Exhibit 10.1

 

 

 

LEASE AGREEMENT

 

 

Between

 

 

 

 

 

FUND VIII AND FUND IX ASSOCIATES,

a Georgia joint venture partnership,

as Landlord

 

 

And

 

 

 

 

 

GAMBRO HEALTHCARE, INC.,

a Tennessee corporation,

as Tenant

 

 

 

 

 

Dated: March 4, 2004

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BASIC LEASE PROVISIONS

 

The following is a summary of some of the Basic Provisions of the Lease. In the
event of any conflict between the terms of these Basic Lease Provisions and the
referenced Sections of the Lease, the referenced Sections of the Lease shall
control.

 

1.      Building (See Section 1):

   15253 Bake Parkway      Irvine, California

Project (See Section 1):

                                         
                                        
                                                                            

2.      Premises (See Section 1):

    

Floor:

   100% of Building

Rentable Square Feet:

   65,006

3.      Term (See Section 2):

   Approximately 123 months

4.      Base Rent (See Sections 2 and 3):

 

Lease Months

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Monthly Rate per

Rentable Square Foot of

the Premises

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Annual Rate per Rentable

Square Foot of the

Premises

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0 - 3

   $0.00    $  0.00

  4 - 15

   $1.12    $13.44

16 - 27

   $1.17    $14.04

28 - 39

   $1.21    $14.52

40 - 51

   $1.26    $15.12

52 - 63

   $1.31    $15.72

64 - 75

   $1.36    $16.32

76 - 87

   $1.41    $16.92

88 - 99

   $1.46    $17.52

100 - 111

   $1.51    $18.12

112 - 123

   $1.56    $18.72

 

  5.   Tenant’s Share (See Section 13): 100%

 

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT (hereinafter called the “Lease”) is made and entered into
this 4th day of March, 2004, by and between FUND VIII AND FUND IX ASSOCIATES, a
Georgia joint venture partnership (hereinafter called “Landlord”), and GAMBRO
HEALTHCARE, INC., a Tennessee corporation (hereinafter called “Tenant”).

 

1. Premises. Landlord does hereby rent and lease to Tenant and Tenant does
hereby rent and lease from Landlord, for general office purposes of a type
customary for first-class office buildings, the following described space
(hereinafter called the “Premises”):

 

65,006 rentable square feet of space comprising 100% of a two-story building
(the “Building”) located on the real property described in Exhibit “A” attached
hereto (the “Property”), said Premises to be located as shown by diagonal lines
on the drawing attached hereto as Exhibit “A-1” and made a part hereof by
reference. The Building is located within a larger office park (“Project”)
consisting of approximately              acres, together with any and all
improvements now or hereafter located thereon and together with any additional
land and/or buildings which Landlord hereinafter acquires and makes a part of
the Project. The Premises shall be prepared for Tenant’s occupancy in the manner
and subject to the provisions of Exhibit “B” attached hereto and made a part of
hereof. [confirm factually accurate: Landlord and Tenant agree that the number
of rentable square feet described above has been confirmed and conclusively
agreed upon by the parties.

 

2. Lease Term. Tenant shall have and hold the Premises for a term (“Term”)
commencing on the date (the “Commencement Date”) which is the earlier of (i)
five (5) days after the date on which Landlord notifies Tenant that the Work is
Substantially Complete (each as hereinafter defined) or (ii) the date Tenant
first occupies all or any portion of the Premises for the conduct of its
business, and shall terminate at midnight on the last day (the “Expiration
Date”) of the one hundred twenty third (123rd) full calendar month following the
Commencement Date, unless sooner terminated or extended as hereinafter provided.
Promptly following the Commencement Date, Landlord and Tenant shall enter into a
letter agreement in the form attached hereto as Exhibit “C”, specifying the
Commencement Date, the Expiration Date, the conclusively agreed number of
rentable square feet contained within the Premises and the agreed amount of Base
Rent payable hereunder for the first Lease Year (as defined in Section 4 below).

 

3. Base Rent. Tenant shall pay to Landlord, at Fund VIII and Fund IX Associates,
PO Box 926040, Norcross, GA 30010-6040, or at such other place as Landlord shall
designate in writing to Tenant, annual base rent (“Base Rent”) in the amounts
set forth in the Basic Lease Provisions. The term “Lease Year”, as used in the
Basic Lease Provisions and throughout this Lease, shall mean each and every
consecutive twelve (12) month period during the Term of this Lease, with the
first such twelve (12) month period commencing on the Commencement Date;
provided, however, if the Commencement Date occurs other than on the first day
of a calendar month the first Lease Year shall be that partial month plus the
first full twelve (12) months thereafter.

 

4. Rent Payment. The Base Rent for each Lease Year shall be payable in equal
monthly installments, due on the first day of each calendar month, in advance,
in legal tender of the United States of America, without abatement, demand,
deduction or offset whatsoever, except as may be expressly provided in this
Lease. One full monthly installment of Base Rent shall be due and payable on the
date of execution of this Lease by Tenant for the first month’s Base Rent and a
like monthly installment of Base Rent shall be due and payable on or before the
first day of each calendar month following the

 

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Commencement Date during the Term hereof; provided, that if the Commencement
Date should be a date other than the first day of a calendar month, the monthly
Base Rent installment paid on the date of execution of this Lease by Tenant
shall be prorated to that partial calendar month, and the excess shall be
applied as a credit against the next monthly Base Rent installment. Tenant shall
pay, as Additional Rent, all other sums due from Tenant under this Lease (the
term “Rent”, as used herein, means all Base Rent, Additional Rent and all other
amounts payable hereunder from Tenant to Landlord).

 

5. Late Charge. Other remedies for non-payment of Rent notwithstanding, if any
monthly installment of Base Rent or Additional Rent is not received by Landlord
on or before the date due, or if any payment due Landlord by Tenant which does
not have a scheduled due date is not received by Landlord on or before the fifth
(5th) business day following the date Tenant was invoiced, a late charge of five
percent (5%) percent of such past due amount shall be immediately due and
payable as Additional Rent and interest shall accrue from the date past due
until paid at the lower of twelve percent (12%) per annum or the highest rate
permitted by applicable law. In the event that checks submitted by Tenant to
Landlord for payment of amounts due pursuant to the Lease shall not be honored
by the financial institute due to insufficient funds in excess of two (2) times
during the Term, Landlord may, in its sole discretion, require that all future
payments by Tenant to Landlord be paid by certified funds, cashier’s check or
cash.

 

6. Partial Payment. No payment by Tenant or acceptance by Landlord of an amount
less than the Rent herein stipulated shall be deemed a waiver of any other Rent
due. No partial payment or endorsement on any check or any letter accompanying
such payment of Rent shall be deemed an accord and satisfaction, but Landlord
may accept such payment without prejudice to Landlord’s right to collect the
balance of any Rent due under the terms of this Lease or any late charge
assessed against Tenant hereunder.

 

7. Construction of this Agreement. No failure of Landlord to exercise any power
given Landlord hereunder, or to insist upon strict compliance by Tenant of his
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of Landlord’s right to demand exact
compliance with the terms hereof. Time is of the essence of this Lease.

 

8. Use of Premises.

 

(a) Tenant shall use and occupy the Premises for general office purposes of a
type customary for first-class office buildings and for no other purpose. The
Premises shall not be used for any illegal purpose, nor in violation of any
valid regulation of any governmental body, nor in any manner to create any
nuisance or trespass, nor in any manner to vitiate the insurance or increase the
rate of insurance on the Premises or the Building, nor in any manner
inconsistent with the first-class nature of the Building.

 

(b) Tenant shall not cause or permit the receipt, storage, use, location or
handling on the Property (including the Building and Premises) of any product,
material or merchandise which is explosive, highly inflammable, or a “hazardous
or toxic material,” as that term is hereafter defined. “Hazardous or toxic
material” shall include all materials or substances which have been determined
to be hazardous to health or the environment, including, without limitation
hazardous waste (as defined in the Resource Conservation and Recovery Act);
hazardous substances (as defined in the Comprehensive Emergency Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act); gasoline or any other petroleum product or by-product or
other hydrocarbon derivative; toxic substances, (as defined by the Toxic
Substances Control Act); insecticides, fungicides or rodenticide, (as defined in
the Federal Insecticide, Fungicide, and Rodenticide Act); asbestos and radon and
substances determined to be hazardous under the Occupational Safety and Health
Act or regulations

 

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promulgated thereunder. Notwithstanding the foregoing, Tenant shall not be in
breach of this provision as a result of the presence in the Premises of de
minimis amounts of hazardous or toxic materials which are in compliance with all
applicable laws, ordinances and regulations and are customarily present in a
general office use (e.g., copying machine chemicals and kitchen cleansers).

 

(c) The occupancy rate of the Premises shall in no event be more than seven (7)
persons per one thousand (1,000) useable square feet within the Premises, or the
maximum occupancy permitted pursuant to applicable laws or codes, whichever is
less. In the event that Tenant exceeds this ratio, and Landlord consents to such
overage, Landlord may condition its consent upon Tenant’s payment of any and all
costs related with such overage, including without limitation, excessive
maintenance charges, increased electrical and HVAC usage, and increased parking
demand.

 

(d) Landlord hereby represents and warrants to Tenant that, to the best of
Landlord’s actual knowledge, neither the Building nor the Property contains any
“hazardous or toxic material” (except de minimis amounts of hazardous or toxic
materials which are in compliance with all applicable laws, ordinances and
regulations). In addition, Landlord does hereby represent and warrant that,
except for de minimis amounts of hazardous or toxic materials which are in
compliance with all applicable laws, ordinances and regulations above, Landlord
shall not use, generate, manufacture, produce, store, release, discharge, or
dispose of, on, under or about the Premises, Building or the Real Property or
transport to or from the Premises, the Building or the Real Property any
“hazardous or toxic material” or allow its employees, agents or contractors to
do so. To the extent permitted by then applicable law, Landlord shall protect,
indemnify, defend and hold harmless Tenant from and against any all claims,
liabilities, losses, actions, costs, and expenses (including reasonable
attorneys’ fees) incurred by such indemnified persons, or any of them, as the
result of (i) the introduction in or onto the Premises, the Building or the Real
Property by Landlord, its employees, agents, or contractors (collectively,
“Landlord’s Agents”) of any “hazardous or toxic material”, and (ii) the presence
of any “hazardous or toxic material” (other than de minimis amounts of hazardous
or toxic materials which are in compliance with all applicable laws, ordinances
and regulations above) in or on the Premises, the Building or the Property on
the date of this Lease of which Landlord had actual knowledge but failed to
disclose to Tenant.

 

9. Definitions. “Landlord,” as used in this Lease, shall include the party named
in the first paragraph hereof, its representatives, assigns and successors in
title to the Premises. “Tenant” shall include the party named in the first
paragraph hereof, its heirs and representatives, and, if this Lease shall be
validly assigned or sublet, shall also include Tenant’s assignees or subtenants,
as to the Premises, or portion thereof, covered by such assignment or sublease.
“Landlord” and “Tenant” include male and female, singular and plural,
corporation, partnership, limited liability company (and the officers, members,
partners, employees or agents of any such entities) or individual, as may fit
the particular parties.

 

[this provision to be further revised upon consultation with Landlord:

 

10. Repairs By Landlord. Tenant, by taking possession of the Premises, shall
accept and shall be held to have accepted the Premises as suitable for the use
intended by this Lease. Landlord shall not be required, after possession of the
Premises has been delivered to Tenant, to make any repairs or improvements to
the Premises, except as set forth in this Lease. Except for damage caused by
casualty and condemnation (which shall be governed by Section 28 and 29 below),
and subject to normal wear and tear, Landlord shall maintain in good repair the
exterior walls, roof, foundation and structural portions of the Building,
provided such repairs are not occasioned by Tenant, Tenant’s invitees or anyone
in the employ or control of Tenant.

 

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[this provision to be further revised upon consultation with Landlord:

 

11. Repairs By Tenant. Except as described in Section 10 above, Tenant shall, at
its own cost and expense, maintain the Premises, the Building and the Property
in good repair and in a neat and clean, first-class condition, including making
all necessary repairs and replacements. Tenant shall further, at its own cost
and expense, repair or restore any damage or injury to all or any part of the
Premises, the Building or the Property caused by Tenant or Tenant’s agents,
employees, invitees, licensees, visitors or contractors, including but not
limited to any repairs or replacements necessitated by (i) the construction or
installation of improvements to the Premises by or on behalf of Tenant, (ii) the
moving of any property into or out of the Premises. If Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make the repairs
and replacements and the costs of such repair or replacements shall be charged
to Tenant as Additional Rent and shall become due and payable by Tenant with the
monthly installment of Base Rent next due hereunder.

 

12. Alterations and Improvements. Except for minor, decorative alterations which
do not affect the Building structure or systems, are not visible from outside
the Premises and do not cost in excess of $30,000.00 in the aggregate, Tenant
shall not make or allow to be made any alterations, physical additions or
improvements in or to the Premises without first obtaining in writing Landlord’s
written consent for such alterations or additions, which consent may be granted
or withheld in the sole, unfettered discretion of Landlord (if the alterations
will affect the Building structure or systems or will be visible from outside
the Premises), but which consent shall not be unreasonably withheld (if the
alterations will not affect the Building structure or systems and will not be
visible from outside the Premises). Upon Landlord’s request, Tenant will furnish
Landlord plans and specifications for any proposed alterations, additions or
improvements and shall reimburse Landlord for its reasonable cost to review such
plans. Any alterations, physical additions or improvements shall at once become
the property of Landlord; provided, however, Landlord, at its option, may
require Tenant to remove any alterations, additions or improvements in order to
restore the Premises to the condition existing on the Commencement Date. All
costs of any such alterations, additions or improvements shall be borne by
Tenant. All alterations, additions or improvements must be made in a good,
first-class, workmanlike manner and in a manner that does not disturb other
tenants (i.e., any loud work must be performed during non-business hours) and
Tenant must maintain appropriate liability and builder’s risk insurance
throughout the construction. Tenant does hereby indemnify and hold Landlord
harmless from and against all claims for damages or death of persons or damage
or destruction of property arising out of the performance of any such
alterations, additions or improvements made by or on behalf of Tenant. Under no
circumstances shall Landlord be required to pay, during the Term of this Lease
and any extensions or renewals thereof, any ad valorem or Property tax on such
alterations, additions or improvements, Tenant hereby covenanting to pay all
such taxes when they become due. In the event any alterations, additions,
improvements or repairs are to be performed by contractors or workmen other than
Landlord’s contractors or workmen, any such contractors or workmen must first be
approved, in writing, by Landlord. Landlord agrees to assign to Tenant any
rights it may have against the contractor of the Premises with respect to any
work performed by said contractor in connection with improvements made by
Landlord at the request of Tenant.

 

[this provision to be further revised upon consultation with Landlord:

 

13. Operating Expenses.

 

(a) Tenant agrees to reimburse Landlord throughout the Term, as Additional Rent
hereunder for Tenant’s Share (as defined below) of the annual Operating Expenses
(as defined below). The term

 

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“Tenant’s Share” shall mean the percentage determined by dividing the rentable
square footage of the Premises by the rentable square footage of the Building.
Landlord and Tenant hereby agree that Tenant’s Share is 100%. If Tenant does not
lease the Premises during the entire full calendar year in which the Term of
this Lease commences or ends, Tenant’s Share of excess Operating Expenses for
the applicable calendar year shall be appropriately prorated for the partial
year, based on the number of days Tenant has leased the Premises during that
year.

 

(b) Except to the extent set forth in Section 20 below, Operating Expenses shall
be all those expenses of operating, servicing, managing, maintaining and
repairing the Property, Building, all parking areas and related common areas (as
well as an allocation of certain Project expenses, as reasonably allocated by
Landlord to the Building and the other buildings in the Project) in a manner
deemed by Landlord reasonable and appropriate and in the best interest of the
tenants of the Building and in a manner consistent with first-class office
buildings in the metropolitan area in which the Project is located. Operating
Expenses shall include, without limitation, the following:

 

[this provision to be further revised to incorporate Prop 13 concepts:

 

(1) All taxes and assessments, whether general or special, applicable to the
Property and the Building, which shall include real and personal property ad
valorem taxes, and any and all reasonable costs and expenses incurred by
Landlord in seeking a reduction of any such taxes and assessments. However,
Tenant shall not be obligated for taxes on the net income from the operation of
the Building, unless there is imposed in the future a tax on rental income on
the Building in lieu of the real Property ad valorem taxes, in which event such
tax shall be deemed an Operating Expense of the Building.

 

(2) Insurance premiums and deductible amounts, including, without limitation,
for commercial general liability, ISO Causes of Loss Special Form property, rent
loss and other coverages carried by Landlord on the Building and Property
(including terrorism insurance, if Landlord elects to carry it or is required to
carry it by any lender).

 

(3) Management fees (or a charge equal to fair market management fees if
Landlord provides its own management services) and the market rental value of a
management office;

 

[this provision to be further revised upon consultation with Landlord:

 

(4) The costs, including interest, amortized over its useful life, of any
capital improvement made to the Building by or on behalf of Landlord after the
date of this Lease which is required under any governmental law or regulation
(or any judicial interpretation thereof) that was not applicable to the Building
as of the date of this Lease, and of the acquisition and installation of any
device or equipment designed to improve the operating efficiency of any system
within the Building or which is acquired to improve the safety of the Building
or Project.

 

(5) All services, supplies, repairs, replacements or other expenses directly and
reasonably associated with servicing, maintaining, managing and operating the
Building.

 

(6) Wages and salaries of Landlord’s employees (not above the level of Building
Manager) engaged in the maintenance, operation, repair and services of the
Building, including taxes, insurance and customary fringe benefits.

 

(7) Legal and accounting costs.

 

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(8) Costs to maintain and repair the Building and Property.

 

(9) The Building’s allocated share (as reasonably be determined by Landlord) of
certain expenses which are incurred on a Project-wide basis including, without
limitation, costs in connection with (i) landscaping, (ii) utility and road
repairs, (iii) security, (iv) signage installation, replacement and repair and
(v) taxes or assessments which are not assessed against a particular building or
the parcel on which it is located. If the Project is covered by a declaration
and/or an owners association and costs of the type described above are allocated
to the Building by way of dues or costs charged or assessed under that
declaration or by that association, those charges or dues shall be included in
the Operating Expenses.

 

(c) If requested by Tenant, Landlord shall, on or before the Commencement Date
and on or before December 20 of each calendar year, provide Tenant a statement
of the estimated monthly installments of Tenant’s Share of excess Operating
Expenses increases which will be due for the remainder of the calendar year in
which the Commencement Date occurs or for the upcoming calendar year, as the
case may be. In the event Landlord has not provided Tenant with such statement
prior to January 1 of any calendar year, Tenant shall continue to pay Tenant’s
Share of excess Operating Expenses in the same amount as the previous calendar
year, unless and until Landlord provides a statement of estimated monthly
installments for the current calendar year. As soon as practicable after
December 31 of each calendar year during the Term of this Lease, Landlord shall
furnish to Tenant an itemized statement of the Operating Expenses within the
Building for the calendar year then ended. Upon reasonable prior written request
given not later than thirty (30) days following the date Landlord’s statement is
delivered to Tenant, Landlord will provide Tenant detailed documentation to
support the itemized statement. If Tenant does not notify Landlord of any
objection to Landlord’s itemized statement within thirty (30) days of Landlord’s
delivery thereof, Tenant shall be deemed to have accepted such statement as true
and correct and shall be deemed to have waived any right to dispute the excess
Operating Expenses due pursuant to that statement.

 

(i) Tenant shall pay to Landlord, together with its monthly payment of Base Rent
as provided in Sections 3 and 4 hereinabove, as Additional Rent hereunder, the
estimated monthly installment of Tenant’s Share of the excess Operating Expenses
for the calendar year in question. At the end of any calendar year if Tenant has
paid to Landlord an amount in excess of Tenant’s Share of excess Operating
Expenses for such calendar year, Landlord shall reimburse to Tenant any such
excess amount (or shall apply any such excess amount to any amount then owing to
Landlord hereunder, and if none, to the next due installment or installments of
Additional Rent due hereunder, at the option of Landlord). At the end of any
calendar year if Tenant has paid to Landlord less than Tenant’s Share of excess
Operating Expenses for such calendar year, Tenant shall pay to Landlord any such
deficiency within thirty (30) days after Tenant receives the annual statement.

 

(ii) For the calendar year in which this Lease terminates, and is not extended
or renewed, the provisions of this Section shall apply, but Tenant’s Share for
such calendar year shall be subject to a pro rata adjustment based upon the
number of days prior to the expiration of the Term of this Lease. Tenant shall
make monthly estimated payments of the prorata portion of Tenant’s Share for
such calendar year (in the manner provided above) and when the actual prorated
Tenant’s Share for such calendar year is determined Landlord shall send a
statement to Tenant and if such statements reveals that Tenant’s estimated
payments for the prorated Tenant’s Share for such calendar year exceeded the
actual prorated Tenant’s Share for such calendar year, Landlord shall include a
check for that amount along with the statement. If the statement reveals that
Tenant’s estimated payments for the prorated Tenant’s Share for such calendar
year were less than the actual prorated Tenant’s Share for such calendar year,
Tenant shall pay the shortfall to Landlord within thirty (30) days of the date
Tenant receives Landlord’s statement.

 

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(iii) If the Building is less than ninety-five percent (95%) occupied throughout
any calendar year of the Term, then the actual Operating Expenses for the
calendar year in question shall be increased to the amount of Operating Expenses
which Landlord reasonably determines would have been incurred during that
calendar year if the Building had been fully occupied throughout such calendar
year.

 

14. Landlord’s Failure to Give Possession. Landlord shall not be liable for
damages to Tenant for failure to deliver possession of the Premises to Tenant if
such failure is due to no fault of Landlord, to the failure of any construction
or remodeling of the Premises by Tenant to be completed or to the failure of any
previous tenant to vacate the Premises. Landlord will use commercially
reasonable efforts to give possession to Tenant by the scheduled Commencement
Date of the Term. If Landlord’s failure to do so is caused by the act of any
previous tenant holding over, Landlord agrees to use reasonable efforts to
recover possession as soon as reasonably possible, including filing a customary
dispossession action.

 

15. Acceptance and Waiver. Landlord shall not be liable to Tenant, its agents,
employees, guests or invitees (and, if Tenant is an entity, its officers,
agents, employees, guests or invitees) for any damage caused to any of them due
to the Building or any part or appurtenances thereof being improperly
constructed or being or becoming out of repair, or arising from the leaking of
gas, water, sewer or steam pipes, from water rising from underground pipes or
the ground, or from electricity, but Tenant, by moving into the Premises and
taking possession thereof, shall accept, and shall be held to have accepted the
Premises as suitable for the purposes for which the same are leased, and shall
accept and shall be held to have accepted the Building and every appurtenances
thereof, and Tenant by said act waives any and all defects therein; provided,
however, that this Section shall not apply to any damages or injury caused by or
resulting from the negligence or willful misconduct of Landlord.

 

16. Signs. Except as set forth below, Tenant shall not paint or place signs,
placards, or other advertisement of any character upon the windows or inside
walls of the Premises except with the consent of Landlord which consent may be
withheld by Landlord in its absolute discretion, and Tenant shall place no signs
upon the outside walls, common areas or the roof of the Building.

 

Subject to compliance with all applicable laws, ordinances and governmental
approvals, subject to the approval of the association governing the Building,
and subject to compliance with Irvine Spectrum sign guidelines and City of
Irvine sign criteria (the compliance with which, including the procurement of
all necessary permits and licenses, is Tenant’s responsibility), Tenant shall
have the right to install, at Tenant’s sole cost and expense, Tenant’s name and
other signage on the building’s exterior facade (“Tenant’s Signage”) in
accordance with the location(s), size, color, design, material, content,
lighting and other characteristics to be reasonably approved by Landlord. At
Tenant’s sole cost and expense, Tenant shall maintain Tenant’s Signage in good
condition, subject to Landlord’s reasonable approval as to Tenant’s maintenance
plan and implementation. Landlord hereby covenants that Tenant’s Signage shall
be the only signage placed on the exterior facade of the Building. Upon either:
(i) a default, which has not been cured within the applicable cure period, if
any; (ii) the expiration or earlier termination of this Lease, (iii) the
assignment of the Lease or sublet of the Premises, or (iv) the occurrence of an
event which causes the rentable square feet leased to Tenant to fall below
                             rentable square feet, Tenant’s signage rights shall
no longer be exclusive, and Landlord shall have the right, but not the
obligation, to require Tenant to remove Tenant’s Signage from the Building, to
require Tenant to repair all injury or damage resulting from such removal and to
require Tenant to return the Building to as good a condition as it was at the
Commencement Date, reasonable wear and tear excepted, all at Tenant’s sole cost
and expenses. If Tenant fails to perform as required in the immediately
preceding sentence, Landlord shall have the right to perform on Tenant’s behalf
and Tenant shall reimburse Landlord for all actual cost incurred in connection
therewith.

 

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17. Advertising. Landlord may advertise the Premises as being “For Rent” at any
time following a default by Tenant which remains uncured and at any time within
one hundred eighty (180) days prior to the expiration, cancellation or
termination of this Lease for any reason and during any such periods may exhibit
the Premises to prospective tenants.

 

18. Removal of Fixtures. If Tenant is not in default hereunder, Tenant may,
prior to the expiration of the Term of this Lease, or any extension thereof,
remove any trade fixtures and equipment which it has placed in the Premises
which can be removed without significant damage to the Premises, provided Tenant
repairs all damages to the Premises caused by such removal.

 

19. Entering Premises. Landlord may enter the Premises at reasonable hours
provided that Landlord’s entry shall not unreasonably interrupt Tenant’s
business operations and that prior notice is given when reasonably possible
(and, if in the opinion of Landlord any emergency exists, at any time and
without notice): (a) to inspect the Premises to see that Tenant is complying
with all of the terms and conditions of this Lease and with the rules and
regulations hereof; (b) to remove from the Premises any articles or signs kept
or exhibited therein in violation of the terms hereof; (c) to run pipes,
conduits, ducts, wiring, cabling or any other mechanical, electrical, plumbing
or HVAC equipment through the areas behind the walls, below the floors or above
the drop ceilings; and (d) to exercise any other right or perform any other
obligation that Landlord has under this Lease. Landlord shall be allowed to take
all material into and upon the Premises that may be required to make any
repairs, improvements and additions, or any alterations, without in any way
being deemed or held guilty of trespass and without constituting a constructive
eviction of Tenant. The Rent reserved herein shall not abate while said repairs,
alterations or additions are being made and Tenant shall not be entitled to
maintain a set-off or counterclaim for damages against Landlord by reason of
loss from interruption to the business of Tenant because of the prosecution of
any such work. All such repairs, decorations, additions and improvements shall
be done during ordinary business hours, or, if any such work is at the request
of Tenant to be done during any other hours, the Tenant shall pay all overtime
and other extra costs.

 

20. Services. From and after the date of this Lease, Tenant will be responsible,
at its sole cost and expense, for the furnishing of all services and utilities
to the Premises, including, but not limited to, heating, ventilating and
air-conditioning, electricity, water, telephone, janitorial and security
services, window washing and landscaping services. Landlord shall have no
obligation to provide any services or utilities to the Premises, including, but
not limited to, heating, ventilating and air-conditioning, electricity, water,
telephone, janitorial and security services, window washing and landscaping
services. Landlord shall not be liable for any damages directly or indirectly
resulting from the interruption in any of the services or utilities to the
Premises, nor shall any such interruption entitle Tenant to any abatement of
Rent or any right to terminate this Lease.

 

21. Indemnities. Tenant does hereby indemnify and save harmless Landlord against
all claims for damages to persons or property which are caused anywhere in the
Building or on the Property by the negligence or willful misconduct of Tenant,
its agents or employees or which occur in the Premises (or arise out of actions
taking place in the Premises) unless such damage is caused by the negligence or
willful misconduct of Landlord, its agents, or employees. Landlord does hereby
indemnify and hold Tenant harmless against all claims for damaged persons or
property if caused by the negligence or willful misconduct of Landlord, its
agents or employees. The indemnities set forth hereinabove shall include the
obligation to pay reasonable expenses incurred by the indemnified party,
including, without limitation, reasonable, actually incurred attorney’s fees.
The indemnities contained herein do not override the waivers contained in
Section 22(d) below.

 

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22. Tenant’s Insurance; Waivers.

 

(a) Tenant further covenants and agrees that from and after the date of delivery
of the Premises from Landlord to Tenant, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:

 

(i) Commercial General and Umbrella Liability Insurance covering the Premises
and Tenant’s use thereof against claims for personal injury or death, property
damage and product liability occurring upon, in or about the Premises, such
insurance to be written on an occurrence basis (not a claims made basis), with a
limit for each occurrence not less than $3,000,000 and to have general aggregate
limits of not less than $5,000,000 for each policy year. The insurance coverage
required under this Section 22(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 21 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
The general aggregate limits under the Commercial General Liability (CGL)
insurance policy or policies must apply separately to the Premises and to
Tenant’s use thereof (and not to any other location or use of Tenant) and, if
necessary, such policy shall contain an endorsement to that effect. CGL
insurance shall be written on ISO occurrence form CG 00 01 01 96 (or a
substitute form providing equivalent or better coverage).The certificate of
insurance evidencing the Commercial General Liability form of policy shall
specify all endorsements required herein, shall name all additional insureds
required by Section 22(b) below and shall specify on the face thereof that the
limits of such policy applies separately to the Premises.

 

(ii) Commercial all risk property insurance covering all of the items included
in Tenant’s leasehold improvements, heating, ventilating and air conditioning
equipment maintained by Tenant, trade fixtures, merchandise and personal
property from time to time in, on or upon the Premises, and alterations,
additions or changes made by Tenant pursuant to Section 12, in an amount not
less than one hundred percent (100%) of their full replacement value from time
to time during the Term, providing protection against perils included within the
ISO Special Causes of Loss—Form insurance policy (or substitute form providing,
in Landlord’s reasonable discretion, equivalent or better coverage), together
with insurance against sprinkler damage, vandalism and malicious mischief. Any
policy proceeds from such insurance shall be held in trust by Tenant’s insurance
company for the repair, construction and restoration or replacement of the
property damaged or destroyed unless this Lease shall cease and terminate under
the provisions of Section 28 of this Lease. The certificate of insurance
evidencing such coverage which is delivered by Tenant pursuant to Section 22(b)
below shall designate Landlord and Wells Management, Inc. as loss payee as their
interests may appear with respect to the Building, all leasehold improvements,
heating, ventilating and air-conditioning equipment and all fixtures (other than
Tenant’s trade fixtures).

 

(iii) Workers’ Compensation and Employer’s Liability insurance affording
statutory coverage and containing statutory limits with the Employer’s Liability
portion thereof to have minimum limits of $500,000.00.

 

(iv) Business Interruption Insurance equal to not less than fifty percent (50%)
of the estimated annual gross earnings (as defined in the standard form of
business interruption insurance provision) of Tenant generated from or through
the Premises for its most recent fiscal year, which insurance shall be issued on
an “all risks” basis (or its equivalent).

 

(v) Automobile (and if necessary, commercial umbrella) liability insurance with
a limit of not less than $5,000,000 for each accident. Such insurance shall
insure liability arising out of any automobiles used in connection with Tenant’s
business (including owned, hired, leased and non-owned automobiles).

 

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(b) All policies of the insurance provided for in Section 22(a) shall be issued
in form acceptable to Landlord by insurance companies with a rating and
financial size of not less than A-X in the most current available “Best’s
Insurance Reports”, and licensed to do business in the state in which Landlord’s
Building is located. Landlord, in its sole discretion, shall be permitted to
temporarily waive or accept alternative coverages for Tenant’s insurance as
required by the terms of this Section 22. Each and every such policy:

 

(i) shall name Landlord and Wells Management, Inc. as an additional insured (as
well as any mortgagee of Landlord and any other party reasonably designated by
Landlord) and the coverage in item (ii) shall also name Landlord as loss payee
as its interest may appear with respect to all leasehold improvements, heating,
ventilating and air-conditioning equipment and fixtures (other than Tenant’s
trade fixtures).

 

(ii) shall (and a certificate thereof shall be delivered to Landlord at or prior
to the execution of the Lease) be delivered to each of Landlord and any such
other parties in interest within thirty (30) days after delivery of possession
of the Premises to Tenant and thereafter within thirty (30) days prior to the
expiration of each such policy, and, as often as any such policy shall expire or
terminate. Renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent;

 

(iii) shall contain a provision that the insurer will give to Landlord and such
other parties in interest at least thirty (30) days notice in writing in advance
of any material change, cancellation, termination or lapse, or the effective
date of any reduction in the amounts of insurance; and

 

(iv) shall be written as a primary policy which does not contribute to and is
not in excess of coverage which Landlord may carry.

 

(c) Any insurance provided for in Section 22(a) may be maintained by means of a
policy or policies of blanket insurance, covering additional items or locations
or insureds, provided, however, that:

 

(i) Landlord and any other parties in interest from time to time designated by
Landlord to Tenant shall be named as an additional insured thereunder as its
interest may appear;

 

(ii) the coverage afforded Landlord and any such other parties in interest will
not be reduced or diminished by reason of the use of such blanket policy of
insurance;

 

(iii) any such policy or policies [except any covering the risks referred to in
Section 22(a)] shall specify therein (or Tenant shall furnish Landlord with a
written statement from the insurers under such policy specifying) the amount of
the total insurance allocated to the Tenant’s improvements and property more
specifically detailed in Section 22(a); and

 

(iv) the requirements set forth in this Section 22 are otherwise satisfied.

 

(d) Notwithstanding anything to the contrary set forth hereinabove, Landlord and
Tenant do hereby waive any and all claims against one another for damage to or
destruction of real or personal property to the extent such damage or
destruction can be covered by an ISO Causes of Loss—Special Form property
insurance of the type described in Section 22(a)(ii) above. Each party shall
also be responsible for the payment of any deductible amounts required to be
paid under the applicable ISO Causes of

 

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Loss—Special Form property insurance carried by the party whose property is
damaged. These waivers shall apply if the damage would have been covered by a
customary ISO Causes of Loss—Special Form property insurance policy, even if the
party fails to obtain such coverage. The intent of this provision is that each
party shall look solely to its insurance with respect to property damage or
destruction which can be covered by ISO Causes of Loss—Special Form property
insurance of the type described in Section 22(a)(ii). To further effectuate the
provisions of this Section 22(d), Landlord and Tenant both agree to provide
copies of this Lease (and in particular, these waivers) to their respective
insurance carriers and to require such insurance carriers to waive all rights of
subrogation against the other party with respect to property damage covered by
the applicable ISO Causes of Loss—Special Form property insurance policy.

 

(e) Tenant acknowledges and agrees that any contractors (and subcontractors of
any tier) hired by Tenant to do work in the Premises will be required to carry
sufficient insurance coverage insuring the contractor (or subcontractor), Tenant
and Landlord with terms equivalent to those specified in this Section 22, and
Tenant shall provide certificates of such insurance to Landlord prior to
commencing any work in the Premises.

 

23. Governmental Requirements. Tenant shall, at its own expense, promptly comply
with all requirements of any legally constituted governmental or public
authority made necessary by reason of Tenant’s occupancy of the Premises,
including, without limitation, the Americans with Disabilities Act.

 

24. Abandonment of Premises. Tenant agrees not to abandon or vacate the Premises
during the Term of this Lease. If Tenant does abandon or vacate the Premises for
more than ninety (90) days, Landlord may terminate this Lease, by written notice
to Tenant at any time prior to Tenant reoccupying the Premises, but such
termination shall not entitle Landlord to pursue any other remedies unless an
uncured Event of Default then exists, in which case Landlord may pursue any and
all remedies provided by this Lease, at law or in equity.

 

25. Assignment and Subletting. Tenant may not, without the prior written consent
of Landlord, which consent shall not be unreasonably withheld by Landlord,
assign this Lease or any interest hereunder, or sublet the Premises or any part
thereof, or permit the use of the Premises by any party other than Tenant. In
the event that Tenant is a corporation or entity other than an individual, any
transfer of a majority or controlling interest in Tenant (whether by stock
transfer, merger, operation of law or otherwise) shall be considered an
assignment for purposes of this paragraph and shall require Landlord’s prior
written consent. Landlord will be deemed reasonable in withholding its consent
to any such request based on: (i) the poor business reputation of the proposed
assignee, sublessee or transferee; (ii) the poor financial condition of the
proposed assignee, sublessee or transferee; (iii) the fact that the use of the
proposed assignee, sublessee or transferee is not in keeping with the nature of
the Building or may affect the marketability of the Building; (iv) the fact that
proposed assignee, sublessee or transferee is an existing tenant of the Project,
or is a prospective tenant with respect to space in the Project; (v) the fact
that the use contemplated by the proposed assignee, sublessee or transferee
would violate an exclusive granted by Landlord to another tenant of the Project
or otherwise; or (vi) the fact that the proposed assignee, sublessee or
transferee is a governmental subdivision or agency or any person or entity who
enjoys diplomatic or sovereign immunity. Consent to one assignment or sublease
shall not waive this provision, and all later assignments and subleases shall
likewise be made only upon the prior written consent of Landlord. Tenant shall
reimburse Landlord for its legal and administrative costs in reviewing any such
proposed assignment or sublease. Subtenants or assignees shall become liable to
Landlord for all obligations of Tenant hereunder, without relieving Tenant’s
liability hereunder and, in the event of any default by Tenant under this Lease,
Landlord may, at its option, but without any obligation to do so, elect

 

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to treat such sublease or assignment as a direct Lease with Landlord and collect
rent directly from the subtenant. In addition, upon any request by Tenant for
Landlord’s consent to an assignment or sublease, Landlord may elect to terminate
this Lease and recapture all of the Premises (in the event of an assignment
request) or the applicable portion of the Premises (in the event of a subleasing
request); provided, however, if Landlord notifies Tenant that Landlord elects to
exercise this recapture right, Tenant may, within five (5) business days of its
receipt of Landlord’s notice, notify Landlord that Tenant withdraws its request
to sublease or assign, in which case Tenant shall continue to lease all of the
Premises, subject to the terms of this Lease and Landlord’s recapture notice
shall be null and void. If Tenant desires to assign or sublease, Tenant must
provide written notice to Landlord describing the proposed transaction in detail
and providing all documentation (including detailed financial information for
the proposed assignee or subtenant) reasonably necessary to let Landlord
evaluate the proposed transaction. Landlord shall notify Tenant within twenty
(20) days of its receipt of such notice whether Landlord elects to exercise its
recapture right and, if not, whether Landlord consents to the requested
assignment or sublease. If Landlord fails to respond within such twenty (20) day
period, Landlord will be deemed not to have elected to recapture and not to have
consented to the assignment or sublease. If Landlord does consent to any
assignment or sublease request and the assignee or subtenant pays to Tenant an
amount in excess of the Rent due under this Lease (after deducting Tenant’s
reasonable, actual expenses in obtaining such assignment or sublease, amortized
in equal monthly installments over the then remainder of the Term), Tenant shall
pay 75% of such excess to Landlord as and when the monthly payments are received
by Tenant.

 

Notwithstanding the foregoing to the contrary, but subject to compliance with
all other provisions of this Lease (including, but not limited to, the “use”
provisions hereof), Tenant may assign this Lease or sublet the Premises or any
portion thereof, without Landlord’s consent, to any partnership, corporation or
other entity which controls, is controlled by, or is under common control with
Tenant or Tenant’s parent (control being defined for such purposes as ownership
of at least 50% of the equity interests in, and the power to direct the
management of, the relevant entity) (with any such entity being referred to
herein as an “Affiliate”), provided that (i) Landlord receives thirty (30) days’
prior written notice of such assignment or subletting, (ii) Tenant and any
guarantor are not dissolved as a matter of law as a consequence of the
assignment or subletting or at any time thereafter, (iii) the Affiliate remains
an affiliate meeting the definition of “Affiliate” above for the duration of the
subletting or the balance of the Lease Term in the event of an assignment, (iv)
the Affiliate assumes in writing (the form of which shall be subject to
Landlord’s approval) all of Tenant’s obligations under this Lease, as amended
from time to time, and the prior Tenant and any guarantor are not released from
any of their respective obligations or liabilities under this Lease, as amended
from time to time, or any guaranty delivered to Lender in connection with this
Lease, (v) Landlord receives a fully executed copy of the assignment or sublease
agreement between Tenant and Affiliate, and (vi) the primary purpose of such
assignment or sublet is for legitimate business reasons unrelated to this Lease,
and the assignment or sublet is not a subterfuge by Tenant to avoid its
obligations under this Lease or the restrictions on assignment and subletting
contained herein. Any attempted assignment or subletting in violation of the
preceding sentence shall be voidable at Landlord’s option.

 

Notwithstanding the foregoing to the contrary, but subject to compliance with
all other provisions of this Lease (including, but not limited to, the “use”
provisions hereof), Tenant may assign this Lease without Landlord’s consent, to
any partnership, corporation or other entity resulting from a merger or
consolidation with Tenant, or to any person or entity which acquires
substantially all the assets or stock of Tenant as a going concern, (any of the
foregoing being, a “Permitted Successor”), provided that (i) Landlord receives
thirty (30) days’ prior written notice of such assignment, (ii) the Permitted
Successor’s net worth, as reasonably determined by Landlord, is not less than
Tenant’s and/or any guarantor’s net worth as of the date of this Lease or as of
the date immediately prior to the assignment,

 

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whichever is greater, (iii) the Permitted Successor (or in the case of a newly
formed entity, its management) has proven experience in the operation of a
first-class business of a type consistent with the use of the Building as a
first-class Building in Irvine, California, (iv) the Permitted Successor assumes
in writing (the form of which shall be subject to Landlord’s approval) all of
Tenant’s obligations under this Lease, as amended from time to time, and the
prior Tenant and guarantor are not released from any of their respective
obligations or liabilities under this Lease, as amended from time to time, or
any guaranty delivered to Lender in connection with this Lease, (v) Landlord
receives a fully executed copy of the assignment between Tenant and the
Permitted Successor, and (vi) the primary purpose of such assignment is for
legitimate business reasons unrelated to this Lease, and the assignment is not a
subterfuge by Tenant to avoid its obligations under this Lease or the
restrictions on assignment contained herein. Any attempted assignment in
violation of the preceding sentence shall be voidable at Landlord’s option.

 

26. Default. If Tenant shall default in the payment of Rent herein reserved when
due and fails to cure such default within five (5) business days after written
notice of such default is given to Tenant by Landlord; or if Tenant shall be in
default in performing any of the terms or provisions of this Lease other than
the provisions requiring the payment of Rent, and fails to cure such default
within thirty (30) days after written notice of such default is given to Tenant
by Landlord [or, if such default cannot be cured within thirty (30) days, Tenant
shall not be in default if Tenant promptly commences and diligently proceeds the
cure to completion as soon as possible and in all events within ninety (90)
days]; or if Tenant is adjudicated a bankrupt; or if a permanent receiver is
appointed for Tenant’s Property and such receiver is not removed within sixty
(60) days after written notice from Landlord to Tenant to obtain such removal;
or if, whether voluntarily or involuntarily, Tenant takes advantage of any
debtor relief proceedings under any present or future law, whereby the Rent or
any part thereof, is, or is proposed to be, reduced or payment thereof deferred;
or if Tenant’s effects should be levied upon or attached and such levy or
attachment is not satisfied or dissolved within thirty (30) days after written
notice from Landlord to Tenant to obtain satisfaction thereof; or, if Tenant is
an individual, in the event of the death of the individual and the failure of
the executor, administrator or personal representative of the estate of the
deceased individual to have assigned the Lease within three (3) months after the
death to an assignee approved by Landlord; then, and in any of said events,
Landlord, at its option, may exercise any or all of the remedies set forth in
Section 27 below.

 

27. Remedies. Upon the occurrence of any default set forth in Section 26 above
which is not cured by Tenant within the applicable cure period provided therein,
if any, Landlord may exercise all or any of the following remedies:

 

(a) terminate this Lease by giving Tenant written notice of termination, in
which event this Lease shall terminate on the date specified in such notice and
all rights of Tenant under this Lease shall expire and terminate as of such
date, Tenant shall remain liable for all obligations under this Lease up to the
date of such termination and Tenant shall surrender the Premises to Landlord on
the date specified in such notice, and if Tenant fails to so surrender, Landlord
shall have the right, without notice, to enter upon and take possession of the
Premises and to expel and remove Tenant and its effects without being liable for
prosecution or any claim of damages therefor;

 

(b) terminate this Lease as provided in the immediately preceding subsection and
recover from Tenant all damages Landlord may incur by reason of Tenant’s
default, including without limitation, the then present value of (i) the total
Rent which would have been payable hereunder by Tenant for the period beginning
with the day following the date of such termination and ending with the
Expiration Date of the term as originally scheduled hereunder, minus (ii) the
aggregate reasonable rental value of the

 

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Premises for the same period (as determined by a real estate broker licensed in
the state where the Project is located, who has at least ten (10) years
experience, immediately prior to the date in question evaluating commercial
office space, taking into account all relevant factors including, without
limitation, the length of the remaining Term, the then current market conditions
in the general area, the likelihood of reletting for a period equal to the
remainder of the Term, net effective rates then being obtained by landlords for
similar type space in similar buildings in the general area, vacancy levels in
the general area, current levels of new construction in the general area and how
that would affect vacancy and rental rates during the period equal to the
remainder of the Term and inflation), plus (iii) the costs of recovering the
Premises, and all other expenses incurred by Landlord due to Tenant’s default,
including, without limitation, reasonable attorneys’ fees, plus (iv) the unpaid
Rent earned as of the date of termination, plus interest, all of which sum shall
be immediately due and payable by Tenant to Landlord;

 

(c) without terminating this Lease, and without notice to Tenant, Landlord may
in its own name, but as agent for Tenant enter into and take possession of the
Premises and re-let the Premises, or a portion thereof, as agent of Tenant, upon
any terms and conditions as Landlord may deem necessary or desirable (Landlord
shall have no obligation to attempt to re-let the Premises or any part thereof.
Upon any such re-letting, all rentals received by Landlord from such re-letting
shall be applied first to the costs incurred by Landlord in accomplishing any
such re-letting, and thereafter shall be applied to the Rent owed by Tenant to
Landlord during the remainder of the term of this Lease and Tenant shall pay any
deficiency between the remaining Rent due hereunder and the amount received by
such re-letting as and when due hereunder;

 

(d) allow the Premises to remain unoccupied and collect Rent from Tenant as it
becomes due; or

 

(e) pursue such other remedies as are available at law or in equity.

 

28. Destruction or Damage.

 

(a) Tenant shall promptly notify Landlord of any material damage to the Premises
resulting from fire or any other casualty. If the Building or the Premises are
totally destroyed by storm, fire, earthquake, or other casualty, or damaged to
the extent that, in Landlord’s reasonable opinion the damage cannot be restored
within one hundred eighty (180) days of the date Landlord provides Tenant
written notice of Landlord’s reasonable estimate of the time necessary to
restore the damage, or if the damage is not covered by standard ISO Causes of
Loss—Special Form property insurance, or if the Landlord’s lender requires that
the insurance proceeds be applied to its loan, Landlord shall have the right to
terminate this Lease effective as of the date of such destruction or damage by
written notice to Tenant on or before thirty (30) days following Landlord’s
notice described in the next sentence and Rent shall be accounted for as between
Landlord and Tenant as of that date. Landlord shall provide Tenant with notice
within sixty (60) days following the date of the damage of the estimated time
needed to restore, whether the loss is covered by Landlord’s insurance coverage
and whether or not Landlord’s lender requires the insurance proceeds be applied
to its loan.

 

(b) If the Premises are damaged by any such casualty or casualties but Landlord
is not entitled to or does not terminate this Lease as provided in subparagraph
(a) above, this Lease shall remain in full force and effect, Landlord shall
notify Tenant in writing within sixty (60) days of the date of the damage that
the damage will be restored (and will include Landlord’s good faith estimate of
the date the restoration will be complete), in which case Rent shall abate as to
any portion of the Premises which is not usable, and Landlord shall restore the
Premises to substantially the same condition as before the damage occurred as
soon as practicable, whereupon full Rent shall recommence.

 

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29. Eminent Domain. If the whole of the Building or Premises, or such portion
thereof as will make the Building or Premises unusable in the reasonable
judgment of Landlord for their intended purposes, is condemned or taken by any
legally constituted authority for any public use or purpose, then in either of
said events, Landlord may terminate this Lease by written notice to Tenant and
the Term hereby granted shall cease from that time when possession thereof is
taken by the condemning authorities, and Rent shall be accounted for as between
Landlord and Tenant as of that date. If a portion of the Building or Premises is
so taken, but not such amount as will make the Premises unusable in the
reasonable judgment of Landlord for the purposes herein leased, or if Landlord
elects not to terminate this Lease, this Lease shall continue in full force and
effect and the Rent shall be reduced prorata in proportion to the amount of the
Premises so taken. Tenant shall have no right or claim to any part of any award
made to or received by Landlord for such condemnation or taking, and all awards
for such condemnation or taking shall be made solely to Landlord. Tenant shall,
however, have the right to pursue any separate award that does not reduce the
award to which Landlord is entitled.

 

30. Service of Notice. Except as otherwise provided by law, Tenant hereby
appoints as its agent to receive the service of all dispossessory or distraint
proceedings and notices thereunder, the person in charge of or occupying the
Premises at the time of such proceeding or notice; and if no person be in charge
or occupying the Premises, then such service may be made by attaching the same
to the front entrance of the Premises.

 

31. Mortgagee’s Rights.

 

(a) Tenant agrees that this Lease shall be subject and subordinate (i) to any
mortgage, deed to secure debt or other security interest now encumbering the
Property and to all advances which may be hereafter made, to the full extent of
all debts and charges secured thereby and to all renewals or extensions of any
part thereof, and to any mortgage, deed to secure debt or other security
interest which any owner of the Property may hereafter, at any time, elect to
place on the Property; (ii) to any assignment of Landlord’s interest in the
leases and rents from the Building or Property which includes the Lease which
now exists or which any owner of the Property may hereafter, at any time, elect
to place on the Property; and (iii) to any Uniform Commercial Code Financing
Statement covering the personal property rights of Landlord or any owner of the
Property which now exists or any owner of the Property may hereafter, at any
time, elect to place on the foregoing personal property (all of the foregoing
instruments set forth in (i), (ii) and (iii) above being hereafter collectively
referred to as “Security Documents”). Tenant agrees upon request of the holder
of any Security Documents (“Holder”) to hereafter execute any documents which
the counsel for Landlord or Holder may deem necessary to evidence the
subordination of the Lease to the Security Documents. If Tenant fails to execute
any such requested documents, Landlord or Holder is hereby empowered to execute
such documents in the name of Tenant evidencing such subordination, as the act
and deed of Tenant, and this authority is hereby declared to be coupled with an
interest and not revocable.

 

(b) In the event of a foreclosure pursuant to any Security Documents, Tenant
shall at the election of the Landlord, thereafter remain bound pursuant to the
terms of this Lease as if a new and identical Lease between the purchaser at
such foreclosure (“Purchaser”), as landlord, and Tenant, as tenant, had been
entered into for the remainder of the Term hereof and Tenant shall attorn to the
Purchaser upon such foreclosure sale and shall recognize such Purchaser as the
Landlord under the Lease. Such attornment shall be effective and self-operative
without the execution of any further instrument on the part of any of the
parties hereto. Tenant agrees, however, to execute and deliver at any time and
from time to time, upon the request of Landlord or of Holder, any instrument or
certificate that may be necessary or appropriate in any such foreclosure
proceeding or otherwise to evidence such attornment.

 

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(c) If the Holder of any Security Document or the Purchaser upon the foreclosure
of any of the Security Documents shall succeed to the interest of Landlord under
the Lease, such Holder or Purchaser shall have the same remedies, by entry,
action or otherwise for the non-performance of any agreement contained in the
Lease, for the recovery of Rent or for any other default or event of default
hereunder that Landlord had or would have had if any such Holder or Purchaser
had not succeeded to the interest of Landlord. Any such Holder or Purchaser
which succeeds to the interest of Landlord hereunder, shall not be (a) liable
for any act or omission of any prior Landlord (including Landlord); or (b)
subject to any offsets or defenses which Tenant might have against any prior
Landlord (including Landlord); or (c) bound by any Rent which Tenant might have
paid for more than the current month to any prior Landlord (including Landlord);
or (d) bound by any amendment or modification of the Lease made without its
consent.

 

(d) Tenant hereby acknowledges that if the interest of Landlord hereunder is
covered by an assignment of Landlord’s interest in Lease, Tenant shall pay all
Rent due and payable under the Lease directly to the Holder of the assignment of
Landlord’s interest in Lease upon notification of the exercise of the rights
thereunder by the Holder thereof.

 

(e) Notwithstanding anything to the contrary set forth in this Section 31, the
Holder of any Security Documents shall have the right, at any time, to elect to
make this Lease superior and prior to its Security Document. No documentation,
other than written notice to Tenant, shall be required to evidence that the
Lease has been made superior and prior to such Security Documents, but Tenant
hereby agrees to execute any documents reasonably requested by Landlord or
Holder to acknowledge that the Lease has been made superior and prior to the
Security Documents.

 

(f) Upon Tenant’s prior written request, Landlord shall use commercially
reasonable efforts to deliver to Tenant a commercially reasonable
non-disturbance agreement from the then Holder stating substantially that, so
long as Tenant is not in default under this Lease, Tenant’s right to possession
of the Premises shall not be disturbed.

 

32. Tenant’s Estoppel. Tenant shall, from time to time, upon not less than ten
(10) days prior written request by Landlord, execute, acknowledge and deliver to
Landlord a written statement certifying that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), the dates to
which the Rent has been paid, that Tenant is not in default hereunder and has no
offsets or defenses against Landlord under this Lease, whether or not to the
best of Tenant’s knowledge Landlord is in default hereunder (and if so,
specifying the nature of the default), and other matters reasonably requested by
Landlord concerning the status of the Lease and the Premises, it being intended
that any such statement delivered pursuant to this paragraph may be relied upon
by a prospective purchaser of Landlord’s interest or by a mortgagee of
Landlord’s interest or assignee of any security deed upon Landlord’s interest in
the Premises.

 

33. Attorney’s Fees and Homestead. If Landlord exercises any of the remedies
provided to Landlord under this Lease as a result of Tenant’s failure to comply
with its obligations, or if Landlord brings any action to enforce its rights
under this Lease, Tenant shall be obligated to reimburse Landlord, on demand,
for all costs and expenses, including reasonable attorneys’ fees and court
costs, incurred in connection therewith.

 

34. Parking. No rights to specific parking spaces are granted under this Lease;
however, subject to Landlord’s rights pursuant to the remainder of this Section
34, Tenant shall be entitled to use the parking

 

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facilities located on the Property. All parking spaces provided to Tenant shall
be unreserved and are to be used by Tenant, its employees and invitees in common
with the other tenants of the Building and their employees and invitees.
Landlord reserves the right to build improvements upon, reduce the size of,
relocate, reconfigure, eliminate, and/or make alterations or additions to such
parking facilities at any time. The use of the parking spaces is provided by
Landlord to Tenant without additional charge.

 

35. Storage. If Landlord makes available to Tenant any storage space outside the
Premises, anything stored therein shall be wholly at the risk of Tenant, and
Landlord shall have no responsibility or liability for the items stored therein.

 

36. Waste Disposal.

 

(a) All normal trash and waste (i.e., waste that does not require special
handling pursuant to subparagraph (b) below) shall be disposed of through the
janitorial service.

 

(b) Tenant shall be responsible for the removal and disposal of any waste deemed
by any governmental authority having jurisdiction over the matter to be
hazardous or infectious waste or waste requiring special handling, such removal
and disposal to be in accordance with any and all applicable governmental rules,
regulations, codes, orders or requirements. Tenant agrees to separate and mark
appropriately all waste to be removed and disposed of through the janitorial
service pursuant to (a) above and hazardous, infectious or special waste to be
removed and disposed of by Tenant pursuant to this subparagraph (b). Tenant
hereby indemnifies and holds harmless Landlord from and against any loss,
claims, demands, damage or injury Landlord may suffer or sustain as a result of
Tenant’s failure to comply with the provisions of this subparagraph (b).

 

37. Surrender of Premises. Whenever under the terms hereof Landlord is entitled
to possession of the Premises, Tenant at once shall surrender the Premises and
the keys thereto to Landlord in the same condition as on the Commencement Date
hereof, natural wear and tear only excepted, and Tenant shall remove all of its
personalty therefrom and shall, if directed to do so by Landlord, remove all
improvements (including cabling) and restore the Premises to its original
condition prior to the construction of any improvements which have been made
therein by or on behalf of Tenant, including any improvements made prior to the
Commencement Date. Landlord may forthwith re-enter the Premises and repossess
itself thereof and remove all persons and effects therefrom, using such force as
may be necessary without being guilty of forcible entry, detainer, trespass or
other tort. Tenant’s obligation to observe or perform these covenants shall
survive the expiration or other termination of the Term of this Lease. If the
last day of the Term of this Lease or any renewal falls on Sunday or a legal
holiday, this Lease shall expire on the business day immediately preceding.

 

38. Cleaning Premises. Upon vacating the Premises, Tenant agrees to return the
Premises to Landlord broom clean and in the same condition when Tenant’s
possession commenced, natural wear and tear excepted.

 

39. No Estate In Land. This contract shall create the relationship of landlord
and tenant between Landlord and Tenant; no estate shall pass out of Landlord;
Tenant has only a usufruct, not subject to levy or sale, and not assignable by
Tenant except with Landlord’s consent.

 

40. Cumulative Rights. All rights, powers and privileges conferred hereunder
upon the parties hereto shall be cumulative but not restrictive to those given
by law.

 

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41. Paragraph Titles; Severability. The paragraph titles used herein are not to
be considered a substantive part of this Lease, but merely descriptive aids to
identify the paragraph to which they refer. Use of the masculine gender includes
the feminine and neuter, and vice versa, where necessary to impart contextual
continuity. If any paragraph or provision herein is held invalid by a court of
competent jurisdiction, all other paragraphs or severable provisions of this
Lease shall not be affected thereby, but shall remain in full force and effect.

 

42. Damage or Theft of Personal Property. All personal property brought into the
Premises shall be at the risk of the Tenant only and Landlord shall not be
liable for theft thereof or any damage thereto occasioned by any acts of
co-tenants, or other occupants of the Building, or any other person, except,
with respect to damage to the Premises, as may be occasioned by the negligent or
willful act of the Landlord, its employees and agents.

 

43. Holding Over. In the event Tenant remains in possession of the Premises
after the expiration of the Term hereof, or of any renewal term, with Landlord’s
written consent, Tenant shall be a tenant at will and such tenancy shall be
subject to all the provisions hereof, except that the monthly rental shall be at
the higher of 150% of the monthly Base Rent payable hereunder upon such
expiration of the Term hereof, or of any renewal term, or 150% of the then
current fair market rental value of the Premises as the same would be adjusted
pursuant to the provisions of Section 4 hereof. In the event Tenant remains in
possession of the Premises after the expiration of the Term hereof, or any
renewal term, without Landlord’s written consent, Tenant shall be a tenant at
sufferance and may be evicted by Landlord without any notice, but Tenant shall
be obligated to pay rent for such period that Tenant holds over without written
consent at the same rate provided in the previous sentence and shall also be
liable for any and all other damages Landlord suffers as a result of such
holdover including, without limitation, the loss of a prospective tenant for
such space. There shall be no renewal of this Lease by operation of law or
otherwise. Nothing in this Section shall be construed as a consent by Landlord
for any holding over by Tenant after the expiration of the Term hereof, or any
renewal term.

 

44. Not Used.

 

45. Tenant Finishes. The Work Letter attached hereto as Exhibit “B” is hereby
made a part of this Lease, and its provisions shall control in the event of a
conflict with the provisions contained in this Lease.

 

46. Rules and Regulations. The rules and regulations in regard to the Building,
annexed hereto, and all reasonable rules and regulations which Landlord may
hereafter, from time to time, adopt and promulgate for the government and
management of said Building, are hereby made a part of this Lease and shall,
during the said term, be observed and performed by Tenant, his agents, employees
and invitees.

 

47. Quiet Enjoyment. Tenant, upon payment in full of the required Rent and full
performance of the terms, conditions, covenants and agreements contained in this
Lease, shall peaceably and quietly have, hold and enjoy the Premises during the
term hereof. Landlord shall not be responsible for the acts or omissions of any
other tenant, Tenant or third party that may interfere with Tenant’s use and
enjoyment of the Premises.

 

48. Entire Agreement. This Lease contains the entire agreement of the parties
and no representations, inducements, promises or agreements, oral or otherwise,
between the parties not embodied herein shall be of any force or effect.

 

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49. Limitation of Liability. Landlord’s obligations and liability with respect
to this Lease shall be limited solely to Landlord’s interest in the Building, as
such interest is constituted from time to time, and neither Landlord nor any
partner of Landlord, or any officer, director, shareholder, or partner of any
partner of Landlord, shall have any personal liability whatsoever with respect
to this Lease. No owner of the Property, whether or not named herein, shall have
liability hereunder after it ceases to hold title to the Property.

 

50. Submission of Agreement. Submission of this Lease to Tenant for signature
does not constitute a reservation of space or an option to acquire a right of
entry. This Lease is not binding or effective until execution by and delivery to
both Landlord and Tenant.

 

51. Authority. If Tenant executes this Lease as a corporation, limited
partnership, limited liability company or any other type of entity, each of the
persons executing this Lease on behalf of Tenant does hereby personally
represent and warrant that Tenant is a duly organized and validly existing
corporation, limited partnership, limited liability company or other type of
entity, that Tenant is qualified to do business in the state where the Project
is located, that Tenant has full right, power and authority to enter into this
Lease, and that each person signing on behalf of Tenant is authorized to do so.
In the event any such representation and warranty is false, all persons who
execute this Lease shall be individually, jointly and severally, liable as
Tenant. Upon Landlord’s request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing representations and
warranties.

 

52. Not Used.

 

53. Broker Disclosure.                     , a real estate broker licensed in
the State of                     , has acted as agent for Landlord in this
transaction and is to be paid a commission by Landlord pursuant to a separate
agreement. Eduardo Alegre, a real estate broker licensed in the State of
California, has acted as agent for Tenant in this transaction and is to be paid
a commission by Landlord pursuant to a separate agreement. Landlord represents
that it has dealt with no other broker other than the broker(s) identified
herein. Landlord agrees that, if any other broker makes a claim for a commission
based upon the actions of Landlord, Landlord shall indemnify, defend and hold
Tenant harmless from any such claim. Tenant represents that it has dealt with no
broker other than the broker(s) identified herein. Tenant agrees that, if any
other broker makes a claim for a commission based upon the actions of Tenant,
Tenant shall indemnify, defend and hold Landlord harmless from any such claim.
Tenant will cause its broker to execute a customary lien waiver, adequate under
the law of the state where the Project is located, to extinguish any lien claims
such broker may have in connection with this Lease.

 

54. Notices. Any notice which is required or permitted to be given by either
party under this Lease shall be in writing and must be given only by certified
mail, return receipt requested, by hand delivery or by nationally recognized
overnight courier service at the addresses set forth below. Any such notice
shall be deemed given on the date sent or deposited for delivery in accordance
with one of the permitted methods described above. The time period for
responding to any such notice shall begin on the date the notice is actually
received, but refusal to accept delivery or inability to accomplish delivery
because the party can no longer be found at the then current notice address,
shall be deemed receipt. Either party may change its notice address by notice to
the other party in accordance with the terms of this Section 54. The following
are the initial notice addresses for each party:

 

Landlord’s Notice Address:             Wells Management, Inc.

                                    6200 The Corners Parkway, Suite 250

                                    Norcross, Georgia 30092-2295

 

                                    Attention: 15253 Bake Parkway, Irvine, CA

 

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With a copy to:

                    Attention:                                         
                    

Tenant’s Notice Address:

      Gambro Healthcare, Inc.                
Attention:                                                               

With a copy to:

                    Attention:                                     
                         

 

55. Force Majeure. In the event of a strike, lockout, labor trouble, civil
commotion, an act of God, or any other event beyond Landlord’s control (a “force
majeure event”) which results in the Landlord being unable to timely perform its
obligations hereunder to repair the Premises, provide services, or complete Work
(as provided in Exhibit “B”), so long as Landlord diligently proceeds to perform
such obligations after the end of the force majeure event, Landlord shall not be
in breach hereunder, this Lease shall not terminate, and Tenant’s obligation to
pay any Base Rent, additional rent, or any other charges and sums due and
payable shall not be excused.

 

56. Special Stipulations. The Special Stipulations, if conflicting, if any,
attached hereto as Exhibit “D ” are modifications to the terms of this Lease and
such Special Stipulation shall control in the event of any conflict with the
other provisions of this Lease or any exhibits hereto.

 

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IN WITNESS WHEREOF, the parties herein have hereunto set their hands and seals,
the day and year first above written.

 

LANDLORD:

FUND VIII AND FUND IX ASSOCIATES,

a Georgia joint venture partnership

By: Wells Real Estate Fund IX, L.P., a

Georgia limited partnership, its general

partner

By: Wells Capital, Inc., a Georgia

corporation, its general partner

By:

--------------------------------------------------------------------------------

    Name:

--------------------------------------------------------------------------------

    Title:

--------------------------------------------------------------------------------

                    (CORPORATE SEAL)

TENANT:

GAMBRO HEALTHCARE, INC., a

Tennessee corporation

By:

--------------------------------------------------------------------------------

    Name:

--------------------------------------------------------------------------------

    Title:

--------------------------------------------------------------------------------

                    (CORPORATE SEAL)