EXHIBIT 10.67

ADDENDUM TO LEASE

This is an Addendum to that certain Lease by and between Aerojet-General
Corporation, an Ohio corporation, as Landlord, and Foundation Health, a
California Health Plan, a California corporation, as Tenant, dated July 13,
1995.

 

35. Premises. Landlord does hereby lease to Tenant and Tenant hereby leases from
Landlord approximately fifty thousand (50,000) rentable square feet of office
space (herein called “Premises”) comprising the entire first (1st) floor of
Building number 2025 (the “Building”) located at the Aerojet headquarters in the
City of Rancho Cordova, in the State of California. The rentable square feet
contained in the Building and the Premises shall be field measured according to
BOMA Standards (ANSI 265.1-1980/reaffirmed 1989) by a reputable space planner or
architect reasonably satisfactory to Landlord.

 

36. Condition of Premises and Building Improvements.

 

  A. Landlord’s Obligations. Prior to delivery of the Premises to Tenant,
Landlord shall conduct, at Landlord’s sole cost and expense, the following
cleaning and repair of the Premises (collectively, “Landlord’s Work”):

 

  1. Repair T-Bar grid and replace damaged ceiling tiles.

 

  2. Perform minor repairs to drywall prior to painting.

 

  3. Paint all interior walls, door frames, and columns.

 

  4. Repair existing carpeting and, to the extent needed, install new direct
glue down carpeting. Landlord and Tenant estimate that ten percent (10%) to
fifteen percent (15%) of the carpeting in the Premises will require replacement.

Existing doors and hardware will remain. No work will be done to the lobby area.
No demolition work will be conducted. Other than Landlord’s Work, Tenant shall
take the Premises “as is.” Upon execution of the Lease, Landlord and Tenant
shall conduct a walk-through of the Premises and agree upon the maximum cost
that Landlord shall be required to incur in conducting Landlord’s Work.

 

  B. Tenant’s Obligations. Any other preparation of, or improvements to, the
Building that Tenant desires shall, subject to approvals from Landlord under
paragraph 10 of this Lease, be the responsibility of Tenant and done at Tenant’s
sole cost and expense, except that Landlord agrees to provide to Tenant an
allowance up to eighty thousand dollars ($80,000,00) to reimburse Tenant for
costs and expenses incurred by Tenant in refurbishing the southern entrance to
the Building and the exterior of the Building near said southern entrance.

 

A1 - 1

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

  C. Communications Improvements. Tenant shall have the right to install and
distribute data communications wiring, telephone lines and other communications
and information processing relating wiring and equipment as reasonably required
for Tenant’s business,

 

37. Possession. Landlord shall deliver the Premises to Tenant upon completion of
Landlord’s Work. Landlord shall use its best efforts to complete said work on or
before September 1, 1995. If Landlord fails to deliver the Premises to Tenant on
or before September 1, 1995, then the term of the Lease shall commence on the
date of delivery and end two (2) years and one (1) month after that date.

 

38. Use by Subsidiaries. Tenant may allow any one hundred percent (100%) owned
subsidiary of Foundation Health Corporation, a Delaware corporation, to use the
Premises at any time, and for any duration, during the term of the Lease,
provided there shall be no assignments of, or subletting under, this Lease. If
Tenant does request Landlord’s consent to any assignment, subletting, or use by
any other person or entity, Landlord may withhold such consent arbitrarily,
capriciously, and without reason.

 

39. Option to Extend. Tenant shall have the right and option to extend the term
of this Lease for two (2) consecutive six (6) month periods commencing
immediately upon the ending date of this Lease and the first six (6) month
extension, respectively, upon the following conditions:

 

  A. That Tenant is not, at the time of option exercise, in default under this
Lease.

 

  B. That Tenant shall, not later than one hundred fifty (150) calendar days
prior to the ending date of this Lease or the first six (6) month extension, as
appropriate, provide, and Landlord receives, a duly mailed written notice
setting forth Tenant’s exercise of the option to extend the term of this Lease.
Failure by Tenant to provide timely written notice as set forth herein shall,
unless, and in the sole discretion of Landlord, a later notice is acceptable to
the Landlord, cause the option to lapse and its exercise by Tenant shall not be
effective.

 

40. Option to Expand.

 

 

a.

Thirty Thousand (30,000) Rentable Square Feet. During the first year of the term
of the Lease, Tenant shall have the right and option to expand the Premises to
include thirty thousand (30,000) rentable square feet situated on the second
(2nd) floor of the Building (“First Expansion Space”) upon thirty days’ written
notice to Landlord (“First Option to Expand”). If Tenant fails to exercise such
option to expand, then, on the first anniversary of the commencement of the
term, the Premises shall be expanded automatically to include the First
Expansion Space.

The exact location and configuration of the First Expansion Space are to be
determined by Tenant upon the earlier of (i) Tenant’s exercise of its First
Option to Expand or (ii) thirty (30) days prior to the first anniversary of the
term of the Lease.

 

A1 - 2

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

  b. Twenty Thousand (20,000) Rentable Square Feet. Tenant shall have the right
and option to expand the Premises to include all, and not less than all, of the
remaining rentable square feet contained in the Building (which the parties
anticipate to be approximately twenty thousand (20,000) rentable square feet)
(“Second Expansion Space”). Tenant shall have the right to effect such expansion
option upon written notice to Landlord simultaneously with its First Option to
Expand or at anytime after Tenant takes possession of the First Expansion Space.

The rentable square feet contained in the First Expansion Space and the Second
Expansion Space shall be field measured according to BOMA Standards (ANSI
265.1-1980/reaffirmed 1989) by a reputable space planner or architect reasonably
satisfactory to Landlord. The First Expansion Space and the Second Expansion
Space, as appropriate, shall be deemed to be included as a part of the
“Premises” and shall be subject to the same terms and conditions as the original
office space. The rental rate for the additional office space shall be the same
as the rental rate for the original office space.

Landlord shall improve both the First Expansion Space and the Second Expansion
Space to the same extent that Landlord improves the original office space. Such
improvements shall be completed by the earlier of (i) thirty (30) days after
Tenant exercises its First Option to Expand or (ii) the first anniversary of the
term of the Lease. Tenant shall have the right to install and distribute data
communications wiring, telephone line and other communications and information
processing wiring and equipments as reasonably required for Tenant’s business.

 

41. Signage. With Landlord’s prior approval as to the design of the signage,
Tenant may install a sign on the Building. Landlord shall provide a one-time
five thousand dollar ($5,000) allowance for the cost of designing and installing
the signage. Tenant may not erect any other signs without the written permission
of Landlord.

 

42. Parking. Tenant shall be entitled, at no cost, to seven and one-half (7 &
1/2) spaces per one thousand (1,000) rentable square feet of the Premises,

 

43. Security. The Building is located in a complex of office buildings, for
which Landlord provides a package of security features, including without
limitation, a security fence, twenty-four (24) hour security guard, and security
identification cards. Tenant shall benefit from and cooperate in the security
features that Landlord provides to the office complex, including the Premises.

 

44. Access to Premises. Tenant shall have access to the Premises and the parking
twenty-four (24) hours per day, seven (7) days per week, fifty-two (52) weeks
per year.

 

45. Utility Services. Tenant shall be responsible for and timely pay all
electrical and gas utility costs associated with the occupancy and use of the
Premises. At Landlord’s expense, the Building will be separately metered for
electrical and gas service.

Landlord will use its best efforts to ensure continuous availability of
telecommunications, telephone, electrical, gas, and other utility services to
the Building, but Landlord cannot and does not guaranty that such continuous
service will occur. Tenant agrees that Landlord shall have no liability for any
loss or damage caused by discontinuation or interruption of utility services.

 

A1 - 3

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

46. Brokers’ Fee. Landlord shall pay a brokers’ fee equal to six percent (6%) of
the total rent for the Premises leased at the commencement of the term. One-half
(1/2) of the brokers’ fee shall be due and payable promptly following the
determination of the exact square footage of the Premises, upon which the rent
is based, provided that Landlord is then assured that no rescission under
Section 47 can occur. The balance of the brokers’ fee shall be due and payable
upon commencement of the term of this Lease.

If Tenant exercises its option to extend the Lease or its option to expand the
Premises or the Premises are automatically expanded, then Landlord shall pay a
brokers’ fee equal to six percent (60) of the total increase in rent for the
Premises. Such additional brokers’ fee shall be due and payable upon effective
exercise of the Tenant’s option or the automatic expansion, as appropriate.

 

47. Compliance with Governmental Requirements. Landlord shall be responsible for
bringing the Building into compliance with the Americans with Disabilities Act
(“ADA”). Landlord shall bear the cost of bringing the Building into compliance
with the ADA and shall not pass such cost through to Tenant by any means,
including, without limitation, deducting the cost of ADA compliance from any of
Tenant’s tenant improvement allowances.

If in the process of obtaining government permits or approvals necessary to make
the Building available to Tenant in accordance with the terms of this Lease,
unusual or burdensome requirements are imposed, then either Landlord or Tenant
may rescind this Lease. Completion of Landlord’s Work and issuance of a building
permit to Tenant for its initial work shall be conclusively deemed to mean that
no such unusual or burdensome requirements were imposed.

 

48. Environmental Site Conditions Certification and Indemnification. Landlord
represents and certifies to Tenant the following relative to the Building:

 

  A. Landlord has no information indicating that the Building ever had any
industrial activity conducted on it. Landlord is not aware of any soil
contamination on the Building.

 

  B. Groundwater contamination, at depth, may exist below the Building. Such
contamination is being addressed pursuant to a consent decree entered into by
Landlord and state and federal environmental protection agencies. Such decree
requires Landlord to investigate and remediate any such groundwater
contamination with the review and approval of the state and federal governments.

 

  C. The consent decree also requires Landlord to notify the governments before
any possessory interest in any land on the Sacramento facility is granted. On
August 2, 1995 Landlord provided such notice regarding the potential lease of
Building number 2023.

 

A1 - 4

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

Landlord will defend and indemnify Tenant in respect of any liability and claim
of liability (“Liability Claim”) which any third person asserts against Tenant
and is based solely on and arises solely out of any environmental contamination
which is associated with the Premises and its immediate surrounding area and is
caused by Landlord, subject to each of the following conditions:

 

  A. Tenant promptly gives Landlord written notice of any Liability Claim and
delivers to Landlord a copy of each document or other writing which Tenant
receives in connection therewith;

 

  B. Tenant, at its own expense, cooperates with Landlord in every reasonable
way in connection with the defense of each Liability Claim;

 

  C. Landlord, at its option, may control the defense of each Liability Claim,
select lawyers to defend each Liability Claim, and compromise and settle each
Liability Claim; and

 

  D. Tenant gives Landlord notice of the Liability Claim within one year after
the expiration or termination of this Lease, whichever first occurs.

Tenant will defend and indemnify Landlord in respect of any liability and claim
of liability (“Liability Claim”) which any third person asserts against Landlord
and is based solely on and arises solely out of any environmental contamination
which is associated with the premises and its immediate surrounding area and is
caused by Tenant during this Lease.

 

49. Insurance. Landlord and Tenant agree that the amount of coverage that Tenant
shall procure and maintain pursuant to Section 16 shall be no less than Five
Million Dollars ($5,000,000.00). Tenant may have a deductible up to, and no
greater than, One Million Dollars ($1,000,000.00). The insurer or insurers shall
be subject to Landlord’s approval, which approval shall not be unreasonably
withheld or delayed, and any substitute insurer or insurers shall have equal or
better performance and financial ratings under “Best’s Key Rating Guide.”

Tenant shall also procure and maintain, at Tenant’s sole cost and expense,
insurance adequate to protect Tenant and Landlord under the workers’
compensation laws of the State of California (Part A) plus standard employer’s
liability insurance in an amount not less than One Million Dollars
($1,000,000.00) (Part B), including waiver of subrogation rights with respect to
Landlord. Tenant shall provide Landlord with appropriate certification or other
proof of such coverage.

 

A1 - 5

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

      Landlord      

Aerojet-General Corporation,

an Ohio corporation

Dated:       By:  

/s/ Terry P. Griffin

      Its:   Director, Real Estate       Tenant      

Foundation Health,

a California Health Plan,

a California corporation

Dated:  

August 2, 1995

    By:  

/s/ Joe E. Erway

      Its:   Vice President

 

A1 - 6

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

SECOND ADDENDUM (“Second Addendum”) TO OFFICE BUILDING LEASE

DATED JULY 13, 1995, BETWEEN

AEROJET - GENERAL CORPORATION,

an Ohio corporation (“Landlord”), and

FOUNDATION HEALTH, A CALIFORNIA HEALTH PLAN,

a California corporation (“Tenant”)

Aerojet 2025 Building, Rancho Cordova, California

THIS SECOND ADDENDUM is attached to and made part of the above-referenced lease,
which lease includes an Addendum to Lease that contains Sections 35 through 49
(collectively, the “Lease”). Unless otherwise defined in this Second Addendum,
all capitalized terms used in this Second Addendum shall have the same meaning
as such capitalized terms have in the Lease. All references within this Second
Addendum to a “Section” are to a specific section within the Lease unless
otherwise indicated,

1. Sections 4 and 37, Possession. If Landlord, for any reason other than a
Tenant-caused delay, shall fail to substantially complete Landlord’s Work and
deliver the Premises to Tenant by September 1, 1995 (the “Scheduled Commencement
Date”), the parties agree that Tenant shall have the following remedies:

(a) If such delivery occurs later than thirty (30) days after the Scheduled
Commencement Date, then Tenant shall be entitled to one (1) day of free rent for
each day after said thirty (30) days that Landlord is late in so delivering the
Premises.

(b) If such delivery occurs later than ninety (90) days after the Scheduled
Commencement Date, then Tenant may terminate the Lease by written notice to
Landlord prior to Tenant’s occupancy of the Premises.

2. Section 5, Rent. The parties acknowledge that Tenant shall have no obligation
to pay “operating expenses,” other than the cost of electrical and gas service
pursuant to Section 45.

3. Section 9, Compliance with Law. Tenant’s obligation under Section 9 of the
Lease and elsewhere in the Lease with respect to the compliance with laws,
statutes, ordinances, and governmental rules and regulations (including, but not
limited to, the Americans with Disabilities Act of 1990), as all of the same may
be amended and supplemented from time to time (collectively, “Laws”) shall be
limited to (i) Laws pertaining to Tenant’s personal property; (ii) Laws
pertaining to modifications made to the Premises by Tenant; and (iii) Laws
pertaining to Tenant’s specific use of the Premises. Landlord, at Landlord’s
sole cost and expense, shall comply with all other Laws pertaining to the
Building and parking area; provided, however, that if the aggregate cost of the
Landlord’s complying with any Laws exceeds Two Hundred Fifty Thousand Dollars
($250,000.00), and Landlord did not have actual or constructive notice prior to
commencement of the term of the general cost of the compliance now being
required, and Tenant is unwilling to pay the cost of such compliance in excess
of $250,000.00 (it being agreed that Tenant has no obligation to pay such cost),
Landlord shall have the right to terminate the Lease upon one hundred twenty
(120) days’ written notice to Tenant. If Landlord

 

A2 - 1

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

exercises such termination right, Landlord shall pay reasonable costs and
expenses incurred by Tenant in relocating to new premises, not to exceed
Seventy-Five Thousand Dollars ($75,000.00).

4. Section 10, Alterations and Additions.

(a) Landlord’s consent to alterations, additions or improvements (collectively,
“Alterations”) shall in no event be unreasonably withheld or delayed.

(b) In no event shall Tenant be obligated to remove any Alterations on the
Premises (including, but not limited to, the leasehold improvements constructed
by Landlord), unless such Alterations were made by Tenant during the term of the
Lease. If Tenant desires to have the right to surrender the Alterations at the
expiration of the Lease term and not remove them from the Premises, Tenant
shall, at the time that it requests Landlord’s consent to the making of those
Alterations, notify Landlord of such desire, and Landlord shall have the option
to either (i) require such surrender of the Alterations, or (ii) expressly
condition Landlord’s approval of such Alterations on Tenant’s agreement to
remove such Alterations at the expiration of the Lease term,

5. Sections 11, Repairs. Tenant shall not be responsible for the correction or
repair of any latent defect in the Premises, or any existing defect or code
violation in existence prior to the commencement of the term. The repairs or
maintenance that are Landlord’s responsibility shall be done diligently and on a
timely basis.

6. Section 17, Services and Utilities. If any utility or other service to the
Premises is interrupted, Tenant shall be entitled to an abatement of rent
(proportionate to the degree to which Tenant’s use of the Premises for office
purposes is interfered with) until ouch interruption is cured by Landlord.
Landlord shall use diligent and good faith efforts to promptly restore utility
service.

7. Section 21, Entry by Landlord. Landlord shall provide to Tenant advance
notice of Landlord’s entry onto Premises (except in the case of an emergency, or
in such cases as Landlord’s security procedures do not reasonably permit advance
notice). Landlord’s right to enter the Premises to show them to prospective
tenants pursuant to Section 21 shall be limited to the last six (6) months of
the Lease term. In no event shall Landlord’s access onto the Premises
unreasonably interfere with Tenant’s use of the Premises.

8. Section 22, Reconstruction. Tenant shall be entitled to a rent abatement
pursuant to Section 22, from the date of the casualty until the repairs are
completed, whether or not such casualty is covered by Landlord’s insurance.

9. Section 23, Default. In Section 2.3.a, the words “vacating or” are hereby
deleted. In Section 23.b, the words “three (3) days” are hereby replaced with
“ten (10) days.”

10. Section 29(ii), Waiver. This waiver by Tenant of any term, covenant or
condition in the Lease or this Second Addendum shall not be deemed a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition contained in the Lease or this Second
Addendum.

 

A2 - 2

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

11. Section 29(iii), Notices. All notices to Tenant shall be sent to the
Premises and:

Foundation Health Corporation

Attention: Director of Real Estate

Post Office Box 2470

Rancho Cordova, California 95741-2470

12. New Provision, Hazardous Materials. Nothing in the Lease is intended to
prevent Tenant from using hazardous materials or hazardous substances normally
associated with office activities, provided the same are used in compliance with
all applicable laws. Tenant’s responsibility respecting hazardous materials or
hazardous substances shall be limited to those materials actually introduced by
Tenant in the Premises; the responsibility for compliance with laws respecting
all other hazardous materials or hazardous substances shall be Landlord’s.

13. Section 36A, Landlord’s Obligations. Landlord and Tenant shall, as soon as
possible after the execution of the Lease, and from time to time during the
course of construction, confer respecting the Landlord’s Work, such that Tenant
will be kept apprised of the progress of that work, and so the Tenant has the
right to approve (which approval shall not be unreasonably withheld or delayed)
all construction drawings, finishes and materials. In addition to the work
described in Section 36A, the Landlord’s Work shall include all work necessary
to bring the Building into compliance with applicable building codes and other
applicable laws, such that Tenant can lawfully occupy the Premises.

14. Section 36B, Tenant’s Obligations. The allowance referenced in Section 36B
shall be paid not later than thirty (30) days after Landlord’s receipt of a
reasonably detailed invoice from Tenant.

15. Section 39, Option to Extend. The rent during the option terms shall be One
and 04/100ths Dollars ($1.04) per square foot of rentable area per month.

IN WITNESS WHEREOF, the parties have executed this Second Addendum as of the
date first set forth above.

 

LANDLORD     TENANT

AEROJET – GENERAL CORPORATION,

an Ohio corporation

   

FOUNDATION HEALTH,

A CALIFORNIA HEALTH PLAN,

a California corporation

By:  

/s/ T. P. Griffin

    By:  

/s/ Joe E. Erway

Name:  

T. P. Griffin

    Name:  

Joe E. Erway

Its:  

Director, Real Estate

    Its:  

Vice President

Date of Execution: August 2, 1995                                               
Date of Execution: August 2, 1995                                         

 

A2 - 3

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

THIRD ADDENDUM TO LEASE

This is the Third Addendum attached to that certain Lease by and between
Aerojet-General Corporation, an Ohio corporation, as Landlord, and Foundation
Health, a California Health Plan, a California corporation, as Tenant, dated
duly 13, 1995, including that certain Addendum and that certain Second Addendum
attached thereto (collectively, the “Lease”).

 

1. Temporary Storage Area. Landlord does hereby permit and allow Tenant
temporary use (the “License”) of a portion of the space contained in building
number 2006 located at said Aerojet property in Rancho Cordova, California (the
“Temporary Storage Area”). The exact location and configuration of the Temporary
Storage Area shall be determined by Landlord and Tenant through mutual
consultations immediately after execution of the Lease and this Third Addendum
and shall contain approximately three thousand (3,000) to four thousand
(4,000) rentable square feet. The Temporary Storage Area will not be separated
from the balance of the space in said building number 2006 by any demising wall
or walls. Landlord and Tenant agree to cooperate reasonably and fairly with each
other in connection with uses of their respective portions of said building.

 

2. Use of Temporary storage Area. Tenant may use the Temporary Storage Area for
the storage, light assembly, and staging of computers and related equipment to
be used in Tenant’s business, including, but not limited to, preparation for
Tenant’s taking of possession of the Premises in said building 2025, and for no
other use without Landlord’s advance written consent. Tenant expects to have no
more than approximately six (6) employees working in the Temporary Storage Area
at any time. The Temporary Storage Area is not intended, nor will it be
prepared, for long-term occupancy or use as business offices.

 

3. Term of License. The term of the License shall commence upon full execution
of the Lease and this Third Addendum 8/2/95 and shall continue on a
month-to-month basis thereafter. The License may be terminated by thirty
(30) days’ written notice of termination given by either Landlord or Tenant to
the other, except that Landlord cannot terminate the License effective earlier
than thirty (30) days after Landlord delivers possession of the Premises to
Tenant.

 

4. License Fee. Tenant agrees to pay to Landlord, without prior notice or
demand, and without deduction or offset, in advance, as consideration for the
License, the sum of (a) One Dollar ($1.00) per rental square foot (as measured
by said BOMA standards) of the Temporary Storage Area per month; plus
(b) fourteen cents ($0.14) per rental square foot of the Temporary Storage Area
per month as a fixed reimbursement to Landlord for the estimated cost of
providing electrical and gas service to the Temporary Storage Area. Said
payments shall be made on or before the first (1st) day of each calendar month
of the term of the License. Payment for any period during the term of the
License that is less than one (1) month shall be a prorated portion of the
monthly payment, based upon a thirty (30) day month. Tenant shall have no
obligation to pay for utility services provided by Landlord to the Temporary
Storage Area except as set forth above in this section.

 

A3 - 1

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

5. Preparation of Temporary Storage Area. Landlord shall be responsible for
coordinating the preparation of the Temporary Storage Area for use by Tenant.
Tenant shall bear all reasonable costs and expenses incurred in carrying out
such preparation and shall, at the request of Landlord, provide labor to assist
Landlord in carrying out such preparation. In this connection, Landlord and
Tenant shall work together to utilize, to the extent possible, various interior
partitions that Landlord has available and stored in said building 2006. Other
than such preparation, Lessee accepts the Temporary Storage Area “as is,” and
Lessor shall have no duty to improve or change the Temporary Storage Area in any
way.

 

6. Parking. Tenant shall have access to the parking area near said building
number 2006 to the extent reasonably necessary for Tenant’s use of the Temporary
Storage Area.

 

7. Janitorial Service. Landlord shall have no obligation to provide janitorial
service with respect to the Temporary Storage Area.

 

8. Terms of Lease. The License shall be subject to all terms and conditions of
the Lease that are consistent with the terms specifically applicable to the
License and consistent with the temporary nature of the License. Specifically,
the License shall not be subject to the following provisions: Sections 3, 5, 27,
30, 31, 35, 36, 37, 39, 40, 41, 42, 46, 47, and 48 of the Lease; the first
sentence of section 8 of the Lease; all references to janitorial services in
Section 17 of the Lease; the second sentence of Section 45 of the Lease; and
Sections 1, 3, 14, and 15 of the Second Addendum.

 

9. Hold Harmless and Waiver. Tenant agrees to indemnify Landlord and to hold
Landlord free and harmless from and against any and all liabilities and losses
arising from or related to Tenant’s use of the Temporary Storage Area. Tenant
hereby assumes all risk of damage to property or injury to persons in, upon, or
about the Temporary Storage Area, including, but not limited to, injury to or
death of employees of Tenant and damage to, or loss of use of, property of
Tenant or of any of Tenant’s employees, and Tenant hereby waives all claims, and
agrees not to sue Landlord, in respect thereof.

 

      Landlord      

Aerojet-General Corporation,

an Ohio corporation

Dated:  

 

    By:  

/s/ Terry P. Griffin

      Its:         Tenant      

Foundation Health,

a California Health Plan,

a California corporation

Dated:  

August 2, 1995

    By:  

/s/ Joe E. Erway

      Its:   Vice President

 

A3 - 2

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

FOURTH ADDENDUM TO LEASE

This is the Fourth Addendum attached to that certain Lease by and between
Aerojet-General Corporation, an Ohio corporation, as Landlord, and Foundation
Health, a California Health Plan, a California corporation, as Tenant, dated
July 13, 1995, including that certain Addendum, and that certain Second Addendum
and that certain Third Addendum attached thereto (collectively, the “Lease”).

 

1. Third Expansion Space. Landlord does hereby lease to Tenant and Tenant hereby
leases from Landlord approximately thirty-three thousand five hundred
(33,500) rentable square feet of office space (“Third Expansion Space”)
comprising part of building number 2015B (“Building 2015B”), a single story
building, located at the Aerojet headquarters in the City of Rancho Cordova, in
the State of California. The location and configuration of the Third Expansion
Space is shown on the floor plan thereof, a copy of which is attached as Exhibit
“A” to this Addendum and incorporated herein by this reference.

 

2. Condition of Third Expansion Space and Building 2015B Improvements.

 

  A. Landlord’s Obligations. Prior to delivery of the Third Expansion Space to
Tenant, Landlord conducted, at Landlord’s sole cost and expense, the following
cleaning and repair of Building 2015B (collectively, the “Building 2015B Work”):

 

  1. Repaired T-Bar grid and replace damaged ceiling tiles.

 

  2. Performed minor repairs to drywall prior to painting.

 

  3. Painted all interior walls, door frames, and columns.

 

  4. Repaired existing carpeting and, to the extent needed, installed new direct
glue down carpeting.

Existing doors and hardware were left in place. No work was done to the lobby
area. No demolition work was conducted. The Building 2015B Work included all
work necessary to bring Building 2015B into compliance with applicable building
codes and other applicable laws, such that Tenant could lawfully occupy Building
2015B. Other than the Building 2015B Work, Tenant accepted Building 2015B “as
is.”

 

  B. Tenant’s Obligations. Any other preparation of, or improvements to,
Building 2015B that Tenant may desire shall, subject to approvals from Landlord
under paragraph 10 of this Lease, be the responsibility of Tenant and done at
Tenant’s sole cost and expense.

 

  C. Communications Improvements. Tenant shall have the right to install and
distribute in Building 2015B data communications wiring, telephone lines and
other communications and information processing related wiring and equipment as
reasonably required for Tenant’s business.

 

A4 - 1

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

3. Possession. Landlord delivered the Third Expansion Space to Tenant upon
completion of the Building 2015B Work, which completion and delivery occurred on
November 22, 1995.

 

4. Option to Expand. Tenant shall have the right and option to expand the
Premises to include all of the remaining rentable square feet of office space
contained in Building 2015B (which is approximately sixteen thousand five
hundred (16,500) rentable square feet) (“Fourth Expansion Space”). Tenant shall
have the right to effect such expansion option upon written notice to Landlord.
Alternatively, Landlord and Tenant shall work together and coordinate delivery
of portions of the Fourth Expansion Space as and when needed by Tenant; provided
that, in all events, as of November 17, 1996, the Premises shall be expanded
automatically to include the Fourth Expansion Space, with said option then being
deemed to have been exercised with respect to all of said Fourth Expansion
Space. Landlord shall have no obligation to improve the Fourth Expansion Space
above and beyond the Building 2015B Work.

 

5.

Parking. Tenant shall be entitled, at no cost, to the minimum number of parking
spaces with respect Tenant’s use of the Third Expansion Space and the Fourth
Expansion Space, if appropriate, as required from time to time by applicable
law, which requirement is currently four and one-half (4- 1/2) parking spaces
per one thousand (1,000) rentable square feet of office space, as set forth in
Sacramento Zoning Code, Chapter 3, Article 2, section 330-22.

 

6. Brokers’ Fee.

 

  A. Tenant and Landlord agree that they have had no dealings with any real
estate broker or agent in connection with the negotiation of this Fourth
Addendum excepting only Aguer Pipgras Real Estate and they know of no other real
estate broker or agent who is entitled to a commission in connection with this
Fourth Addendum.

 

 

B.

Landlord shall pay to Aguer Pipgras Real Estate a brokers’ fee equal to three
percent (3%) of the total rent for the Third Expansion Space. One-half ( 1/2) of
the brokers’ fee shall be due and payable upon execution of this Fourth
Addendum, provided that Landlord is then assured that no rescission under
Section 47 can occur. The balance of the brokers’ fee shall be due and payable
upon delivery of the Third Expansion Space to Tenant.

 

  C. If Tenant exercises, or is deemed to have exercised, its option with
respect to the Fourth Expansion Space, then Landlord shall pay to Aguer Pipgras
Real Estate a brokers’ fee equal to three percent (3%) of the total rent for the
Fourth Expansion Space. Such additional brokers’ fee shall be due and payable
upon effective exercise, or deemed exercise, of the Tenant’s option.

 

7.

The Premises and Other Terms and Conditions of the Lease. The Third Expansion
Space and the Fourth Expansion Space, if appropriate, shall be deemed to be
included as a part of the “Premises” and the “Building” and shall be subject to
the same terms and

 

A4 - 2

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

 

conditions as the original office space as set forth in the Lease, except to the
extent that any provision of this Fourth Addendum is inconsistent or in conflict
with such terms and conditions, and except that Sections 35, 36, 37, 40, 41, 42
and 46 set forth in the Addendum to Lease, Sections 1 and 14 of the Second
Addendum to Office Building Lease, and Sections 1 through 9 of the Third
Addendum to Lease shall not apply to the Third Expansion Space or the Fourth
Expansion Space, if appropriate. Specifically, the Third Expansion Space and the
Fourth Expansion Space, if appropriate, shall be subject to the terms and
conditions of this Fourth Addendum and, to the extent compatible and consistent
with the provisions of this Fourth Addendum, subject to Sections 1 through 31 of
the Lease, Sections 38, 39, 43, 44, 45, 47, 48, and 49 of the Addendum to Lease,
and Sections 2 through 13, and 15 of the Second Addendum to Office Building
Lease; and the Rules and Regulations attached to the Lease. The rental rate for
the Third Expansion Space and for the Fourth Expansion Space shall be the same
as the rental rate for the Premises as first demised by the Lease. The
termination date for all of the Premises, including the Third Expansion Space,
the Fourth Expansion Space, and all areas previously included within the
Premises under the Lease, shall be same date, which date is set forth in the
Lease.

 

8. Applicable Rental Amount. As a memorandum of record, the rent for the Third
Expansion Space added by this Fourth Addendum is Thirty-three Thousand Five
Hundred Dollars ($33,500.00) per month, computed at One Dollar ($1.00) per
square foot.

 

      Landlord      

Aerojet-General Corporation,

an Ohio corporation

Dated:  

March 12, 1996

    By:  

/s/ Terry P. Griffin

      Its:   Director, Real Estate       Tenant      

Foundation Health,

a California Health Plan,

a California corporation

Dated:  

March 4, 1996

    By:  

/s/ Joe E. Erway

      Its:   Vice President

 

A4 - 3

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

FIFTH ADDENDUM TO LEASE

This is the Fifth Addendum attached to that certain Lease by and between
Aerojet-General Corporation, an Ohio corporation, as Landlord, and Foundation
Health, a California Health Plan, a California corporation, as Tenant, dated
July 13, 1995, including that certain Addendum, that certain Second Addendum,
that certain Third Addendum, and that certain Fourth Addendum thereto
(collectively, the “Lease”).

RECITALS

 

A. Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B and the
entire Building number 2025 (collectively, the “Existing Premises”) and no other
space. The term of the Lease ends on September 14, 1997, and Tenant has the
option to extend the term for two (2) consecutive six (6) month periods. The
rent for the Existing Premises is One Dollar ($1.00) per square foot per month.

 

B. In accordance with the provisions herein, Landlord and Tenant desire to
expand the Premises to include an additional building, to extend the term of the
lease, to provide for increases in the rent payable by Tenant, and to supersede
the existing extension options.

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals
and the covenants contained in this Fifth Addendum, agree as follows:

 

1. Expansion of the Premises. Landlord does hereby lease to Tenant, and Tenant
hereby leases from Landlord, approximately thirty thousand (30,000) rentable
square feet of office space comprising the entire Building number 2006
(“Building 2006”) located at the Aerojet headquarters in the City of Rancho
Cordova, in the State of California. Measurement of the rentable square feet
contained in Building 2006 shall be conducted in accordance with a method
acceptable to both parties. The “Premises” under the Lease shall thus henceforth
include both the Existing Premises and Building 2006.

 

2. Extension of Term. The term of the Lease for the Premises is hereby extended
thirty and one-half (30.5) months and shall end on March 31, 2000.

 

3. Rent.

 

  A. Initial Rent. Subject to increases in rent as set forth below, the rent for
the Existing Premises shall continue at One Dollar and No Cents ($1.00) per
square foot per month. Subject to increases in rent as set forth below, the rent
for Building 2006 shall be One Dollar and Fourteen Cents ($1.14) per square foot
per month.

 

  B.

Rental Increases. The rent for the Existing Premises and the rent for Building
2006 shall increase on October 1, 1998 and again on October 1, 1999 as follows:
(1) on October 1, 1998, the rent for the Existing premises and the rent for
Building 2006 shall each increase by the same percentage as the Consumer Price

 

A5 - 1

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

 

Index, unadjusted, for All Urban Consumers (all items), as published by the
United States Department of Labor, Bureau of Labor Statistics, for the San
Francisco-Oakland-San Jose Area (1982-84 = 100 Base) (the “CPI”), has increased
from the CPI as published for September, 1997 to the CPI as published for
September, 1998; and (2) on October 1, 1999, the rent for the Existing Premises
and the rent for Building 2006 shall each increase by the same percentage as the
CPI has increased from the CPI as published for September, 1998 to the CPI as
published for September, 1999; provided that under no circumstances shall either
of said increases in rent, the one occurring October 1, 1998 and the other
occurring on October 1, 1999, exceed three and one-quarter percent (3.25%).
Landlord shall calculate and notify Tenant of all applicable rental increases.
If the CPI for calculating any such increase is not available at the time a
rental increase begins, then Tenant shall temporarily continue paying rent at
the existing rate. Once the applicable CPI becomes available and Landlord
notifies Tenant of the amount of the applicable rental increase, then Tenant
shall pay the difference between any rent paid and the rent as adjusted under
the applicable CPI.

 

  C. Another Index. If the CPI is not in existence at the time any increase is
to be computed, Landlord and Tenant shall utilize such other index published by
that governmental authority as shall be most similar thereto and consistent with
the intent to adjust the rent in accordance with changes, if any, in the
“cost-of-living” that occurs during the applicable period.

 

4. Extension of Term.

 

  A. Option. Tenant shall have the right and option (the “Extension Option”) to
extend the term of the Lease for thirty (30) months (the “Extension Period”)
commencing immediately upon the expiration of the term of this Lease
(commencing, therefore, on April 1, 2000). Tenant shall no longer have the
extension periods of six (6) months each set forth in Section 39 of the Addendum
(the “Superseded Extension Periods”), nor shall Landlord have any duty to pay
the broker’s fee that would have been payable in connection with the Superseded
Extension Periods under Section 46 of the Addendum to Lease.

 

  B. Extension Premises. Tenant may exercise the Extension Option with respect
to any or all of the buildings that comprise the Premises, provided that Tenant
may not exercise the Extension Option with respect to only a portion of a
building.

 

  C. Rent During Extension.

 

  1. Initial Rent. During the first (1st) twelve (12) months of the Extension
Period, the rent shall be as follows: (a) the rent for Building 2015B and the
rent for Building 2025 shall continue at the same rate as the rent for those
buildings during the month immediately preceding the commencement of the
Extension Period, and (b) the rent for Building 2006 shall be One Dollar and
Twenty-Three Cents ($1.23) per square foot per month or, if greater, the rent
for that building during the month immediately preceding the commencement of the
Extension Period.

 

A5 - 2

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

 

2.

Rental Increases. During the Extension Period, the rent for Building 2006, the
rent for Building 2015B, and the rent for Building 2025 shall all increase as
follows: (a) on April 1, 2001, said rent shall increase by the same percentage
as the CPI has increased from March, 2000 to March, 2001; and (b) on April 1,
2002, said rent shall increase by the same percentage as the CPI has increased
from March, 2001 to March, 2002; provided that under no circumstances shall
either of said increases in rent, the one occurring April 1, 2001 and the other
occurring on April 1, 2002, exceed three and one-quarter percent.(3.25%).
Landlord shall calculate and notify Tenant of all applicable rental increases.
If the CPI for calculating any such increase is not available at the time a
rental increase begins, then Tenant shall temporarily continue paying rent at
the existing rate. Once the applicable CPI becomes available and Landlord
notifies Tenant of the amount of the applicable rental increase, then Tenant
shall pay the difference between any rent paid and the rent as adjusted under
the applicable CPI.

 

  D. Exercise of Extension Option. To exercise the Extension Option, Tenant
shall, not later than one hundred fifty (150) calendar days prior to the
expiration of the term of the Lease, provide, and Landlord shall receive, a duly
mailed or personally delivered written notice setting forth (i) Tenant’s
exercise of the Extension Option, and (ii) a statement clearly designating to
which of the buildings comprising the Premises the Extension Period shall apply.
Failure by Tenant to provide timely or adequate written notice as set forth
herein shall, unless, and in the sole discretion of Landlord, an untimely or
inadequate notice is acceptable to Landlord, cause the Extension Option to lapse
and its exercise by Tenant shall not be effective.

 

  E. Condition. Tenant’s right to exercise the Extension Option set forth in
this Fifth Addendum is conditioned upon the requirement that, after the
applicable cure period, if any, Tenant shall not be in default under the Lease
at the time of exercise of the Extension Option.

 

5. Building 2006.

 

  A. Condition of Building 2006 Improvements.

 

  1. Landlord’s Obligations. Prior to delivery of Building 2006 to Tenant,
Landlord shall conduct, at Landlord’s sole cost and expense, the following
cleaning and repair of the Premises (collectively, the “Building 2006 Work”):

 

  a. Replace all ceiling tiles.

 

  b. Paint all interior walls, door frames, and columns.

 

A5 - 3

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

  c. Install new carpeting.

Materials used for the Building 2006 Work shall be of the same or similar
quality as those materials previously used by Landlord in the repair of the
Existing Premises pursuant to the Lease. Existing doors and hardware will
remain. No demolition work will be conducted. Other than the Building 2006 Work,
Tenant shall take Building 2006 “as is.”

 

  2. Tenant’s Obligations. Any other preparation of, or improvements to,
Building 2006 that Tenant may desire shall, subject to approvals from Landlord
under Section 10 of the Lease, be the responsibility of Tenant and done at
Tenant’s sole cost and expense.

 

  3. Communications Improvements. Landlord shall provide a telecommunications
conduit between Building 2006 and the Existing Premises. Tenant shall have the
right to install and distribute in Building 2006 data communications wiring,
telephone lines and other communications and information processing related
wiring and equipment as reasonably required for Tenant’s business.

 

  B. Possession. Landlord shall use reasonable efforts to deliver possession of
the Building 2006 to Tenant on or before September 1, 1997. Notwithstanding the
foregoing, Landlord shall complete the Building 2006 Work on or before
October 1, 1997 and shall deliver possession of Building 2006 to Tenant on
October 1, 1997.

 

  C. Parking. In addition to Tenant’s right to parking spaces with respect to
the Existing Premises, Tenant shall also be entitled, at no cost, to five
(5) parking spaces per one thousand (1,000) rentable square feet of office space
contained in Building 2006.

 

  D.

The Premises and Other Terms and Conditions of the Lease. Building 2006 shall be
deemed to be included as a part of the “Premises” and the “Building” and shall
be subject to the same terms and conditions as the original office space as set
forth in the Lease, except to the extent that any provision of this Fifth
Addendum is inconsistent or in conflict with such terms and conditions, and
except that Sections 35, 36, 37, 39, 40, 41, 42 and 46 set forth in the Addendum
to Lease, Sections 1 and 14 of the Second Addendum to Office Building Lease,
Sections 1 through 9 of the Third Addendum to Lease, and Sections 1 through 8 of
the Fourth Addendum to Lease shall not apply to Building 2006. Specifically,
Building 2006 shall be subject to the terms and conditions of this Fifth
Addendum and, to the extent compatible and consistent with the provisions of
this Fifth Addendum, subject to Sections 1 through 31 of the Lease, Sections 38,
43, 44, 45, 47, 48, and 49 of the Addendum to Lease, and Sections 2 through 13,
and 15 of the Second Addendum to Office Building Lease; and the Rules and
Regulations attached to the Lease. Section 39 of the Addendum to Lease shall no
longer apply

 

A5 - 4

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

 

to any portion of the Premises. The termination date for all of the Premises
shall be same date, which date is set forth in this Fifth Addendum at Section 2
above, subject to extension under Section 4 above and subject to earlier
termination as is possible under other provisions of the Lease, such as
Section 24 of the Lease.

 

6. Brokers’ Fee.

 

  A. Tenant and Landlord agree that they have had no dealings with any real
estate broker or agent in connection with the negotiation of this Fifth Addendum
excepting only Aguer Pipgras Real Estate, and they know of no other real estate
broker or agent who is entitled to a commission in connection with this Fifth
Addendum.

 

 

B.

Landlord shall pay to Aguer Pipgras Real Estate a broker’s fee equal to three
percent (3%) of the total rent for the thirty-and-one-half-months extension of
the term of the Lease for the Existing Premises and three percent (3%) of the
total rent for Building 2006 for the period prior to the Extension Period.
One-half ( 1 /2) of said broker’s fee hereunder shall be due and payable upon
execution of this Fifth Addendum, provided that Landlord is then assured that no
rescission under Section 48 of the Addendum to Lease can occur. The balance of
said broker’s fee shall be due and payable upon October 1, 1997. If the
Extension Option is effectively exercised by Tenant, then Landlord shall pay to
Aguer Pipgras Real Estate, at the beginning of the Extension Period, three
percent (3%) of the total rent payable during the Extension Period for that
portion of the Premises as to which the Extension Option is exercised as set
forth in Section 4.B above.

 

            Landlord      

Aerojet-General Corporation,

an Ohio corporation

Dated:  

July 8, 1997

    By:  

/s/ Terry P. Griffin

      Its:   Director, Real Estate       Tenant      

Foundation Health,

a California Health Plan,

a California corporation

Dated:  

July 7, 1997

    By:  

/s/ Joe E. Erway

      Its:   Joe E. Erway, Vice President of Tenant’s parent company, duly
authorized to bind Tenant under this document.

 

A5 - 5

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

SIXTH ADDENDUM TO LEASE

This is the Sixth Addendum attached to that certain Lease by and between
Aerojet-General Corporation, an Ohio corporation, as Landlord, and Foundation
Health, a California Health Plan, a California corporation, as Tenant, dated
July 13, 1995, including that certain Addendum, that certain Second Addendum,
that certain Third Addendum, that certain Fourth Addendum, and that certain
Fifth Addendum thereto (collectively, the “Lease”). Unless otherwise defined in
this Sixth Addendum, all capitalized terms used in this Sixth Addendum shall
have the same meanings as such capitalized terms have in the Lease. All
references within this Sixth Addendum to a “Section” are to a specific section
within the Lease unless otherwise indicated.

RECITALS

 

A. Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, and approximately thirty thousand (30,000) square
feet within Building number 2006 (incorrectly described in the Fifth Addendum as
the entire Building number 2006) (collectively, the “Existing Premises”) and no
other space.

 

B. In accordance with the provisions herein, Landlord and Tenant desire to
expand the Premises to include additional space located in Building 2015A.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals
and the covenants contained in this Sixth Addendum, agree as follows:

 

1. Expansion of the Premises. Landlord does hereby lease to Tenant, and Tenant
hereby leases from Landlord, approximately twenty thousand (20,000) to
twenty-five (25,000) rentable square feet of office space (“Building 2015A
Expansion Space”) comprising part of building number 2015A (“Building 2015A”), a
single-story building, located at the Aerojet headquarters in the City of Rancho
Cordova, in the State of California. The precise number of rentable square feet,
the location, and the configuration of the Building 2015A Expansion Space shall
be conclusively determined by mutual agreement of Landlord and Tenant and will
be shown on the floor plan therefor, a copy of which shall be attached as
Exhibit “A” to this Sixth Addendum and incorporated herein by this reference.
Measurement of the rentable square feet contained in the Building 2015A
Expansion Space shall be conducted in accordance with a method acceptable to
both parties. The “Premises” under the Lease shall thus henceforth include both
the Existing Premises and the Building 2015A Expansion Space.

 

2. Rent.

 

  A. Initial Rent. Subject to increases in rent as set forth below, the rent for
the Building 2015A Expansion Space shall be One Dollar ($1.00) per square foot
per month commencing as of the date possession of the Building 2015A Expansion
Space is delivered to Tenant.

 

A6 - 1

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

  B. Rental Increases. The rent for the Building 2015A Expansion Space shall
increase on October 1, 1998 and again on October 1, 1999 as follows: (1) on
October 1, 1998, the rent for the 2015A Expansion Space shall increase by the
same percentage as the Consumer Price Index, unadjusted, for All Urban Consumers
(all items), as published by the United States Department of Labor, Bureau of
Labor Statistics, for the San Francisco-Oakland-San Jose Area (1982-84 = 100
Base) (the “CPI”), has increased from the CPI as published for September, 1997
to the CPI as published for September, 1998; and (2) on October 1, 1999, the
rent for the Building 2015 Expansion Space shall each increase by the same
percentage as the CPI has increased from the CPI as published for September,
1998 to the CPI as published for September, 1999; provided that under no
circumstances shall either of said increases in rent, the one occurring
October 1, 1998 and the other occurring on October 1, 1999, exceed three and
one-quarter percent (3.25%), Landlord shall calculate and notify Tenant of all
applicable rental increases. If the CPI for calculating any such increase is not
available at the time a rental increase begins, then Tenant shall temporarily
continue paying rent at the existing rate. Once the applicable CH becomes
available and Landlord notifies Tenant of the amount of the applicable rental
increase, then Tenant shall pay the difference between any rent paid and the
rent as adjusted under the applicable CPI.

 

3. Term. The term of the Lease for the Building 2015A Expansion Space shall end
on March 31, 2000.

 

4. Extension of Term.

 

  A. Option. With respect to the Building 2015A Expansion Space, Tenant shall
have the Extension Option described in the Fifth Addendum, which Extension
Option shall be exercisable subject to the conditions and in accordance with the
procedures set forth in Section 4 of the Fifth Addendum; provided, however, that
the initial rent and rental increases applicable to the Building 2015A Expansion
Space during the Extension Period shall be as set forth in subsection C below.

 

  B. Buy-Out. In the event that Tenant fails to exercise the Extension Option
with respect to the Building 2015A Expansion Space, Tenant shall pay to Landlord
the sum of Three Hundred and Forty-Thousand Dollars ($340,000.00), being the
amount of money that the parties stipulate to be the unamortized balance of
Landlord’s expenditures for the Building 2015A Work (as defined below). Payment
of said amount shall be owed in addition to payment and performance by Tenant of
all obligations accruing under the Lease up to the date of the expiration of the
Lease.

 

  C. Rent During Extension.

 

  i. Initial Rent. During the first (1st) twelve (12) months of the Extension
Period, the rent for the Building 2015A Expansion Space shall continue at the
same rate as the rent for the Building 2015A Expansion Space during the month
immediately preceding the commencement of the Extension Period.

 

A6 - 2

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

  ii. Rental Increases. During the Extension Period, the rent for the Building
2015A Expansion Space shall all increase as follows: (a) on April 1, 2001, said
rent shall increase by the same percentage as the CPI has increased from March,
2000 to March, 2001; and (b) on April 1, 2002, said rent shall increase by the
same percentage as the CPI has increased from March, 2001 to March, 2002;
provided that under no circumstances shall either of said increases in rent, the
one occurring April 1, 2001 and the other occurring on April 1, 2002, exceed
three and one-quarter percent (3.25%). Landlord shall calculate and notify
Tenant of all applicable rental increases. If the CPI for calculating any such
increase is not available at the time a rental increase begins, then Tenant
shall temporarily continue paying rent at the existing rate. Once the applicable
CH becomes available and Landlord notifies Tenant of the amount of the
applicable rental increase, then Tenant shall pay the difference between any
rent paid and the rent as adjusted under the applicable CPI.

 

5. Building 915A.

 

  A. Conditions Building 2015A and Improvements.

 

  i. Lease of Remaining Building Space. Tenant understands that the Building
2015A Expansion Space constitutes approximately one-half of Building 2015A, and
that Landlord has agreed, or may agree, to lease the remaining portion of
Building 2015A to another tenant, and that Tenant shall, therefore, have no
right to lease any additional space in Building 2015A.

 

  ii. Space Plan. Tenant and Landlord acknowledge and agree that the precise
number of rentable square feet and the specific location of the Building 2015A
Expansion Space within Building 2015A shall be shown on the floor plan to be
prepared by Forar Williams & Associates, with consultations with REF and Sons,
Inc., and in accordance with instructions from Landlord and Tenant, and attached
hereto as Exhibit “A.”

 

  iii. Landlord’s Obligations. Prior to delivery of the Building 2015A Expansion
Space to Tenant, Landlord shall construct, at Landlord’s sole cost and expense,
the tenant improvements described in Exhibit “B” attached hereto and
incorporated herein by this reference (the “Building 2015A Work”). Materials
used for the Building 2015A Work shall be of the same or similar quality as
those materials previously used by Landlord in the repair of the Existing
Premises pursuant to the Lease. Existing doors and hardware will remain. No
demolition work will be conducted. Other than the Building 2015A Work, Tenant
shall take the Building 2015A Expansion Space “as is.”

 

A6 - 3

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

  iv. Tenant’s Obligations. Any other preparation of, or improvements to, the
Building 2015A Expansion Premises that Tenant may desire shall, subject to
approvals from Landlord under Section 10 of the Lease, be the responsibility of
Tenant and done at Tenant’s sole cost and expense.

 

  v. Communications Improvements. Landlord shall provide a telecommunications
conduit between Building 2015A and the Existing Premises. Tenant shall have the
right to install and distribute in Building 2015A data communications wiring,
telephone lines and other communications and information processing related
wiring and equipment as reasonably required for Tenant’s business.

 

  B. Possession. Landlord shall use reasonable efforts to deliver possession of
the Building 2015A Expansion Premises to Tenant on or before December 10, 1997.
Notwithstanding the foregoing, Landlord shall complete the Building 2015A Work
no later than December 31, 1997 and shall deliver possession of the Building
2015A Expansion Space to Tenant on January 5, 1998.

 

  C. Parking. In addition to Tenant’s right to parking spaces with respect to
the Existing Premises, Tenant shall also be entitled, at no cost, to five
(5) parking spaces per one thousand (1,000) rentable square feet of office space
contained in the Building 2015A Expansion Space.

 

  D. The Premises and Other Terms and Conditions the Lease. The Building 2015A
Expansion Space shall be deemed to be included as a part of the “Premises” and
the “Building” and shall be subject to the same terms and conditions as the
original office space as set forth in the Lease, except to the extent that any
provision of this Sixth Addendum is inconsistent or in conflict with such terms
and conditions, and except that Sections 35, 36, 37, 39, 40, 41, 42 and 46 set
forth in the Addendum to Lease, Sections 1, 14, and 15 of the Second Addendum to
Office Building Lease, Sections 1 through 9 of the Third Addendum to Lease,
Sections 1 through 8 of the Fourth Addendum to Lease, and Sections 1, 2, 3A, 3B,
4C, 5, and 6 of the Fifth Addendum to Lease shall not apply to the Building
2015A Expansion Space. Specifically, the Building 2015A Expansion Space shall be
subject to the terms and conditions of this Sixth Addendum and, to the extent
compatible and consistent with the provisions of this Sixth Addendum, subject to
Sections 1 through 31 of the Lease, Sections 38, 43, 44, 45, 47, 48, and 49 of
the Addendum to Lease, Sections 2 through 13 of the Second Addendum to Office
Building Lease, Sections 3C, 4A, 4B, 4D, and 4E of the Fifth Addendum, and the
Rules and Regulations attached to the Lease, With respect to the notice
described in Section 48, Landlord provided such notice regarding the potential
lease of the Building 2015A Expansion Space on August 2, 1995. Section 39 of the
Addendum to Lease shall no longer apply to any portion of the Premises. The
termination date for the Building 2015A Expansion Space shall be the same as the
Lease termination date for the Existing Premises, which date is set forth in the
Fifth Addendum at Section 2, subject to extension under Section 4 of this Sixth
Addendum and subject to earlier termination as is possible under other
provisions of the Lease, such as Section 24 of the Lease.

 

A6 - 4

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

  E. Brokers’ Fee.

 

  i. Tenant and Landlord agree that they have had no dealings with any real
estate broker or agent in connection with the negotiation of this Sixth Addendum
excepting only Aguer Pipgras Associates, and they know of no other real estate
broker or agent who is entitled to a commission in connection with this Sixth
Addendum.

 

 

ii.

Landlord shall pay to Aguer Pipgras Associates a broker’s fee equal to three
percent (3%) of the total rent for the Building 2015A Expansion Space for the
period prior to the Extension Period. One-half ( 1/2) of said broker’s fee
hereunder shall be due and payable upon execution of this Sixth Addendum,
provided that Landlord is then assured that no rescission under Section 47 of
the Addendum to Lease can occur. The balance of said broker’s fee shall be due
and payable upon January 15, 1998. If the Extension Option is effectively
exercised by Tenant, then Landlord shall pay to Aguer Pipgras Associates, at the
beginning of the Extension Period, three percent (3%) of the total rent payable
during the Extension Period for that portion of the Premises as to which the
Extension Option is exercised as set forth in Section 4.B of the Fifth Addendum.

 

      Landlord      

Aerojet-General Corporation,

an Ohio corporation

Dated:  

 

    By:  

 

      Its:        

Tenant

Foundation Health,

a California Health Plan,

a California corporation

Dated:  

December 10, 1997

    By:  

/s/ Joe E. Erway

      Its:   Joe E. Erway, Vice President of Tenant’s parent company, duly
authorized to bind Tenant under this document.

 

A6 - 5

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

LOGO [g82075ex10_66pg25a.jpg]

 

A6 - 6

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

SEVENTH ADDENDUM TO LEASE

This is the Seventh Addendum, which, upon approval, will be attached to that
certain Lease by and between Aerojet-General Corporation, an Ohio corporation,
as Landlord, and Foundation Health Federal Services, Inc., a Delaware
corporation, successor in interest to Foundation Health, a California Health
Plan, a California corporation, as Tenant, dated July 13, 1995, including that
certain Addendum, that certain Second Addendum, that certain Third Addendum,
that certain Fourth Addendum, that certain Fifth Addendum, and that certain
Sixth Addendum thereto (collectively, the “Lease”). Unless otherwise defined in
this Seventh Addendum, all capitalized terms used in this Seventh Addendum shall
have the same meanings as such capitalized terms have in the Lease. All
references within this Seventh Addendum to a “Section” are to a specific section
within the Lease unless otherwise indicated.

RECITALS

 

A. Pursuant to the terms of the Lease Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately thirty thousand (30,000) square feet
within Building number 2006 (incorrectly described in the Fifth Addendum as the
entire Building number 2006) and approximately twenty thousand (20,000) to
twenty-five thousand (25,000) square feet in Building number 2015A
(collectively, the “Premises”) and no other space.

 

B. In accordance with the provisions herein, Landlord and Tenant desire, among
other things, to extend the term of the Lease, to grant to Tenant a New
Extension Option (defined below), to require Landlord to install a new card
access and additional security measures, and to provide for other improvements
to the Premises.

 

C. Tenant has advised Landlord that (i) the original Tenant under the Lease,
Foundation Health, a California Health Plan (“FH”), has been merged into Health
Net, a California corporation (“Health Net”), and (iii) Health Net is a
subsidiary of Foundation Health Systems, Inc., a Delaware corporation (“FHS”).
Pursuant to a separate Assignment of Lease, Health Net has, with Landlord’s
consent, assigned all of its interest under the Lease to Foundation Health
Federal Services, Inc., a Delaware corporation, which is also a subsidiary of
FHS.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals
and the covenants contained in this Seventh Addendum, agree as follows:

 

1. Exercise of Extension Option. Tenant hereby exercises, and Landlord hereby
confirms Tenant’s exercise of the Extension Option described in the Fifth
Addendum, as modified by this Seventh Addendum, with respect to all of the
Premises.

 

2. Term. By reason of said exercise by Tenant of said Extension Option, the term
of the Lease for all of the Premises expires at midnight on September 30, 2002.

 

A7 - 1

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

3. Rent. The rent for the period of April 1, 2000 through September 30, 2002
shall be the rent as calculated under Section 4.C. of the Fifth Addendum and
under Section 4.C. of the Sixth Addendum.

 

4. Further Extension of Term.

 

  A. New Extension Option. Tenant shall have the right and option (the “New
Extension Option”) to extend the term of this Lease for thirty (30) months (the
“New Extension Period”) commencing immediately upon the expiration of the term
of this Lease (commencing, therefore, on October 1, 2002).

 

  B. Extension Premises. Tenant may exercise the New Extension Option with
respect to any or all of the buildings that comprise the Premises, provided that
Tenant may not exercise the New Extension Option with respect to only a portion
of a building.

 

  C. Rent During New Extension Period.

 

  i. Initial Rent. During the first (1st) twelve (12) months of the New
Extension Period, the rent shall be as follows: (a) the rent for Building 2015B,
the rent for Building 2025, and the rent for Building 2015A shall be One Dollar
and Ten Cents ($1.10) per rentable square foot per month, and (b) the rent for
Building 2006 shall be One Dollar and Thirty Cents ($1.30) per rentable square
foot per month.

 

 

ii.

Rental Increases. During the New Extension Period, the rent for Building 2015B,
the rent for Building 2025, the rent for Building 2006, and the rent for
Building 2015A shall all increase as follows: (a) on October 1, 2003, said rent
shall increase by the same percentage as the Consumer Price Index, unadjusted,
for All Urban Consumers (all items), as published by the United States
Department of Labor, Bureau of Labor Statistics, for the San
Francisco-Oakland-San Jose Area (1982-84 =100 Base) (the “CPI”) has increased
from the CPI as published for September, 2002, to the CPI as published for
September, 2003; and (b) on October 1, 2004, said rent shall increase by the
same percentage as the CPI has increased from the CPI as published for
September, 2003: to the CPI as published for September 2004; provided that under
no circumstances shall either of said increases in rent, the one occurring
October 1, 2003 and the other occurring on October 1, 2004, exceed three and
one-quarter percent (3.25%). Landlord shall calculate and notify Tenant of all
applicable rental increases. If the CPX for calculating any such increase is not
available at the time a rental increase begins, then Tenant shall temporarily
continue paying rent at the existing rate. Once the applicable CPI becomes
available and Landlord notifies Tenant of the amount of the applicable rental
increase, then Tenant shall pay the difference between any rent paid and the
rent as adjusted under the applicable CPI.

 

A7 - 2

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

  D. Exercise of New Extension Option. To exercise the New Extension Option,
Tenant shall, not later than May 4, 2002, give, and Landlord shall receive, a
duly mailed or personally delivered written notice setting forth (i) Tenant’s
exercise of the New Extension Option, and (ii) a statement clearly designating
to which of the buildings comprising the Premises the New Extension Period shall
apply. Failure by Tenant to provide timely or adequate written notice as set
forth herein shall, unless, and in the sole discretion of Landlord, an untimely
or inadequate notice is acceptable to Landlord, cause the New Extension Option
to lapse and its exercise by Tenant shall not be effective.

 

  E. Condition. Tenant’s right to exercise the New Extension Option set forth in
this Seventh Addendum is conditioned upon the requirement that, after the giving
of written notice and the passage of the applicable cure period, if any, Tenant
shall not be in default under the Lease at the time of exercise of the New
Extension Option.

 

5. Prior Rental Increases. Landlord agrees to review its notices of rental
increases effective October 1, 1998, and October 1, 1999, under Section 3.B. of
the Fifth Addendum as previously delivered to Tenant and to review the CPI as
published for the months designated therein. Promptly after the execution and
delivery of this Seventh Addendum, Landlord shall report its findings to Tenant.
If rental increases previously paid by Tenant were in excess of the increases
that should have been paid, Landlord shall provide Tenant with credit for the
excess against the rent next becoming due under the Lease.

 

6. Improvements and Energy Casts.

 

  A. Security. Promptly following the execution and delivery of this Seventh
Addendum, Landlord shall, at a total cost to Landlord not exceeding Fifty-Three
Thousand Dollars ($53,000.00), install a new card access and additional security
measures, all in accordance with plans and specifications that Landlord and
Tenant have been discussing and shall mutually approve after the execution and
delivery of this Seventh Addendum.

 

  B. Other Improvements. In addition to the new card access and additional
security measures to be installed under Section 6.A., above, Landlord agrees to
expend no more than Three Dollars ($3.00) per rentable square foot to pay for
permanent improvements to the Premises (the “New Improvements”), to be done in
accordance with plans and specifications to be prepared and mutually approved by
Landlord and Tenant following the execution and delivery of this Seventh
Addendum. Landlord agrees to commence installation of the New Improvements as
promptly as may be reasonably possible after said plans and specifications are
mutually approved and all necessary permits are obtained, and to prosecute such
installation to completion with commercially reasonable diligence. Materials
used for said new permanent improvements shall be of the same or similar quality
as those materials previously used by Landlord in the repair and Improvement of
the Premises pursuant to the Lease. The New Improvements are generally as
follows:

 

A7 - 3

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

  i. To build out a few perimeter offices, but not to exceed twenty (20) such
offices;

 

  ii. To replace two (2) additional entrance doors (10S and 11S) with glass;

 

  iii. To plumb water coolers;

 

  iv. To install additional landscaping;

 

  v. To reduce noise in HVAC unit, second floor, enrollment area;

 

  vi. To upgrade breakrooms;

 

  vii. To spot paint as needed;

 

  viii. To replace carpeting as needed;

 

  ix. To install lockers in restrooms;

 

  x. To add bulletin boards; and

 

  xi. To continue parking lot improvements.

 

  C. Tenant’s Obligations. Any other improvements to the Premises that Tenant
may desire shall, subject to approvals from Landlord under Section 10 of the
Lease, be the responsibility of Tenant and done at Tenant’s sole cost and
expense.

 

  D. Energy Costs. At the request of Tennant, Landlord agrees to work with
Tenant in the development of an energy cost reduction program with respect to
electrical usage, including, but not limited to, HVAC, at the Premises and to
implement any such program if and to the extent, the cost thereof is reasonable
from Landlord’s perspective under the circumstances.

 

7. Brokers’ Fee.

 

  A. Only One Broker. Tenant and Landlord agree that they have had no dealings
with any real estate broker or agent in connection with the negotiation of this
Seventh Addendum excepting only Aguer Pipgras Associates (the “Broker”), and
they know of no other real estate broker or agent who is entitled to a
commission in connection with this Seventh Addendum.

 

  B. Fee for First Extension. By reason of Tenant’s exercise herein of the
Extension Option granted in the Fifth Addendum, Landlord shall, immediately
after execution and delivery of this Addendum, pay to the Broker its fee
calculated as set forth in Section 6.B. of the Fifth Addendum.

 

  C. Fee for New Extension. If the New Extension Option is effectively exercised
by Tenant, then Landlord shall pay to the Broker, at the beginning of the New
Extension Period, a brokerage fee of three percent (3%) of the total rent
payable during the New Extension Period for that portion of the Premises as to
which the New Extension Option is exercised.

 

A7 - 4

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

8. Effect. Landlord and Tenant agree that the Least is in full force and effect
without modification except as expressly set forth in this Seventh Addendum.

 

      Aerojet-General Corporation,       an Ohio corporation Dated:  

December 1, 1999

    By:  

/s/ Terry P. Griffin

      Its:   President Aerojet Investments Ltd.       Foundation Health Federal
Services, Inc.,       a Delaware corporation Dated:  

July 7, 1997

    By:  

/s/ Michael Radford

      Its:   Vice President

 

A7 - 5

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

EIGHTH ADDENDUM TO LEASE

This is the Eighth Addendum, which, upon approval, will be attached to that
certain Lease (the “Original Lease”) by and between Aerojet-General Corporation,
an Ohio corporation, as Landlord, and Health Net, Inc., a Delaware corporation,
as successor in interest by merger to Foundation Health Federal Services, Inc.,
a Delaware corporation (“FHFS”), as successor in interest to Foundation Health,
a California Health Plan, a California corporation (“FH”), as Tenant, dated
July 13, 1995, including that certain Addendum, that certain Second Addendum,
that certain Third Addendum, that certain Fourth Addendum, that certain Fifth
Addendum, that certain Sixth Addendum, and that certain Seventh Addendum thereto
(collectively, the “Lease”). Unless otherwise defined in this Eighth Addendum,
all capitalize terms used in this Eighth Addendum shall have the same meanings
as such capitalized terms have in the Lease. All references within this Eighth
Addendum to a “section” are to a specific section within the Lease unless
otherwise indicated.

RECITALS

 

A. Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately twenty-eight thousand (28,000) square
feet within Building number 2006 (incorrectly described in the Fifth Addendum as
the entire Building number 2006), and approximately twenty-eight thousand
(28,000) square feet in Building number 2015A (collectively, the “Premises”) and
no other space.

 

B. The Premises consist of approximately two hundred one thousand six hundred
eighty-four (201,684) rentable square feet of office space.

 

C. In accordance with the provisions herein, Landlord and Tenant desire, among
other things, (1) to extend the term of the Lease, (2) to grant to Tenant a
right to further extend the term, (3) to give Tenant expansion and contraction
rights respecting the Premises and a right to first negotiate for additional
space, and (4) to provide a rental schedule for the extended term and an
allowance from Landlord for renovation and improvement work at the Premises.

 

D. Tenant has advised Landlord and hereby represents and warrants to Landlord:
(1) that FH, being the original Tenant under the Lease, disappeared upon its
merger into Health Net, Inc., a California corporation (“Health Net-Cal”), as
the surviving corporation; (2) that Health Net-Cal was at the time of execution
and delivery of the Seventh Addendum a subsidiary of Foundation Health Systems,
Inc., a Delaware corporation (“FHS”); (3) that, pursuant to a separate
Assignment of Lease dated November 30, 1999, Health Net-Cal, with Landlord’s
consent, assigned all of its interest under the Lease to FHS, which was then a
subsidiary of FHS and (4) that as of the date this Eighth Addendum is executed,
Health Net-Cal, FHS, and FHFS have all merged into one (1) surviving company,
which surviving company is Health Net Inc., a Delaware corporation, which is the
current Tenant under the Lease.

 

A8 - 1

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

AGREEMENT

NOW, THEREFORE Landlord and Tenant, in consideration of the foregoing recitals,
all of which are incorporated herein by this reference, and the covenants
contained in this Eighth Addendum, agree as follows:

 

1. Term. Landlord and Tenant agree that, subject to further extension as
provided below, the term of the Lease is extended by five(5) years (the
“Additional Term”) which Additional Term commences on October 1, 2002 and
expires on September 30, 2007, subject to earlier termination as provided
elsewhere in the Lease. The Additional Term supersedes and replaces entirely any
and all extension options Tenant may have had under the Lease as it existed
prior to this Eighth Addendum, including, but not limited to, the New Extension
Option (as defined in the Seventh Addendum). Except as may be expressly provided
to the contrary in this Eighth Addendum, all of the terms and conditions of the
Lease including, but not limited to, the rental amounts payable thereunder, as
it existed prior to this Eighth Addendum shall continue to apply for the period
prior to commencement of the Additional Term.

 

2. Rent. The monthly rent for the Additional Term shall be as follows:

 

 

A.

For the first (1st) through the twelfth (12th) months, One Dollar and
Twenty-Four Cents ($1.24 per rentable square foot, which is, assuming no interim
Contraction Date (defined below), and assuming no interim addendum to the Lease
demising the Expansion Area (defined below , a total of Two Hundred Fifty
Thousand Eighty-Eight Dollars and Sixteen Cents ($250,088.16) per month.

 

 

B.

For the thirteenth (13th) through the forty-eighth (48th) months, One Dollar and
Twenty-Seven Cents ($1.27) per rentable square foot, which is, assuming no
interim Contraction Date (defined below) and assuming no interim addendum to the
Lease demising the Expansion Area (defined below), a total of Two Hundred
Fifty-Six Thousand One Hundred Thirty-Eight Dollars and Sixty-Eight Cents
($256,138.68) per month.

 

 

C.

For the forty-ninth (49th) through the sixtieth (60) months, One Dollar and
Twenty-Nine Cents ($1.29 per rentable square foot, which is, assuming no interim
Contraction Date (defined below) and assuming no interim addendum to the Lease
demising the Expansion Area (defined below) welted below , a total of Two
Hundred Sixty Thousand One Hundred Seventy-Two Dollars and Thirty-Six Cents
($260,172.36) per month.

 

3. Extension of Term.

 

  A. Extension Option. Tenant shall have the right and option (the “Extension
Option” to extend the term of the Lease for five (5) years beyond the Additional
Term (the “Extension Period”) commencing immediately upon expiration of the
Additional Term (commencing, therefore, on October 1, 2007); provided that:

 

A8 - 2

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

  i. Tenant must give to Landlord, and Landlord must have received, by mail or
by personal delivery, written notice of Tenant’s election to exercise the
Extension Option no later than two hundred seventy (270) days prior to the date
the Additional Term expires;

 

  ii. At the time Tenant gives said written notice to Landlord, and at the time
the Extension Period commences, Tenant must not, after the giving of written
notice and the passage of the applicable cure period, if any, be in default
under the Lease;

 

  iii. Subject to Tenant’s Contraction Option (defined below) Tenant may
exercise the Extension Option with respect to all of the premises only, and may
not exercise the Extension Option with respect to only part of the Premises; and

 

  iv. Failure by Tenant to provide timely or adequate written notice as set
forth herein shall, unless, and in the sole discretion of Landlord, an untimely
or inadequate notice is acceptable to Landlord, cause the Extension Option to
lapse and its exercise by Tenant shall not be effective.

 

  B. Rent during the Extension Period. The monthly rental payable during the
Extension Period shall be in the fair market rental for the Premises, as of the
beginning of the Extension Period, taking into account the specific provisions
of the Lease that will remain constant, including, but not limited to, the term
thereof as hereby modified, the improvements installed by Landlord, services
provided to Tenant, the fact that said fair market rental shall not be subject
to increase during the Extension Period, and other pertinent items and the
amenities, location, identity, quality, age, and conditions of the buildings in
which the Premises are located; provided that, in no event, shall the monthly
rental payable for the Premises during the Extension. Period be less than the
monthly rental payable for the last month of the Additional Term, regardless
what the fair market rental may be. The fair market rental for the Premises
shall be determined by applying the following procedures and subject to the
following terms and conditions:

 

  i. At least one hundred fifty (150) days prior to the expiration of the
Additional Term, Landlord and Tenant may meet and confer but are not obligated
to meet and confer, respecting the establishment of the fair market rental;

 

  ii. In the event that Landlord and Tenant fail to meet and confer or cannot
agree upon the fair market rental at least one hundred twenty (120) days prior
to the expiration of the Additional Term, then at least one hundred (100) days
prior to the expiration of the Additional Term, Landlord and Tenant shall each
give to the other a written notice setting forth its final determination of the
fair market rental (collectively, the “Fair Rental Notices”);

 

A8 - 3

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

  iii. If only one (1) Fair Rental Notice is timely given, then that Fair Rental
Notice shall conclusively establish the fair market rental;

 

  iv. If both Landlord and Tenant give Fair Rental Notices, and the Fair Rental
Notices are different in any respect, then the fair market rental shall be
conclusively established by, a third-party appraiser mutually chosen by Landlord
and Tenant; provided that, if Landlord and Tenant have not agreed upon, and
engaged, such appraiser at least ninety (90) days prior to expiration of the
Additional Term, then Landlord and Tenant shall each engage a duly licensed
California attorney with commercial leasing experience of at least five
(5) years, which attorneys shall, by their agreement, select the appraiser;
provided that, if said attorneys have not agreed upon an appraiser at least
sixty (60) days prior to the expiration of the Additional Term, then the
appraiser shall be selected by the Presiding Judge of the Superior Court of
Sacramento County acting in his or her individual capacity if said Judge is
willing to do so;

 

  v. Landlord and Tenant shall share equally the fees and expenses of the
selected appraiser and shall each pay its own attorneys’ fees;

 

  vi. Within thirty (30) days after the appraiser’s engagement, the appraiser
shall deliver to Landlord and to Tenant the appraiser’s determination of which
of the two (2) Fair Rental Notices is, in the appraiser’s best judgment, the
closest to the fair market rental for the Premises (the “Chosen Fair Rental
Notice”), and the amount set forth in the Chosen Fair Rental Notice shall be
deemed to be the fait market rental; and

 

  vii. The appraiser shall be required to give to Landlord and to Tenant a
written statement of the appraiser’s reasoning, and justification for selection
of the Chosen Fair Rental Notice; the appraiser shall not be permitted to decide
on a middle ground, or to suggest any compromise; the appraiser’s sole function
shall be to determine the Chosen Fair Rental Notice, and provide his or her
reasons therefor.

 

4. Tenant Improvements.

 

  A. Renovation Allowance. As of the commencement of the Additional Term, and in
consideration for the Additional Rent (defined below), Landlord shall make
available for paying costs of renovating and improving the Premises an allowance
of Five Dollars ($5.00) per rentable square foot of the premises not including
the Expansion Area (defined below), which is assuming no interim Contraction
date (defined below a total amount of One Million Eight Thousand Four Hundred
Twenty-Nine Dollars ($l,008,429.00) (the “Renovation Allowance”).

 

  B.

Construction of Improvements. Subject to the Reimbursement Option (defined
below), Landlord agrees to expend an amount up to the Renovation Allowance (the
portion of the Renovation Allowance actually expended is hereinafter

 

A8 - 4

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

 

referred to as the “Expended Allowance”) as and when Landlord incurs costs for
the construction of permanent improvements (collectively the “Permanent
Improvements”) to the premises, including, but not limited to, costs associated
with architectural designs engineering, preparation of plans and specifications,
permits and fees, labor and materials, equipment purchase or rental amounts paid
to contractors, including contractor profit and overhead, provided that all such
Permanent Improvements shall be constructed in accordance with plans and
specifications that are mutually approved by Landlord and Tenant. Landlord
agrees to commence installation of the Permanent Improvements as promptly as may
be reasonably possible after said plans and specifications are mutually approved
and all necessary permits are obtained, to make reasonable efforts to minimize
any disruption to Tenant’s business operations as a result of such installation,
and to prosecute such installation to completion with commercially reasonable
diligence. Materials used for said Permanent Improvements shall be of the same
or similar quality as those materials previously used by Landlord in the repair
and improvement of the Premises pursuant to the Lease. The contract between
Landlord and its general contractor construction of the Permanent Improvements
shall be a fixed-price contract for all of the work contemplated, and Landlord
shall give Tenant a copy thereof at least five (5) business days before it is
fully executed and delivered by Landlord and its general contractor. Tenant
acknowledges that the amount of such contract will not include the cost of any
change orders or corrections issued by the architect or Tenant. If the cost of
any such change orders or corrections causes the total cost for the Permanent
Improvements to exceed the amount of the Renovation Allowance, then Tenant
shall, upon presentation of invoices or other reasonable proof of the cost
thereof, pay, or reimburse Landlord for, such excess.

 

  C. Consultants and Contractor. Although Landlord will pay, out of the
Renovation Allowance, the costs of design work for the Permanent Improvements,
Tenant shall have the right to select an interior space planning firm and other
consultants to prepare said plans and specifications for Landlord and Tenant
mutually to approve, except that Landlord, and not Tenant, shall select the
engineer or engineering company to be used. Landlord and Tenant agree to engage
REF & Sons as the general contractor to construct the Permanent Improvements
(Tenant acknowledges that Landlord has advised Tenant that Landlord will not
accept an alternative contractor) in accordance with the mutually approved plans
and specifications. Landlord and Tenant agree to engage Forrar Williams &
Associates as the architectural firm to do the interior space planning and
design work and to prepare the plans and specifications for the Permanent
Improvements (Landlord acknowledges that Tenant has advised Landlord that Tenant
will not accept an alternative design, planning, and architectural firm).

 

 

D.

Organized Labor. Landlord and its general contractor shall provide organized
labor (construction trades) the opportunity to participate in the construction
of the Permanent Improvements via the-bidding process. When applicable, Landlord
shall award any job or jobs to companies using organized labor if they are the
most responsive and their pricing is competitive.

 

A8 - 5

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

 

E.

Budgeting. Landlord’s fiscal year ends November 30 of each year. Landlord has
budgeted expenditure of the Renovation Allowance one-half (1/2) during the
fourth (4th) quarter of Landlord’s 2002 fiscal year (i.e., between October 1,
2002, when the Additional Term commences, and November 30, 2002) and one-half
(1/2) during Landlord’s 2003 fiscal year (i.e., between December 1, 2002 and
November 30, 2003). Landlord and-Tenant agree to cooperate reasonably with each
other to cause design, mutual approval, and construction of the Permanent
Improvements to be consistent with Landlord’s said budgeting, including, but not
limited to, planning to complete construction of the Permanent Improvements by
November 30, 2003. Landlord shall no obligation to pay from the Renovation
Allowance any cost incurred after November 30, 2003 unless that cost is incurred
after November 30, 2003 by reason of Landlord’s purposeful delay or other fault.

 

  F. The Reimbursement Option. Notwithstanding that subparts B through D of this
paragraph 4 contemplate that Landlord shall arrange for, and supervise, the
renovation and improvement work for which the Renovation Allowance or some
portion thereof is to be spent after the Additional Term has commenced, Landlord
agrees that, at any time prior at any time or to commencement of the Additional
Term Tenant may give Landlord written notice of Tenant’s desire to have that
work done before commencement of the Additional Term (an “Early Work Notice”).
If and when an Early Work Notice is given, then Tenant may itself arrange for,
and supervise, all of the renovation and improvement work, in which case all
costs and expenses incurred therefor shall be paid by Tenant as and when they
become due, and Tenant shall be entitled to receive from the Renovation
Allowance reimbursement for said costs and expenses (the “Reimbursement
Option”); provided that:

 

  i. All other provisions of subparts B through D of this paragraph 4 that are
not inconsistent with the Reimbursement Option, including, but not limited to,
Landlord’s right to review and approve in advance all plans and specifications
for the work and to select the engineer or engineering company and Landlord and
Tenant’s agreement to use REF Sons as the general contractor and to use Forrar
Williams & Associates as the architectural firm, shall apply under the
Reimbursement Option;

 

  ii. As and when costs and expenses are incurred and the work is done, Tenant
shall keep Landlord regularly informed of the amounts involved and progress
toward completion and shall provide to Landlord all appropriate backup
documentation, including, but not limited to, copies of contracts, change order,
invoices, billing statements, and other such documentation;

 

  iii. When the work is completed and Tenant has paid all costs and expenses
incurred, and there are no other costs or expenses to be incurred for which
Tenant will seek reimbursement under the Reimbursement Option, then Tenant shall
deliver to Landlord a complete and final breakdown, in reasonable detail, and a
statement of the total amount owed by Landlord to reimburse Tenant therefor (the
“Reimbursement Amount”), which Reimbursement Amount shall not exceed the amount
of the Renovation Allowance; and

 

A8 - 6

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

  iv. Landlord shall pay to Tenant one-half (1/2) of the Reimbursement Amount no
later than during the month of October, 2002, and the remaining one-half
(1/2) of the Reimbursement Amount no later than during the month of December,
2002.

 

  G. Tenant’s Obligations. Any other improvements to the Premises that Tenant
may wire shall, subject to approvals from Landlord under Section 10 of the
Original Lease, be the responsibility of Tenant and done at Tenant’s sole cost
and expense.

 

 

H.

Additional Rent. In consideration for Landlord’s making the Renovation Allowance
available, and in addition to the monthly rent payable under paragraph 2 of this
Addendum Tenant agrees to pay, commencing at the beginning of the Additional
Term, additional monthly rent (the “Additional Rent”) in the amount that is
necessary to fully amortize, during the five (5) years of the Additional Term,
in equal monthly installments, the Expended Allowance or the Reimbursement
Amount, as the case may be, plus interest accruing on the unpaid balance thereof
at ten percent (10%) per annum provided that, if no part of the Renovation
Allowance is actually expended by Landlord, then such Additional Rent shall not
become due. For example, if Landlord expends all of the Renovation Allowance
then the Additional Rent will be Twenty-One Thousand Four Hundred Twenty Five
Dollars and Ninety-Four Cents ($21 425.94) payable in advance on the first
(1st) day of each month, commencing on the first (1st) day of the Additional
Tern, notwithstanding that the Renovation Allowance is expended after
commencement of the Additional Term.

 

5. Contraction Option. Tenant shall have the right and option to contract the
area of the premises as much as, but by no more than, one hundred thousand (100
000) square feet (the “Contraction Option”), subject to the following terms and
conditions:

 

  A. The Contraction Option may be exercised only by written notice of exercise
given by Tenant either by certified U.S. Mail or by personal delivery to
Landlord (a “Contraction Notice”);

 

  B. A Contraction Notice may be given only if the Department of Defense (the
“DOD”) fails to extend or renew one (1) or more of the following three
(3) CHAMPUS contracts currently held by Tenant, each of which has two
(2) possible two (2) year extensions or renewals, as of dates set forth below:
(i) the Region 11 CHAMPUS contract; (ii) the Region 6 CHAMPUS contract; and
(iii) the Regions 9/10/12 CHAMPUS contract;

 

  C. If the Region 11 CHAMPUS contract is not extended or renewed as of
February 28, 2002 or as of February 28, 2004 (collectively, the “Region 11
Extension Dates”), that will permit exercise of the Contraction Option for up
to, but no more than, twenty thousand (20,000) square feet;

 

A8 - 7

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

  D. If the Region 6 CHAMPUS contract is not extended or renewed as of
October 31, 2002 or as of October 31, 2004 (collectively the “Region 6 Extension
Dates”), that will permit exercise of the Contraction Option for up to, but no
more than, thirty thousand (30,000) square feet;

 

  E. If the Regions 9/10/12 CHAMPUS contract is not extended or renewed as of
March 31, 2003 or as of March 31, 2005 (collectively, the “Regions 9/10/12
Extension Dates”), that will permit exercise of the Contraction Option for up
to, but no more than, fifty thousand (50,000) square feet;

 

  F. A Contraction Notice must specify which DOD CHAMPUS contract was not
extended or renewed and the exact date as of which the area of the Premises
shall be reduced (a “Contraction Date”) which date cannot be earlier than but
may be later than, one (1) of the Region 11 Extension Dates one (1) of the First
Region 6 Extension Dates, or one (1) of the Regions 9/10/12 Extension Dates
(collectively, the “Extension Dates”), respectively, depending upon which of the
three (3) CHAMPUS contracts is not extended or renewed and is the subject of the
Contraction Notice;

 

  G. A Contraction Notice must also describe the area of the Premises affected
(the “Deleted Area”), set forth Tenant’s best estimate of the number of rentable
square feet contained within the Deleted Area (although the exact number of
rentable square feet shall be determined by Landlord by application of the
method for determining “rentable area” under the ANSI/BOMA Z65.1-1996 standard)
and a commitment by Tenant to surrender to Landlord, on the Contraction Date,
possession of the Deleted Area;

 

  H. A Contraction Notice shall be effective only if it is given by Tenant and
received by Landlord at least six (6) months prior to the Contraction Date set
forth therein and no later than thirty (30) days after an Extension Date for the
CHAMPUS contract referenced therein;

 

  I. Concurrently with Tenant’s giving a Contraction Notice to Landlord Tenant
shall pay to Landlord the total amount of the unamortized portion of the
Expended Allowance or the Reimbursement Amount, as the case may be, and of the
broker’s commission payable to the Broker (defined below) under paragraph 12
below, both as proportionally attributable to the number of rentable square feet
of the Deleted Area compared to the number of rentable square feet contained in
the entire Premises for the period from the Contraction Date to the end of the
five (5) years of the Additional Term. For purposes of this subpart I of this
paragraph 5, said brokerage commission shall be deemed amortized on a
straight-line basis over a period of five (5) years, commencing upon
commencement of the Additional Term, and the Expended Allowance or the
Reimbursement Amount shall be deemed amortized as provided in subpart H of
paragraph 4 of this Addendum;

 

A8 - 8

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

  J. If Tenant actually surrenders possession of a Deleted Area to Landlord, on
or before the Contraction Date applicable thereto then rent under the Lease
shall be proportionately abated, as of the Contraction Date, using the rent per
rentable square foot then in effect and if the Contraction Date precedes the
commencement of the Additional Term, the Renovation Allowance shall be
proportionately reduced so that it shall not exceed the amount per rentable
square foot specified in subpart A of paragraph 4 of this Addendum;

 

 

K.

Tenant agrees to pay all out-of-pocket costs and expenses reasonably incurred by
Landlord to cause each Delete Area to become separate premises that can be
demised to a separate tenant, including, but not limited to, compliance with
legal requirements for ingress and egress and safety. Said payment by Tenant
shall be made in one (1) or several installments as, and within ten (10) days
after, Landlord presents to Tenant appropriate evidence of such costs or
expenses either when incurred by Landlord or after they are owed or paid by
Landlord, with copies of invoices from contractors and others who are doing the
work and/or supplying the materials being deemed to be such appropriate
evidence. Said costs and expenses reasonably incurred by Landlord shall include,
but shall not be limited to, costs and expenses for construction of demising
walls and corridors, which may include fire walls as required by law, causing
electricity to be separately metered to the Deleted Area, and installing
standard numbers of electrical outlets and wiring in such demising and corridor
walls, but shall in no event include improvement work commonly called “tenant
improvements” designed specially for the use and enjoyment of a particular
tenant; and

 

  L. At the request of either Landlord or Tenant, they shall, after any
Contraction Date, enter into an amendment to the Lease as hereby amended
documenting the facts arising from Tenant’s exercise of the Contraction Option,
including, but not limited to, that the Deleted Area is no longer part of the
premises and what the current rent has become.

 

6. Expansion Option. Tenant shall have one (l) right and option to expand the
area of the Premises by as much as, and by no more than, sixty thousand
(60,000) square feet of rentable area (the “Expansion Option”), subject to the
following terms and conditions:

 

 

A.

The Expansion Option may be exercised by Tenant only by written notice given to
Landlord during, and neither before nor after, the first (1st) twelve
(12) months of the Additional Term (the “Expansion Notice”);

 

  B. The Expansion Notice must specify the area or areas within a building or
buildings owned by Landlord and located within Landlord’s administrative area on
Aerojet Road that Tenant desires to add to the Premises (the “Expansion Area”);

 

  C.

If, at the time the Expansion Notice is given, the Expansion Area is available
for leasing to Tenant, then Landlord and Tenant shall immediately enter into
another written addendum to the Lease to effect a demise thereof to Tenant, at
the same

 

A8 - 9

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

 

terms and conditions as the Premises are then being leased to Tenant under the
Lease (with the exception that the rent shall be the fair market rental for such
Expansion Area determined as set forth in subpart E of this paragraph 6);
provided that, if through no fault of Landlord, Tenant and Landlord have not,
within ninety (90) days after the Expansion Notice is given, entered into a
fully executed addendum to the Lease, then Landlord may, by written notice to
Tenant, terminate Tenant’s Expansion Option, and upon the giving of such written
notice, Tenant shall have no further interest in, or rights to, the Expansion
Area;

 

  D. Whether or not the Expansion Area is “available for leasing to Tenant”
shall be determined by Landlord in the exercise of its reasonable discretion.
Without limiting the generality of the foregoing, Landlord may determine that
the Expansion Area is not available for leasing to Tenant if it is then occupied
by another tenant, is already subject to a leasing arrangement for any period
that would overlap with any portion of the then remaining Additional Term or any
part of the Extension Period, or is used or expected to be used by Landlord for
its own business operations. Landlord shall respond in writing to any Expansion
Notice within fifteen (15) business days of the receipt thereof, and advise
Tenant as to whether the Expansion Area is “available for leasing to Tenant” (if
available, a “Notice of Availability”); and

 

  E. Determining Fair Market Rental. The monthly rental payable for the
Expansion Area shall be the fair market rental for the Expansion Area, taking
into account the specific provisions of the Lease that will remain constant,
including, but not limited to, the term thereof as hereby modified, the
improvements installed by Landlord, services provided to Tenant, the fact that
said fair market rental for the Expansion Area shall not be subject to increase
during the Additional Term, and other pertinent items and the amenities,
location, identity, quality, age, and conditions of the buildings in which the
Premises are located; provided that, in no event shall the monthly rental per
rentable square foot for the Expansion Area be less than the monthly rental per
rentable square foot payable for the Premises under paragraph 2 hereof, as of
the date the Expansion Notice is given, regardless what the fair market rental
for the Expansion Area may be. The fair market rental for the Expansion Area
shall be determined by applying the following procedures and subject to the
following terms and conditions:

 

  i. Within ten (10) days after Landlord gives the Notice of Availability,
Landlord and Tenant may meet and confer, but are not obligated to meet and
confer, respecting the establishment of the fair market rental for the Expansion
Area;

 

  ii. In the event that Landlord and Tenant fail to meet and confer or cannot
agree upon the fair market rental within thirty (30) days after the Expansion
Notice was given, then within forty-five (45) days after the Expansion Notice
was given, Landlord and Tenant shall each give to the other a written notice
setting forth its final determination of the fair market rental for the
Expansion Area (collectively, the “Expansion Area Fair Rental Notices”);

 

A8 - 10

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

  iii. If only one (1) Expansion Area Fair Rental Notice is timely given, then
that Expansion Area Fair Rental Notice shall conclusively establish the fair
market rental for the Expansion Area;

 

  iv. If both Landlord and Tenant give Expansion Area Fair Rental Notices, and
the Expansion Fair Rental Notices are different in any respect, then the fair
market rental for the Expansion Area shall be conclusively established by a
third-party appraiser mutually chosen by Landlord and Tenant; provided that, if
Landlord and Tenant have not agreed upon, and engaged, such appraiser within
sixty (60) days after the Expansion Notice was given, then Landlord and Tenant
shall each engage a duly licensed California attorney with commercial leasing
experience of at least five (5) years, which attorneys shall, by their
agreement, select the appraiser; provided that, if said attorneys have not
agreed upon an appraiser within seventy-five (75) days after the Expansion
Notice was given, then the appraiser shall be selected by the Presiding Judge of
the Superior Court of Sacramento County acting in his or her individual capacity
if said Judge is willing to do so;

 

  v. Landlord and Tenant shall share equally the fees and expenses of the
selected appraiser and shall each pay its own attorneys’ fees;

 

  vi. Within fifteen (15) days after the appraiser’s engagement, the appraiser
shall deliver to Landlord and to Tenant the appraiser’s determination of which
of the two (2) Expansion Area Fair Rental Notices is, in the appraiser’s best
judgment, the closest to the fair market rental for the Expansion Area (the
“Chosen Expansion Area Fair Rental Notice”), and the amount set forth in the
Chosen Expansion Area Fair Rental Notice shall be deemed to be the fair market
rental for the Expansion Area; and

 

  vii. The appraiser shall be required to give to landlord and to Tenant a
written statement of the appraiser s reasoning and justification for selection
of the Chosen Expansion Area Fair Rental Notice; the appraiser shall not be
permitted to decide on a middle ground, or to suggest any compromise; the
appraiser’s sole function shall be to determine the Chosen Expansion Area Fair
Rental Notice, and provide his or her reasons therefor.

 

7. Right to First Negotiate. Tenant shall have the right and option to first
negotiate for leasing of additional space within any building owned by Landlord
and located in Landlord’s administrative area on Aerojet Road (the “First
Right”), subject to the following terms and conditions;

 

  A.

If, at any time during the Additional Term or the Extension Period, Landlord
decides to seek a tenant or tenants for any space within any building owned by

 

A8 - 11

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

 

and located in Landlord’s administrative area on Aerojet Road, Landlord shall
first give written notice to Tenant (a “Landlord’s Notice” ) setting forth a
description of the available space (the “Available Space”) the monthly rental
rate, and all other material terms and conditions upon which Landlord intends to
offer the Available Space. A Landlord’s Notice shall be deemed to be an offer to
lease to Tenant the Available Space on the terms stated therein;

 

  B. Upon Tenant’s receipt of a Landlord’s Notice, Tenant shall have five
(5) business days to respond by giving Landlord a written acceptance setting for
Tenant’s commitment to lease the Available Space on the terms stated in the
Landlord’s Notice (a “Tenant’s Acceptance”);

 

  C. If Tenant fails to give to Landlord a Tenant’s Acceptance within said five
(5) business days, that failure shall be deemed to be a rejection of Landlord’s
offer to lease the Available Space (a “Tenant’s Rejection”) and, except as
provided in subpart E of this paragraph 7 shall be deemed a termination of
Tenant’s First Right, so that Landlord shall have no further duty to give any
Landlord’s Notice respecting the Available Space or any other space it may own
from time to time, just as if this paragraph 7 were not a part of this Eighth
Addendum;

 

  D. After any Tenant’s Rejection, Landlord shall, for a period of one (1) year,
be free to lease the Available Space to any other person or entity for rent and
upon the terms and conditions at least as favorable to Landlord as those set
forth in the Landlord’s Notice;

 

  E. If (a) during said one (1) year Landlord desires to lease the Available
Space upon terms and conditions that are less favorable to Landlord than those
set forth in the Landlord’s Notice, or (b) the Available Space is not leased by
Landlord to another person or entity within said one (1) year, and if Landlord
desires to continue to seek a tenant therefor, then, and in either of those
events, Landlord must give Tenant another Landlord’s Notice respecting that
Available Space, and the provisions of this paragraph 7 shall again apply;

 

  F. If and when Landlord has without breach of this paragraph 7, leased any
space that is subject to the First Right to another person or entity, the First
Right shall terminate and be of no further force or effect, this paragraph 7
being then deemed not to be a part of this Eighth Addendum; and

 

  G. If a Tenant’s Rejection ever occurs, Tenant agrees to provide to Landlord
such written proof, including, but not limited to, an estoppel certificate, as
Landlord may request to prove when Landlord leases or is negotiating to lease,
or seeking a tenant for, the Available Space, that the First Right no longer
applies thereto, which written proof shall be provided within five (5) business
days after Landlord’s written request therefor is received by Tenant.

 

8.

Parking. Tenant shall be entitled to its current parking ratio and, in any
event, not less than five (5) vehicle parking spaces for every one thousand
(l,000) rentable square feet of

 

A8 - 12

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

 

the Premises, as and if the size of the Premises changes from time to time as
provided elsewhere in this Eighth Addendum, which parking spaces shall be
provided by Landlord at no charge.

 

9. Roof Rights. Provided that Tenant complies with all rules and regulations
adopted by Landlord respecting access to, and activities and installations on,
the roof of any of the buildings in which the Premises are located and provide
Tenant gives to Landlord, at least ten (10) days in advance, written notice of
Tenant’s plans and expected activities, Tenant may, at Tenant’s sole cost and
expense, install a satellite dish, microwave antenna, or any other electrical
devise, communications equipment, or mechanical equipment on the rooftop area of
any such building, subject to Tenants compliance with all governmental
requirements, including, but not limited to, issuance of appropriate permits and
conduct of appropriate inspections, and subject to Landlord’s review and
approval of all plans and specifications therefor.

 

10. Mortgages. Landlord hereby represents and warrants to Tenant that the
Premises are not currently encumbered by any mortgage or deed of trust, and
therefore, no lender’s non-disturbance and attornment agreement is necessary or
appropriate.

 

11. Signage Rights. Tenant may maintain its existing building identification and
may, in its reasonable determination, expand its identification signage, subject
to Tenant’s compliance with all governmental requirements, including, but not
limited to, issuance of appropriate permits and conduct of appropriate
inspections, and subject to first obtaining written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned, or delayed.

 

12. Brokers’ Fee.

 

  A. Only One Broker. Tenant and Landlord agree that they have had no dealings
with any real estate broker or agent in connection with the negotiation of this
Eighth Addendum excepting only Aguer Pipgras Associates (the “Broker”), and they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Eighth Addendum.

 

  B. Fee for the Additional Term. Landlord agrees to pay to the Broker, payable
one-half (1/2) upon the fill execution of this Eighth Addendum, and one-half
(1/2) at the commencement of Additional Term, a brokerage fee equal to five
percent (5%) of the total rent payable during the five (5) years of the
Additional Term.

 

  C. Fee for Extension Option. If the Extension Option is effectively exercised
by Tenant, then Landlord shall pay to the Broker, at the beginning of the
Extension Period, a brokerage fee equal to two and one-half percent (2-1/2%) of
the total rent payable during the Extension Period.

 

  D. Fee for Expansion Option. If the Expansion Option is effectively exercised
by Tenant then Landlord shall pay to the Broker, at the time Tenant takes
occupancy of the Expansion Area, a brokerage fee equal to five percent (5%) of
the total rent payable for the Expansion Area from the date rent commences to
accrue thereon to expiration of the five (5) years of the Additional Term.

 

A8 -13

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

 

E.

Fee for the First Right. If the First Right is effectively exercised by Tenant,
then Landlord shall pay to the Broker, at the time Tenant takes occupancy of the
Available Space, a brokerage fee equal to five percent (5%) of the total rent
payable for the Available Space within five (5) years of such occupancy. If
exercise of the First Right produces a lease of the Available Space the term of
which is, or, through exercise of an option or options, becomes longer than five
(5) years, then, at the beginning of the sixth (6th ) year, Landlords shall pay
to the Broker a brokerage fee equal to two and one-half percent (2-1/2%) of the
total rent payable from the commencement of said sixth (6th) year and before the
expiration of ten (10) years from the date Tenant takes occupancy of the
Available Space. Notwithstanding the foregoing provisions of this subpart E of
this paragraph 12, if any such period or periods are not a part of the initial
term for which Tenant is committed to pay rent for the Available Space, but are
payable, for example, only if an option is exercised or a right to terminate is
not exercised by Tenant, then said portion or portions of the commission
attributable thereto shall be due to Broker only if and when Tenant becomes
committed to pay rent of such period or periods.

 

  F. Landlord acknowledges that the Broker and Tenant have notified Landlord
that the Broker will pay part of said brokerage fees to Tenant although the
amount of such payments has not been shared with Landlord.

 

13. Effect. Landlord and Tenant agree that the Lease is in full force and effect
without modification except as expressly set forth in this Eighth Addendum.

 

      Aerojet-General Corporation,       an Ohio corporation Dated:  

June 28, 2001

    By:  

/s/ Terry P. Griffin

      Its:   President, Aerojet Investments Ltd.       Health Net, Inc.,       a
Delaware corporation Dated:  

June 12, 2001

    By:  

/s/ Michael Radford

      Its:   Vice President

 

A8 - 14

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

NINTH ADDENDUM TO LEASE

This is the Ninth Addendum, which, upon approval, will be attached to that
certain Lease (the “Original Lease”) by and between Aerojet-General Corporation,
an Ohio corporation, as Landlord, and Health Net, Inc., a Delaware corporation,
as successor in interest by merger to Foundation Health Federal Services, Inc.,
a Delaware corporation (“FHFS”), as successor in interest to Foundation Health,
a California Health Plan, a California corporation (“FH”), as Tenant, dated
July 13, 1995, including that certain Addendum, that certain Second Addendum,
that certain Third Addendum, that certain Fourth Addendum, that certain Fifth
Addendum, that certain Sixth Addendum, that certain Seventh Addendum, and that
certain Eighth Addendum thereto (collectively, the “Lease”). Unless otherwise
defined in this Ninth Addendum, all capitalized terms used in this Ninth
Addendum shall have the same meanings as such capitalized terms have in the
Lease. All references within this Ninth Addendum to a “section” are to a
specific section within the Lease unless otherwise indicated in this Ninth
Addendum.

RECITALS

 

A. Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately twenty-eight thousand (28,000) square
feet within Building number 2006 (incorrectly described in the Fifth Addendum as
the entire Building number 2006), and approximately twenty-eight thousand
(28,000) square feet in Building number 2015A (collectively, the “Premises”) and
no other space.

 

B. The Premises consist of approximately two hundred one thousand six hundred
eighty-four (201,684) rentable square feet of office space.

 

C. In accordance with the provisions herein, Landlord and Tenant desire, among
other things, to memorialize their agreements regarding (i) Tenant’s prepayment
of rent, and (ii) Tenant’s obligation regarding Additional Rent.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals,
all of which are incorporated herein by this reference, and the covenants
contained in this Ninth Addendum, agree as follows:

 

1. Payment of Rent.

 

  A. Landlord acknowledges receipt from Tenant of the sum of Two Million Five
Hundred Eleven Thousand Three Hundred Fifteen and no/100ths Dollars
($2,511,315.00) (the “Rent Payment”), and agrees that such Rent Payment shall
constitute payment in full of all of Tenant’s rent obligations under the Lease
for the period of time commencing on September 1, 2001 and ending at 11:59 p.m.
on September 30, 2002 (such period of time is hereinafter referred to as the
“Payment Period”), notwithstanding any contrary provision of the Lease. Nothing
in this Section 1.A is intended, however, to relieve Tenant of its obligation to
pay the Additional Rent pursuant to Section 2 of this Ninth Addendum.

 

A9 - 1

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

  B. If the Lease is terminated prior to the end of the Payment Period by reason
of fire or other casualty, condemnation or any other event beyond the reasonable
control of Tenant (and in all events excluding a termination resulting from
Tenant’s default or breach of the Lease), Landlord agrees, within thirty
(30) business days after such termination, to pay Tenant the unearned balance of
the Monthly Rent, calculated at the rate of Six Thousand Four Hundred Thirty
Nine and 27/100ths Dollars ($6,439.27) per day (the “Per Diem Amount”).

 

  C. If, during the Payment Period, an event occurs that would entitle Tenant to
an abatement or reduction of monthly rent payable under the Lease (including,
but not limited to Sections 22 and 25 of the Original Lease, and Sections 6 and
8 of the Second Addendum, such abatement or reduction (on a daily rate equal to
the Per Diem Amount) shall be credited to Tenant’s monthly rent obligations that
accrue following the Payment Period until such credit is exhausted.

 

2. Additional Monthly Rent Increases. Tenant shall pay Landlord the sum of Four
Hundred Nine Three Thousand Six Hundred Fifty-Three and no/100ths Dollars
($493,653.00) the “Additional Rent”), not later than October 31, 2001 (the
parties acknowledge that the “Additional Rent” owing under this Section 2 is a
separate and distinct obligation from the “Additional Rent” that may be payable
under Section 4.H of the Eighth Addendum, and nothing in this Ninth Addendum is
intended to modify Tenant’s obligation to pay Additional Rent pursuant to
Section 4.H of the Eighth Addendum). The parties agree that the payment of the
Additional Rent shall satisfy in full any obligation Tenant has under the Lease
to pay (i) previous CPI increases in monthly rent (including, but not limited to
any increases referenced in Sections 3 and 4 of the Fifth Addendum, and Sections
2 and 4 of the Sixth Addendum), and (ii) any CPI increase in monthly rent
scheduled to occur on April 1, 2002 pursuant to clause (b) of Section 4.C of the
Fifth Addendum, notwithstanding any contrary provision of the Lease. The parties
acknowledge and agree that the Additional Rent amount represents a negotiated
amount, and it is intended that the payment of such Additional Rent shall fully
and finally settle any dispute or potential dispute arising from previous CPI
increases in monthly rent.

 

3. Mortgages. Landlord hereby represents and warrants to Tenant that the
Premises are not currently encumbered by any mortgage or deed of trust, and
therefore, no lender’s non-disturbance and attornment agreement is necessary or
appropriate.

 

4. Effect. Landlord and Tenant agree that the Lease is in full force and effect
without modification except as expressly set forth in this Ninth Addendum. In
the event of any discrepancy between the terms of this Ninth Addendum and any
other term of the Lease, the terms of this Ninth Addendum shall govern.

 

A9 - 2

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

      Aerojet-General Corporation,       an Ohio corporation Dated:  

November 7, 2001

    By:  

/s/ Thomas Brown

      Its:   Vice President, Aerojet Investments Ltd.       Health Net, Inc.,  
    a Delaware corporation Dated:  

November 9, 2001

    By:  

/s/ Michael Radford

      Its:   Vice President

 

A9 - 3

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

TENTH ADDENDUM TO LEASE

This is the Tenth Addendum, which, upon approval, will be attached to that
certain Lease (the “Original Lease”) by and between Aerojet-General Corporation,
an Ohio corporation, as Landlord, and Health Net, Inc., a Delaware corporation,
as successor in interest by merger to Foundation Health Federal Services, Inc.,
a Delaware corporation, as successor in interest to Foundation Health, a
California Health Plan, a California corporation, as Tenant, dated July 13,
1995, including that certain Addendum, that certain Second Addendum, that
certain Third Addendum, that certain Fourth Addendum, that certain Fifth
Addendum, that certain Sixth Addendum, that certain Seventh Addendum, that
certain Eighth Addendum, and that certain Ninth Addendum thereto (collectively,
the “Lease”). Unless otherwise defined in this Tenth Addendum, all capitalized
terms used in this Tenth Addendum shall have the same meanings as such
capitalized terms have in the Lease. All references within this Tenth Addendum
to a “section” are to a specific section within the Lease unless otherwise
indicated.

RECITALS

 

A. Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately twenty-eight thousand
(28,000) rentable square feet within Building number 2006 (incorrectly described
in the Fifth Addendum as the entire Building number 2006), and approximately
twenty-eight thousand (28,000) rentable square feet in Building number 2015A
(collectively, the “Existing Premises”) and no other space.

 

B. The Existing Premises consist of approximately two hundred one thousand six
hundred eighty-four (201,684) rentable square feet of office space.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals,
all of which are incorporated herein by this reference, and the covenants
contained in this Tenth Addendum, agree as follows:

 

1.

Premises. Subject to the terms and conditions of this Tenth Addendum, Landlord
hereby leases to Tenant, and Tenant hereby leases from Landlord, approximately
fifty-three thousand nine hundred ninety (53,990) rentable square feet of space,
being a portion of the first (1st) floor and approximately one-half (1/2) of the
second (2nd) floor of Building number 2019 located within the same complex of
buildings as the Existing Premises on Aerojet Road in Sacramento County,
California (the “Building 2019 Expansion Space”) (collectively, the Existing
Premises and the Building 2019 Expansion Space, the “Premises”), the location of
which Building 2019 Expansion Space is shown on Exhibits “A-1” and “A-2”
attached hereto and incorporated herein by this reference, in addition to
continuing Tenant’s leasehold interest in the Existing Premises under the Lease
as modified by this Tenth Addendum; provided that, Landlord hereby reserves, and
Tenant acknowledges that Landlord shall have, at all times during the term of
the Lease, (a) access through the Building 2019 Expansion Space to and from the
area known as the

 

A10 - 1

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

 

Platelet Design room, which access shall be limited by the requirement that
persons using the Platelet Design room must first check in with Tenant’s
reception and security; (b) for fire safety purposes for all of said Building
number 2019, access through fire corridors and exits, including exits in the
lobby area, and (c) for both fire safety purposes and for compliance with the
Americans with Disabilities Act for all of said Building number 2019, access to
and from, and use of, the elevator within the Building 2019 Expansion Space. See
Exhibits “B-1” and “B-2” attached hereto and incorporated herein by this
reference for information about said access rights reserved by Landlord.

 

2. Term. Landlord and Tenant agree that the term of the Lease for the Building
2019 Expansion Space shall commence, subject to any Phased TI Completion
(defined below), on the date as of which Landlord has substantially completed
the TI Work (defined below) (the “Completion Date”), and shall expire on
July 31, 2009 (the “New Expiration Date”). Landlord hereby grants to Tenant an
option to extend the term of the Lease for the Existing Premises (the “Existing
Premises Option”) from its current expiration date of September 30, 2007 (the
“Old Expiration Date”), to the New Expiration Date (the “New Additional Term”);
provided that, unless, prior to March 31, 2007, Tenant gives to Landlord a
written notice that Tenant does not exercise the Existing Premises Option,
Tenant shall be deemed to have exercised the Existing Premises Option as of Old
Expiration Date. Thus, unless such a notice of non-exercise of the Existing
Premises Option is timely given, the term of the Lease for both the Building
2019 Expansion Space and the Existing Premises shall expire on the same day.
Notwithstanding the foregoing provisions of this paragraph 2, (a) Landlord and
Tenant agree to work together and cooperate in connection with the TI Work such
that substantial completion of the TI Work, and delivery by Landlord to Tenant
of the completed Building 2019 Expansion Space, may be accomplished in phases
(collectively, “Phased TI Completion”); and (b) if Phased TI Completion does
occur, the term of the Lease for the Building 2019 Expansion Space, and the
payment of monthly rent, as set forth in paragraph 3 of this Tenth Addendum,
shall both commence as of the delivery or deliveries of possession for each such
phase or phases of the Phased TI Completion (each, a “Phased Completion Date”);
provided that no such Phased Completion Date shall accelerate the New Expiration
Date for that phase, but shall increase the length of the term of the Lease
applicable thereto by the number of days said Phased Completion Date precedes
the Completion Date. The provisions of this paragraph 2 and the provisions of
paragraph 6 of this Tenth Addendum supersede and replace entirely any and all
extension, contraction, and expansion options Tenant may have had under the
Lease as it existed prior to this Tenth Addendum, including, but not limited to,
paragraphs 3, 5, and 6 of the Eighth Addendum. When the Completion Date or any
Phased Completion Date occurs, Landlord and Tenant shall then promptly execute
and deliver to each other, based upon the form attached hereto as Exhibit “C”
and incorporated herein by this reference, a written certification (an “Building
2019 Expansion Space Completion Date Certification”) of the Completion Date or
Phased Completion Date, as the case may be, and, if requested by Landlord or
Tenant, a further addendum to the Lease setting forth the Completion Date or
Phased Completion Date and the monthly rental amount applicable thereto. As of
the execution of this Tenth Addendum, Landlord estimates that a Phased TI
Completion may be accomplished on the schedule set forth in Exhibits “D-1” and
“D-2” attached hereto and incorporated herein by this reference.

 

A10 - 2

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

3. Rent. The monthly rent for the Existing Premises for the period prior to, and
including, the Old Expiration Date is not modified by this Tenth Addendum, but
continues on the same schedule as set forth in paragraphs 2 and 4H of the Eighth
Addendum. If the Existing Premises Option is deemed exercised as set forth in
paragraph 2 of this Tenth Addendum, then the monthly rent for the Existing
Premises for the New Additional Term, being the period commencing immediately
after the Old Expiration Date and ending on the New Expiration Date, shall be at
the same rates per rentable square foot as apply, from time to time, to the
Building 2019 Expansion Space as set forth in the next sentence of this
paragraph 3. The monthly rent for the term of this Lease applicable to the
Building 2019 Expansion Space, commencing on the Completion Date (subject to
earlier commencement of monthly rent if and when any Phased Completion Date
occurs) and expiring on the New Expiration Date, shall be calculated by
multiplying the number of rentable square feet thereof by the following amounts:
(a) One Dollar and Thirty-Eight Cents ($1.38) for the period commencing on the
Completion Date and ending July 31, 2005; (b) One Dollar and Forty Cents ($1.40)
for the period commencing August 1, 2005, and ending July 31, 2006; (c) One
Dollar and Forty-Two Cents ($1.42) for the period commencing August 1, 2006, and
ending July 31, 2007; (d) One Dollar and Forty-Four Cents ($1.44) for the period
commencing August 1, 2007, and ending July 31, 2008; and (e) One Dollar and
Forty-Six Cents ($1.46) for the period commencing August 1, 2008, and ending
July 31, 2009. If a Phased TI Completion occurs, then the monthly rent for the
period or periods, commencing upon each Phased Completion Date, and expiring on
the Completion Date, shall be calculated by multiplying the number of rentable
square feet in the completed phase by One Dollar and Thirty-Eight Cents ($1.38).
Such rent shall be set forth in the Building 2019 Expansion Space Completion
Date Certification applicable to that phase. Notwithstanding the foregoing
provisions of this paragraph 3, Tenant agrees to pay to Landlord, in advance, in
two (2) equal installments as set forth below, to be credited to the monthly
rent for the Building 2019 Expansion Space for the thirteen (13) month period
commencing on December 1, 2004, and expiring on December 31, 2005, Nine Hundred
Seventy-Two Thousand Nine Hundred Dollars ($972,900.00) (the “Prepaid Rent”),
and upon Tenant’s timely payment of the Prepaid Rent, the rental rate per
rentable square foot for the Building 2019 Expansion Space and for the Existing
Premises, for the period commencing on December 1, 2005, and expiring on New
Expiration Date, shall be reduced by Two Cents ($.02) from the scheduled amounts
set forth above in this paragraph 3; provided that, if the Existing Premises
Option is not deemed exercised as set forth in paragraph 2 of this Tenth
Addendum, then said reduction in the rental rate for the Existing Premises will
expire on the Old Expiration Date. One-half (1/2) of the Prepaid Rent, being the
amount of Four Hundred Eighty-six Thousand Four Hundred Fifty Dollars
($486,450.00), shall be paid within fifteen (15) days after the execution of
this Tenth Addendum; the other one-half (1/2) of the Prepaid rent, being the
amount of Four Hundred Eighty-six Thousand Four Hundred Fifty Dollars
($486,450.00), shall be paid upon the Completion Date.

 

A10 -3

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

4. Extension of Term.

 

  A. New Extension Option. Tenant shall have the right and option (the “New
Extension Option”) to extend the term of the Lease for the Premise for five
(5) years beyond the New Expiration Date (the “New Extension Period”) commencing
immediately after the New Expiration Date; provided that:

 

  i. Tenant must give to Landlord, and Landlord must have received, by mail or
by personal delivery, written notice of Tenant’s election to exercise the New
Extension Option no later than two hundred seventy (270) days prior to the New
Expiration Date;

 

  ii. At the time Tenant gives said written notice to Landlord, and at the time
the New Extension Period commences, Tenant must not, after the giving of written
notice and the passage of the applicable cure period, if any, be in default
under the Lease;

 

  iii. Tenant may exercise the New Extension Option with respect to all of the
Premises only, and may not exercise the New Extension Option with respect to
only part of the Premises; and

 

  iv. Failure by Tenant to provide timely or adequate written notice as set
forth herein shall, unless, and in the sole discretion of Landlord, an untimely
or inadequate notice is acceptable to Landlord, cause the New Extension Option
to lapse and its exercise by Tenant shall not be effective.

 

  B. Rent during the New Extension Period. The monthly rental payable during the
New Extension Period shall be the fair market rental for the Premises, as of the
beginning of the New Extension Period, taking into account the specific
provisions of the Lease that will remain constant, including, but not limited
to, the term thereof as hereby modified, the improvements installed by Landlord,
services provided to Tenant, the fact that said monthly rental based upon the
fair market rental shall not be subject to increase during the New Extension
Period, the cost to Landlord of paying to the Broker (defined below) any
commission required under paragraph 12B of this Tenth Addendum in connection
with Tenant’s exercise of the New Extension Option, and other pertinent items,
and the amenities, location, identity, quality, age, and conditions of the
buildings in which the Premises are located; provided that, in no event, shall
the monthly rental payable for the Premises during the New Extension Period be
less than the monthly rental payable for the month immediately preceding the New
Expiration Date, regardless what the fair market rental may be. The fair market
rental for the Premises shall be determined by applying the following procedures
and subject to the following terms and conditions:

 

  i. At least one hundred twenty (120) days prior to the New Expiration Date,
Landlord and Tenant may meet and confer, but are not obligated to meet and
confer, respecting the establishment of the fair market rental;

 

A10 - 4

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

  ii. In the event that Landlord and Tenant fail to meet and confer or cannot
agree upon the fair market rental at least one hundred (100) days prior to the
New Expiration Date, then, at least ninety (90) days prior to the New Expiration
Date (the “Notice Deadline”), Landlord and Tenant shall each give to the other a
written notice setting forth its final determination of the fair market rental
(collectively, the “Fair Rental Notices”); provided that, in order to help
prevent inadvertent loss of any party’s right to give a Fair Rental Notice, the
Notice Deadline shall extend, for both Landlord and Tenant, until one (1) of
them gives a Fair Rental Notice plus, for the other, a period expiring five
(5) business days thereafter.

 

  iii. If only one (1) Fair Rental Notice is timely given, then that Fair Rental
Notice shall conclusively establish the fair market rental;

 

  iv. If both Landlord and Tenant give Fair Rental Notices, and the Fair Rental
Notices are different in any respect, then the fair market rental shall be
conclusively established by a third-party appraiser or broker mutually chosen by
Landlord and Tenant; provided that, if Landlord and Tenant have not agreed upon,
and engaged, such appraiser or broker at least sixty (60) days prior to the New
Expiration Date, then Landlord and Tenant shall each engage a duly licensed
California attorney with commercial leasing experience of at least five
(5) years, which attorneys shall, by their agreement, select the appraiser or
broker; provided that, if said attorneys have not agreed upon an appraiser or
broker at least thirty (30) days prior to the New Expiration Date, then either
Landlord or Tenant may commence an action for declaratory relief or other
appropriate remedy to have the court appoint the appraiser or broker;

 

  v. Landlord and Tenant shall share equally the fees and expenses of the
selected appraiser or broker and shall each pay its own attorneys’ fees;

 

  vi. Within thirty (30) days after the appraiser or broker’s engagement, the
appraiser or broker shall deliver to Landlord and to Tenant the appraiser or
broker’s determination of which of the two (2) Fair Rental Notices is, in the
appraiser or broker’s best judgment, the closest to the fair market rental for
the Premises (the “Chosen Fair Rental Notice”), and the amount set forth in the
Chosen Fair Rental Notice shall be deemed to be the fair market rental; and

 

  vii. The appraiser or broker shall be required to give to Landlord and to
Tenant a written statement of the appraiser or broker’s reasoning and
justification for selection of the Chosen Fair Rental Notice; the appraiser or
broker shall not be permitted to decide on a middle ground, or to suggest any
compromise; the appraiser or broker’s sole function shall be to determine the
Chosen Fair Rental Notice, and provide his or her reasons therefor.

 

A10 - 5

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

5. Tenant Improvements.

 

  A. Improvement Allowance. Landlord shall make available for paying costs of
improving the Building 2019 Expansion Space an allowance of Twenty-Five Dollars
($25.00) per rentable square foot of the Building 2019 Expansion Space (the “TI
Allowance”). Landlord shall, at Landlord’s sole cost and expense, and without
charge against the TI Allowance, cause the Building 2019 Expansion Space to be a
“standard building shell” (as more specifically described in Exhibit “E”
attached hereto and incorporated herein by this reference) that complies with
all applicable building codes and regulations (the “Standard Building Shell”)
and to which Landlord may lawfully add the TI Work (defined below). Within
thirty (30) days following the Completion Date, Landlord shall send to Tenant a
written notice setting forth the amount of the Expended Allowance (defined
below). If the Expended Allowance is less then the amount of the TI Allowance,
then Landlord shall apply the difference solely to the reasonable cost of such
additional permanent improvements to the Building 2019 Expansion Space as are
reasonably requested by Tenant and approved by Landlord. For construction of
such additional permanent improvements, Tenant shall, or, at Landlord’s option,
Landlord shall, engage REF & Sons, being the contractor authorized by Landlord
to work in the Building 2019 Expansion Space.

 

  B.

Construction of Improvements. Following completion of the Standard Building
Shell, Landlord agrees to expend the TI Allowance or such lesser amount as may
be sufficient (the “Expended Allowance”) as and when Landlord incurs costs for
the construction of permanent improvements (collectively, the “TI Work”) to the
Building 2019 Expansion Space, including, but not limited to, costs associated
with architectural design, engineering, preparation of plans and specifications,
permits and fees, labor and materials, equipment purchase or rental, amounts
paid to contractors, including contractor profit and overhead, provided that all
such TI Work shall be done in accordance with plans and specifications that are
mutually approved by Landlord and Tenant. Landlord agrees to commence
installation of the TI Work as promptly as may be reasonably possible after said
plans and specifications are mutually approved and all necessary permits are
obtained, to make reasonable efforts to minimize any disruption to Tenant’s
business operations as a result of such installation, and to prosecute such
installation to completion with commercially reasonable diligence. Materials
used for said TI Work shall be of the same or similar quality as those materials
previously used by Landlord in the repair and improvement of the Premises
pursuant to the Lease; provided that Tenant may elect to use better quality
materials as part of the plans approval process. The work order or contract
between Landlord and its general contractor for construction of the TI Work
shall be a fixed-price work order or contract for all of the work contemplated
and shall be reasonably priced, and Landlord shall give Tenant a copy thereof at
least five (5) business days before it is fully executed and delivered by
Landlord and its general contractor. Tenant acknowledges that the amount of such
contract will not include the cost of any change orders or corrections issued by
the architect or Tenant. If the cost of any such change orders or corrections
causes the total cost for the TI Work to exceed

 

A10 - 6

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

 

the amount of the TI Allowance, then Tenant shall, upon presentation of invoices
or other reasonable proof of the cost thereof, pay, or reimburse Landlord for,
such excess: provided that, if a change order is issued by Tenant, then, before
Landlord implements said change order, Landlord shall obtain Tenant’s approval
of the estimated cost of implementing that change order; provided further that,
if a correction is required due to a defect in the original construction of the
building or to complete the Standard Building Shell, then such correction shall
be made at Landlord’s sole cost and expense, and the cost thereof shall not be
charged against the TI Allowance.

 

  C. Consultants and Contractor. Although Landlord will pay, out of the TI
Allowance, the costs of design work for the TI Work, Tenant shall have the right
to select an interior space planning firm and other consultants to prepare said
plans and specifications for Landlord and Tenant mutually to approve (Tenant’s
selection of an architectural firm is set forth below in this paragraph), except
that Landlord, and not Tenant, shall select the engineer or engineering company
to be used; provided such engineer or engineering company provides services at
commercially reasonable rates. Landlord and Tenant agree to engage REF & Sons as
the general contractor to do the TI Work (Tenant acknowledges that Landlord has
advised Tenant that Landlord will not accept an alternative contractor) in
accordance with the mutually approved plans and specifications. Landlord and
Tenant agree to engage Architectural Arts as the architectural firm to do the
interior space planning and design work and to prepare the plans and
specifications for the TI Work (Landlord acknowledges that Tenant has advised
Landlord that Tenant will not accept an alternative design, planning, and
architectural firm).

 

  D. Organized Labor. Landlord and its general contractor shall provide
organized labor (construction trades) the opportunity to participate in the
construction of the TI Work via the bidding process. When applicable, Landlord
shall award any job or jobs to companies using organized labor if they are the
most responsive and their pricing is competitive.

 

  E. Tenant’s Obligations. Any other improvements to the Premises that Tenant
may desire shall, subject to approvals from Landlord under Section 10 of the
Original Lease, be the responsibility of Tenant and done at Tenant’s sole cost
and expense.

 

6. Expansion and Contraction Options.

 

  A. Expansion Option. All options to expand the Premises set forth in the Lease
prior to execution of this Tenth Addendum, including, but not limited to, the
options to expand the Premises set forth in paragraph 6 of the Eighth Addendum,
are hereby superseded and deleted from the Lease. Landlord and Tenant agree that
Tenant shall have the right and option to expand the area of the Premises
subject to the Lease (“Tenant’s Expansion Option”) subject to the following
terms and conditions:

 

A10 - 7

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

 

i.

Tenant’s Expansion Option applies only to space within the second (2nd) floor of
said Building number 2019;

 

  ii. Tenant must give to Landlord written notice of its election to exercise
Tenant’s Expansion Option (an “Expansion Notice”) no later than six (6) months
prior to the date as of which the expansion shall be effective;

 

 

iii.

The Expansion Notice must describe the area within said second (2nd) floor of
said Building 2019 desired by Tenant;

 

  iv. Landlord shall have no obligation to deliver the expansion space earlier
than October 1, 2006;

 

  v. The monthly rental for the expansion space shall be the fair market rental
for the expansion space determined in the same manner as the fair market rental
for the New Extension Period shall be determined under the provisions of
paragraph 4B of this Tenth Addendum;

 

  vi. Tenant shall accept the expansion space “as is” with Landlord having no
obligation to construct, or pay any part of the cost of, any improvement work
required to make the expansion space suitable for Tenant’s use unless, and to
the extent, that Landlord and Tenant then reach a contrary agreement; and

 

  vii. Within thirty (30) days after Tenant gives the Expansion Notice to
Landlord, or, if later, within ten (10) days after the fair market rental for
the expansion space is determine, Landlord and Tenant shall enter into and
amendment to the Lease setting forth that fair market rental amount and other
details about the effect of Tenant’s exercise of Tenant’s Expansion Option.

 

  B. Contraction Option. All options to contract or delete space from the
Premises set forth in the Lease prior to execution of this Tenth Addendum,
including, but not limited to, the option to contract set forth in paragraph 5
of the Eighth Addendum, are hereby superseded and deleted from the Lease.
Landlord and Tenant agree that Tenant shall have the right and option to reduce
or contract the area of the Premises subject the Lease (“Tenant’s Contraction
Option”) subject to the following terms and conditions:

 

  i. Tenant’s Contraction Option applies only to space within said Building
number 2006;

 

  ii. Tenant must give to Landlord written notice (a “Contraction Notice”) of
its election to exercise Tenant’s Contraction Option;

 

  iii. The Contraction Notice must specify the date as of which the contraction
shall be effective (a “Contraction Date”), provided that the Contraction Date
shall not be earlier than December 31, 2006;

 

A10 - 8

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

  iv. The Contraction Notice must be given no later than three (3) months prior
to the Contraction Date;

 

  v. The Contraction Notice must describe the area within said Building 2006,
which may be all or any portion of said Building 2006, that Tenant wants to
surrender to Landlord (the “Deleted Area”) and a commitment by Tenant to
surrender the Deleted Area to Landlord on the Contraction Date;

 

  vi. Concurrently with Tenant’s giving a Contraction Notice to Landlord, Tenant
shall pay to Landlord the total amount of the unamortized portion of the
brokerage commission, if any, payable to the Broker (defined below) under
paragraph 12 of this Tenth Addendum and proportionately attributable to the
Deleted Area;

 

  vii. If Tenant actually surrenders possession of a Deleted Area to Landlord,
on or before the Contraction Date, then rent under the Lease shall be
proportionately abated, as of the Contraction Date, using the rent per rentable
square foot then in effect;

 

  viii. Tenant agrees to pay all out-of-pocket costs and expenses reasonably
incurred by Landlord to cause each Deleted Area to become separate premises that
can be demised to a separate tenant, including, but not limited to, compliance
with legal requirements for ingress and egress and safety. Said payment by
Tenant shall be made in one (1) or several installments as, and within ten
(10) days after, Landlord presents to Tenant appropriate evidence of such costs
or expenses either when incurred by Landlord or after they are owed or paid by
Landlord, with copies of invoices from contractors and others who are doing the
work and/or supplying the materials being deemed to be such appropriate
evidence. Said costs and expenses reasonably incurred by Landlord shall include,
but shall not be limited to, costs and expenses for construction of demising
walls and corridors, which may include fire walls as required by law, causing
electricity to be separately metered to the Deleted Area, and installing
standard numbers of electrical outlets and wiring in such demising and corridor
walls, but shall in no event include improvement work commonly called “tenant
improvements” designed specially for the use and enjoyment of a particular
tenant; and

 

  ix. At the request of either Landlord or Tenant, they shall, after any
Contraction Date, enter into an amendment to the Lease documenting the facts
arising from Tenant’s exercise of the Contraction Option, including, but not
limited to, that the Deleted Area is no longer part of the Premises and what the
current rent has become.

 

7.

Right to First Negotiate. All rights of first refusal or to negotiate for
additional space owned by Landlord set forth in the Lease prior to execution of
this Tenth Addendum, including, but not limited to, the right set forth in
paragraph 7 of the Eighth Addendum,

 

A10 - 9

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

 

are hereby superseded and deleted from the Lease. Landlord and Tenant agree that
Tenant shall have a first right to negotiate to lease additional office space
from Landlord (“Tenant’s First Right”) subject to the following terms and
conditions:

 

 

A.

Tenant’s First Right shall apply only to space within the first (1st) floor of
said Building number 2019;

 

 

B.

If, at any time while Tenant continues to use and occupy all of the Building
2019 Expansion Space, Landlord decides to seek a tenant or tenants for any space
within the first (1st) floor of said Building 2019, Landlord shall first give
written notice to Tenant (a “Landlord’s Notice”) setting forth a description of
the available space (the “Available Space”), the monthly rental rate, and all
other material terms and conditions upon which Landlord intends to offer the
Available Space. A Landlord’s Notice shall be deemed to be an offer to lease to
Tenant the Available Space on the terms stated therein;

 

  C. Upon Tenant’s receipt of a Landlord’s Notice, Tenant shall have five
(5) business days to respond by giving Landlord a written acceptance setting for
Tenant’s commitment to lease the Available Space on the terms stated in the
Landlord’s Notice (a “Tenant’s Acceptance”);

 

  D. If Tenant fails to give to Landlord a Tenant’s Acceptance within said five
(5) business days, that failure shall be deemed to be a rejection of Landlord’s
offer to lease the Available Space (a “Tenant’s Rejection”) and, except as
provided in subpart F of this paragraph 7, shall be deemed a termination of
Tenant’s First Right, so that Landlord shall have no further duty to give any
Landlord’s Notice respecting the Available Space or any other space it may own
from time to time, just as if this paragraph 7 were not a part of this Tenth
Addendum;

 

  E. After any Tenant’s Rejection, Landlord shall, for a period of one (1) year,
be free to lease the Available Space to any other person or entity for rent and
upon the terms and conditions at least as favorable to Landlord as those set
forth in the Landlord’s Notice;

 

  F. If (i) during said one (1) year, Landlord desires to lease the Available
Space upon terms and conditions that are less favorable to Landlord than those
set forth in the Landlord’s Notice, or (ii) the Available Space is not leased by
Landlord to another person or entity within said one (1) year, and if Landlord
desires to continue to seek a tenant therefor, then, and in either of those
events, Landlord must give Tenant another Landlord’s Notice respecting that
Available Space, and the provisions of this paragraph 7 shall again apply;

 

  G. If and when Landlord has, without breach of this paragraph 7, leased any
space that is subject to the First Right to another person or entity, the First
Right shall terminate and be of no further force or effect, this paragraph 7
being then deemed not to be a part of this Tenth Addendum; and

 

A10 - 10

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

  H. If a Tenant’s Rejection ever occurs, Tenant agrees to provide to Landlord
such written proof, including, but not limited to, an estoppel certificate, as
Landlord may request to prove, when Landlord leases or is negotiating to lease,
or seeking a tenant for, the Available Space, that the First Right no longer
applies thereto, which written proof shall be provided within five (5) business
days after Landlord’s written request therefor is received by Tenant.

 

8. Parking. Tenant shall be entitled to its current parking ratio and, in any
event, not less than five (5) vehicle parking spaces for every one thousand
(1,000) rentable square feet of the Premises, as and if the size of the Premises
changes from time to time as provided elsewhere in this Tenth Addendum, which
parking spaces shall be provided by Landlord at no charge. For the Building 2019
Expansion Space, if Phased TI Completion occurs, then Tenant shall be entitled a
proportionate share of parking spaces as of each Phased Completion Date.

 

9. Limitations on Access to Roof. Tenant shall not have access to, and shall not
allow any of its employees, contractors, consultants, agents, or other invitees
to go upon, the roof of any of the buildings in which the Premises are located;
except that Landlord shall reasonably consider granting to Tenant or its
contractor permission to enter upon any such roof to install on the rooftop a
satellite dish, microwave antenna, or any other electrical devise,
communications equipment, or mechanical equipment; provided that: (a) Tenant
first requests such permission in writing delivered to Landlord no later than
ten (10) business days prior to the date of desired access; (b) Landlord may, in
its discretion, impose reasonable conditions upon such access for the protection
of the building or people, including, but not limited to, requiring that
Landlord control some or all of the rooftop activities; (c) when Tenant delivers
its said request to Landlord, Tenant shall also deliver in writing details about
the rooftop installation and the contractor proposed to be engaged to do the
work, including, but not limited to, any plans and specifications; and
(d) Tenant shall, at all times, comply with all governmental requirements,
including, but not limited to, issuance of appropriate permits and conduct of
appropriate inspections.

 

10. Mortgages. Landlord hereby represents and warrants to Tenant that no
mortgage or deed of trust encumbers the Premises or any portion thereof; that
Landlord has not assigned to any lender or other third party all or any part of
Landlord’s interests in the Lease as modified by this Tenth Addendum, whether
for collateral purposes or otherwise; and that Landlord is under no obligation
to obtain the consent of any lender or other third party to enter into this
Tenth Addendum.

 

11. Signage Rights. Tenant may maintain its existing building identification and
may, in its reasonable determination, expand its identification signage to the
Building 2019 Expansion Space, subject to Tenant’s compliance with all
governmental requirements, including, but not limited to, issuance of
appropriate permits and conduct of appropriate inspections, and subject to first
obtaining written approval of Landlord, which approval shall not be unreasonably
withheld, conditioned, or delayed.

 

A10 - 11

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

12. Broker’s Fee.

 

  A. Only One Broker. Tenant and Landlord agree that they have had no dealings
with any real estate broker or agent in connection with the negotiation of this
Tenth Addendum excepting only Cushman & Wakefield of California, Inc. (the
“Broker”), and they know of no other real estate broker or agent who is entitled
to a commission in connection with this Tenth Addendum.

 

  B. Commission. By a separate Commission Agreement executed by Landlord as of
March 31, 2004, Landlord has agreed to pay a commission to the Broker in
connection with this Tenth Addendum as follows: (a) One Hundred Nine Thousand
Three Hundred Seventy-three Dollars and Eighty-seven Cents ($109,373.87) (based
upon an expectation that the Prepaid Rent will be timely paid and upon an
assumption that there will be no early occupancy under a Phased TI Completion)
when this Tenth Addendum is executed and delivered: (b) approximately One
Hundred Nine Thousand Three Hundred Seventy-three Dollars and Eighty-seven Cents
($109,373.87) (subject to adjustments to account for early occupancy under a
Phased TI Completion, if any, for the actual Completion Date, and for any
failure of Tenant to timely pay the Prepaid Rent) when the Completion Date has
occurred and the Building 2019 Expansion Space Completion Date Certification has
been executed and delivered; (c) subject to Landlord’s timely receipt of the
applicable Agency Confirmation (defined below), Three Hundred Twenty-one
Thousand Eight Hundred Eighty-eight Dollars and Zero Cents ($321,888.00) on
October 1, 2007, if and only if the Existing Premises Option is deemed exercised
as provided in paragraph 2 of this Tenth Addendum; and (d) subject to Landlord’s
timely receipt of the applicable Agency Confirmation, if and when the New
Extension Option is exercised and the New Extension Period has commenced, a full
commission calculated in accordance with said Commission Agreement dated
March 31, 2004. Landlord shall not be required to pay said commission under
subparts (c) or (d) of this paragraph 12B unless and until, in each instance,
Landlord timely receives from Tenant a written designation and confirmation that
the Broker is then serving as Tenant’s exclusive agent in connection with the
Lease and the Premises (an “Agency Confirmation”). An applicable Agency
Confirmation, to be effective, must be received by Landlord, (i) with respect to
the portion of the commission payable under said subpart (c), no later than the
later of October 1, 2007, or the date that is ten (10) days after Tenant
receives from Landlord a written request for such Agency Confirmation; and
(ii) with respect to the portion of the commission payable under said subpart
(d), no later than the later of the date Tenant exercises the New Extension
Option or the date that is ten (10) days after Tenant receives from Landlord a
written request for such Agency Confirmation. If Landlord fails to pay to the
Broker when due hereunder any portion of said commission, Tenant shall have the
right, but no obligation, to pay the Broker what is owed and deduct that amount
from the next monthly rent becoming due under the Lease until Tenant is fully
reimbursed therefor; provided that Tenant must first give to Landlord written
notice of Tenant’s intention to so pay and deduct no later than thirty (30) days
prior to making such payment to the Broker.

 

A10 - 12

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

13. Occupant of the Premises. Tenant represents and warrants that Health Net
Federal Services, Inc., a Delaware corporation (the “Occupant”), is a wholly
owned subsidiary of Tenant. Landlord acknowledges that the Occupant shall have
the right to occupy the Premises throughout the term of the Lease without prior
notice to or consent from Landlord.

 

14. The Premises and Other Terms and Conditions of the Lease. The Building 2019
Expansion Space shall be deemed to be included as a part of the “Premises” and
the “Building” and shall be subject to the same terms and conditions set forth
in the Lease, except to the extent that any provision of this Tenth Addendum is
inconsistent or in conflict with such terms and conditions.

 

15. Effect. Landlord and Tenant agree that the Lease is in full force and effect
without modification except as expressly set forth in this Tenth Addendum.

 

16. Estoppels. Landlord and Tenant acknowledge and agree that, as of the
execution and delivery of this Tenth Addendum, neither Landlord nor Tenant is in
default under the terms of the Lease, nor has the Lease been modified or amended
except as recited or set forth in this Tenth Addendum.

 

      Aerojet-General Corporation,       an Ohio corporation Dated:  

March 31, 2004

    By:  

/s/ Terry P. Griffin

      Its:   Authorized Agent       Health Net, Inc.,       a Delaware
corporation Dated:  

 

    By:  

/s/ Marvin P. Rich

      Its:   Executive Vice President

 

A10 - 13

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

LOGO [g82075ex10_66pg61.jpg]

 

A10 - 14

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

LOGO [g82075ex10_66pg62.jpg]

 

A10 - 15

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

LOGO [g82075ex10_66pg63.jpg]

 

A10 - 16

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

LOGO [g82075ex10_66pg64.jpg]

 

A10 - 17

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

Exhibit “C”

Memorandum Certifying the Completion Date

[Alternative Title: Memorandum Certifying a Phased Completion Date]

To: Health Net, Inc. (“Tenant”)

From: Aerojet-General Corporation (“Landlord”)

Date:                     , 2004

Subject: Building 2019 Expansion Space Completion Date Certification

Greetings:

Landlord and Tenant hereby certify that, as of                     , 2004 (the
“Completion Date”) [alternatively, (a “Phased Completion Date”)], Landlord has
substantially completed tenant improvement work (the “TI Work”) at Building 2019
located on Aerojet Road in Sacramento County, California (the “Building”). The
TI Work thus completed is described a follows:

 

 

 

 

  .            

The rentable square feet of the Building affected by said TI Work consists of
                     (            ) rentable square feet (the “Completed
Premises”). The monthly rental rate applicable, as of the Completion Date
[alternatively, Phased Completion Date], to the Completed Premises is
                     Dollars ($            .        ) (the “Monthly Rent”).

By execution of this Memorandum Certifying the Completion Date [alternatively,
this Memorandum Certifying a Phased Completion Date], Landlord and Tenant
certify to each other, and for the benefit of their respective lenders,
investors, affiliates, successors, and assigns, that this Memorandum is true and
accurate as of its date set forth above. Landlord and Tenant are each be
estopped to deny the truth of any statement of fact set forth in this
Memorandum.

 

Aerojet-General Corporation By:  

 

Its:  

 

Health Net, Inc. By:  

 

Its:  

 

 

A10 - 18

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

LOGO [g82075ex10_66pg66.jpg]

 

A10 - 19

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

LOGO [g82075ex10_66pg67.jpg]

 

A10 - 20

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

Exhibit “E”

(Definition of Standard Building Shell)

Landlord shall provide at Landlord’s sole cost and expense, a finished building
shell prior to the completion of tenant improvements including existing building
roof, main HVAC system with main loop installed and package units, and main
building electrical backbone with panel installed. Landlord shall be responsible
for bringing the building into compliance with the Americans with Disabilities
Act (ADA), and all other governmental regulations, including proper exiting and
life safety compliance. Landlord has removed all hazardous materials from the
first (1st) and second (2nd) floors except for the VAT at the first (1st) floor,
which will be capsulized under the new floor covering, and shall be responsible
for all remediation work in preparing the Building 2019 Expansion Space for
Tenant’s occupancy.

 

A10 - 21

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

ELEVENTH ADDENDUM TO LEASE

This is the Eleventh Addendum, which, upon approval, will be attached to that
certain Lease (the “Original Lease”) by and between Aerojet-General Corporation,
an Ohio corporation, as Landlord, and Health Net, Inc., a Delaware corporation,
as successor in interest by merger to Foundation Health Federal Services, Inc.,
a Delaware corporation, as successor in interest to Foundation Health, a
California Health Plan, a California corporation, as Tenant, dated July 13,
1995, including that certain Addendum, that certain Second Addendum, that
certain Third Addendum, that certain Fourth Addendum, that certain Fifth
Addendum, that certain Sixth Addendum, that certain Seventh Addendum, that
certain Eighth Addendum, that certain Ninth Addendum, and that certain Tenth
Addendum thereto (collectively, the “Lease”). Unless otherwise defined in this
Eleventh Addendum, all capitalized terms used in this Eleventh Addendum shall
have the same meanings as such capitalized terms have in the Lease. All
references within this Eleventh Addendum to a “section” are to a specific
section within the Lease unless otherwise indicated.

RECITALS

 

A.

Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately twenty-eight thousand
(28,000) rentable square feet within Building number 2006 (incorrectly described
in the Fifth Addendum as the entire Building number 2006), approximately
twenty-eight thousand (28,000) rentable square feet in Building number 2015A,
and approximately fifty-three thousand nine hundred ninety (53,990) rentable
square feet, being a portion of the first (1st) floor and approximately one-half
(1/2) of the second (2nd) floor of Building number 2019 (collectively, the
“Existing Premises”) and no other space.

 

B. The Existing Premises consist of approximately two hundred fifty-five
thousand six hundred seventy-four (255,674) rentable square feet of office
space.

 

C. On or about January 29, 2007, Tenant gave to Landlord a Contraction Notice
(as defined in Section 6.B.ii. of the Tenth Addendum), by which Contraction
Notice Tenant exercised Tenant’s Contraction Option with respect to a portion of
Building number 2006. Attached hereto and incorporated herein by this reference
is Exhibit “A,” showing the Deleted Area (labeled “Vacant”) of approximately
twenty-six thousand four hundred eighty-five (26,485) rentable square feet, and
showing the portion of Building number 2006 that will continue as part of the
Existing Premises (labeled “Health Net”) consisting of approximately one
thousand five hundred fifteen (1,515) rentable square feet.

 

A11 - 1

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

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals,
all of which are incorporated herein by this reference, and the covenants
contained in this Eleventh Addendum, agree as follows:

 

1. Contraction of Premises.

(a) Effective as of June 1, 2007, the Deleted Area is deleted from the Existing
Premises, thus reducing the total rentable area of the Premises demised by the
Lease to approximately two hundred twenty-nine thousand one hundred eighty-nine
(229,189) rentable square feet.

(b) Tenant shall vacate all of the Deleted Area and surrender possession of the
Deleted Area to Landlord no later than 11:59 p.m. on May 31, 2007.

(c) Upon Tenant’s vacating and surrendering possession of the Deleted Area, all
rent and other obligations of Tenant and Landlord under the Lease shall cease to
accrue with respect to the Deleted Area, including, but not limited to, the
monthly rental payment for Building number 2006 shall (at the current monthly
rental rate of One Dollar and Twenty-Seven Cents [$1.27] per rentable square
foot) be reduced from Thirty-Five Thousand Five Hundred Sixty Dollars
($35,560.00) to One Thousand Nine Hundred Twenty-Four Dollars and Five Cents
($1,924.05).

(d) Landlord hereby waives any claim against Tenant respecting, and agrees that
there does not exist, any unamortized portion of the brokerage commission as
otherwise payable by Tenant under Section 6.B.vi. of the Tenth Addendum.

(e) Landlord does not waive any claim under Section 6.B.viii. of the Tenth
Addendum respecting, and reserves its right to collect, if incurred, any
out-of-pocket costs and expenses as described therein. As of the execution of
this Eleventh Addendum Landlord anticipates, but is not assuring Tenant, that no
such out-of-costs and expenses will be incurred.

(f) Nothing in this Eleventh Addendum shall be construed to affect in any way
obligations respecting Additional Rent under Section 4.H. of the Eighth
Addendum.

 

2. Effect. Landlord and Tenant agree that the Lease is in full force and effect
without modification except as expressly set forth in this Eleventh Addendum.

 

3. Estoppels. Landlord and Tenant acknowledge and agree that, as of the
execution and delivery of this Eleventh Addendum, neither Landlord nor Tenant is
in default under the terms of the Lease, nor has the Lease been modified or
amended except as recited or set forth in this Eleventh Addendum.

 

A11 - 2

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

In witness whereof, Landlord and Tenant have executed this Eleventh Addendum on
the dates set forth with their signatures below.

 

      Aerojet-General Corporation,       an Ohio corporation Dated:  

June 1, 2007

    By:  

/s/ Terry P. Griffin

      Its:   Authorized Agent       Health Net, Inc.,       a Delaware
corporation Dated:  

May 22, 2007

    By:  

/s/ Dennis Bell

      Its:   Chief Real Estate & Procurement Officer

 

A11 - 3

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

Exhibits “A”

(Floor Plan Showing the Deleted Area and

the Continuing Health Net Area of Building number 2006)

 

A11 - 4

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

LOGO [g82075ex10_66pg73.jpg]

 

A11 - 5

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

TWELFTH ADDENDUM TO LEASE

This is the Twelfth Addendum, which, upon approval, will be attached to that
certain Lease (the “Original Lease”) by and between Aerojet-General Corporation,
an Ohio corporation, as Landlord, and Health Net Federal Services, LLC a
Delaware limited liability company, as successor in interest (by reason of name
change and conversion from a Delaware corporation to a Delaware limited
liability company) to Health Net Federal Services, Inc., a Delaware corporation,
as successor in interest by merger to Foundation Health Federal Services, Inc.,
a Delaware corporation (“FHFS”), as successor in interest to Foundation Health,
a California Health Plan, a California corporation (the “Original Tenant”), as
Tenant, dated July 13, 1995, including that certain Addendum, that certain
Second Addendum, that certain Third Addendum, that certain Fourth Addendum, that
certain Fifth Addendum, that certain Sixth Addendum, that certain Seventh
Addendum, that certain Eighth Addendum, that certain Ninth Addendum, that
certain Tenth Addendum, and that certain Eleventh Addendum thereto
(collectively, the “Lease”). Unless otherwise defined in this Twelfth Addendum,
all capitalized terms used in this Twelfth Addendum shall have the same meanings
as such capitalized terms have in the Lease. All references within this Twelfth
Addendum to a “section” are to a specific section within the Lease unless
otherwise indicated.

RECITALS

 

A.

Pursuant to the terms of the Lease, Landlord currently leases to Tenant, and
Tenant currently leases from Landlord, the entire Building number 2015B, the
entire Building number 2025, approximately one thousand five hundred fifteen
(1,515) rentable square feet within Building number 2006 (incorrectly described
in the Fifth Addendum as the entire Building number 2006), approximately
twenty-eight thousand (28,000) rentable square feet in Building number 2015A,
and approximately fifty-three thousand nine hundred ninety (53,990) rentable
square feet, being a portion of the first (1st) floor and approximately one-half
( 1/2) of the second (2nd) floor of Building number 2019 (collectively, the
“Existing Premises”) and no other space.

 

B. The Existing Premises consist of approximately two hundred twenty-nine
thousand one hundred eighty-nine (229,189) rentable square feet of office space.

 

C. By its terms, the Lease expires on July 31, 2009, which date is defined as
the “New Expiration Date” in said Tenth Addendum.

 

D. On or about September 21, 2007, Tenant delivered to Landlord an Agency
Confirmation (as defined in Section 12B of said Tenth Addendum) thereby
designating Cushman & Wakefield of California, Inc. (“C&W”) as Tenant’s
exclusive real estate agent with respect to “the contingent portion of the
Commission described in Article 12B of the Tenth Addendum.” Said contingency
portion is payable in two (2) portions under subparts (c) and (d), respectively,
of said Section 12B.

 

E. Said Section 12B references the Commission Agreement executed as of March 31
and April 13, 2004, by and between Landlord and C&W (the “C&W Commission
Agreement”). Landlord represents that Landlord has heretofore paid to C&W the
commission owed under subparts (a), (b), and (c) of said Section 12B of the
Tenth Addendum.

 

A12 - 1

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

F. Subpart (d) of Section 12B of said Tenth Addendum provides for payment of a
commission to C&W upon Tenant’s exercise of the New Extension Option (as defined
in said Tenth Addendum), which shall be “a full commission calculated in
accordance with said Commission Agreement dated March 31, 2004. Said full
commission would be five percent (5%) of the gross rent payable during the first
five (5) years of the New Extension Period (as defined in Section 4A of said
Tenth Addendum.

 

G. By correspondence dated September 19, 2007, from CB Richard Ellis (“CBRE”),
addressed to Landlord, CBRE claims to be the exclusive representative of Tenant,
requests that the terms of the New Extension Option be modified, as set forth
below in this Twelfth Addendum, and, under the heading “Brokerage Fee,” proposes
that “Landlord shall pay pursuant to a separate agreement between Landlord and
Broker [meaning CBRE] upon tenant’s exercise of each Extension of the Term.”
CBRE is not willing, at this time, to enter into said separate agreement between
Landlord and Broker.

 

H. Tenant has advised Landlord and herby represents and warrants to Landlord
that: (i) the Eighth Addendum incorrectly stated that FHFS merged into Health
Net, Inc., a Delaware corporation; (ii) any references in the Lease to Health
Net, Inc., a Delaware corporation, ever having been the Tenant under the Lease
are incorrect; (iii) the correct entity under the Lease is Health Net Federal
Services, LLC, a Delaware limited liability company, which entity was formerly
known as Health Net Federal Services, Inc., a Delaware corporation; and
(iv) Health Net Federal Services, LLC, a Delaware limited liability company, has
succeeded to all rights and obligations of the Original Tenant under the Lease.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the foregoing recitals,
all of which are incorporated herein by this reference, and the covenants
contained in this Twelfth Addendum, agree as follows:

 

1. The New Extension Option. Section 4 of the Tenth Addendum is hereby deleted
from the Lease and replaced entirely by the following new Section 4:

 

2. Extension of Term.

 

  A. New Extension Option. Tenant shall have the right and option (the “New
Extension Option”) to extend the term of the Lease for five (5) years beyond
July 31, 2009 (the “New Expiration Date”), to expire instead on July 31, 2014
(the “New Extension Period”); provided that:

 

  i. Tenant must give to Landlord, and Landlord must have received, by mail or
by personal delivery, written notice of Tenant’s election to exercise the New
Extension Option no later than one hundred twenty (120) days prior to the New
Expiration Date;

 

A12 - 2

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

  ii. At the time Tenant gives said written notice to Landlord, and at the time
the New Extension Period commences, Tenant must not, after the giving of written
notice and the passage of the applicable cure period, if any, be in default
under the Lease;

 

  iii. Tenant may exercise the New Extension Option with respect to all of the
Premises only, and may not exercise the New Extension Option with respect to
only part of the Premises; and

 

  iv. Failure by Tenant to provide timely or adequate written notice as set
forth herein shall, unless, and in the sole discretion of Landlord, an untimely
or inadequate notice is acceptable to Landlord, cause the New Extension Option
to lapse and its exercise by Tenant shall not be effective.

 

  B. Tenant’s Termination Right. If and when the New Extension Period commences,
Tenant shall thereafter have the right and option to terminate the Lease
(“Tenant’s Termination Option”) effective as of July 31, 2011, July 31, 2012, or
July 31, 2013 (each, a “Termination Date”); provided that Tenant’s Termination
Option may be exercised only by giving to Landlord a written notice of
termination no later than ninety (90) days before the Termination Date chosen by
Tenant. Any such termination of the Lease shall apply to all of the Premises,
and cannot be applied to only a portion or portions of the Premises

 

  C. Rent during the New Extension Period. The monthly rental payable during the
New Extension Period shall be the fair market rental for the Premises, as of the
beginning of the New Extension Period, taking into account the specific
provisions of the Lease that will remain constant, including, but not limited
to, the term thereof as hereby modified, the improvements installed by Landlord,
services provided to Tenant, the fact that said monthly rental based upon the
fair market rental shall not be subject to increase during the New Extension
Period, the cost to Landlord of paying any brokerage commission in connection
with Tenant’s exercise of the New Extension Option, and other pertinent items,
and the amenities, location, identity, quality, age, and conditions of the
buildings in which the Premises are located; provided that, in no event, shall
the monthly rental payable for the Premises during the New Extension Period be
less than the monthly rental payable for the month immediately preceding the New
Expiration Date, regardless what the fair market rental may be. The fair market
rental for the Premises shall be determined by applying the following procedures
and subject to the following terms and conditions:

 

  i. At least one hundred (100) days prior to the New Expiration Date, Landlord
and Tenant may meet and confer, but are not obligated to meet and confer,
respecting the establishment of the fair market rental;

 

  ii.

In the event that Landlord and Tenant fail to meet and confer or cannot agree
upon the fair market rental at least ninety (90) days prior to the New
Expiration Date, then, at least eighty (80) days prior to the New Expiration

 

A12 - 3

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

 

Date (the “Notice Deadline”), Landlord and Tenant shall each give to the other a
written notice setting forth its final determination of the fair market rental
(collectively, the “Fair Rental Notices”); provided that, in order to help
prevent inadvertent loss of any party’s right to give a Fair Rental Notice, the
Notice Deadline shall extend, for both Landlord and Tenant, until one (1) of
them gives a Fair Rental Notice plus, for the other, a period expiring five
(5) business days thereafter.

 

  iii. If only one (1) Fair Rental Notice is timely given, then that Fair Rental
Notice shall conclusively establish the fair market rental;

 

  iv. If both Landlord and Tenant give Fair Rental Notices, and the Fair Rental
Notices are different in any respect, then the fair market rental shall be
conclusively established by a third-party appraiser or broker mutually chosen by
Landlord and Tenant; provided that, if Landlord and Tenant have not agreed upon,
and engaged, such appraiser or broker at least sixty (60) days prior to the New
Expiration Date, then Landlord and Tenant shall each engage a duly licensed
California attorney with commercial leasing experience of at least five
(5) years, which attorneys shall, by their agreement, select the appraiser or
broker; provided that, if said attorneys have not agreed upon an appraiser or
broker at least fifty (50) days prior to the New Expiration Date, then either
Landlord or Tenant may commence an action for declaratory relief or other
appropriate remedy to have the court appoint the appraiser or broker;

 

  v. Landlord and Tenant shall share equally the fees and expenses of the
selected appraiser or broker and shall each pay its own attorneys’ fees;

 

  vi. Within thirty (30) days after the appraiser or broker’s engagement, the
appraiser or broker shall deliver to Landlord and to Tenant the appraiser or
broker’s determination of which of the two (2) Fair Rental Notices is, in the
appraiser or broker’s best judgment, the closest to the fair market rental for
the Premises (the “Chosen Fair Rental Notice”), and the amount set forth in the
Chosen Fair Rental Notice shall be deemed to be the fair market rental; and

 

  vii. The appraiser or broker shall be required to give to Landlord and to
Tenant a written statement of the appraiser or broker’s reasoning and
justification for selection of the Chosen Fair Rental Notice; the appraiser or
broker shall not be permitted to decide on a middle ground, or to suggest any
compromise; the appraiser or broker’s sole function shall be to determine the
Chosen Fair Rental Notice, and provide his or her reasons therefor.

 

3.

Brokerage Commissions. Landlord makes no commitment to pay a brokerage
commission to CBRE in connection with this Twelfth Addendum or any exercise of
the New Extension Option unless and until, and only to the extent that, Landlord
and CBRE

 

A12 - 4

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

 

enter into a separate commission agreement (a “CBRE Commission Agreement”). In
no event shall any brokerage commission paid by Landlord to CBRE, for the New
Extension Period, exceed the brokerage commission that Landlord would owe to C&W
under the terms of Section 12B(d) of said Tenth Addendum; provided further that
any such brokerage commission, if paid, shall be paid only as and when Tenant
exercises the New Extension Option, triggering a brokerage commission based upon
two (2) years of rent, and Tenant elects not to exercise Tenant’s Termination
Option as of each Termination Date, each such event triggering a brokerage
commission based upon one (1) year of rent. In no event shall Landlord pay
brokerage commissions to both C&W and CBRE whether or not a CBRE Commission
Agreement is executed. Landlord shall have the right, in its absolute
discretion, in all events, to decline to pay any brokerage commission to CBRE
unless and until Tenant and CBRE provide to Landlord satisfactory assurances and
indemnity, including indemnity against attorneys’ fees incurred, against any
possible Landlord liability to C&W under either Section 12B(d) of the Tenth
Addendum or the C&W Commission Agreement.

 

4. Effect. Landlord and Tenant agree that the Lease is in full force and effect
without modification except as expressly set forth in this Twelfth Addendum.

 

5. Estoppels. Landlord and Tenant acknowledge and agree that, as of the
execution and delivery of this Twelfth Addendum, neither Landlord nor Tenant is
in default under the terms of the Lease, nor has the Lease been modified or
amended except as recited or set forth in this Twelfth Addendum

In witness whereof, Landlord and Tenant have executed this Twelfth Addendum on
the dates set forth with their signatures below.

 

      Aerojet-General Corporation,       an Ohio corporation Dated:  

January 29, 2008

    By:  

/s/ Brian Sweeney

      Its:   Vice President, General Counsel      

Health Net Federal Services, LLC,

a Delaware limited liability company

Dated:  

January 16, 2008

    By:  

/s/ Dennis Bell

      Its:   Vice President, Real Estate

 

A12 - 5