Exhibit 10.1

VANNI BUSINESS PARK INDUSTRIAL LEASE

(ViewRay -- 339 N. Bernardo)

ARTICLE I

PARTIES

This Lease (the or this “Lease”), dated, for reference purposes only, April 11,
2018, is made by and between the Vanni Business Park, LLC, a Delaware limited
liability company (“Lessor”), and ViewRay, Inc., a Delaware corporation
(“Lessee”). This Lease shall be effective as of the date (the “Effective Date”)
set forth immediately above the signature block at the end of the Lease, which
date is intended to be the first date on which both Lessor and Lessee have
signed this Lease.

ARTICLE II

PREMISES

Section 2.01.Premises.  Lessor hereby leases to Lessee and Lessee leases from
Lessor for the term, at the rental, and upon all of the terms and conditions set
forth herein, premises comprised of a portion of Building A (the “Building”) of
the Vanni Business Park (the “Business Park”) commonly known as 339 North
Bernardo Avenue, Mountain View, California 94043, and more particularly
described on the site plan attached hereto as Exhibit A and incorporated herein
by this reference. The premises (the “Premises”) consist of approximately 24,630
rentable square feet of floor space on the ground floor of the Building shown as
the cross-hatched area on Exhibit B attached hereto and incorporated herein by
this reference. The square footage of the Premises includes 100% of the space
with respect to which Lessee has exclusive use rights, and 50% of the space with
respect to which Lessee has limited non-exclusive use rights, as such areas are
designated on Exhibit B and further identified in Section 2.02 below. In the
absence of a condemnation of a portion of the Premises that reduces the size of
the Premises, or Lessee’s leasing of additional space within the Building which
increases the size of the Premises, no remeasurement of the square footage of
the Premises by either party will result in any increase or decrease in rent or
any other number in this Lease which is a function of the square footage of the
Premises.

Section 2.02.Business Park and Exterior Common Areas.  The Building comprises
one of the six buildings situated in the Business Park as of the date of this
Lease. The Business Park is shown on the site plan attached hereto as Exhibit A.
All areas outside the buildings within the Business Park are herein called the
“Common Areas.” Lessee shall be entitled to park in its prorata share of parking
spaces within the parking areas provided from time to time in the Common Areas;
provided that, in all events Lessee shall be entitled to park in no less than
3.7 parking spaces per 1,000 rentable square feet of floor space within the
Premises (based on 24,630 rentable square feet of Premises). Lessee shall also
be entitled to use such exercise facilities as may exist thereon from time to
time, on a nonexclusive basis with other tenants of the Business Park and their
respective employees and invitees. Lessee acknowledges that there are no parking
spaces specifically assigned or designated for the exclusive use of Lessee.
Lessor reserves the right to designate for each tenant of the Business Park a
pro rata share of parking within the Business Park, in which event Lessee shall
thereafter cause its employees, agents, contractors, and other invitees to park
only in the spaces so designated for Lessee’s parking and shall not cause or
permit such entities to park in other areas of the Business Park. In the event
Lessor designates specific parking areas for each tenant of the Business Park,
the location and size of the parking area designated for Lessee shall be subject
to Lessee’s approval, which approval shall not unreasonably be withheld or
delayed. Lessee shall not be required to pay any parking charge for such parking
spaces, Lessee shall have 100% exclusive use of all areas specified on Exhibit B
both as being within the Premises and available for 100% exclusive use by
Lessee. Lessee shall have 50% non-exclusive use of the areas on the ground floor
labeled on Exhibit B as the “Common Lobby,” “Telco Room” and “Common Electrical
Room,” and the areas on the 2nd floor labeled on Exhibit B as the “Front
Conference Room,” “Telco Room,” and “Roof Hatch Room,” subject to the following.
Subject to the limitations on Lessee’s use thereof set forth in this paragraph,
usage of the non-exclusive use areas identified above shall be shared with other
tenants from time to time leasing space in the Building. Except in the case of
emergency where no prior notice shall be

 

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required, upon 24 hours advance written or oral notice delivered by Lessee to
the tenant(s) on the 2nd floor of the Building in whose premises the same are
located, Lessee shall have reasonable access to (i) the Roof Hatch Room leading
to the roof of the Building designated on Exhibit B solely for purposes of
accessing the roof of the Building in order to conduct activities required to be
performed by Lessee under this Lease, such as repair, maintenance and/or
replacement of the HVAC system serving the ground floor of the Building in the
event Lessor elects pursuant to Section 8.01(a) below to have Lessee perform
HVAC maintenance and repairs for any or all HVAC systems serving exclusively
only a portion of the Premises, and (ii) the ground floor Common Electrical Room
and Telco Room and the 2nd floor Telco Room solely for purposes of installation,
maintenance, repair and replacement of Lessee’s telecommunications and other
communication and electrical systems serving the Premises. Lessee and its
employees, agents, contractors, and other invitees shall be entitled to use the
Common Lobby solely for passageway to and from any one or more of the front door
of the Building to the Premises, the front stairwell, and the elevator, and as a
place where Lessee’s invitees may wait for admittance to the Premises. Lessee
shall be entitled to use the front stairwell from the Common Lobby to the 2nd
floor, the elevator, and the front hallway on the 2nd floor of the Building
solely to the extent necessary to access the 2nd floor Front Conference Room,
Telco Room and Roof Hatch Room. Lessee shall be entitled to use the Front
Conference Room to conduct its business meetings, provided that Lessee shall not
be entitled to use the same more than 50% of the time on a shared basis with
other tenants in the Building. Lessee shall coordinate all reservations by
tenant(s) leasing space in the Building for such shared use of the Front
Conference Room. Lessor shall not grant any other tenant(s) within the Building
rights to use the Front Conference Room in excess of an aggregate of 50% of the
time on a shared basis. The Common Lobby is not part of the Premises, and during
the entire term of the Lease, Lessee shall have only shared use of the Common
Lobby and shall not in any way hinder access by other tenants in the Building
(and their employees, contractors, customers and other invitees) through the
Common Lobby. In the event of an emergency, Lessee shall without notice permit
other tenants of the Building and their respective employees, contractors,
customers and other invitees) reasonable access to and passageway through ground
floor emergency hallways, stairwell landings, and Building exits. The Common
Electrical Room and Telco Room on the first floor of the Building are located
within the Premises. Lessee shall permit access to the Common Electrical Room
and such Telco Room during the term of this Lease by Lessor, any and all other
tenants of the Building, and their respective agents, employees, and
contractors, upon reasonable notice to Lessee and subject to Lessee’s reasonable
security requirements, including, if Lessee makes such a representative
available, being escorted by a representative of Lessee; provided that, in the
event of an emergency (e.g. interruption of electrical service or telephone
service to other premises in the Building the connections for which service are
situated in either or both such rooms), then Lessee shall permit immediate
access to such room(s) without prior notice.

ARTICLE III

TERM

Section 3.01.Term Commencement Date.  The term of this Lease shall commence on
the date that is the later of (i) the date that Substantial Completion of
Lessor’s Work has occurred as specified in Section 3.03 and (ii) twenty one (21)
days after Lessor delivers notice to Lessee allowing Lessee to enter onto the
Premises pursuant to the early entry provisions of Section 3.04 (the
“Commencement Date”). The term shall expire on the date (the “Expiration Date”)
that is the day before the seventh annual anniversary of the Commencement Date,
subject to earlier termination due to the default of Lessee hereunder or as
otherwise provided under this Lease, and further subject to extension pursuant
to Section 3.02 below. Within thirty (30) days following the Commencement Date,
Lessor shall deliver to Lessee a letter specifying the Commencement Date and the
Expiration Date in the form attached hereto as Exhibit C, and Lessee shall
acknowledge such dates by signing a copy of such letter and returning the same
to Lessor within twenty (20) days after receipt thereof from Lessor.

Section 3.02.Option to Extend.

(a)Subject to the remaining provisions of this Section 3.02, Lessee shall have
one option (the “Option”) to extend the term of this Lease for a period of five
(5) years (i.e., to the date that is one day before the fifth annual anniversary
of the date the Expiration Date would have occurred had the Option not been
exercised) (such extension period herein called the “Extended Term”). Such
Option shall be exercised, if at all, only by written notice delivered by Lessee
to Lessor at least one hundred eighty (180) days but no more than three hundred
sixty (360) calendar days prior to the then-scheduled expiration of the term of
this Lease (the “Option Exercise

 

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Notice”). Time is of the essence with respect to the time of Lessee’s exercise
of the Option. Notwithstanding the foregoing, Lessee shall not have the right to
exercise the Option if (a) at the time of the purported Option exercise, Lessee
is in default with respect to payment of any monetary amount payable under the
Lease, or is in default with respect to any other material obligation of Lessee
under the Lease (in each case beyond applicable notice and cure periods for a
default, as specified in the Lease), or (b) two or more events have occurred
during the three (3) year period of time immediately preceding the date of such
purported exercise which constitute events of default by Lessee with respect to
payment of any monetary amount payable under the Lease, or with respect to any
other material obligation of Lessee under the Lease (in each case beyond
applicable notice and cure periods for a default, as specified in the Lease).
The parties expressly agree that Lessor shall not be obligated to pay any broker
commission in connection with Lessee’s extension of the term of the Lease
pursuant to any such exercise of the Option, and neither Lessee nor Lessor shall
take any action that gives rise to the obligation on the part of Lessor to pay
any such commission. In no event shall Lessee be entitled to a tenant
improvement allowance nor shall Lessor have any obligation to make or pay for
any tenant improvements in conjunction with either the Option or the Extended
Term. The Extended Term shall be upon all of the terms and conditions hereof,
except that the monthly rent for the Extended Term shall be determined in
accordance with Section 3.02(b). Upon commencement of the Extended Term, all
references herein to the “term” of this Lease shall be deemed to include the
Extended Term. The option rights of Lessee under this Section 3.02 are granted
for Lessee’s personal benefit and may not be assigned or transferred by Lessee,
except pursuant to a Permitted Transfer as defined in Section 13.02 below.

(b)Extended Term Rent.  Within thirty (30) days after Lessor’s receipt of
Lessee’s Option Exercise Notice, Lessor shall deliver to Lessee a written
proposal setting forth the monthly base rent for the upcoming Extended Term. If
Lessee within fifteen (15) business days after receipt of such proposal agrees
to such proposal, the amount of monthly base rent set forth in such proposal
shall be binding on Lessor and Lessee. Should Lessee object in writing to
Lessor’s proposal within fifteen (15) business days after receipt thereof, or
fail to object in writing to such proposal within said fifteen (15) business
days, then during the thirty (30) day period following Lessee’s objection to
Lessor’s proposal, or in the case of Lessee’s failure to object then during the
thirty (30) day period following expiration of such initial fifteen (15)
business day period, Lessor and Lessee shall negotiate in good faith for the
purpose of reaching an agreement regarding the amount of the monthly base rent
during the Extended Term. In the event the parties fail to agree in a written
instrument signed by both parties upon the amount of the monthly base rent for
the Extended Term within such thirty (30) day period, the monthly base rent for
the Extended Term shall be determined in the manner hereafter set forth.

If the parties have not reached agreement on the amount of monthly rent for the
Extended Term by the end of the thirty (30) day period of good faith negotiation
referred to in the immediately preceding paragraph, then the fair market monthly
rent for the Premises shall be determined as follows. Within five (5) days after
such thirty (30) day period, Lessor and Lessee each shall appoint a broker who
has not worked for such party within the five (5) previous years. Each broker
appointed under this Section 3.02(b) shall be a California licensed real estate
broker having at least 5 years experience representing both landlords and
tenants in leasing commercial properties within a ten (10) mile radius of the
Premises. Such brokers so appointed shall each determine the fair market monthly
base rent for the Premises during the entire Extended Term (which may entail an
initial monthly base rent amount that is increased annually during the Extended
Term), taking into account the value of the Premises including the value of any
improvements installed at the Premises that Lessor has a right to keep at the
end of the Lease (assuming that, as to any improvements that Lessor has a right
to elect to keep but has not yet exercised such right, Lessor will elect to keep
the same), and prevailing comparable rentals within a two (2) mile radius of the
Premises considering all relevant factors including without limitation size of
the premises, lease term, financial strength of the tenant, tenant inducements,
tenant improvement allowances, free rent, escalation of rent during the term,
operating costs, brokerage commissions and other landlord concessions for
renewal of leases. Such brokers shall, within twenty (20) business days after
their appointment, complete their determinations and submit their written
reports thereof to Lessor and Lessee. Said brokers, within ten (10) days after
submission of the last report, shall appoint a third broker meeting the broker
qualifications set forth above and who is not currently representing either
Lessor or Lessee. Such third broker, within twenty (20) business days after his
appointment, shall choose one or the other of the first two determinations as
the applicable fair market monthly base rent during the Extended Term. If either
Lessor or Lessee fails to appoint a broker, or if a broker appointed by either
of them fails, after his appointment, to submit a report of his determination
within the required period in accordance with the foregoing, the determination
in the report submitted by the broker properly appointed and timely submitting
his report shall be controlling. If the two brokers appointed by Lessor and
Lessee are unable to agree upon a third broker within the required period in
accordance

 

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with the foregoing, application shall be made within twenty (20) days thereafter
by either Lessor or Lessee to a court of law situated in Santa Clara County,
California having jurisdiction which shall appoint a broker having the
qualifications specified above; provided that, if neither party applies to such
a court or if no court to which either party so applies is willing to appoint
such a broker within sixty (60) days after the first two brokers have issued
their reports, then the third broker shall be specified by Lessor (provided that
the third broker meets the qualifications set forth above for the third broker,
and provided further that such third broker has never worked for either Lessor
or Lessee). Subject to the provisions below, the cost of the initial broker
appointed by Lessor or Lessee shall be borne by the party so appointing such
broker, and the cost of any third broker shall be borne equally by Lessor and
Lessee. Notwithstanding anything to the contrary contained in this Section 3.02,
in no event shall the monthly base rent for the first year of the Extended Term
be less than the amount of monthly base rent applicable in the last month of the
initial seven (7) year term of the Lease (without taking into account any rental
abatement that may be applicable due to damage or destruction of the Premises or
otherwise) multiplied by 95%; and furthermore, on each annual anniversary of the
commencement of the Extended Term, the monthly base rent shall be increased to
an amount which is no less than 1.03 times the amount of monthly rent payable
during the month preceding such increase (without taking into account any rental
abatement that may be applicable due to damage or destruction of the Premises or
otherwise). The intent of the parties is to ensure that, regardless what the
fair market monthly base rent is determined to be pursuant to the foregoing
provisions, the monthly base rent at the start of the Extended Term is no less
than 95% of the amount thereof at the end of the initial term, and to ensure
that annual increases thereafter are not less than 3% of the monthly base rent
amount applicable during the immediately preceding year of the Extended Term.
Notwithstanding anything to the contrary in the preceding two sentences, in the
event Lessee requests or demands that Lessor pay a broker’s commission in
connection with Lessee’s extension of the Lease term pursuant to Section 3.02,
and Lessor agrees to do so, or in the event for any reason Lessor is obligated
to pay a broker commission or the costs of any improvements, alterations or
additions to the Premises in connection with Lessee’s extension of the Lease
term pursuant to Section 3.02, then both references in said two sentences to 95%
shall be changed to 100%.

For purposes of Section 3.02, “business days” shall mean all calendar days other
than Saturdays, Sundays, and legal holidays recognized by the Federal
government, the California state government, or California banks. All other
references to periods of time expressed in a number of days shall mean that
number of calendar days. Time is of the essence with respect to all periods of
time referenced in Section 3.02.

Section 3.03.Lessor’s Work Prior to Delivery of Possession.  Lessor shall
deliver possession of the Premises to Lessee with all alterations and
improvements to the Premises described on the working plans and specifications
attached hereto as Exhibit D and incorporated herein by this reference performed
as set forth in this Section 3.03. “Lessor’s Work” shall mean all the work
required to be performed in order to make the alterations and improvements
described on Exhibit D attached hereto, including any work required by the
Americans With Disabilities Act (“ADA”) and other accessibility laws which may
be triggered by Lessor’s Work. “Lessor’s Work Plans” shall mean such working
plans and specifications so prepared by Lessor, subject to modification and
supplementation of the same to reflect plan check comments from the City of
Mountain View and other requirements of lawful governmental authority, and to
reflect such other modifications as Lessor shall from time to time determine are
appropriate on site in the course of performing Lessor’s Work provided such
modifications are reasonably consistent with the work described in Exhibit D.
Commencing promptly after execution of the Lease Lessor shall submit the working
plans and specifications attached as Exhibit D to the City of Mountain View to
obtain such permits and approvals from the City of Mountain View as are required
to perform the Lessor’s Work, and promptly after obtaining such permits and
approvals Lessor shall cause California licensed contractors to begin
construction of Lessor’s Work and thereafter diligently continue construction of
Lessor’s Work until Substantial Completion of Lessor’s Work. Construction of
Lessor’s Work shall be performed substantially in accordance with the Lessor’s
Work Plans in a good and workmanlike manner, with materials that conform to said
plans and that are new and otherwise of good quality. Lessor’s Work shall be
constructed in accordance with applicable law including, without limitation, the
ADA. Within ten (10) days after Lessor notifies Lessee that Lessor’s Work is
substantially completed, Lessor and Lessee shall together walk through and
inspect Lessor’s Work using their best efforts to discover all incomplete or
defective construction (“punchlist items”). After such inspection has been
completed, a list of punchlist items shall be prepared by Lessor and Lessee.
Lessor shall use its best efforts to cause California licensed contractors hired
by Lessor to diligently complete and/or repair such punchlist items. On the date
that Substantial Completion of Lessor’s Work (as defined below) occurs, Lessee
shall accept possession of the Premises and shall thereupon be deemed to have
accepted Lessor’s Work as complete subject only to Lessor’s completion

 

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and/or correction of punchlist items. “Substantial Completion of Lessor’s Work”
shall mean the date on which all of the following have occurred: (i) Lessor
certifies that all Lessor’s Work has been completed in accordance with the
Lessor’s Work Plans, subject only to normal and customary punchlist items
relating to minor defective or incomplete construction which will not materially
interfere with Lessee’s use of the Premises, and (ii) Lessor has tendered
possession of the Premises to Lessee. All Lessor’s Work shall be performed and
paid for by Lessor.

Section 3.04.Early Access.  Lessor shall deliver notice to Lessee at least
twenty one (21) days prior to Substantial Completion of Lessor’s Work that
Lessee may enter onto the Premises to install workstations, fixtures, furniture,
and communication lines provided that Lessee coordinates such work with Lessor
so as to avoid interference with Lessor’s Work remaining to be performed. In
conjunction with any such early entry onto the Premises by Lessee, Lessee shall
not permit its contractors or subcontractors to cause any labor difficulties
with contractors and subcontractors performing Lessor’s Work (including use of
union labor if Lessor’s workers are non-union, and vice versa, to the extent
that results in strikes, work stoppages, or other labor difficulties with
Lessor’s contractors or subcontractors). In no event shall Lessee occupy the
Premises for purposes of conducting its regular business thereon until
Substantial Completion of Lessor’s Work has been achieved.

Section 3.05.Delay in Delivery of Possession.  Notwithstanding anything to the
contrary contained in this Lease, in the event the Commencement Date has not
occurred by the date that is ninety (90) days after the Effective Date due to
any cause beyond the reasonable control of Lessor, then Lessor shall be entitled
to terminate this Lease by delivery of notice thereof to Lessee within five (5)
days after such date, with such termination to be effective immediately upon
delivery of such notice. Further notwithstanding anything to the contrary
contained in this Lease, in the event the Commencement Date for any reason has
not occurred by the date that is one hundred twenty (120) days after the
Effective Date (“Lessee’s Outside Commencement Date”), then Lessee shall be
entitled to terminate this Lease by delivery of notice thereof to Lessor within
seven (7) days after such date, provided that Lessee’s Outside Commencement Date
specified above in this sentence shall be extended one day for each day, if any,
that Lessor is delayed in delivering possession of the Premises to Lessee due to
any delay caused by Lessee or Lessee’s agents, contractors, or employees, and
further notwithstanding any provisions of this Lease to the contrary, the date
on which rent would otherwise be payable under this Lease pursuant to all other
provisions of this Lease shall be moved up one day sooner for every such day of
delay. Time is of the essence with respect to the time of exercise of any right
of termination of this Lease set forth above in this paragraph.

ARTICLE IV

RENT: SPECIAL NET LEASE

Section 4.01.Rent.  Lessee shall pay to Lessor as rent for the Premises the
following amounts for the following periods of time:

(i)  $36,727.50 from the Commencement Date through December 31, 2018;

(ii)  $72,658.50 from January l, 2019 through the day before the first annual
anniversary of the Commencement Date;

(iii)  $74,838.26 from the first annual anniversary of the Commencement Date
through the day before the second annual anniversary of the Commencement Date;

(iv)  $77,083.40 from the second annual anniversary of the Commencement Date
through the day before the third annual anniversary of the Commencement Date;

(v)  $79,395.90 from the third annual anniversary of the Commencement Date
through the day before the fourth annual anniversary of the Commencement Date;

(vi)  $81,777.78 from the fourth annual anniversary of the Commencement Date
through the day before the fifth annual anniversary of the Commencement Date;

 

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(vii)  $84,231.11 from the fifth annual anniversary of the Commencement Date
through the day before the sixth annual anniversary of the Commencement Date;

(viii)  $86,758.05 from the sixth annual anniversary of the Commencement Date
through the Expiration Date.

Lessee shall pay such rent to Lessor in advance on the first day of each month
starting on the Commencement Date, provided that Lessee shall pay to Lessor the
rent for the first month after the Commencement Date and the security deposit on
the date this Lease is first executed by both Lessee and Lessor. Rent for any
period during the term hereof which is for less than one month shall be a pro
rata portion of the monthly installment. Rent shall be payable in lawful money
of the United States, without prior notice or demand, to Lessor at the address
stated herein or to such other persons or at such other places as Lessor may
designate in writing. If the term of the Lease is scheduled to expire on any
date other than the last day of a calendar month, then Lessee shall pay to
Lessor for the last full month of the term of the Lease an amount of rent equal
to the rent for such full calendar month together with the prorated amount of
rent payable for the last partial calendar month of the term.

Section 4.02.Special Net Lease.  This Lease is what is commonly called a “Net,
Net, Net Lease”, it is being understood that the Lessor shall receive the rent
set forth in Section 4.01 free and clear of any and all impositions, taxes,
liens, charges or expenses of any nature relating to the Premises except as
otherwise provided in this Lease. In addition to the rent reserved by Section
4.01, and except as otherwise expressly provided in this Lease, Lessee shall pay
to the parties respectively entitled thereto all insurance premiums (and
deductibles), taxes, assessments, operating charges, management fees,
maintenance charges, and any other charges, costs and expenses which Lessee is
obligated to pay under any provisions of this Lease for the entire Premises
during the term hereof. All of such charges, costs and expenses shall constitute
additional rent, and upon the failure of Lessee to pay any of such costs,
charges or expenses, Lessor shall have the same rights and remedies as otherwise
provided in this Lease for the failure of Lessee to pay rent. It is the
intention of the parties hereto that this Lease shall not be terminable for any
reason by Lessee, and that Lessee shall in no event be entitled to any abatement
of or reduction in rent payable under this Lease, except as herein expressly
provided. Any present or future law to the contrary shall not alter this
agreement of the parties.

ARTICLE V

SECURITY DEPOSIT

Section 5.01.Security Deposit.  Lessee shall deposit with Lessor upon execution
of this Lease as a security deposit for Lessee’s faithful performance of
Lessee’s obligations hereunder cash in the amount of Eighty Six Thousand Seven
Hundred Fifty Eight Dollars and Five Cents ($86,758.05). If Lessee fails to pay
rent or other charges due hereunder, or otherwise defaults with respect to any
provision of this Lease, Lessor may, without waiving or releasing Lessee from
any obligation under this Lease, and without waiving Lessor’s right to treat
such failure as a default hereof, use, apply, or retain all or any portion of
said cash deposit for the payment of any rent or other charge in default or for
the payment of any other sum to which Lessor may become obligated by reason of
Lessee’s default, or to compensate Lessor for any loss or damage which Lessor
may suffer thereby. If Lessor so uses or applies all or any portion of said cash
deposit, Lessee shall within ten (10) days after written demand therefor deposit
cash with Lessor in an amount sufficient to restore said deposit to the full
amount hereinabove stated and Lessee’s failure to do so shall be a material
breach of this Lease. No trust relationship is created herein between Lessor and
Lessee with respect to said security deposit, and Lessor may commingle it, use
it in ordinary business, transfer or assign it, or use it in any combination of
those ways. In the event Lessor transfers its interest in this Lease, Lessor
shall transfer said deposit to Lessor’s successor in interest, whereupon Lessor
shall no longer have any liability for the return of such deposit or the
accounting therefor.

Section 5.02.Waiver of Limits on Retention Security Deposit.  Any cash security
deposit held by Lessor at the expiration or sooner termination of the term of
this Lease, less sums which Lessor is entitled to deduct therefrom pursuant to
Article V, shall be returned to Lessee (or, at Lessor’s option, to the last
assignee, if any, of Lessee’s interest hereunder), without interest within 75
days after the expiration or termination of this Lease, except that Lessor has
the right to retain all or any portion of a cash security deposit then held by
Lessor to cover rents which will be due in the future or damages for unpaid
future rents (collectively, “Future Rent Damages”) until, at

 

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Lessor’s sole and absolute election, (i) the precise amount of such Future Rent
Damages are determined by a final judgment in a court of law at which time
Lessor may apply such cash toward payment of such sum; or (ii) Lessor, in its
sole and absolute judgment, has reasonably estimated the amount of such Future
Rent Damages at which time it may apply such cash toward payment of such
estimated Future Rent Damages. Lessee expressly waives any requirement in
California Civil Code section 1950.7 or successor or similar statute for the
accounting of or return to Lessee of the security deposit within any period
shorter than specified by this Lease and further expressly waives any and all
other portions of California Civil Code section 1950.7 or successor or similar
statute that is inconsistent with the provisions of this Lease.

ARTICLE VI

USE

Section 6.01.Use.  The Premises shall be used and occupied for general offices,
research and development, and any other incidental related legal use which is
otherwise in compliance with the rules and regulations that may reasonably be
imposed by Lessor from time to time on the Business Park. Lessee shall not use
nor permit the use of the Premises in any manner that will tend to create waste
or a nuisance or tend to unreasonably disturb any other tenants. This Lease does
not grant to Lessee any exclusive use rights that would prevent other tenants or
lessees from conducting businesses or operations within the Business Park
similar to the business or operations of Lessee. Lessee shall be responsible for
obtaining any required business license, use permit, and/or occupancy permit
required for Lessee to use the Premises.

Section 6.02.Compliance with Law.

(a)Lessor warrants to Lessee that (i) the Premises, in its state existing on the
Commencement Date, but without regard to the use for which Lessee will use the
Premises, does not violate any applicable covenants and restrictions of record,
or any applicable law, permit, building code, building regulation or building
ordinance in effect as of the initial completion of construction thereof, and
(ii) to the actual knowledge of Chris Vanni as manager of Lessor, Lessor has not
received written notice from any governmental authority with jurisdiction over
the Premises that the Premises are in violation of any law, permit, building
code, building regulation or building ordinance in effect as of the date this
Lease is executed which violation remains uncured.

(b)Except as provided in Section 6.02(a), Lessee shall, at Lessee’s expense,
comply promptly with all applicable statutes, ordinances, rules, regulations,
orders, covenants, and restrictions of record in effect during the term or any
part of the term hereof, regulating the use, condition, or occupancy of the
Premises. Without limiting the generality of the foregoing, Lessee shall be
obligated at its sole expense to make all alterations or improvements to the
Premises which may be required by lawful governmental authority due to new laws,
codes, ordinances or other promulgations of lawful governmental authority which
come into effect during the term of this Lease. Notwithstanding the preceding
two sentences, if any structural alterations to the Premises are required as a
result of a change in laws, codes, ordinances, rules, or regulations
(collectively, “Laws”) existing on the Effective Date or as a result of
additional Laws enacted after the Effective Date which changed or additional
Laws are applicable to buildings generally (including the Premises) and are not
applicable to the Premises because of Lessee’s particular use of the Premises or
any improvements, additions or alterations (collectively, “Alterations”) thereto
by Lessee, then Lessor at its sole cost shall cause such alterations to be made,
and the Amortized Portion (as defined below) of such cost shall be paid by
Lessee to Lessor as additional rent each month together with and in the same
manner as payments of rent under Section 4.01 above. The “Amortized Portion” of
costs of items, as reasonably determined by Lessor, shall mean an amount equal
to a fraction of the cost of such item the numerator of which is the lesser
of(i) the number of years remaining in the term, and (ii) the number of years of
the estimated useful life of such item as reasonably determined by Lessor, and
the denominator of which is the number of years of the estimated useful life of
such item as reasonably determined by Lessor, with such amount amortized monthly
over the remainder of the term as of the date such cost is incurred assuming an
interest rate (the “Assumed Interest Rate”) equal to the rate of interest on any
loan obtained by Lessor to pay for such item, or if Lessor does not obtain a
loan to pay for such item, then assuming an interest rate equal to the rate of
interest Lessor would have to pay if Lessor were to borrow such funds, as
reasonably determined by Lessor; provided that, in no event shall the Assumed
Interest Rate exceed ten percent (10%) per annum. If Lessee later exercises its
option to extend the term for five (5) years, then upon commencement of the
Extended Term, if such item was not previously fully amortized pursuant to the
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sentence, then Lessee shall pay as additional rent each month together with and
in the same manner as payments of rent under Section 4.01 an additional
Amortized Portion of the cost of such item equal to a fraction the numerator of
which is the lesser of(i) five, or (ii) the same number of years of the
estimated useful life of such item as originally determined by Lessor as reduced
by the number of years represented in the numerator determined pursuant to the
preceding sentence, and the denominator of which is the same number of years of
the estimated useful life of such item as originally determined by Lessor (with
no reduction in such number reflecting any time which has passed since the item
was made), with such portion amortized monthly over the five year Extended Term
assuming interest thereon over such period at the Assumed Interest Rate.

(c)By executing this Lease, Lessee acknowledges that it has reviewed and
satisfied itself as to its compliance, or intended compliance, with the
applicable zoning and permit laws, hazardous waste requirements, and all other
statutes, laws, or ordinances relevant to the uses stated in Section 6.01 above.

Section 6.03.Condition of Premises.

(a)On the Commencement Date, Lessor shall deliver the Premises to Lessee with
the roof, and all life and safety, electrical, plumbing, gas, HVAC, and other
mechanical and building systems serving the Premises in good operating
condition. ln the event Lessee discovers that any of such items are not in good
operating condition, then provided that Lessee delivers to Lessor notice thereof
on or before one hundred eighty (180) days after the Commencement Date, Lessor
shall cause such item(s) to be repaired at Lessor’s sole expense so as to bring
the same into good operating condition; provided that, Lessor shall have no
obligation to repair any such items that have been modified in any way and to
any extent by any improvements, alterations or additions made by Lessee.

(b)Except as otherwise provided in this Lease, Lessee hereby accepts the
Premises in their condition existing as of the Commencement Date, subject to all
zoning, municipal, county, state, and other applicable laws governing and
regulating the use of the Premises, and any covenants or restrictions of record,
and accepts this Lease subject thereto. Lessee acknowledges that neither Lessor
nor Lessor’s agent has made any representation or warranty as to the present or
future suitability of the Premises for the conduct of Lessee’s business. Except
as specified in Section 3.03 and Section 6.03(a) above, Lessee acknowledges that
Lessor has no obligation to make any improvements or repairs to the Premises at
the outset of the Lease, and except as provided in Section 6.02(a) above is not
warranting that as of the Commencement Date the interior or exterior of the
Premises is in compliance with all ordinances, rules, codes and regulations of
applicable governmental authority, as Lessee, subject to 6.02(a) and 6.03(a) and
Lessor’s other requirements under this Lease, is taking possession of the
Premises in their “as-is” physical condition and will be solely responsible for
making any and all repairs and improvements to the Premises as may be necessary
to operate the Premises for the use specified herein and to bring the Premises
into compliance with all such ordinances, rules, codes and regulations, all of
which repairs and/or improvements shall be made in strict accordance with the
provisions of this Lease and at the sole cost and expense of Lessee. Lessor
advises Lessee, and Lessee acknowledges, that the Premises have not been
inspected by a Certified Access Specialist to determine whether it meets all
applicable construction-related accessibility standards pursuant to California
Civil Code Section 55.53.

Section 6.04.Prohibited Uses.  Notwithstanding anything to the contrary
contained in Section 6.01 above, in no event shall the Premises be used for any
retail use, or for any of the other following uses: (i) health club, spa or
gymnasium, (ii) night club or discotheque, (iii) mobile home park, trailer
court, labor camp, junkyard, or stockyard (except that this provision shall not
prohibit the temporary use of construction trailers during periods of
construction provided Lessee has obtained Lessor’s prior written consent
thereto), (iv) any dumping, disposing, incineration, or reduction of garbage
(except for normal disposal of garbage in dumpsters located adjacent to the rear
of and outside the Premises), (v) any close-out, odd lot, fire sale, bankruptcy
sale or auction house operation, (vi) automobile, truck, trailer or R.V.
leasing, display or repair, (vii) skating rink or roller rink, (viii) living
quarters, sleeping apartments, or lodging rooms, (ix) veterinary hospital or
animal raising or grooming facilities, (x) mortuary, (xi) educational or
training facility, other than ancillary to Lessee’s business at the Premises
(e.g., training employees to conduct such business), (xvii) any movie theater or
other theater use, and (xviii) any use which creates vibrations or offensive
odors which are noticeable outside of the Premises, or any noise or sound which
can be heard outside of the Premises and which is offensive due to
intermittency, beat, frequency, shrillness or loudness, provided any usual
paging system shall be allowed.

 

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ARTICLE VII

HAZARDOUS OR TOXIC MATERIALS

Section 7.01.Hazardous or Toxic Materials.  As used herein, “Hazardous
Materials” means any hazardous, toxic, environmentally damaging or radioactive
materials, substances or wastes, including, but not limited to, those materials,
substances or wastes; (1) defined or listed as hazardous or extremely hazardous
materials or wastes pursuant to Title 22, Division 4.5, Chapter 10 et seq., of
the California Code of Regulations, as may be amended; (2) defined or listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601, et seq. and regulations
promulgated thereunder, as may be amended; (3) defined or listed as hazardous or
acutely hazardous wastes pursuant to the Resource Conservation and Recovery Act,
42 U.S.C. § 6901, et seq. and regulations promulgated thereunder, as may be
amended; and/or (4) which consists in whole or part of petroleum, petroleum
fractions, petroleum products or petroleum distillates.

Section 7.02.Compliance with Environmental Laws.  Lessee, at its sole expense,
shall comply with all applicable governmental rules, regulations, codes,
ordinances, statutes, directives and other requirements respecting protection of
the environment and/or the transport, use, storage, maintenance, generation,
manufacture, handling, discharge, release or disposal of Hazardous Materials
(collectively, “Environmental Laws”) in, on or from the Premises resulting from
or caused by the use of the Premises by Lessee or agents, employees,
contractors, assignees, sublessees or invitees of Lessee. To the extent such
investigations, cleanup or other response actions referred to below in this
sentence result from or are connected with the transport, use, storage,
maintenance, generation, manufacture, handling, discharge, release or disposal
by Lessee or agents, employees, contractors, assignees, sublessees or invitees
of Lessee of Hazardous Materials in or on the Premises or the Business Park or
in the groundwater or soils underneath the same occurring at any time prior to
the expiration or sooner termination of the term of this Lease and vacation of
the Premises by Lessee, then Lessee, at its sole cost, shall perform all
investigations, cleanup and other response actions in, on, or about the Premises
which may be required of Lessee or Lessor by any governmental authority. All
actions by Lessee pursuant to the preceding sentence shall be taken in full
compliance with all Environmental Laws. Without limiting the generality of the
foregoing, Lessee shall at its sole cost: (1) at all times use, handle,
generate, store, transport, and dispose of Hazardous Materials in compliance
with all Environmental Laws; (2) make any and all improvements to the Premises
necessary to assure the lawful and safe use, handling, generation, storage,
transportation, and disposal of Hazardous Materials by Lessee and its agents,
employees, contractors, assignees, sublessees or invitees; and (3) ensure that
valid permits have been obtained and maintained as required by all Environmental
Laws concerning the activities of Lessee and its agents, employees, contractors,
assignees, sublessees and invitees.

Section 7.03.No Underground Tanks.  Under no circumstances shall Lessee install
or permit the installation of, temporarily or permanently, within the Business
Park, any underground tanks relating to the use, storage or disposal of
Hazardous Materials.

Section 7.04.Indemnity.  Lessee hereby indemnifies and agrees to protect, defend
(by legal counsel selected by Lessor and reasonably approved by Lessee) and hold
harmless Lessor, its members, partners, directors, employees, assigns, lenders,
successors, agents, representatives and their respective insurers from and
against all costs (including, but not limited to, environmental response costs),
expenses, claims, judgments, losses, demands, liabilities, causes of action,
governmental directives, proceedings and hearings, including reasonable
attorneys’ and experts’ fees and costs, to the extent relating to the transport,
use, storage, maintenance, generation, manufacture, handling, discharge, release
or disposal of Hazardous Materials by Lessee or agents, employees, contractors,
assignees, sublessees or invitees of Lessee, in or on the Premises or in the
groundwater or soils underneath the same occurring at any time prior to the
expiration or sooner termination of the term of this Lease and vacation of the
Premises by Lessee, and/or relating to the breach of any of the obligations of
Lessee under this Article VII. Without limiting the foregoing, the foregoing
indemnity shall include (A) the cost of environmental consultants, attorneys,
and other consultants as Lessor reasonably determines are appropriate to assist
Lessor in (1) investigating the source, extent, and composition of such
Hazardous Materials, (2) cleaning up or otherwise remediating the same, (3)
dealing with any potential or actual liability of Lessor and/or Lessee
respecting such Hazardous Materials, and (4) otherwise dealing with such
Hazardous Materials, and (B) losses in or reductions to rental income, and (C)
any diminution in the fair market value of the Premises or other affected
property.

 

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Section 7.05.Notification Responsibility.  Lessee shall notify Lessor orally
immediately upon becoming aware of, and in writing within 48 hours after
becoming aware of: (1) any environmental investigation, cleanup or other
environmental response action requested, demanded, instituted or to be
instituted by any person, including a governmental entity, relating to the
transport, use, storage, maintenance, generation, manufacture, handling,
discharge, release, migration or disposal of Hazardous Materials on, in,
beneath, about, adjacent to or from the Premises; (2) any claim or demand made
or threatened by any person, including but not limited to a governmental entity,
against Lessor or Lessee, relating to damages, contribution, cost recovery,
compensation, loss or injury relating to, or claimed to result from, any
Hazardous Materials that have come to be located on, in, beneath, or about the
Premises as the result of the activities of Lessee or of Lessee’s agents,
employees, contractors, assignees, sublessees or invitees, or (3) any data,
workplans, proposals or reports submitted to any governmental entity arising out
of or in connection with any Hazardous Materials on, in, about, or beneath the
Premises, including but not limited to any complaints, notices, warnings of
asserted violations in connection therewith.

Lessee, at its sole cost, shall provide Lessor with copies of all chemical lists
it provides to governmental entities regarding Lessee’s activities on or about
the Premises, as well as any Community Right-to-Know information submitted to
governmental entities regarding chemicals used by Lessee on or about the
Premises, including without limitation, the information required to be submitted
pursuant to California Health and Safety Code, Chapter 6.95, any Hazardous
Materials management plan required by the County of Santa Clara, and any other
reports submitted by Lessee to any and all governmental entities respecting
Hazardous Materials.

Section 7.06.Inspection Rights.  Lessor shall have the right, but not the
obligation, in its sole discretion, to enter upon the Premises to inspect,
sample and/or monitor the Premises regarding Hazardous Materials on, in, beneath
or about the Premises. Lessor shall give Lessee twenty four (24) hours advance
notice of any such inspection, except in the event of an emergency, in which
case no such notice shall be required. When conducting any such inspections,
Lessor shall avoid unreasonably disrupting Lessee’s activities on the Premises.
Lessee shall reasonably cooperate with Lessor to facilitate any such inspection
by Lessor. Any such entry and inspection may be conducted by Lessor or by
Lessor’s designated agents, representatives or contractors. If Lessor discovers
that Lessee is not in compliance with the terms of this Article VII, any costs
incurred by Lessor in connection with such inspections, sampling and/or
monitoring, including attorney’s and/or consultants’ fees, shall be due and
payable by Lessee to Lessor within five (5) days following Lessor’s written
demand therefor.

Section 7.07.No Releases or Use; Return of Premises.  Lessee shall not cause or
permit to be released any Hazardous Materials into the groundwater or soils
underlying or adjacent to the Building. Lessee represents and warrants to
Lessor, and covenants with Lessor, that during the Term, except for ordinary
office and cleaning products in amounts reasonably necessary for Lessee’s
permitted use of the Premises and then only to the extent in compliance with all
Environmental Laws regarding the same, Lessee and its subtenants, assignees,
employees, contractors, and invitees shall not generate, handle, place,
discharge, release, store, dispose of, or otherwise use Hazardous Materials in,
on, about, or under the Premises, including, without limitation, the soils and
groundwater thereunder. Prior to the expiration or termination of this Lease,
Lessee shall (1) remove all Hazardous Materials which have become located on,
in, beneath or about the Premises as the result of, and (2) decontaminate and
remove any equipment, improvements or facilities used by Lessee at the Premises
in connection with the transport, use, storage, maintenance, generation,
manufacture, handling, discharge, release or disposal of Hazardous Materials by
Lessee or Lessee’s agents, employees, contractors, assignees, sublessees or
invitees, on, in, beneath, about or from the Premises, such removal, and
decontamination and removal to be performed in full compliance with applicable
Environmental Laws. With respect to Hazardous Materials other than ordinary
office and cleaning products in amounts reasonably necessary for Lessee’s
permitted use of the Premises that have been used by Lessee in compliance with
all Environmental Laws regarding the same, not later than 90 days prior to the
expiration date of the Lease or immediately upon any sooner termination, Lessee
shall submit to Lessor for Lessor’s approval Lessee’s written plan for such
removal, decontamination and disposal of Hazardous Materials which plan shall
identify (1) the Hazardous Materials to be removed and disposed of, (2) the
equipment or other portions of the Premises to be removed, decontaminated and/or
disposed of, (3) the method(s) by which such removal, decontamination, and
disposal will be accomplished, and (4) the licensed and bonded contractor(s) who
will perform such removal, decontamination and disposal. Prior to preparation of
such written plan, Lessee at its sole cost shall cause to be performed such
tests as Lessor may reasonably require, by an environmental consultant
reasonably designated by Lessor, to ascertain whether Hazardous Materials exist
in the soils or groundwater underneath the Premises, or in any improvements on
the Premises.

 

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Section 7.08.Controlling Provisions; Survival of Covenants.  To the extent any
of the provisions of this Lease conflict with the provisions of this Article
VII, the provisions of this Article VII shall be controlling. The obligations of
Lessee under this Article VII shall survive the termination or expiration of the
term of this Lease.

ARTICLE VIII

MAINTENANCE. REPAIRS AND ALTERATIONS

Section 8.01.Maintenance - Premises.

(a)Lessor shall maintain in good and safe condition, order and repair, and
replace as and if necessary the following components of the Premises and the
Building: (i) the roof structure, the roof membrane, and all other components of
the roof of the Building, (ii) structural and nonstructural elements of the
exterior walls (including windows, doors, and painting) of the Building, and
structural and nonstructural elements of interior load-bearing walls, if any, of
the Building, (iii) the foundation of the Building, and (iv) heating,
ventilating, and air conditioning (“HVAC”), electrical, gas, water, sewer and
all other Building systems (other than security systems and telephone and other
communications systems of Lessee) including wiring, pipes, and other conduits
pertaining thereto. Lessor shall initially pay the costs of such maintenance,
repair and replacement, subject to payment by Lessee of all or a portion of such
costs pursuant to the provisions set forth below in this Section 8.01. Lessor
shall commence making repairs under this Section 8.01(a) as promptly as
reasonably possible after Lessor’s receipt of notice from Lessee of the need for
such repairs; provided that, in all events Lessor shall commence repairs no
later than thirty (30) days after Lessor’s receipt of notice from Lessee of the
need therefor and thereafter diligently continue the same until completion
thereof. The preceding sentence shall not be construed to require physical
repair work to have commenced within the time period specified above, as Lessor
shall be deemed to have commenced repairs merely by contacting (by telephone or
otherwise) a contractor to perform such work, whether or not such contractor is
actually ultimately hired or is able to commence physical work within such time
period. In connection with all of Lessor’s activities under this paragraph,
Lessor shall make a reasonable effort to minimize any disruption of Lessee’s
business, provided that Lessor shall not be obligated to incur overtime costs to
employ workers who work after normal business hours and on weekends except to
the extent such work entails concrete sawcutting, jackhammering, or activities
of the same or higher levels of noise in which event such work shall be
performed after normal business hours and/or on weekends. Except as otherwise
specifically provided in Article X below (damage and destruction), there shall
be no abatement of rent or other sums payable by Lessee prior to or during any
repairs by Lessee or Lessor, and Lessee waives all claims for loss of business
or lost profits relating to any such repairs. Lessor shall also maintain in good
operating condition and repair the card security system for the Building (but
not any interior card access system for entry from the Common Lobby to the
Premises or for entry to the Premises from anywhere else in the Building,
maintenance of which shall be the sole responsibility of Lessee), and shall
issue security cards therefor to all employees of Lessee at the outset of the
Lease term as well as all new employees of Lessee during the Lease term at no
additional charge to Lessee; provided that, Lessee shall pay $25 per card to
replace each stolen or lost card after initial issuance by Lessor. Lessor shall
also cause exterior windows to be washed no less often than once per year.
Notwithstanding the foregoing, Lessor in its sole discretion may by delivery to
Lessee of notice thereof elect to have Lessee maintain, repair and replace as
and when necessary any portion of the HVAC system serving the ground floor of
the Building that serves exclusively only a portion of the Premises (such as the
HVAC system serving only the server room situated within the Premises), in which
event from and after delivery of such notice: (i) Lessor shall no longer have
any obligation to maintain, repair or replace the same, (ii) Lessee shall
maintain, repair or replace the same as specified in Section 8.0l(b) below, and
(iii) the costs allocable to the entire Building that Lessee is obligated to pay
50.91% of to Lessor as additional rent pursuant to the following paragraph shall
be adjusted equitably to reflect that Lessee not Lessor is responsible for costs
to repair, maintain or replace the same. Notwithstanding anything to the
contrary in the preceding sentence, Lessee’s obligation to maintain and repair
such HVAC system shall not include an obligation to replace if and only if
Lessee has Properly Maintained such HVAC system. “Properly Maintained” means
that during the entire period of time that Lessee is obligated to maintain and
repair such HVAC system, Lessee has hired a third party HVAC service contractor
reasonably satisfactory to Lessor who has inspected such system no less
frequently than once every three months, and who has performed routine
maintenance, repair and/or replacement of components of such system as and to
the extent recommended by such third party HVAC inspector, and Lessee at its
sole expense has paid all of the costs of such inspection, maintenance, repair
and/or replacement.

 

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Notwithstanding the preceding paragraph, with respect to all costs incurred by
Lessor to perform its maintenance, repair and replacement obligations under
Section 8.01, Lessee shall pay as additional rent 100% of such costs allocable
solely to the Premises, 50.91% of such costs allocable to the entire Building
and 10.12% of such costs allocable to the entire Business Park as reasonably
determined by Lessor within thirty (30) days after Lessor provides Lessee with a
written statement of the amount of such costs actually incurred by Lessor;
provided that, to the extent such costs are capitalized by Lessor for accounting
purposes, then instead of paying the entire amount of Lessee’s share of such
costs (as such share is specified above in this sentence) in a single payment,
Lessee shall pay the Amortized Portion (as defined in Section 6.02 above) of
such costs over the balance of the Lease term (with additional Amortized Portion
payments during any Extended Term as provided in Section 6.02 above)as
additional rent each month together with and in the same manner as payments of
rent under Section 4.01 above. Further notwithstanding the preceding paragraph,
the costs incurred by Lessor to perform its maintenance, repair and replacement
obligations under Section 8.01 shall not include any of the items listed in
clauses (i) through (xvii) of the last full paragraph of Section 8.02(b) below.

(b)Throughout the term, except as provided in Section 8.0l(a) above, Lessee
agrees to keep and maintain each and every part of the Premises, in good and
safe condition, order and repair, reasonable wear and tear and damage due to
casualty excepted. Lessee hereby expressly waives the provisions of any law
permitting repairs by a tenant at the expense of a landlord, including, without
limitation, all rights of Lessee under Sections 1941 and 1942 of the California
Civil Code. Lessee agrees to keep the Premises clean and in sanitary condition
as required by the health, sanitary and police ordinances and regulations of any
political subdivision having jurisdiction. Notwithstanding anything to the
contrary contained in Section 8.0l(a) above, Lessee further agrees at its sole
cost (i) to keep the interior of the Premises, such as the interior surfaces of
windows, carpets, floors, walls, and doors clean and neat in appearance, (ii) to
place all trash and debris which may be found in or around the Premises in waste
baskets, and (iii) to maintain in good operating condition all security,
telephone, internet and other systems, including machinery, equipment, wiring,
and other conduits pertaining thereto, serving all or a portion of the Premises
only, (iv) to maintain in good condition all glass within the Premises, (v) to
maintain in good operating condition the HVAC system serving exclusively only a
portion of the Premises, including machinery, equipment, wiring, pipes, and
other conduits pertaining thereto, from and after the delivery by Lessor of the
notice specified in Section 8.01(a) by which Lessor elects to have Lessee
repair, maintain and replace as and when necessary any portion of the HVAC
system serving the ground floor of the Building that serves exclusively only a
portion of the Premises (provided that, Lessee’s obligation to maintain and
repair such HVAC system shall not include an obligation to replace if and only
if Lessee has Properly Maintained such HVAC system), and (vi) to repair any
damage in excess of reasonable wear and tear to portions of the Premises
otherwise to be maintained by Lessor under Section 8.0l(a) above caused by
Lessee or its agents, contractors, employees or invitees. If Lessee refuses or
neglects to commence such repairs and/or maintenance required under this Lease
or does not diligently prosecute same to completion within forty five (45) days
after written notice thereof, then Lessor may enter the Premises and cause such
repairs and/or maintenance to be made. Lessee agrees that upon demand, it shall
pay to Lessor the cost of any such repairs, together with accrued interest from
the date of payment at ten percent (10%) per annum. Notwithstanding anything to
the contrary above, in the event that Lessee fails to comply with its
maintenance obligations in this Section 8,01(b) and such failure continues for a
period of fifteen (15) days after delivery by Lessor to Lessee of notice of such
failure specifying in reasonable detail the nature of such failure, Lessor may
elect to enter into a maintenance contract with a third party for the provision
of all or a part of Lessee’s maintenance obligations as set forth in this
Section 8.01. Upon such election, Lessee shall be relieved from its obligations
to perform only those maintenance obligations covered by the maintenance
contract, and Lessee shall bear its pro rata share, as set forth in Section 8.02
below, of the costs of such maintenance contract which shall be paid in advance
on a monthly basis with Lessee’s rent payments.

Section 8.02.Maintenance - Common Areas.  Lessor shall maintain in good
condition and repair the Common Areas, together with all facilities and
improvements now or hereafter located thereon, and together with all street
improvements or other improvements adjacent thereto as may be required from time
to time by governmental authority. Lessor shall also maintain in good condition
and repair all interior portions of the Building other than the Premises and the
premises of other tenants in the Building, including the Common Lobby and the
common hallways identified on Exhibit B hereto, and provide janitorial services
for such interior common areas at such times and to such extent as specified in
Article XII or if not specified in Article XII then as Lessor determines in its
sole discretion is appropriate. The manner in which such areas shall be
maintained and the expenditures therefor shall be at the sole discretion of
Lessor. Lessor shall at all times have exclusive control of the Common Areas and
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time temporarily close any part thereof, may exclude and restrain anyone from
any part thereof (except the bona fide customers, employees and invitees of
Lessee who use the Common Areas in accordance with the rules and regulations
that Lessor may from time to time promulgate), and Lessor may change the
configuration of the Common Areas or the location of facilities thereon so long
as any such change by Lessor does not unreasonably interfere with Lessee’s use
of or access to the Premises. Lessor shall also be entitled to employ third
parties to operate and maintain all or any part of such areas, and to perform
janitorial work, on such terms and conditions as Lessor shall determine in its
sole discretion, so long as consistent with Article XII. The surface parking
facilities shall be available for the automobiles of Lessee and Lessee’s
customers, employees and invitees on a non­ assigned, non-exclusive basis,
subject to Section 2.02. In connection with all of Lessor’s activities under
this paragraph, Lessor shall make a reasonable effort to minimize any disruption
of Lessee’s business, provided that Lessor shall not be obligated to incur
overtime costs to employ workers who work after normal business hours and on
weekends except to the extent such work entails concrete sawcutting,
jackhammering, or activities of the same or higher levels of noise in which
event such work shall be performed after normal business hours and/or on
weekends. Except as otherwise specifically provided in Article X below (damage
and destruction), there shall be no abatement of rent or other sums payable by
Lessee prior to or during any repairs by Lessee or Lessor, and Lessee waives all
claims for loss of business or lost profits relating to any such repairs. Lessee
shall have the obligation to notify Lessor, in writing, of any repairs or
maintenance to the Common Areas which may be required, and Lessor shall have a
reasonable time to make repairs; provided that, Lessor shall commence repairs as
promptly as reasonably possible, and in all events, no later than thirty (30)
days, after Lessor’s receipt of notice from Lessee of the need therefor and
thereafter shall diligently continue the same until completion thereof. The
preceding sentence shall not be construed to require physical repair work to
have commenced within such thirty (30) day period of time, as Lessor shall be
deemed to have commenced repairs merely by contacting (by telephone or
otherwise) a contractor to perform such work, whether or not such contractor is
actually ultimately hired or is able to commence physical work within such
thirty (30) period.

Lessee shall pay to Lessor, as additional rent, in the manner and at the time
provided below, Lessee’s proportionate share, as defined below, of all costs and
expenses incurred by Lessor in the operation and maintenance of the Common Areas
of the Business Park during the term of this Lease. Such costs and expenses
shall include, without limiting the generality of the foregoing, all
maintenance, pest control, security, gardening, landscaping, cost of public
liability, property damage, vandalism and malicious mischief, earthquake, and
other insurance deemed necessary by the Lessor, real property taxes, property
taxes, property management costs, including a management fee as determined by
Lessor (which shall in no event exceed 5% of Lessee’s base rent as set forth in
Section 4.01 or as such base rent is determined pursuant to Section 3.02(b)
payable for the period of time covered by such fee), painting, lighting,
cleaning, trash removal, fire protection, and similar items.

Lessee’s proportionate share of such Common Area expenses shall be 10.12%, which
is based on the ratio between the approximately 24,630 rentable square feet
within the Premises and the total of approximately 243,364 rentable square feet
within buildings in the Business Park. Such square footage is measured from the
exterior surface of all exterior walls, and includes entryways and the area
under covered docks. Lessee acknowledges that it has measured the square footage
of the Premises, or has had adequate opportunity to do so, and that the square
footage of the Premises set forth above shall be conclusive unless the area of
the Premises changes subsequent to the Commencement Date. Notwithstanding
Section 8.0l(a), Lessee shall also pay an equitable portion (as reasonably
determined by Lessor) of any costs incurred by Lessor to maintain the front
entry door to the Building, and to maintain HVAC, electrical, gas, water, sewer
and all other Building systems.

Lessor shall bill Lessee monthly for Lessee’s proportionate share of costs set
forth in this Section 8.02, which costs shall be based upon the previous month’s
actual costs and expenses unless Lessor changes its billing system to one based
on estimated costs. Lessee shall pay such proportionate share within thirty days
of receipt of said billing statement from Lessor together with copies of
invoices or other reasonable evidence of such costs. Lessor shall account for
such expenditures in a consistent fashion, such that such costs from one year to
the next are similarly identified and accounted for. In the event Lessor changes
its system of billing costs set forth in this Section 8.02 from one based on
actual costs incurred during the previous month to one based on estimated costs,
then from and after such date, within the ninety (90) day period of time
immediately following the later of the end of a calendar year or the date of
Lessor’s delivery to Lessee of the billing of Lessee’s proportionate share of
exterior and interior common area costs for the month of December of such
calendar year, Lessee shall be entitled to examine the books and records of
Lessor pertaining only to such expenditures incurred during such calendar year
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during normal business hours of normal business days at Lessee’s expense for a
period not to exceed three (3) consecutive days; provided however, if such
examination reveals that Lessor has overcharged Lessee for such costs by more
than five percent (5%), Lessor shall reimburse Lessee for the costs of such
examination up to but not to exceeding Five Thousand Dollars ($5,000), and if
such examination reveals that Lessor has not overcharged Lessee for such costs
at all, then Lessee shall pay Lessor Five Thousand Dollars ($5,000) for its time
dealing with such examination; and provided further, within thirty (30) days
following such examination, the parties shall reconcile such costs.

Notwithstanding anything to the contrary contained in this Section 8.02, common
area expenses shall not include: (i) any fine or penalty, including interest or
penalties for late payment, not caused by Lessee; (ii) to the extent recovered
by Lessor, costs attributable to repairing or maintaining items which are
covered by warranties, other contracts, or insurance maintained by Lessor; (iii)
the cost of constructing tenant improvements for any other tenant of the
Business Park; (iv) legal fees, accountants’ fees, and other expenses incurred
by Lessor in connection with disputes of tenants or other occupants of the
Business Park or associated with the enforcement of the terms of any leases with
tenants of the Business Park or the defense of Landlord’s title to or interest
in the Business Park or any part thereof; (v) payments of rent under and ground
leases of the Premises or the Business Park; (vi) Lessor’s overhead and
administrative costs to the extent exceeding the management fee charge permitted
pursuant to the provisions of this Section 8.02; (vii) brokerage commissions,
attorneys’ fees, accounting costs, and other costs directly related to leasing
space in the Business Park; (viii) executive salaries or salaries of service
personnel to the extent that such personnel perform services not in connection
with the management, operation, repair, or maintenance of the Business Park;
(ix) any costs incurred by Lessor to maintain, repair, and replace all or any
portion of the exterior walls, foundation, or structural components of any
building in the Business Park (provided, Lessee’s prorata share of such costs
pertaining to the Building only may be charged back to Lessee pursuant to
Section 8.01 above); (x) costs incurred by Lessor for repairing damage which
costs are actually recovered from insurance proceeds (or if Lessor fails to
carry the insurance which it is required to carry under this Lease, the costs
that would have been recovered from insurance proceeds had Lessor carried such
insurance) or condemnation awards; (xi) costs of new improvements to the
Business Park (as opposed to repair, maintenance, or restoration of existing
improvements), except to the extent required by codes, ordinances, or other laws
enacted after the Effective Date in which event the cost thereof will be handled
in the manner set forth in Section 6.02(b) with the Amortized Portion payable as
additional rent; (xii) advertising, marketing and promotional costs; (xiii)
entertainment, dining or travel expenses; (xiv) the cost of any magazine,
newspaper, trade or other subscriptions; (xv) the cost of any training or
incentive programs; (xvi) Lessor’s gross receipts taxes, personal and corporate
income taxes, inheritance and estate taxes, and franchise, gift and transfer
taxes; and (xvii) reserves of any kind.

Section 8.03.Alterations and Additions.  No alterations or additions shall be
made to the Premises by Lessee without the prior written consent of Lessor which
Lessor will not unreasonably withhold, except for nonstructural work
contemplated by Section 3.04 and nonstructural alterations the aggregate cost of
which during the entire term of the Lease does not exceed Ten Thousand Dollars
($10,000) which Lessee shall be entitled to make without first obtaining
Lessor’s consent subject to all the other provisions of this Section 8.03, and
provided further that prior to expiration or sooner termination of the Lease
term Tenant removes such alterations made without Lessor’s consent and restores
the Premises to its condition immediately prior to making the same. In no event
shall any alteration or addition be of such a nature as to reduce or otherwise
adversely affect the value of the improvements within the Premises immediately
before making such alterations or additions, or to diminish the general utility
of the Premises for the permitted uses hereunder. Lessor shall have absolutely
no obligation to consider or consent to any request by Lessee to make any
alteration or addition that affects the structural elements of the Premises or
the roof membrane of the Premises. As a condition of giving its consent to any
proposed alterations or additions, Lessor may require that Lessee agree to
remove any such alterations or improvements at the expiration of the term and to
restore the Premises to their prior condition, provided that if Lessor does not
as a condition of such consent so require Lessee to remove such alterations and
additions at the expiration of the term and restore the Premises to its
condition prior to making such alterations and additions, then Lessee shall at
the expiration of the term not have an obligation to remove the same or in
connection therewith to restore the Premises to its condition prior to the
making of such alterations and additions. As a further condition to giving such
consent, Lessor may require Lessee to provide Lessor, at Lessee’s sole cost and
expense, with a lien and completion bond in an amount equal to one and one-half
(l-1/2) times the estimated cost of such improvements, to insure Lessor against
any liability for mechanic’s and materialmen’s liens and to insure completion of
the work. As to any alterations or additions made by Lessee without Lessor’s
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provided above), Lessee shall, unless otherwise requested in writing by Lessor
prior to expiration or sooner termination of the Lease term, remove the same
from the Premises and restore the Premises, including any building systems
affected thereby, to its condition existing immediately prior to such alteration
or addition being made (subject to reasonable wear and tear). All changes,
alterations, or additions to be made to the Premises shall be under the
supervision of a competent architect or competent licensed structural engineer
and made in accordance with plans and specifications that have been furnished to
and approved by Lessor prior to commencement of work. If the written consent of
Lessor to any proposed alterations by Lessee shall have been obtained, Lessee
agrees to advise Lessor in writing of the date upon which such alterations will
commence in order to permit Lessor to post a notice of non-responsibility. All
such alterations, changes and additions shall be constructed in good and
workmanlike manner in accordance with all ordinances and laws relating thereto.
Lessee shall deliver to Lessor “as built” plans of any improvements or
alterations to the Premises made by Lessee during the term of this Lease. Any
such changes, alterations or additions to or on the Premises shall remain for
the benefit of and become the property of Lessor, unless Lessor requires their
removal by giving Lessee written notice at least ninety (90) days before the
scheduled expiration of the Lease term, or within thirty (30) days after any
sooner termination of the term.

Section 8.04.Initial Tenant Improvements.  Except as provided in Section 6.03,
Lessor has no obligation to make or to cause to be made by a contractor any
improvements or alterations to the Premises at the outset of the Lease term.

Section 8.05.Plumbing.  Lessee shall not use the plumbing facilities for any
purpose other than that for which they were constructed. The expense of any
breakage, stoppage or other damage relating to the plumbing and resulting from
the introduction by Lessee, its agents, employees, or invitees of foreign
substances into the plumbing facilities shall be borne by Lessee.

ARTICLE IX

INSURANCE

Section 9.01.Property/Rental Insurance - Premises.  During the term of this
Lease, Lessor shall keep the Building insured against loss or damage by fire and
those risks normally included in the term “all risk” including (a) flood
coverage, (b) earthquake coverage at the election of Lessor, (c) coverage for
loss of up to 12 months of rents (including taxes, insurance, and common area
costs), and (d) boiler and machinery coverage if Lessor deems such coverage
necessary. Lessee shall pay 50.91% of any deductibles to the extent the
deductible relates to damage to the entire Building, and 100% of any deductibles
shall be paid by Lessee to the extent the deductible relates solely to damage to
the Premises or if Lessee causes the damage. Payment of deductibles shall be
made within thirty (30) days after written request by Lessor therefor together
with reasonable evidence of the amount thereof. Notwithstanding the foregoing,
the amount of such deductible payable by Lessee upon request therefor by Lessor
shall not exceed an amount equal to one’s month’s base rent based on the monthly
rent amount payable under this lease at the time such deductible payment is so
requested by Lessor, with any balance of such deductible paid by Lessee in equal
installments amortized over the then remaining balance of the lease term,
assuming interest thereon at the rate of the lesser of 12% per annum or the
highest rate then allowed under law. For purposes of calculating the balance of
the lease term pursuant to the preceding sentence, no unexercised options to
extend the term shall be taken into consideration (in other words, any option
period shall not be included in calculating the remaining balance of the term).
The amount of such insurance shall be not less than one hundred percent (100%)
of the replacement value of the Building, excluding excavations and foundations.
Lessor shall be entitled to procure such insurance under a blanket policy of
insurance covering one or more buildings in the Business Park owned by Lessor.
Any recovery received from said insurance policy or policies shall be paid to
Lessor, and Lessee shall have no interest in any such proceeds.

Lessee, in addition to the rent and other charges provided herein, agrees to pay
to Lessor 50.91% of the premiums allocated by Lessor’s insurer to the Building
for all such insurance; provided that, if such insurer does not so allocate
insurance premiums among the buildings in the Business Park, then Lessee shall
pay 10.12% of the insurance premiums payable by the Business Park for such
insurance. The insurance premiums shall be paid in accordance with Article IV,
within thirty (30) days of Lessee’s receipt of a copy of Lessor’s statement
therefor together with reasonable evidence of the amount thereof.

 

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Section 9.02.Property Insurance - Fixtures and Inventory.  During the term,
Lessee shall, at its sole expense, maintain insurance with “all risk” coverage
on any trade fixtures, leasehold improvements made by Lessee, furnishings,
merchandise, equipment, or personal property in or on the Premises, whether in
place as of the date hereof or installed hereafter, for the full replacement
value thereof, and Lessor shall not have any responsibility nor pay any costs
for maintaining any types of such insurance. Any deductibles under such
insurance shall be paid by Lessee. All proceeds from such insurance shall belong
to Lessee and shall be used to restore or replace the items damaged; provided
that with respect to all such leasehold improvements and fixtures, and with
respect to all equipment that services such leasehold improvements (such as HVAC
serving a new server room) or other portions of the Premises, Lessee shall use
such proceeds of insurance or its own monies to restore or replace the items
damaged unless the Lease is terminated pursuant to the provisions of Article X.

Section 9.03.Lessor’s Liability Insurance.  During the term, Lessor shall
maintain a policy or policies of comprehensive general liability insurance
insuring Lessor (and such others as designated by Lessor) against liability for
bodily injury, death and property damage on or about the Building or the Common
Area of the Business Park, with a minimum combined single limit of liability
coverage of no less than Two Million Dollars ($2,000,000) covering all bodily
injury, property damage, and personal injury or death, however occasioned,
occurring in, on, or about the Common Areas of the Business Park, or in portions
of the Building outside the Premises.

Lessee, in addition to the rent and other charges provided herein, agrees to pay
to Lessor 10.12% of the premiums for all such insurance (except that Lessor
shall be entitled to equitably adjust such percentage if Lessor determines that
any one or more tenants in the Business Park have caused an increase in such
premiums through a change in use of their premises or otherwise, in which event
Lessor may allocate a higher percentage of such premiums to such tenants than a
percentage share based solely on square footage and correspondingly allocate a
lower percentage of such premiums to the rest of the tenants in the Business
Park). The insurance premiums shall be paid in accordance with Article IV,
within thirty (30) days of Lessee’s receipt of a copy of Lessor’s statement
therefor together with reasonable evidence of the amount thereof.

Section 9.04.Lessee’s Liability Insurance.  Lessee shall, at its sole cost and
expense, obtain and keep in force during the term of this Lease comprehensive
general liability insurance against claims of bodily injury, personal injury,
and property damage (including loss of use thereof) arising out of the
condition, use, occupancy, and maintenance of the Premises and the business
operated by Lessee (and if Lessee subleases all or any portion of the Premises
then Lessee shall provide Lessor evidence reasonably satisfactory to Lessor that
such sublessee has obtained such insurance covering the business operated by
such sublessee in the subleased space) on the Premises and applying also to
Lessee’s use of the Common Lobby for access and egress purposes. Such insurance
shall include broad form contractual liability insurance coverage insuring all
of Lessee’s indemnity obligations under this Lease to which such insurance
applies. Such coverage shall have a minimum combined single limit of liability
of at least Five Million Dollars ($5,000,000). All such liability policies shall
be written to apply to bodily injuries, property damages and personal injuries.
All such liability policies shall include Lessor and any lender named by Lessor
as additional insureds and provide that any insurance maintained by Lessor shall
be excess insurance only. Such coverage shall also contain endorsements: (i)
deleting any employee exclusion on bodily injury coverage; and (ii) including
employees as additional insureds. Lessee shall obtain a separate policy meeting
the above coverage requirements that provides for coverage of employer’s
automobile non-ownership liability. All such insurance shall provide for
separation of insureds; and shall afford coverage for all claims based on acts,
omissions, injury and damage, which claims occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy period. The
limits of all insurance described in this Section 9.04 shall not, however, limit
the liability of Lessee hereunder. Not more frequently than once each calendar
year if, in the reasonable opinion of Lessor, the amount of insurance required
hereunder is not adequate, Lessee shall increase said insurance coverage as
reasonably required by Lessor; provided that, in no event shall any such
increase result in an increase in the premium therefor of greater than twenty
percent (20%) of the amount of the premium during the preceding year of the term
of this Lease. The failure of Lessor to require any additional insurance
coverage at any time shall not relieve Lessee from the obligation to provide
increased coverage at any later time or relieve Lessee from any other
obligations under this Lease. Lessee shall furnish to Lessor prior to the
Commencement Date, and at least ten (10) days prior to the expiration date of
any policy, certificates indicating that the liability insurance required to be
carried by Lessee is in full force and effect. Such policy of liability
insurance shall specifically provide that such policy shall not be subject to
cancellation or reduction of coverage except after at least ten (10) days prior
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insurance shall be with insurers approved by Lessor and with policies in form
satisfactory to Lessor, provided however, that such approval shall not be
unreasonably withheld.

Section 9.05.Waiver of Subrogation.

(a)Notwithstanding anything to the contrary contained in this Lease, Lessee
hereby (i) releases and waives any rights it may have against Lessor and its
officers, agents and employees from any and all claims or demands of damages,
loss, expense, or injury occasioned to Lessee, or Lessee’s property within the
Premises or Business Park, arising from any risk covered by fire and extended
coverage insurance maintained by Lessee, whether or not due to the negligence of
Lessor, its agents, employees, contractors, licensees, invitees or other
persons, and (ii) waives on behalf of any insurer providing such insurance to
Lessee, any right of subrogation that any such insurer may have or acquire
against Lessor or such persons by virtue of payment of any loss under such
insurance.

(b)Notwithstanding anything to the contrary contained herein, Lessor hereby (a)
releases and waives any rights it may have against Lessee and its officers,
agents and employees from any and all claims or demands of damages, loss,
expense, or injury occasioned to Lessor, or Lessor’s property within the
Business Park, arising from any risk covered by fire and extended coverage
insurance maintained by Lessor, to the extent of insurance proceeds actually
received by Lessor, whether or not due to the negligence of Lessee, its agents,
employees, contractors, licensees, invitees or other persons, and (b) waives on
behalf of any insurer providing such insurance to Lessor, any right of
subrogation that any such insurer may have or acquire against Lessee or such
persons by virtue of payment of any loss under such insurance.

(c)Lessor and Lessee shall each obtain such policies of insurance as required
hereunder that are not invalidated or prejudiced by the releases described above
in this Section 9.05 so long as such policies are available at commercially
reasonable rates. Each party shall cause each such insurance policy obtained by
it to provide that the insurance company waives all right of recovery by way of
subrogation against the other party in connection with any damage covered by
such policy. If either party is unable to obtain such a waiver of subrogation
with respect to the applicable policies of insurance, such party shall so notify
the other party hereto in writing of such failure.

Section 9.06.Indemnification.  Except to the extent of Lessor’s active
negligence or willful misconduct, Lessee will indemnify Lessor and save it
harmless from and against any and all claims, actions, damages, liability and
expense in connection with loss of life, personal injury and/or damage to
property arising from or out of any occurrence in, upon or at the Premises, or
the occupancy or use by Lessee of the Premises or any part hereof, or to the
extent caused by acts or omissions of Lessee, its agents, contractors,
employees, servants, licensees, or concessionaires or by anyone permitted to be
on the Premises by Lessee. In case Lessor shall be made a party to any such
litigation commenced by or against Lessee, then Lessee shall protect and hold
Lessor harmless from all claims, liabilities, costs and expenses, and shall pay
all costs, expenses and reasonable legal fees incurred by Lessor in connection
with such litigation, except to the extent caused by the active negligence or
willful misconduct of Lessor.

Section 9.07.Waiver of Claims.  Except to the extent caused by the active
negligence or willful misconduct of Lessor, Lessee hereby waives any claims
against Lessor for injury to Lessee’s business or any loss of income therefrom
or for damage to the goods, wares, merchandise or other property of Lessee, or
for injury or death of Lessee’s agents, employees, invitees, or any other person
in or about the Premises or the Business Park from any cause whatsoever,
regardless of whether the same results from conditions existing upon the
Premises or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Lessee. Notwithstanding the foregoing, Lessee waives all claims against Lessor
for loss of business or other consequential damages regardless of the cause
thereof, including without limitation Lessor’s negligence or willful misconduct.

Section 9.08.Plate Glass Replacement.  Lessee shall replace at its sole expense,
any and all plate glass and other glass in and about the Premises that is
damaged or broken by vandalism. If any plate glass or other glass in and about
the Premises is damaged or broken by causes other than vandalism, then Lessor
shall replace the same and Lessee shall reimburse Lessor an amount equal to
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exceed the deductible then in effect on Lessor’s insurance policy, if any,
covering the damaged glass. Nothing herein shall be construed to require Lessor
to carry plate glass insurance.

ARTICLE X

DAMAGE OR DESTRUCTION

Section 10.01.Right to Terminate on Destruction of Premises or Building.  Lessor
shall have the right to terminate this Lease if, during the term, the Premises
are damaged to an extent exceeding thirty-three percent (33%) of the then
reconstruction cost of the Premises as a whole, or if, during the term, the
Building is damaged to an extent exceeding thirty-three percent (33%) of the
then reconstruction cost of the Building as a whole, excluding the cost of
excavation of the foundation, regardless whether the Premises are damaged.
Lessor shall also have the right to terminate this Lease if any portion of the
Premises is damaged by an uninsured peril; provided that Lessor shall not have
such right to terminate if the reason such damage is uninsured is because Lessor
failed to obtain and maintain in effect insurance that Lessor is expressly
required to obtain and maintain in effect under the provisions of this Lease. In
any such case, Lessor may elect to terminate as provided above by written notice
to Lessee delivered within sixty (60) days of the happening of such damage. Both
Lessee and Lessor shall have a right to terminate this Lease if, during the
term, the Premises are damaged to an extent that the estimated restoration time
therefor, including obtaining requisite governmental permits for such
restoration and any insurance proceeds necessary to pay for such restoration, as
such period of time is reasonably estimated by Lessor, exceeds two hundred
seventy (270) days from the date of such damage. Lessor shall notify Lessee of
its estimate of the restoration time promptly after Lessor determines the same.
Each party shall exercise its right of termination pursuant to the preceding
sentence, if at all, by written notice to the other within twenty (20) days
after Lessor delivers notice to Lessee of Lessor’s estimate of the restoration
time. Any such notice of termination shall be effective, and shall result in
termination of this Lease, thirty (30) days after delivery thereof. Lessor shall
have no further obligation to repair such damage after the date of any such
notice of termination by Lessee.

Section 10.02.Repairs by Lessor.  If neither Lessor nor Lessee elects to
terminate this Lease pursuant to Section 10.01, Lessor shall, immediately upon
receipt of insurance proceeds paid in connection with such casualty, but in no
event later than one hundred twenty (120) days after such damage has occurred,
proceed to repair or rebuild the Premises, on the same plan and design as
existed immediately before such damage or destruction occurred and will proceed
expeditiously to complete such restoration, subject to such delays as may be
reasonably attributable to governmental restrictions or failure to obtain
materials or labor, or otherwise due to causes beyond the control of Lessor.
Lessee shall be liable for the repair and replacement of all trade fixtures,
leasehold improvements made by Lessee, furnishing, merchandise, equipment and
personal property as provided in Section 9.02.

Section 10.03.Reduction of Rent During Repairs.  In the event Lessee is able to
continue to conduct its business from and after the occurrence of the damage
until completion of repairs, the rent then prevailing under Section 4.01 will be
equitably reduced in the proportion that the square footage of the unusable part
of the Premises bears to the square footage of the whole thereof for such period
of time. No rent shall be payable while the Premises are wholly unusable due to
casualty damage.

Section 10.04.Lessor’s Overriding Right to Terminate.  Notwithstanding anything
to the contrary herein, if the proceeds payable to Lessor under insurance
required to be maintained by Lessor under Section 9.01are less than the amount
resulting from subtracting the proceeds payable to Lessor under insurance
required to be maintained by Lessor under Section 9.01 from the cost of
repairing the damage to the Premises, Lessor may at its option terminate this
Lease upon thirty (30) days’ written notice. For purposes of the preceding
sentence, “proceeds payable to Lessor” includes amounts of deductibles payable
by tenants of the Business Park in connection with such damage collected by
Lessor to the extent such deductibles are payable for insurance of the same type
as Lessee is obligated to pay deductibles for under this Lease; provided that if
Lessee does not pay I00% of such deductibles for such insurance under this
Lease, then the amount collected from such other tenants for deductibles shall
be similarly reduced as determined by Lessor in its reasonable discretion.

 

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ARTICLE XI

REAL PROPERTY TAXES

Section 11.01.Payment of Taxes.  Lessee shall pay to Lessor the real property
tax, as defined in Section 11.02, payable during the term of this Lease as
follows: 100% to the extent such tax is allocable solely to the Premises (e.g.
for interior improvements made to the Premises), 50.91% of such real property
tax allocable to the entire Building, and 10.12% of all real property tax
allocable to land and to site improvements other than buildings within the
Business Park. Such allocations shall be based on the tax assessor’s worksheets
to the extent available. All such payments shall be made thirty (30) days after
Lessor’s delivery of a copy of the tax statement to Lessee specifying the share
of real property taxes payable by Lessee. If any such taxes paid by Lessee shall
cover any period of time prior to the Commencement Date or after the Expiration
Date, Lessee’s share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year during which this Lease shall be in
effect, and Lessor shall reimburse Lessee to the extent required. If Lessee
shall fail to pay any such taxes, Lessor shall have the right to pay the same,
in which case Lessee shall repay such amount to Lessor with Lessee’s next rent
installment together with interest at the prime commercial lending rate then in
effect at the Bank of America (or if Bank of America is no longer in existence
then a comparable national bank selected by Lessor). Lessor shall pay all real
property taxes to the applicable taxing authorities prior to the date the same
become delinquent and shall solely bear any penalties for late payment or
underpayment of same.

Section 11.02.Definition of “Real Property Tax”.  As used herein, the term “real
property tax” shall include any form of real estate tax or assessment, general,
special, supplemental, ordinary or extraordinary, foreseen and unforeseen, and
any license fee, commercial rental tax, improvement bond or bonds, levy or tax
(excluding in all instances inheritance, federal or state net income, corporate,
franchise, documentary transfer, or estate taxes) imposed on the Premises by any
authority having the direct or indirect power to tax, including any improvement
district thereof, as against any real property of which the Premises are a part,
as against Lessor’s right to rent or other income therefrom, and as against
Lessor’s business of leasing the Premises, and any taxes or levies in
substitution of or in lieu of any of the foregoing.

Section 11.03.Joint Assessment.  If the Building is not separately assessed,
Lessee’s liability shall be an equitable proportion of the real property taxes
for all of the land and improvements included within the tax parcel assessed, as
reasonably determined by Lessor. Lessee shall pay Lessor said proportionate
amount within thirty (30) days after Lessor’s delivery of an invoice therefor.

Section 11.04.Personal Property Taxes.

(a)Lessee shall pay prior to delinquency all taxes assessed against and levied
upon trade fixtures, furnishings, equipment and all other personal property of
Lessee contained in the Premises or elsewhere. When possible, Lessee shall cause
said trade fixtures, furnishings, equipment and all other personal property to
be assessed and billed separately from the real property of Lessor.

(b)If any of Lessee’s said personal property shall be assessed with Lessor’s
real property, Lessee shall pay Lessor the taxes attributable to Lessee within
thirty (30) days after receipt of a written statement setting forth the taxes
applicable to Lessee’s property.

(c)If Lessee shall fail to pay any such taxes, Lessor shall have the right to
pay the same, in which case Lessee shall repay such amount to Lessor with
Lessee’s next rent installment together with interest at the Prime Rate (as
defined in Section 20.02).

ARTICLE XII

UTILITIES AND JANITORIAL

Lessee shall pay prior to delinquency throughout the term the cost of water,
gas, heating, cooling, sewer, telephone, electricity, garbage, air conditioning
and ventilation, janitorial service, and all other materials, utilities,

 

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and services supplied to or serving the Premises. Prior to the Commencement
Date, Lessor at its sole cost, and not as an item of expense charged back to
Lessee under common are maintenance charges, shall cause electrical service to
the Premises to be separately metered. If any such services are not separately
metered to Lessee, Lessee shall pay its proportionate share (as provided in the
last sentence of this Article XII) of all charges that are jointly metered, as
reasonably determined by Lessor, and payment shall be made by Lessee within
thirty (30) days of receipt of the statement for such charges. Lessor during the
entire term of the Lease shall supply for the benefit of Lessee’s use in the
Premises air conditioning of the Premises, Common Lobby, and common hallways
during normal business hours (7:00 AM through 7:00 PM Monday through Friday),
subject to reasonable governmental requests or requirements regarding levels to
which the Premises should be heated or cooled provided the same levels are
applied to all areas of the Building other than server rooms, and further
subject to Lessee’s obligation to maintain, repair and replace portions of the
HVAC serving the ground floor of the Building that serve exclusively only
portions of the Premises if Lessor elects under Section 8.01(a) to have Lessee
maintain, repair and replace the same (provided that, Lessee’s obligation to
maintain and repair such HVAC system shall not include an obligation to replace
if and only if Lessee has Properly Maintained such HVAC system). In the event
Lessee is so obligated to maintain and repair any portion of the HVAC system
serving the Premises, and provided that electrical service to the Premises is
separately metered, then as to the portion of the HVAC system so maintained and
repaired by Lessee, during the period of time that Lessee maintains and repairs
the same, Lessee shall have control as to the hours and days of operation
thereof. Lessor during the entire term of the Lease shall also supply for the
benefit of Lessee’s use with respect to the Premises the following services and
utilities: (i) reasonable levels of electricity and water consistent with the
intended office use of the Premises, (ii) garbage pickup from the exterior
garbage bin no less than once per week, (iii) elevator maintenance to keep the
common elevator in the Building in good operating condition, and (iv) in the
outside Common Areas, upkeep and replacement when necessary of landscaping,
maintenance and repair in good condition of parking areas, driveways, and
sidewalks (if any), and maintenance in good operating condition and operation
during normal business hours of the Business Park of the water fountain in the
outside Common Areas. Lessor’s performance of all of the foregoing services
shall be subject to curtailment or cessation of same due to governmentally
mandated or recommended curtailment or cessation. Lessee shall pay for
connection charges and ongoing service charges for any telephone, DSL, cable and
other television, internet and communication services Lessee desires to consume
from the Premises, as well as any other services not listed above that may be
desired by Lessee. Lessor shall not be liable for damage to either person or
property nor shall Lessor be deemed to have evicted Lessee nor shall there be
any abatement of rent nor shall Lessee be relieved from performance of any
covenant on its part to be performed hereunder by reason of (i) deficiency in
the provision of HVAC services described above, (ii) breakdown of equipment or
machinery utilized in supplying such HVAC services, or (iii) curtailment or
cessation of such HVAC services due to causes or circumstances beyond the
reasonable control of Lessor. Except as to portions of the HVAC system serving
exclusively portions of the Premises that Lessor has elected under Section
18.01(a) to shift to Lessee the obligation to maintain, repair and replace, as
to which Lessor shall have no obligation to repair or maintain, and no
obligation to replace if Lessee fails to Properly Maintain the same, Lessor
shall use reasonable diligence to make such repairs as may be required to
machinery or equipment within the Building or on the roof of the Building to
provide restoration of such HVAC services (including using best efforts to cause
a contractor or other repair person to visit the Building to conduct an
inspection of such machinery or equipment within three (3) business days after
Lessee notifies Lessor of cessation of HVAC services to the Premises) and, where
the cessation or interruption of service has occurred due to circumstances or
conditions beyond Business Park boundaries, to cause the same to be restored, by
diligent application or request to the provider thereof. If Lessee requires in
excess of reasonable levels of electricity consumption (based on sufficient
electricity to power one personal computer or other office machine of similar
low electrical consumption per 500 square feet in the Premises, plus lighting to
the extent provided by Lessor in the Premises on the Commencement Date during
the hours specified above), or uses more water than would normally be used for
ancillary kitchen use (if applicable) and bathrooms, then Lessee shall pay the
cost of such excess electricity and/or water consumption as determined by
Lessor; provided that, this sentence shall not apply to electricity consumption
during the period of time, if any, that both (i) electric service for the
Premises is separately metered, and (ii) Lessee is obligated pursuant to Section
8.01 to maintain and repair all portions of the HVAC system serving the Premises
that serve exclusively a portion of the Premises. Lessor shall be entitled to
install a water meter at Lessee’s sole expense to measure such excess usage of
water; provided however, if such meter shows that Lessee is not excessively
consuming water, Lessor shall pay for such meter. If Lessee desires to operate
the HVAC system serving the Premises before 7:00 AM, after 7:00 PM, or on
weekends/holidays from 7:00 AM to 7:00 PM, then Lessee shall request the same in
writing to Lessor, specifying the dates and times of extra operation of the HVAC
system that Lessee desires. Lessee shall deliver such request to Lessor no later
than three (3) business days in advance of the first date that Lessee desires
such excess service. Lessor shall provide such excess

 

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HVAC service, and Lessee shall pay the actual costs of Lessor to provide such
excess service for the HVAC zone that includes the Premises. Lessee shall pay
such costs to Lessor within thirty (30) days after receipt of each billing
statement from Lessor specifying such costs. Lessor shall be entitled to cease
provision of such excess HVAC usage if Lessee does not fully and timely pay for
any such excess usage (or is otherwise in default under this Lease). As to any
portion of the HVAC system that Lessee is obligated to maintain and repair
pursuant to Section 8.01, the provisions of the immediately preceding five
sentences shall not be operative during the period of time, if any, that (1)
Lessee is so obligated to maintain and repair the same, and (ii) electric
service for the Premises is separately metered. Lessee shall pay only a portion
of the total charges for electricity, gas, water and other utilities and
services provided to or serving the Building (except to the extent utility
charges are separately metered to the Premises, or separately charged by the
service provider to the Premises such as for garbage pickup and telephone
service in which event Lessee shall pay only such charges as are separately
metered or separately charged to the Premises) equal to the ratio (a) the
numerator of which is 24,630, and (b) the denominator of which is the sum of
24,630 plus the aggregate number of square feet of the premises leased to and
occupied by other tenants in the Building (subject to equitable adjustment of
such ratio for utility charges as reasonably determined by Lessor to reflect
disproportionate consumption of same by one or more tenants in the Building).

ARTICLE XIII

ASSIGNMENT AND SUBLETTING

Section 13.01.Lessor’s Consent Required.  Except as otherwise provided in
Section 13.02, Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of
Lessee’s interest in this Lease or in the Premises, without Lessor’s prior
written consent which Lessor shall not unreasonably withhold. All of the
following shall be deemed an assignment within the meaning of this Article XIII:
(i) any transfer resulting from the merger, consolidation or other
reorganization of Lessee, or transfer to any Affiliate (as defined below) of
Lessee, (ii) any transfer resulting from the sale or other transfer of all or
substantially all of Lessee’s assets, (iii) if Lessee is a corporation,
partnership, limited liability company, trust or unincorporated association, the
sale, issuance or transfer of a controlling interest therein, or the transfer of
a majority interest in or a change in the voting control of any corporation,
partnership, limited liability company, trust, unincorporated association which
is an Affiliate of Lessee, or the transfer of any portion of any general
partnership or managing interest in Lessee or in any such Affiliate. “Affiliate”
shall mean any Entity controlled by, under common control with, or controlling,
Lessee. “Entity” shall mean any person, corporation, partnership (general or
limited), limited liability company, joint venture, association, joint stock
company, trust or other business entity or organization. For purposes of this
paragraph, “control” shall mean (i) with respect to a corporation, the direct or
indirect ownership of more than fifty percent (50%) of any class of voting
shares, (ii) with respect to a partnership, the ownership of a general
partnership interest, or entitlement to more than fifty percent (50%) of the
partnership interests in profits or capital, (iii) with respect to any other
Entity, the ownership of a majority of the voting rights thereof, or the ability
to direct its management decisions. Notwithstanding the foregoing, an
“assignment” for purposes of Article XIII shall not include any transfer or
issuance of stock over the New York Stock Exchange, the American Stock Exchange,
or NASDAQ.

Section 13.02.Permitted Transfers.  Notwithstanding Section 13.01, Lessee shall
be entitled to assign this Lease or sublet the Premises or any portion thereof,
without Lessor’s consent, to (i) any Affiliate, (ii) any Entity which results
from a merger or consolidation with or other reorganization of Lessee, (iii) any
Entity which acquires substantially all of the stock or assets of Lessee as a
going concern with respect to the business that is being conducted in the
Premises, or (iv) any change in ownership or control of Lessee by transfer of
stock of Lessee (each of (i), (ii), (iii), and (iv) a “Permitted Transfer”),
provided that as to each Permitted Transfer either (i) Lessee survives such
transaction and remains fully and primarily liable under this Lease for the
performance of all of Lessee’s obligations hereunder, or (ii) if Lessee does not
survive (for example, it merges into another corporation), then the net worth of
such assignee on the effective date of such assignment determined in accordance
with GAAP and exclusive of any good will and other intangible assets is at least
equal to the net worth of Lessee immediately prior to such transfer. The
assignee or sublease under any such Permitted Transfer shall expressly assume in
writing the obligations of the Lessee under this Lease.

Section 13.03.Request for Permission to Assign or Sublease.  Lessee must make
any request for Lessor’s approval of a proposed assignment, sublease, or other
transfer in writing. Lessee’s written request to Lessor

 

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for consent to an assignment or subletting shall be accompanied by (a) the name
and legal composition of the proposed sublease; (b) the nature of the proposed
sublease’s business to be carried on in the Premises; (c) the terms and
provisions of the proposed sublease; and (d) such financial and other reasonable
information as Lessor may request concerning the proposed sublease. Lessor shall
respond to Lessee’s request for consent hereunder within twenty (20) days after
receipt of Lessee’s request and any attempted assignment, transfer, mortgage,
encumbrance, or subletting without such consent shall be void, and shall
constitute a breach of this Lease. Lessor’s consent shall not be deemed
unreasonably withheld if consent is denied, among other reasons, because the
prospective sublessee or assignee will in any way diminish the value of the
Premises or increase Lessor’s exposure to risk due to the nature of Lessee’s
proposed use. Each proposed assignment or sublease agreement shall recite that
it is and shall be subject and subordinate to the provisions of this Lease, that
the assignee or sublessee accepts such assignment or sublease and as to any such
assignment assumes and agrees to perform all of the obligations of Lessee
hereunder, and that the termination of this Lease shall, at Lessor’s sole
election, constitute a termination of every such assignment or sublease.

Section 13.04.No Release of Lessee.  Regardless of Lessor’s consent, no
subletting or assignment shall release Lessee of Lessee’s obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Lessee or
any successor Lessee in the performance of any of the terms hereof, Lessor may
proceed directly against Lessee without the necessity of exhausting remedies
against said assignee. If Lessee shall purport to assign this Lease, or sublease
all or any portion of the Premises, or permit any person or persons other than
Lessee to occupy the Premises, without Lessor’s prior written consent, Lessor
may collect rent from the person or persons then or thereafter occupying the
Premises and apply the net amount collected to the rent reserved herein, but no
such collection shall be deemed a waiver of Lessor’s rights and remedies under
this Article XIII or the acceptance of any such purported assignee, sublease or
occupant, or a release of Lessee from the further performance by Lessee of
covenants on the part of Lessee herein contained.

Section 13.05.Attorneys’ Fees.  In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do,
then Lessee shall pay Lessor’s reasonable attorneys’ fees incurred in connection
therewith.

Section 13.06.Excess Rent.  In the event Lessor shall consent to a sublease or
an assignment under the Lease, then Lessee shall pay to Lessor with its
regularly scheduled rent payments fifty percent (50%) of all sums collected by
Lessee from all sublessees and/or assignees which are in excess of the rent then
owing pursuant to Article IV above, after first deducting therefrom only the
following costs: (i) broker commissions paid out of pocket by Lessee in
connection with such sublease or assignment, up to but not exceeding six percent
(6%) of the rent payable under the sublease or assignment, (ii) reasonable
attorneys’ fees not to exceed One Thousand Five Hundred Dollars ($1,500), and
(iii) costs of tenant improvements paid out of pocket by Lessee, made
specifically to induce such sublease or assignee to enter into such sublease or
assignment, and performed no sooner than thirty (30) days before and no later
than thirty (30) days after such sublessee or assignee takes occupancy of the
subleased or assigned space. Lessee shall deliver to Lessor reasonable evidence
that the standards and requirements of the three clauses in the preceding
sentence have been met before so deducting any such costs.

Section 13.07.Recapture of Premises.  Any purported assignment of less than all
of the Lease shall be deemed a sublease for purposes of this Lease. In the event
Lessee requests Lessor’s consent pursuant to Article XIII to either (i) a
proposed sublease (other than to a sublessee pursuant to a Permitted Transfer)
of more than fifty percent (50%) of the square footage of the Premises and for a
term substantially equal to the remaining term of this Lease, or (ii) a proposed
assignment of this Lease (other than to an assignee pursuant to a Permitted
Transfer), then in lieu of giving or denying such consent within the twenty (20)
day period of time specified in Section 13.03 therefor, Lessor may instead elect
to terminate the Lease (but in the event of a sublease, only for that portion of
the Premises so subleased). Such election shall be made, if at all, by written
notice to Lessee thereof within said twenty (20) day period. Such termination
shall be effective on the date such sublease or assignment would otherwise have
been effective, or if no such date is specified in Lessee’s request for Lessor’s
consent to such sublease or assignment, then on the date which is thirty (30)
days after Lessor’s election to terminate. Lessor may, but shall not be
obligated to, lease the Premises so recaptured by Lessor to any entity to whom
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or assign the same, at the same rent, or any higher or lower rent, as was
proposed by Lessee in connection with its proposed sublease or assignment.

ARTICLE XIV

DEFAULTS; REMEDIES

Section 14.01.Defaults.  The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee:

(a)The abandonment of the Premises by Lessee, or the failure of Lessee to
deliver an estoppel certificate within the period of time specified in Article
XVII where such failure shall continue for a period of five (5) days after
delivery of notice to Lessee that Lessee has failed to timely deliver to Lessor
such estoppel certificate;

(b)The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due, where such failure
shall continue for a period of five (5) days after delivery of notice to Lessee
that such payment is overdue; provided that, any such notice shall constitute
the notice required under Section 1161 of the California Code of Civil Procedure
(and/or any related or successor statutes regarding unlawful detainer actions)
so long as such notice is given in accordance with the requirements of such
statute; and provided further that, if two or more such notices that such
payment is overdue shall be delivered to Lessee in any one year period during
the term of this Lease, then, unless applicable law requires otherwise, each and
every succeeding failure to pay any sum payable hereunder when due shall
constitute a material default and breach of this Lease, and Lessee shall not be
entitled to any notice or cure period with respect to any such failure to pay;

(c)The failure by Lessee to observe or perform any of the covenants, conditions
or provisions of this Lease to be observed or performed by Lessee, other than
described in Sections 14.01(a) and 14.01(b) above, where such failure shall
continue for a period of thirty (30) days after written notice hereof from
Lessor to Lessee; provided, however, that if the nature of Lessee’s default is
such that more than thirty (30) days are reasonably required for its cure, then
Lessee shall not be deemed to be in default if Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion;

(d)(i) The making by Lessee of any general arrangement or assignment for the
benefit of creditors; (ii) Lessee becomes a “debtor” as defined in 11 U.S.C.
Section 101 or any successor statute thereto; (iii) the taking or suffering of
any action by Lessee under any insolvency or bankruptcy act; (iv) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee’s assets located at the Premises or of Lessee’s interest in this Lease,
or (v) the attachment (unless removed, released, and discharged within sixty
(60) days of its origination), execution or other judicial seizure of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease;

(e)The discovery by Lessor that any financial statement given to Lessor by
Lessee, any assignee of Lessee, any successor in interest of Lessee or any
guarantor of Lessee’s obligation hereunder, and any of them, was materially
false.

Section 14.02.Remedies.  In the event of any such material default or breach by
Lessee, Lessor may at any time thereafter, with or without notice or demand and
without limiting Lessor in the exercise of any other right or remedy which
Lessor may have by reason of such default or breach, take any of the following
actions:

(a)Lessor shall be entitled to terminate Lessee’s right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In the
event of any such termination of this Lease, Lessor shall be entitled to recover
from Lessee (i) the worth at the time of award of the unpaid rent which had been
earned at the time of termination; plus, (ii) the worth at the time of award of
the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss for
the same period that Lessee proves could have been reasonably avoided; plus
(iii) the worth at the time of award of the amount by which the unpaid rent for
the balance of the term after the time of award exceeds the amount of such
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could be reasonably avoided; plus (iv) any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee’s failure to perform
Lessee’s obligations under this Lease, or which in the ordinary course of things
would be likely to result therefrom. The “worth at the time of award” of the
amounts referred to in clauses (i) and (ii) of this Section 14.02(a) shall be
computed by allowing interest at the lower of ten percent (10%) per annum, or
the maximum rate then permitted by law. The “worth at the time of award” of the
amount referred to in clause (iii) of this Section 14.02(a) shall be computed by
discounting such amount at the discount rate of the Federal Reserve Board of San
Francisco at the time of award plus one percent (1%). The term “time of award”
as used in subparagraphs (i), (ii), and (iii) shall mean the date of entry of a
judgment or award against Lessee in an action or proceeding arising out of
Lessee’s breach of this Lease. This Lease may be terminated by a judgment
specifically providing for termination, or by Lessor’s delivery to Lessee of
written notice specifically terminating this Lease. In no event shall any one or
more of the following actions by Lessor, in the absence of a written election by
Lessor to terminate this Lease, constitute a termination of this Lease or a
waiver of Lessor’s right to recover damages under this Section 14.02(a):
appointment of a receiver in order to protect Lessor’s interest hereunder;
consent to any subletting of the premises or assignment of this Lease by Lessee,
whether pursuant to provisions hereof concerning subletting and assignment or
otherwise; or any other action by Lessor or Lessor’s agents intended to mitigate
the adverse effects of any breach of this Lease by Lessee, including without
limitation any action taken to maintain and preserve the Premises, or any action
taken to relet the Premises or any portion thereof for the account of Lessee and
in the name of Lessee.

(b)Lessor shall be entitled to maintain Lessee’s right to possession in which
case this Lease shall continue in effect whether or not Lessee shall have
abandoned the Premises. In such event Lessor shall be entitled to enforce all of
Lessor’s rights and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.

(c)Lessor shall be entitled to pursue any other remedy now or hereafter
available to Lessor under the laws or judicial decisions of the state of
California. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the Prime Rate (as defined in Section 20.02).

Section 14.03.Default by Lessor.  Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than thirty (30) days after written notice by Lessee to Lessor
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor’s obligation is such that more
than thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such 30-day period and thereafter
diligently prosecutes the same to completion. In the event Lessor does not
commence performance within the thirty (30) day period provided herein, or does
not diligently prosecute the same to completion, Lessee may perform such
obligation and will be reimbursed for its expenses by Lessor together with
interest thereon at the Prime Rate (as defined in Section 20.02). , provided,
however, that if the parties are in dispute as to what constitutes Lessor’s
obligations under this Lease, any such dispute shall be resolved by arbitration
in accordance with the rules of the American Arbitration Association as then in
effect, and judgment upon the award rendered by the arbitration may be entered
in any court having jurisdiction. The expenses of arbitration shall be borne by
the parties as allocated by the arbitrators. The party desiring arbitration
shall serve notice upon the other party, together with designation of the first
party’s arbitrator.

Section 14.04.Late Charges.  Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor’s designated agent when such amount is due
and owing, Lessee shall pay to Lessor a late charge equal to five percent (5%)
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of any such late charge by Lessor
shall in no event constitute a waiver of Lessee’s default with respect to such
overdue amount, nor prevent Lessor from exercising any of the other rights and
remedies granted hereunder. Notwithstanding the foregoing, Lessor will not
assess a late charge until Lessor has given written notice of such late payment
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late payment in any twelve (12) month period and after Lessee has not cured such
late payment within three (3) days from receipt of such notice. No other notices
will be required during the following twelve (12) months for a late charge to be
incurred.

Section 14.05.Impounds.  In the event Lessee fails on three (3) occasions during
any consecutive twelve (12) month period to make rental payments within ten (10)
days of Lessee’s receipt of written notice of such delinquency, or shall on
three (3) occasions issue a check which is declined by Lessee’s bank for
insufficient funds, Lessor may require, by delivery of notice thereof to Lessee,
that Lessee pay all rent quarterly in advance for the balance of the Lease term,
and that all such payments be made by cash, cashier’s check or money order in
lieu of Lessee’s check. Acceptance of payment by check shall not be construed as
a waiver of any such rights. The exercise of any rights under this paragraph
shall not limit or otherwise affect Lessor’s other rights and remedies under
this Lease or by law. Such quarterly advance installment shall be payable on
each January 1, April 1, July 1, and October 1 thereafter occurring during the
Lease term in the amount of rent, real property tax and insurance expenses as
estimated by Lessor which are payable by Lessee under the terms of this Lease.
Such fund shall be established to insure payment when due, before delinquency,
of any or all such rent. All moneys paid to Lessor under this paragraph may be
intermingled with other money of Lessor, shall not bear interest, and shall not
create any trust relationship between Lessor and Lessee or any fiduciary duties
on the part of Lessor to Lessee. In the event of a default in the obligations of
Lessee to perform under this Lease, then any balance remaining from funds paid
to Lessor under the provisions of this paragraph may, at the option of Lessor,
be applied to the payment of any monetary default of Lessee in lieu of being
applied to the payment of rent.

ARTICLE XV

CONDEMNATION OF PREMISES

Section 15.01.Total Condemnation.  If the entire Premises, whether by exercise
of governmental power or the sale or transfer by Lessor to any condemnor under
threat of condemnation or while proceedings for condemnation are pending, at any
time during the term, shall be taken by condemnation, this Lease shall then
terminate as of the date transfer of possession is required. Upon such
condemnation, all rent shall be paid up to the date transfer of possession is
required, and Lessee shall have no claim against Lessor for the value of the
unexpired term of this Lease.

Section 15.02.Partial Condemnation.  If any portion of the Premises is taken by
condemnation during the term, whether by exercise of governmental power or the
sale or transfer by Lessor to a condemnor under threat of condemnation or while
proceedings for condemnation are pending, this Lease shall remain in full force
and effect except that in the event such taking leaves the Premises unfit for
normal and proper conduct of the business of Lessee, then Lessee shall have the
right to terminate this Lease effective upon the date transfer of possession is
required. Moreover, Lessor and Lessee shall have the right to terminate this
Lease effective on the date transfer of possession is required if more than
thirty-three percent (33%) of the total square footage of the Premises is taken
by condemnation. Lessee and Lessor may elect to exercise their respective rights
to terminate this Lease pursuant to this Section by serving written notice to
the other within one hundred twenty (120) days of their receipt of notice of
condemnation. All rent shall be paid up to the date of termination, and Lessee
shall have no claim against Lessor for the leasehold value, or the value of any
unexpired term of this Lease. If this Lease shall not be canceled, the rent
after such partial taking shall be that percentage of the adjusted base rent
specified herein, equal to the percentage which the square footage of the
untaken part of the Premises, immediately after taking, bears to the square
footage of the entire Premises immediately before the taking. Any sums owing
hereunder which are calculated on the basis of Lessee’s pro rata share (as set
forth in Section 8.02) shall also be adjusted to reflect the decreased square
footage of the Premises due to the condemnation. If Lessee’s continued use of
the Premises requires alterations and repair by reason of a partial taking, all
such alterations and repair shall be made by Lessee at Lessee’s expense.

Section 15.03.Award to Lessee.  In the event of any condemnation, whether total
or partial, Lessee shall have the right to claim and recover from the condemning
authority such compensation as may be separately awarded or recoverable by
Lessee for moving expenses and loss of its business fixtures, or equipment
belonging to Lessee immediately prior to the condemnation. The balance of any
condemnation award shall belong to Lessor and Lessee shall have no further right
to recover from Lessor or the condemning authority for any additional claims
arising out of such taking.

 

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ARTICLE XVI

ENTRY BY LESSOR

Lessee shall permit Lessor and its agents, contractors, and employees to enter
the Premises at all reasonable times upon written or oral notice from Lessor to
Lessee of Lessor’s entry no less than 24 hours prior to such entry, for any of
the following purposes: to inspect the Premises; to maintain the Building; to
make such repairs, alterations, and additions to the Premises as Lessor is
obligated or may elect to make; to deal with emergencies; to show the Premises
and post “To Lease” signs for the purposes of reletting during the last one
hundred eighty (180) days of the term; to show the Premises as part of a
prospective sale by Lessor or prospective loan to Lessor or to post notices of
non-responsibility. Lessee shall be entitled to accompany Lessor’s agents,
employees, and contractors entering the Premises pursuant to this paragraph
provided that Lessee provides the personnel for such accompaniment at the time
Lessor enters onto the Premises; any failure by Lessee to so provide such
personnel shall not delay Lessor’s entry onto the Premises. Lessor shall have
such right of entry without any rebate of rent to Lessee for any loss of
occupancy or quiet enjoyment of the Premises thereby occasioned. Except in the
event of fire or other emergencies entailing a threat of imminent harm or
occurrence of harm to property or any one or more persons, in connection with
any such entries Lessor shall not access any areas of the Premises designated by
Lessee as “SECURE AREAS” in written notice from Lessee to Lessor describing
precisely such secure area(s) which in no event shall exceed 2,000 square feet
of floor space.

ARTICLE XVII

ESTOPPEL CERTIFICATE

Section 17.01Requirement.  Lessee shall at any time upon not less than ten (10)
business days’ prior written notice from Lessor execute, acknowledge and deliver
to Lessor a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, (ii) acknowledging that there are not any uncured defaults on
the part of Lessor hereunder, or specifying such defaults if any are claimed,
(iii) acknowledging that to Lessee’s actual knowledge after reasonably diligent
and thorough inspection of the Premises and examination of whether any Lessor
defaults could be claimed by Lessee based on events that have occurred or any
failure by Lessor to perform something it is obligated to perform but which
events or failures have not yet ripened into defaults only because Lessee has
not yet given Lessor the notice or period of time to cure specified for Lessor
defaults under this Lease, there are no such events or failures by Lessor, or if
there are such events or failures then specifying the same, and (iv) certifying
such other information regarding this Lease as Lessor or a prospective purchaser
or lender of Lessor may reasonably request. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.

Section 17.02Failure.  Lessee’s failure to deliver such statement within such
time shall be conclusive upon Lessee (i) that this Lease is in full force and
effect, without modification except as may be represented by Lessor, (ii) that
there are no uncured defaults in Lessor’s performance and no matters with the
passage of time or giving of notice, or both, could constitute a default on
Lessor’s part, and (iii) that not more than one month’s rent has been paid in
advance. Alternatively, such failure may be considered by Lessor as a default by
Lessee under this Lease.

ARTICLE XVIII

LESSOR’S LIABILITY, SUBORDINATION AND ATTORNMENT

Section 18.01.Transfer of Ownership.  The term “Lessor” as used herein shall
mean only the owner or owners at the time in question of the fee title of the
Premises, In the event of any transfer of such title or interest, Lessor herein
named (and in case of any subsequent transfers then the grantor) shall be
relieved from and after the date of such transfer of all liability as respects
Lessor’s obligations thereafter to be performed, provided that any funds in the
hands of Lessor or the then grantor at the time of such transfer, in which
Lessee has an interest, shall be

 

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delivered to the grantee. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor’s
successors and assigns, only during their respective periods of ownership.

Section 18.02.Attornment.  Lessee shall attorn to any third party purchasing or
otherwise acquiring the premises at any sale or other proceeding, or pursuant to
the exercise of any rights, powers or remedies under any mortgages or deeds of
trust or ground leases now or hereafter encumbering all or any part of the
premises, as if such third party had been named as Lessor under this Lease.
Lessee shall execute a new lease with such new Lessor on the same terms of this
Lease if so required by such new Lessor.

Section 18.03.Subordination.  Lessee agrees that this Lease shall be subject and
subordinate to any mortgage, deed of trust, or other instrument of security
(each, a “Mortgage”) now of record. Lessee agrees that this Lease shall be
subject and subordinate to any Mortgage which is recorded after the date of this
Lease affecting the Premises, and such subordination is hereby made effective
without any further act of Lessee; provided that, no such subordination shall be
effective unless Lessor first obtains from a lender a written subordination,
nondisturbance and attornment agreement substantially in the form of Exhibit E
attached hereto. Lessee shall execute in recordable form and return to Lessor
said subordination, nondisturbance and attornment agreement within ten (10)
business days after delivery thereof to Lessee, and the failure of Lessee to so
execute and return the same shall constitute a default hereunder subject to
applicable notice and cure periods set forth in Article XIV. Notwithstanding
anything to the contrary set forth above, the lender under any Mortgage may at
any time subordinate its Mortgage to this Lease, without any need to obtain
Lessee’s consent, by execution of a written document subordinating such Mortgage
to this Lease and thereupon this Lease shall be deemed prior to such Mortgage
without regard to their respective dates of execution, delivery, and/or
recording.

Section 18.04.No Recourse.  The obligations of Lessor under this Lease shall be
without recourse to any partner, officer, trustee, beneficiary, shareholder,
director, member, unit holder or employee of Lessor or to any of their
respective assets. It is expressly agreed that if Lessee obtains a money
judgment against Lessor resulting from a default by Lessor under this Lease,
that judgment shall be satisfied only out of the rents, issues, profits and
other income actually received on account of Lessor’s right, title and interest
in the Premises and no other real, personal or mixed property of Lessor shall be
subject to levy, attachment or execution, or otherwise used to satisfy any such
judgment. Lessee hereby waives any right to satisfy a judgment against Lessor
except from the rents, issues, profits and other income actually received on
account of Lessor’s right, title and interest in the Premises.

ARTICLE XIX

EXPIRATION ON TERMINATION

Section 19.01.Surrender of Possession.  Lessee agrees to deliver up and
surrender to Lessor possession of the Premises and all improvements thereon, in
as good order and condition as when possession was taken by Lessee, excepting
only ordinary wear and tear and any alterations made by Lessee with Lessor’s
consent to the extent Lessor did not require as a condition to such consent that
Lessee remove the same upon expiration of the term of the Lease, Upon
termination of this Lease, Lessor may reenter the Premises and remove all
persons and property therefrom. If Lessee shall fail to remove any effects which
it is entitled to remove from the Premises upon the termination of this Lease,
for any cause whatsoever, Lessor, at its option, may remove the same and store
or dispose of them, and Lessee agrees to pay to Lessor on demand any and all
expenses incurred in such removal and in making the Premises free from all dirt,
litter, and debris, including all storage and insurance charges. If the Premises
are not surrendered at the end of the Lease term, Lessee shall indemnify Lessor
against loss or liability resulting from delay by Lessee in so surrendering the
Premises, including, without limitation, actual damages for lost rents.

Section 19.02.Holding Over.  If Lessee, with or without Lessor’s consent,
remains in possession of the Premises after expiration of the term, then (i) if
Lessee remains in such possession without Lessor’s express written consent, then
such occupancy shall be a tenancy from month to month at a monthly rental
equivalent to 150% of the monthly rental in effect immediately prior to such
expiration, and (ii) if Lessee remains in such possession with Lessor’s express
written consent, then such occupancy shall be a tenancy from month to month at a
monthly rental equivalent to 125% of the monthly rental in effect immediately
prior to such expiration.

 

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ARTICLE XX

MISCELLANEOUS PROVISIONS

Section 20.01.Severability.  The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

Section 20.02.Interest on Past-due Obligations.  Except as expressly herein
provided, any amount due to Lessor not paid when due shall bear interest at the
Prime Rate. The “Prime Rate” shall mean the lesser of ten percent (10%) per
annum or the prime commercial lending rate then in effect at Bank of America (or
if Bank of America is no longer in existence then a comparable national bank
selected by Lessor). Payment of such interest shall not excuse or cure any
default by Lessee under this Lease.

Section 20.03.Time.  Time is of the essence in the performance of all
obligations under this Lease. All references to days contained in this Lease
shall be deemed to mean calendar days, unless otherwise specifically stated.

Section 20.04.Additional Rent.  Any monetary obligations of Lessee to Lessor
under the terms of this Lease shall be deemed to be rent.

Section 20.05.Incorporation of Prior Agreements; Amendments.  This Lease
contains all agreements of the parties with respect to any matter mentioned
herein, No prior agreement or understanding pertaining to any such matter shall
be effective. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither Lessor nor any employees or
agents of the Lessor has made any oral or written warranties or representations
to Lessee relative to the condition or use by Lessee of said Premises and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the Americans With Disabilities Act, and the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.

Section 20.06.Notices.  Any notice required or permitted to be given hereunder
shall be in writing and shall be given by personal delivery or email (provided
confirmation of receipt is obtained from the recipient), overnight courier, or
certified mail, and if given personally, by courier, or by mail, shall be
addressed to Lessee or to Lessor at the property address noted below the
signature line of the respective parties, as the case may be, and if given by
email shall be emailed to the email address noted below the signature line of
the respective parties. Either party may by notice to the other specify a
different property or email address for notice purposes. A copy of all notices
required or permitted to be given to Lessor hereunder shall be concurrently
transmitted to such party or parties at such addresses as Lessor may from time
to time hereafter designate by notice to Lessee. Any notice delivered in
accordance with the foregoing (i) by commercial courier or other personal
delivery shall be deemed delivered on the date of actual receipt (as evidenced
by signed receipt), or upon refusal of receipt, (ii) by email shall be deemed
delivered on the date of receipt (as evidenced by written confirmation of
receipt by the recipient), or (iii) if delivered by United States mail on the
date of receipt evidenced by the return receipt, or upon refusal of receipt. No
notice shall be deemed effective under this Lease unless delivered in compliance
with the provisions of this Section 20.06.

Section 20.07.Waivers.  No waiver by either party of any provision hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach by
the other party of the same or any other provisions. Lessor’s consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance
of rent hereunder by Lessor shall not be a waiver of any preceding breach by
Lessee of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted, regardless of Lessor’s knowledge of such preceding
breach at the time of acceptance of such rent.

Section 20.08.Recording.  Upon request by Lessor to Lessee, Lessee shall
execute, acknowledge and deliver to Lessor a “short form” memorandum of this
Lease for recording purposes. If any such short form

 

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memorandum of this Lease is recorded in the public records, then upon expiration
or sooner termination of the term of this Lease, Lessee shall within ten (10)
business days after request by Lessor therefor execute in recordable form and
deliver to Lessor a quitclaim deed or such other documentation as Lessor shall
reasonably request in order to evidence the termination of this Lease. Except as
provided above, neither this Lease nor any memorandum thereof shall be recorded
in the public records,

Section 20.09.Cumulative Remedies.  No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

Section 20.10.No Jury Trial.  Each party waives any rights it may have to a jury
trial respecting any dispute or other matter arising under or relating to this
Lease.

Section 20.11.Binding Effect; Choice of Law; Venue.  Subject to any provisions
hereof restricting assignment or subletting by Lessee and subject to the
provisions of Article XVIII, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of California, Venue for any action or proceeding brought to
enforce or defend this agreement, and for any other purpose hereunder, shall be
Santa Clara County.

Section 20.12.No Accord and Satisfaction.  No payment by Lessee, or receipt by
Lessor, of an amount which is less than the full amount of rent and all other
sums payable by Lessee hereunder at such time shall be deemed to be other than
on account of (a) the earliest of such other sums due and payable, and
thereafter (b) to the earliest rent due and payable hereunder. No endorsement or
statement on any check or any letter accompanying any payment of rent or such
other sums shall be deemed an accord and satisfaction, and Lessor may accept any
such check or payment without prejudice to Lessor’s right to receive payment of
the balance of such rent and/or the other sums, or Lessor’s right to pursue any
remedies to which Lessor may be entitled to recover such balance.

Section 20.13.Attorneys’ Fees.

(a)Lessor Made Party to Litigation.  If Lessor becomes a party to any litigation
brought by someone other than Lessee and concerning this Lease, or the Lessee’s
use or occupancy of the Premises or the condition thereof, based upon any real
or alleged act or omission of Lessee or its authorized agents or representative,
Lessee shall be liable to Lessor for reasonable attorneys’ fees and court costs
incurred by Lessor in the litigation.

(b)Certain Litigation Between the Parties.  If any action or proceeding in law
or in equity or any arbitration proceeding is instituted by Lessor for damages
or possession of the Premises or both, for an alleged breach of any obligation
of Lessee under this Lease, to recover rent, to terminate the tenancy of Lessee
at the Premises, to enforce, protect, or establish any right or remedy of
Lessor, or to enforce any other right of Lessor under this Lease or interpret
any provision of this Lease, the prevailing party in such action or proceeding
shall be entitled to collect from the other party all attorneys’ fees, expert
witness fees, and court costs incurred by the prevailing party, or as may be
fixed by the court or jury, but this provision shall not apply to any
cross-complaint filed by anyone other than Lessor in such action or proceeding.

Section 20.14.Interpretation.  The captions and headings of the numbered
paragraphs of this Lease are inserted solely for the convenience of the parties
hereto, and are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof. When required by the context
of this Lease, the neuter includes the masculine, the feminine, a partnership, a
corporation, or a joint venture, and the singular shall include the plural. The
language in all parts of this Lease shall in all cases be construed as a whole
according to its fair meaning and not strictly for or against either Lessor or
Lessee, and without regard to which party prepared this Lease.

Section 20.15.Signs.  Lessee shall not place any sign upon the Premises without
Lessor’s prior written consent, which consent shall not be unreasonably
withheld. Notwithstanding the preceding sentence, Lessee shall have the right to
install in the Common Lobby signage and marketing materials, in locations within
the Common Lobby approved or designated by Lessor in its reasonable discretion,
and provided all such signage and marketing materials are first submitted to
Lessor for review and approval, which approval shall not be unreasonably
withheld or

 

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delayed beyond ten (10) business days after Lessee’s request for Lessor’s
approval thereof. Any and all signs shall be in accordance with standards
generally observed for signage throughout the Business Park. Subject to the
foregoing requirements, Lessee shall be entitled at its sole cost to place its
name identification signage on the door to the Premises leading to the front
Common Lobby of the Building, on the front door to the Building, and on the
exterior monument for the Building, provided that, Lessee shall not take more
than 50% of the space provided for tenant signage on such monument. The size,
coloring, and font of the lettering of each such sign and all other elements of
such signage shall be subject to Lessor’s prior written approval. Lessee shall
maintain all such signage in good condition with all lettering in place at all
times during the term of this Lease, and at Lessee’s sole cost shall remove the
same at the end of the Lease and immediately thereafter repair all damage
occasioned by such removal.

Section 20.16.Voluntary Surrender or Merger.  The voluntary or other surrender
of this Lease by Lessee, or a mutual cancellation thereof, or a termination by
Lessor, shall not work a merger, and shall, at the option of Lessor, terminate
all or any existing subtenancies or may, at the option of Lessor, operate as an
assignment to Lessor of any or all of such subtenancies.

Section 20.17.Guarantor.  In the event that there is a guarantor of this Lease,
said guarantor shall have the same obligations as Lessee under this Lease.

Section 20.18.Quiet Possession.  Upon Lessee paying the rent for the Premises
and observing and performing all of the covenants, conditions and provisions on
Lessee’s part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.

Section 20.19.Rules and Regulations.  Lessee agrees that it will abide by, keep
and observe all reasonable rules and regulations which Lessor may make from time
to time for the management, safety, care and cleanliness of the Premises and
Common Areas, the parking of vehicles and the preservation of good order therein
as well as for the convenience of other occupants and tenants of the Business
Park. The violations of any such rules and regulations shall be deemed a
material breach of this Lease. Lessee, however, shall not be bound by any future
rules or regulations, unless it shall approve same, which approval shall not be
unreasonably withheld.

Section 20.20.Easements.  Lessor reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee.

Section 20.21.Authority to Sign.  The individuals executing this Lease on behalf
of each party represent and warrant to the other party that they are fully
authorized and legally capable of executing this Lease on behalf of such party
and that such execution is binding upon such party. Each individual executing
this Lease on behalf of a corporation represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation in
accordance with a duly adopted resolution of the Board of Directors of the
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.

Section 20.22.Delays for Cause.  In any case where either party hereto is
required to do any act, delays caused by or resulting from Acts of God, war,
civil commotion, fire, flood or other casualty, labor difficulties, shortages of
labor, materials or equipment, government regulations, unusually severe weather,
or other causes beyond such party’s reasonable control (other than financial
inability) shall not be counted in determining the time during which work shall
be completed, whether such time be designated by a fixed date, a fixed time or
“a reasonable time”, and such time shall be deemed to be extended by the period
of such delay.

Section 20.23.Brokers.  Except for Newmark Knight Frank (“NMF”) representing
Lessor and Kidder Mathews representing Lessee (together called “Brokers”), whose
commissions shall be paid by Lessor in accordance with the provisions of a
separate commission agreement between Lessor and NMF, each party represents to
the other that it has not had any dealings with any real estate broker, finder,
or other person, with respect to this Lease, and each party shall indemnify and
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resulting from any claims that may be asserted against the indemnified party by
any broker, finder, or other person other than Brokers with whom the
indemnifying party has or purportedly has dealt.

Section 20.24.Joint and Several Liability.  If Lessee is more than one person or
entity, each such person or entity shall be jointly and severally liable for the
obligations of Lessee hereunder.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

Executed in Mountain View, California by Lessee and in Gilroy, California, by
Lessor as of April 11, 2018.

 

Lessor:

 

 

 

Address:

 

 

 

 

 

VANNI BUSINESS PARK, LLC,

 

 

a Delaware limited liability company

 

 

 

 

 

 

 

By:

 

/s/ Christopher Vanni

 

c/o Chris Vanni

 

 

Christopher Vanni, Manager

 

8080 Santa Teresa Blvd., Ste 210

 

 

 

 

Gilroy, California 95020

 

 

 

 

Email: Chris@VanniProp.com

 

 

 

 

 

Lessee:

 

 

 

 

 

 

 

 

 

VIEWRAY, INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

 

By:

 

/s/ Doug Keare

 

 

Its:

 

Chief Operating Officer

 

ViewRay, Inc.

 

 

 

 

339 North Bernardo Ave., Ste 339-A

 

 

 

 

Mountain View, CA 94043-5226

 

 

 

 

Attn: Doug Keare, Chief Operating Officer

 

 

 

 

Email: dkeare@viewray.com

 

 

 

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EXHIBIT A

Site Plan

 

[ghtqgijp4ira000001.jpg]

 

 

 

 

 

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EXHIBIT B

Premises & Common Portions of Interior of Building (Note: Premises are part of
the 1st Floor; NO PORTION OF THE PREMISES ARE ON THE 2ND FLOOR)

 

 

[ghtqgijp4ira000002.jpg]

 

 

 

 

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EXHIBIT B

Premises & Common Portions of Interior of Building (Note: Premises are part or
the 1st Floor; NO PORTION OF THE PREMISES ARE ON THE 2ND FLOOR)

 

 

[ghtqgijp4ira000003.jpg]

 

 

 

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EXHIBIT C

TERM COMMENCEMENT DATE AGREEMENT

This Agreement is made as of                                , 20       by and
between Vanni Business Park, LLC, a Delaware limited liability company
(“Lessor”), and ViewRay, Inc., a Delaware corporation (“Lessee”).

WHEREAS, Lessor and Lessee have entered into a Lease (the “Lease”) dated
                                                   , 2018 for premises situated
on the ground floor of the building located at 339 North Bernardo Avenue,
Mountain View, California 94043 and more particularly described in the Lease;

WHEREAS, the term Commencement Date as referred to in Section 3.01 of the Lease,
has occurred, and pursuant to Section 3.05 of the Lease, Lessor desires to
confirm various dates relating to the Lease;

NOW THEREFORE, Lessor and Lessee agree and acknowledge that the information set
forth below is true and accurate.

Commencement Date:                                                    

Dates in Section 4.01 Regarding Payment of monthly base rent:

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

$                                  from                                    to
                                  

Expiration Date of initial 7 year term:

Extended Term Commencement Date (if option to extend for five years is
exercised):

The execution of this Agreement shall not constitute an exercise by Lessee of
any option to extend the term.

EXECUTED as of the date first set forth above.

 

Lessor:

 

 

 

 

 

VANNI BUSINESS PARK, LLC,

a Delaware limited liability company

 

 

 

By:

 

 

Chris Vanni

 

 

 

Lessee:

 

 

 

 

 

VIEWRAY, INC.,

a Delaware corporation

 

 

 

By:

 

 

 

 

 

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EXHIBIT D - LESSOR"S WORK

 

 

[ghtqgijp4ira000004.jpg]

 

 

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EXHIBIT D - LESSOR"S WORK

 

 

[ghtqgijp4ira000005.jpg]

 

 

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EXHIBIT E

RECORDING REQUESTED
BY AND WHEN

RECORDED RETURN TO:

 

 

                                           

                                           

                                           

                                           

SUBORDINATION,

NONDISTURBANCE

AND ATTORNMENT AGREEMENT

NOTICE:

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR
LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN
THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.

DEFINED TERMS

 

Execution Date:

Beneficiary & Address:

 

 

with a copy to:

 

Tenant & Address:

 

Landlord & Address:

 

Loan: A first mortgage loan in the original principal amount of $

from Beneficiary to Landlord.

Note: A Promissory Note executed by Landlord in favor of Beneficiary in the
amount of the Loan dated as of

 

Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing dated as
of executed by Landlord, to                                          as Trustee,
for the benefit of Beneficiary securing repayment of the Note to be recorded in
the records of the County in which the Property is located.

 

Lease and Lease Date: The lease entered into by Landlord and Tenant dated as of
                                                covering the Premises.

[Add amendments]

Property: [Property Name]
[Street Address 1]
[City, State, Zip]
The Property is more particularly described on Exhibit A.

 

 

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THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”) is
made by and among Tenant, Landlord, and Beneficiary and affects the Property
described in Exhibit A. Certain terms used in this Agreement are defined in the
Defined Terms. This Agreement is entered into as of the Execution Date with
reference to the following facts:

A.Landlord and Tenant have entered into the Lease covering certain space in the
improvements located in and upon the Property (the “Premises”).

B.Beneficiary has made or is making the Loan to Landlord evidenced by the Note.
The Note is secured, among other documents, by the Deed of Trust.

C.Landlord, Tenant and Beneficiary all wish to subordinate the Lease to the lien
of the Deed of Trust.

D.Tenant has requested that Beneficiary agree not to disturb Tenant’s rights in
the Premises pursuant to the Lease in the event Beneficiary forecloses the Deed
of Trust, or acquires the Property pursuant to the trustee’s power of sale
contained in the Deed of Trust or receives a transfer of the Property by a
conveyance in lieu of foreclosure of the Property (collectively, a “Foreclosure
Sale”) but only if Tenant is not then in default under the Lease and Tenant
attorns to Beneficiary or a third party purchaser at the Foreclosure Sale (a
“Foreclosure Purchaser”).

NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:

1.Subordination. The Lease and the leasehold estate created by the Lease and all
of Tenant’s rights under the Lease are and shall remain subordinate to the Deed
of Trust and the lien of the Deed of Trust, to all rights of Beneficiary under
the Deed of Trust and to all renewals, amendments, modifications and extensions
of the Deed of Trust.

2. Acknowledgments by Tenant. Tenant agrees that: (a) Tenant has notice that the
Lease and the rent and all other sums due under the Lease have been or are to be
assigned to Beneficiary as security for the Loan. In the event that Beneficiary
notifies Tenant of a default under the Deed of Trust and requests Tenant to pay
its rent and all other sums due under the Lease to Beneficiary, Tenant shall pay
such sums directly to Beneficiary or as Beneficiary may otherwise request; (b)
Tenant shall send a copy of any notice or statement under the Lease to
Beneficiary at the same time Tenant sends such notice or statement to Landlord;
(c) this Agreement satisfies any condition or requirement in the Lease relating
to the granting of a nondisturbance agreement.

3.Foreclosure and Sale. In the event of a Foreclosure Sale,

(a)So long as Tenant complies with this Agreement and is not in default under
any of the provisions of the Lease, the Lease shall continue in full force and
effect as a direct lease between Beneficiary and Tenant, and Beneficiary will
not disturb the possession of Tenant, subject to this Agreement. To the extent
that the Lease is extinguished as a result of a Foreclosure Sale, a new lease
shall automatically go into effect upon the same provisions as contained in the
Lease between Landlord and Tenant, except as set forth in this Agreement, for
the unexpired term of the Lease. Tenant agrees to attorn to and accept
Beneficiary as landlord under the Lease and to be bound by and perform all of
the obligations imposed by the Lease, or, as the case may be, under the new
lease, in the event that the Lease is extinguished by a Foreclosure Sale. Upon
Beneficiary’s acquisition of title to the Property, Beneficiary will perform all
of the obligations imposed on the Landlord by the Lease except as set forth in
this Agreement; provided, however, that Beneficiary shall not be: (i) liable for
any act or omission of a prior landlord (including Landlord); or (ii) subject to
any offsets or defenses that Tenant might have against any prior landlord
(including Landlord); or (iii) bound by any rent or additional rent which Tenant
might have paid in advance to any prior landlord (including Landlord) for a
period in excess of one month or by any security deposit, cleaning deposit or
other sum that Tenant may have paid in advance to any prior landlord (including
Landlord); or (iv) bound by any amendment, modification, assignment or
termination of the Lease made without the written consent of Beneficiary; (v)
obligated or liable with respect to any representations, warranties or
indemnities contained in the Lease; or (vi)

 

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liable to Tenant or any other party for any conflict between the provisions of
the Lease and the provisions of any other lease affecting the Property which is
not entered into by Beneficiary.

(b)Upon the written request of Beneficiary after a Foreclosure Sale, the parties
shall execute a lease of the Premises upon the same provisions as contained in
the Lease between Landlord and Tenant, except as set forth in this Agreement,
for the unexpired term of the Lease.

(c)Notwithstanding any provisions of the Lease to the contrary, from and after
the date that Beneficiary acquires title to the Property as a result of a
Foreclosure Sale, (i) Beneficiary will not be obligated to expend any monies to
restore casualty damage in excess of available insurance proceeds; (ii) tenant
shall not have the right to make repairs and deduct the cost of such repairs
from the rent without a judicial determination that Beneficiary is in default of
its obligations under the Lease; (iii) in no event will Beneficiary be obligated
to indemnify Tenant, except where Beneficiary is in breach of its obligations
under the Lease or where Beneficiary has been actively negligent in the
performance of its obligations as landlord; and (iv) other than determination of
fair market value, no disputes under the Lease shall be subject to arbitration
unless Beneficiary and Tenant agree to submit a particular dispute to
arbitration.

4.Subordination and Release of Purchase Options. Tenant represents that it has
no right or option of any nature to purchase the Property or any portion of the
Property or any interest in the Borrower. To the extent Tenant has or acquires
any such right or option, these rights or options are acknowledged to be subject
and subordinate to the Mortgage and are waived and released as to Beneficiary
and any Foreclosure Purchaser.

5.Acknowledgment by Landlord. In the event of a default under the Deed of Trust,
at the election of Beneficiary, Tenant shall and is directed to pay all rent and
all other sums due under the Lease to Beneficiary.

6.Construction of Improvements. Beneficiary shall not have any obligation or
incur any liability with respect to the completion of the tenant improvements
located in the Premises at the commencement of the term of the Lease.

7.Notice. All notices under this Agreement shall be deemed to have been properly
given if delivered by overnight courier service or mailed by United States
certified mail, with return receipt requested, postage prepaid to the party
receiving the notice at its address set forth in the Defined Terms (or at such
other address as shall be given in writing by such party to the other parties)
and shall be deemed complete upon receipt or refusal of delivery.

8.Miscellaneous. Beneficiary shall not be subject to any provision of the Lease
that is inconsistent with this Agreement. Nothing contained in this Agreement
shall be construed to derogate from or in any way impair or affect the lien or
the provisions of the Deed of Trust. This Agreement shall be governed by and
construed in accordance with the laws of the State of in which the Property is
located.

9.Liability and Successors and Assigns. In the event that Beneficiary acquires
title to the Premises or the Property, Beneficiary shall have no obligation nor
incur any liability in an amount in excess of $10,000,000 and Tenant’s recourse
against Beneficiary shall in no extent exceed the amount of $10,000,000. This
Agreement shall run with the land and shall inure to the benefit of the parties
and, their respective successors and permitted assigns including a Foreclosure
Purchaser. If a Foreclosure Purchaser acquires the Property or if Beneficiary
assigns or transfers its interest in the Note and Deed of Trust or the Property,
all obligations and liabilities of Beneficiary under this Agreement shall
terminate and be the responsibility of the Foreclosure Purchaser or other party
to whom Beneficiary’s interest is assigned or transferred. The interest of
Tenant under this Agreement may not be assigned or transferred except in
connection with an assignment of its interest in the Lease which has been
consented to by Beneficiary.

IN WITNESS WHEREOF, the parties have executed this Subordination, Nondisturbance
and Attornment Agreement as of the Execution Date.

 

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IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE
EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.

 

BENEFICIARY:

 

 

 

 

 

a                                                                   

 

 

 

 

By:                                                               

 

 

 

 

Its:                                                                

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

a                                                                   

 

 

 

 

 

 

 

 

 

By:                                                               

 

 

 

 

Its:                                                                

 

 

 

 

 

 

 

 

 

By:                                                               

 

 

 

 

Its:                                                                

 

 

 

 

 

 

 

LANDLORD:

 

 

 

 

 

a                                                                   

 

 

 

 

 

 

 

 

 

By:                                                               

 

 

 

 

Its:                                                                

 

 

 

 

 

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