall be cumulative of any other rights and remedies which Landlord may
have under this Lease with regard to the failure of Tenant to make any payment
of Rent or any other sum due under this Lease.

Section 3.3 Consecutive Late Payments. If Tenant fails in two (2) consecutive
months to make Rent payments within five (5) days after the date when due,
Landlord may require that future Rent payments be paid quarterly in advance
instead of monthly and/or that all future Rent payments be made on or before the
due date by cash, cashier’s check, or money order or ACH (in which event, the
delivery of Tenant’s personal or corporate check will no longer constitute a
payment of Rent under this Lease). The election by Landlord to exercise either
or both of the foregoing remedies shall be made by written notice to Tenant and
shall be in addition to any interest and late charges accruing under
Section 3.2, as well as any other rights and remedies accruing as a result of
such default. Any acceptance of a monthly Rent payment in the form of a personal
or corporate check by Landlord thereafter shall not be construed as a subsequent
waiver of these rights.

Section 3.4 Security Deposit. Tenant shall pay the Security Deposit to Landlord
on the date this Lease is executed by Tenant in cash or in such other manner
acceptable to Landlord. Tenant hereby grants to Landlord a security interest in
the Security Deposit. Landlord shall have, and Landlord expressly retains and
reserves, all rights of setoff, recoupment, and similar remedies available to
Landlord under applicable laws or in equity. Landlord may commingle the Security
Deposit with its other funds and shall receive and hold the Security Deposit
without liability for interest. Upon default by Tenant, Landlord may from time
to time, and without prejudice to any other remedy, use the Security Deposit to
the extent necessary to make good any arrears of Rent or other sums then due
from Tenant to Landlord or to pay the cost of any damage, injury, expense, or
liability caused by any default by Tenant under this Lease. After any such
application of any portion of the Security Deposit, Tenant shall pay to
Landlord, immediately upon demand, the amount so applied so as to restore the
Security Deposit to its original amount; and such amount shall then be deemed to
be part of the Security Deposit. Tenant’s failure to restore the Security
Deposit may, at Landlord’s sole option, constitute a default under this Lease.
If Tenant is not in default under this Lease and after application of the
Security Deposit to the repair of any damage or injury to the Project caused by
Tenant or by any Tenant Related Party, any remaining balance of the Security
Deposit held by Landlord shall be returned by Landlord to Tenant within a
reasonable period of time after the expiration or termination of this Lease. The
Security Deposit shall not be considered an advance payment of rental or a
measure of Landlord’s damages resulting from a default by Tenant.

 

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ARTICLE 4

RESERVED

ARTICLE 5

ALTERATIONS, REPAIRS AND TRADE FIXTURES

Section 5.1 Alterations, Improvements and Additions.

(a) Tenant’s obligations to provide leasehold improvements within the Premises
shall include partitions, lighting fixtures, floor and wall coverings, and other
interior decoration and shall be of a design and quality consistent with the
standards generally observed by Landlord and other tenants of the Building.

(b) All work to be done to improve, equip, or alter the Premises and any work in
any other areas of the Project for which Tenant is responsible shall be subject
to the following conditions:

(i) all such work shall be done at Tenant’s sole cost, risk, and expense and in
accordance with all Legal Requirements, Insurance Requirements, Building Rules,
and construction guidelines and standards of Landlord;

(ii) all such work shall be performed in a good and workmanlike manner with
labor and materials of such quality as Landlord may reasonably require;

(iii) no such work shall be commenced until approved in writing by Landlord;

(iv) all such work shall be performed in strict accordance with the plans and/or
specifications previously approved by Landlord;

(v) all such work shall be prosecuted diligently and continuously to completion;

(vi) all such work shall be performed in a manner so as to minimize interference
with the normal business operations of other tenants in the Building; the
performance of Landlord’s obligations under this Lease, any other lease for
space in the Building, or any Financing Lien or Ground Lease covering or
affecting all or any part of the Project; and any work being done in any other
portion of the Project;

(vii) Landlord may impose such conditions with respect to such work as Landlord
deems appropriate, including, without limitation, (A) requiring Tenant to
furnish Landlord with security for the payment of all costs to be incurred in
connection with such work and (B) requiring Tenant or Tenant’s contractor to
maintain insurance against liabilities which may arise out of such work;

 

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(viii) such work shall be performed by contractors approved in writing by
Landlord and, if requested by Landlord, any such contractor and all work to be
performed by such contractor shall be fully bonded (with Landlord named as
co-obligee) with companies and in amounts acceptable to Landlord in its sole
discretion; and

(ix) upon completion of any such work and upon Landlord’s request, Tenant shall
deliver to Landlord evidence of payment, contractors’ affidavits, and full and
final waivers of all liens for labor, services, or material.

(c) No alterations, improvements, or additions (including lighting fixtures,
track lighting tracks, track lighting cans, and light bulbs) made to the
Premises by or on behalf of either Landlord or Tenant may be removed by Tenant
without Landlord’s prior written consent. All such alterations, improvements, or
additions shall become the property of Landlord upon the termination or
expiration of this Lease. Tenant shall have no (and hereby waives all) rights to
payment or compensation for any such alteration, improvement, or addition to the
Premises.

(d) Tenant shall not allow any liens to be filed against the Premises or the
Project in connection with the installation of any alterations, improvements, or
additions to the Premises. If any such liens shall be filed, Tenant shall cause
the same to be released immediately by payment, bonding, or other method
acceptable to Landlord. If Tenant shall fail to cancel or remove any lien, then
Landlord, at its sole option, may obtain the release of that lien; and Tenant
shall pay to Landlord, on demand, the amount incurred by Landlord for the
release of each lien, plus an additional charge (as determined by Landlord) to
cover Landlord’s administrative overhead and expenses.

(e) Tenant hereby indemnifies and holds Landlord harmless from all losses,
costs, damages, claims, expenses (including attorneys’ fees and costs of suit),
liabilities, or causes of action arising out of or relating to any alterations,
additions, or improvements that Tenant makes or causes to be made to the
Premises or to any repairs made to any portion of the Project, including any
occasioned by the filing of any mechanic’s, materialman’s, construction, or
other liens or claims (and all costs or expenses associated with any such lien
or claim) asserted, filed, or arising out of such work. Nothing contained in
this Lease shall be deemed or construed in any way as constituting the consent
of or request by Landlord, express or implied, to any contractor, subcontractor,
laborer, or

 

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materialman for the performance of any labor or the furnishing of any materials
for the improvement, alteration, or repair of the Premises or the Project or as
giving Tenant any right or authority to contract for or permit the rendering of
any labor or the furnishing of any materials that would give rise to a lien
against the Premises or the Project.

(f) Tenant shall have the sole responsibility for compliance with all applicable
Legal Requirements and Insurance Requirements relative to any such alterations,
improvements, or additions. Landlord’s approval of any plans or specifications
shall never constitute an indication, representation, or certification that such
alterations, improvements, or additions will be in compliance with any
applicable Legal Requirement or Insurance Requirement or as to the adequacy or
sufficiency of the alterations, improvements, or additions to which such consent
relates. In instances in which several sets of requirements must be met, the
strictest applicable requirements shall control.

Section 5.2 Maintenance and Repairs. Tenant shall take good care of and maintain
the Premises (including all plate glass, Trade Fixtures, and improvements,
additions, or alterations situated in the Premises) in a first class, clean, and
safe condition. Tenant shall not commit or allow any waste or damage to be
committed on any portion of the Premises or the Project. Tenant shall repair or
replace any damage to any part of the Project, caused by Tenant or by a Tenant
Related Party. However, Landlord may, at its option, make such repairs,
improvements, or replacements; and Tenant shall repay Landlord on demand the
actual costs incurred by Landlord to make such repairs, improvements, or
replacements plus an additional charge (as determined by Landlord) to cover
administrative overhead. Tenant shall arrange for the repair and maintenance of
the foundation, exterior walls, and roof of the Buildings; the public areas
within the Buildings; the heating, air conditioning, and ventilation system
within the Buildings; and the facilities providing utility services which are
located within the Project (collectively, “Tenant’s Repair Obligations”).

Section 5.3 Reserved.

Section 5.4 Surrender of Premises. Upon the expiration or termination of this
Lease, Tenant shall surrender the Premises to Landlord, broom-clean and in a
good state of repair and condition, excepting only ordinary wear and tear. Upon
the expiration or termination of this Lease, Tenant will deliver all keys to the
Premises to Landlord and inform Landlord of all combinations on locks, safes,
and vaults, if any, which remain in the Premises.

 

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ARTICLE 6

RIGHTS RESERVED BY LANDLORD

Section 6.1 Landlord’s Access. Landlord (and its agents, representatives, and
contractors) shall have the right to enter upon the Premises at any reasonable
time (and, in the case of an emergency, at any time) to (a) inspect the
Premises; (b) make repairs, alterations, or additions; and (c) show the Premises
to prospective tenants, subtenants, mortgagees, and purchasers as Landlord may
deem necessary or desirable. No such entry shall ever be construed to be an
eviction of Tenant, a default by Landlord, or a breach of the covenant of quiet
enjoyment. In exercising its rights under this Section 6.1, Landlord shall use
reasonable efforts to avoid (to the extent reasonable and practicable under the
circumstances) material interference with Tenant’s Permitted Use of the
Premises.

Section 6.2 Assignment, Subletting, or Other Transfers by Tenant. Tenant shall
not, without having obtained Landlord’s prior written consent, (a) assign,
convey, or otherwise transfer (whether voluntarily, by operation of law, or
otherwise) this Lease, the Premises, or any interest of Tenant under this Lease,
(b) mortgage, pledge, or otherwise encumber any interest of Tenant under this
Lease, (c) grant any concession or license within the Premises, (d) grant or
transfer any management privileges or rights with respect to the Premises,
(e) allow any lien, security interest, or other encumbrance to be placed upon
any interest of Tenant under this Lease, (f) sublet all or any part of the
Premises; or (g) permit any other party to occupy or use all or any part of the
Premises. Any attempted transfer by Tenant without Landlord’s prior written
consent shall be of no force or effect and may, at Landlord’s option, be a
default by Tenant under this Lease. If Tenant is other than a natural person and
if Tenant’s voting securities are not traded on a national securities exchange,
any conveyance, assignment, or transfer of more than a twenty-five percent
(25%) interest in Tenant in a single transaction or in a series of transactions
shall be deemed an assignment prohibited by this Lease. In the event of a
transfer of any interest of Tenant under this Lease (whether with or without
Landlord’s consent), (h) each transferee shall fully observe all covenants and
obligations of Tenant under this Lease; (i) no transferee shall use the Premises
for any use except the Permitted Use; (j) such transfer shall be subject to all
of the terms, covenants, and conditions of this Lease; (k) any transferee must
assume in writing all of the applicable obligations of the Tenant under this
Lease; and (l) any expansion, renewal, or like options granted to Tenant under
this Lease shall automatically terminate as of the date of such transfer. All
cash or other proceeds of any transfer of Tenant’s interest in this Lease or the
Premises, whether or not with the consent of Landlord, shall be paid to
Landlord, notwithstanding the fact that such proceeds exceed the Rent payable by
Tenant under this Lease, unless Landlord specifically agrees to the contrary in
writing; and Tenant hereby assigns all rights that Tenant might have or ever
acquire to any such proceeds to Landlord. No such transfer shall ever

 

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be construed to constitute a waiver of any of Tenant’s covenants contained in
this Lease, a release of Tenant from any obligation or liability of Tenant under
this Lease, or a waiver of any of Landlord’s rights under this Lease. The
consent by Landlord to a particular transfer shall not constitute Landlord’s
consent to any other or subsequent transfer. No transferee of Tenant shall have
any right to further sublease or assign, or otherwise transfer, encumber,
pledge, or mortgage its interest under this Lease. Neither the voluntary or
other surrender of this Lease by Tenant nor a mutual cancellation of this Lease
shall ever constitute a merger of estates. Instead, any such early termination
of this Lease shall, at the option of Landlord, either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
Tenant’s interest in any or all such subleases or subtenancies.

Section 6.3 Assignment by Landlord. Landlord shall have the right at any time to
transfer and assign, in whole or in part and by operation of law or otherwise,
Landlord’s rights, benefits, privileges, duties, and obligations under this
Lease, in the Buildings, or in any portion of the Project. Landlord shall be
released from any further obligation under this Lease, and Tenant agrees to look
solely to Landlord’s successor in interest for the performance of, all
obligations of Landlord accruing subsequent to the date of such transfer. All
covenants of Landlord under this Lease shall be binding upon Landlord and its
successors only with respect to breaches occurring during its or their
respective periods of ownership of Landlord’s interest under this Lease.

Section 6.4 Alterations and Additions by Landlord. Landlord reserves the right
to make alterations or additions to the Project at any time and from time to
time. Landlord further reserves the right to construct (or permit others to
construct) other buildings or improvements within the Project at any time and
from time to time. Such rights set forth in the two preceding sentences include
the right to construct additional stories to any building within the Project,
the right to build adjoining buildings, the right to construct multi-level,
elevated, underground, and other parking facilities within the Project, and the
right to erect or build temporary scaffolds or other aids to such construction.
Neither the diminution nor the shutting off of any light, air, or view nor any
other effect on the Premises as a result of Landlord’s exercise of the rights
reserved in this Section 6.4 shall affect this Lease, abate or reduce Rent, or
otherwise impose any liability on Landlord.

 

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Section 6.5 Subordination to Mortgages. This Lease shall be subject and
subordinate at all times to the lien or liens of all mortgages and deeds of
trust now existing or subsequently placed on the Project or Landlord’s interest
or estate in the Project (“Financing Lien”), and to each and every advance made
or hereafter to be made in connection with any such Financing Lien, and all
renewals, modifications, consolidations, replacements, and extensions of any
Financing Lien. The provisions of this Section shall be self-operative without
the necessity of the execution of any other document by any party. However,
Tenant shall execute and deliver any instruments, releases, or other documents
requested by Landlord for the purpose of confirming the provisions of this
Section or further subjecting and subordinating this Lease to any Financing
Lien. In the event of the enforcement by the holder of any Financing Lien of the
remedies provided for by law or by such Financing Lien, including the exercise
of the Power of Sale, or in the event of the transfer of the Buildings or
Landlord’s interest or estate in any part of the Buildings by foreclosure or
deed in lieu of foreclosure, this Lease shall automatically terminate.
Notwithstanding anything to the contrary set forth in this Lease, the holder of
any Financing Lien may elect at any time to cause their interest in the Project
to be subordinate to Tenant’s interest under this Lease by filing an instrument
in the real property records of San Diego County, California, affecting such
election; and Tenant shall execute and deliver to Landlord immediately any such
instruments or documents requested by the holder of such Financing Lien for the
purpose of confirming that such Financing Lien is subordinated to Tenant’s
interest under this Lease.

Section 6.6 Certificates. Within five (5) days after Landlord’s written request,
Tenant will execute, acknowledge, and deliver to Landlord (and any other persons
specified by Landlord) a certificate certifying as to such facts (to the extent
true) as Landlord may reasonably request, including (a) that this Lease is in
full force and effect, (b) the date and nature of each modification to this
Lease, (c) the date to which Rent and other sums payable under this Lease have
been paid, and (d) that Tenant is not aware of any default under this Lease
which has not been cured, except such defaults as may be specified in said
certificate. Such request may be made by Landlord at any time, and from time to
time, during the Lease Term. Any such certificate may be relied upon by Landlord
and by such other persons specified by Landlord or to whom such certificate may
be delivered. Tenant’s failure to deliver any such certificate within the
specified time period shall constitute a representation by Tenant that all
factual statements made by Landlord relative to those matters are true and
correct and may be relied upon by any person.

 

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Section 6.7 Building Rules. Landlord reserves the right to rescind any of the
Building Rules and to make any modifications or additions to the Building Rules
as shall be necessary or advisable for the safety, protection, care, and
cleanliness of the Building and the Project, the operation of the Project, the
preservation of good order in the Project, the protection and comfort of the
tenants in the Building (and their agents, employees, and invitees), and the
reputation of the Project. All amendments, modifications, and additions to the
Building Rules shall be binding upon Tenant from the date on which notice of any
such Building Rules is delivered to Tenant. While the Building Rules are
intended to be of general applicability to all tenants of the Building, Landlord
reserves the right to waive the applicability of any one or more of the Building
Rules to a particular situation, but such waiver by Landlord shall not be
construed as a waiver of such Building Rules with respect to any other
comparable situation and shall not prevent Landlord from thereafter enforcing
any of such Building Rules against or any or all of the tenants in the Building.

ARTICLE 7

CONDEMNATION AND CASUALTY

Section 7.1 Condemnation. In the event of a Total Taking of the Premises or the
Building, then this Lease shall terminate as of the date when physical
possession of the Premises or Building, as applicable, is taken by the
condemning authority. If a Partial Taking occurs which relates to a material
portion of the Building or if Landlord is required to pay any of the proceeds
from such Partial Taking to the holder of a Financing Lien, then this Lease, at
the option of Landlord, exercised by written notice to Tenant within thirty
(30) days after the date of such Partial Taking, shall terminate regardless of
whether the Premises are affected by such Partial Taking. In this event, Rent
shall be apportioned as of the date when physical possession of the applicable

portion of the Building is taken by the condemning authority. If a Partial
Taking of the Premises occurs, then Landlord shall allow Tenant a fair
diminution of Rent as to that portion of the Premises subject to such Taking;
and this Lease shall otherwise continue in full force and effect. All proceeds
(whether in a lump sum or in separate awards) of any Taking shall be paid to
Landlord, and Tenant shall not be entitled to (and expressly waives any claim
to) any portion of any such award. The term “Taking” means a transfer during the
Lease Term of all or any part of the Premises, the Building, or the Project, as
applicable, as a result of, or in lieu of or in anticipation of, the exercise of
the right of condemnation or eminent domain for any public or quasi-public use
under any governmental law, ordinance, or regulation. The term “Partial Taking”
means a Taking of less than the whole or substantially the whole of the Building
and/or the Premises. The term “Total Taking” means a Taking of the whole or
substantially the whole of the Building or the Premises.

 

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Section 7.2 Casualty Damage. If the Premises shall be destroyed or damaged by
fire or any other casualty, Tenant shall immediately give written notice of that
occurrence to Landlord. In the event that any portion of the Project is damaged
by fire or other casualty and if (a) such damage is such that the Buildings
cannot reasonably be expected to be substantially completed within two hundred
forty (240) days after the date of the casualty, (b) Landlord, in Landlord’s
sole judgment, elects not to repair or rebuild such damaged areas, or (c) less
than one (1) year remains in the Lease Term at the time of any damage to the
Project, then Landlord, at Landlord’s sole option, shall have the right to
terminate this Lease, regardless of whether the Premises are affected by such
casualty. In such event, all Rent owed up to the time of termination shall be
paid by Tenant to Landlord; and this Lease shall cease and come to an end as of
the date of Landlord’s written notice to Tenant regarding such termination. In
no event shall Landlord have the obligation to expend for the restoration or
repair of the Project an amount in excess of the insurance proceeds actually
received by Landlord as a result of such casualty; all costs and expenses of
restoring the Premises shall be borne by Tenant. Landlord shall not be liable
for any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from any casualty or the repair or restoration work made
necessary by the occurrence of any casualty.

Section 7.3 Insurance.

(a) Landlord shall maintain fire and extended coverage insurance on the Building
(excluding leasehold improvements and all Tenant Related Parties’ personal
property) in amounts desired by Landlord and at the expense of Landlord. All
payments for losses thereunder shall be made solely to Landlord.

(b) Tenant shall procure and maintain, at its sole cost and expense during and
throughout the Lease Term, a policy or policies of (i) commercial general
liability insurance in an amount of not less than $5,000,000.00 which can be
complied with by commercial general liability limits or by combination with
additional excess or umbrella (commercial catastrophe) liability limits
(ii) fire and extended coverage insurance with respect to Tenant’s Trade
Fixtures, inventory, and leasehold improvements located in the Premises written
on an “All Risk” basis for the full replacement cost, (iii) worker’s
compensation and employer’s liability insurance, and (v) such other insurance as
Landlord may, from time to time, reasonably require. In addition, Tenant shall
obtain a fire legal liability endorsement or other coverage satisfactory to
Landlord in the amount of $100,000.00, which removes the “owned, rented, or
occupied” property exclusion from Tenant’s liability policy. All such insurance
shall be maintained with companies authorized to transact business in the State
of California and of good financial standing on State approved forms.

 

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In addition, each such policy, other than the workers compensation/employers
liability policies, shall name Landlord and the Landlord Related Parties as
“additional insureds” thereunder and shall contain a standard “other insurance”
clause, unmodified in any way that would make the coverage provided by the
policy excess over or contributory with any additional insured’s own insurance
coverage.

(c) All policies of insurance required to be maintained by Tenant shall provide
that Landlord shall be given at least thirty (30) days’ prior written notice of
any cancellation or non-renewal of any such policy. A duly executed certificate
of insurance with respect to each such policy shall be deposited with Landlord
by Tenant on or before the Commencement Date, and a duly executed certificate of
insurance with respect to each subsequent policy shall be deposited with
Landlord at least fifteen (15) days prior to the expiration of the policy then
in effect.

(d) Tenant shall not do or permit anything to be done in or about the Premises,
nor bring nor keep nor permit anything to be brought to or kept in the Premises,
which will in any way increase the existing rate of or affect any fire insurance
or other insurance which Landlord carries on the Project or any of its contents,
cause a cancellation or invalidation of any such insurance or otherwise violate
any Insurance Requirement. If the annual premiums to be paid by Landlord with
respect to any insurance obtained by Landlord covering the Project or any of its
contents shall be increased because either the nature of Tenant’s operations or
the nature of Tenant’s Trade Fixtures, inventory, or leasehold improvements in
the Premises may result in a hazardous exposure, Tenant shall pay such increase
upon demand by Landlord.

(e) All fire and extended coverage insurance policies carried by either Landlord
or Tenant shall provide for a waiver of rights of subrogation against Landlord
and Tenant on the part of the applicable insurance carrier unless either
(i) such waiver is then prohibited by applicable California law or (ii) such
waiver would invalidate, nullify, or provide a defense to coverage under any
such insurance policy. As long as the waivers contemplated by this Subsection
are in effect, Landlord and Tenant each hereby waives any and all rights of
recovery, claims, actions, or causes of action against the other (and their
respective employees, agents, officers, or partners) for any loss or damage
which may occur to the Premises or the Project which is covered by valid and
collectible insurance policies and to the extent that such loss is actually
recovered under any such insurance policy. The failure of Tenant to take out or
maintain any insurance policy required under this Section 7.3 shall be a defense
to any claim asserted by Tenant against Landlord by reason of any loss sustained
by Tenant which would have been covered by any such required policy. The waivers
set forth in this Subsection shall be in addition to, but shall not be in
substitution for, any other waivers, indemnities, or limitation of liabilities
set forth in this Lease.

 

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Section 7.4 Indemnity. Landlord and the other Protected Parties shall not be
liable to Tenant or to the Tenant Related Parties for any injury to person or
damage to property caused by the negligence or misconduct of Tenant or the
Tenant Related Parties, or arising out of any use of, or the conduct of any
business in the Premises or other portions of the Project, by Tenant or the
Tenant Related Parties. Tenant shall indemnify and hold Landlord and the other
Protected Parties harmless from any liability, loss, cost, claim, or expense
(including attorneys’ fees and expenses, court costs, and costs of
investigation) arising out of, or alleged to have arisen out of, the negligence
or misconduct of Tenant or the Tenant Related Parties or out of any use of, or
conduct of any business in, the Premises or any other portion of the Project by
Tenant or the Tenant Related Parties, EVEN IF ANY SUCH LIABILITY, LOSS, COST,
CLAIM, OR EXPENSE ARISES FROM OR IS ATTRIBUTED TO THE CONCURRENT NEGLIGENCE OF
LANDLORD OR ANY OF THE OTHER PROTECTED PARTIES WHERE SUCH CONCURRENT NEGLIGENCE
IS NOT THE PRIMARY CAUSE. The indemnifications granted by both Landlord and
Tenant in this Section 7.4 are subject to any express limitations to the
contrary in this Lease. “Landlord Related Parties” means Landlord’s officers,
partners, employees, agents, and contractors. “Protected Parties” means the
Landlord Related Parties and, to the extent applicable, the holder of any
Financing Lien, and the management company for the Buildings (and their
respective directors, partners, officers, employees, and agents).

Section 7.5 Damages from Certain Causes. None of the Protected Parties shall
ever be liable or responsible to Tenant, or any person claiming through Tenant,
for any loss, injury to person, or damage to property in, upon, or about the
Premises or any other portion of the Project resulting from (a) theft, fire,
casualty, vandalism, acts of God, public enemy, injunction, riot, strike,
inability to procure materials, insurrection, war, court order, requisition, or
order of any governmental body or authority; (b) the acts or omissions of other
tenants of the Project; (c) any other causes beyond Landlord’s control; or
(d) any damage or inconvenience which may arise through repair or alteration of
the Project. All goods, property, or personal effects stored or placed by Tenant
or Tenant Related Parties in or about the Project shall be at the sole risk of
Tenant or Tenant Related Parties.

ARTICLE 8

DEFAULT AND REMEDIES

Section 8.1 Default by Tenant. The occurrence of any of the following events and
the expiration of any grace periods hereafter described shall constitute a
default by Tenant under this Lease:

(a) The failure of Tenant to pay any Rent for a period of ten (10) days after
the date such payment is due;

 

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(b) Tenant assigns its interest in this Lease or sublets any portion of the
Premises except as permitted in this Lease or Tenant otherwise breaches the
provisions of Section 6.2 of this Lease;

(c) Tenant uses the Premises for any purpose other than the Permitted Use or
otherwise breaches Tenant’s operational covenants under Sections 2.3 of this
Lease;

(d) Tenant breaches or fails to comply with any term, provision, covenant, or
condition of this Lease (other than as described in Subsections [a], [b], or [c]
above), or with any of the Building Rules now or subsequently established, and
such breach or failure continues for fifteen (15) calendar days after notice by
Landlord to Tenant;

(e) If the interest of Tenant under this Lease is levied on under execution or
other legal process, or if any petition in bankruptcy or other insolvency
proceedings is filed by or against Tenant, or any petition is filed or other
action taken to declare Tenant as bankrupt or to delay, reduces or modify
Tenant’s debts or obligations or to reorganize or modify Tenant’s capital
structure or indebtedness or to appoint a trustee, receiver or liquidator of
Tenant or of any property of Tenant, or any proceedings or other action is
commenced or taken by a governmental authority for the dissolution or
liquidation of Tenant (provided that no such levy, execution, legal process; or
petition filed against Tenant shall constitute a breach of this Lease if Tenant
shall vigorously contest the same by appropriate proceedings and shall remove or
vacate the same within thirty (30) calendar days from the date of its creation,
service, or filing);

(f) Tenant becomes insolvent, makes an assignment for the benefit of creditors,
or makes a transfer in fraud of creditors; or a receiver or trustee is appointed
for Tenant or any of its properties;

(g) Reserved.

(h) If Tenant is an individual person, the death or legal incapacity of Tenant;
if Tenant is a corporation, Tenant ceases to exist as a corporation in good
standing in the state of its incorporation and/or ceases to be duly authorized
to transact business within the State of Texas; or if Tenant is a partnership or
other entity, Tenant is dissolved or otherwise liquidated.

 

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Section 8.2 Landlord’s Remedies. Upon the occurrence of any default by Tenant
under this Lease, Landlord, at Landlord’s sole option, may exercise any one or
more of the following described remedies, in addition to all other rights and
remedies provided at law or in equity:

(a) Landlord may at any time thereafter (without being under any obligation to
do so) re-enter the Premises and correct or repair any condition which shall
constitute a failure on the part of Tenant to observe, perform, or satisfy any
term, condition, covenant, agreement, or obligation of Tenant under this Lease;
and Tenant shall fully reimburse and compensate Landlord on demand for the costs
incurred by Landlord in doing so, plus profit and overhead in any amount equal
to fifteen percent (15%) of such cost. No action taken by Landlord under this
subsection shall relieve Tenant from any of Tenant’s obligations under this
Lease or from any consequences or liabilities arising from the failure of Tenant
to perform such obligations.

(b) Landlord may terminate this Lease and repossess the Premises. In the event
that Landlord elects to terminate this Lease, Landlord shall be entitled to
recover damages equal to the total of (i) the cost of recovering the Premises
(including attorneys’ fees and costs); (ii) the cost of removing and storing
Tenant’s or any other occupant’s property; (iii) the unpaid Rent owed at the
time of termination, plus interest thereon from the date when due at the maximum
rate of interest then allowed by law; (iv) the cost of reletting the Premises
(as reasonably estimated by Landlord and including alterations or repairs to the
Premises and brokerage commissions); (v) the costs of collecting any sum due to
Landlord (including without limitation, attorneys’ fees and costs); and (vi) any
other sum of money or damages owed by Tenant to Landlord as a result of the
default by Tenant, whether under this Lease, at law, or in equity.

(c) Landlord may terminate Tenant’s right of possession of the Premises without
terminating this Lease and repossess the Premises. In the event that Landlord
elects to take possession of the Premises without terminating this Lease, Tenant
shall remain liable for, and shall pay to Landlord, from time to time on demand,
(i) all costs and damages described in Subsection (ii) of this Section 8.2 and
(b) any deficiency between the total Rent due under this Lease for the remainder
of the Lease Term and rents, if any, which Landlord is able to collect from
Space Tenants for the Premises during the remainder of the Lease Term (“Rental
Deficiency”). Landlord may file suit to recover any sums falling due under the
terms of this Lease from time to time, and no delivery to or recovery by
Landlord of any portion of the sums owed to Landlord by Tenant under this Lease
shall be a defense in any action to recover any amount not previously reduced to
judgment in favor of Landlord.

 

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(d) In the event that Landlord elects to re-enter or take possession of the
Premises after Tenant’s default, Tenant hereby waives notice of such re-entry or
re-possession and of Landlord’s intent to re-enter or retake possession.
Landlord may, without prejudice to any other remedy which Landlord may have for
possession or arrearages in or future Rent, expel or remove Tenant or any other
person who may be occupying the Premises. Landlord may also change or alter the
locks or other security devices on the doors to the Premises and/or, if
applicable, remove Tenant’s access media from the security system; and Tenant
waives, to the fullest extent allowed by law, any requirement that notice be
posted on the Premises as to the location of a key to such new locks and any
rights to obtain such a key.

(e) If Tenant commits any event of default under this Lease with respect to
which written notice was provided and at any time within the immediately
preceding twelve (12) month period and thereafter commits the same or a similar
default, no notice after the first such notice shall be required to be given by
Landlord for or with respect to any subsequent default before the pursuit of any
one or more of the remedies provided in this Lease. Tenant hereby expressly
waives both (i) notice of any default for which notice is not specifically
required under Section 8.1 and (ii) all subsequent notices of a similar default.

(f) All rights and remedies of Landlord under this Lease shall be non-exclusive
and shall be in addition to an cumulative of all other rights or remedies
available to Landlord under this Lease or by law or in equity.

Section 8.3 Attorney’s Fees and Other Expenses of Enforcement. In the event
Tenant defaults in the performance or observance of any of the terms, covenants,
agreements, or conditions contained in this Lease, Tenant, to the extent
permitted by applicable law, shall pay to Landlord (a) all reasonable expenses
incurred by Landlord in collecting any sums due under, or enforcing any of the
terms of, this Lease; and (b) if Landlord places the enforcement of all or any
part of this Lease in the hands of an attorney, all attorneys’ fees and other
costs of collection and enforcement incurred by Landlord.

ARTICLE 9

MISCELLANEOUS PROVISIONS

Section 9.1 Amendments. This Lease may not be altered, changed, or amended
except by an instrument in writing signed by both Landlord and Tenant.

 

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Section 9.2 Non-Waiver. No course of dealing between Landlord and Tenant or any
other person, nor any delay on the part of Landlord in exercising any rights
under this Lease, nor any failure to enforce any provision of this Lease, nor
the acceptance of any Rent by Landlord shall operate as a waiver or a
modification of the terms of this Lease or of any right which Landlord has to
demand strict compliance by Tenant with the terms of this Lease. If Landlord
waives any agreement, condition, or provision of this Lease, such waiver must be
expressly set forth in a writing signed by Landlord and shall not be deemed a
waiver of any subsequent breach of the same or any other agreement, condition,
or provision contained in this Lease.

Section 9.3 Holding Over. In the event Tenant remains in possession of the
Premises after the expiration or termination of this Lease without the consent
of Landlord, Tenant shall be deemed to be occupying the Premises as a tenant at
will and shall pay Rent for each month (or partial month) during any such
holdover period at a rate equal to twice the Rent which Tenant was obligated to
pay for the month immediately preceding the end of the Lease Term. No holding
over by Tenant after the expiration or termination of this Lease shall be
construed to extend the Lease Term or in any other manner be construed as
permission by Landlord to holdover. Additionally, in the event of any
unauthorized holding over by Tenant, Tenant shall indemnify Landlord against all
claims for any damages by any other person or entity to whom Landlord may have
leased all or any part of the Premises and for any other loss, cost, damage, or
expense (including attorneys’ fees and costs of suit) incurred by Landlord as a
result of such holding over.

Section 9.4 Notices. Any notice, demand, consent, approval, request, or other
communication required or permitted to be given pursuant to this Lease
(including any Exhibit to this Lease) or by applicable law shall be in writing
and shall be delivered by registered or certified mail, postage prepaid, return
receipt requested, telegram, facsimile, or expedited delivery service with proof
of delivery, addressed to Landlord or Tenant, as applicable, at the address for
each specified in the first paragraph of this Lease. Any such communication
transmitted by telegram, facsimile, or personal delivery shall be deemed to have
been delivered as of the date actually received by the addressee. Any such
communication transmitted by registered or certified mail shall be deemed to
have been given or served on the third (3rd) day following the date on which
such notice was deposited in a receptacle maintained by the United States Postal
Service for such purpose. Any notice of default from Tenant to Landlord shall
also be delivered to any holder of a Financing Lien who has notified Tenant of
its interest and the address to which notices are to be sent; and such notice
shall not be effective until delivered to such parties. Either Landlord or
Tenant may, by ten (10) days’ prior notice to the other in accordance with this
Section 9.4, designate a different address or different addresses to which
communications intended for the party are to be sent.

 

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Section 9.5 Independent Obligations. The obligations of Tenant under this Lease
are independent of Landlord’s obligations, and Tenant shall not, for any reason,
withhold or reduce Tenant’s required payments of Rent or fail to fully perform
Tenant’s obligations under this Lease. In the event that Landlord commences any
proceedings against Tenant as a result of Tenant’s default under this Lease,
Tenant will not interpose any counterclaim or other claim against Landlord of
whatever nature or description in any such proceedings. In the event that Tenant
attempts to interpose any such counterclaim or other claim against Landlord in
such proceedings, Landlord and Tenant stipulate and agree that such counterclaim
or other claim asserted by Tenant shall, upon motion by Landlord, be severed out
of the proceedings instituted by Landlord and that those proceedings may proceed
to final judgment separately and apart from, and without consolidation with or
reference to the status of, such counterclaim or other claim asserted by Tenant.

Section 9.6 Survival. Neither the expiration or termination of the Lease Term
pursuant to the provisions of this Lease, by operation of law, or otherwise, nor
any repossession of the Premises pursuant to any remedy granted to Landlord
under this Lease or otherwise shall ever relieve Tenant of Tenant’s liabilities
and obligations under this Lease, all of which shall survive such expiration,
termination, or repossession.

Section 9.7 Other Tenants of Building. Neither this Lease nor Tenant’s continued
occupancy of the Premises is conditioned upon either (a) the opening of any
business in the Building or in any portion of the Project by any other person or
entity or (b) the continued operations of any Tenant Related Party or business.

Section 9.8 Name of Building and Project. Tenant shall not utilize the name of
the Building or the Project for any purpose whatsoever, except to identify the
location of the Premises in Tenant’s address. Landlord shall have the right to
change the name of the Building and/or the Project whenever Landlord, in its
sole discretion, deems it appropriate without any liability to Tenant and
without any consent of Tenant being necessary.

 

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Section 9.9 Consent by Landlord. In each circumstance under this Lease in which
the prior consent or permission of Landlord is required before Tenant is
authorized to take any particular type of action, the decision of whether to
grant or deny such consent or permission shall be within the sole and exclusive
judgment and discretion of Landlord unless otherwise specifically provided in
this Lease with respect to that specific matter. Tenant shall not have any claim
for breach by Landlord or any defense to performance of any covenant, duty, or
obligation of Tenant under this Lease on the basis that Landlord delayed or
withheld the granting of such consent or permission. Landlord’s consent or
approval to any particular act by Tenant which requires such consent or approval
shall not be deemed to waive or render unnecessary consent to or approval of any
subsequent similar act.

Section 9.10 Legal Interpretation. This Lease, and the rights and obligations of
Landlord and Tenant under this Lease, shall be interpreted, construed, and
enforced in accordance with the laws of the State of Texas. All obligations of
the parties shall be performable in, and all legal actions to enforce or
construe this Lease shall be instituted in, the courts of, San Diego County,
California. All defined terms and other words used in this Lease shall include
the singular and plural, as applicable. References to the Premises, the
Building, the Land, or the Project shall also include any portion of each.
References to the Project shall include the Building and the Premises, and
references to the Building shall include the Premises. Words which are not used
as defined terms in this Lease shall be construed in accordance with the
meanings commonly ascribed to those words, relative to the context in which each
is used. The word “including” shall be construed as if followed, in each
instance, by the phrase “but not limited to.” All article, section, and
subsection headings used in this Lease are for reference and identification
purposes only and are not intended to, and shall not under any circumstances,
alter, amend, amplify, vary, or limit the express provisions in this Lease. All
rights, powers, and remedies provided in this Lease may be exercised only to the
extent that their exercise does not violate any applicable law and are intended
to be limited to the extent necessary so that such provision will not render
this Lease invalid or unenforceable under applicable law. In the event that any
provision in this Lease, or the application of such provision to any person or
circumstance, shall be invalid or unenforceable to any extent, the remainder of
this Lease, or the application of such term or provision to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby. Landlord and Tenant hereby respectively
acknowledge that each such party has substantial experience in negotiation
commercial real estate leases, that this Lease is the product of extension
negotiations between the parties, and that, therefore, neither Landlord nor
Tenant shall be charged with having promulgated this Lease and that no rule of
strict construction with respect to the provisions of this Lease shall be
applicable.

 

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Section 9.11 Entire Agreement. Tenant agrees that (a) this Lease supersedes and
cancels any and all previous statements, negotiations, arrangements, brochures,
agreements, and understandings, if any, between Landlord and Tenant or displayed
by Landlord to Tenant with respect of the subject matter of this Lease, the
Premises, the Building, or the Project and (b) there are no representations,
agreements or warranties (express or implied, oral or written) between Landlord
and Tenant with respect to the subject matter of this Lease, the Premises, the
Building, or the Project other than as set forth in this Lease.

Section 9.12 Tenant’s Authority. Tenant represents and warrants that (a) Tenant
has the full right, power, and authority to enter into, and to perform its
obligations under, this Lease, and (b) upon execution of this Lease by Tenant,
this Lease shall constitute a valid and legally binding obligation of Tenant. If
Tenant signs as a corporation, each of the persons executing this Lease on
behalf of Tenant covenant and warrant that Tenant is a duly and validly existing
corporation, that the execution of this Lease by such persons on behalf of
Tenant has been duly authorized by all necessary corporate action, and that
Tenant is qualified to do business in the State of California.

Section 9.14 Landlord’s Liability. Notwithstanding anything to the contrary set
forth in this Lease, Tenant agrees that no personal, partnership, or corporate
liability of any kind or character whatsoever shall attach to Landlord or its
partners or venturers for payment of any amounts payable under this Lease or for
the performance of any obligation under this Lease. The exclusive remedies of
Tenant for the failure of Landlord to perform any of Landlord’s obligations
under this Lease shall be to proceed against the interest of Landlord in and to
the Project. Landlord shall not be responsible in any way to Tenant or any
Tenant Related Party for any loss of property from the Premises or public areas
of the Building or for any damages to any property from any cause whatever. Nor
shall Landlord be responsible for lost or stolen personal property, money, or
jewelry from the Premises, regardless of whether such loss occurs when the
Premises are locked. Landlord shall never be liable for consequential or special
damages.

Section 9.15 Time of the Essence. In all instances in which Tenant is required
to pay any sum or do any act at a particular time or within a particular period,
it is understood that time is of the essence.

 

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Section 9.16 Instruments and Evidence Required to be Submitted to Landlord. Each
written instrument and all evidence of the existence or non-existence of any
circumstances or conditions which is required by this Lease to be furnished to
Landlord shall in all respects be in form and substance satisfactory to
Landlord, and the duty to furnish such written instrument or evidence shall not
be considered satisfied until Landlord shall have acknowledged that Landlord is
satisfied with the form and content of each.

Section 9.17 Counterparts. This Lease may be executed in any number of
counterparts, each of which, when executed and delivered, shall be an original;
but such counterparts shall together constitute one and the same instrument.

Section 9.18 Financial Reporting. Tenant shall deliver to Landlord within ninety
(90) days after the end of each tax year final statements of the Tenant
certified by its chief financial officer to be true and correct, and upon
request by Landlord, Tenant shall also deliver to Landlord quarterly financial
statements of Tenant, certified by its chief financial officer to be true and
correct.

Section 9.19 Effective Date. The submission of this Lease to Tenant for
examination does not constitute a reservation of or offer or option for the
Premises, and this Lease shall become effective only upon execution by both
Landlord and Tenant. The term “Effective Date” shall mean the date on which this
Lease is first fully executed by both Landlord and Tenant.

Section 9.20 Successors and Assigns. From and after the Effective Date, this
Lease shall be binding upon, inure to the benefit of, and be enforceable by the
parties to this Lease and their respective successors and assigns (subject to
the provisions of this Lease). As used in this Lease, the phrase “successors and
assigns” is used in its broadest possible context and includes, without
limitation and as applicable, the respective heirs, personal representatives,
successors, and assigns of each of the parties to this Lease and any person,
partnership, corporation, or other entity succeeding to any interest in this
Lease, the Premises, the Building, or the Project. Nothing contained in this
Section 9.20 nor in the definition of Tenant Related Parties shall serve to
alter or vary the provisions of Section 6.2 prohibiting the types of transfers
by Tenant described in that Section.

Section 9.21 Joint and Several Liability. If there is more than one party
executing this Lease as Tenant, or if Tenant is a partnership, Tenant’s
obligations under this Lease shall be the joint and several obligations of all
such parties executing as Tenant or all such partners constituting Tenant (as
applicable).

 

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Section 9.22 Exhibits. The following Exhibits (and, if applicable, addenda,
riders, or other attachments to this Lease) are attached, to and incorporated
in, this Lease for all purposes.

 

Exhibit “A”    Property Description Exhibit “B”    Rules and Regulations

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
Effective Date.

 

    LANDLORD:     FPA GOVERNOR PARK ASSOCIATES, LLC     a Delaware limited
liability company     By its Operating Member:     FPA GOVERNOR PARK INVESTORS,
LLC     a Delaware limited liability company     By its Manager:     GF GOVERNOR
PARK, LLC     a Delaware limited liability company Date Executed on Dec. 20,
2008     By:  

/s/ Michael B. Earl

Behalf of Landlord:     Name:   Michael B. Earl, Manager     TENANT:     TRINITY
PROPERTY CONSULTANTS, LLC     a California limited liability company Date
Executed on Dec. 20, 2008     By:  

/s/ Joseph A. Clark

    Name:   Joseph A. Clark, Chief Financial Officer

 

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