EXHIBIT 10.7
LEASE
RREEF AMERICA REIT II CORP. FFF,
a Maryland corporation,
Landlord,
and
AVANIR PHARMACEUTICALS,
a California corporation,
Tenant

 

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TABLE OF CONTENTS

                      page
1.
  USE AND RESTRICTIONS ON USE     1  
2.
  TERM     2  
3.
  RENT     3  
4.
  RENT ADJUSTMENTS     4  
5.
  SECURITY DEPOSIT     7  
6.
  ALTERATIONS     7  
7.
  REPAIR     8  
8.
  LIENS     8  
9.
  ASSIGNMENT AND SUBLETTING     8  
10.
  INDEMNIFICATION     10  
11.
  INSURANCE     11  
12.
  WAIVER OF SUBROGATION     11  
13.
  SERVICES AND UTILITIES     11  
14.
  HOLDING OVER     13  
15.
  SUBORDINATION     13  
16.
  RULES AND REGULATIONS     13  
17.
  REENTRY BY LANDLORD     13  
18.
  DEFAULT     14  
19.
  REMEDIES     14  
20.
  TENANT’S BANKRUPTCY OR INSOLVENCY     16  
21.
  QUIET ENJOYMENT     16  
22.
  CASUALTY     17  
23.
  EMINENT DOMAIN     18  
24.
  SALE BY LANDLORD     18  
25.
  ESTOPPEL CERTIFICATES     18  
26.
  SURRENDER OF PREMISES     18  
27.
  NOTICES     19  
28.
  TAXES PAYABLE BY TENANT     19  
29.
  RELOCATION OF TENANT     19  
30.
  PARKING     20  
31.
  DEFINED TERMS AND HEADINGS     21  
32.
  TENANT’S AUTHORITY     21  
33.
  FINANCIAL STATEMENTS AND CREDIT REPORTS     21  
34.
  COMMISSIONS     22  
35.
  TIME AND APPLICABLE LAW     22  
36.
  SUCCESSORS AND ASSIGNS     22  
37.
  ENTIRE AGREEMENT     22  
38.
  EXAMINATION NOT OPTION     22  

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TABLE OF CONTENTS
(continued)

                      page
39.
  RECORDATION     22  
40.
  OPTION TO RENEW     22  
41.
  RIGHT OF FIRST OFFER     23  
42.
  SUITE SIGNAGE     24  
43.
  BUILDING SIGNAGE     24  
44.
  BUILDING SIGNAGE     25  
45.
  MONUMENT SIGNAGE     26  
46.
  LANDLORD DEFAULT     26  
47.
  LIMITATION OF LANDLORD’S LIABILITY     26  

EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES
EXHIBIT A-1 – SITE PLAN
EXHIBIT B – INITIAL ALTERATIONS
EXHIBIT C – INITIAL PREMISES COMMENCEMENT DATE MEMORANDUM
EXHIBIT C-1 – ADDITIONAL PREMISES COMMENCEMENT DATE MEMORANDUM
EXHIBIT D – RULES AND REGULATIONS
EXHIBIT E – EARLY POSSESSION AGREEMENT
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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GROSS (BY) OFFICE LEASE
REFERENCE PAGES

     
BUILDING:
  101 Enterprise
 
  Aliso Viejo, California
 
   
LANDLORD:
  RREEF AMERICA REIT II CORP. FFF,
 
  a Maryland corporation
 
   
LANDLORD’S ADDRESS:
  101 Enterprise, Suite 150
 
  Aliso Viejo, California 92656
 
   
WIRE INSTRUCTIONS AND/OR ADDRESS FOR
  RREEF AMERICA REIT II CORP. FFF
RENT PAYMENT:
  Department 2796
 
  Los Angeles, California 90084-2796
 
   
LEASE REFERENCE DATE:
  April 28, 2006
 
   
TENANT:
  AVANIR PHARMACEUTICALS,
 
  a California corporation
 
   
TENANT’S NOTICE ADDRESS:
   
 
   
     (a) As of beginning of Term:
  101 Enterprise, Suite 300
 
  Aliso Viejo, California 92656
 
   
     (b) Prior to beginning of Term (if different):
  11388 Sorrento Valley Road
 
  San Diego, California 92121
 
   
PREMISES ADDRESS:
  101 Enterprise, Suites 300, 320, 330 & 335
Aliso Viejo, California 92656
 
   
PREMISES RENTABLE AREA:
  Approximately 17,609 sq. ft. (consisting of approximately 5,074 sq. ft. known
as Suite 300 and approximately 6,245 sq. ft. known as Suite 320 (collectively,
the “Initial Premises”) and approximately 4,939 sq. ft. known as Suite 330 and
approximately 1,351 sq. ft. known as Suite 335 (collectively, the “Additional
Premises”)). The Initial Premises and Additional Premises shall be collectively
referred to herein as the “Premises”. For an outline of the Premises see
Exhibit A.
 
   
SCHEDULED COMMENCEMENT DATES:
  Initial Premises: June 15, 2006 (“Scheduled Initial Premises Commencement
Date”)
 
   
 
  Additional Premises: April 15, 2007 (“Scheduled Additional Premises
Commencement Date”)
 
   
TERM OF LEASE:
  Approximately five (5) years beginning on the Initial Premises Commencement
Date and ending on the Termination Date. The period from the Initial Premises
Commencement Date to the last day of the same month is the “Commencement Month.”

     
 
   
iii
Initials

 

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TERMINATION DATE:
  The last day of the sixtieth (60th) full calendar month after (if the
Commencement Month is not a full calendar month), or from and including (if the
Commencement Month is a full calendar month), the Commencement Month, which
Termination Date is estimated to be June 14, 2011.
 
   
ANNUAL RENT and MONTHLY INSTALLMENT OF
RENT FOR THE INITIAL PREMISES (Article 3):
   

                                          Period   Rentable Square   Annual Rent
  Annual Rent   Monthly Installment from   through   Footage   Per Square Foot  
    of Rent
6/15/2006*
  **            11,319     $ 31.80     $ 359,944.20     $ 29,995.35 ***

 

*   Or the actual Initial Premises Commencement Date.   **   One day prior to
the Additional Premises Commencement Date.   ***   Subject to abatement pursuant
to Section 3.3 of this Lease.

ANNUAL RENT and MONTHLY INSTALLMENT OF
RENT FOR THE PREMISES (Article 3):

                                          Period   Rentable Square   Annual Rent
  Annual Rent   Monthly Installment from   through   Footage   Per Square Foot  
    of Rent
Additional Premises Commencement Date
    6/14/2007       17,609     $ 31.80     $ 559,966.20     $ 46,663.85  
6/15/2007
    6/14/2008       17,609     $ 32.75     $ 576,694.75     $ 48,057.90  
6/15/2008
    6/14/2009       17,609     $ 33.73     $ 593,951.57     $ 49,495.96  
6/15/2009
    6/14/2010       17,609     $ 34.74     $ 611,736.66     $ 50,978.06  
6/15/2010
    6/14/2011       17,609     $ 35.78     $ 630,050.02     $ 52,504.17  

     
BASE YEAR (EXPENSES):
  2006
 
   
BASE YEAR (TAXES):
  2006
 
   
BASE YEAR (INSURANCE):
  2006
 
   
TENANT’S PROPORTIONATE SHARE:
  2.34% for the Initial Premises
3.64% for the Initial Premises and the Additional Premises, collectively,
effective as of the Additional Premises Commencement Date
 
   
SECURITY DEPOSIT:
  $57,754.59
 
   
ASSIGNMENT/SUBLETTING FEE:
  $1,000.00
 
   
AFTER-HOURS HVAC COST:
  $60.00 per hour, subject to change from time to time in accordance with
Section 13.2

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

     
iv
   
 
Initials

 

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PARKING:
  Tenant shall be entitled to the non-exclusive use of Tenant’s Proportionate
Share of unassigned, non-reserved parking passes at no charge to Tenant during
the initial Term in accordance with the terms of this Lease, which as of the
date of this Lease is 45 parking passes for the Initial Premises and an
additional 25 parking passes for the Additional Premises, for a total of 70
parking passes for the Premises. Tenant shall be entitled to convert up to 5
parking passes to reserved covered parking passes. (See Article 30 on Parking.)
 
   
REAL ESTATE BROKER:
  CB Richard Ellis, representing both Landlord and Tenant, to which Landlord
shall pay a commission in connection with this Lease in accordance with a
separate agreement
 
   
TENANT’S SIC CODE:
  2834
 
   
BUILDING BUSINESS HOURS:
  7:00 a.m. – 7:00 p.m., Monday through Friday (excluding Building holidays) and
8:00 a.m. – 2:00 p.m. Saturdays.
AMORTIZATION RATE:
  N/A

The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. The Lease includes Exhibits A through E, all
of which are made a part of the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have entered into the Lease as of the
Lease Reference Date set forth above.

                      LANDLORD:       TENANT:
 
                    RREEF AMERICA REIT II CORP. FFF,       AVANIR
PHARMACEUTICALS, a Maryland corporation       a California corporation
 
                   
By:
  RREEF Management Company, a Delaware corporation, its Property Manager        
       
 
                   
By:
          By:        
 
                   
 
                   
Name:
  Robin Iles       Name:   Eric K. Brandt    
 
                   
Title:
  Vice President, District Manager       Title:   President and CEO    
 
                   
Dated:
                                          , 2006       Dated:  
                                        , 2006    
 
                   
 
          By:        
 
                   
 
                   
 
          Name:   Keith Katkin    
 
                   
 
          Title:   Sr. Vice President, Sales and Marketing    
 
                   
 
          Dated:                                           , 2006    

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LEASE
     By this Lease Landlord leases to Tenant and Tenant leases from Landlord the
Premises in the Building as set forth and described on the Reference Pages. The
Premises are depicted on the floor plan attached hereto as Exhibit A, and the
Building is depicted on the site plan attached hereto as Exhibit A-1. The
Reference Pages, including all terms defined thereon, are incorporated as part
of this Lease.
1. USE AND RESTRICTIONS ON USE.
     1.1 The Premises are to be used solely for general office purposes. Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way obstruct or interfere with the rights of other tenants or occupants
of the Building or injure, annoy, or disturb them, or allow the Premises to be
used for any (in Landlord’s reasonable judgment) improper, immoral, unlawful, or
objectionable purpose, or commit any waste. Tenant shall not do, permit or
suffer in, on, or about the Premises the sale of any alcoholic liquor without
the written consent of Landlord first obtained. Tenant shall comply with all
federal, state and city laws, codes, ordinances, rules and regulations
(collectively, “Regulations”) applicable to the use of the Premises and its
occupancy and shall promptly comply with all governmental orders and directions
for the correction, prevention and abatement of any violations in the Building
or appurtenant land, caused or permitted by, or resulting from the specific use
by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s
sole expense. Notwithstanding anything to the contrary set forth herein, except
to the extent properly included in Expenses, Landlord shall be responsible for
the cost of correcting any violations of Title III of the ADA with respect to
the interior and exterior common areas of the Building, at its sole cost and
expense. Tenant shall not do or permit anything to be done on or about the
Premises or bring or keep anything into the Premises which will in any way
increase the rate of, invalidate or prevent the procuring of any insurance
protecting against loss or damage to the Building or any of its contents by fire
or other casualty or against liability for damage to property or injury to
persons in or about the Building or any part thereof.
     1.2 Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employees, licensees or invitees (collectively, the “Tenant
Entities”) to at any time handle, use, manufacture, store or dispose of in or
about the Premises or the Building any (collectively, “Hazardous Materials”)
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal,
state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively, “Environmental Laws”), nor shall
Tenant suffer or permit any Hazardous Materials to be used in any manner not
fully in compliance with all Environmental Laws, in the Premises or the Building
and appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as defined in
Article 31) harmless from and against any and all loss, claims, liability or
costs (including court costs and reasonable attorney’s fees) incurred by reason
of any actual or asserted failure of Tenant to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or from the
Premises of any Hazardous Materials by Tenant or any Tenant Entity (even though
permissible under all applicable Environmental Laws or the provisions of this
Lease), or by reason of any actual or asserted failure of Tenant to keep,
observe, or perform any provision of this Section 1.2. As of the date hereof,
Landlord has not received written notice from any governmental agencies that the
Building is in violation of any Environmental Laws.
     1.3 Tenant and the Tenant Entities will be entitled to the non-exclusive
use of the common areas of the Building as they exist from time to time during
the Term, including the parking facilities, subject to Landlord’s reasonable
rules and regulations adopted from time to time regarding such use, which rules
and regulations shall be generally applicable to all users of the parking
facilities. However, in no event will Tenant or the Tenant Entities park more
vehicles in the parking facilities than Tenant’s Proportionate Share of the
total parking spaces available for common use. The foregoing shall not be deemed
to provide Tenant with an exclusive right to any parking spaces or any guaranty
of the availability of any particular parking spaces or any specific number of
parking spaces (except as specifically set forth in the Reference Pages under
“Parking”.

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2. TERM.
     2.1 The Term of this Lease for the Initial Premises, subject to Tenant
Delays (as defined below in Section 2.2), shall begin on the date that Landlord
shall tender possession of the Initial Premises to Tenant with the Initial
Premises Alterations (as defined in Exhibit B to this Lease) Substantially
Complete (as defined below in this Section 2.1) (such date is the “Initial
Premises Commencement Date”), and shall terminate on the date as shown on the
Reference Pages (“Termination Date”), unless sooner terminated by the provisions
of this Lease. The Term of this Lease for the Additional Premises, subject to
Tenant Delays, shall begin on the date that Landlord shall tender possession of
the Additional Premises to Tenant with the Additional Premises Alterations
Substantially Complete (the “Additional Premises Commencement Date”), and shall
terminate on the Termination Date, unless sooner terminated by the provisions of
this Lease. The Initial Premises Commencement Date shall be the “Commencement
Date” as used in this Lease, except that with respect to obligations that are
specific to the Additional Premises, the “Commencement Date” shall mean the
Additional Premises Commencement Date. Tenant shall deliver a punch list of
items of the Initial Premises Alterations that are not completed within thirty
(30) days after Landlord tenders possession of the Initial Premises and Landlord
agrees to proceed with due diligence to perform its obligations regarding such
items and to use commercially reasonable efforts to complete such items within
thirty (30) days following receipt of such punch list. Tenant shall deliver a
punch list of items of the Additional Premises Alterations not completed within
thirty (30) days after Landlord tenders possession of the Additional Premises
and Landlord agrees to proceed with due diligence to perform its obligations
regarding such items and to use commercially reasonable efforts to complete such
items within thirty (30) days following receipt of such punch list. Tenant
shall, at Landlord’s request, execute and deliver memorandum agreements provided
by Landlord in the form of Exhibit C and Exhibit C-1 attached hereto, setting
forth the Initial Premises Commencement Date, the Additional Premises
Commencement Date, Termination Date and, if necessary, a revised rent schedule.
Should Tenant fail to do so within thirty (30) days after any such Landlord’s
request, the information set forth in any such memorandum agreements provided by
Landlord shall be conclusively presumed to be agreed and correct. The Initial
Premises Alterations and the Additional Premises Alterations shall each be
deemed to be “Substantially Complete” on the later of (a) date that all of the
Initial Premises Alterations or the Additional Premises Alterations, as the case
may be, have been performed, in accordance with the applicable Plans and with
the exception of any punch list items of the type typically found on
architectural “punch list”, and (b) the date Landlord receives from the
appropriate governmental authorities, with respect to the Initial Alterations,
all approvals necessary for the occupancy of the Premises, if any.
     2.2 Landlord shall use commercially reasonable efforts to Substantially
Complete the Initial Premises Alterations on or before the Initial Premises
Scheduled Commencement Date and the Additional Premises Alterations on or before
the Additional Premises Scheduled Commencement Date. Tenant agrees that in the
event of the inability of Landlord to so deliver possession of the Initial
Premises on the Scheduled Initial Premises Commencement Date or the Additional
Premises on the Scheduled Additional Premises Commencement Date, as the case may
be, for any reason, Landlord shall not be liable for any damage resulting from
such inability, but except to the extent such delay is the result of a Tenant
Delay, Tenant shall not be liable for any rent until the time when Landlord
delivers possession of the Initial Premises to Tenant and Tenant shall not be
liable for any rent until the time when Landlord delivers possession of the
Additional Premises to Tenant. No such failure to give possession on the
Scheduled Initial Premises Commencement Date or the Scheduled Additional
Premises Commencement Date, as applicable, shall affect the other obligations of
Tenant under this Lease, except that the actual Initial Premises Commencement
Date and Additional Premises Commencement Date shall be postponed until the date
that Landlord delivers possession of the Initial Premises and Additional
Premises, respectively, to Tenant, except to the extent that such delay is as a
result of a Tenant Delay. For purposes of this Lease, each of the following
events shall constitute a “Tenant Delay”: (a) Tenant’s failure to agree to or
deliver plans and specifications (in particular by the due dates set forth in
Exhibit B) and/or construction cost estimates or bids; (b) Tenant’s request for
materials, finishes or installations other than Landlord’s standard except
those, if any, that Landlord shall have expressly agreed to furnish without
extension of time agreed by Landlord; (c) Tenant’s change in any plans or
specifications (subject to any grace periods in Exhibit B); or, (d) performance
or completion by a party employed by Tenant (each of the foregoing, a “Tenant
Delay”). If any delay is the result of a Tenant Delay, the Initial Premises
Commencement Date or the Additional Premises Commencement Date, as the case may
be, and the payment of rent under this Lease shall be the date that Landlord
could have delivered possession of the applicable Premises to Tenant absent such
Tenant Delay. Landlord shall use reasonable efforts to notify Tenant in writing,
of any circumstances of which Landlord is aware that have caused or may cause a
Tenant Delay, so that Tenant may take whatever action is appropriate to minimize
or prevent such Tenant Delay.
     2.3 Subject to the terms of this Section 2.3 and provided that this Lease
has been fully executed by all parties, Tenant has execute the Early Possession
Agreement attached as Exhibit E and Tenant has delivered all prepaid rental, the
Security Deposit, and insurance certificates required hereunder, Landlord grants
Tenant the right to enter the Initial Premises following Landlord’s Substantial
Completion of the Initial Premises Alterations (but in any event not more than
four (4) weeks prior to the Initial Premises Commencement Date), at Tenant’s
sole risk solely for the purpose of installing

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telecommunications and data cabling, equipment, furnishings and other personalty
therein. Such possession prior to the Initial Premises Commencement Date shall
be subject to all of the terms and conditions of this Lease, except that Tenant
shall not be required to pay Monthly Installment of Rent or Tenant’s
Proportionate Share of Expenses, Taxes and Insurance Costs with respect to the
period of time prior to the Initial Premises Commencement Date during which
Tenant occupies the Initial Premises solely for such purposes. However, Tenant
shall be liable for any utilities or special services provided to Tenant during
such period. Notwithstanding the foregoing, if Tenant takes possession of the
Initial Premises before the Initial Premises Commencement Date for any purpose
other than as expressly provided in the preceding sentence, such possession
shall be subject to the terms and conditions of this Lease and Tenant shall pay
Monthly Installment of Rent, Tenant’s Proportionate Share of Expenses, Taxes and
Insurance Costs, and any other charges payable hereunder to Landlord for each
day of possession before the Initial Premises Commencement Date. Said early
possession shall not advance the Termination Date. Further, if Tenant takes
possession of the Additional Premises before the Additional Premises
Commencement Date, such possession shall be subject to the terms and conditions
of this Lease and Tenant shall pay Monthly Installment of Rent, Tenant’s
Proportionate Share of Expenses, Taxes and Insurance Costs, and any other
charges payable hereunder to Landlord for each day of possession before the
Additional Premises Commencement Date.
     2.4 Notwithstanding the foregoing, if the Initial Premises Commencement
Date has not occurred on or before the Required Completion Date (defined below),
Tenant, as its sole remedy, may terminate this Lease by giving Landlord written
notice of termination on or before the earlier to occur of: (i) 5 Business Days
after the Required Completion Date; and (ii) the Initial Premises Commencement
Date. In such event, this Lease shall be deemed null and void and of no further
force and effect and Landlord shall promptly refund any prepaid rent and
Security Deposit previously advanced by Tenant under this Lease and, subject to
any then existing defaults by Tenant under Exhibit B, if any, the parties hereto
shall have no further responsibilities or obligations to each other with respect
to this Lease. The “Required Completion Date” shall mean the date which is
75 days after the later of the date this Lease is properly executed and
delivered by Tenant, the date all prepaid rental and Security Deposits required
under this Lease are delivered to Landlord, and the date the building permit for
the Initial Premises Alterations has been obtained. Landlord shall make
commercially reasonable efforts to timely obtain any such building permits.
Landlord and Tenant acknowledge and agree that: (i) the determination of the
Initial Premises Commencement Date shall take into consideration the effect of
any Tenant Delays; and (ii) the Required Completion Date shall be postponed by
the number of days the Initial Premises Commencement Date is delayed due to
events of Force Majeure (as defined in Article 31).
3. RENT.
     3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to
time by paying the Monthly Installment of Rent then in effect on or before the
first day of each full calendar month during the Term, except that the first
full month’s rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth (1/12) of the
Annual Rent in effect at such time. Rent for any period during the Term which is
less than a full month shall be a prorated portion of the Monthly Installment of
Rent based upon the number of days in such month. Said rent shall be paid to
Landlord, without deduction or offset and without notice or demand, at the Rent
Payment Address, as set forth on the Reference Pages, or to such other person or
at such other place as Landlord may from time to time designate in writing. If
an Event of Default occurs, Landlord may require by notice to Tenant that all
subsequent rent payments be made by an automatic payment from Tenant’s bank
account to Landlord’s account, without cost to Landlord. Tenant must implement
such automatic payment system prior to the next scheduled rent payment or within
ten (10) days after Landlord’s notice, whichever is later. Unless specified in
this Lease to the contrary, all amounts and sums payable by Tenant to Landlord
pursuant to this Lease shall be deemed additional rent.
     3.2 Tenant recognizes that late payment of any rent or other sum due under
this Lease will result in administrative expense to Landlord, the extent of
which additional expense is extremely difficult and economically impractical to
ascertain. Tenant therefore agrees that if rent or any other sum is not paid
when due and payable pursuant to this Lease, a late charge shall be imposed in
an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b) five
percent (5%) of the unpaid rent or other payment; provided that Tenant shall be
entitled to a grace period of 5 days for the first late payments of Rent in any
12 month period before such late fee shall apply. The amount of the late charge
to be paid by Tenant shall be reassessed and added to Tenant’s obligation for
each successive month until paid. The provisions of this Section 3.2 in no way
relieve Tenant of the obligation to pay rent or other payments on or before the
date on which they are due, nor do the terms of this Section 3.2 in any way
affect Landlord’s remedies pursuant to Article 19 of this Lease in the event
said rent or other payment is unpaid after date due.
     3.3 Notwithstanding anything in this Lease to the contrary, so long as
Tenant is not then in default under this Lease following written notice thereof,
Tenant shall be entitled to an abatement of Monthly Installment of Rent solely
with respect to the Initial Premises for the first forty-five (45) days of the
Term (the “Monthly Rent Abatement Period”), in the

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amount of $999.85 per day, which totals $44,993.03 (the “Abated Rent”). During
the Monthly Rent Abatement Period, only Monthly Installment of Rent for the
Initial Premises shall be abated as set forth above, and Tenant’s Proportionate
Share of Expenses, Taxes and Insurance Costs for the Initial Premises, and all
other costs and charges specified in this Lease, shall remain as due and payable
pursuant to the provisions of this Lease, except to the extent expressly
provided in Section 4.7 below.
4. RENT ADJUSTMENTS.
     4.1 For the purpose of this Article 4, the following terms are defined as
follows:
          4.1.1 Lease Year: Each fiscal year (as determined by Landlord from
time to time) falling partly or wholly within the Term.
          4.1.2 Expenses: All costs of operation, maintenance, repair,
replacement and management of the Building (including the amount of any credits
which Landlord may grant to particular tenants of the Building in lieu of
providing any standard services or paying any standard costs described in this
Section 4.1.2 for similar tenants), as determined in accordance with generally
accepted accounting principles, including the following costs by way of
illustration, but not limitation: water and sewer charges; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas; waste
disposal; the cost of janitorial services; the cost of security and alarm
services (including any central station signaling system); costs of cleaning,
repairing, replacing and maintaining the common areas, including parking and
landscaping, window cleaning costs; labor costs; costs and expenses of managing
the Building including management and/or administrative fees; air conditioning
maintenance costs; elevator maintenance fees and supplies; material costs;
equipment costs including the cost of maintenance, repair and service agreements
and rental and leasing costs; purchase costs of equipment; current rental and
leasing costs of items which would be capital items if purchased; tool costs;
licenses, permits and inspection fees; wages and salaries; employee benefits and
payroll taxes; accounting and legal fees; any sales, use or service taxes
incurred in connection therewith. In addition, Landlord shall be entitled to
recover, as additional rent (which, along with any other capital expenditures
constituting Expenses, Landlord may either include in Expenses or cause to be
billed to Tenant along with Expenses and Taxes but as a separate item), Tenant’s
Proportionate Share of: (i) an allocable portion of the cost of capital
improvement items which are reasonably calculated to reduce operating expenses;
(ii) the cost of fire sprinklers and suppression systems and other life safety
systems; and (iii) other capital expenses which are required under any
Regulations which were not applicable to the Building at the time it was
constructed; but the costs described in this sentence shall be amortized over
the reasonable life of such expenditures in accordance with such reasonable life
and amortization schedules as shall be determined by Landlord in accordance with
generally accepted accounting principles, with interest on the unamortized
amount at one percent (1%) in excess of the Wall Street Journal prime lending
rate announced from time to time. Expenses shall not include Taxes, Insurance
Costs, depreciation or amortization of the Building or equipment in the Building
except as provided herein, loan principal payments, costs of alterations of
tenants’ premises, leasing commissions, interest expenses on long-term
borrowings or advertising costs. The following items are also excluded from
Expenses and in no event shall Tenant have any obligation to perform, pay
directly or reimburse Landlord for any of the following except to the extent
expressly provided herein:
     (a) Marketing costs, including leasing commissions, attorneys’ fees in
connection with the negotiation and preparation or enforcement of letters, deal
memos, letters of intent, leases, subleases and/or assignments, space planning
costs, lease concessions, allowances, and other costs and expenses incurred in
connection with lease, sublease and/or assignment negotiations and transactions
with present or prospective tenants or other occupants of the Building.
     (b) Attorney’s fees and other expenses incurred in connection with
negotiations or disputes with prospective tenants or tenants or other occupants
of the Building.
     (c) Any expenses for which Landlord has received actual reimbursement
(other than through Expenses).
     (d) Sums paid to subsidiaries or other affiliates of Landlord for services
on or to the Building and/or Premises, but only to the extent that the costs of
such services exceed the competitive cost for such services rendered by persons
or entities of similar skill, competence and experience.
     (e) Ground lease rental.
     (f) Interest (except as provided in this Lease for the amortization of
capital improvements and except to the extent incurred as a result of any act or
omission of Tenant).

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     (g) Costs incurred by Landlord in connection with the correction of latent
defects in the original construction of the Building.
     (h) Any fines, penalties or interest resulting from the gross negligence or
willful misconduct of the Landlord or its agents or employees.
     (i) Landlord’s charitable and political contributions.
     (j) Fines, costs or penalties incurred as a result and to the extent of a
violation by Landlord or other tenants of the project of which Building is a
part of any applicable laws.
     (k) The cost or expense of any services or benefits provided generally to
other tenants in the Building and not provided or available to Tenant.
     (l) All costs of purchasing or leasing major sculptures, paintings or other
major works or objects of art (as opposed to decorations purchased or leased by
Landlord for display in the common areas of the Building).
     (m) Principal payments of mortgage and other non-operating debts of
Landlord.
     (n) The cost of operating any commercial concession which is operated by
Landlord in the Building, including, without limitation, any compensation paid
to clerks, attendants or other persons operating such commercial concessions on
behalf of Landlord, but only to the extent revenues from any such commercial
concessions exceed such costs and compensation.
     (o) All items (including repairs) and services for which Tenant or other
tenants pay directly to third parties or for which Tenant or other tenants
reimburse Landlord (other than through Expenses).
     (p) Reserves not spent by Landlord by the end of the calendar year for
which Expenses are paid.
     (q) Any cost or expense related to removal, cleaning, abatement or
remediation of Hazardous Materials existing as of the date hereof in or about
the Building, except to the extent such removal, cleaning, abatement or
remediation is related to the general repair and maintenance of the Building.
     (r) All costs associated with the operation of the business of the entity
which constitutes “Landlord” (as distinguished from the costs of operating,
maintaining, repairing and managing the Building) including, but not limited to,
Landlord’s or Landlord’s managing agent’s general corporate overhead and general
administrative expenses.
     (s) The cost of correcting existing (as of the Commencement Date)
violations of Title III of the Americans with Disabilities Act.
     (t) Rental and leasing costs of items which would be capital items if
purchased.
     (u) Actual costs or expenses incurred by Landlord during a calendar year to
the extent Landlord uses reserves to pay for such costs or expenses and such
reserves are otherwise included in Expenses for such calendar year.
     (v) Except as expressly provided in the first paragraph of this
Section 4.1.2, the cost of capital improvement items and the cost of fire
sprinklers and suppression systems and other life safety systems.
          4.1.3 Taxes: Real estate taxes and any other taxes, charges and
assessments which are levied with respect to the Building or the land
appurtenant to the Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Building and used in connection with the operation of the Building and said
land, any payments to any ground lessor in reimbursement of tax payments made by
such lessor; and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any Lease Year. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building or any taxes
to be paid by Tenant pursuant to Article 28.
          4.1.4 Insurance Costs: Any and all insurance charges of or relating to
all insurance policies and endorsements deemed by Landlord to be reasonably
necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof.

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     4.2 If in any Lease Year, (i) Expenses paid or incurred shall exceed
Expenses paid or incurred in the Base Year (Expenses) and/or (ii) Taxes paid or
incurred by Landlord in any Lease Year shall exceed the amount of such Taxes
which became due and payable in the Base Year (Taxes), and/or (iii) Insurance
Costs paid or incurred by Landlord in any Lease Year shall exceed the amount of
such Insurance Costs which became due and payable in the Base Year (Insurance),
Tenant shall pay as additional rent for such Lease Year Tenant’s Proportionate
Share of each such excess amount.
     4.3 The annual determination of Expenses and Insurance Costs shall be made
by Landlord and shall be binding upon Landlord and Tenant, subject to the
provisions of this Section 4.3. During the Term, Tenant may review, at Tenant’s
sole cost and expense, the books and records supporting such determination in an
office of Landlord, or Landlord’s agent, during normal business hours, upon
giving Landlord five (5) days advance written notice within sixty (60) days
after receipt of such determination, but in no event more often than once in any
one (1) year period, subject to execution of a commercially reasonable
confidentiality agreement reasonably acceptable to Landlord, and provided that
if Tenant utilizes an independent accountant to perform such review it shall be
one with expertise in and familiarity with general industry practice with
respect to the operation of and accounting for a first class office building and
which is reasonably acceptable to Landlord, is not compensated on a contingency
basis and is also subject to such confidentiality agreement. If Tenant fails to
object to Landlord’s determination of Expenses and Insurance Costs within one
hundred and twenty (120) days after receipt, or if any such objection fails to
state with specificity the reason for the objection, Tenant shall be deemed to
have approved such determination and shall have no further right to object to or
contest such determination. In the event that during all or any portion of any
Lease Year or Base Year, the Building is not fully rented and occupied Landlord
shall make an appropriate adjustment in occupancy-related Expenses for such year
for the purpose of avoiding distortion of the amount of such Expenses to be
attributed to Tenant by reason of variation in total occupancy of the Building,
by employing consistent and sound accounting and management principles to
determine Expenses that would have been paid or incurred by Landlord had the
Building been at least ninety-five percent (95%) rented and occupied, and the
amount so determined shall be deemed to have been Expenses for such Lease Year.
     4.4 Prior to the actual determination thereof for a Lease Year, Landlord
may from time to time estimate Tenant’s liability for Expenses, Insurance Costs
and/or Taxes under Section 4.2, Article 6 and Article 28 for the Lease Year or
portion thereof. Landlord will give Tenant written notification of the amount of
such estimate and Tenant agrees that it will pay, by increase of its Monthly
Installments of Rent due in such Lease Year, additional rent in the amount of
such estimate. Any such increased rate of Monthly Installments of Rent pursuant
to this Section 4.4 shall remain in effect until further written notification to
Tenant pursuant hereto.
     4.5 When the above mentioned actual determination of Tenant’s liability for
Expenses, Insurance Costs and/or Taxes is made for any Lease Year and when
Tenant is so notified in writing, then:
          4.5.1 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Expenses, Insurance Costs and/or Taxes for the Lease
Year is less than Tenant’s liability for Expenses, Insurance Costs and/or Taxes,
then Tenant shall pay such deficiency to Landlord as additional rent in one lump
sum within thirty (30) days of receipt of Landlord’s bill therefor; and
          4.5.2 If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Expenses, Insurance Costs and/or Taxes for the Lease
Year is more than Tenant’s liability for Expenses, Insurance Costs and/or Taxes,
then Landlord shall credit the difference against the then next due payments to
be made by Tenant under this Article 4, or, if this Lease has terminated, refund
the difference in cash. Tenant shall not be entitled to a credit by reason of
actual Expenses and/or Taxes and/or Insurance Costs in any Lease Year being less
than Expenses and/or Taxes and/or Insurance Costs in the Base Year (Expenses
and/or Taxes and/or Insurance).
     4.6 If the Commencement Date is other than January 1 or if the Termination
Date is other than December 31, Tenant’s liability for Expenses, Insurance Costs
and Taxes for the Lease Year in which said Date occurs shall be prorated based
upon a three hundred sixty-five (365) day year.
     4.7 Notwithstanding anything in this Lease to the contrary, so long as
Tenant is not then in default under this Lease following written notice thereof,
Tenant shall be entitled to an abatement of Tenant’s Proportionate Share of any
Expenses, Insurance Costs and Taxes in excess of the applicable Base Year (as
described in Section 4.2 above), if any, for the period commencing on the
Initial Premises Commencement Date and ending on the day before the 12-month
anniversary of the Initial Premises Commencement Date (the “Expense Abatement
Period”) (collectively, the “Abated Expenses”). During the Expense Abatement
Period, only Expenses, Insurance Costs and Taxes shall be abated as set forth
above, and Tenant’s Monthly Installment of Rent, and all other costs and charges
specified in this Lease, shall remain as due and payable pursuant to the
provisions of this Lease, except to the extent expressly provided in Section 3.3
above.

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5. SECURITY DEPOSIT. Tenant shall deposit the Security Deposit with Landlord
upon the execution of this Lease. Said sum shall be held by Landlord as security
for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as an
advance rental deposit or as a measure of Landlord’s damage in case of Tenant’s
Event of Default. In an Event of Default, Landlord may use any part of the
Security Deposit for the payment of any rent or any other sum in default, or for
the payment of any amount which Landlord may spend or become obligated to spend
by reason of Tenant’s Event of Default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant’s Event of Default.
If any portion is so used, Tenant shall within ten (10) days after written
demand therefor, deposit with Landlord an amount sufficient to restore the
Security Deposit to its original amount and Tenant’s failure to do so shall be a
material breach of this Lease. Except to such extent, if any, as shall be
required by law, Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the Security Deposit or any balance thereof
shall be returned to Tenant at such time after termination of this Lease when
Landlord shall have determined that all of Tenant’s obligations under this Lease
have been fulfilled. Notwithstanding anything to the contrary contained herein
or in Article 23 hereof, Tenant hereby waives the provisions of Section 1950.7
of the California Civil Code, or any similar or successor Regulations or other
laws now or hereinafter in effect.
6. ALTERATIONS.
     6.1 Except for those, if any, specifically provided for in Exhibit B to
this Lease, Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord. When applying for such consent, Tenant shall, if requested
by Landlord, furnish complete plans and specifications for such alterations,
additions and improvements. Landlord’s consent shall not be unreasonably
withheld with respect to alterations which (i) are not structural in nature,
(ii) are not visible from the exterior of the Building, (iii) do not affect or
require modification of the Building’s electrical, mechanical, plumbing, HVAC or
other systems, and (iv) in aggregate do not cost more than $5.00 per rentable
square foot of that portion of the Premises affected by the alterations in
question. In addition, Tenant shall have the right to perform, with prior notice
but without Landlord’s consent, any alteration, addition, or improvement that
satisfies all of the following criteria (a “Cosmetic Alteration”): (1) is of a
cosmetic nature such as painting, wallpapering, hanging pictures and installing
carpeting; (2) is not visible from the exterior of the Premises or Building;
(3) will not affect the systems or structure of the Building; (4) costs less
than $25,000.00 in the aggregate during any 12-month period of the Term of this
Lease, and (5) does not require work to be performed inside the walls or above
the ceiling of the Premises. However, even though consent is not required, the
performance of Cosmetic Alterations shall be subject to all the other provisions
of this Article 6.
     6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made by using either
Landlord’s contractor or a contractor reasonably approved by Landlord, in either
event at Tenant’s sole cost and expense. If Tenant shall employ any contractor
other than Landlord’s contractor and such other contractor or any subcontractor
of such other contractor shall employ any non-union labor or supplier, Tenant
shall be responsible for and hold Landlord harmless from any and all delays,
damages and extra costs suffered by Landlord as a result of any dispute with any
labor unions concerning the wage, hours, terms or conditions of the employment
of any such labor. In any event Landlord may charge Tenant a construction
management fee not to exceed five percent (5%) of the cost of such work to cover
its overhead as it relates to such proposed work (but this fee shall apply only
if Landlord performs or contracts for the work or, at Tenant’s request,
supervises the work for Tenant), plus third-party costs actually incurred by
Landlord in connection with the proposed work and the design thereof, with all
such amounts being due five (5) days after Landlord’s demand.
     6.3 All alterations, additions or improvements proposed by Tenant shall be
constructed in accordance with all Regulations, using Building standard
materials where applicable, and Tenant shall, prior to construction, provide the
additional insurance required under Article 11 in such case, and also all such
assurances to Landlord as Landlord shall reasonably require to assure payment of
the costs thereof, including but not limited to, notices of non-responsibility,
waivers of lien, surety company performance bonds and funded construction
escrows and to protect Landlord and the Building and appurtenant land against
any loss from any mechanic’s, materialmen’s or other liens. Tenant shall pay in
addition to any sums due pursuant to Article 4, any increase in real estate
taxes attributable to any such alteration, addition or improvement for so long,
during the Term, as such increase is ascertainable; at Landlord’s election said
sums shall be paid in the same way as sums due under Article 4. Landlord may, as
a condition to its consent to any particular alterations or improvements,
require Tenant to deposit with Landlord the amount reasonably estimated by
Landlord as sufficient to cover the cost of removing such alterations or
improvements and restoring the Premises, to the extent required under
Section 26.2; provided that Landlord may require such a deposit only to the
extent that the approved alterations, in Landlord’s reasonable judgment,

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are of a nature that would require removal and repair costs that are materially
in excess of the removal and repair costs associated with standard office
improvements.
7. REPAIR.
     7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the Building, including the basic plumbing, air conditioning,
heating and electrical systems installed or furnished by Landlord. However,
notwithstanding the foregoing, Landlord agrees that the base Building,
electrical, heating, ventilation and air conditioning and plumbing systems
located in the Premises shall be in good working order as of the date Landlord
delivers possession of the Premises to Tenant. Except to the extent caused by
the acts or omissions of Tenant or any Tenant Entities or by any alterations or
improvements performed by or on behalf of Tenant, if such systems are not in
good working order as of the date possession of the Premises is delivered to
Tenant and Tenant provides Landlord with notice of the same within thirty
(30) days following the date Landlord delivers possession of the Premises to
Tenant, Landlord shall be responsible for repairing or restoring the same.
Subject to the foregoing, by taking possession of the Premises, Tenant accepts
them as being in good order, condition and repair and in the condition in which
Landlord is obligated to deliver them, except as set forth in the punch list to
be delivered pursuant to Section 2.1. It is hereby understood and agreed that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant, except as specifically set forth in this Lease.
     7.2 Tenant shall, at all times during the Term, keep the Premises in good
condition and repair excepting damage by fire, or other casualty, and in
compliance with all applicable governmental laws, ordinances and regulations,
promptly complying with all governmental orders and directives for the
correction, prevention and abatement of any violations or nuisances in or upon,
or connected with, the Premises, all at Tenant’s sole expense.
     7.3 Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant.
     7.4 Except as provided in Article 22, there shall be no abatement of rent
and no liability of Landlord by reason of any injury to or interference with
Tenant’s business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Tenant hereby waives any
and all rights under and benefits of subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code, or any similar or successor
Regulations or other laws now or hereinafter in effect.
8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and
Tenant’s leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within twenty (20) days following the imposition of any such lien, to either
cause the same to be released of record or provide Landlord with insurance
against the same issued by a major title insurance company or such other
protection against the same as Landlord shall reasonably accept (such failure to
constitute an Event of Default), Landlord shall have the right to cause the same
to be released by such means as it shall deem proper, including payment of the
claim giving rise to such lien. All such sums paid by Landlord and all expenses
incurred by it in connection therewith shall be payable to it by Tenant within
ten (10) days of Landlord’s written demand.
9. ASSIGNMENT AND SUBLETTING.
     9.1 Except as provided herein with respect to a Permitted Transfer, Tenant
shall not have the right to assign or pledge this Lease or to sublet the whole
or any part of the Premises whether voluntarily or by operation of law, or
permit the use or occupancy of the Premises by anyone other than Tenant, and
shall not make, suffer or permit such assignment, subleasing or occupancy
without the prior written consent of Landlord, such consent not to be
unreasonably withheld, and said restrictions shall be binding upon any and all
assignees of this Lease and subtenants of the Premises. In the event Tenant
desires to sublet, or permit such occupancy of, the Premises, or any portion
thereof, or assign this Lease, Tenant shall give written notice thereof to
Landlord at least thirty (30) days but no more than one hundred twenty
(120) days prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and copies of
financial reports and other relevant financial information of the proposed
subtenant or assignee.
     9.2 Notwithstanding any assignment or subletting, permitted or otherwise,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for compliance
with

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all of its other obligations under the terms, provisions and covenants of this
Lease. Upon the occurrence of an Event of Default, if the Premises or any part
of them are then assigned or sublet, Landlord, in addition to any other remedies
provided in this Lease or provided by law, may, at its option, collect directly
from such assignee or subtenant all rents due and becoming due to Tenant under
such assignment or sublease and apply such rent against any sums due to Landlord
from Tenant under this Lease, and no such collection shall be construed to
constitute a novation or release of Tenant from the further performance of
Tenant’s obligations under this Lease.
     9.3 In addition to Landlord’s right to approve of any subtenant or
assignee, except in the case of a Permitted Transfer, Landlord shall have the
option, in its sole discretion, in the event of any proposed subletting or
assignment, to terminate this Lease, or in the case of a proposed subletting of
less than the entire Premises that is at least 25% of the Premises for all or
substantially all of the remaining Term, to recapture the portion of the
Premises to be so sublet, as of the date the subletting or assignment is to be
effective. The option shall be exercised, if at all, by Landlord giving Tenant
written notice given by Landlord to Tenant within thirty (30) days following
Landlord’s receipt of Tenant’s written notice as required above. However, if
Tenant notifies Landlord, within five (5) business days after receipt of
Landlord’s termination notice, that Tenant is rescinding its proposed assignment
or sublease, the termination notice shall be void and this Lease shall continue
in full force and effect. If this Lease shall be terminated with respect to the
entire Premises pursuant to this Section, the Term of this Lease shall end on
the date stated in Tenant’s notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures under this Section only a portion
of the Premises, the rent to be paid from time to time during the unexpired Term
shall abate proportionately based on the proportion by which the approximate
square footage of the remaining portion of the Premises shall be less than that
of the Premises as of the date immediately prior to such recapture. Tenant
shall, at Tenant’s own cost and expense, discharge in full any outstanding
commission obligation which may be due and owing as a result of any proposed
assignment or subletting, whether or not the Premises are recaptured pursuant to
this Section 9.3 and rented by Landlord to the proposed tenant or any other
tenant.
     9.4 In the event that Tenant sells, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to fifty
percent (50%) of any Increased Rent (as defined below), less the Costs Component
(as defined below), when and as such Increased Rent is received by Tenant. As
used in this Section, “Increased Rent” shall mean the excess of (i) all rent and
other consideration which Tenant is entitled to receive by reason of any sale,
sublease, assignment or other transfer of this Lease, over (ii) the rent
otherwise payable by Tenant under this Lease at such time. For purposes of the
foregoing, any consideration received by Tenant in form other than cash shall be
valued at its fair market value as determined by Landlord in good faith. The
“Costs Component” is that amount which, if paid monthly, would fully amortize on
a straight-line basis, over the entire period for which Tenant is to receive
Increased Rent, the reasonable costs incurred by Tenant for leasing commissions,
reasonable attorneys fees, and tenant improvements in connection with such
sublease, assignment or other transfer.
     9.5 Notwithstanding any other provision hereof, it shall be considered
reasonable for Landlord to withhold its consent to any assignment of this Lease
or sublease of any portion of the Premises if at the time of either Tenant’s
notice of the proposed assignment or sublease or the proposed commencement date
thereof, there shall exist any uncured default of Tenant, or if the proposed
assignee or sublessee is an entity: (a) with which Landlord is already in
negotiation; (b) is already an occupant of the Building unless Landlord is
unable to provide the amount of space required by such occupant; (c) is a
governmental agency; (d) is incompatible with the character of occupancy of the
Building; (e) with which the payment for the sublease or assignment is
determined in whole or in part based upon its net income or profits; or
(f) would subject the Premises to a use which would: (i) involve significant
increased personnel or significant wear upon the Building; (ii) violate any
exclusive right granted to another tenant of the Building; (iii) require any
addition to or modification of the Premises or the Building in order to comply
with building code or other governmental requirements; or, (iv) involve a
violation of Section 1.2. Tenant expressly agrees that for the purposes of any
statutory or other requirement of reasonableness on the part of Landlord,
Landlord’s refusal to consent to any assignment or sublease for any of the
reasons described in this Section 9.5, shall be conclusively deemed to be
reasonable.
     9.6 Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord’s
costs, including reasonable attorney’s fees, incurred in investigating and
considering any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord shall consent
to, refuse consent, or determine that Landlord’s consent is not required for,
such assignment, pledge or sublease (the “Review Reimbursement”). Except as
otherwise expressly provided herein, the Review Reimbursement shall not exceed
$1,000.00 (the “Cap”). If: (a) Tenant fails to execute Landlord’s standard form
of consent without any changes to this Lease, without material changes to the
consent and without material negotiation of the consent, and (b) Landlord shall
notify Tenant that the Review Reimbursement shall exceed the Cap as a result of
such changes and/or negotiation, and (c) Tenant elects to proceed with such
changes and/or negotiation, then the Cap shall not apply and Tenant

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shall pay to Landlord the Assignment/Subletting Fee plus the Review
Reimbursement in full. The foregoing shall in no event be deemed to be a right
of Tenant to rescind its written notice to Landlord requesting consent to a
transfer of this Lease or a sublease of all or a portion of the Premises as
provided in Section 9.1. In the event that Tenant fails to notify Landlord of
its election as provided in subsection (c) above within three (3) business days
following Landlord’s notice to Tenant of the excess described in subsection (b)
above, then Tenant shall be deemed to have elected proceed with any such changes
and/or negotiation and the Cap shall not apply. Any purported sale, assignment,
mortgage, transfer of this Lease or subletting which does not comply with the
provisions of this Article 9 shall be void.
     9.7 Unless Tenant is an entity whose outstanding stock is listed on a
recognized securities exchange, or if at least fifty-one (51%) of its voting
stock is owned by another entity, the voting stock of which is so listed (in
either of which case an acquisition of a controlling interest in Tenant while
Tenant is so listed shall not be a Transfer, even if such acquisition is by a
privately held entity that later causes Tenant to be removed from such
securities exchange), if Tenant is a corporation, limited liability company,
partnership or trust, any transfer or transfers of or change or changes within
any twelve (12) month period in the number of the outstanding voting shares of
the corporation or limited liability company, the general partnership interests
in the partnership or the identity of the persons or entities controlling the
activities of such partnership or trust resulting in the persons or entities
owning or controlling a majority of such shares, partnership interests or
activities of such partnership or trust at the beginning of such period no
longer having such ownership or control shall be regarded as equivalent to an
assignment of this Lease to the persons or entities acquiring such ownership or
control and shall be subject to all the provisions of this Article 9 to the same
extent and for all intents and purposes as though such an assignment.
     9.8 So long as Tenant is not entering into the Permitted Transfer (as
defined below) for the purpose of avoiding or otherwise circumventing the
remaining terms of this Article 9, Tenant may assign its entire interest under
this Lease, without the consent of Landlord, to (a) an affiliate, subsidiary, or
parent of Tenant, or a corporation, partnership or other legal entity wholly
owned by Tenant (collectively, an “Affiliated Party”), or (b) a successor to
Tenant by purchase, merger, consolidation or reorganization, provided that all
of the following conditions are satisfied (each such transfer a “Permitted
Transfer” and any such assignee or sublessee of a Permitted Transfer, a
“Permitted Transferee”): (i) Tenant is not in an Event of Default under this
Lease; (ii) the Permitted Use does not allow the Premises to be used for retail
purposes; (iii) Tenant shall give Landlord written notice at least thirty
(30) days prior to the effective date of the proposed Permitted Transfer;
(iv) with respect to a proposed Permitted Transfer to an Affiliated Party,
either (I) Tenant continues to have a net worth equal to or greater than
Tenant’s net worth at the date of this Lease, or (II) in the event such
transferee does not have a net worth equal to or greater than Tenant’s net worth
as of the date of the Lease, Tenant obtains and delivers to Landlord a written
guaranty from an entity (X) that is incorporated or organized in the United
States, (Y) that is not on the OFAC list, and (Z) has a net worth that is equal
to greater than the net worth of Tenant as of the date of the Lease, in a form
reasonably acceptable to Landlord, guaranteeing Tenant’s obligations under this
Lease; and (v) with respect to a purchase, merger, consolidation or
reorganization or any Permitted Transfer which results in Tenant ceasing to
exist as a separate legal entity, (A) Tenant’s successor shall own all or
substantially all of the assets of Tenant, and (B) Tenant’s successor shall have
a net worth which is at least equal to the greater of Tenant’s net worth at the
date of this Lease or Tenant’s net worth as of the day prior to the proposed
purchase, merger, consolidation or reorganization, or shall obtain and deliver
to Landlord a written guaranty from an entity (x) that incorporated or organized
in the United States, (y) that is not on the OFAC list, and (z) has a net worth
that is equal to greater than the net worth of Tenant as of the date of the
Lease, in a form reasonably acceptable to Landlord, guaranteeing Tenant’s
obligations under this Lease. Tenant’s notice to Landlord shall include
information and documentation showing that each of the above conditions has been
satisfied. If requested by Landlord, Tenant’s successor shall sign a
commercially reasonable form of assumption agreement. As used herein, (1)
“parent” shall mean a company which owns a majority of Tenant’s voting equity;
(2) “subsidiary” shall mean an entity wholly owned by Tenant or at least
fifty-one percent (51%) of whose voting equity is owned by Tenant; and (3)
“affiliate” shall mean an entity controlled, controlling or under common control
with Tenant.
10. INDEMNIFICATION.
     10.1 None of the Landlord Entities shall be liable and Tenant hereby waives
all claims against them for any damage to any property or any injury to any
person in or about the Premises or the Building by or from any cause whatsoever
(including without limiting the foregoing, rain or water leakage of any
character from the roof, windows, walls, basement, pipes, plumbing works or
appliances, the Building not being in good condition or repair, gas, fire, oil,
electricity or theft), except to the extent caused by or arising from the gross
negligence or willful misconduct of Landlord or its agents, employees or
contractors. Tenant shall protect, indemnify and hold the Landlord Entities
harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney’s fees) incurred by reason of (a) any damage
to any property (including but not limited to property of any Landlord Entity)
or any injury (including but not limited to death) to any person occurring in,
on or about the Premises or the Building to the extent that such injury or
damage shall be caused by or arise from any actual or alleged act, neglect,
fault, or omission by or of Tenant or any Tenant Entity to meet any standards

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imposed by any duty with respect to the injury or damage; (b) the conduct or
management of any work or thing whatsoever done by the Tenant in or about the
Premises or from transactions of the Tenant concerning the Premises;
(c) Tenant’s failure to comply with any and all Regulations applicable to the
condition or use of the Premises or its occupancy; or (d) any breach or default
on the part of Tenant in the performance of any covenant or agreement on the
part of the Tenant to be performed pursuant to this Lease. The provisions of
this Article shall survive the termination of this Lease with respect to any
claims or liability accruing prior to such termination.
     10.2 Landlord shall protect, indemnify and hold Tenant harmless from and
against any and all loss, claims, liability or costs (including court costs and
attorney’s fees) incurred by reason of any damage to any property (including but
not limited to property of Tenant) or any injury (including but not limited to
death) to any person occurring in, on or about the common areas of the Building
to the extent that such injury or damage shall be caused by or arise from the
gross negligence or willful misconduct of Landlord or any of Landlord’s agents
or employees.
11. INSURANCE.
     11.1 Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000 per occurrence and
not less than $2,000,000 in the annual aggregate, or such larger amount as
Landlord may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) Worker’s
Compensation Insurance with limits as required by statute with Employers
Liability and limits of $500,000 each accident, $500,000 disease policy limit,
$500,000 disease—each employee; (d) All Risk or Special Form coverage protecting
Tenant against loss of or damage to Tenant’s alterations, additions,
improvements, carpeting, floor coverings, panelings, decorations, fixtures,
inventory and other business personal property situated in or about the Premises
to the full replacement value of the property so insured; and, (e) Business
Interruption Insurance with limit of liability representing loss of at least
approximately six (6) months of income.
     11.2 The aforesaid policies shall (a) be provided at Tenant’s expense;
(b) name the Landlord Entities as additional insureds (General Liability) and
loss payee (Property—Special Form); (c) be issued by an insurance company with a
minimum Best’s rating of “A-:VII” during the Term; and (d) provide that said
insurance shall not be canceled unless thirty (30) days prior written notice
(ten days for non-payment of premium) shall have been given to Landlord; a
certificate of Liability insurance on ACORD Form 25 and a certificate of
Property insurance on ACORD Form 27 shall be delivered to Landlord by Tenant
upon the Initial Premises Commencement Date and the Additional Premises
Commencement Date and at least thirty (30) days prior to each renewal of said
insurance.
     11.3 Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises (“Work”) the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall require; and the policies of or certificates evidencing such insurance
must be delivered to Landlord prior to the commencement of any such Work.
12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the respective
party but only to the extent of the net insurance proceeds payable under such
policies. Each party shall obtain any special endorsements required by their
insurer to evidence compliance with the aforementioned waiver.
13. SERVICES AND UTILITIES.
     13.1 Provided there is no Event of Default under this Lease, and subject to
the other provisions of this Lease, Landlord agrees to furnish to the Premises
during Building Business Hours (specified on the Reference Pages) on generally
recognized business days (but exclusive in any event of Sundays and national and
local legal holidays), the following services and utilities subject to the rules
and regulations of the Building prescribed from time to time: (a) water suitable
for normal office use of the Premises (including for use outside of Building
Business Hours for occasional after-hours use); (b) heat and air conditioning
required in Landlord’s judgment for the use and occupation of the Premises
during Building Business Hours; (c) cleaning and janitorial service;
(d) elevator service by nonattended automatic elevators, if applicable; and,
(e) equipment to bring to the Premises electricity for lighting, convenience
outlets and other normal office use (including

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for use outside of Building Business Hours for occasional after-hours use). To
the extent that Tenant is not billed directly by a public utility, Tenant shall
pay, within ten (10) days of Landlord’s demand, for all electricity used by
Tenant in the Premises. The charge shall be at the rates charged for such
services by the local public utility. Alternatively, Landlord may elect to
include electricity costs in Expenses. In the absence of Landlord’s gross
negligence or willful misconduct, Landlord shall not be liable for, and Tenant
shall not be entitled to, any abatement or reduction of rental by reason of
Landlord’s failure to furnish any of the foregoing, unless such failure shall
persist for an unreasonable time after written notice of such failure is given
to Landlord by Tenant and provided further that Landlord shall not be liable
when such failure is caused by accident, breakage, repairs, labor disputes of
any character, energy usage restrictions or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord. Landlord shall use
reasonable efforts to remedy any interruption in the furnishing of services and
utilities.
     13.2 Should Tenant require any additional work or service, as described
above, including services furnished outside ordinary business hours specified
above (other than electricity and water for typical office use for occasional
use outside of Building Business Hours), Landlord may, on terms to be agreed,
upon reasonable advance notice by Tenant, furnish such additional service and
Tenant agrees to pay Landlord such charges as may be agreed upon, including any
tax imposed thereon, but in no event at a charge less than Landlord’s actual
cost plus overhead for such additional service and, where appropriate, a
reasonable allowance for depreciation of any systems being used to provide such
service. The current charge for after-hours HVAC service, which is subject to
change at any time, is specified on the Reference Pages; provided that any
increases in such charge for after-hours HVAC service shall be limited to
increases in Landlord’s actual, reasonable costs of supplying the after-hours
HVAC services, including reasonable administration fees.
     13.3 Wherever heat-generating machines or equipment (other than standard
office equipment such as printers and copy machines) are used by Tenant in the
Premises which affect the temperature otherwise maintained by the air
conditioning system or Tenant allows occupancy of the Premises by more persons
than the heating and air conditioning system is designed to accommodate, in
either event whether with or without Landlord’s approval, Landlord reserves the
right to install supplementary heating and/or air conditioning units in or for
the benefit of the Premises and the cost thereof, including the cost of
installation and the cost of operations and maintenance, shall be paid by Tenant
to Landlord within five (5) days of Landlord’s demand.
     13.4 Tenant will not, without the written consent of Landlord, use any
apparatus or device in the Premises, including but not limited to, electronic
data processing machines and machines using current in excess of 2000 watts
and/or 20 amps or 120 volts, which will in any way increase the amount of
electricity or water usually furnished or supplied for use of the Premises for
normal office use, nor connect with electric current, except through existing
electrical outlets in the Premises, or water pipes, any apparatus or device for
the purposes of using electrical current or water. If Tenant shall require water
or electric current in excess of that usually furnished or supplied for use of
the Premises as normal office use, Tenant shall procure the prior written
consent of Landlord for the use thereof, which Landlord may refuse, and if
Landlord does consent, Landlord may cause a water meter or electric current
meter to be installed so as to measure the amount of such excess water and
electric current. The cost of any such meters shall be paid for by Tenant.
Tenant agrees to pay to Landlord within five (5) days of Landlord’s demand , the
cost of all such excess water and electric current consumed (as shown by said
meters, if any, or, if none, as reasonably estimated by Landlord) at the rates
charged for such services by the local public utility or agency, as the case may
be, furnishing the same, plus any additional expense incurred in keeping account
of the water and electric current so consumed.
     13.5 Tenant will not, without the written consent of Landlord, contract
with a utility provider to service the Premises with any utility, including, but
not limited to, telecommunications, electricity, water, sewer or gas, which is
not previously providing such service to other tenants in the Building. Subject
to Landlord’s reasonable rules and regulations adopted from time to time
regarding such use, which rules and regulations shall be generally applicable to
all occupants of the Building, and the provisions of Articles 6 and 26, Tenant
shall be entitled to the use of wiring (“Communications Wiring”) from the
existing telecommunications nexus in the Building to the Premises, sufficient
for normal general office use of the Premises. Tenant shall not install any
additional Communications Wiring, nor remove any Communications Wiring, without
in each instance obtaining the prior written consent of Landlord, which consent
may be withheld in Landlord’s sole and absolute discretion. Landlord’s shall in
no event be liable for disruption in any service obtained by Tenant pursuant to
this paragraph.
     13.6 Tenant shall have access to the Building for Tenant and its employees
24 hours per day/7 days per week, subject to the terms of this Lease and such
security or monitoring systems as Landlord may reasonably impose, including,
without limitation, sign-in procedures and/or presentation of identification
cards to the extent applicable.

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14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One
Hundred Fifty Percent (150%) of the greater of (a) the amount of the Annual Rent
for the last period prior to the date of such termination plus Tenant’s
Proportionate Share of Expenses, Taxes and Insurance Costs under Article 4; and
(b) the then market rental value of the Premises as determined by Landlord
assuming a new lease of the Premises of the then usual duration and other terms,
in either case, prorated on a daily basis, and also pay all damages sustained by
Landlord by reason of such retention. If Landlord gives notice to Tenant of
Landlord’s election to such effect, such holding over shall constitute renewal
of this Lease for a period from month to month or one (1) year, whichever shall
be specified in such notice, in either case at the Holdover Rate, but if the
Landlord does not so elect, no such renewal shall result notwithstanding
acceptance by Landlord of any sums due hereunder after such termination; and
instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have
been created. In any event, no provision of this Article 14 shall be deemed to
waive Landlord’s right of reentry or any other right under this Lease or at law.
15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord’s interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant’s interest in this Lease be superior to any such
instrument, then, by notice to Tenant, this Lease shall be deemed superior,
whether this Lease was executed before or after said instrument. Notwithstanding
the foregoing, Tenant covenants and agrees to execute and deliver within ten
(10) days of Landlord’s request such further instruments evidencing such
subordination or superiority of this Lease as may be required by Landlord.
Notwithstanding the foregoing, upon written request by Tenant, Landlord will use
reasonable efforts to obtain a non-disturbance, subordination and attornment
agreement from Landlord’s then current mortgagee on such mortgagee’s then
current standard form of agreement. “Reasonable efforts” of Landlord shall not
require Landlord to incur any cost, expense or liability to obtain such
agreement, it being agreed that Tenant shall be responsible for any fee or
review costs charged by such mortgagee. Landlord’s failure to obtain a
non-disturbance, subordination and attornment agreement for Tenant shall have no
effect on the rights, obligations and liabilities of Landlord and Tenant or be
considered to be a default by Landlord hereunder.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all
the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the non-performance by any other tenant or occupant of the Building
of any such rules and regulations.
17. REENTRY BY LANDLORD.
     17.1 Landlord reserves and shall at all times have the right to re-enter
the Premises to inspect the same, to supply janitor service and any other
service to be provided by Landlord to Tenant under this Lease, to show said
Premises to prospective purchasers, mortgagees or tenants, and to alter, improve
or repair the Premises and any portion of the Building, without abatement of
rent, and may for that purpose erect, use and maintain scaffolding, pipes,
conduits and other necessary structures and open any wall, ceiling or floor in
and through the Building and Premises where reasonably required by the character
of the work to be performed, provided entrance to the Premises shall not be
blocked thereby, and further provided that the business or operations of Tenant
shall not be interfered with unreasonably. Notwithstanding the foregoing, except
(i) to the extent requested by Tenant, (ii) in connection with scheduled
maintenance programs, and/or (iii) in the event of an emergency, Landlord shall
provide to Tenant reasonable prior notice (either written or oral) before
Landlord enters the Premises to perform any repairs therein. Landlord shall have
the right at any time to change the arrangement and/or locations of entrances,
or passageways, doors and doorways, and corridors, windows, elevators, stairs,
toilets or other public parts of the Building and to change the name, number or
designation by which the Building is commonly known (in which event Landlord
shall reimburse Tenant for replacement of a one month supply of stationary and a
reasonable supply of business cards and advertising materials) provided the
changes do not materially affect Tenant’s ability to use the Premises for the
permitted use set forth in the Reference Pages or unreasonably interfere with
Tenant’s access to the Premises. In the event that Landlord damages any portion
of any wall or wall covering, ceiling, or floor or floor covering within the
Premises, Landlord shall repair or replace the damaged portion to match the
original as nearly as commercially reasonable but shall not be required to
repair or replace more than the portion actually damaged. Tenant hereby waives
any claim for damages for any injury or inconvenience to or interference with
Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned by any action of Landlord authorized by this Article
17. Notwithstanding the foregoing, except in emergency situations as determined
by Landlord, Landlord shall exercise commercially reasonable efforts to perform
any entry into the Premises that occurs during normal business hours in a manner
that is reasonably designed to minimize interference and disruption with the
operation of Tenant’s business in the Premises.

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     17.2 For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant’s vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry to
any portion of the Premises. As to any portion to which access cannot be had by
means of a key or keys in Landlord’s possession, Landlord is authorized to gain
access by such means as Landlord shall elect and the cost of repairing any
damage occurring in doing so shall be borne by Tenant and paid to Landlord
within five (5) days of Landlord’s demand.
18. DEFAULT.
     18.1 Except as otherwise provided in Article 20, the following events shall
be deemed to be Events of Default under this Lease:
          18.1.1 Tenant shall fail to pay when due any sum of money becoming due
to be paid to Landlord under this Lease, whether such sum be any installment of
the rent reserved by this Lease, any other amount treated as additional rent
under this Lease, or any other payment or reimbursement to Landlord required by
this Lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of five (5) days after written notice that
such payment was not made when due, but if any such notice shall be given, for
the twelve (12) month period commencing with the date of such notice, the
failure to pay within five (5) days after due any additional sum of money
becoming due to be paid to Landlord under this Lease during such period shall be
an Event of Default, without notice. The notice required pursuant to this
Section 18.1.1 shall replace rather than supplement any statutory notice
required under California Code of Civil Procedure Section 1161 or any similar or
successor statute.
          18.1.2 Tenant shall fail to comply with any term, provision or
covenant of this Lease which is not provided for in another Section of this
Article and shall not cure such failure within twenty (20) days (forthwith, if
the failure involves a hazardous condition) after written notice of such failure
to Tenant provided, however, that such failure shall not be an Event of Default
if such failure could not reasonably be cured during such twenty (20) day
period, Tenant has commenced the cure within such twenty (20) day period and
thereafter is diligently pursuing such cure to completion, but the total
aggregate cure period shall not exceed ninety (90) days.
          18.1.3 Tenant shall fail to vacate the Premises immediately upon
termination of this Lease, by lapse of time or otherwise, or upon termination of
Tenant’s right to possession only.
          18.1.4 Tenant shall become insolvent, admit in writing its inability
to pay its debts generally as they become due for purposes of any state or
federal insolvency proceeding with respect to Tenant, file a petition in
bankruptcy or a petition to take advantage of any insolvency statute, make an
assignment for the benefit of creditors, make a transfer in fraud of creditors,
apply for or consent to the appointment of a receiver of itself or of the whole
or any substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.
          18.1.5 A court of competent jurisdiction shall enter an order,
judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of
Tenant, or of the whole or any substantial part of its property, without the
consent of Tenant, or approving a petition filed against Tenant seeking
reorganization or arrangement of Tenant under the bankruptcy laws of the United
States, as now in effect or hereafter amended, or any state thereof, and such
order, judgment or decree shall not be vacated or set aside or stayed within
sixty (60) days from the date of entry thereof.
19. REMEDIES.
     19.1 Upon the occurrence of any Event or Events of Default under this
Lease, whether enumerated in Article 18 or not, Landlord shall have the option
to pursue any one or more of the following remedies without any notice (except
as expressly prescribed herein) or demand whatsoever (and without limiting the
generality of the foregoing, Tenant hereby specifically waives notice and demand
for payment of rent or other obligations and waives any and all other notices or
demand requirements imposed by applicable law):
          19.1.1 Terminate this Lease and Tenant’s right to possession of the
Premises and recover from Tenant an award of damages equal to the sum of the
following:
               19.1.1.1 The Worth at the Time of Award of the unpaid rent which
had been earned at the time of termination;

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               19.1.1.2 The Worth at the Time of Award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rent loss that Tenant affirmatively proves
could have been reasonably avoided;
               19.1.1.3 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 rent loss that Tenant affirmatively proves could be reasonably
avoided;
               19.1.1.4 Any other amount necessary to compensate Landlord for
all the detriment either proximately caused by Tenant’s failure to perform
Tenant’s obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom; and
               19.1.1.5 All such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under applicable law.
The “Worth at the Time of Award” of the amounts referred to in parts 19.1.1.1
and 19.1.1.2 above, shall be computed by allowing interest at the lesser of a
per annum rate equal to: (i) the greatest per annum rate of interest permitted
from time to time under applicable law, or (ii) the Prime Rate plus 5%. For
purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly
announced as its prime or base rate by a federally insured bank selected by
Landlord in the State of California. The “Worth at the Time of Award” of the
amount referred to in part 19.1.1.3, above, shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus 1%;
          19.1.2 Employ the remedy described in California Civil Code § 1951.4
(Landlord may continue this Lease in effect after Tenant’s breach and
abandonment and recover rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations); or
          19.1.3 Notwithstanding Landlord’s exercise of the remedy described in
California Civil Code § 1951.4 in respect of an Event or Events of Default, at
such time thereafter as Landlord may elect in writing, to terminate this Lease
and Tenant’s right to possession of the Premises and recover an award of damages
as provided above in Section 19.1.1.
     19.2 The subsequent acceptance of rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord’s knowledge of such preceding breach at
the time of acceptance of such rent. No waiver by Landlord of any breach hereof
shall be effective unless such waiver is in writing and signed by Landlord.
     19.3 TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF
THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF
CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER REGULATIONS AND RULES OF LAW
FROM TIME TO TIME IN EFFECT DURING THE TERM PROVIDING THAT TENANT SHALL HAVE ANY
RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY
REASON OF TENANT’S BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS LEASE.
     19.4 No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every right
and remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing by agreement, applicable law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable law, to injunctive relief, or to
a decree compelling performance of any of the covenants, agreements, conditions
or provisions of this Lease, or to any other remedy allowed to Landlord at law
or in equity. Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an Event of Default shall not be deemed or construed to
constitute a waiver of such Event of Default.
     19.5 This Article 19 shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion.
     19.6 If more than one (1) Event of Default occurs during the Term or any
renewal thereof, Tenant’s renewal options, expansion options, purchase options
and rights of first offer and/or refusal, if any are provided for in this Lease,
shall be null and void.

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     19.7 If, on account of any Event of Default by Tenant in Tenant’s
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney or
collection agency concerning or to enforce or defend any of Landlord’s rights or
remedies arising under this Lease or to collect any sums due from Tenant, Tenant
agrees to pay all costs and fees so incurred by Landlord, including, without
limitation, reasonable attorneys’ fees and costs. TENANT EXPRESSLY WAIVES ANY
RIGHT TO: (A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY
PRESENT OR FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT
REQUIRED BY THE TERMS OF THIS LEASE.
     19.8 Upon the occurrence of an Event of Default, Landlord may (but shall
not be obligated to) cure such Event of Default at Tenant’s sole expense.
Without limiting the generality of the foregoing, Landlord may, at Landlord’s
option, enter into and upon the Premises if Landlord determines in its
reasonable discretion that Tenant is not acting within a commercially reasonable
time to maintain, repair or replace anything for which Tenant is responsible
under this Lease or to otherwise effect compliance with its obligations under
this Lease and correct the same, without being deemed in any manner guilty of
trespass, eviction or forcible entry and detainer and without incurring any
liability for any damage or interruption of Tenant’s business resulting
therefrom and Tenant agrees to reimburse Landlord within ten (10) days of
Landlord’s demand as additional rent, for any expenses which Landlord may incur
in thus effecting compliance with Tenant’s obligations under this Lease, plus
interest from the date of expenditure by Landlord at the Wall Street Journal
prime rate.
20. TENANT’S BANKRUPTCY OR INSOLVENCY.
     20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a “Debtor’s Law”):
          20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or
receiver of Tenant’s assets (each a “Tenant’s Representative”) shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor’s Law. Without limitation of the
generality of the foregoing, any right of any Tenant’s Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:
               20.1.1.1 Such Debtor’s Law shall provide to Tenant’s
Representative a right of assumption of this Lease which Tenant’s Representative
shall have timely exercised and Tenant’s Representative shall have fully cured
any default of Tenant under this Lease.
               20.1.1.2 Tenant’s Representative or the proposed assignee, as the
case shall be, shall have deposited with Landlord as security for the timely
payment of rent an amount equal to the larger of: (a) three (3) months’ rent and
other monetary charges accruing under this Lease; and (b) any sum specified in
Article 5; and shall have provided Landlord with adequate other assurance of the
future performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant’s Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant’s obligations under this Lease.
               20.1.1.3 The assumption or any contemplated assignment of this
Lease or subleasing any part of the Premises, as shall be the case, will not
breach any provision in any other lease, mortgage, financing agreement or other
agreement by which Landlord is bound.
               20.1.1.4 Landlord shall have, or would have had absent the
Debtor’s Law, no right under Article 9 to refuse consent to the proposed
assignment or sublease by reason of the identity or nature of the proposed
assignee or sublessee or the proposed use of the Premises concerned.
21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and
authority to enter into this Lease and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease. Landlord shall not be liable for any interference or disturbance by
other

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tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance. Landlord
shall use commercially reasonable efforts to end or minimize interference or
disturbance by other tenants or third persons after Tenant has requested
Landlord to do so in writing; provided however, that Landlord shall not be
liable for any interference or disturbance by other tenants or third persons,
nor shall Tenant be released from any of the obligations of this Lease because
of such interference or disturbance.
22. CASUALTY.
     22.1 In the event the Premises or the Building are damaged by fire or other
cause and in Landlord’s reasonable estimation such damage can be materially
restored within one hundred eighty (180) days, Landlord shall forthwith repair
the same and this Lease shall remain in full force and effect, except that
Tenant shall be entitled to a proportionate abatement in rent from the date of
such damage. Such abatement of rent shall be made pro rata in accordance with
the extent to which the damage and the making of such repairs shall interfere
with the use and occupancy by Tenant of the Premises from time to time. Within
forty-five (45) days from the date of such damage, Landlord shall notify Tenant,
in writing, of Landlord’s reasonable estimation of the length of time within
which material restoration can be made. For purposes of this Lease, the Building
or Premises shall be deemed “materially restored” if they are in such condition
as would not prevent or materially interfere with Tenant’s use of the Premises
for the purpose for which it was being used immediately before such damage.
     22.2 If such repairs cannot, in Landlord’s reasonable estimation, be made
within one hundred eighty (180) days, Landlord and Tenant shall each have the
option of giving the other, at any time within ninety (90) days after such
damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 22.1.
     22.3 Landlord shall not be required to repair or replace any damage or loss
by or from fire or other cause to any panelings, decorations, partitions,
additions, railings, ceilings, floor coverings, office fixtures or any other
property or improvements installed on the Premises by, or belonging to, Tenant.
Any insurance which may be carried by Landlord or Tenant against loss or damage
to the Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control.
     22.4 In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
this Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed.
     22.5 Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days after
receipt of Landlord’s notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.
     22.6 In the event of any damage or destruction to the Building or Premises
by any peril covered by the provisions of this Article 22, it shall be Tenant’s
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.

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     22.7 Tenant hereby waives any and all rights under and benefits of
Sections 1932(2) and 1933(4) of the California Civil Code, or any similar or
successor Regulations or other laws now or hereinafter in effect.
23. EMINENT DOMAIN. If all or any substantial part of the Premises shall be
taken or appropriated by any public or quasi-public authority under the power of
eminent domain, or conveyance in lieu of such appropriation, either party to
this Lease shall have the right, at its option, of giving the other, at any time
within thirty (30) days after such taking, notice terminating this Lease, except
that Tenant may only terminate this Lease by reason of taking or appropriation,
if such taking or appropriation shall be so substantial as to materially
interfere with Tenant’s use and occupancy of the Premises. If neither party to
this Lease shall so elect to terminate this Lease, the rental thereafter to be
paid shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose, and Tenant hereby assigns to
Landlord any interest it may have in or claim to all or any part of such sums,
other than any separate award which may be made with respect to Tenant’s trade
fixtures and moving expenses; Tenant shall make no claim for the value of any
unexpired Term. Tenant hereby waives any and all rights under and benefits of
Section 1265.130 of the California Code of Civil Procedure, or any similar or
successor Regulations or other laws now or hereinafter in effect.
24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, provided that any successor pursuant to a voluntary,
third-party transfer (but not as part of an involuntary transfer resulting from
a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations
under this Lease either by contractual obligation, assumption agreement or by
operation of law, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord’s successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.
25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant shall execute and deliver to
Landlord or mortgagee or prospective mortgagee a sworn statement certifying:
(a) the date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been modifications to
this Lease, that this Lease is in full force and effect, as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease has been paid; (d) the fact that
there are no current defaults under this Lease by either Landlord or Tenant
except as specified in Tenant’s statement; and (e) such other matters as may be
reasonably requested by Landlord. Landlord and Tenant intend that any statement
delivered pursuant to this Article 25 may be relied upon by any mortgagee,
beneficiary or purchaser. Tenant irrevocably agrees that if Tenant fails to
execute and deliver such certificate within such ten (10) day period Landlord or
Landlord’s beneficiary or agent may execute and deliver such certificate on
Tenant’s behalf, and that such certificate shall be fully binding on Tenant.
Landlord shall, within ten (10) business days after receipt of a written request
from Tenant, execute and deliver a commercially reasonable estoppel certificate
to Tenant’s lender. Such estoppel certificate shall provide a certification
solely as to (i) the date of commencement of this Lease, (ii) the fact that this
Lease is unmodified and in full force and effect (or, if there have been
modifications to this Lease, that this Lease is in full force and effect, as
modified, and stating the date and nature of such modifications); (iii) the date
to which the rent payable under this Lease have been paid; (iv) that, to the
best of Landlord’s actual knowledge, there are no current defaults under this
Lease by Tenant except as specified in Landlord’s statement.
26. SURRENDER OF PREMISES.
     26.1 Tenant shall arrange to meet Landlord for two (2) joint inspections of
the Premises, the first to occur at least thirty (30) days (but no more than
sixty (60) days) before the last day of the Term, and an appointment for the
second to be agreed upon to occur not later than forty-eight (48) hours after
Tenant has vacated the Premises. In the event of Tenant’s failure to arrange
such joint inspections and/or participate in either such inspection, Landlord’s
inspection at or after Tenant’s vacating the Premises shall be conclusively
deemed correct for purposes of determining Tenant’s responsibility for repairs
and restoration.

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     26.2 All alterations, additions, and improvements (but not Tenant’s
personalty) in, on, or to the Premises made or installed by or for Tenant,
including, without limitation, carpeting (collectively, “Alterations”), shall be
and remain the property of Tenant during the Term. Upon the expiration or sooner
termination of the Term, all Alterations shall become a part of the realty and
shall belong to Landlord without compensation, and title shall pass to Landlord
under this Lease as by a bill of sale. At the end of the Term or any renewal of
the Term or other sooner termination of this Lease, Tenant will peaceably
deliver up to Landlord possession of the Premises, together with all Alterations
by whomsoever made, in the same conditions received or first installed, broom
clean and free of all debris, excepting only ordinary wear and tear and damage
by fire or other casualty. Notwithstanding the foregoing, if Landlord elects by
notice given to Tenant at least ten (10) days prior to expiration of the Term,
Tenant shall, at Tenant’s sole cost, remove any Alterations, including
carpeting, so designated by Landlord’s notice, and repair any damage caused by
such removal. Tenant must, at Tenant’s sole cost, remove upon termination of
this Lease, any and all of Tenant’s furniture, furnishings, equipment, movable
partitions of less than full height from floor to ceiling and other trade
fixtures and personal property, as well as all data/telecommunications cabling
and wiring installed by or on behalf of Tenant, whether inside walls, under any
raised floor or above any ceiling (collectively, “Personalty”). Personalty not
so removed shall be deemed abandoned by the Tenant and title to the same shall
thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant
shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In lieu of requiring
Tenant to remove Alterations and Personalty and repair the Premises as
aforesaid, Landlord may, by written notice to Tenant delivered at least thirty
(30) days before the Termination Date, require Tenant to pay to Landlord, as
additional rent hereunder, the cost of such removal and repair in an amount
reasonably estimated by Landlord; provided, however, if Tenant has a bona fide
estimate from a contractor acceptable to Landlord for the removal and repair
work which is less than the estimated amount stated in Landlord’s notice to
Tenant for the same work, and such contractor agrees to provide equal pricing to
Landlord, Landlord shall elect to either accept such lower amount from Tenant or
shall require Tenant to remove the subject Alterations and Personalty, which
removal shall be performed in accordance with the terms hereof.
     26.3 All obligations of Tenant under this Lease not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term. Upon the expiration or earlier termination
of the Term, Tenant shall pay to Landlord the amount, as reasonably estimated by
Landlord, necessary to repair and restore the Premises as provided in this Lease
and/or to discharge Tenant’s obligation for unpaid amounts due or to become due
to Landlord. All such amounts shall be used and held by Landlord for payment of
such obligations of Tenant, with Tenant being liable for any additional costs
upon written demand by Landlord, or with any excess to be returned to Tenant
after all such obligations have been determined and satisfied. Any otherwise
unused Security Deposit shall be credited against the amount payable by Tenant
under this Lease.
27. NOTICES. Any notice or document required or permitted to be delivered under
this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant’s Notice Address.
28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid by
Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any
and all taxes payable by Landlord (other than net income or corporate franchise
taxes) whether or not now customary or within the contemplation of the parties
to this Lease: (a) upon, allocable to, or measured by or on the gross or net
rent payable under this Lease, including without limitation any gross income tax
or excise tax levied by the State, any political subdivision thereof, or the
Federal Government with respect to the receipt of such rent; (b) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Premises or any portion thereof,
including any sales, use or service tax imposed as a result thereof; (c) upon or
measured by the Tenant’s gross receipts or payroll or the value of Tenant’s
equipment, furniture, fixtures and other personal property of Tenant or
leasehold improvements, alterations or additions located in the Premises; or
(d) upon this transaction or any document to which Tenant is a party creating or
transferring any interest of Tenant in this Lease or the Premises. In addition
to the foregoing, Tenant agrees to pay, before delinquency, any and all taxes
levied or assessed against Tenant and which become payable during the term
hereof upon Tenant’s equipment, furniture, fixtures and other personal property
of Tenant located in the Premises.
29. RELOCATION OF TENANT. [Intentionally Omitted]

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30. PARKING.
     30.1 During the initial Term of this Lease, Tenant agrees to lease from
Landlord and Landlord agrees to lease to Tenant, the number and type of parking
passes as set forth on the Reference Page of this Lease. This right to park in
the Building’s parking facilities (the “Parking Facility”) shall be on an
unreserved, nonexclusive, first come, first served basis, for passenger-size
automobiles and is subject to the following terms and conditions:
          30.1.1 Tenant shall pay to Landlord, or Landlord’s designated parking
operator, the Building’s prevailing monthly parking charges, without deduction
or offset, on the first day of each month during the Term of this Lease;
provided that during the initial Term of this Lease there shall be no charge for
number and type of parking passes as set forth on the Reference Page of this
Lease. Landlord will notify Tenant upon not less than thirty (30) days’ notice
of any increases in the monthly parking charges prior to billing Tenant any
increases. No deductions from the monthly charge shall be made for days on which
the Parking Facility is not used by Tenant.
          30.1.2 Tenant shall at all times abide by and shall cause each of
Tenant’s employees, agents, customers, visitors, invitees, licensees,
contractors, assignees and subtenants (collectively, “Tenant’s Parties”) to
abide by any rules and regulations (“Rules”) for use of the Parking Facility
that Landlord or Landlord’s garage operator reasonably establishes from time to
time, which Rules shall be generally applicable to all users of the Parking
Facility, and otherwise agrees to use the Parking Facility in a safe and lawful
manner. Landlord reserves the right to adopt, modify and enforce the Rules
governing the use of the Parking Facility from time to time including any
key-card, sticker or other identification or entrance system and hours of
operation. Landlord may refuse to permit any person who violates such Rules to
park in the Parking Facility, and any violation of the Rules shall subject the
car to removal from the Parking Facility.
          30.1.3 Unless specified to the contrary above, the parking spaces
hereunder shall be provided on a non-designated “first-come, first-served”
basis. Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant’s Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking. Tenant acknowledges that the Parking
Facility may be closed entirely or in part in order to make repairs or perform
maintenance services, or to alter, modify, re-stripe or renovate the Parking
Facility, or if required by casualty, strike, condemnation, act of God,
governmental law or requirement or other reason beyond the operator’s reasonable
control. Notwithstanding the foregoing, Landlord shall use commercially
reasonable efforts to perform any repairs, renovations or re-striping of the
Parking Facility in a manner which will require closure of only those portions
of the Parking Facility affected by such repairs, renovations or re-striping and
not the closure of the entire Parking Facility.
          30.1.4 Tenant acknowledges that to the fullest extent permitted by
law, Landlord shall have no liability for any damage to property or other items
located in the parking areas of the Building (including without limitation, any
loss or damage to tenant’s automobile or the contents thereof due to theft,
vandalism or accident), nor for any personal injuries or death arising out of
the use of the Parking Facility by Tenant or any Tenant’s Parties, whether or
not such loss or damage results from Landlord’s active negligence or negligent
omission. The limitation on Landlord’s liability under the preceding sentence
shall not apply however to loss or damage arising directly from Landlord’s
willful misconduct. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. Tenant and
Tenant’s Parties each hereby voluntarily releases, discharges, waives and
relinquishes any and all actions or causes of action for personal injury or
property damage occurring to Tenant or any of Tenant’s Parties arising as a
result of parking in the Parking Facility, or any activities incidental thereto,
wherever or however the same may occur, and further agrees that Tenant will not
prosecute any claim for personal injury or property damage against Landlord or
any of its officers, agents, servants or employees for any said causes of action
and in all events, Tenant agrees to look first to its insurance carrier and to
require that Tenant’s Parties look first to their respective insurance carriers
for payment of any losses sustained in connection with any use of the Parking
Facility. Tenant hereby waives on behalf of its insurance carriers all rights of
subrogation against Landlord or any Landlord Entities.
          30.1.5 Tenant’s right to park as described in this Article and this
Lease is exclusive to Tenant and may not be assigned or transferred except in
connection with an assignment or sublease permitted under this Lease.
          30.1.6 In the event any surcharge or regulatory fee is at any time
imposed by any governmental authority with reference to parking, Tenant shall
(commencing after two (2) weeks’ notice to Tenant) pay, per parking pass, such
surcharge or regulatory fee to Landlord in advance on the first day of each
calendar month concurrently with the month

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installment of rent due under this Lease. Landlord will enforce any surcharge or
fee in an equitable manner amongst the Building tenants.
     30.2 If Tenant violates any of the terms and conditions of this Article,
the operator of the Parking Facility shall have the right to remove from the
Parking Facility any vehicles hereunder which shall have been involved or shall
have been owned or driven by parties involved in causing such violation, without
liability therefor whatsoever. In addition, Landlord shall have the right to
cancel Tenant’s right to use the Parking Facility pursuant to this Article upon
ten (10) days’ written notice, unless within such ten (10) day period, Tenant
cures such default. Such cancellation right shall be cumulative and in addition
to any other rights or remedies available to Landlord at law or equity, or
provided under this Lease.
31. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for
convenience of reference and shall in no way define, increase, limit or describe
the scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following “Landlord Entities”, being Landlord, Landlord’s investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord’s trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term “rentable area” shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including a
proportionate share of any common areas. Tenant hereby accepts and agrees to be
bound by the figures for the rentable square footage of the Premises and
Tenant’s Proportionate Share shown on the Reference Pages; however, Landlord may
adjust either or both figures if there is manifest error, addition or
subtraction to the Building or any business park or complex of which the
Building is a part, remeasurement or other circumstance reasonably justifying
adjustment. The term “Building” refers to the structure in which the Premises
are located and the common areas (parking lots, sidewalks, landscaping, etc.)
appurtenant thereto. If the Building is part of a larger complex of structures,
the term “Building” may include the entire complex, where appropriate (such as
shared Expenses, Insurance Costs or Taxes) and subject to Landlord’s reasonable
discretion. Whenever a period of time is prescribed for the taking of an action
by Landlord or Tenant (except the obligations of either party to pay money to
the other party, including rental, Security Deposit and other charges, pursuant
to the Lease), the period of time for the performance of such action shall be
extended by the number of days that the performance is actually delayed due to
strikes, acts of God, shortages of labor or materials, war, terrorist acts,
civil disturbances and other causes beyond the reasonable control of the
performing party (“Force Majeure”).
32. TENANT’S AUTHORITY.
     32.1 If Tenant signs as a corporation, partnership, trust or other legal
entity each of the persons executing this Lease on behalf of Tenant represents
and warrants that Tenant has been and is qualified to do business in the state
in which the Building is located, that the entity has full right and authority
to enter into this Lease, and that all persons signing on behalf of the entity
were authorized to do so by appropriate actions. Tenant agrees to deliver to
Landlord, simultaneously with the delivery of this Lease, a corporate
resolution, proof of due authorization by partners, opinion of counsel or other
appropriate documentation reasonably acceptable to Landlord evidencing the due
authorization of Tenant to enter into this Lease.
     32.2 Tenant hereby represents and warrants that neither Tenant, nor any
persons or entities holding any legal or beneficial interest whatsoever in
Tenant, are (i) the target of any sanctions program that is established by
Executive Order of the President or published by the Office of Foreign Assets
Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the
President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. §
5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the
Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or
any Executive Order of the President issued pursuant to such statutes; or
(iii) named on the following list that is published by OFAC: “List of Specially
Designated Nationals and Blocked Persons.” If the foregoing representation is
untrue at any time during the Term, an Event of Default will be deemed to have
occurred, without the necessity of notice to Tenant.
33. FINANCIAL STATEMENTS AND CREDIT REPORTS. At Landlord’s request, Tenant shall
deliver to Landlord a copy, certified by an officer of Tenant as being a true
and correct copy, of Tenant’s most recent audited financial statement, or, if
unaudited, certified by Tenant’s chief financial officer as being true, complete
and correct in all material respects. Tenant hereby authorizes Landlord to
obtain one or more credit reports on Tenant at any time, and shall execute such
further authorizations as Landlord may reasonably require in order to obtain a
credit report. So long as Tenant is a

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publicly traded company on an “over-the-counter” market or any recognized
national or international securities exchange, the foregoing shall not apply so
long as Tenant’s current public annual report (in compliance with applicable
securities laws) for such applicable year is available to Landlord in the public
domain.
34. COMMISSIONS. Each of the parties represents and warrants to the other that
it has not dealt with any broker or finder in connection with this Lease, except
as described on the Reference Pages.
35. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
state in which the Building is located.
36. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of the heirs, successors, executors, administrators and assigns
of the parties to this Lease.
37. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.
38. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a
reservation of the Premises. Landlord shall not be bound by this Lease until it
has received a copy of this Lease duly executed by Tenant and has delivered to
Tenant a copy of this Lease duly executed by Landlord, and until such delivery
Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month’s rent as set forth in Article 3 and any
sum owed pursuant to this Lease.
39. RECORDATION. Tenant shall not record or register this Lease or a short form
memorandum hereof without the prior written consent of Landlord, and then shall
pay all charges and taxes incident such recording or registration.
40. OPTION TO RENEW.
     40.1 Provided this Lease is in full force and effect and there is no Event
of Default under this Lease at the time of notification or commencement, Tenant
shall have one (1) option to renew (the “Renewal Option”) this Lease for a term
of five (5) years (the “Renewal Term”), for the portion of the Premises being
leased by Tenant as of the date the Renewal Term is to commence, on the same
terms and conditions set forth in this Lease, except as modified by the terms,
covenants and conditions as set forth below:
          40.1.1 If Tenant elects to exercise the Renewal Option, then Tenant
shall provide Landlord with written notice no earlier than the date which is two
hundred seventy (270) days prior to the expiration of the Term of this Lease but
no later than the date which is one hundred eighty (180) days prior to the
expiration of the Term of this Lease. If Tenant fails to provide such notice,
Tenant shall have no further or additional right to extend or renew the Term of
this Lease.
          40.1.2 The Annual Rent and Monthly Installment in effect at the
expiration of the then current Term of this Lease shall be increased to reflect
the Prevailing Market (as defined in Section 40.1.5) rate. Landlord shall advise
Tenant of the new Annual Rent and Monthly Installment for the Premises no later
than thirty (30) days after receipt of Tenant’s written request therefor. Said
request shall be made no earlier than thirty (30) days prior to the first date
on which Tenant may exercise its Renewal Option under this Article 40. Said
notification of the new Annual Rent may include a provision for its escalation
to provide for a change in the Prevailing Market rate between the time of
notification and the commencement of the Renewal Term. If Tenant and Landlord
are unable to agree on a mutually acceptable rental rate not later than sixty
(60) days prior to the expiration of the then current Term, then Landlord and
Tenant shall each appoint a qualified MAI appraiser doing business in the area,
in turn those two independent MAI appraisers shall appoint a third MAI appraiser
and the majority shall decide upon the fair market rental for the Premises as of
the expiration of the then current Term. Landlord and Tenant shall equally share
in the expense of this appraisal except that in the event the Annual Rent and
Monthly Installment is found to be within six percent (6%) of the original rate
quoted by Landlord, then Tenant shall bear the full cost of all the appraisal
process.

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          40.1.3 This Renewal Option is not transferable; the parties hereto
acknowledge and agree that they intend that the aforesaid option to renew this
Lease shall be “personal” to Tenant as set forth above and that in no event will
any assignee or sublessee (except pursuant to a Permitted Transfer) have any
rights to exercise the aforesaid option to renew.
          40.1.4 If the Renewal Option is validly exercised or if Tenant fails
to validly exercise the Renewal Option, Tenant shall have no further right to
extend the term of this Lease.
          40.1.5 For purposes of this Renewal Option, “Prevailing Market” shall
mean the arms length fair market annual rental rate per rentable square foot
under renewal leases and amendments entered into on or about the date on which
the Prevailing Market is being determined hereunder for space comparable to the
Premises in the Building and buildings comparable to the Building in the South
Orange County, California area as of the date the Renewal Term is to commence,
taking into account the specific provisions of this Lease which will remain
constant. The determination of Prevailing Market shall take into account any
material economic differences between the terms of this Lease and any comparison
lease or amendment, such as rent abatements, construction costs and other
concessions and the manner, if any, in which the landlord under any such lease
is reimbursed for operating expenses and taxes. The determination of Prevailing
Market shall also take into consideration any reasonably anticipated changes in
the Prevailing Market rate from the time such Prevailing Market rate is being
determined and the time such Prevailing Market rate will become effective under
this Lease.
41. RIGHT OF FIRST OFFER.
     41.1 Tenant shall have the on-going right of offer (the “Offer Right”) to
lease any space located in the Building (“Offer Space”), provided that said
space is not already encumbered by options of existing tenants at the Building,
effective at such time as the subject Offer Space is vacated by the prior tenant
(or, if the prior tenant has confirmed in writing that tenant will not extend or
renew its lease prior to vacating the Offer Space, upon such time as Landlord
receives such written confirmation). In such event, Landlord shall give written
notice to Tenant of the availability of the subject Offer Space and the terms
and conditions on which Landlord intends to offer it to the public and Tenant
shall have a period of fifteen (15) days in which to exercise Tenant’s Offer
Right to lease the entire subject Offer Space only pursuant to the terms and
conditions contained in Landlord’s notice, failing which Landlord may lease the
subject Offer Space to any third party on whatever basis Landlord desires, and
Tenant shall have no further rights with respect to such subject Offer Space. If
Tenant exercises its Offer Right for the Offer Space in accordance with the
terms and conditions of this Article 41, effective as of the date Landlord
delivers the subject Offer Space (the “Delivery Date”), such Offer Space shall
automatically be included within the Premises and subject to all the terms and
conditions of this Lease, except as set forth in Landlord’s notice and as
follows:
          41.1.1 Tenant’s Proportionate Share shall be recalculated, using the
total square footage of the Premises, as increased by the subject Offer Space,
as the case may be.
          41.1.2 the Offer Space shall be leased on an “as is” basis and
Landlord shall have no obligation to improve the Offer Space or grant Tenant any
improvement allowance thereon except as may be provided in Landlord’s written
notice of the Offer Right to Tenant.
          41.1.3 Tenant shall, prior to the beginning of the term for the
subject Offer Space, as the case may be, execute a written memorandum or
amendment confirming the inclusion of the subject Offer Space and the Monthly
Installment of Rent and Annual Rent applicable thereto.
     41.2 Tenant shall have no such Offer Right with respect to the subject
Offer Space, as the case may be, and Landlord need not provide Tenant with a
written notice of the same, if:
          41.2.1 There is an Event of Default under this Lease at the time that
Landlord would otherwise deliver its written notice of the subject Offer Right
as described above; or
          41.2.2 the Premises, or any portion thereof, is sublet (other than
pursuant to a Permitted Transfer) at the time Landlord would otherwise deliver
its written notice of the subject Offer Right as described above; or
          41.2.3 this Lease has been assigned (other than pursuant to a
Permitted Transfer) prior to the date Landlord would otherwise deliver its
written notice of the subject Offer Right as described above; or
          41.2.4 Tenant (or a Permitted Transferee) is not occupying the
Premises on the date Landlord would otherwise deliver its written notice of the
Offer Right as described above; or

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          41.2.5 the subject Offer Space is not intended for the exclusive use
of Tenant during the Term; or
          41.2.6 the existing tenant in the subject Offer Space is interested in
extending or renewing its lease for such Offer Space or entering into a new
lease for such Offer Space.
     41.3 If Landlord is delayed delivering possession of the subject Offer
Space due to the holdover or unlawful possession of such space by any party,
Landlord shall use reasonable efforts to obtain possession of such space, and
the commencement of the term for the subject Offer Space shall be postponed
until the date Landlord delivers possession of the subject Offer Space to Tenant
free from occupancy by any party.
The rights of Tenant hereunder with respect to the Offer Space shall terminate
on the earlier to occur of: (i) the expiration of the initial Term of this Lease
(or, if Tenant exercise its Renewal Option, the expiration of the Renewal Term);
(ii) with respect to any particular availability, the date Landlord would have
provided Tenant written notice of the Offer Right as described herein above if
Tenant had not been in violation of one or more of the conditions set forth in
Section 41.2 above; and (iii) with respect to any particular availability,
Tenant’s failure to exercise its Offer Right within the fifteen (15) day period
provided in Section 41.1 above. Notwithstanding the foregoing, if (i) Tenant was
entitled to exercise its Offer Right, but failed to exercise its right within
the fifteen (15) day period provided in paragraph 41.1 above, and (ii) within
six (6) months after the end of such fifteen (15) day period, period, Landlord
proposes to lease the same Offer Space to a third party on terms that are
substantially different than those offered to Tenant. For purposes hereof, the
terms offered to a third party shall be deemed to be substantially the same as
those set forth in the Advice as long as there is no more than a ten percent
(10%) reduction in the “bottom line” cost per rentable square foot of the Offer
Space to the third party when compared with the “bottom line” cost per rentable
square foot offered to Tenant, considering all of the economic terms of the both
deals, respectively, including, without limitation, the net rent, any tax or
expense escalation or other financial escalation and any financial concessions.
     41.5 Notwithstanding anything herein to the contrary, Tenant’s Offer Right
is subject and subordinate to the expansion rights (whether such rights are
designated as a right of first offer, right of first refusal, expansion option
or otherwise) of any tenant of the Building existing on the date hereof.
42. SUITE SIGNAGE. Landlord shall provide and install, at Landlord’s sole cost
and expense, the initial signage for Tenant in the Building directory and
Building standard suite signage at the entry to the Premises. Such signage shall
consist of Building standard materials and shall comply with current Building
specifications.
43. EYEBROW SIGNAGE. Tenant shall have the right to have eyebrow signage located
on the Enterprise side of the Building (the “Eyebrow Signage”). The exact
location of the Eyebrow Signage shall be subject to all applicable Regulations
and Landlord’s prior written approval, which approval shall not be unreasonably
withheld, provided that the location does not detract from the first-class
quality of the Building. Such right to Eyebrow Signage is personal to Tenant and
is subject to the following terms and conditions:
     43.1 Tenant shall submit plans and drawings for the Eyebrow Signage to the
City of Aliso Viejo and to any other public authorities having jurisdiction and
shall obtain written approval from each such jurisdiction prior to installation,
and shall fully comply with all applicable Regulations.
     43.2 Tenant shall, at Tenant’s sole cost and expense, design, construct and
install the Eyebrow Signage.
     43.3 The Eyebrow Signage shall be subject to Landlord’s prior written
approval, which approval shall not be unreasonably withheld.
     43.4 Tenant shall maintain the Eyebrow Signage in good condition and
repair, and all costs of maintenance and repair shall be borne by Tenant.
Maintenance shall include, without limitation, cleaning and, if the Eyebrow
Signage is illuminated, relamping at reasonable intervals. Tenant shall be
responsible for any electrical energy used in connection with the Eyebrow
Signage. Notwithstanding the foregoing, Tenant shall not be liable for any fee
in connection with Tenant’s right to display the Eyebrow Signage in accordance
with this Lease. At Landlord’s option, Tenant’s right to the Eyebrow Signage may
be revoked and terminated upon occurrence of any of the following events:
          43.4.1 There is an Event of Default under this Lease.
          43.4.2 Tenant occupies less than fifty percent (50%) of the Premises.

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          43.4.3 This Lease shall terminate or otherwise no longer be in effect.
     43.5 Upon the expiration or earlier termination of this Lease or at such
other time that Tenant’s signage rights are terminated pursuant to the terms
hereof, if Tenant fails to remove the Eyebrow Signage and repair the Building in
accordance with the terms of this Lease, Landlord shall cause the Eyebrow
Signage to be removed from the Building and the Building to be repaired and
restored to the condition which existed prior to the installation of the Eyebrow
Signage (including, if necessary, the replacement of any precast concrete
panels), all at the sole cost and expense of Tenant and otherwise in accordance
with this Lease, without further notice from Landlord notwithstanding anything
to the contrary contained in this Lease. Tenant shall pay all costs and expenses
for such removal and restoration within five (5) business days following
delivery of an invoice therefor.
     43.6 The rights provided in this Article 43 are subject and subordinate to
the existing rights of RemedyTemp Inc., a California corporation (or its
successor in interest at the Building) (“RemedyTemp”), and shall be
non-transferable unless otherwise agreed in writing by Landlord and by
RemedyTemp, each in its sole discretion. Notwithstanding the foregoing, Landlord
shall not disapprove a transfer of the Eyebrow Signage in connection with a
Permitted Transfer, so long as the original name of Tenant hereunder remains on
the Eyebrow Signage. If the name on the Eyebrow Signage will change in
connection with such Permitted Transfer, Landlord shall have the right to
approve the new name on the Eyebrow Signage, which approval shall not be
unreasonably withheld.
44. BUILDING SIGNAGE. In the event Tenant leases fifty percent (50%) or more of
the Building, Tenant shall have the right of first offer to have one exclusive
sign to be located on top of the Building (the “Building Signage”) at such time
as space becomes available during the Term. In such event, Landlord shall give
written notice to Tenant of the availability of space for the Building Signage
and Tenant shall have a period of five (5) days to notify Landlord that Tenant
exercises its right of first offer for the Building Signage. The exact location
of the Building Signage shall be subject to all applicable Regulations and
Landlord’s prior written approval, which approval shall not be unreasonably
withheld, provided that the location does not detract from the first-class
quality of the Building. Such right to Building Signage is personal to Tenant
and is subject to the following terms and conditions:
     44.1 Tenant shall submit plans and drawings for the Building Signage to the
City of Aliso Viejo and to any other public authorities having jurisdiction and
shall obtain written approval from each such jurisdiction prior to installation,
and shall fully comply with all applicable Regulations.
     44.2 Tenant shall, at Tenant’s sole cost and expense, design, construct and
install the Building Signage.
     44.3 The Building Signage shall be subject to Landlord’s prior written
approval, which shall not be unreasonably withheld.
     44.4 Tenant shall maintain the Building Signage in good condition and
repair, and all costs of maintenance and repair shall be borne by Tenant.
Maintenance shall include, without limitation, cleaning and, if the Building
Signage is illuminated, relamping at reasonable intervals. Tenant shall be
responsible for any electrical energy used in connection with the Building
Signage. Notwithstanding the foregoing, Tenant shall not be liable for any fee
in connection with Tenant’s right to display the Building Signage in accordance
with this Lease. At Landlord’s option, Tenant’s right to the Building Signage
may be revoked and terminated upon occurrence of any of the following events:
          44.4.1 There is an Event of Default under this Lease.
          44.4.2 Tenant occupies less than fifty percent (50%) of the Building.
          44.4.3 This Lease shall terminate or otherwise no longer be in effect.
     44.5 Upon the expiration or earlier termination of this Lease or at such
other time that Tenant’s signage rights are terminated pursuant to the terms
hereof, if Tenant fails to remove the Building Signage and repair the Building
in accordance with the terms of this Lease, Landlord shall cause the Building
Signage to be removed from the Building and the Building to be repaired and
restored to the condition which existed prior to the installation of the
Building Signage (including, if necessary, the replacement of any precast
concrete panels), all at the sole cost and expense of Tenant and otherwise in
accordance with this Lease, without further notice from Landlord notwithstanding
anything to the contrary contained in this Lease. Tenant shall pay all costs and
expenses for such removal and restoration within five (5) business days
following delivery of an invoice therefor.

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     44.6 The rights provided in this Article 44 shall be non-transferable
unless otherwise agreed by Landlord in writing in its sole discretion.
Notwithstanding the foregoing, Landlord shall not disapprove a transfer of the
Building Signage in connection with a Permitted Transfer, so long as the
original name of Tenant hereunder remains on the Building Signage. If the name
on the Building Signage will change in connection with such Permitted Transfer,
Landlord shall have the right to approve the new name on the Building Signage,
which approval shall not be unreasonably withheld.
45. MONUMENT SIGNAGE.
     45.1 Provided that no Event of Default exists under the terms of this
Lease, and Tenant leases and occupies the Premises, Tenant shall have the right
of first offer to place its name on the Building’s monument sign (the “Monument
Sign”) at such time as space becomes available during the Term, which shall be
at Tenant’s sole cost, and subject to governmental approval. In such event,
Landlord shall give written notice to Tenant of the availability of space on the
Monument Sign and Tenant shall have a period of five (5) days to notify Landlord
that Tenant desires to put its name on the Monument Sign. The design, size and
color of the signage with Tenant’s name to be included on the Monument Sign, and
the manner in which it is attached to the Monument Sign, shall be subject to the
reasonable approval of Landlord and all Regulations, and Landlord shall have the
right to require that all names on the Monument Sign be of the same size and
style. Tenant, at its cost, shall be responsible for the maintenance, repair or
replacement of Tenant’s signage on the Monument Sign, which shall be maintained
in a manner reasonably satisfactory to Landlord. The location of Tenant’s name
on the Monument Sign, shall be subject to the existing rights of existing
tenants in the Building, and the location of Tenant’s name on the Monument Sign
shall be further subject to Landlord’s reasonable approval. Although the
Monument Sign will be maintained by Landlord, Tenant shall pay its proportionate
share of the cost of any maintenance and repair associated with the Monument
Sign. Upon expiration or earlier termination of this Lease or Tenant’s right to
possession of the Premises, or if Tenant ceases to lease or occupy the Premises,
Landlord, at Tenant’s cost, payable as additional rent within five (5) business
days after demand therefor, shall have the right to remove Tenant’s signage from
the Monument Sign and restore the Monument Sign to the condition it was in prior
to installation of Tenant’s signage thereon, ordinary wear and tear excepted.
     45.2 The rights provided in this Article 45 shall be non-transferable
unless otherwise agreed by Landlord in writing. Notwithstanding the foregoing,
Landlord shall not disapprove a transfer of the Monument Signage in connection
with a Permitted Transfer, so long as the original name of Tenant hereunder
remains on the Monument Signage. If the name on the Monument Signage will change
in connection with such Permitted Transfer, Landlord shall have the right to
approve the new name on the Monument Signage, which approval shall not be
unreasonably withheld.
46. LANDLORD DEFAULT. In addition to any of Tenant’s rights or remedies at law
but except as expressly waived in this Lease and subject to Article 47, Landlord
shall be in default under this Lease if (i) Landlord fails to perform any of its
obligations hereunder and said failure continues for a period of 30 days after
written notice thereof from Tenant to Landlord (provided that if such failure
cannot reasonably be cured within said 30 day period, Landlord shall be in
default hereunder only if Landlord fails to commence the cure of said failure
within said 30 day period, or having commenced the curative action within said
60 day period, fails to diligently pursue same) and (ii) each mortgagee of whose
identity Tenant has been notified in writing shall have failed to cure such
default within 30 days (or such longer period of time as may be specified in any
written agreement between Tenant and mortgagee regarding such matter) after
receipt of written notice from Tenant of Landlord’s failure to cure within the
time periods provided above. In the event of a default by Landlord under the
Lease, Tenant shall use reasonable efforts to mitigate its damages and losses
arising from any such default and Tenant may pursue any and all remedies
available to it at law or in equity, provided, however, in no event shall Tenant
claim a constructive or actual eviction or that the Premises have become
unsuitable or unhabitable prior to a default and failure to cure by Landlord and
its mortgagee under this Lease and, further provided, in no event shall Tenant
be entitled to receive more than its actual direct damages, it being agreed that
Tenant hereby waives any claim it otherwise may have for special or
consequential damages.
47. LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord
under this Lease shall be limited to and enforceable only against and to the
extent of Landlord’s interest in the Building in which the Premises is located.
The obligations of Landlord under this Lease are not intended to be and shall
not be personally binding on, nor
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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shall any resort be had to the private properties of, any of its or its
investment manager’s trustees, directors, officers, partners, beneficiaries,
members, stockholders, employees, or agents, and in no case shall Landlord be
liable to Tenant hereunder for any lost profits, damage to business, or any form
of special, indirect or consequential damages.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Lease
Reference Date set forth in the Reference Pages of this Lease.

                      LANDLORD:       TENANT:
 
                    RREEF AMERICA REIT II CORP. FFF,       AVANIR
PHARMACEUTICALS, a Maryland corporation       a California corporation
 
                   
By:
  RREEF Management Company, a
Delaware corporation, its Property Manager                
 
                   
By:
          By:        
 
                   
 
                   
Name:
  Robin Iles       Name:   Eric K. Brandt    
 
                   
Title:
  Vice President, District Manager       Title:   President and CEO    
 
                   
Dated:
                                          , 2006       Dated:  
                                        , 2006    
 
                   
 
          By:        
 
                   
 
                   
 
          Name:   Keith Katkin    
 
                   
 
          Title:   Sr. Vice President, Sales and Marketing    
 
                   
 
          Dated:                                           , 2006    

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EXHIBIT A – FLOOR PLAN DEPICTING THE PREMISES
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
Exhibit A is intended only to show the general layout of the Premises as of the
beginning of the Term of the Lease. It does not in any way supersede any of
Landlord’s rights set forth in Article 17 of the Lease with respect to
arrangements and/or locations of public parts of the Building and changes in
such arrangements and/or locations. It is not to be scaled; any measurements or
distances shown should be taken as approximate.

     
A-1
   
 
Initials

 

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EXHIBIT A-1 – SITE PLAN
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
Exhibit A-1 is intended only to show the general location of the Building and/or
the project of which the Building is a part as of the beginning of the Term of
the Lease. It does not in any way supersede any of Landlord’s rights set forth
in Article 17 of the Lease with respect to arrangements and/or locations of
public parts of the Building and changes in such arrangements and/or locations.
It is not to be scaled; any measurements or distances shown should be taken as
approximate.

     
A-2
   
 
Initials

 

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EXHIBIT B – INITIAL ALTERATIONS
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
1. This Exhibit B shall set forth the obligations of Landlord and Tenant with
respect to the improvements to be performed in the Initial Premises and the
Additional Premises for Tenant’s use. All improvements described in this
Exhibit B to be constructed in and upon the Initial Premises by Landlord in
accordance with the Initial Premises Plans (as defined below) are hereinafter
referred to as the “Initial Premises Alterations” and all improvements described
in this Exhibit B to be constructed in and upon the Additional Premises by
Landlord in accordance with the Additional Premises Plans (as defined below) are
hereinafter referred to as the “Additional Premises Alterations”. The Initial
Premises Alterations and the Additional Premises Alterations shall sometimes be
collectively referred to herein as the “Initial Alterations”. It is agreed that
construction of the Initial Alterations will be completed at Landlord’s sole
cost and expense (subject to the Initial Premises Maximum Amount and the
Additional Premises Maximum Amount (hereinafter defined) and further subject to
the terms of Section 5 below), using Building standard methods, materials, and
finishes, in a good and workmanlike manner, and in accordance with the Initial
Premises Plans and the Additional Premises Plans, as the case may be.
Notwithstanding the foregoing, Landlord and Tenant acknowledge that the Initial
Premises Plans (hereinafter defined) for the Initial Premises Alterations have
not yet been prepared and, therefore, it is impossible to determine the exact
cost of the Initial Premises Alterations at this time. Accordingly, Landlord and
Tenant agree that Landlord’s obligation to pay for the cost of the Initial
Premises Alterations (inclusive of the hard and soft costs of the Initial
Premises Alterations, including the cost of preparing the Initial Premises
Plans, obtaining permits, a construction management fee equal to three percent
(3%) of the total construction costs and other related costs such as design and
other professional fees and permitting costs) shall be limited to $169,785.00
(the “Initial Premises Maximum Amount”) and that Tenant shall be responsible for
the cost of the Initial Premises Alterations, plus any applicable state sales or
use tax, if any, to the extent that it exceeds the Initial Premises Maximum
Amount. Landlord and Tenant acknowledge that the Additional Premises Plans
(hereinafter defined) for the Additional Premises Alterations have not yet been
prepared and, therefore, it is impossible to determine the exact cost of the
Additional Premises Alterations at this time. Accordingly, Landlord and Tenant
agree that Landlord’s obligation to pay for the cost of the Additional Premises
Alterations (inclusive of the hard and soft costs of the Additional Premises
Alterations, including the cost of preparing the Additional Premises Plans,
obtaining permits, a construction management fee equal to three percent (3%) of
the total construction costs and other related costs such as design and other
professional fees and permitting costs) shall be limited to $94,350.00 (the
“Additional Premises Maximum Amount”) and that Tenant shall be responsible for
the cost of the Additional Premises Alterations, plus any applicable state sales
or use tax, if any, to the extent that it exceeds the Additional Premises
Maximum Amount. Landlord shall obtain bids for the Initial Alterations from up
to three (3) general contractors identified by Tenant and reasonably approved by
Landlord; provided that any such general contractor must at a minimum be
qualified (with good references), bonded, licensed in the state in which the
Alterations are being performed, and carry the insurance required by Landlord,
all as reasonably determined by Landlord. Landlord shall consult with Tenant
upon receipt of such bids, and following such consultation shall enter into a
direct contract for the Initial Alterations with a general contractor selected
by Landlord. Landlord shall not be required to select the contractor that
presents the lowest bid. In addition, Landlord shall have the right to select
and/or approve of any subcontractors used in connection with the Initial
Alterations.
2. Tenant shall be solely responsible for the timely preparation and submission
to Landlord of the final architectural, electrical and mechanical construction
drawings, plans and specifications (the “Initial Premises Plans”) necessary to
construct the Initial Premises Alterations, which plans shall be subject to
approval by Landlord and Landlord’s architect and engineers and shall comply
with their requirements to avoid aesthetic or other conflicts with the design
and function of the balance of the Building. Tenant shall be solely responsible
for the timely preparation and submission to Landlord of the final
architectural, electrical and mechanical construction drawings, plans and
specifications (the “Additional Premises Plans”) necessary to construct the
Additional Premises Alterations, which plans shall be subject to approval by
Landlord and Landlord’s architect and engineers and shall comply with their
requirements to avoid aesthetic or other conflicts with the design and function
of the balance of the Building. The Initial Premises Plans and the Additional
Premises Plans shall sometimes be collectively referred to herein as the
“Plans”. Tenant shall be responsible for all elements of the design of the Plans
(including, without limitation, compliance with law, functionality of design,
the structural integrity of the design, the configuration of the Initial
Premises and the Additional Premises, as the case may be, and the placement of
Tenant’s furniture, appliances and equipment), and Landlord’s approval of the
Plans shall in no event relieve Tenant of the responsibility for such design. If
requested by Tenant, Landlord’s architect will prepare the Plans necessary for
such construction at Tenant’s cost. Whether or not the layout and Plans are
prepared with the help (in whole or in part) of Landlord’s architect, Tenant
agrees to remain solely responsible for the timely preparation and submission of
the Plans and

     
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for all elements of the design of such Plans and for all costs related thereto.
Tenant has assured itself by direct communication with the architect and
engineers (Landlord’s or its own, as the case may be) that the final approved
Initial Premises Plans can be delivered to Landlord on or before May 12, 2006
(the “Initial Premises Plans Due Date”), provided that Tenant promptly furnishes
complete information concerning its requirements to the architect and engineers
as and when requested by them. The final approved Additional Premises Plans
shall be delivered to Landlord on or before February 28, 2007 (the “Additional
Premises Plans Due Date”), provided that Tenant promptly furnishes complete
information concerning its requirements to the architect and engineers as and
when requested by them. Each of the Initial Premises Plans Due Date and the
Additional Premises Plans Due Date shall be extended by one day for each day of
Landlord Delay (defined below) in responding to Tenant’s requests for approval
of the Plans or revisions thereto corresponding to the applicable Premises.
Tenant covenants and agrees to cause the final, approved Plans to be delivered
to Landlord on or before the Initial Premises Plans Due Date and the Additional
Premises Plans Due Date, as applicable, and to devote such time as may be
necessary in consultation with the architect and engineers to enable them to
complete and submit the Plans within the required time limit. Time is of the
essence in respect of preparation and submission of the Plans by Tenant. If the
Initial Premises Plans are not fully completed and approved by the Initial
Premises Plans Due Date, Tenant shall be responsible for one day of Tenant Delay
for each day during the period beginning on the day following the Initial
Premises Plans Due Date and ending on the date completed Initial Premises Plans
are approved. If the Additional Premises Plans are not fully completed and
approved by the Additional Premises Plans Due Date, Tenant shall be responsible
for one day of Tenant Delay for each day during the period beginning on the day
following the Additional Premises Plans Due Date and ending on the date
completed Additional Premises Plans are approved. (The word “architect” as used
in this Exhibit B shall include an interior designer or space planner.) Landlord
shall respond to any Tenant request for approval of its Plans or any revisions
thereto within three (3) business days following receipt thereof, and each day
beyond such three (3) business day period in which Landlord fails to respond
shall be considered one (1) day of “Landlord Delay” for purposes of this
Exhibit B.
3. If Landlord’s estimate and/or the actual cost of the Initial Premises
Alterations shall exceed the Initial Premises Maximum Amount, Landlord, prior to
commencing any construction of the Initial Premises Alterations, shall submit to
Tenant a written estimate setting forth the anticipated cost of the Initial
Premises Alterations, including but not limited to labor and materials,
contractor’s fees and permit fees. Within three (3) business days thereafter,
Tenant shall either notify Landlord in writing of its approval of the cost
estimate, or specify its objections thereto and any desired changes to the
proposed Initial Premises Alterations. If Landlord’s estimate and/or the actual
cost of the Additional Premises Alterations shall exceed the Additional Premises
Maximum Amount, Landlord, prior to commencing any construction of the Additional
Premises Alterations, shall submit to Tenant a written estimate setting forth
the anticipated cost of the Additional Premises Alterations, including but not
limited to labor and materials, contractor’s fees and permit fees. Within three
(3) business days thereafter, Tenant shall either notify Landlord in writing of
its approval of the cost estimate, or specify its objections thereto and any
desired changes to the proposed Additional Premises Alterations. If Tenant
notifies Landlord of such objections and desired changes with respect to either
the Initial Premises Alterations or the Additional Premises Alterations, Tenant
shall work with Landlord to reach a mutually acceptable alternative cost
estimate and such period shall not be considered a Tenant Delay with respect to
the applicable Initial Alterations; provided that if Landlord and Tenant are
unable to agree on an alternative cost estimate within three (3) days after
Tenant’s notification, then Landlord may either (a) proceed with construction of
the applicable Initial Alterations using Landlord’s cost estimate, including any
revisions to which Landlord and Tenant have agreed as of that date, or (b) if
Tenant so requests in writing, Landlord may elect to continue to work with
Tenant to further revise the cost estimate or applicable Initial Alterations, in
which event any delay in completion of the applicable Initial Alterations beyond
the 3-day period above shall be a Tenant Delay.
4. If Landlord’s estimate and/or the actual cost of construction shall exceed
the Initial Premises Maximum Amount (such amounts exceeding the Initial Premises
Maximum Amount being herein referred to as the “Initial Premises Excess Costs”),
Tenant shall pay to Landlord such Initial Premises Excess Costs, plus any
applicable state sales or use tax thereon, upon demand. If Landlord’s estimate
and/or the actual cost of construction shall exceed the Additional Premises
Maximum Amount (such amounts exceeding the Additional Premises Maximum Amount
being herein referred to as the “Additional Premises Excess Costs”), Tenant
shall pay to Landlord such Additional Premises Excess Costs, plus any applicable
state sales or use tax thereon, upon demand. The statements of costs submitted
to Landlord by Landlord’s contractors shall be conclusive for purposes of
determining the actual cost of the items described therein. The amounts payable
by Tenant hereunder constitute rent payable pursuant to the Lease, and the
failure to timely pay same constitutes an Event of Default under the Lease.
5. If Tenant shall request any change, addition or alteration in any of the
Plans after approval by Landlord, Landlord shall have such revisions to the
drawings prepared as soon as practicable, and Tenant shall reimburse Landlord
for the cost thereof, plus any applicable state sales or use tax thereon, upon
demand to the extent that the cost of performing such revisions cause the cost
of the Initial Premises Alterations to exceed the Initial Premises Maximum
Amount or the cost of performing such revisions cause the cost of the Additional
Premises Alterations to exceed the Additional Premises Maximum

     
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Amount. Promptly upon completion of the revisions, Landlord shall notify Tenant
in writing of the increased cost, if any, which will be chargeable to Tenant by
reason of such change, addition or deletion. Tenant, within one business day,
shall notify Landlord in writing whether it desires to proceed with such change,
addition or deletion. In the absence of such written authorization, Landlord
shall have the option to continue work on the Initial Premises or the Additional
Premises, as applicable, disregarding the requested change, addition or
alteration, or Landlord may elect to discontinue work on the Initial Premises or
the Additional Premises until it receives notice of Tenant’s decision, in which
event Tenant shall be responsible for any Tenant Delay in completion of the
Initial Premises or the Additional Premises resulting therefrom. If such
revisions result in a higher estimate of the cost of construction and/or higher
actual construction costs which exceed the Initial Premises Maximum Amount, such
increased estimate or costs shall be deemed Initial Premises Excess Costs
pursuant to Section 4 hereof and Tenant shall pay such Initial Premises Excess
Costs, plus any applicable state sales or use tax thereon, upon demand. If such
revisions result in a higher estimate of the cost of construction and/or higher
actual construction costs which exceed the Additional Premises Maximum Amount,
such increased estimate or costs shall be deemed Additional Premises Excess
Costs pursuant to Section 4 hereof and Tenant shall pay such Additional Premises
Excess Costs, plus any applicable state sales or use tax thereon, upon demand.
6. Following approval of the Initial Premises Plans and the payment by Tenant of
the required portion of the Initial Premises Excess Costs, if any, Landlord
shall cause the Initial Premises Alterations to be constructed substantially in
accordance with the approved Initial Premises Plans. Landlord shall notify
Tenant of substantial completion of the Initial Premises Alterations. Following
approval of the Additional Premises Plans and the payment by Tenant of the
required portion of the Additional Premises Excess Costs, if any, Landlord shall
cause the Additional Premises Alterations to be constructed substantially in
accordance with the approved Additional Premises Plans. Landlord shall notify
Tenant of substantial completion of the Additional Premises Alterations.
7. Any portion of the Initial Premises Maximum Amount which exceeds the cost of
the Initial Premises Alterations or is otherwise remaining after September 30,
2006 may be added to the Additional Premises Maximum Amount. Any portion of the
Additional Premises Maximum Amount (including any addition thereto carried over
from the Initial Premises Maximum Amount) which exceeds the cost of the
Additional Premises Alterations or is otherwise remaining after September 30,
2007, shall accrue to the sole benefit of Landlord, it being agreed that Tenant
shall not be entitled to any credit, offset, abatement or payment with respect
thereto.
8. This Exhibit B shall not be deemed applicable to any additional space added
to the Premises at any time or from time to time, whether by any options under
the Lease or otherwise, or to any portion of the original Premises or any
additions to the Premises in the event of a renewal or extension of the original
Term of the Lease, whether by any options under the Lease or otherwise, unless
expressly so provided in the Lease or any amendment or supplement to the Lease.
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EXHIBIT C – INITIAL PREMISES COMMENCEMENT DATE MEMORANDUM
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
INITIAL PREMISES COMMENCEMENT DATE MEMORANDUM
     THIS MEMORANDUM, made as of ___, 20___, by and between RREEF AMERICA REIT
II CORP. FFF, a Maryland corporation (“Landlord”) and AVANIR PHARMACEUTICALS, a
California corporation (“Tenant”).
Recitals:

  A.   Landlord and Tenant are parties to that certain Lease, dated for
reference April 28, 2006 (the “Lease”) for certain premises (the “Premises”)
consisting of approximately 11,319 square feet for the Initial Premises and
approximately 6,290 square feet for the Additional Premises, for a total of
approximately 17,609 rentable square feet at the building commonly known as 101
Enterprise, Aliso Viejo, California.     B.   Tenant is in possession of the
Initial Premises and the Term of the Lease has commenced.     C.   Landlord and
Tenant desire to enter into this Memorandum confirming the Initial Premises
Commencement Date and the Termination Date and other matters under the Lease.

     NOW, THEREFORE, Landlord and Tenant agree as follows:

  1.   The Initial Premises Commencement Date is ___.     2.   The actual
Termination Date is ___.     3.   The schedule of the Annual Rent and the
Monthly Installment of Rent set forth on the Reference Pages for the Initial
Premises is deleted in its entirety, and the following is substituted therefor:

[insert rent schedule]

  4.   Capitalized terms not defined herein shall have the same meaning as set
forth in the Lease.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

                      LANDLORD:       TENANT:
 
                    RREEF AMERICA REIT II CORP. FFF,       AVANIR
PHARMACEUTICALS, a Maryland corporation       a California corporation
 
                   
By:
  RREEF Management Company, a                     Delaware corporation, its
Property Manager            
 
                   
By:
          By:        
 
                   
Name:
  DO NOT SIGN       Name:   DO NOT SIGN    
 
                   
Title:
          Title:        
 
                   
 
                   
Dated:
          Dated:        
 
                   

     
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EXHIBIT C-1 – ADDITIONAL PREMISES COMMENCEMENT DATE MEMORANDUM
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
ADDITIONAL PREMISES COMMENCEMENT DATE MEMORANDUM
     THIS MEMORANDUM, made as of ___, 20___, by and between RREEF AMERICA REIT
II CORP. FFF, a Maryland corporation (“Landlord”) and AVANIR PHARMACEUTICALS, a
California corporation (“Tenant”).
Recitals:

  A.   Landlord and Tenant are parties to that certain Lease, dated for
reference April 28, 2006 (the “Lease”) for certain premises (the “Premises”)
consisting of approximately 11,319 square feet for the Initial Premises and
approximately 6,290 square feet for the Additional Premises, for a total of
approximately 17,609 rentable square feet at the building commonly known as 101
Enterprise, Aliso Viejo, California.     B.   Tenant is in possession of the
Premises and the Term of the Lease has commenced.     C.   Landlord and Tenant
desire to enter into this Memorandum confirming the Additional Premises
Commencement Date and the Termination Date and other matters under the Lease.

     NOW, THEREFORE, Landlord and Tenant agree as follows:

  1.   The Additional Premises Commencement Date is ___.     2.   The actual
Termination Date is ___.     3.   The schedule of the Annual Rent and the
Monthly Installment of Rent set forth on the Reference Pages for the Premises is
deleted in its entirety, and the following is substituted therefor:

[insert rent schedule]

  4.   Capitalized terms not defined herein shall have the same meaning as set
forth in the Lease.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

                      LANDLORD:       TENANT:
 
                    RREEF AMERICA REIT II CORP. FFF,       AVANIR
PHARMACEUTICALS, a Maryland corporation       a California corporation
 
                   
By:
  RREEF Management Company, a                     Delaware corporation, its
Property Manager            
 
                   
By:
          By:        
 
                   
Name:
  DO NOT SIGN       Name:   DO NOT SIGN    
 
                   
Title:
          Title:        
 
                   
 
                   
Dated:
          Dated:        
 
                   

     
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EXHIBIT D – RULES AND REGULATIONS
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without the
prior written consent of the Landlord. Landlord shall have the right to remove,
at Tenant’s expense and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on doors and walls shall
be printed, painted, affixed or inscribed at Tenant’s expense by a vendor
designated or approved by Landlord. In addition, Landlord reserves the right to
change from time to time the format of the signs or lettering and to require
previously approved signs or lettering to be appropriately altered.
2. If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, or stairways of the Building. No tenant and no employee or invitee of
any tenant shall go upon the roof of the Building.
4. Any directory of the Building, if provided, will be exclusively for the
display of the name and location of tenants only and Landlord reserves the right
to exclude any other names. Landlord reserves the right to charge for Tenant’s
directory listing.
5. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of the
Premises. Landlord shall not in any way be responsible to any Tenant for any
loss of property on the Premises, however occurring, or for any damage to any
Tenant’s property by the janitor or any other employee or any other person.
6. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed. No
foreign substance of any kind whatsoever shall be thrown into any of them, and
the expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.
7. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
issued from time to time by Landlord. Tenant will comply with any and all
recycling procedures designated by Landlord.
8. Landlord will furnish Tenant ten (10) keys free of charge to each door in the
Premises that has a passage way lock. Landlord may charge Tenant a reasonable
amount for any additional keys, and Tenant shall not make or have made
additional keys on its own. Tenant shall not alter any lock or install a new or
additional lock or bolt on any door of its Premises. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys of all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
9. If Tenant requires telephone, data, burglar alarm or similar service, the
cost of purchasing, installing and maintaining such service shall be borne
solely by Tenant. No boring or cutting for wires will be allowed without the
prior written consent of Landlord.
10. No equipment, materials, furniture, packages, bulk supplies, merchandise or
other property will be received in the Building or carried in the elevators
except between such hours and in such elevators as may be designated by
Landlord. The persons employed to move such equipment or materials in or out of
the Building must be acceptable to Landlord.
11. Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Heavy objects shall stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the Building to
such a degree as

     
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to be objectionable to Landlord or to any tenants shall be placed and maintained
by Tenant, at Tenant’s expense, on vibration eliminators or other devices
sufficient to eliminate the noise or vibration. Landlord will not be responsible
for loss of or damage to any such equipment or other property from any cause,
and all damage done to the Building by maintaining or moving such equipment or
other property shall be repaired at the expense of Tenant.
12. Landlord shall in all cases retain the right to control and prevent access
to the Building of all persons whose presence in the reasonable judgment of
Landlord would be prejudicial to the safety, character, reputation or interests
of the Building and its tenants, provided that nothing contained in this rule
shall be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of its business, unless such persons are
engaged in illegal activities. Landlord reserves the right to exclude from the
Building between the hours of 6 p.m. and 7 a.m. the following day, or such other
hours as may be established from time to time by Landlord, and on Sundays and
legal holidays, any person unless that person is known to the person or employee
in charge of the Building or has a pass and is properly identified. Tenant shall
be responsible for all persons for whom it requests passes and shall be liable
to Landlord for all acts of such persons. Landlord shall not be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person.
13. Tenant shall not use any method of heating or air conditioning other than
that supplied or approved in writing by Landlord.
14. Tenant shall not waste electricity, water or air conditioning. Tenant shall
close and lock the doors of its Premises and entirely shut off all water faucets
or other water apparatus and electricity, gas or air outlets before Tenant and
its employees leave the Premises. Tenant shall be responsible for any damage or
injuries sustained by other tenants or occupants of the Building or by Landlord
for noncompliance with this rule.
15. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or other device on the roof or exterior walls of the Building
without Landlord’s prior written consent, which consent may be withheld in
Landlord’s sole discretion, and which consent may in any event be conditioned
upon Tenant’s execution of Landlord’s standard form of license agreement. Tenant
shall be responsible for any interference caused by such installation.
16. Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork, plaster, or drywall (except for pictures, tackboards and similar
office uses) or in any way deface the Premises. Tenant shall not cut or bore
holes for wires. Tenant shall not affix any floor covering to the floor of the
Premises in any manner except as approved by Landlord. Tenant shall repair any
damage resulting from noncompliance with this rule.
17. Tenant shall not install, maintain or operate upon the Premises any vending
machine without Landlord’s prior written consent, except that Tenant may install
food and drink vending machines solely for the convenience of its employees.
18. No cooking shall be done or permitted by any tenant on the Premises, except
that Underwriters’ Laboratory approved microwave ovens or equipment for brewing
coffee, tea, hot chocolate and similar beverages shall be permitted provided
that such equipment and use is in accordance with all applicable Regulations.
19. Tenant shall not use in any space or in the public halls of the Building any
hand trucks except those equipped with the rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.
20. Tenant shall not permit any motor vehicles to be washed or mechanical work
or maintenance of motor vehicles to be performed in any parking lot.
21. Tenant shall not use the name of the Building or any photograph or likeness
of the Building in connection with or in promoting or advertising Tenant’s
business, except that Tenant may include the Building name in Tenant’s address
and provided that Tenant may use images of the Building on its website with
Landlord’s prior approval. Landlord shall have the right, exercisable without
notice and without liability to any tenant, to change the name and address of
the Building.
22. Tenant requests for services must be submitted to the Building office by an
authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instruction from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
23. Tenant shall not permit smoking or carrying of lighted cigarettes or cigars
other than in areas designated by Landlord as smoking areas.

     
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24. Canvassing, soliciting, distribution of handbills or any other written
material in the Building is prohibited and each tenant shall cooperate to
prevent the same. No tenant shall solicit business from other tenants or permit
the sale of any good or merchandise in the Building without the written consent
of Landlord.
25. Tenant shall not permit any animals other than service animals, e.g.
seeing-eye dogs, to be brought or kept in or about the Premises or any common
area of the Building.
26. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of any premises in the Building. Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant or tenants, but no such waiver by Landlord shall be construed
as a waiver of such Rules and Regulations in favor of any other tenant or
tenants, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.
27. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building, and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant’s employees, agents, clients, customers, invitees and guests.
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EXHIBIT E – EARLY POSSESSION AGREEMENT
attached to and made a part of the Lease bearing the
Lease Reference Date of April 28, 2006 between
RREEF AMERICA REIT II CORP. FFF, a Maryland corporation, as Landlord and
AVANIR PHARMACEUTICALS, a California corporation, as Tenant
EARLY POSSESSION AGREEMENT
     Reference is made to that Lease dated April 28, 2006, between RREEF AMERICA
REIT II CORP. FFF, a Maryland corporation (“Landlord”) and AVANIR
PHARMACEUTICALS, a California corporation (“Tenant”), for the premises located
in the City of Aliso Viejo, County of Orange, State of California, commonly
known as 101 Enterprise.
     It is hereby agreed that, notwithstanding anything to the contrary
contained in the Lease, Tenant may occupy the Premises on
                                                            . The first Monthly
Installment of Rent is due on                     .
     Landlord and Tenant agree that all the terms and conditions of the above
referenced Lease are in full force and effect as of the date of Tenant’s
possession of the Premises other than the payment of Rent.

                      LANDLORD:       TENANT:
 
                    RREEF AMERICA REIT II CORP. FFF,       AVANIR
PHARMACEUTICALS, a Maryland corporation       a California corporation
 
                   
By:
  RREEF Management Company, a                     Delaware corporation, its
Property Manager            
 
                   
By:
          By:        
 
                   
Name:
  DO NOT SIGN       Name:   DO NOT SIGN    
 
                   
Title:
          Title:        
 
                   
 
                   
Dated:
          Dated:        
 
                   

     
E-1
   
 
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