exv10w19









Exhibit 10.19





TABLE OF CONTENTS




									








Table of Contents







NET LEASE AGREEMENT (OFFICE)




2900 Kilgore Road

Rancho Cordova, California




between




Panattoni-Catlin Venture XXVI,

a California general partnership




and




Endosonics Corporation,

a Delaware corporation




January 10, 1996




	 	 	 	 	 
	 	 	See also 1st Amendment dated 4/30/97
	 
	 	 	 	 
	 

	 	 	 	    2nd Amendment dated 5/8/97
	 
	 	 	 	 
	 

	 	 	 	    3rd Amendment dated 8/23/99
	 
	 	 	 	 
	 

	 	 	 	    4th Amendment dated 10/11/2000
	 
	 	 	 	 
	 	 	& Lease Assumption Agent dated 7/5/2001






 









Table of Contents







TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Section	 	Description	 	Page(s)
	1.

	 	PURCHASE TRANSACTION
	 	 	3	 
	2.

	 	BUILDING IMPROVEMENTS
	 	 	3	 
	3.

	 	PREMISES
	 	 	6	 
	4.

	 	ACCEPTANCE OF PREMISES
	 	 	6	 
	5.

	 	DEFINITIONS
	 	 	6	 
	6.

	 	POSSESSION
	 	 	7	 
	7.

	 	RENT
	 	 	7	 
	8.

	 	SECURITY DEPOSIT	 	 	8	 
	9.

	 	OPERATING EXPENSES
	 	 	9	 
	10.

	 	TAXES
	 	 	11	 
	11.

	 	UTILITIES
	 	 	12	 
	12.

	 	USE
	 	 	13	 
	13.

	 	COMPLIANCE WITH THE LAW
	 	 	13	 
	14.

	 	ALTERATIONS AND ADDITIONS
	 	 	15	 
	15.

	 	REPAIRS AND MAINTENANCE
	 	 	15	 
	16.

	 	WASTE
	 	 	17	 
	17.

	 	LIENS
	 	 	17	 
	18.

	 	ASSIGNMENT AND SUBLETTING
	 	 	17	 
	19.

	 	INDEMNITY
	 	 	19	 
	20.

	 	DAMAGE TO PREMISES OR BUILDING
	 	 	19	 
	21.

	 	TENANT’S INSURANCE /WAIVER OF SUBROGATION
	 	 	19	 
	22.

	 	WAIVER
	 	 	22	 
	23.

	 	ENTRY BY LANDLORD
	 	 	22	 
	24.

	 	CASUALTY DAMAGE
	 	 	23	 
	25.

	 	CONDEMNATION
	 	 	24	 
	26.

	 	TENANT’S DEFAULT
	 	 	25	 
	27.

	 	REMEDIES FOR TENANT’S DEFAULT
	 	 	26	 
	28.

	 	SURRENDER OF PREMISES
	 	 	27	 
	29.

	 	DEFAULT BY LANDLORD
	 	 	28	 
	30.

	 	PARKING
	 	 	28	 
	31.

	 	ESTOPPEL CERTIFICATE
	 	 	28	 
	32.

	 	SALE OF PREMISES
	 	 	29	 
	33.

	 	SUBORDINATION, ATTORNMENT
	 	 	29	 
	34.

	 	AUTHORITY OF PARTIES
	 	 	29	 
	35.

	 	BROKER
	 	 	30	 
	36.

	 	HOLDING OVER
	 	 	30	 
	37.

	 	RULES AND REGULATIONS
	 	 	30	 
	38.

	 	FIRST AND FINAL RIGHT OF REFUSAL / OPTION TO EXPAND
	 	 	30	 
	39.

	 	OPTION TO EXTEND
	 	 	32	 
	40.

	 	OPTION TO PURCHASE
	 	 	34	 
	41.

	 	TERMINATION RIGHTS
	 	 	34	 
	42.

	 	CONTEMPLATED EXPANSION
	 	 	35	 
	43.

	 	NOTICES
	 	 	35	 
	44.

	 	GENERAL PROVISIONS
	 	 	35	 






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NET LEASE AGREEMENT (OFFICE)




2900 Kilgore Road 
Rancho
Cordova, California




Basic
Lease Information




	 	 	 
	Defined Terms:	 	Information:
	Lease
Date:

	 	January 10, 1996
	 
	 	 
	Landlord:

	 	Panattoni-Catlin Venture
XXVI, 
a California general
partnership 
3620 Fair Oaks
Boulevard, Suite 150 Sacramento,
California 95864
	 
	 	 
	Tenant:

	 	Endosonics Corporation

6616 Owens Drive

Pleasanton, California 94588
	 
	 	 
	Premises:

	 	The Premises referred to in
this Lease are located at 2900
Kilgore Road, Rancho Cordova,
California (“Building”), and
consists of approximately 43,000
rentable square feet (43,000
usable square feet) as shown in

Exhibit A, which is 58.90%
(“Tenant’s Proportionate Share”)
of the rentable square feet of the
Building. The Building referred
to in this Lease consists of
approximately 73,000 rentable
square feet and 73,000 usable
square feet. The rentable and
usable square footage set forth
herein is subject to adjustment
pursuant to Section 2g.
	 
	 	 
	Term:

	 	The term shall be ten (10)
years from the Commencement Date
(as hereinafter defined) .
	 
	 	 
	Base Rent:

	 	Thirty Six Thousand Five
Hundred Ninety Three and No/100ths
Dollars ($36,593.00)
per month based on forty
three thousand (43,000) rentable
square feet at $.851 per square
foot per month payable in advance
on the first day of each month,
subject to adjustment pursuant to
Section 7 and until increased as
provided in Section 7 hereof.
	 
	 	 
	Use:

	 	General office use,
research, development and light
manufacturing of medical equipment
and any other lawful permitted use
with Landlord’s prior written
consent, which consent shall not
be unreasonably withheld or
delayed.
	 
	 	 
	Security Deposit:

	 	Tenant shall deliver to
Landlord the amount of Ten
Thousand and No/100ths Dollars
($10,000.00) on the Lease Date,
and an additional Ten Thousand and
No/100ths Dollars ($10,000.00) on
the date that is thirty (30) days
following the Lease Date, for a
total Security Deposit of Twenty
Thousand and No/100ths Dollars
($20,000.00)
	 
	 	 
	Broker for Tenant:

	 	Cornish & Carey Commercial

1601 Response Road, Suite 140

Sacramento, California 95815
	 
	 	 
	Broker for Landlord:

	 	Cornish & Carey Commercial

1601 Response Road, Suite 140

Sacramento, California 95815






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NET LEASE AGREEMENT

(OFFICE)




     This Lease is made and entered into by the Landlord and Tenant referred to
in the Basic Lease Information. The Basic Lease Information attached to this Lease as
page 1 is hereby incorporated Into this Lease by this reference.



     1. PURCHASE TRANSACTION: [INTENTIONALLY DELETED]



     2. BUILDING IMPROVEMENTS:



          a.
Preliminary Plans: Within ten (10) days following the Lease Date, Landlord shall
prepare and deliver to Tenant draft preliminary plans and
specifications (“Preliminary Plans”)
setting forth the description of (i) the shell of the Building, (ii) the materials to be used in
the construction of the Building, (iii) the electrical, mechanical and HVAC systems to be used
within the Building, (iv) a general landscaping plan for the Project, and (v) the space plan of the
Premises and the improvements to be constructed therein. The improvements described in subsection
(v) are referred to as the “Tenant Improvements.” Attached hereto as Exhibit B are
specifications and standards (“Building Specifications”) which shall be more particularly set forth
in the Preliminary Plans. Tenant shall approve or disapprove of the Preliminary Plans within ten
(10) days following Tenant’s receipt of such documents by providing Landlord with written notice
(“Objection Notice”) of such determination within such time period. The failure of Tenant to
provide such notice shall be deemed Tenant’s approval of the Preliminary Plans. In the event that
Tenant disapproves of the Preliminary Plans as provided herein, Landlord and Tenant shall use their
good faith efforts and due diligence to resolve the matters set forth in the Objection Notice to
the reasonable satisfaction of Landlord and Tenant; provided, however, if Landlord and Tenant have
not resolved such matters within twenty (20) days following Landlord’s receipt of the Objection
Notice, such disputed matter shall be submitted to an engineer or architect, reasonably acceptable
to Landlord and Tenant, who shall render a determination of such matter within five (5) days
following such appointment, which determination shall be binding upon Landlord and Tenant.
Notwithstanding the foregoing, to the extent that Tenant requests any modifications to the Tenant
Improvements, which modifications result in an increase in the cost to construct and/or install the
Tenant Improvements, such increase expense shall be the responsibility of Tenant and Tenant shall
have the right to elect, in writing, delivered to Landlord, to (i) have Landlord offset such excess
expense against the Allowance (as hereinafter defined), (ii) pay such excess directly to Landlord,
which amount shall be due prior to the commencement of construction of the Tenant Improvements, or
(iii) amortize such excess cost over the Term, at a rate of nine percent (9.00%) per annum, and pay
such amount on a monetary basis concurrent with the payment of Base Rent. If Tenant fails to make
such election prior to the commencement of construction of the Tenant Improvements, Tenant shall be
deemed to have elected Subsection (i) above. Upon Landlord and Tenant reaching agreement upon the
Preliminary Plans, such document shall be referred to as the “Approved Preliminary Plans.”




          b. Final Plans: Within sixty (60) days following the Lease Date, Landlord shall
prepare and deliver to Tenant final plans and specifications (“Final Plans”) substantially in
conformity with the Approved Preliminary Plans. Within ten (10) days after delivery of the
Final Plans, Tenant shall give written notice of any changes necessary to bring the Final
Plans into substantial conformity with the Approved Preliminary Plans; Tenant shall not
object to any logical refinement of the Approved Preliminary Plans or any change necessitated
by applicable governmental laws or regulations. Failure of Tenant to deliver to Landlord
written notice of such changes within the ten (10) day period shall be deemed approval of the
Final Plans. Upon approval of the Final Plans, both parties shall endorse their approval on
the Final Plans as may be necessary for filing such




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documents with the appropriate governmental entity for approval, which shall be the responsibility
of Landlord. Upon obtaining the appropriate approvals of the Final
Plan from the applicable governmental entity, such document shall be referred to as the “Approved Final Plans.”




          c. Construction: Promptly upon obtaining the
Approved Final Plans, Landlord shall commence construction of the building shell and
improvements described therein, including the Tenant Improvements, which are collectively referred
to as the “Building Improvements,” and diligently prosecute such construction to completion.
Landlord shall hire Voit Construction (DeWeese Construction), and/or any other contractor
reasonably acceptable to Tenant, to act as the general contractor to construct the Building
Improvements. Landlord, using Landlord’s good faith efforts and due diligence, shall cause the
Premises to be Ready for Occupancy (as hereinafter defined), excepting Punch List Items (as
hereinafter defined), on or before the expiration of two hundred one (201) days following the Lease
Date (“Completion Deadline”), provided that Landlord shall use its reasonable efforts to cause the
Premises, to be Ready for Occupancy by June 10, 1996.




          d. Completion and Delivery: The Premises shall be ready for occupancy (“Ready for
Occupancy”) when (i) construction of the Building Improvements is substantially completed in
accordance with the Approved Final Plans, (ii) Landlord has obtained for the Premises any permits
(temporary or final) that are legally required for Tenant’s occupancy, but not the operation of
Tenant’s business, (iii) any and all parking areas to be constructed by Landlord, as set forth in
the Approved Final Plans, relating to the Premises have been completed, (iv) any and all
landscaping, sidewalks and other outdoor common area improvements in the Approved Final Plans have
been completed, (v) any Tenant identification signs (monument or otherwise) described in the
Approved Final Plans to be constructed by Landlord for Tenant have been completed, (vi) any all
utility hook-ups necessary for the use of the Building are in place and are fully operational, and
(vii) Tenant shall have received a fully executed and notarized nondisturbance and attornment
agreement, in a form reasonably satisfactory to Tenant, from any lender of Landlord then having a
lien on the Premises. Landlord shall deliver to Tenant a written statement certifying (a) that the
Premises are Ready for Occupancy; and (b) the date of such completion. Landlord shall use its good
faith efforts to give Tenant thirty (30) days prior written notice (“Pre-Occupancy Notice”) of the
date when the Premises will be Ready for Occupancy.




          e. Early Entry: Tenant may, following its receipt of
the Pre-Occupancy Notice, at Tenant’s sole risk, enter the
Premises and install trade fixtures, equipment and other tenant
improvements in the Premises; provided, however, that (i)
Tenant’s early entry shall not unreasonably interfere with
construction of the Building Improvements; (ii) all provisions of
this Lease, excepting Sections 7, 9, 10 and 11, shall apply
during such entrance; and (iii) Tenant shall pay utility charges
reasonably allocated by Landlord to Tenant, based on Landlord’s
reasonable estimate of Tenant’s use thereof arising from such
pre-Commencement Date activities.




          f. Completion Deadline: In the event that Landlord has not caused the Premises to be Ready
for Occupancy on or before the Completion Deadline, this Lease shall remain effective and in
addition to any Rent free possession of the Premises provided in Section 7, the following shall
apply:




               (1) If the Premises becomes Ready for Occupancy during the first seven (7) days following the
Completion Deadline, Tenant shall accrue one (1) day Rent free possession of the Premises for every
day that the Premises is not Ready for Occupancy following the Completion Deadline, or



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               (2) If the Premises becomes Ready for Occupancy at any time between the eighth (8th) and
twenty-first (21st) day following the Completion Deadline, Tenant shall accrue two (2) days
Rent free possession of the Premises for every day that the Premises is not Ready for
Occupancy following the Completion Deadline through the twenty-first (21st) day following the
Completion Deadline, or



               (3) If the Premises becomes Ready for Occupancy at anytime after the twenty-first (2lst)
day following the Completion Deadline, Tenant shall accrue three (3) days Rent free
possession of the Premises for every day that the Premises is not Ready for Occupancy
following the Completion Deadline.



     In the event that the Premises is not Ready for Occupancy within one hundred twenty (120) days
following the Completion Deadline, for a period of ten (10) days thereafter, Tenant shall have
the right to terminate this Lease by providing Landlord with written notice of such election, in
which case this Lease shall terminate, and the parties shall have no further obligations hereunder,
except (i) for those obligations of Landlord and Tenant hereunder which expressly survive the
expiration or early termination of this Lease; (ii) that Landlord shall return to Tenant at the
time such notice is received or given by Landlord, the Security Deposit (subject to Section 8), any
prepaid Rent or other amounts prepaid by Tenant to Landlord hereunder; and (iii) Landlord shall
promptly reimburse Tenant any amount of the Allowance to which Tenant is entitled pursuant to
Section 2(h) which has not already been paid to Tenant by Landlord. The failure of Tenant to
deliver such notice within such time period shall be deemed a waiver of such right to terminate.
The Completion Deadline shall be automatically extended for any delays beyond the reasonable
control of Landlord, such as acts of God, fire, earthquake, acts of a public enemy, riot,
insurrection, unavailability of materials, governmental restrictions on the sale of materials or
supplies or on the transportation of such materials or supplies, strike directly affecting
construction or transportation of materials or supplies, shortages of materials or labor resulting
from government controls, or weather conditions (collectively, “Force Majeure Event”). Landlord
shall provide Tenant with written notice of the occurrence of any Force Majeure Event, which
notice specifies the action or inaction which Landlord contends constitutes such Force Majeure
Event. If Tenant has not objected to such Force Majeure Event, in writing, within five (5)
business days following Tenant’s receipt of such written notice from Landlord, the Force Majeure
Event, as set forth in such notice, shall be deemed to have occurred. If Tenant objects to such
Force Majeure Event, and such objection is not resolved within ten (10) days following Landlord’s
receipt of such objection, the disputed matter shall be submitted to binding arbitration in
accordance with the commercial rules of the American Arbitration
Association (“Arbitration”).



          g. Measurement of Premises and Building: Within fifteen (15) days following the Premises
becoming Ready for Occupancy, Landlord shall cause the Premises and the Building to be measured by
Landlord’s engineer, or a third party engineer reasonably acceptable to Landlord and Tenant, to
determine the Usable Area (as hereinafter defined) thereof, which
determination shall be binding
upon Landlord and Tenant. In the event that the Usable Area of the Premises and/or Building is
different than that set forth in the Basic Lease Information, Landlord and Tenant shall execute a
written amendment to modify the Usable Area and Rentable Area of the Premises and/or the Building,
as applicable, and Tenant’s Proportionate Share. Landlord anticipates, but is not certain, that
there will not be Building Common Areas (as hereinafter defined) within the Building, resulting in
no difference between the Rentable Area and Usable Area (as such terms are hereinafter defined) for
the Premises.




          h. Allowance: Landlord shall provide Tenant with a tenant improvement allowance
(“Allowance”) in the amount of forty Six Thousand
Five Hundred and No/100ths Dollars ($46,500.00)




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which may be used by Tenant, as deemed appropriate by Tenant to pay any expenses incurred by
Tenant as a result of entering into this Lease; provided, however, in the event that this Lease
terminates prior to the Commencement Date, if such termination is a result of (i) a default by
Tenant or Tenant has elected to terminate this Lease in accordance with its expressed rights set
forth herein, Tenant shall immediately reimburse Landlord for the portion of the Allowance, if any,
which has been released to Tenant, or (ii) a default by Landlord or Landlord has elected to
terminate this Lease in accordance with its expressed rights set forth herein, Tenant shall be
entitled to retain the Allowance distributed to Tenant as of the date of such termination. Payments
of the Allowance shall be made by Landlord any time after the Lease Date within ten (10) business
days following Landlord’s receipt of satisfactory evidence from Tenant of such expenses; provided
that Landlord shall have no obligation for such payment if Tenant is in default hereunder.




          i. Construction: As of the Commencement Date, Landlord represents and warrants that the
Building, Premises, Building Common Areas and Project Common Areas, to the extent that such were
constructed by or caused to be constructed by Landlord, are in compliance with all applicable laws,
statutes and ordinances, which includes ADA (as hereinafter defined), and shall be in good working
order and repair.




     3. PREMISES: This Lease shall be effective as of the date of execution hereof by Landlord and
Tenant. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord upon the terms and
conditions contained herein the Premises.



     4. ACCEPTANCE OF PREMISES: Subject to Section 2(i) and excepting Punch List Items (as
hereinafter-defined), if any, Tenant’s taking possession of the Premises shall constitute Tenant’s
acknowledgment that the Premises are in good condition and that the Building Improvements are
constructed in accordance with the provisions of this Lease and that Tenant agrees to accept the
same in its condition existing as of the date of such entry and subject to all applicable
municipal, county, state and federal statutes, laws, ordinances, including zoning ordinances,
and regulations governing and relating to the use, occupancy or
possession of the Premises, excepting latent defects. Within
thirty (30) days after the Tenant takes possession of the
Premises, Tenant shall deliver to Landlord a list of items
(“Punch List Items”) that Tenant reasonably deems that Landlord
complete or correct in order for the Premises to be reasonably
acceptable. Following Landlord’s receipt of the Punch List
Items, Landlord shall complete and/or correct such items set
forth on the Punch List Items using its good faith efforts and
due diligence within thirty (30) days following Landlord’s
receipt of such document. If Tenant does not deliver the Punch
List Items to Landlord within such time period, Tenant shall be
deemed to have accepted the condition of the Premises. Landlord
shall use its reasonable efforts to not unreasonably interfere
with Tenant’s use of the Premises as a result of such repair
work.



     5. DEFINITIONS:



          a. “Building” shall refer to the entire structure in which the Premises are located, the term
“Lot” shall refer to the Assessor’s tax parcel on which the Building is situated, and the term
“Project” shall refer to the project as shown on
Exhibit A. This Lease confers no rights
either with regard to the subsurface of the land below the ground level of the Building or with
regard to airspace above the roof of the Building.




          b. “Building Common Areas” shall mean the areas on individual floors devoted to corridors,
fire vestibules, lobbies, electric and telephone closets, rest rooms, mechanical rooms, janitor
closets and other similar facilities for the benefit of all lessees public lobbies, loading docks,
and other similar facilities for the benefit of all lessees, but excluding public stairs, pipe
shafts, and the enclosing walls thereof.




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          c. “Project Common Areas” shall refer to all areas and facilities outside the Premises
and within the Project that are provided and designated by Landlord from time to time for the
general nonexclusive use of Landlord, Tenant, and of other lessees in the Project and their
respective employees, suppliers, shippers, customers, and invitees. Landlord hereby grants to
Tenant, during the term of this Lease, the nonexclusive right to use, in common with others
entitled to such use, the Project Common Areas as they exist from time to time, subject to any
rules, regulations, and restrictions governing the use of the Project as from time to time made or
amended by Landlord. Provided that Landlord, using its reasonable efforts does not unreasonably
interfere with Tenant’s use of the Premises, Landlord reserves the right at any time and from time
to time, to: (i) make alterations in or additions to the Project and to the Project Common Areas;
and (ii) temporarily close any of the Project Common Areas for maintenance purposes.




          d. “Rentable Area” shall mean:




               (1) as to a floor leased entirely by Tenant, all areas within outside permanent
Building walls, measured to the inside surface of the dominant portion of the permanent outer
Building walls, including restroom, janitorial, telephone and electrical closets, mechanical areas,
excluding any major vertical penetrations of the floor, balconies, arcades and covered entrances,
plus Tenant’s pro rata share of Building Common Areas.



               (2) as to a floor only a portion of which is
leased by Tenant, the aggregate of the Usable Area of the portion of that floor occupied by Tenant,
plus Tenant’s pro rata share of Building Common Areas on the floor leased in part by Tenant and
Tenant’s pro rata share of Building Common Areas.



          e. “Usable Area” shall mean all floor area in the Tenant’s space, measured from the inside
surface of the interior walls of the Premises, but excluding any balconies, arcades and covered
entrances.




     6. POSSESSION: Subject to and upon the terms and conditions set forth herein, the Term shall
be for the period specified in the Base Lease Information, commencing upon the date on which the
Premises is Ready for Occupancy (“Commencement
Date”). Within thirty (30) days after the
Commencement Date, Landlord and Tenant shall execute an amendment to this Lease, setting forth the
Commencement Date and the expiration date of the Term.



     7. RENT:



          a. Tenant agrees to pay Landlord, without prior notice, demand, deduction or offset,
a Base Rent in the amount set forth in the Basic Lease Information as adjusted from time to time in
the manner set forth in this Section. In addition to the Base Rent, for the purpose of this Lease,
“Rent” also includes Tenant’s Proportionate Share of Operating Expenses, Taxes, and Utilities, and
any other amounts owing from Tenant to Landlord pursuant to the terms of this Lease. The Rent
shall be payable in advance on or before the first day of each month throughout the term of the
Lease, except that if Tenant exercises Tenant’s option to eliminate any “free” Base Rent only, the
first month’s Base Rent shall be paid upon the execution of this Lease; otherwise, the first
payment of Base Rent due hereunder shall be paid on the first day of the first month in which Base
Rent is actually due. Base Rent for any period during the term hereof which is for less than one
month shall be a prorated portion of the monthly installment based upon a 30-day month.




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          b. The Base Rent shall be increased during the Term of this Lease as follows:




	 	 	 
	Months During Term	 	 
	(From Commencement Date)	 	Base Rent
	01 through 06

	 	Free
	 
	 	 
	07 through 18

	 	$36,593.00 
($.851 per
rentable square foot)
	 
	 	 
	19 through 50

	 	$39,603.00 
($.921 per
rentable square foot)
	 
	 	 
	51 through 90

	 	$41,237.00 
($.959 per
rentable square foot)
	 
	 	 
	91 through 120

	 	$43,774.00
($1.018 per
rentable square foot)






     Notwithstanding the foregoing Base Rent schedule, prior to the Commencement Date, or at
any time within the “free” Base Rent period, Tenant shall have the right to elect, by providing
Landlord with written notice, to eliminate the “free” Base Rent for the first six (6) months of the
Term (or the remaining portion of the “free” Base Rent Period), in which case the Base Rent for the
first (1st) month through the eighteenth (18th) month of the Term shall be the amount of Twenty
Three Thousand Eight Hundred Twenty Seven and No/100ths Dollars ($23,827.00) (or, if such election
is made during such “free” Base Rent period, an appropriately prorated portion of such “free” Base
Rent). Additionally, Tenant shall be entitled to credit against Base Rent owing in the seventh
(7th) month following the Commencement Date, one-half (1/2) of the Security Deposit, and the
remaining one-half (1/2) of the Security Deposit during the eighth (8th) month following the
Commencement Date, following which Tenant’s Security Deposit shall be equal to zero.



     8. SECURITY DEPOSIT: Tenant shall deposit the Security
Deposit with Landlord at the times and in the amounts specified
in the Basic Lease Information, as security for the full and
faithful performance by Tenant of the provisions of this Lease.
If Tenant is in default, beyond any applicable cure period,
Landlord may use the Security Deposit, or any portion of it, to
cure the default or to compensate Landlord for all damages which
Landlord may suffer by reason of Tenant’s default. Tenant shall
immediately on demand pay to Landlord a sum equal to the portion
of the Security Deposit expended or applied by Landlord as
provided in this Section so as to maintain the Security Deposit
in the sum specified. Tenant’s failure to forthwith remit to
Landlord an amount in cash sufficient to restore the Security
Deposit to the original sum deposited within thirty (30) days
after receipt of such demand from Landlord shall constitute an
event of default under the terms of this Lease. Within thirty
(30) days after the expiration or termination of this Lease,
Landlord shall return the Security Deposit to Tenant, less such
amounts as are reasonably necessary to remedy Tenant’s default,
to repair damages to the Premises caused by Tenant, or to clean
the Premises upon such termination, as soon as practicable
thereafter. Landlord’s obligations with respect to the Security
Deposit are those of a debtor and not a trustee. Landlord may
maintain the Security Deposit with Landlord’s general and other
funds. Landlord shall not be required to pay Tenant interest on
the Security Deposit. Tenant shall not mortgage, assign,
transfer or encumber the Security Deposit without the prior
written consent of Landlord. If Landlord sells its interest in
the Premises, Landlord may deliver the Security Deposit to the
purchaser of Landlord’s interest and thereupon be relieved of any
further liability or obligation with respect to the Security
Deposit.



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     9. OPERATING EXPENSES:



          a. As additional Rent, Tenant shall pay Tenant’s Proportionate Share of all Operating
Expenses. The term “Operating Expenses” means the total amounts paid or payable by Landlord or
others on behalf of Landlord during the Term in connection with the ownership, maintenance, repair,
and operation of the Premises, the Building and the Project in a quality, first class condition,
and includes, but is not limited to, the amount paid for all hot and cold water; the amount paid
for Project lighting; the amount paid for utilities and not paid separately by tenants in the
Building; the amount paid for all labor and/or wages and other employment related payments,
including cost to Landlord of workmen’s compensation and disability insurance, payroll taxes,
welfare, and fringe benefits made to janitors, employees, building managers, contractors, and
subcontractors of the Landlord involved in the operation, maintenance and repair of the Building to
the extent such persons were involved in such activities; the cost of maintenance and repair (but
not replacement) of the roof, landscaping, sidewalks, driveways, parking lots, fences and other
exterior Project Common Areas and interior Building Common Areas; the amount paid for maintaining
and repairing plumbing, alarm and security systems, heating, air conditioning and ventilation
systems, including the cost of preventative maintenance contracts; modifications to the Building
occasioned by any rules, regulations, or laws effective subsequent to the Commencement Date
(subject to the limitations set forth in Section 9d); permits, licenses, and certificates necessary
to operate and manage the Building; managerial fees (not to exceed three and one-half percent
(3.5%) of the amount of Base Rent) and, as allowed by Section 9d below, managerial, administrative,
and telephone expenses related to the Building; the total charges of any independent contractors
employed in the care and operation, maintenance, cleaning, and repair of the Building and the
Project landscaping; the amount paid for all supplies, tools, equipment, and necessities which are
occasioned by everyday wear and tear; the costs of window and exterior wall cleaning; inspection
and consulting services; the amount paid for premiums for all insurance obtained by Landlord or
required by Landlord’s mortgagees (provided that in no event shall Tenant be required to pay any
portion of annual earthquake insurance premiums in excess of $.03 per $100.00 of replacement cost);
any expenses which are designated as capital expenditures by generally accepted accounting
procedures (“GAAP”), provided that if such expenditure is (i) less than Two Thousand and No/l00ths
Dollars ($2,000.00), such amount shall be included in Operating Expenses for the year such expense
is incurred or (ii) more than Two Thousand and No/l00ths Dollars ($2,000.00), such amount shall be
amortized over the useful life, as determined by GAAP, of such capital expenditure, and such
amortization shall be included in Operating Expenses for each year of such useful life falling
within the Term of the Lease (to the extent that the useful life of a capital expenditure exceeds
the expiration of the Term, Tenant shall have no obligation to pay Landlord such amount following
such expiration); and, subject to Section 9d below, compliance with applicable, laws, statutes and
ordinances effecting the Project. Landlord, or an affiliate of Landlord, may act as the manager of
the Building provided that the cost of such service is competitive with comparable services
rendered by third party management companies. Unless otherwise set forth in this Lease, the
listing of Operating Expense items shall not create an obligation on Landlord to provide such
corresponding services.




          b. In determining the amount of Operating Expenses for any year, if during any period within
such year less than ninety-five percent (95%) of the Project’s Rentable Area shall have been
occupied by tenants, then with respect to such period, the Operating Expenses shall be
proportionately increased to an amount equal to the Operating Expenses that would have been
incurred had the occupancy of the Building been ninety-five percent (95%) throughout such portion
of the year.




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          c. Tenant acknowledges that Landlord shall have no obligation whatsoever to provide
guard service or other security measures for the benefit of the Premises or Project. Should
Landlord elect to provide security protection for the Project, the cost of guards and other
protection services shall be included within the definition of Operating Expenses.




          d. Operating Expenses shall not, however, include interest on debt, capital retirement of
debt, depreciation; subject to Section 9a, expenses properly chargeable to capital account, except
for capital expenditures as required by applicable laws, statutes and ordinances, the compliance
with which is not required as of the Lease Date, expenses directly chargeable by the Landlord to
any tenant or tenants; legal fees, brokerage commissions, advertising costs and other related
expenses incurred in connection with the leasing of the Building; repairs, alterations, additions,
improvements, or replacements made to correct any defect in design, materials or workmanship of the
Building or Property constructed by Landlord, its agents or contractors or to comply with any
existing requirements of any governmental authority in effect as of the Commencement Date; damage
and repairs attributable to condemnation, fire, flood or earthquake; damage and repairs covered
under any warranty or insurance policy, to the extent Landlord receives such funds, carried by
Landlord in connection with the Building or Property; damage and repairs necessitated by the gross
negligence or willful misconduct of Landlord, its employees, contractors, or agents; executive
salaries of Landlord; salaries of service personnel to the extent that such service personnel
performs services not connected with the management, operation, repair or maintenance of the
Building or Project Common Areas; Landlord’s general overhead expenses not related to the Building;
payments of principal or interest on any mortgage or other encumbrance including ground lease
payments and points, commissions and legal fees associated with financing; legal fees, accountant
fees and other expenses incurred in connection with disputes with third parties, Tenant or any
other tenants or occupants of the Building or associated with the enforcement of any leases;
provided that if such action (i) confers a general benefit on all tenants of the Project, (ii) are
not recovered by Landlord from the opposing party, (iii) Landlord has acted prudently and used
sound business judgment in pursuing such opposing party, and (iv) Landlord has obtained the prior
consent of Tenant, which consent shall not be unreasonably withheld, such expenses shall be
included within Operating Expenses; costs (including permit, license and inspection fees) incurred
in renovating or otherwise improving, decorating, painting or altering space for other occupants or
vacant space in the Building; costs incurred due to violation by Landlord of the terms and
conditions of the Lease; charitable or political contributions; any costs or expenses related to
the testing for, removal, remediation, transportation or storage of Hazardous Materials from the
Premises, Building or Project, except with respect to Hazardous Materials released or disposed upon
the surface of the Project (as opposed to migrating subsurface Hazardous Materials) by third
parties, other than Landlord, Landlord’s Parties (as hereinafter defined), or any other tenant of
the Project, during the Term of this Lease (provided that nothing herein shall be deemed to, in any
way, modify, limit or terminate Tenant’s obligations pursuant to Section 13); interests, penalties
or other costs arising out of Landlord’s failure to make timely payments of its obligations; and
costs incurred in advertising and promotional activities for the Building. Landlord shall not
collect in excess of one hundred percent (100%) of Operating Expenses, or any item of cost more
than once. Any Operating Expense charged to Landlord by any of its affiliates for goods or
services provided to the Building shall not exceed the prevailing costs thereof that would be
charged to Landlord by not affiliated parties.




          e. Tenant’s Proportionate Share of the Operating Expense shall be paid as follows: Landlord
shall estimate from time to time, in good faith, the anticipated Operating Expenses, and shall
compute Tenant’s Proportionate Share thereof. One-twelfth (1/12) of such amount due shall be paid
by Tenant to




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Landlord as additional Rent on the first day of each month.
Landlord may revise the same from time to time, in good faith,
and require Tenant to pay one-twelfth (1/12) of such revised
annual amount as additional Rent hereunder as of the first of
each month. Not later than March 1 of each calendar year,
including the year following the year in which this Lease
terminates, Landlord shall furnish to Tenant with a true and
correct accounting of actual costs with respect to the items set
forth above, and within thirty (30) days following Landlord’s
delivery of such accounting, Tenant shall pay to Landlord the
amount of any underpayment. Notwithstanding the failure by
Landlord to timely provide such accounting by such date, such
failure shall not constitute a waiver by Landlord of its right to
collect Tenant’s share of any underpayment. Landlord shall
credit the amount of any overpayment of Tenant toward the next
estimated monthly installment(s) falling due, or where the term
of the Lease has expired, promptly refund the amount of
overpayment to Tenant within thirty (30) days’ following the
termination of this Lease.




          f. Notwithstanding any other provision of this Lease to the contrary, in no event shall
Tenant’s Proportionate Share of Operating Expenses and Taxes for the first six (6) months
following the Commencement Date exceed Four Thousand Two Hundred Eighty and No/l00ths Dollars
($4,280.00) per month. During such six (6) month period, Tenant shall remain responsible for
the Tenant’s Proportionate Share of the Utilities (as hereinafter defined).




          g. Provided that Tenant is not in default under the provisions of this Lease, Tenant shall
have the right after reasonable written notice and at reasonable times to inspect Landlord’s
accounting records at Landlord’s accounting office. If after such inspection any dispute arises as
to the amount of any portion of the Operating Expenses owed by Tenant hereunder and Tenant and
Landlord are unable to resolve such dispute within fifteen (15) days following the completion of
Tenant’s inspection, an accountant, who shall be reasonably acceptable to Tenant and Landlord,
shall prepare a certificate as to the proper amount of the expenditure, which certification shall
be final and conclusive. Tenant agrees to pay the cost of such certification unless it is
determined that Landlord’s original statement overstated Operating Expense by more than five
percent (5.00%), in which case Landlord shall pay for such audit.




     10. TAXES:



          a. Tenant shall pay as additional Rent, Tenant’s Proportionate Share of all Taxes. The
term “Taxes” shall include all real property taxes, bonds and assessments levied against the
Project and the various estates therein and the underlying land, all taxes, assessments and
reassessments of every kind and nature whatsoever levied or assessed in lieu of or in substitution
of any existing or additional real or personal property taxes and assessments on the Project, any
increase in taxes or assessments resulting from a re-evaluation of the Project resulting from the
sale, conveyance, assignment, ground lease or other transfer thereof, service payments in lieu of
such taxes, excises, transit charges and fees, housing, park and child care assessments,
development and other assessments, reassessments, levies, fees or charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind which are assessed, levied,
charged, confirmed, or imposed by any public authority upon the Project, its operations or the Rent
provided for in this Lease, or amounts necessary to be expended because of governmental orders,
whether general or special, ordinary or extraordinary, unforeseen as well as foreseen, of any
kind and nature for public improvements, services, benefits, or any other purposes which are
assessed, levied, confirmed, imposed or become a lien upon the Premises, Building or Project or
become payable during the Term. If at any time during the Term under the laws of the United States
Government or the State of California, or any political subdivision thereof, a tax or excise on
Rent herein reserved, or any other tax however described, is levied or




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assessed by any such political body against Landlord on account of such Rent, or a portion
thereof, Tenant shall pay One Hundred Percent (100%) of any such tax or excise as additional Rent
hereunder. Notwithstanding the foregoing, in no event shall Tenant’s Proportionate Share of Taxes
during the Term increase, as a result of a sale or transfer resulting in a reassessment of the
Project, by more than three percent (3.00%) per annum, on a cumulative basis, above Tenant’s
Proportionate Share of Taxes for the first calendar year following the Commencement Date. For the
purpose of determining Taxes for the first calendar year of the Term, the occupancy of the Rentable
Area of the Building shall be adjusted to ninety-five percent (95.00%) (any vacant space shall be
assumed to have Tenant Improvements equal to Twenty and No/l00ths Dollars ($20.00) per rentable
square foot) throughout such calendar year. The following shall not constitute Taxes for the
purposes of this Lease, and nothing contained herein shall be deemed to require Tenant to pay any
of the following: (i) any franchise, succession or transfer taxes; (ii) interest on taxes or
penalties resulting from Landlord’s failure to pay taxes; (iii) any taxes which are essentially
payments to a governmental agency with the right to make improvements to the Building; (iv) any
Taxes which are due and payable in installments but which Landlord has voluntarily prepaid (which
does not include making such prepayment to satisfy conditions to obtain entitlements or approvals
from a governmental entity) in advance of the time such amount is due, to the extent of such
prepayment only; or (v) any Taxes which relate to excessive tenant improvements installed by
Landlord for the benefit of other tenants of the Project (the term “excessive” shall mean tenant
improvements in excess of Twenty Two and 50/100ths Dollars ($22.50) per rentable square foot,
increased by four percent (4.00%) for every calendar year
following calendar year 1996. To the best of Landlord’s actual
current knowledge, the Project is not subject to any special assessment of Taxes not of
record as of the Lease Date.




          b. Taxes shall be paid as follows: Landlord shall determine or estimate, from time to time,
Tenant’s share of the Taxes. One-twelfth (1/12) of the amount due or estimated by Landlord to be
due shall be paid by Tenant to Landlord on the first day of each month. As soon as reasonably
possible after Landlord has received the tax bill for the year, Landlord shall furnish Tenant with
a true and correct tax statement, and within thirty (30) days of Landlord’s delivery of such
statement, Tenant shall pay to Landlord the amount of any underpayment. Notwithstanding the failure
of Landlord to timely provide such statement by such date, such failure shall not constitute a
waiver of Landlord of its right to collect Tenant’s share of any underpayment. Landlord shall
credit the amount of any overpayment of Tenant toward the next estimated monthly installment (s)
falling due or, where the term of the Lease has expired, promptly refund the amount of overpayment
to Tenant.




          c. Tenant shall pay before delinquent all taxes assessed against and upon equipment,
furniture, fixtures, and other personal property of Tenant. If any taxes on Tenant’s personal
property are levied against Landlord or Landlord’s property, or if the assessed value of the
Building and other improvements, is increased by the inclusion of a value placed on Tenant’s
personal property, and if Landlord pays the taxes on any of these items, Tenant, on demand, shall
immediately reimburse Landlord for the sum of the taxes levied against Landlord, or the proportion
of the taxes resulting from the increase in Landlord’s assessment. Landlord shall have the right
to pay these taxes regardless of the validity of the levy.




     11. UTILITIES:



          a. Tenant shall be solely responsible for paying the cost of all utilities, including,
but not limited to, sewer use and connection fees, water, gas, electricity, telephone, and other
utilities (the “Utilities”) provided to the Premises and billed or metered separately to Tenant.
Landlord shall have the right to separately meter, at the expense of Landlord, the Premises, in
which case, to the extent Utilities are separately




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metered to
Tenant, such expense shall not be included in Operating Expenses. If the
Utilities are not separately billed to Tenant, Tenant shall pay to Landlord within fifteen (15)
days after receiving a bill from Landlord the Tenant’s Proportionate Share of the cost of
Utilities. In determining Tenant’s Proportionate Share of the cost of Utilities attributable to
Tenant’s use during any period of time, if during any period within such year less than ninety-five
percent (95%) of the Project’s rentable area shall have been occupied by tenants, then with respect
to such period, any portion of the Utilities which vary with the occupancy percentage of the
Building and/or Project, if any, shall be proportionately increased to an amount equal to the
Utilities that would have been incurred had the occupancy of the Building been ninety-five percent
(95%) throughout such portion of the year. Extraordinary use of Utilities shall include, but not be
limited to, use beyond normal business hours of 7:00 a.m. to 6:00 p.m., Monday through Friday; 7:00
a.m. to 12:00 on Saturdays, excluding any national holidays, and uses beyond those uses set forth
in this Lease. Tenant shall have the right, upon reasonable advance written notice to Landlord, to
request heating and air conditioning during other than normal business hours, and maintenance and
cleaning services in addition to those set forth in this Lease. Tenant shall reimburse Landlord for
the actual costs of any such after hour additional heating, air conditioning, maintenance and
cleaning services within fifteen (15) days following Tenant’s receipt of written notice from
Landlord.




          b. Failure by Landlord to furnish any Utilities, or any cessation thereof, which result from
causes beyond the control of Landlord, shall not render Landlord liable in any respect for damages
to either person or property, nor be construed as an eviction of Tenant, nor cause an abatement of
rent, or relieve Tenant from fulfillment of any covenant or agreement hereof. If any of the
machinery utilized in supplying services and Utilities breaks down, or ceases to function properly,
Landlord shall use reasonable diligence to repair the same promptly. Tenant shall have no right to
terminate this Lease, and shall have no claim for rebate of rent or damages on account of any
interruptions in service or in Utilities occasioned thereby or resulting therefrom.




     12. USE: Tenant shall use the Premises for the uses set forth in the Basic Lease Information
and shall not use the Premises for any other purposes. Tenant shall be solely responsible for
obtaining any necessary governmental approvals of such use. Tenant warrants that it shall not make
any use of the Premises which may cause contamination of the soil, the subsoil or groundwater.
Tenant shall not do, bring, or keep anything in or about the Premises that will cause a
cancellation of any insurance covering the Premises. If the rate of any insurance carried by
Landlord is increased as a result of Tenant’s use, Tenant shall pay to Landlord within thirty (30)
days before the date Landlord is obligated to pay a premium on the insurance, or within thirty (30)
days after Landlord delivers to Tenant a certified statement from Landlord’s insurance carrier
stating that the rate increase was caused solely by an activity of Tenant on the Premises as
permitted in this Lease, whichever date is later, a sum equal to the difference between the
original premium and the increased premium. Landlord reserves the right to prescribe the weight
and position of all safes, fixtures and heavy installations that Tenant desires to place in the
Premises so as to distribute properly the weight, or to require plans prepared by a qualified
structural engineer for such heavy objects, which shall be prepared at Tenant’s sole cost and
expense.



     13. COMPLIANCE WITH THE LAW: Neither, Tenant nor its agents, employees or contractors shall
not use the Premises in any manner which will in any way conflict with any law, statute, zoning
restriction, ordinance or governmental law or rule, regulation, or requirement of any duly
constituted public authorities now in force or which may hereafter be enacted or promulgated
including, but not limited to, any and all federal,



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state and local laws, ordinances, regulations, orders and directives pertaining to any
substance defined as “hazardous wastes”, “hazardous substances”, “hazardous materials”, “toxic
substances” or words to that affect, including but not limited to petroleum based products,
under any applicable current or future federal or state laws or regulations (collectively,
“Hazardous Materials”), or subject Landlord to any liability for injury to any person or
property by reason of any business operation being conducted in or about the Premises.
Following the Commencement Date, and subject to Section 2(i), Tenant shall, at its sole cost
and expense, promptly comply with all laws, statutes, ordinances, and governmental rules,
regulations, which includes, but is not limited to, the Americans with Disability Act (“ADA”)
of 1990 (42 U.S.C. 12101 et. seq. ),  and any amendment thereto or regulations promulgated
thereunder, or requirements of any board or fire insurance underwriters or other similar
bodies, now or hereafter constituted, relating to or affecting the condition, use, or
occupancy of the Premises, to the extent such laws relate to Tenant’s particular use of the
Premises (as opposed to general office use) or are implicated by Tenant’s making of
Alterations. Otherwise, Landlord shall be responsible for the compliance with all applicable
laws, statutes and ordinances affecting the Project which expense shall be within the
definition of Operating Expenses, as more particularly described in Section 9 hereof. The
final judgment of any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law,
statute, ordinance, or governmental rule, regulation, or requirement, shall be conclusive of
that fact as between Landlord and Tenant.




     Neither Tenant, nor any assignee, sublessee or occupier of any portion of the Premises, shall
permit the introduction, placement, use, generation, manufacture, storage, disposal or
transportation in or around the Premises of any hazardous, poisonous or toxic substance, material
or waste of any kind that may be hazardous to health and/or the environment, including, without
limitation, substances from time to time identified as such by federal and/or state laws and
regulations, without the prior written consent of Landlord; provided,
however, Tenant shall be
entitled to possess and maintain, in compliance with all applicable laws, statutes and ordinances,
within the Premises reasonable amounts of such Hazardous Materials which are customarily used in
connection with Tenant’s permissible use of the Premises as set forth in this Lease, and Tenant
agrees to indemnify, defend and hold Landlord harmless from any and all costs incurred (whether by
Landlord or otherwise) in cleaning, decontaminating or otherwise correcting the effects of any such
introduction, placement, use, storage or disposal in or about the Premises, as well as all
costs of complying with all applicable laws, rules, regulations or requirements applicable thereto,
including payment of any fines or penalties levied on account thereof or arising therefrom, and the
cost of discharging any lien on the Premises securing such cost of correction.



     Landlord shall not permit any of its employees, agents or contractors (collectively,
“Landlord’s Parties”) to cause any Hazardous Materials to be used, generated, stored or
disposed of, on or about the Premises, the Building or the Property.




     Landlord shall indemnify, defend by counsel acceptable to Tenant, protect and will
hold Tenant and the Tenant Parties harmless from and against all liabilities, losses, costs
and expenses, demands, causes of action, claims or judgments arising out of the presence of,
use, generation, storage or disposal of Hazardous Materials at the Project (i) prior to the
Lease Date, (ii) by Landlord or any of the Landlord’s Parties, or (iii) resulting from
groundwater contamination from adjacent properties.



     To
the extent that Landlord tests for, removes, remediates, transports and/or stores any
Hazardous Materials released or disposed upon the surface of the Project (as opposed to
migrating Subsurface Hazardous Materials) by third parties, other than



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Landlord, Landlord’s Parties, or any other tenant of the Project,
during the Term of this Lease, such expense shall be within the
definition of Operating Expenses. The provisions of this Section
13 shall survive the expiration of this Lease.




     14. ALTERATIONS AND ADDITIONS: Tenant shall not make or suffer to be made any alterations,
additions, or improvements (collectively, “Alterations”) to or of the Premises, or any part
thereof, without first obtaining the written consent of Landlord, which shall not be unreasonably
withheld. Any Alterations to the Premises, including, but not limited to, wall covering, paneling,
and built-in cabinet work, but excepting movable furniture and trade fixtures, shall on the
expiration of the Term become a part of the realty and belong to Landlord, and shall be surrendered
with the Premises. However, Landlord can, at the time consent is requested by Tenant, require
Tenant remove such Alterations that Tenant intends to make to the Premises. If Landlord so elects,
Tenant, at its own cost, shall repair any damage caused by the removal of the Alterations. Before
Landlord’s consent to such Alterations will be given, Tenant shall submit detailed
specifications, floor plans and necessary permits (if applicable) to Landlord for review. In no
event shall any Alterations affect the structure of the Building or its facade. As a condition to
its consent, Landlord may request adequate assurance that all contractors who will perform such
work have in force workman’s compensation and such other employee and public liability insurance as
Landlord deems necessary. In the event Landlord consents to the making of any Alterations to the
Premises by Tenant, the same shall be made by Tenant at Tenant’s sole cost and expense, comply with
all applicable laws, statutes and ordinances, be completed to the satisfaction of Landlord, and any
architect, contractor or person selected by Tenant to make the same must first be approved in
writing by Landlord. If Tenant makes any Alterations to the Premises, the Alterations shall not be
commenced until five (5) business days after Landlord has received notice from Tenant stating the
date the installation of the alterations is to commence so that Landlord can post and record an
appropriate notice of nonresponsibility. Notwithstanding the foregoing, without the prior consent
of Landlord, but with the prior notice to Landlord, Tenant shall be entitled to make Alterations
within the Premises, provided that (i) the cost of the constructing such Alterations does not
exceed Ten Thousand and No/l00ths Dollars ($10,000.00) per project in the aggregate, (ii) does not
affect the structure or mechanical systems of the Building, and (iii) Tenant otherwise complies
with the provisions of this Section. Tenant shall indemnify, defend and hold the Landlord, the
Building and the Premises free and harmless from any liability, loss, damage, cost, reasonable
attorneys’ fees and other expenses incurred on account of such construction, or claims by any
person performing work or furnishing materials or supplies for Tenant or any persons claiming under
Tenant.



     15. REPAIRS AND MAINTENANCE: Except as specified in the following paragraph, Tenant shall,
at Tenant’s sole cost and expense, maintain the Premises in first class condition, clean and safe
condition and repair, which includes maintaining janitorial service for the Premises for the Term,
and any extension thereto. Without limiting the generality of the foregoing, Tenant shall be
solely responsible for maintaining, and repairing (but not replacing) all fixtures, electrical
lighting, ceilings and flooring coverings, windows, doors, plate glass, skylights, and interior
walls within the Premises. To the extent that replacement of such items are required, Landlord may
cause such replacement to occur, in which case such expense would be an Operating Expense, subject
to the limitations set forth in Section 9. With respect to Utilities servicing the Premises, Tenant
shall be responsible for the maintenance and repair of any such facilities servicing the Premises,
including all such facilities that are within the walls or floor. In addition, subject to the
provisions of Section 21j, Tenant shall be responsible for all repairs made necessary by Tenant,
its employees, agents, contractors or invitees. Landlord shall have no obligation to alter,
remodel, improve, repair, decorate or



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paint the Premises except as specifically set forth in this Lease. Under no circumstances shall
Tenant make any repairs to the Building or to the mechanical, electrical or heating, ventilating or
air conditioning systems of the Premises or the Building, unless such repairs are previously
approved in writing by Landlord. However, in no event shall Tenant’s obligations to repair under
this subsection extend to (i) damage and repairs covered under any insurance policy carried by
Landlord, to the extent such policies actually fund such repairs, in connection with the Building;
(ii) damage caused by any defects in the design, construction or materials of the Building,
including the Premises, installed therein by Landlord; (iii) damage caused by the gross negligence
or willful misconduct of Landlord or Landlord’s Parties; (iv) conditions covered under any
warranties of Landlord’s contractors pursuant to which such contractors perform such repair, and
(v) reasonable wear and tear, (vi) damages to the Premises and/or Building required to be repaired
by Landlord pursuant to this Lease, (vii) repairs required by to be made by Landlord pursuant to
this Lease, (viii) damage caused by fire, flood or earthquake, or by acts of governmental
authorities, or (ix) repairs made and charged as an Operating Expense (except as expressly provided
in this Section 15).




     Landlord shall be responsible, at Landlord’s sole cost and expense, for repairing any latent
defects and making all structural repairs to the Building, which includes latent defects relating
to the installation and water tightness of the windows within the Building. Landlord shall
maintain the roof, side-walls, and foundations of the Building in good, clean and safe condition
and repair. Landlord shall also maintain all landscaping, driveways, parking lots, fences, signs,
sidewalks and other exterior Project Common Areas and interior Building Common Areas of the
Project. Landlord shall be responsible for maintenance and repair of all plumbing, heating,
electrical, air conditioning and ventilation systems. Landlord shall obtain and maintain, at
Landlord’s expense without right of reimbursement from Tenant, (i) a ten (10) year warranty (or
similar protection providing the same level of repair assurance) on the roof of the Building, (ii)
a ten (10) year warranty (or similar protection providing the same level of repair assurance) on
the HVAC system servicing the Building, and (iii) a four (4) year warranty (or similar protection
providing the same level of repair assurance) on the windows within the Building. Landlord shall
use its reasonable efforts and due diligence to enforce such warranties when required. Except as
otherwise provided in this Lease, Landlord shall have no liability to Tenant, nor shall Tenant’s
obligations under this Lease be reduced or abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to business arising from Landlord making any
repairs or changes which Landlord is required or permitted by this Lease or by any other tenants’
lease or required by law to make in or to any portion of the Building or the Premises. Landlord
shall use reasonable efforts to minimize any interference with Tenant’s business at the Premises.
If Tenant fails to maintain the Premises in good order, condition and repair, Landlord may give
Tenant thirty (30) days written notice to do such acts as are reasonably required to so maintain
the Premises. If Tenant fails to promptly commence such work within such time period and
diligently prosecute it to completion, then Landlord shall have the right to do such acts and
expend such funds at the expense of Tenant as are reasonably required to perform such work. Any
amount so expended by Landlord shall be paid by Tenant promptly after demand with interest at the
“Reference Rate” (formerly, “Prime Rate”) then being charged by the San Francisco main office of
Bank of America NT & SA plus two percent (2%) per annum, from the date of such work, but not to
exceed the maximum amount then allowed by law. Landlord shall have no liability to Tenant for any
damage, inconvenience, or interference with the use of the Premises by Tenant as the result of
performing any such work. In the event of an emergency whereby Landlord has an obligation to
repair the condition causing such emergency pursuant to this Lease, provided that Landlord has not
responded to such emergency for a period of forty-eight (48) hours following Landlord’s receipt of
written




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notice from Tenant, which is captioned “Emergency Notice”, Tenant shall have the right to
undertake temporary repairs of such nature as would be Landlord’s responsibility. Any such
temporary repairs shall comply with all applicable laws, statutes and ordinances and, shall not
exceed the level of repairs required to temporarily remediate such emergency condition. In the
event that Tenant performs such emergency repairs, Landlord shall reimburse Tenant’s actual costs
incurred within fifteen (15) days following Landlord’s receipt of written notice from Tenant, which
notice shall include invoices for such repair work.




     16. WASTE: Tenant shall not use the Premises in any manner that will constitute waste, nuisance,
or unreasonable annoyance to owners or occupants of adjacent properties or to other tenants of the
Building.



     17. LIENS: Tenant shall keep the Premises and the Project free from any liens arising out of any
work performed, materials furnished, or obligations incurred by Tenant.



     18. ASSIGNMENT
AND SUBLETTING: Tenant shall not assign, transfer, mortgage, pledge, hypothecate,
or encumber this Lease or any interest therein, nor sublet the Premises or any part thereof, or any
right or privilege appurtenant thereto or permit the use or occupancy by any other party without
the written consent of the Landlord first had and obtained, which consent shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without such
consent shall be void and shall constitute a breach of this Lease without the need for notice to
Tenant. Tenant shall give Landlord written notice of Tenant’s desire to assign or sublet all or
some portion of the Premises and the date on which Tenant wishes to make such assignment or
sublease; at least thirty (30) days prior to such date. Such written notice shall set forth the
name of the proposed assignee or sublessee, the nature of the business to be carried on in the
Premises, the space to be assigned or sublet, the material terms and provisions of the proposed
sublease or assignment, and such financial information as Landlord may reasonably request.
Landlord shall then have a period of thirty (30) days following receipt of such notice and
accompanying information within which to notify Tenant of its decision with respect to the proposed
sublease or assignment.
The withholding of Landlord’s consent to the assignment or subletting will be deemed to have been
reasonable where based upon Landlord’s good faith determination of: (i) the financial
irresponsibility of assignee or sublessee; (ii) the lack of suitability of assignee’s or
sublessee’s
intended use of the Premises; or (iii) the intended unlawful use of the Premises by sublessee or
assignee; provided, however, that the foregoing enumeration shall not be exclusive. Landlord shall,
within such thirty (30) day period, notify Tenant in writing that Landlord elects either (i) in the
case of a proposed assignment only, to terminate this Lease as of the date so specified by Tenant,
in which event Tenant will be relieved of all further obligations hereunder and the Security
Deposit (subject to Section 8) and any other prepaid sums by Tenant shall be returned to Tenant pro
rata, if applicable, pursuant to the provisions of this Lease, (ii) reasonably withhold its consent
to such proposed assignment or sublease, or (iii) to permit Tenant to make such assignment or
sublease subject to the following:



          a. Any such assignment, sublease or the like must be
pursuant to a written agreement in a form acceptable to Landlord in its reasonable discretion and
must provide that such assignee, sublessee, or other transferee agrees not to violate the terms and
conditions of this Lease. No sublease or assignment by Tenant shall relieve Tenant of any
liability hereunder. Any sublease must provide that Tenant (Sublessor) has the right to reenter
the Premises upon termination of such sublease. No sublessee or assignee shall further assign or
sublet all or any part
of the Premises.




          b. One-half (1/2) of any sums or other economic consideration received by Tenant as a result
of such subletting,




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which exceed in the aggregate the total sums which Tenant is obligated to pay Landlord under this
Lease (prorated to reflect obligations allocable to that portion of the Premises subject to such
sublease), plus the cost of (i) reasonable broker’s commissions paid by Tenant with regard to the
transfer; (ii) the cost of improvements approved by Landlord pursuant to Section 13 made to the
subleased premises by Tenant at Tenant’s expense for the purpose of subleasing; and (iii)
reasonable legal fees paid by Tenant with regard to the transfer, shall be payable to Landlord as
additional Rent under this Lease without affecting or reducing any other obligation of Tenant
hereunder.




          c. No assignment or sublease shall be valid and no assignee or subtenant shall take possession
of the Premises until an executed counterpart of such assignment or
sublease has been delivered to Landlord. In the event Tenant assigns or sublets all or more than
thirty percent (30.00%) of the Premises as permitted by this Lease, except in the event of an
assignment or subletting to a Tenant affiliate, all options to purchase the Premises, to renew this
Lease at the end of the original term, or to lease additional space in the Project, which options,
if any, are defined and explained herein or in an addendum to this Lease, shall terminate.




          d. Any sale or other transfer of the majority of the voting stock of Tenant if Tenant is a
corporation, or a majority of the partnership interest in Tenant if Tenant is a partnership shall
be an assignment for the purposes of this Section 18; provided, however, in such event, Landlord’s
consent to an assignment resulting from such sale or other transfer shall not be required if,
following such transfer, the net worth of Tenant is not materially less than that as of the Lease
Date (fifty percent (50.00%) or more decrease), and if such net worth as of the date of such
proposed assignment is materially less than that as of the Lease
Date, Landlord’s consent shall
not be required if the transferee of such majority of the voting stock or majority of partnership
interest (i) assumes and agrees to perform the obligations of Tenant hereunder arising following
such assignment pursuant to documentation reasonably acceptable to Landlord, or (ii) guarantees the
obligations of Tenant set forth in this Lease pursuant to documentation reasonably acceptable to
Landlord. The sale of Tenant’s stock, which does not involve a shifting of the majority of the
voting stock of Tenant, on a publicly traded exchange shall be inapplicable to the provisions of
this Section 18.




          e. Tenant may assign this Lease or sublet the Premises or any portion thereof, without
Landlord’s consent, to (i) any corporation which controls, is controlled by or is under common
control with Tenant, (ii) any corporation resulting from the merger or consolidation of Tenant,
provided that, to the extent that Endosonics Corporation no longer exists or its net worth is
materially less than that as of the Lease Date (fifty percent (50.00%) or more decrease), the
resulting entity must have a net worth equal to or greater than Tenant as of the Lease Date; or
(iii) any person or entity acquires all of the assets of Tenant as an ongoing concern of the
business being conducted at the Premises; provided that (a) the assignee or sublessee assumes, in
full, the obligations of Tenant under this Lease, (b) except if Tenant no longer exists as provided
in
Subsection (11), Tenant remains fully liable under this Lease, (c) the permissible use of the
Premises under this Lease remains unchanged, and (iv) Landlord receives not less than twenty (20)
days’ prior written notice of such assignment or subletting.




          f. If Tenant requests Landlord to consent to a proposed assignment or subletting, Tenant
shall pay Landlord, whether or not consent is ultimately given, Landlord’s reasonable costs,
including attorneys’ fees (which attorneys’ fees shall not exceed Five Hundred and
No/100ths Dollars ($500.00) for each proposed assignment or subletting) incurred in
connection with evaluating such request and/or documenting such sublease or assignment.





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     19. INDEMNITY: Tenant shall indemnify, defend, protect and hold Landlord, any partner,
co-venturer, officer, director, employee, agent, or representative of Landlord (collectively,
“Landlord Group”) harmless against and from all claims, damages and liabilities, arising from
Tenant’s use of the Premises or the conduct of Tenant’s business or from any activity, work, or
other thing done, permitted or suffered by Tenant in or about the Building, and shall further
indemnify and hold the Landlord Group harmless against and from any and all claims, damages and
liabilities, directly arising from any breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease, or arising from any act or negligence
of the Tenant or any officer, agent, employee, guest, or invitee of Tenant, and from all and
against all costs, reasonable attorneys’ fees, expenses, and liabilities incurred in or about any
such claim or any action or proceeding brought thereon, and, in any case, action, or proceeding
brought against Landlord by reason of any such claim. Notwithstanding anything to the contrary
herein, nothing herein shall be deemed to require Tenant to indemnify, defend, protect and hold the
Landlord Group harmless from any claims, damages or liabilities resulting from the gross negligence
or willful misconduct of Landlord or any members of the Landlord Group. Tenant, as a material part
of the consideration to Landlord under this Lease, hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises, except that Tenant shall not assume any risk for
damage resulting from the gross negligence or wrongful act of Landlord or its authorized
representatives.



          Subject to the preceding paragraph, Landlord shall indemnify, defend, protect and hold Tenant and
any officer, director, employee, agent or representative of Tenant, harmless from any claims,
damages or liabilities resulting from the gross negligence or willful of misconduct of Landlord or
any member of the Landlord Group and from all and against all costs, reasonable attorney fees,
expenses, and liabilities incurred in or about such claim or any action or proceeding brought
thereon. The obligations of Landlord and Tenant pursuant to this Section 19,
shall survive the expiration or earlier termination of this Lease.




          Landlord shall not be liable for injury or damage which may be sustained by the person or property
of Tenant, its employees, invitees or customers, or any other person in or about the Premises,
caused by or resulting from fire, steam, electricity, gas, water or rain which may leak or flow
from or into any part of the Premises, or from the breakage, leakage, obstruction or other defects
from pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
whether such damage or injury results from conditions arising upon the Premises or upon other
portions of the Building or from other sources, except to the extent such damage or injury results
from the gross negligence or willful misconduct of Landlord, its contractors or the Landlord
Group. Landlord shall not be liable for any damages arising from any act or omission from any
other tenant of the Building.




     20. DAMAGE TO PREMISES OR BUILDING: All injury to the Premises or the Building caused by
moving the property of Tenant
or its employees, agents, guests or invitees into, in or out of
the Building and all breakage done by Tenant or the agents,
servants, employees, and visitors of Tenant shall be repaired as
determined by the Landlord at the expense of the Tenant to the
extent not covered and paid by insurance maintained by Landlord.



     21. TENANT’S INSURANCE/WAIVER OF SUBROGATION:



          a. All insurance required to be carried by Tenant and Landlord shall be issued by responsible
insurance companies which are rated by Best Insurance Reports as A:VII or better and licensed or
authorized to do business in the State of California. Each policy maintained by Tenant shall name
Landlord, and at Landlord’s request, any mortgagee of Landlord, as an additional insured, as their
respective interests may appear. Each policy




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maintained by Tenant shall contain (i) a separation of insureds condition, (ii) a provision
that such policy and the coverage evidenced thereby shall be primary and non-contributing with
respect to any policies carried by Landlord and that any coverage carried by Landlord shall be
excess insurance for Landlord’s interest only (with respect to Tenant’s policies only), and (iii) a
waiver by the insurer of any right of subrogation against Landlord, its agents, employees and
representatives, which arises or might arise by reason of any payment under such policy or by
reason of any act or omission of Landlord, its agents, employees or representatives. A copy of each
paid up policy (authenticated by the insurer) or certificate of the insurer evidencing the
existence and amount of each insurance policy required hereunder shall be delivered to Landlord
before the date Tenant is given possession of the Premises, and thereafter, within thirty (30)
days after any demand by Landlord therefor. No such policy maintained
by Tenant or Landlord shall be cancelable, materially changed or reduced in coverage except after
thirty (30) days’ written notice to the other party. Tenant shall furnish Landlord with renewals
or “binders” of any such policy at least ten (10) days prior to the expiration thereof. Tenant
shall have the right to provide such insurance coverage pursuant to blanket policies obtained by
the Tenant, provided such blanket policies expressly afford coverage to the Premises, Landlord,
Landlord’s mortgagee and Tenant as required by this Lease.




          b. Beginning on the date Tenant is given access to the Premises for any purpose and continuing
until expiration of the Term of the Lease, Tenant shall procure, pay for and maintain in effect
policies of property insurance covering (i) any alterations, additions or improvements as may be
made by Tenant pursuant to the provisions of Section 12 hereof, and (ii) trade fixtures,
merchandise and other personal property from time to time, in, on or about the Premises, in an
amount not less than one hundred percent (100%) of their actual replacement cost from time to time,
providing protection against all risks of physical loss or damage. The proceeds of such insurance
shall be used for the repair or replacement of the property so insured. Upon termination of this
Lease following a casualty as set forth herein, the proceeds under (i) shall be paid to Landlord,
and the proceeds under (ii) above shall be paid to Tenant.




          c.
Beginning on the date Tenant is given access to
the Premises for any purpose and continuing until expiration of the term of the Lease, Tenant
shall procure, pay for and maintain in effect workers’ compensation and employer’s liability
insurance and commercial general liability insurance which includes coverage for personal injury,
contractual liability and Tenant’s independent contractors. The commercial general liability should
be procured and maintained with not less than Two Million Five
Hundred Thousand and No/100ths
Dollars ($2,500,000.00) per occurrence combined single limit for bodily injury, personal injury or
property damage liability. If such insurance covers more than one location, and general aggregate
limit shall apply on a per location basis.




          d. Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the term of the Lease, Tenant shall pay for and maintain in
effect business income insurance on an “all risk” basis which, will provide recovery for a
minimum of twelve (12) months of Tenant’s continuing Rent obligation to Landlord.




          e. Not more than twice during the Term, in Landlord’s
reasonable judgment, good business practice or change in conditions indicate a need for additional
or different types of insurance, Tenant shall upon request of Landlord obtain such insurance at
its own expense.




          f. Tenant agrees to obtain certificates of insurance evidencing commercial general liability
insurance, including completed operations and XCU coverage, and workers’ compensation insurance and
employer’s liability insurance from any contractors
or subcontractors engaged in repairs or maintenance to the




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Premises during the term of the Lease. Such liability insurance must be for minimum limits
of One Million Dollars ($1,000,000.00) per occurrence combined single limit for bodily injury
including death and property damage liability.




          g. Landlord shall maintain a policy of comprehensive general liability insurance (including a
blanket “contractual” liability endorsement) against liability for personal injury, bodily injury,
death and damage to property occurring in or about, or resulting from an occurrence in or about,
the Property with combined single limit coverage of not less than the amount of Two Million Five
Hundred Thousand and No/100ths Dollars ($2,500,000.00). Landlord shall provide Tenant (i) with
reasonable satisfactory evidence of the existence of such coverage, in the form copy of the
policies in question or a certificate of the insurer, certifying that such policy has been issued,
promptly following the Lease Date, and (ii) shall provide at least ten (10) days prior written
notice before the expiration of such coverage.




          h. To the extent that Landlord maintains policies of insurance regarding Landlord’s ownership of
the Building, Tenant shall have the right to review the amount of deductibles payable by Landlord
thereunder to determine if such amounts are commercially reasonable as compared to similar
buildings to the Building in the Rancho Cordova-California Highway 50 corridor area, and given the
requirements of Landlord’s lender. If, following such review, Tenant disputes such amount, Tenant
shall provide Landlord with written notice thereof, with supporting documentation evidencing the
basis for such conclusion. If such disputed matter is not resolved within thirty (30) days
following Landlord’s receipt of such notice, such disputed matter shall be submitted to
Arbitration.




          i. Landlord shall secure and maintain policies of insurance for the Building in an “all risk”
policy, if available, or if not, on a “special form” basis, in an amount equal to the full
replacement value, including the Tenant Improvements, but excluding all subsequent alterations,
additions and improvements to the Premises made by Tenant, with loss payable to Landlord and to the
holders of any deeds of trust, mortgages or ground leases on the Building. Landlord shall not be
obligated to obtain insurance for Tenant’s trade fixtures, equipment, furnishing, and machinery
within the Premises. Such policy shall provide protection against fire and extended coverage
perils and such additional perils as Landlord deems suitable, and with deductibles as are
commercially reasonable, provided that in no event shall a deductible for earthquake insurance be
more than twenty percent (20.00%) of the replacement cost of the Building. Tenant agrees that
earthquake insurance is not required to be obtained by Landlord pursuant to this Lease. Tenant
shall reimburse Landlord, as an Operating Expense, for Tenant’s Proportionate Share of any
applicable deductible portion of earthquake insurance (if earthquake insurance is maintained only),
provided that if the amount owing by Tenant, with respect thereto, exceeds an amount equal to one
(1) month of the then payable Base Rent, then Tenant shall pay Landlord, as a lump sum, an amount
equal to the then payable Base Rent only, and the remaining sum shall be amortized over the
remaining Term of the Lease and paid by Tenant to Landlord as
additional rent at the same
time and, in the same manner as Base Rent is due hereunder. If the annual cost to Landlord for
insurance exceeds the standard rates because of the nature of Tenant’s operations permitted
under this Lease, Tenant shall, within ten (10) business days of receipt of appropriate invoices
and supporting documentation, reimburse Landlord for such increase in costs, which amount shall be
deemed Rent hereunder. Tenant shall not be named as an additional insured under any policy of
insurance maintained by Landlord.




          j. Landlord and Tenant each hereby waive all rights of recovery against the other and against the
officers, employees, agents, and representatives of the other, on account of loss by or damage to
the waiving party of its property or the




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property of others under its control, to the extent that such loss or damage is insured against and
payment is made under any “all risk” insurance policy which either may have in force at the time
of the loss or damage. Tenant shall, upon obtaining the policies of insurance required under this
Lease, give notice to its insurance carrier or carriers that the foregoing mutual waiver of
subrogation as contained in this Lease.




     22. WAIVER:
No delay or omission in the exercise of any right or remedy of Landlord or Tenant on
any default by Tenant or Landlord shall impair such a right or remedy or be construed as a waiver.
The subsequent acceptance of Rent by Landlord after breach by Tenant of any covenant or term of
this Lease shall not be deemed a waiver of such breach, other than a waiver of timely payment for
the particular Rent involved, and shall not prevent Landlord from maintaining an unlawful detainer
or other action based on such breach. No act or conduct of Landlord, including without limitation
the acceptance of the keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the term. Prior to the scheduled expiration of the
term of the Lease, only a notice from Landlord to Tenant shall constitute acceptance of the
surrender of the Premises and accomplish an early termination of the Lease. Landlord’s consent to
or approval of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to
waive or render unnecessary Landlord’s consent to or approval of any subsequent act by Tenant. Any
waiver by Landlord or Tenant of any default must be in writing and shall not be a waiver of any
other default concerning the same or any other provision of the Lease. The review, approval, or
inspection by Landlord of any item to be reviewed, approved, or inspected by Landlord under the
terms of this Lease shall not constitute the assumption of any responsibility by Landlord for the
accuracy or sufficiency of any such item or the quality or suitability of such item for its
intended use.



     23. ENTRY BY LANDLORD: Landlord reserves, and shall at any and all reasonable times with
reasonable written notice, at least twenty-four (24) hours in advance (except in the case of
emergencies), have the right to enter the Premises to inspect the same, to supply any service to be
provided by Landlord to Tenant
hereunder, to show the Premises to prospective purchasers or tenants (during the last nine (9)
months of the Term only and
only if Tenant has not exercised Tenant’s right to extend in
accordance with Section 39 of this Lease), to post notices of
non-responsibility, and to maintain and repair the Premises and
any portion of the Building that Landlord may deem necessary or
desirable, without abatement of Rent, and may for that purpose
erect scaffolding and other necessary structures, where
reasonably required by the character of the work to be performed,
always providing that the entrance to the Premises shall not be
blocked thereby and further providing that the business of the
Tenant shall not be interfered with unreasonably. With regard to
any entrance into the Premises pursuant to this Section, Landlord
agrees to use its good faith efforts to not unreasonably
interfere with Tenant’s business operations at the Premises.
Tenant hereby waives any claims for damages or 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 thereby. 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, upon and about the Premises,
excluding Tenant’s vaults, safes and files, and Landlord shall
have the right to use any and all means which Landlord may deem
proper to open said doors in the event of an emergency (as
determined by Landlord or its employees or representatives acting
in good faith), in order to obtain entry to the Premises without
liability to Landlord. Any entry to the Premises obtained by
Landlord by any of said means or otherwise shall not under any
circumstances be construed or be deemed to be a forcible or
unlawful entry into, or a detainer of the Premises, or an
eviction of Tenant from the Premises or any portion thereof.



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     24. CASUALTY DAMAGE: During the term hereof, if the Premises or any part thereof shall be
damaged by fire or other casualty, Tenant shall give prompt written notice thereof to Landlord. In
case the Building shall be so damaged by fire or other casualty, that substantial alteration or
reconstruction of the Building shall be required (whether or not the Premises shall have been
damaged by such fire or other casualty), (i) if such damage cannot be repaired within two hundred
ten (210) days, following the commencement of such construction, as verified by written statement
from Landlord’s architect (“Reconstruction
Estimate”) delivered to Tenant, (ii) if any mortgagee
under a mortgage or deed of trust covering the Building requires that the insurance proceeds
payable as a result of said fire or other casualty be used to retire or reduce such mortgage debt,
or (iii) if such damage is not covered by insurance carried by Landlord, or required to be carried
by Landlord pursuant to this Lease, Landlord may, at its option, terminate this Lease and the term
and estate hereby granted by notifying Tenant in writing of such termination within forty-five (45)
days after the date of such damage, in which event the Rent shall be abated as of the date of such
damage. Similarly, if the Reconstruction Estimate specifies that such damage cannot be repaired
within such two hundred ten (210) day period, Tenant may, at its option, terminate this Lease by
notifying Landlord in writing of such termination within thirty (30) days following Tenant’s
receipt of the Reconstruction Estimate, in which event the Rent shall be abated as of the date of
such damage. If the damage does not require substantial alteration or reconstruction or if
Landlord does not thus elect to terminate this Lease, Landlord shall, within sixty (60) days after
the later of (i) date of such damage, or (ii) the date of the determination of the Arbitration if
instituted by Tenant pursuant to this Section, commence to repair and restore the Building and
shall proceed with reasonable diligence to restore the Building (except that Landlord shall not be
responsible for delays outside its control) to substantially the same condition in which it was
immediately prior to the happening of the casualty, except that Landlord shall not be required to
rebuild, repair or replace any part of Tenant’s furniture and furnishings or fixtures and equipment
removable by Tenant under the provisions of this Lease, but such work shall not exceed the scope
of the work done by Landlord in originally constructing the Building. Tenant shall not be
entitled to any compensation or damages from Landlord, and Landlord shall not be liable, for
any loss of the use of the whole or any part of the Premises, the Building, Tenant’s personal
property, or any inconvenience or annoyance occasioned by such loss of use, damage, repair,
reconstruction or restoration, except that, subject to the provisions of the next sentence,
Landlord shall allow Tenant a diminution of Rent on a square footage basis during the time and to
the extent the Premises are unfit or unavailable for occupancy. Prior to Landlord’s commencement
of reconstruction of repair of the Building, Tenant shall have the right, by providing written
notice to Landlord, to contest Landlord’s conclusion that such reconstruction or repair shall
take less than two hundred ten (210) days to complete. If Landlord and Tenant have not resolved
such contested matter within five (5) days following Landlord’s receipt of such notice from Tenant,
such contested matter shall be submitted to Arbitration for determination. If as a result of the
Arbitration it is determined that such reconstruction or repair cannot be completed within two
hundred ten (210) days, for a period of fifteen (15) days following such determination, Tenant
shall have the right to terminate this Lease by providing Landlord with written notice of such
election, which termination would become effective upon the date of such damage. Following
Landlord’s commencement of such reconstruction, in the event that such reconstruction is not
completed within two hundred seventy (270) days following such commencement, as may be extended by
a Force Majeure Event, for a period of fifteen (15) days following the expiration of said two
hundred seventy (270) day period, Tenant shall have the right to terminate this Lease by delivery
of written notice of such election to Landlord, which termination would be effective upon
Landlord’s receipt of such notice. Subject to Section 21j., if the Premises or any other portion
of the Building are damaged by



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fire or
other casualty resulting from the negligence of Tenant or any of Tenant’s agents,
employees, or invitees, and the cost thereof is not covered and funded by insurance maintained by
Landlord, Tenant shall be liable to Landlord for the cost and expense of the repair and
restoration of the Building caused thereby to the extent such cost and expense is not covered by
insurance proceeds. Any insurance which may be carried by Landlord or Tenant against loss or
damage to the Building or to the Premises shall be for the sole benefit of the party carrying such
insurance and under its sole control. Tenant hereby specifically waives any and all rights it
may have under any law, statute, ordinance or regulation to terminate the Lease by reason of
casualty or damage to the Premises or Building, and the parties hereto specifically agree that the
Lease shall not automatically terminate by law upon destruction of the Premises.




     If the Building or the Premises is damaged or destroyed during the last twelve (12) months of the
Term of the Lease, and the Premises or the Building cannot be fully repaired or restored by
Landlord within sixty (60) days after the date of damage or destruction, either Landlord or Tenant
may terminate this Lease upon written notice to the other, which termination shall become
effective upon the date of receipt of such notice.



     25. CONDEMNATION:



          a. If the whole of the Building or Premises should be condemned, this Lease shall terminate as of
the date when physical possession of the Building or the Premises is taken by the condemning
authority. If less than substantially the whole of the Building or the Premises is thus taken or
sold, this Lease shall be unaffected by such taking, provided that (i) Tenant shall have the right
to terminate this Lease by written notice to Landlord given within ninety (90) days after the date
Tenant is informed of such taking if twenty percent (20%) or more of the Premises is taken and the
remaining area of the Premises is not reasonably sufficient for Tenant to continue operation of its
business, and (ii) Landlord (whether or not the Premises are affected thereby) may terminate this
Lease by giving written notice thereof to Tenant within sixty (60) days after the date of such
taking, in which event this Lease shall terminate as of the date when physical possession of such
portion of the Building or Premises is taken by the condemning authority. If, upon any such
condemnation of less than substantially the whole of the Building or the Premises, this Lease shall
not be thus terminated, the Rent payable hereunder shall be diminished by an amount representing
that part of the Rent as shall properly be allocable to the portion of the Premises which was so
condemned, and Landlord shall, at Landlord’s sole expense, restore and reconstruct the remainder of
the Building and the Premises to substantially their former condition to the extent that the same,
in Landlord’s reasonable judgment, may be feasible, but such work shall not exceed the scope of the
work done in originally constructing the Building, nor shall Landlord in any event be required to
spend for such work an amount in excess of the amount received by Landlord as compensation awarded
upon a taking of any part or all of the Building or the Premises. Subject to the rights of any
mortgagee under a mortgage or deed of trust covering the Building, Landlord shall be entitled to
and shall receive the total amount of any award made with respect to condemnation of the Premises
or Building, regardless of whether the award is baaed on a single award or a separate award as
between the respective parties, and to the extent that any such award or awards shall be made to
Tenant or to any person claiming through or under Tenant, Tenant hereby irrevocably assigns to
Landlord all of its rights, title and interest in and to any such awards. No portion of any such
award or awards shall be allocated to or paid to Tenant for any so-called bonus or excess
value of this Lease by reason of the relationship between the rental payable under this Lease and
what may at the time be a fair market rental for the Premises, nor for Tenant’s unamortized costs
of leasehold improvements. The foregoing notwithstanding, and if Tenant be not in default for any
reason, Landlord shall turn over to Tenant, promptly after receipt thereof by Landlord,





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that portion of any such award received by Landlord hereunder which is attributable to Tenant’s
fixtures and equipment which
are condemned as part of the property taken but which Tenant would otherwise be entitled to remove
and Tenant’s relocation cost, and the appraisal of the condemning authority with respect to the
amount of any such award allocable to such items shall be conclusive. The foregoing shall not,
however, be deemed to restrict Tenant’s right to pursue a separate award specifically for its
relocation expenses or the taking of Tenant’s personal property or trade fixtures so long as such
separate award does not diminish any award otherwise due Landlord as a result of such condemnation
or taking. Tenant hereby specifically waives any and all rights it may have under any law,
statute, ordinance or regulation (including, without limitation, Sections 1265.120 and 1265.130 of
the California Code of Civil Procedure), to terminate or petition to terminate this Lease upon
partial condemnation of the Premises or Building, and the parties hereto specifically agree that
this Lease shall not automatically terminate upon condemnation.




          b. Landlord may, without any obligation or liability to Tenant and without affecting the validity
and existence of this Lease other than as hereafter expressly provided, agree to sell and/or convey
to the condemnor the Premises or portion thereof sought by the condemnor, without first requiring
that any action or proceeding be instituted, or if such action or proceeding shall have been
instituted, without first requiring any trial or hearing thereof (and Landlord is expressly
empowered to stipulate to judgment therein), free from this Lease and the rights of Tenant
hereunder.




          c. If all or any portion of the Premises is condemned or otherwise taken for a period (i) of less
than one hundred twenty (120) days, this Lease shall remain in full force and effect and Tenant
shall continue to perform all terms and covenants of this Lease; provided, however, Rent shall
abate during such limited period in proportion to the portion of the Premises that is rendered
unusable as a result of such condemnation or other taking, or (ii) of one hundred twenty (120) days
or more, Tenant shall have the right to terminate this Lease by providing written notice of such
election within thirty (30) days of the date Tenant is informed of such condemnation in which case
Rent shall be abated as of the date of such condemnation.




          d. The words “condemnation” or “condemned” as used herein shall mean the taking for any public or
quasi-public use under any governmental law, ordinance, or regulation, or the exercise of, or the
intent to exercise, the power of eminent domain, expressed in writing, as well as the filing of any
action or proceeding for such purpose, by any person, entity, body, agency, or authority having the
right or power of eminent domain, and shall include a voluntary sale by Landlord to any such
person, entity, body agency or authority, either under threat of
condemnation expressed in writing
or while condemnation proceedings are pending, and shall occur in point of time upon the actual
physical taking of possession pursuant to the exercise of said power of eminent domain.




     26. TENANT’S DEFAULT: The occurrence of any one or more of the following events shall constitute
a default and breach of this Lease by Tenant:



          a. The abandonment or vacation of the Premises by Tenant (failure to occupy and operate the
Premises for thirty (30) consecutive days shall be deemed an abandonment).




          b. The failure by Tenant to make any payment of Rent or any other payment required to be made by
Tenant hereunder as and when due, where such failure shall continue for a period of five (5)
business days following Tenant’s receipt of written notice from Landlord that such payment is due;
provided that if Landlord has delivered two (2) such notices during any given calendar year, but
not more than six (6) notices during the Term,




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during the remainder of such calendar year payments pursuant to this Section must be made
within five (5) business days of the due date.




          c. Tenant’s failure to observe or perform any of the covenants, conditions, or provisions of this
Lease to be observed or performed by Tenant, other than as described in subparagraph (b) above,
where such failure shall continue for a period of thirty (30) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of Tenant’s default is such that more
than sixty (60) days are reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant commences such cure within said sixty (60) day period and thereafter diligently
prosecutes such cure to completion.




          d. The making by Tenant of any general assignment or general arrangement for the benefit of
creditors, or the appointment of a trustee or a receiver to take possession of substantially all of
Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is
not restored to Tenant within thirty (30) days, or the attachment, execution, or other judicial
seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in
this Lease, where such seizure is not discharged in thirty (30) days.




          e. The filing of any voluntary petition in bankruptcy by Tenant, or the filing of any involuntary
petition by Tenant’s creditors, which involuntary petition remains undischarged for a period of
thirty (30) days. In the event that under applicable law the trustee in bankruptcy or Tenant has
the right to affirm this Lease and perform the obligations of Tenant hereunder, such trustee or
Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction,
cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease,
and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant’s obligation under this Lease.




          f. Without the prior written consent of Landlord, which shall not be unreasonably withheld,
selling, leasing, assigning, encumbering, hypothecating, transferring, or otherwise disposing of
all or substantially all of the Tenant’s assets.




          g. If Tenant is a partnership or consists of more than one (1) person or entity, if any partner
of the partnership or other person or entity is involved in any of the acts or events described in
Subparagraph (d) or (e) above.




     27. REMEDIES FOR TENANT’S DEFAULT: In the event of Tenant’s default, Landlord may:



          a. Terminate Tenant’s right to possession of the Premises by any lawful means, in which
case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises
to Landlord. In such event, Landlord shall be entitled to recover from Tenant:




               (1) the worth at the time of the award of any unpaid rent which had been earned at the time of
such termination; plus



               (2) the worth at the time of the award of the amount by which the unpaid
rent which would have been earned after termination until the time of award exceeds the amount of
such rental loss which Tenant proves could have been reasonably avoided, plus



               (3) the worth at the time of the 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 rental loss which Tenant proves could be reasonably avoided, plus



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               (4) any other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom (including, without limitation, the cost of
recovering possession of the Premises, expenses of reletting including necessary renovation and
alteration of the Premises, reasonable attorneys’ fees, and real estate commissions actually paid
and that portion of the leasing commission paid by Landlord and applicable to the unexpired portion
of this Lease), plus



               (5) such other amounts in addition to or in lieu of the foregoing as may be permitted from time
to time by applicable California law.



     As used in Subsections (1) and (2) above, the “worth at the time of the award” shall be computed by
allowing interest at the lesser of ten percent (10%) per annum, or the maximum rate permitted by
law per annum. As used in subsection (3) above, the “worth at the time of award” 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 one percent (1%).



          b. Continue this Lease in full force and effect, and the Lease will continue in effect, as long
as Landlord does not terminate Tenant’s right to possession, and Landlord shall have the right to
collect Rent when due. During the period Tenant is in default, Landlord may enter the Premises and
relet them, or any part of them, to third parties for Tenant’s account. Tenant shall be liable
immediately to Landlord for all costs Landlord reasonably incurs in reletting the Premises,
including, without limitation, brokers’ commissions, expenses of remodeling the Premises required
by the reletting, and like costs. Reletting can be for a period shorter or longer than the
remaining term of this Lease. Tenant shall pay to Landlord the Rent due under this Lease on the
dates the Rent is due, less the rent Landlord receives from any reletting. In no event shall
Tenant be entitled to any excess rent received by Landlord. No act by Landlord allowed by this
paragraph shall terminate this Lease unless Landlord notifies Tenant in writing that Landlord
elects to terminate this Lease. After Tenant’s default and for as long as Landlord does not
terminate Tenant’s right to possession of
the Premises, if Tenant obtains Landlord’s consent, Tenant shall have the right to assign or sublet
its interest in this Lease, but Tenant shall not be released from liability.




          c. Cause a receiver to be appointed to collect Rent. Neither the filing of a petition for the
appointment of a receiver nor the appointment itself shall constitute an election by Landlord to
terminate the Lease.




          d. Cure the default at Tenant’s cost. If Landlord at any time, by reason of Tenant’s default,
reasonably pays any sum or does any act that requires the payment of any sum, the sum paid by
Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid
at a later date shall bear interest at the lesser of ten percent (10%) per annum, or the maximum
rate an individual is permitted by law to charge from the date the sum is paid by Landlord until
Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional Rent.




     The foregoing remedies are not exclusive; they are cumulative, in addition to any remedies now or
later allowed by law, to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditors’ rights generally.



     28. SURRENDER
OF PREMISES: On expiration of this Lease or within five (5) days after the earlier
termination of the Term, Tenant shall surrender to Landlord the Premises in good condition (except
for ordinary wear and tear, repair and maintenance which is the obligation of Landlord, and
destruction to the Premises
covered by Section 24). Tenant shall remove all its personal



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property within the above-stated time. Tenant shall perform all restoration made necessary by
the removal of any alterations or Tenant’s personal property within the time periods stated in this
paragraph.




     29. DEFAULT BY LANDLORD:



          a. Landlord shall not be deemed to be in default in the performance of any obligation
required to be performed by it hereunder unless and until it has failed to perform such obligations
within thirty (30) days after written notice by
Tenant to Landlord specifying wherein Landlord has failed to perform such obligation, provided,
however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter diligently prosecute
the same to completion. In no event shall Landlord be liable to Tenant for loss of profits,
business interruption, or consequential damages if Landlord performs its obligations within the
time periods specified in this paragraph.




          b. Tenant agrees to give any mortgagee and/or trust deed holders, by registered mail, a copy of
any Notice of Default served upon the Landlord, provided that prior to such notice Tenant has been
notified in writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of the
address of such mortgagee and/or trust deed holder. Tenant further agrees that if Landlord shall
have failed to cure such default within the time provided for in this Lease, then the mortgagees
and/or trust deed holders shall have an additional thirty (30) days within which to cure such
default.




     30. PARKING: Tenant shall have the right to park in the Building’s parking facilities in common
with other tenants of the Building upon terms and conditions as may from time to time be
established by Landlord. In this regard, during the term of the Lease, Tenant shall be entitled to
(i) the non-exclusive use of up to three and 80/100 (3.80) parking spaces for every one thousand
(1,000) square feet of Rentable Area of the Premises, at no cost to Tenant, and (ii) forty (40)
reserved and designated parking stalls, the location of which is approved by Landlord and such
location shall comply with applicable laws, statutes and ordinances, including ADA. Landlord
shall have the right, in addition to pursuing any other legal remedy available, to tow any vehicle
belonging to Tenant or Tenant’s employees which is not in compliance with the regulations for the
parking facility then in effect if a violation continues after the first notice of such violation,
at the reasonable expense of Tenant; nothing in this Lease, however, shall require Landlord to tow
parked cars or take other actions to free occupied unreserved spaces for Tenant’s use. Landlord
shall not be liable for any claims, losses, damages, expenses or demands with respect to injury or
damage to the vehicles of Tenant or Tenant’s customers or employees that park in the parking areas
of the Project, except for such loss or damage as may be caused by the negligence or willful
misconduct of Landlord, its agents, employees, contractors and subcontractors.



     31. ESTOPPEL CERTIFICATE: Tenant shall at any time and from time to time upon not less than ten
(10) business days’ prior written notice from Landlord execute, acknowledge, and deliver to
Landlord a statement in writing, (a) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying that this Lease as
modified is in full force and effect) and the date to
which the Rental and other charges are paid in advance, if any; (b) certifying that the Premises
have been accepted by Tenant; (c) confirming the Commencement Date and the expiration date of the
Lease; and (d) acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the
part of the Landlord hereunder, or specifying such defaults, if any are claimed. Any such statement
may be relied upon by a prospective



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purchaser or encumbrancer of all or any portion of the real property of which the Premises
are a part.




     32. SALE
OF PREMISES: In the event of any sale of the Project, Landlord shall be and hereby is
entirely freed and relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease and the purchaser, at such sale or any subsequent sale of
the Premises , shall be deemed, provided such successor assumes in writing, the obligations of
Landlord hereunder and any such purchaser, to have assumed and agreed to carry out any and all of
the covenants and obligations of Landlord under this Lease. If any security deposit or prepaid
Rent has been paid by Tenant, Landlord will transfer the security deposit and prepaid rent to
Landlord’s successor and upon such transfer, Landlord shall be relieved of any and all further
liability with respect thereto.



     33. SUBORDINATION, ATTORNMENT:



          a. This Lease is and shall be subordinate to any encumbrance now of record or recorded
after the date of this Lease affecting the Building, other improvements, and land of which the
Premises are a part. If any mortgagee, trustee, or ground lessor shall elect to have this Lease
and any options granted hereby prior to the lien of its mortgage, deed of trust, or ground lease,
and shall give written notice thereof to Tenant, this Lease and such options shall be deemed prior
to such mortgage, deed of trust, or ground lease, whether this Lease or such options are deeded
prior or subsequent to the date of said mortgage, deed of trust, or ground lease, or the date of
recording thereof.




          b. In the event any proceedings are brought for foreclosure, or in the event of a sale or
exchange of the real property on which the Building is located, or in the event of the exercise of
the power of sale under any mortgage or deed of trust made by Landlord covering the Premises,
Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser
as
the Landlord under this Lease. Tenant agrees
to execute any documents required to effectuate an attornment or to make this Lease or any options
granted herein prior to the lien of any mortgage, deed of trust, or ground lease, as the case may
be.




          c. Landlord agrees that Tenant’s obligations to subordinate under this Section to any future or
existing ground lease, mortgage, or deed of trust shall be conditioned upon Tenant’s receipt of a
non-disturbance agreement (“Nondisturbance Agreement”) from the party requiring such subordination
(which party is referred to for the purposes of this Section as the
“Superior Lienor”). Such
non-disturbance agreement shall provide, at a minimum, that Tenant’s possession of the Premises
shall not be interfered with following a foreclosure, provided Tenant is not in default beyond any
applicable cure periods. Landlord’s obligation with respect to such a non-disturbance agreement
shall be limited to obtaining the non-disturbance agreement in such form as the Superior Lienor
generally provides in connection with its standard commercial loans, however, Tenant shall have the
right to negotiate, and Landlord shall use its
good faith efforts and due diligence in assisting Tenant in the negotiation of, revisions to
that non-disturbance directly with the Superior Lienor. Tenant agrees to use its good faith efforts
to reach agreement with the Superior Lienor upon acceptable terms and conditions of a
non-disturbance agreement.




     34. AUTHORITY OF PARTIES:



          a. Tenant’s Authority: If Tenant is a corporation, each individual executing this Lease on
behalf of said corporation represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of said corporation, and that this Lease is binding upon said
corporation in accordance with its terms. If Tenant is a partnership, each individual executing
this Lease on behalf of said partnership represents and




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warrants that he is duly authorized to execute and deliver this Lease on behalf of said
partnership under the terms of the partnership agreement of said partnership.




          b. Landlord’s Authority: If Landlord is a
corporation, each individual executing this Lease on behalf of said corporation represents and
warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation, and that this Lease is
binding upon said corporation in accordance with its terms. If
Landlord is a partnership; each
individual executing this Lease on behalf of said partnership represents and warrants that he is
duly authorized to execute and deliver this Lease on behalf of said partnership under the terms of
the partnership agreement of said partnership.




     35. BROKER: Landlord and Tenant each warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease except for the Brokers listed in
the Basic Lease Information, and it knows of no other real estate broker or agent who is entitled
to a commission in connection with the Lease. Each party shall indemnify and hold harmless the
other from and against any and all liabilities or expenses arising out of claims made by any broker
(other than the Broker stated in the Basic Lease Information) or individuals for commissions or
fees resulting from the actions of the indemnifying party in connection with the Lease.



     36. HOLDING OVER: Upon termination of the Lease or expiration of the Term hereof, if Tenant
retains possession of the Premises, Tenant’s possession shall be deemed a month-to-month tenancy
upon all of the terms and conditions contained in this Lease, except the base rent portion of the
Rent which shall be increased to one hundred twenty five percent (125%) of the amount of the Base
Rent at the expiration or earlier termination of the Lease, as the case may be. Rent, as adjusted
pursuant to this Section, shall be payable in advance on or before the first day of each month. If
either party desires to terminate such month-to-month tenancy, it shall give the other party not
less than thirty (30) days’ advance written notice of the date of termination.



     37. RULES AND REGULATIONS: Tenant shall faithfully observe and comply with the reasonable rules
and regulations that Landlord shall from time to time promulgate and provide written copies thereof
to Tenant. Landlord reserves the right from time to time to make all reasonable nondiscriminatory
modifications to said rules. The additions and modifications to those rules shall be binding upon
Tenant upon delivery of a copy to them to Tenant (a copy of the present Rules and Regulations is
attached hereto as Exhibit C). Landlord shall use its reasonable efforts to enforce
compliance with such rules, but shall not be responsible to Tenant for the nonperformance of any of
said rules by other tenants or occupants.



     38. FIRST AND FINAL RIGHT OF REFUSAL/OPTION TO EXPAND:
Tenant desires to have certain expansion rights within the Building and Landlord is willing to
grant such expansion rights in accordance with the terms and conditions of this section.



          a. First Right of Refusal:




               (1) At anytime during the first (3) years
following the Commencement Date, Landlord shall notify Tenant in
writing (“Interested Party
Notice”) of any third party (“Interested
Party”) who expresses a bona fide interest in leasing any
space (“First Refusal Space”) within the Building, as evidenced by a
proposed letter of intent, or similar document, submitted to Landlord by the Interested Party,
which Landlord is willing to accept. Landlord agrees to use its good faith efforts to keep Tenant
apprised of any interest by an Interested party in any vacant space at the Building. For a period
of twelve (12) days following Tenant’s receipt of the Interested Party Notice, Tenant shall have
the right (“First Right of Refusal”) to lease the First Refusal Space by providing Landlord with
written notice



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of such
election (“Election Notice”). The failure of Tenant to deliver the Election Notice to
Landlord within such time period shall be deemed Tenant’s waiver of the Initial Right of Refusal
and Landlord shall be free to lease the First Refusal Space to the Interested Party.




               (2) If Tenant elects to exercise its First Right of Refusal, the First Refusal Space shall
be deemed to be leased under all the terms and conditions of this Lease and shall constitute a
portion of the “Premises” for all purposes, and the term of Tenant’s lease of the First Refusal
Space shall be coterminous with the term of this Lease with respect to the original Premises.
The date that is the sooner to occur of the day that the First Refusal Space is Ready for Occupancy
pursuant to subparagraph (5) below, and the day that Tenant takes occupancy of the First Refusal
Space, is hereinafter referred to as the “Occupancy Date”. Landlord and Tenant shall execute an
amendment to this Lease evidencing the lease of the First Refusal Space.



               (3) The Base Rent for the First Refusal Space
shall be the then current Base Rent which Tenant is obligated to pay for the original Premises, on
a per square foot of rentable area basis, and shall be subject-to increase at the same times and in
the same manner as Base Rent is adjusted pursuant to Section 7 above. If Tenant exercises its
option to extend the term of this Lease as provided in Section 39, the Base Rent for the First
Refusal Space shall be the same as the Base Rent for the Premises, on per square foot of rentable
area basis, during such extended term. Tenant’s obligation to pay Base Rent and other rent
respecting the First Refusal Space shall commence on the Occupancy Date.



               (4) As a condition to Tenant’s right to expand
into the First Refusal Space, Tenant or a Tenant Affiliate shall continue, both before and after
the exercise of the option to expand, to occupy a minimum of seventy percent
(70.00%) of the Premises originally demised under this Lease, and furthermore, as of the time of
the exercise of the option, and at the time Tenant takes possession
of such First Refusal Space,
Tenant shall not be in default under this Lease, beyond any applicable cure period.



               (5) Landlord agrees to construct leasehold improvements to the First Refusal Space subject to the
limitations of this subsection. The maximum amount of the allowance to be expended by Landlord
shall be an amount equal to the unamortized portion of the Allowance (using the length of the
initial Term as an amortization period unless Tenant has exercised its right to extend the Term
pursuant to Section 39) calculated as of the date of Landlord’s receipt of the Election Notice.
Prior to the commencement of such work by Landlord, Tenant and Landlord shall enter into a work
letter agreement which shall be in a form reasonably acceptable to Landlord and Tenant.



               (6) As of the Occupancy Date, the Tenant’s
Proportionate Share used for purposes of calculating Operating Expenses shall be increased in order
to reflect the addition of the First Refusal Space to the Premises or otherwise modified pursuant
to Section 42.



               (7) In the event that Tenant elects or is deemed to have elected to not exercise its First Right
of Refusal, and Landlord and the Interested Party have not entered into a lease agreement within
ninety (90) days following the date of such election by Tenant, the First Refusal Space shall
remain subject to Tenant’s First Right of Refusal.



          b.
Final Right of Refusal:




               (1) At anytime following the expiration of the
first three (3) years after the Commencement Date, Landlord shall deliver to Tenant any Interested
Party Notice received from any Interested Party who expresses a bona fide interest in leasing



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any space
(“Final Refusal Space”) within the Building, which may include the First Refusal
Space if not leased by Tenant pursuant to Section 38.a. above, as evidenced by a proposed letter of
intent or similar document, submitted to Landlord by the Interested Party, which Landlord is
willing to accept, which notice shall contain a summary of the terms and conditions submitted by
the Interested Party. For a period of ten (10) days following Tenant’s receipt of the Interested
Party Notice, Tenant shall have the right (“Final Right of
Refusal”) to lease the Final Refusal
Space by providing Landlord with an Election Notice. The failure of Tenant
to deliver the Election Notice to Landlord within such time period shall be deemed Tenant’s waiver
of the Final Right of Refusal and Landlord shall be free to lease the Final Refusal Space to the
Interested Party subject to Subsection (4) below.




               (2) In the event that Tenant delivers the
Election Notice to Landlord, Tenant and Landlord shall enter into a new lease agreement
(“Final Refusal Lease”) upon the terms and conditions set forth in the Interested Party Notice
within thirty (30) days following Landlord’s receipt of the Election Notice.



               (3) As a condition to Tenant’s delivery of the
Election Notice and Landlord’s acceptance of such notice, Tenant shall not be in default under this
Lease beyond any applicable grace period.



               (4) In no event shall Tenant’s failure to exercise its Final Refusal Right be deemed a waiver or
relinquishment of Tenant of: (i) Tenant’s Final Refusal Right should the Final Refusal Space be
offered or leased to any party for rent that is less than ninety-five percent (95.00%) of the rent
specified in the Interested Party Notice, (ii) Tenant’s Final Refusal Right should the Final
Refusal Space be offered to a party for lease other than the prospective tenant specified in the
Interested Party Notice, (iii) Tenant’s Final Refusal Right if the Final Refusal Space specified in
the Interested Party Notice is still not leased within ninety (90) days following the date Tenant’s
receipt of the Interested Party Notice, (iv) Tenant’s Final Refusal Right as to the space specified
in the Interested Party Notice should it become available for lease again during the Term, or
(v) Tenant’s Final Refusal Right as to
any other Final Refusal Space that is not specified in the Interested Party Notice and that becomes
available for lease in the Building during the Term.



          c. Option to Expand:




               (1) At anytime during the first twelve (12)
months following the Commencement Date, Tenant shall have the right to expand the Premises
(“Option to Expand”) to include that certain
premises (“Expansion Premises”), consisting of
approximately six thousand (6,000) rentable square feet, by providing Landlord with written notice
(“Expansion Notice”) of such election on or before the expiration of such twelve (12) month period.
On the Commencement Date, Landlord and Tenant shall attach as
Exhibit D to this Lease a description of the Expansion Premises, which Exhibit shall be
initialled by both parties. The failure of Tenant to deliver the Expansion Notice on or before
such date shall be deemed Tenant’s waiver of its
right to exercise the Option to Expand and Landlord shall be free to
lease to any third
party the Expansion Space, or any space within the Building which includes the Expansion Space.



               (2) If Tenant elects to exercise its Option to
Expand, the provisions of Sections 38 (a) (2), (3), (4), (5) and (6) shall be applicable.



     39. OPTION TO EXTEND: Tenant shall have the right to extend this Lease for three (3) consecutive
five (5) year periods by giving Landlord written notice of its intention to do so at least nine (9)
months prior to the expiration of the original term or then extension term, as applicable;
provided, however, that Tenant is not in material default beyond any applicable cure



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period under the Lease on the date of giving such notice or on the date of commencement of the
extended term. Each extended term shall be upon all of the terms and conditions of this Lease,
except that the following rights of Tenant shall not apply during such extension, terms: (a) any
right to rent-free possession, (b) any right to further extension of the term of the Lease (except
as already provided in this Lease), and (c) any right to continue to pay the same Base Rent.
Landlord and Tenant hereby acknowledge and agree that the Base Rent during each extended term shall
be ninety-five percent (95%) of the “Fair Market Rental” for the Premises, as determined in
accordance with this Section. The parties shall have until the date that is six (6) months prior to
the date that the original term or then extension term, as applicable, will expire in order to
agree on Base Rent during the next extension term. If the parties agree on the Base Rent for the
extension term during that period, they shall immediately execute an amendment to this Lease
stating the Base Rent. If the parties are unable to agree on Base Rent for the extended term
during that period, then the Fair Market Rental shall be established by appraisal.




     Landlord and Tenant shall each appoint one appraiser at least five (5) months prior to the
expiration of the original term or then extension term, as applicable; provided, however, that if
either party fails to designate an appraiser within the time period specified,
then the appraiser who is designated shall conclusively determine the Fair Market Rental. If two
(2) appraisers are designated, then they shall submit within thirty (30) days after the second
thereof has been designated their appraisals of the Fair Market Rental. Each appraiser shall
prepare a written appraisal report that shall conform with the standards of professional practice
of the American Institute of Real Estate Appraisers. Landlord and Tenant intend that the “Fair
Market Rental” shall be deemed to be the rent per square foot of Rentable Area of office space that
is then being charged for office space located in office buildings in the immediate vicinity
(defined as the Rancho Cordova-California Highway 50 Corridor area) of the Building that are
comparable in quality and offer similar amenities to the Building and involving leases with similar
terms and conditions (including, but not limited to, free rent, brokerage commissions, and all
other monetary and nonmonetary concessions), and involving the use of the premises for general
office purposes, but shall not include value added by alterations and/or improvements made by
Tenant, at Tenant’s expense. The office spaces used for comparison shall be comparable in size,
quality and design to the Premises, and such office spaces used for comparison shall be comparable
to the Premises with respect to their location within such buildings, the quality and quantity of
tenant improvements, installed at each landlord’s expense, the services provided by each landlord to
such tenant, and the financial strength of Tenant.



     Should the two appraisers be unable to agree within said thirty (30) days, the two appraisers shall
each submit an independent written appraisal and together they shall designate one (l) additional
person as appraiser within five (5) days following the expiration of said thirty (30)-day period:
provided, however, that if the difference between the two appraisals is five percent (5%) or less
of the lowest appraisal, then an additional appraiser shall not be
designated and the Fair
Market Rental shall equal the average of the two (2) appraisals that are submitted. The third
appraiser shall submit an independent written appraisal within thirty (30) days following his or
her appointment. If the two appraisers cannot agree upon a third appraiser, then either party
hereunder may request that the Presiding Judge of the
Sacramento County Superior Court appoint such third appraiser. The Fair Market Rental shall be
equal to the average of the two (2) written appraisals which are closest, and the third (3rd)
appraisal shall be disregarded. Each party shall bear the cost of the appraiser appointed by it. If
three (3) appraisers are appointed, each party shall bear the cost of the appraiser appointed by it
and the parties shall share equally in the cost of the third appraiser. No person shall be
appointed or designated an appraiser unless he or she is (i) an



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independent appraiser who is a currently certified member of the American Institute of Real Estate
Appraisers (with MAI designation) and unless he or she has at least five (5) years’ experience as
an appraiser in Sacramento County, or (ii) a real estate broker with a minimum of at least ten (10)
years’ experience in leasing of commercial office space in the
vicinity of the Project. The third
appraiser shall not have ever been employed (full-time or part-time or on a consulting basis) by
Landlord or Tenant. In the event that the Fair Market Rental is not established before the
commencement of the extended term, Tenant shall continue to pay the Base Rent in effect as of the
end of the original term; when the Fair Market Rental has been established, the new Base Rent shall
be retroactively effective as of the beginning of the extended term, and Tenant shall pay Landlord
any deficiency within thirty (30) days after the establishment of the new Base Rent. If Tenant has
overpaid Base Rent during such period, such overpayment shall be offset against Rent thereafter
coming due.




     40. OPTION TO PURCHASE: In addition to all other rights that Tenant has under this Lease
to use and occupy the Premises during the Term, Landlord grants
Tenant an option (“Option”) to
purchase the Project on the following terms and conditions:



          a. Option Date: This Option may only be exercised on the first (1st) day of the fourteenth
(14th) calendar month following the Commencement Date
(“Option Date”). If Tenant does not exercise
the Option on the Option Date, Landlord shall be released from all obligations under this Option,
and all of Tenant’s rights under this Option, legal or equitable, shall cease.




          b. Transferability of Option: This Option may be assigned only with the prior written consent
of Landlord, which may be withheld in Landlord’s sole discretion. The Option granted under this
Lease is personal to Tenant and any Tenant Affiliate and may not be separated from or transferred
independently from the Lease.




          c. Exercise of Option: The Option shall be exercised by mailing or delivering a written notice
(“Exercise Notice”) to Landlord prior to the expiration of the Option Date. It is a
condition to the effectiveness of Tenant’s exercise of the Option that Tenant not then be in
default under the Lease beyond any applicable cure period. If Tenant is in default under this
Lease beyond any applicable cure period at the time Tenant gives the Exercise Notice, the Exercise
Notice shall be void. Simultaneously with Tenant’s delivery of the Exercise Notice, Tenant shall
execute and deliver to Landlord, the Agreement of Purchase and Sale
(“Purchase Agreement”) which
shall be in the
form of Exhibit E. Within ten (10) days following Landlord’s
receipt of the Purchase Agreement, provided that the Option is
effective pursuant to this Section, Landlord shall execute the
Purchase Agreement and return an original thereof to Tenant, and
such document shall control the purchase and sale transaction
regarding the Premises. The Purchase Agreement shall not be
effective for any purpose unless Tenant timely and effectively
exercises the Option. To the extent of any inconsistencies
between the provisions of the Purchase Agreement and the Option,
the provisions of the Option shall prevail.




          d. Notices: The Exercise Notice shall be delivered
to Landlord in accordance with the notice requirements set forth in this Lease.




          e. Effect of Exercise: In the event that Buyer elects to exercise the Option and thereafter
does not acquire fee title to the Project for any reason, this
Lease shall remain effective and in full force.




     41. TERMINATION RIGHTS: Provided that Tenant is not in default under the terms and conditions of
this Lease beyond any applicable cure period, Tenant shall have the right to terminate this Lease
on the last day of the seventh (7th) year following



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the
Commencement Date (“Termination Date”) by delivering written notice of such election to
Landlord at least one hundred eighty (180) days prior to the Termination Date. In, the event that
Tenant makes such election, as a condition precedent to the
effectiveness of the termination of
this Lease, on the Termination Date, Tenant shall pay Landlord the amount of Three Hundred Fifty
Thousand and No/100ths Dollars ($350,000.00), which amount is in addition to any other amount which
may be owing at such time by Tenant. Provided that Tenant has complied with the provisions of this
Section, on the Termination Date, this Lease shall terminate, and the parties shall have no further
obligations hereunder except (i) for those obligations of Landlord and Tenant hereunder which
expressly survive the expiration or early termination of the Lease; and (ii) that Landlord shall
return to Tenant the Security Deposit and any prepaid Rent or other amounts prepaid by Tenant
hereunder, in accordance with the provisions of this Lease.




     42. CONTEMPLATED EXPANSION: In the event that Tenant, following the Lease Date, determines to
lease the remaining space within the Building, resulting in the Tenant leasing one hundred percent
(100%) of the Rentable Area and Usable Area of the Building, Tenant shall thereafter, for the
remaining Term of the Lease, (i) be responsible for the one hundred percent (100%) of all Operating
Expenses, Taxes and Utilities, (ii) assume all maintenance, repair and replacement obligations of
Landlord for the Project Common Areas and the Building, to the extent set forth in the Lease,
excepting latent defects within the Building, the structural portions of the roof, the structural
walls and foundation of the Building, which shall remain the responsibility of Landlord, and (iii)
be responsible for procuring and maintaining all Utilities and services provided by Landlord to
Tenant the expenses for which are within the definition of Operating Expenses. In such event,
Landlord and Tenant shall enter into a written amendment to this Lease which addresses the matters
set forth above, and any other matter deemed appropriate by the parties, with the intention to
convert Tenant’s leasehold interest in the Premises to a standard “Single-Tenant, Net,
Net, Net” leasing relationship. In the event that Tenant elects to lease one hundred percent
(100.00%) of the Rentable Area and Useable Area of the Building as set forth in this Section,
provided that Landlord and Tenant agree upon reasonable terms and conditions, Landlord would be
willing to act as the manager of the Building, on behalf of Tenant, for a management fee of three
and one-half percent (3.50%) of Rent, as may be modified pursuant to this Section.



     43. NOTICES: All notices and demands required to be sent to the Landlord or Tenant under the
terms of this Lease shall be personally delivered or sent by certified mail, postage prepaid or by
overnight courier (i.e. Federal Express), to the addresses indicated in the Basic Lease
Information, or to such other addresses as the parties may from time to time designate by notice
pursuant to this paragraph. Notices shall be deemed received upon the earlier of (i) if personally
delivered, the date of delivery to the address of the person to receive such notice (ii) if mailed,
two (2) days following the date of posting by the U.S. Postal Service, and (iii) if by overnight
courier, on
the business day following the deposit of such notice with such
courier.



     44. GENERAL PROVISIONS:



          a. Exhibits: Exhibits affixed to this Lease are a part hereof.




          b. Joint Obligation: If there be more than one Tenant, the obligations hereunder imposed upon
Tenant shall be joint and several.




          c. Marginal Headings: The marginal headings and titles to the paragraphs of this Lease are not
a part of this Lease and shall have no effect upon the construction or interpretation of any part
hereof.




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          d. Time: Time is of the essence in this Lease and with respect to each and all of its
provisions in which performance is a factor.




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




          f. Prior Agreements: This Lease contains all of the
agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and
no prior agreements or understanding pertaining to any such matters shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors in interest. This Lease shall not be
effective or binding on any party until fully executed by both parties hereto.




          g. Inability to Perform: This Lease and Landlord’s and Tenant’s obligations hereunder
(excepting Tenant’s payment of Rent) shall not be affected or impaired if the performance of an
obligation is prevented due to a Force Majeure Event. Landlord or Tenant, as the case may be,
shall provide the other party with written notice of the occurrence of such Force Majeure Event and
a description of the performance of the obligations delayed thereby, which Force Majeure Event may
be objected to by such other party within five (5) days following its receipt of such notice. If
objection is made to such Force Majeure Event, and such objection is not resolved within ten (10)
days thereafter, the disputed matter shall be submitted to Arbitration for determination.




          h. CC&Rs: Tenant shall comply with all conditions, covenants and restrictions recorded against
the Project as of the Lease Date.




          i. Jury Trial: The parties hereto shall, and they hereby do, waive trial by jury in any action,
proceeding, or counterclaim brought by either of the parties hereto against the other on any
matters whatsoever arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, Tenant’s use or occupancy of the Premises and/or any claim of injury or
damage.




          j. Landlord’s Personal Liability: The liability of Landlord (which, for purposes of this
paragraph, shall include the owner of the Building if other than Landlord, affiliates, officers,
employees, partners or principals) to Tenant for any default by Landlord under the terms of this
Lease shall be limited to (i) the greater of the amount of Two Million Five Hundred Thousand and
No/100ths Dollars ($2,500,000.00) or the interest of Landlord or any of them in the Building, until
the Premises is Ready for Occupancy (for the purpose of this Subsection (i), Benjamin Catlin and
Carl Panattoni, in their individual
capacity, agree to be responsible, to the same extent as Landlord, for the amount of damages
specified in this Subsection (i)), and (ii) following the Premises becoming Ready for
Occupancy, the interest of Landlord or any of them in the Building. Except as provided in this
Section, neither Landlord nor any partner, co-venturer, co-tenant, officer, director, employee,
agent, or representative of Landlord shall have any personal liability whatsoever with respect
thereto.




          k. Severability: Any provisions of this Lease which
shall prove to be invalid, void, and illegal shall in no way affect, impair, or invalidate any
other provision hereof, and such other provisions shall remain in full force and effect.




          l. Choice of Law: This Lease shall be governed by the laws of the State in which the Premises
are located.




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          m. Signs: Tenant shall not place any sign upon the Premises without Landlord’s prior written
consent. Any sign that Tenant has the right to place, construct, and maintain shall comply with
all laws, and Tenant shall obtain any approval required by such laws. Landlord makes no
representation with respect to Tenant’s ability to obtain such approval.




          n. Project Name: Tenant may use the name of the Project in which the Premises are located in all
Tenant’s advertising in connection with Tenant’s business at the Premises and for no other
purpose, except with Landlord’s consent. Tenant shall not have or acquire any property right or
interest in the name of the Project. Landlord reserves the right to change the name, title, or
address of the Project or the address of the Premises at any time, and Tenant waives all claims for
damages caused by such change.




          o. Late Charges: Tenant acknowledges that late payment by Tenant to Landlord of Rent will
cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs
being extremely difficult and impracticable to fix. Such costs include, without limitation,
processing charges, accounting charges, and late charges that may be imposed on Landlord by the
terms of any encumbrance and note secured by any encumbrance covering the Premises. Therefore, if
any delinquent installment of Rent or other sums due from Tenant is not received by Landlord within
ten (10) days after the same are due, Tenant shall pay to Landlord an additional sum equal to five
percent (5%) of such overdue amount as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the
administrative and other costs that Landlord will incur by reason of late payment by Tenant.
Acceptance of any late charge shall not constitute a waiver of Tenant’s default with respect to the
overdue amount, nor prevent Landlord from exercising any of the other rights and remedies available
to Landlord.




	 	 	 	 	 
	LANDLORD:

	 	TENANT:	 	 
	 
	 	 	 	 
	/s/
[ILLEGIBLE]

	 	/s/ [ILLEGIBLE]
	 	(Initials)






          p. Interest: Notwithstanding any other provisions of this Lease, any installment of Rent or
other amounts due under this Lease not paid to Landlord when due shall bear interest from the date
due or from the date of expenditure by Landlord for the account of Tenant, until the same have been
fully paid, at a rate per annum which is the lesser of the “prime” or “reference” rate of interest
announced or internally posted by the Bank of America, N.T. & S.A., plus two (2) percentage points,
but not to exceed the highest rate permitted under applicable law. The payment of such interest
shall not constitute a waiver of any default by Tenant hereunder.




          q. Attorneys’ Fees: In the event any legal action is brought to enforce or interpret the
provisions of this Lease, the prevailing party therein shall be entitled to recover all costs and
expenses including reasonable attorneys’ fees. In addition, if either party becomes a party to any
litigation concerning this Lease, the Premises, or the Building or other improvements, by reason of
any act or omission of the other party or its authorized representatives, and not by any act or
omission of the party that becomes a party to that litigation or any act or omission of its
authorized representatives, the party that causes the other party to become involved in the
litigation shall be liable to that party for reasonable attorneys’ fees and court costs incurred by
it in the litigation.




          r. Modifications: This Lease contains the entire agreement between the parties relating to the
rights herein granted and the obligations herein assumed. Any oral representations or
modifications concerning this Lease shall be of no force or effect, excepting a subsequent
modification in writing signed by the party to be charged.




          s.
Execution: Submission of this instrument for examination or signature by Tenant does not
constitute a




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reservation
of or an option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.




          t. Successors and Assigns: Subject to the provisions of this Lease, this Lease and each of its
covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs,
executors, administrators, legal representatives, successors and assigns.




          u. Waiver of California Code Sections:
Notwithstanding any other provision of this Lease and in addition to any waivers which may be
contained in this Lease, Tenant waives the provisions of Civil Code Section 1932(2) and 1933(4)
with respect to the destruction of the Premises; Civil Code Sections 1932(1), 1941 and 1942 with
respect to Landlord’s repair duties and Tenant’s right of repair; and Code of Civil Procedure
Section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises for public or
quasi-public use by statute, by right
of eminent domain, or by purchase in lieu of eminent domain; and any right of redemption or
reinstatement of Tenant under any present or future case law or statutory provision (including Code
of Civil Procedure Section 473, 1174 (c) and 1179 and Civil Code Section 3275) in the event Tenant
is dispossessed from the premises for any reason. This waiver applies to future statutes enacted in
addition or in substitution to the statute specified herein, and this waiver shall apply even
though Tenant may be the subject of a voluntary or involuntary petition in bankruptcy.




          v. Government Energy or Utility Controls: In the event of imposition of federal, state or local
governmental controls, regulations or restrictions on the use or consumption of energy or other
utilities during the term, both Landlord and Tenant shall be bound thereby.




          w.
Accord and Satisfaction; Allocation of Payments:
No payment by Tenant or receipt by Landlord of a lesser amount than the Rent provided for in this
Lease shall be deemed to be other than on account of the earliest due Rent, nor shall any
endorsement or statement on any check or letter accompanying any check or payment as Rent be deemed
an accord and satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of the Rent or pursue any other remedy provided for in this
Lease. In connection with the foregoing, Landlord shall have the absolute right in its sole
discretion to apply any payment received from Tenant to any account or other payment of Tenant
which is then due or delinquent.




          x. Changes Requested by Lender: Neither Landlord nor Tenant shall unreasonably withhold its
consent to changes
or amendments to this Lease requested by the lender on Landlord’s interest, so long as these
changes do not alter the Base Rent or other basic business terms of this Lease or otherwise
diminish any right or increase any obligations of the party from whom consent to such change or
amendment is requested.




          y. Furnishing Financial Statements: In order to induce Landlord to enter into this Lease, prior
to the Commencement Date, Tenant agrees that it shall promptly furnish Landlord and Landlord’s
lender, from time to time, upon Landlord’s written request, with financial statements reflecting
Tenant’s current financial condition. Tenant represents and warrants that all financial statements,
records and information furnished by Tenant to Landlord and
Landlord’s lender in connection
with the Lease are true, correct and complete in all respects.




          z. Objection to Statements: Tenant’s failure to object to any statement, invoice or billing
rendered by Landlord within a period of ninety (90) days after receipt thereof shall constitute
Tenant’s acquiesce with respect thereto and shall




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render such statement, invoice or billing an account stated between Landlord and Tenant.




          aa. Recording: Within five (5) days following the Commencement Date, Landlord and Tenant shall
execute, notarize, and record a short form memorandum of this Lease in the form attached hereto as
Exhibit F, and cause such document to be recorded. Upon the termination of this Lease,
within ten (10) business days following Tenant’s receipt of written demand from Landlord, Tenant
shall execute a Quitclaim Deed, in a form reasonably acceptable to Landlord and Tenant, to remove
such encumbrance from title to the Project. The provisions of this Section shall survive the
termination of this Lease.




          ab. Execution of Lease, No Options: The submission of this Lease to Tenant shall be for
examination purposes only, and does not and shall not constitute a reservation of or option for
Tenant to Lease, or otherwise created any interest of Tenant in the Premises or any other Premises
within the Building. Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord
notwithstanding any time interval, until Landlord has in fact signed and delivered this Lease to
Tenant.




     IN WITNESS WHEREOF, this Lease is executed on the date and year first above written.



	 	 	 	 	 	 	 
	LANDLORD:

	 	TENANT:
	 
	 	 	 	 	 	 
	PANATTONI-CATLIN VENTURE XXVI	 	ENDOSONICS CORPORATION,
	a California general partnership	 	a Delaware corporation
	 
	 	 	 	 	 	 
	By :

	/s/
[ILLEGIBLE]
	 	By :
	/s/
[ILLEGIBLE]
	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Its:

	
[ILLEGIBLE]
	 	Its:
	President
& CEO
	 
	 	 	 	 	 	 
	Date: 

	1-25-96
	 	Date: 
	1-10-96






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LIST OF EXHIBITS





			
	A.	 	Description of Premises






			
	B.	 	Building Specification






			
	C.	 	Rules and Regulations






			
	D.	 	Description of Expansion Premises (To Be Attached On The Commencement Date)






			
	E.	 	Agreement of Purchase and Sale






			
	F.	 	Memorandum of Lease






 









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EXHIBIT
A 




DESCRIPTION
OF PREMISES




 









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EXHIBIT - A

ENDOSONICS CORPORATE OFFICE BUILDING




NARRATIVE BUILDING DESCRIPTION



The proposed building is one story in height with a plan area of approximately 73,000 SF. The
construction consists of:




	 	 	 
	a.

	 	Slab on grade floors.
	 
	 	 
	b.

	 	Predominantly tilt-up walls with punched window openings and areas of stick framed walls.
	 
	 	 
	c.

	 	Perimeter and interior tube steel columns supporting glue-lam beams and a diaphragm roof system with built-up roofing.
	 
	 	 
	d.

	 	Roof top, packaged unit mechanical systems on curbs. (Tilt-up panels provide wall parapet visual screening of equipment from grade.)
	 
	 	 
	Exterior Finishes Include:
	 
	 	 
	a.

	 	Bands and solid areas of thin set
tile and thin brick.
	 
	 	 
	b.

	 	“Tex Coat” finished concrete panels.
	 
	 	 
	c.

	 	Tinted glass in painted aluminum frames.
	 
	 	 
	d.

	 	Round column covers at predominant corners.






Page 1 of 1




 









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EXHIBIT-                    

ENDOSONICS CORPORATE OFFICE BUILDING




SITE PLAN AND APPROXIMATE DEMISED PREMISES









Page 1 of 1




 









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EXHIBIT A










 










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EXHIBIT B




BUILDING SPECIFICATIONS





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	TENANT IMPROVEMENT OUTLINE SPECIFICATIONS

	 	ISSUED: OCTOBER 5, 1995
	OFFICE BUILDING FOR KILGORE ROAD — PANATTONI-CATLIN VENTURE







	 	1.	 	NON-RATED PARTITION






	 	A.	 	3-5/8" X 25 gauge metal studs spaced per code.
	 
	 	B.	 	5/8" gypsum board one (1) layer each side.
	 
	 	C.	 	Taping to be three (3) coats with light spray stipple finish.
	 
	 	D.	 	Partition height extend to underside of finished ceiling except as
noted on construction
plan.






	 	2.	 	WOOD DOORS






	 	A.	 	Office & manufacturing areas — 3' –
0" X 8' – 0", solid core, paint grade.
	 
	 	B.	 	Corporate & reception areas – 3' –
0" X 8' – 0", solid core plain
sliced prefinished hardwood
veneer.
	 
	 	C.	 	20 minute rated/labeled (as required).






	 	3.	 	METAL DOOR FRAMES






	 	A.	 	3" – 0" X 8' – 0", Pressed
metal Timely style (knock-down).
	 
	 	B.	 	Factory paint color to be determined by owner and tenant.
	 
	 	C.	 	20 minute rated/labeled (as required).






	 	4.	 	HARDWARE






	 	A.	 	Latchset: Schlage D Series, Rhodes style handle brushed chrome finish (or equal).

	 
	 	B.	 	Locksets: With panic bars at exit doors.
	 
	 	C.	 	Hinges: Hager No. BB1279, 4-1/2 X 4-1/2 size, 1-1/2 pair per door, US 26D
finish.
	 
	 	D.	 	Entrance Hardware: Tubular pulls and push bars. Electric locks with card
key access.
	 
	 	E.	 	Doorstop: Wall bumper #1274 CS.






	 	5.	 	ACOUSTICAL CEILING






	 	A.	 	Grid: 15/16" grid. Exposed white. 2X4.




 









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	TENANT IMPROVEMENT OUTLINE SPECIFICATIONS

	 	ISSUED: OCTOBER 5, 1995 
	OFFICE BUILDING FOR KILGORE ROAD — PANATTONI-CATLIN VENTURE







	 	B.	 	Tile Types:






	 	a.	 	Office and manufacturing areas — Armstrong Minaboard
Fissured 2'X4'X5/8"
white.
	 
	 	b.	 	Clean room areas — mylar of vinyl non-dusting tile
suitable for class 100,000 clean
rooms.
	 
	 	c.	 	Corporate and recreation areas — Armstrong Bold Look II.






	 	6.	 	CARPET (office areas)






	 	A.	 	Installation: Direct glue installation in all areas except over pad in Board
Room.
	 
	 	B.	 	28 oz. loop or tufted pile broadloom with standard backing.






	 	7.	 	BASE






	 	A.	 	4" rubber base.






	 	1.	 	Coved in hard surface areas.
	 
	 	2.	 	Straight at carpet.






	 	8.	 	RESILIENT FLOORING (manufacturing areas)






	 	A.	 	VCT: Armstrong Standard Excelon, 12" X 12" X
1/8" thick.

	 
	 	B.	 	Antistatic VCT: Flexco static dissipative vinyl 12" X
12".






	 	9.	 	SEALED CONCRETE (storage areas)
	 
	 	10.	 	PAINTED EPOXY COATED CONCRETE (model shop)
	 
	 	11.	 	PAINTING






	 	A.	 	Walls






	 	1.	 	Low sheen, Latex wall finish.

	 
	 	2.	 	Maximum two (2) colors per room.






	 	12.	 	LIGHT FIXTURES






	 	A.	 	Manufacturing areas:






	 	•	 	2X4 3 Lamp Fluorescent Fixtures with prismatic lenses to provide 100
footcandles
minimum average.






	 	B.	 	Office areas:






	 	•	 	2X4 3 Lamp Fluorescent Fixtures in 3" deep cell
parabolic lenses to provide 40-60
footcandles average.






	 	C.	 	Upgraded Architectural lighting in the following areas:






	 	1.	 	Reception
	 
	 	2.	 	Board Room




 









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	TENANT IMPROVEMENT OUTLINE SPECIFICATIONS

	 	ISSUED: OCTOBER 5, 1995
	OFFICE BUILDING FOR
KILGORE ROAD — PANATTONI-CATLIN VENTURE







	 	D.	 	Parking area and site lighting per code.






	 	13.	 	LIGHT SWITCHES






	 	A.	 	Rocker Switch — paired in double gang box to meet CAC Title 24.

	 
	 	B.	 	White color plastic coverplate.
	 
	 	 	 	Note: Allowance: One (1) fixture per eighty (80) square feet of allowance area.






	 	14.	 	ELECTRICAL WALL OUTLET






	 	A.	 	Levitlon 120V. duplex.
	 
	 	B.	 	White colored plastic coverplate.






	 	15.	 	TELEPHONE WALL OUTLET






	 	A.	 	Double gang outlet box with ring and pull wire in wall.
	 
	 	B.	 	Coverplate by telephone company to match white.






	 	16.	 	WINDOW COVERING






	 	A.	 	Horizontal mini blinds 1" blade.
	 
	 	B.	 	Color: Standard color through out.






	 	17.	 	SPRINKLERS






	 	A.	 	Chrome finish semi-recessed sprinkler head provided per code.

	 
	 	B.	 	Chrome finish escutcheon plate.






	 	18.	 	EXIT LIGHT






	 	A.	 	Perfectlite recessed edgelight, fluorescent fixture.






	 	19.	 	HVAC






	 	A.	 	Design Criteria:






	 	1.	 	All indoor areas shall be heated, ventilated, and
air conditioned appropriate to the
intended use in accordance with indoor design criteria to 75 degrees F
drybulb in
summer and 72 degrees F drybulb in winter when the outside temperature
is thirty two (32) degrees Fahrenheit and that the air conditioning systems
serving the
Premises shall cool all areas of the Premises to an inside temperature
of seventy five (75) degrees Fahrenheit plus or minus two (2) degrees when
relative humidity
is fifty percent (50%) plus or minus five percent (5%) and the outside
temperature
is ninety-six (96) degrees dry bulb, seventy-three (73) degrees wet
bulb. The air
diffusion temperature differences shall be 21 degrees F maximum for
cooling and
40 degrees F for heating.
	 
	 	2.	 	Fresh Air Criteria: Landlord’s HVAC system shall provide a minimum of 20
CFM
per person of fresh air for typical office areas and 35 CFM for designated smoking




 









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	TENANT IMPROVEMENT OUTLINE SPECIFICATIONS

	 	ISSUED: OCTOBER 5, 1995
	OFFICE BUILDING FOR KILGORE ROAD — PANATTONI-CATLIN VENTURE







	 	 	 	areas and conference rooms. (Provided through main supply air
duct.)






	 	B.	 	Zoning Assumptions:






	 	1.	 	All areas of the building shall be zoned as required to
prevent non-uniform
temperature in a space due to variable heat gain from outdoor exposure,
variation
in people density, etc.
	 
	 	2.	 	Rooms or areas having an exterior exposure shall not be
in same zone as an
interior room or area. Rooms or areas having an exterior exposure on one
side of
the building shall not be in same zone as a room or area on another side
of the
building. Corner rooms or areas shall be on a separate zone. For open
offices,
consider exterior zone as extending 15 feet from perimeter.
	 
	 	3.	 	Zone areas shall not exceed eight hundred (800) square
feet for perimeter zones
or one thousand, two hundred (1,200) square feet for interior zones. The
zones
may be located anywhere in the building at the discretion of the
Owner.






	 	C.	 	Noise Attenuation Requirements:






	 	1.	 	30 NRC in conference and executive offices.
	 
	 	2.	 	35 NRC in office areas.
	 
	 	3.	 	40 NRC maximum in lobbies.






	 	D.	 	HVAC Special Requirements:






	 	1.	 	Exhaust fans in the following areas:






	 	a.	 	Toilet Rooms
	 
	 	b.	 	Copy Areas
	 
	 	c.	 	Lunch Room






	 	20.	 	MILLWORK






	 	A.	 	Plastic Laminate faced WIC custom grade
	 
	 	B.	 	Upgraded reception desk




 









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	 	R M W
	 	Robinson	 	Architecture	 	1718 3rd Street	 	Suite 101
	 	 
	 	Mills -	 	and	 	Sacramento CA 95814	 	 
	 	 
	 	Williams	 	Interior Design	 	916.449.1400	 	FAX 916.449.1414






MEMORANDUM




	 	 	 
	DATE:

	 	October 12, 1995
	 
	 	 
	TO:

	 	Tim Gagnier, Panattoni-Catlin
Venture 
Paul Thomas, Voit
	 
	 	 
	FROM:

	 	Steve Guest, RM+W
	 
	 	 
	SUBJECT:

	 	Clarifications and additions to Endosonics Tenant
Improvements from meeting with Tom Black, and Cliff Varney on
Tuesday October 11, 1995.





The following list summarizes our discussion regarding finishes, equipment
requirements and operational criteria for specific rooms from the Endosonics space plan
dated September 28, 1995 (Scale 1/8"-1'-0").





	A.	 	Catheter Production Room:






	 	1.	 	HVAC Requirements: Maintain temperature range of 70-75° during
production. Maintain relative
humidity at 65% with ± 5% maximum deviation at all times.
	 
	 	2.	 	Landlord to provide energy management system with local alarms.

	 
	 	3.	 	Landlord to provide EMS 24 hour monitoring with alarm and zone control from remote
location.
	 
	 	4.	 	Redundancy not necessary.

	 
	 	5.	 	Hood Requirements:






	 	a.	 	Landlord to provide non-corrosive hood (plastic)
100 CFM over entire work area
(approximately 4'X8' — could be contained in separate room).
	 
	 	b.	 	Landlord to provide second low velocity hood (galvanized
sheet metal 4'X6').






	 	6.	 	Room Finishes:






	 	a.	 	Floors: Sheet vinyl flooring.

	 
	 	b.	 	Walls: Floor to ceiling Marlite panels throughout.






	 	7.	 	Electrical Requirements:






	 	a.	 	Landlord will provide electrical closet within or near the
production area with 277 volt panel, step down transformer and 110 volt panel
with capacity for 50-20 amp circuits.






	 	8.	 	Compressed Air Requirements: (See O below)
	 
	 	9.	 	Vacuum Air Requirements: (See P below)






	B.	 	Gowning Room:






	 	1.	 	Landlord to provide round Bradley type hand wash sink with foot
control, with capacity for 8-10
people.
	 
	 	2.	 	Landlord to provide 8-10 air hand dryers.
	 
	 	3.	 	Landlord to provide lockers for 100 (1/2 height, double stacked).
	 
	 	4.	 	Landlord to provide rough-in and installation for eyewash unit furnished by Tenant.
	 
	 	5.	 	Room Finishes: Sheet vinyl flooring.






	C.	 	Model Shop:






	 	1.	 	Room must be under negative pressure.
	 
	 	2.	 	Compressed air requirement: (See O below)
	 
	 	3.	 	Vacuum air requirement: (See P below)




 









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MEMORANDUM




Endosonics Tenant Improvements

October 12, 1995

Page 2





	D.	 	Extrusion Room:






	 	1.	 	Room-must be under negative pressure.
	 
	 	2.	 	Landlord to provide floor sink and cold water line with shut-off valve.

	 
	 	3.	 	Room Finishes:






	 	a.	 	Floors: VCT
	 
	 	b.	 	Walls: Marlite panels
	 
	 	c.	 	Ceiling: “Non-dusting”, class 100,000 clean room. .






	 	4.	 	Compressed air requirement: (See O below)
	 
	 	5.	 	Vacuum air requirement: (See P below)






	E.	 	System Production:






	 	1.	 	Provide a total of 4 burn rooms (2 shown), each with:






	 	a.	 	Windowed double doors.
	 
	 	b.	 	400 CFM fans with individual controls.
	 
	 	c.	 	Rough-in for electrical heater, strips provided by Tenant.






	 	2.	 	Provide sink with hot and cold water in base cabinets with uppers (as shown) add
residential size
kitchen hood/fan ducted unit.
	 
	 	3.	 	Compressed air as required: (See O below)

	 
	 	4.	 	Vacuum air as required: (See P below)






	F.	 	Engineering Lab:






	 	1.	 	Provide sink and hood as in J above.
	 
	 	2.	 	Compressed air as required: (See O below)
	 
	 	3.	 	Vacuum air as required: (See P below)






	G.	 	Transducer Room:






	 	1.	 	Provide sink and hood as in J above.
	 
	 	2.	 	Compressed air as required: (See O below)

	 
	 	3.	 	Vacuum air as required: (See P below)






	H.	 	Lunch Room:






	 	1.	 	Landlord to provide the following equipment:






	 	a.	 	Full, size refrigerator (large).
	 
	 	b.	 	2 microwaves (cabinet hung).
	 
	 	c.	 	Sink with disposer.
	 
	 	d.	 	Dishwasher.
	 
	 	e.	 	3 filtered water taps below sink.
	 
	 	f.	 	Instahot.






	I.	 	Front Break Room:






	 	1.	 	Landlord to provide:






	 	a.	 	Full size refrigerator (medium)
	 
	 	b.	 	Dishwasher
	 
	 	c.	 	Sink with disposer
	 
	 	d.	 	3 filtered water taps
	 
	 	e.	 	Microwave (cabinet hung)




 









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MEMORANDUM




Endosonics Tenant
Improvements 
October 12, 1995

Page 3





	J.	 	Executive Conference/Board Room:






	 	1.	 	Landlord to provide:






	 	a.	 	Millwork with bar sink and u.c. refrigerator.
	 
	 	b.	 	Executive display/white board unit.
	 
	 	c.	 	Roughed-in J box with wall switch for future recessed, automatic
projection screen (ceiling
mounted).






	K.	 	Staff Toilets:






	 	1.	 	Finishes:






	 	a.	 	6X6 tile floors with tile base.
	 
	 	b.	 	Tile wainscot as required by code.
	 
	 	c.	 	P-lam counter tops.






	 	2.	 	Provide floor drains.






	L.	 	Executive/Board Room Toilets:






	 	1.	 	Finishes:






	 	a.	 	6X6 tile floors in toilet room.
	 
	 	b.	 	Carpet in lavatory room.
	 
	 	c.	 	Tile wainscot as required by code.
	 
	 	d.	 	Granite counter tops.






	 	2.	 	Provide floor drains.






	M.	 	Loading Areas:






	 	1.	 	Provide dock leveler at dock bay.
	 
	 	2.	 	Provide covered awning at van spaces over roll-up doors.






	N.	 	Vault Room (Not shown on plan yet.):






	 	1.	 	Provide 10X12 storage room with 2 hour wall and door construction, and
hard lid with 2 layers of
gyp. board.






	O.	 	Compressed Air System:






	 	1.	 	Landlord provides:






	 	a.	 	Compressor room
	 
	 	b.	 	Power rough-in for compressors
	 
	 	c.	 	Main air line plumbing distribution to all rooms indicated above with shut-offs as
follows:





	 	 	 	 	 	 	 
	 

	 	•
	 	Catheter Production
	 	5 valves
	 
	 	 	 	 	 	 
	 

	 	•
	 	Model Shop
	 	2 valves
	 
	 	 	 	 	 	 
	 

	 	•
	 	Extrusion Room
	 	2 valves
	 
	 	 	 	 	 	 
	 

	 	•

	 	Systems Production
	 	2 valves
	 
	 	 	 	 	 	 
	 

	 	•

	 	Engineering Lab
	 	2 valves
	 
	 	 	 	 	 	 
	 

	 	•

	 	Transducer Room
	 	2 valves







	 	2.	 	Tenant Provides:






	 	a.	 	Compressor units
	 
	 	b.	 	Filters, regulators, dryers

	 
	 	c.	 	Local distribution within rooms




 









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MEMORANDUM




Endosonics Tenant Improvements

October 12, 1995

Page 4





	P.	 	Vacuum Air System:






	 	1.	 	Landlord provides an allowance for 400 linear feet of PVC
schedule 40, 2" main
distribution pipe with “T” fittings every 50'.






	Q.	 	Security System:






	 	1.	 	Landlord provides at all exterior doors:






	 	a.	 	Electric door hardware for card readers.
	 
	 	b.	 	J box and conduit to ceiling plenum for card readers.






	 	2.	 	All installation of tenant’s security system components, cabling and door interfaces
provided by
Tenant.




 









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EXHIBIT C




RULES AND REGULATIONS




     1. Landlord shall have the right to control and operate
the public portions of the Building and the public facilities, as
well as facilities furnished for the common use of the tenants,
in such manner as it deems best for the benefit of the tenants
generally. No tenant shall invite to the demised Premises, or
permit the visit of, persons in such numbers or under such
conditions as to interfere with the use and enjoyment of the entrances, corridors, elevators and facilities of the Building by
other tenants.



     2. Landlord reserves the right to close and keep locked
all entrance and exit doors of the Building outside of normal
business hours as Landlord may deem to be advisable for the
protection of the property. All tenants, their employees, or
other persons entering or leaving the Building at any time when
it is so locked may be required to sign the Building register
when so doing, and the watchman in charge may refuse to admit to
the Building while it is so locked Tenant or any of Tenant’s
employees, or any other person, without a pass previously
arranged, or other satisfactory identification showing his right
of access to the Building at such time. Landlord assumes no
responsibility and shall not be liable for any damage resulting
from any error in regard to any such pass or identification, or
from the admission of any unauthorized person to the Building.



     3. Landlord reserves the right to exclude or expel from
the Building or in regard to any such pass or identification, or
from the admission of any unauthorized person to the Building, or
any person who, in the judgment of Landlord, is intoxicated or
under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of the Rules and Regulations of the Building or in violation of any law, order, ordinance, or governmental regulation.



     4. The entries, corridors, stairways and elevators shall
not be obstructed by any tenant, or used for any other purpose than ingress or egress to and from
its respective offices. Tenant shall not bring into or keep within the Building any animal or
vehicle.



     5. Freight, furniture, business equipment, merchandise and
bulky matter of any description ordinarily shall be delivered to
and removed from the demised Premises only in the designated the
service entrances and corridors, but special arrangements will be
made for moving large quantities or heavy items of equipment and
supplies into or out of the Building.



     6. All entrance doors in the demised Premises shall be
left locked when the demised Premises are not in use.



     7. Tenant shall not attach or permit to be attached
additional locks or similar devices to any door, transom or
window of the demised Premises; change existing locks or the
mechanism thereof; or make or permit to be made any keys for any
door thereof other than those provided by Landlord. (If more
than two keys for one lock are desired, Landlord will provide them upon payment therefor by
Tenant).



     8. Canvassing, soliciting or peddling in the Building is
prohibited and each tenant shall cooperate to prevent the same.



     9. Tenant shall not advertise the business, profession or
activities of Tenant in any manner which violates the letter or
spirit of any code of ethics adopted by any recognized association or organization pertaining thereto or use the name of the
Building for any purpose other than the business address of the
Tenant.



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     10. The drinking fountains, lavatories, water closets and
urinals shall not be used for any purpose other than those for
which they were installed.



     11. No awnings or other projections over or around the
windows or entrances of the demised Premises shall be installed
by any tenant. Tenant shall not change the draperies or the
color of induction unit enclosures in any manner which will alter
the Building’s appearance from the outside of the Building.



     12. Rooms or other areas used in common by tenants shall be
subject to such regulations.



     13. Landlord is not responsible to any tenant for the non-observance or violation of the Rules and Regulations by any other
tenant.



     14. Landlord reserves the right by written notice to
Tenant, to rescind, alter to waive any rule or regulation at any
time prescribed for the Building when, in Landlord’s reasonable
judgment, it is necessary, desirable or proper for the best
interest of the Building and its tenants.



     15. The Tenant shall not exhibit, sell or offer for sale on
the demised Premises or in the Building any article or thing
except those articles and things essentially connected with the
stated use of the demised Premises by the Tenant without the
advance consent of the Landlord.



     16. The Tenant shall never use any picture or likeness of
the Building in any circulars, notices, advertisements or correspondence without the Landlord’s consent.



     17. The Tenant shall cooperate fully with the Landlord to
assure the effective operation of the Building’s air conditioning
system. If Tenant shall so use the demised Premises that noxious
or objectionable fumes, vapors and odors exist beyond the extent
to which they are discharged or eliminated by means of the flues
and other devices contemplated by the various plans, specifications and leases, then Tenant shall provide proper ventilating
equipment for the discharge of such excess fumes, vapors and
odors so that they shall not enter into the air conditioning system or be discharged into
other vents or flues of the Building or annoy any of the tenants of the Building or adjacent
properties. The design, location and installation of such equipment shall be subject to
Landlord’s approval.



     18. All loading and unloading of merchandise, supplies,
materials, garbage and refuse shall be made only through such
entryways and elevators and at such times as the Landlord shall
designate. In its use of the loading areas in the basement, the
Tenant shall not obstruct or permit the obstruction of said
loading area and at no time shall park or allow its officers,
agents or employees to park vehicles therein except for loading
or unloading.



     19. There shall not be used or kept anywhere in the
Building by any tenant or persons or firms visiting or transacting business with a tenant any hand trucks, except those
equipped with rubber tires and side guards, or other vehicles of any kind.



     20. The Tenant shall not contract for any work or service
which might involve the employment of labor incompatible with the
Building employees or employees of contractors doing work or
performing services by or on behalf of the Landlord.



     21. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with any window or
door of the demised Premises without the prior written consent of
the Landlord.



     22. No sign, advertisement notice or other lettering shall be exhibited,
inscribed, painted or affixed by Tenant on any part



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of the outside or inside of the demised Premises or of the Building, without the prior
written consent of Landlord. In the event of any violation of the foregoing by Tenant,
Landlord may remove same without any liability, and may charge the expense incurred by such
removal to Tenant. Interior signs on doors and directory tablet shall be inscribed, painted
or affixed for Tenant by Landlord at the expense of Tenant, and shall be of a quality,
quantity, type, design, color, size, style, composition, material, location and general
appearance acceptable to Landlord.




     23. The sashes, sash doors, skylights, windows and doors
that reflect or admit light or air into the halls, passageways or
other public places in the Building shall not be covered or
obstructed by Tenant, nor shall any bottles, parcels, or other
articles be placed on the window sills, or in the public portions
of the Building.



     24. Tenant shall not mark, paint, drill into or in any way
deface any part of the demised Premises or the Building. No
boring, cutting or stringing of wires shall be permitted, except
with the prior written consent of Landlord, and as Landlord may
direct.



     25. No animal or bird of any kind shall be brought into or
kept in or about the demised Premises or the Building.



     26. Neither Tenant nor any of Tenant’s agents, servants,
employees, contractors, visitors or licensees shall at any time
bring or keep upon the demised Premises any inflammable, combustible or explosive fluid, chemical or substance.



     27. No additional locks, bolts or mail slots of any kind
shall be placed upon any of the doors or windows by Tenant, nor
shall any change be made in existing locks or the mechanism
thereof. Tenant must, upon the termination of the tenancy,
restore to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by Tenant, and in the
event of the loss of any keys so furnished, Tenant shall pay to
Landlord the cost thereof.



     28. Landlord shall have the right to prohibit any advertising referring to the Building which, in Landlord’s reasonable
opinion, tends to impair the reputation of the Building or its
desirability as a first-class building for offices, and upon
notice from Landlord, Tenant shall refrain from or discontinue
such advertising.



     29. Tenant’s contractors shall, while in the Building or
elsewhere in the complex of which the Building forms a part, be
subject to and under the control and direction of the Superintendent of the Building (but not as agent or servant of said
Superintendent or of Landlord).



     30. If the demised Premises is or becomes infested with
vermin as a result of the use or any misuse or neglect of the
demised Premises by Tenant, its agents, servants, employees,
contractors, visitors or licensees, Tenant shall forthwith at
Tenant’s expense cause the same to be exterminated from time to
time to the satisfaction of Landlord and shall employ such
licensed exterminators as shall be approved in writing in advance by
Landlord.



     31. The requirements of Tenant will be attended to only
upon application at the office of the Building. Building personnel shall not perform any work or do anything outside of their
regular duties, unless under special instructions from the office
of Landlord.



     32. No
water cooler, air conditioning unit or system or
other apparatus shall be installed or used by Tenant without the
written consent of Landlord.



     33. Tenant shall install and maintain, at Tenant’s sole
cost and expense, an adequate visibly marked (at all times



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properly operational) fire extinguisher next to any duplicating
or photocopying machine or similar heat producing equipment,
which may or may not contain combustible material, in the demised
Premises.




     34. Tenant shall not use the name of the Building for any purpose other than as the
address of the business to be conducted by Tenant in the demised Premises, nor shall Tenant use any
picture of the Building in its advertising, stationery or in any other manner without the prior
written permission of Landlord. Landlord expressly reserves the right at any time to change said
name without in any manner being liable to Tenant therefor.



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EXHIBIT
D




DESCRIPTION OF EXPANSION PREMISES

(To Be Attached On Commencement Date)




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EXHIBIT
- D

ENDOSONICS CORPORATE OFFICE BUILDING




SITE PLAN AND APPROXIMATE DEMISED PREMISES









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EXHIBIT E




AGREEMENT OF PURCHASE AND SALE




     This Agreement of Purchase and Sale (“Agreement”), dated for
reference purposes only                            , 19          , is entered into by
and between PANATTONI-CATLIN VENTURE XXVI, a California general partnership (“Seller”), and
ENDOSONICS CORPORATION, a Delaware corporation (“Buyer”).



Recitals




     A. Seller is the owner of certain real property (“Real
Property”), located in Rancho Cordova (“City”), Sacramento County
(“County”), California (“State”), also known as Assessor’s Parcel
Number                                         .



     B. The Real Property has constructed thereon a certain
building, containing approximately
                     gross square feet,
(“Improvements”). The Real Property and Improvements are
collectively referred to as the “Project,” which is commonly
known as                                   , Rancho Cordova, California.



     C. The Real Property, Improvements, Personal Property (as
hereinafter defined), and Seller’s interest in the Leases and
Service Contracts (each of which are hereinafter defined) are
hereinafter collectively referred to as the “Property.”



     D. Buyer, as tenant, and Seller, as Landlord, prior to the
Effective Date, have entered into a certain Net Lease Agreement
(“Lease”) dated                                         , pursuant to which Buyer and Seller
have entered into this Agreement.



     E. Buyer desires to purchase from Seller and Seller
desires to sell to Buyer the Property pursuant to the provisions
of this Agreement.



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



Agreement




     1. Purchase
and Sale. Seller agrees to sell and convey to
Buyer, and Buyer agrees to purchase from Seller, the Property on
the terms and subject to the conditions set forth in this
Agreement. For the purposes of this Agreement, the date which
the last party executes this Agreement and delivers it to the
other party shall hereinafter be referred to as the “Effective
Date.”



     2. Purchase
Price. The purchase price (“Purchase Price”)
for the Property shall be One Hundred Eight and No/100ths Dollars
($108.00 per gross square foot of the Improvements). At Close of
Escrow (as hereinafter defined), to the extent that there is
vacant space within the Improvements, the amount of Twenty Two
and No/100ths Dollars ($22.00), multiplied by the gross square
footage of such vacant space shall be offset against the Purchase
Price.



     3. Payment
of Purchase Price. The Purchase Price for the
Property shall be payable by Buyer as follows:



          (a)
Initial Deposit. On or before the fifth (5th) day following the Effective
Date, Buyer shall deposit with Stewart Title of Sacramento (“Escrow Holder”) the amount of
Twenty-Five Thousand and No/100ths Dollars ($25,000.00) (“Initial Deposit”). The Initial
Deposit shall be invested by Escrow Holder with a financial institution acceptable to Seller
in a federally-insured interest-bearing demand account, and the Initial Deposit, and all
interest accrued thereon, shall be credited to the Purchase Price upon the Close of Escrow.




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          (b)
Final Deposit. On or before the expiration of the
Contingency Period (as hereinafter defined), unless this
Agreement has been previously terminated by Buyer pursuant to its
rights set forth in this Agreement, Buyer shall deposit with
Escrow Holder the amount of One Hundred Thousand and No/100ths
Dollars ($100,000.00) (“Final Deposit”). Upon
Buyer’s delivery of the Final Deposit to Escrow Holder, (i) the Final Deposit
shall be invested by Escrow Holder in the interest-bearing
account as is required for the Initial Deposit in Section 3(a)
above, (ii) the Initial Deposit and the Final Deposit
(collectively, “Deposit”), totalling One Hundred
Twenty Five Thousand and No/100ths Dollars ($125,000.00), and all interest
accrued thereon, shall be credited to the Purchase Price at Close
of Escrow, and (iii) the Deposit shall become non-refundable,
become the sole and absolute property of Seller, except as
otherwise provided herein.




          (c)
Cash at Close of Escrow. On or before the Close
of Escrow, Buyer shall deposit with Escrow Holder the remaining
portion of the Purchase Price, in immediately available funds,
which shall be paid to Seller at Close of Escrow.




     4. Escrow.



          (a)
Opening of Escrow. Within two (2) days following
the Effective Date, Buyer shall open an escrow (“Escrow”) with
Escrow Holder. Buyer and Seller agree to execute and deliver to
Escrow Holder, in a timely manner, all escrow instructions
necessary to consummate the transaction contemplated by this
Agreement. Any such instructions shall not conflict with, amend
or supersede any portion of this Agreement. If there is any
inconsistency between such instructions and this Agreement, this
Agreement shall control.




          (b)
Close of Escrow. For purposes of this Agreement,
“Close of Escrow” shall be defined as the date that the Grant
Deed (as hereinafter defined) is recorded in the Official Records
of the County. The Close of Escrow shall occur ten (10) days
following the expiration of the Contingency Period (“Outside
Date”), unless extended by the mutual written consent of the
parties.




     5. Conditions
of Title. It shall be a condition to the
Close of Escrow and a covenant of Seller that title to the
Project be conveyed to Buyer by Seller by a Grant Deed, which
shall be in the form customarily used by Escrow Holder in the
County (“Grant Deed”), subject only to (a) a lien to secure
payment of real estate taxes, not yet due and payable; (b) the
lien of supplemental taxes, not yet due and payable; (c)
exceptions which are approved and/or accepted by Buyer in writing
in accordance with this Agreement; and (d) all applicable laws,
ordinances, rules and governmental regulations (including, but
not limited to those relative to building, zoning and land use)
affecting the development, use, occupancy or enjoyment of the
Property (collectively, “Approved Conditions of Title”).



     6. Conditions to Close of Escrow.



          (a)
Conditions to Buyer’s Obligations. The Close of Escrow and Buyer’s obligations
to consummate the transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions (or Buyer’s written waiver thereof) which are for Buyer’s sole benefit, on
or prior to the dates designated below for the satisfaction of such conditions, or the Close of
Escrow in absence of a specified date:




               (i) Title. Buyer shall have the right to approve any and all matters of and exceptions to
title of the Project, including the legal description, as disclosed by the following documents and
instruments (collectively, “Title Documents”): (A) a Preliminary Report (“Preliminary Report”)
issued by Escrow Holder with respect to the Project and all matters referenced therein; and (B)
legible copies of all documents, whether recorded or unrecorded, referred to in such Preliminary
Report.



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Buyer shall cause Escrow Holder to deliver the Title Documents to Buyer and Seller within ten
(10) calendar days following the Effective Date. Buyer shall have ten (10) calendar days
following its receipt of the Title Documents to give Seller and Escrow Holder written notice
(“Buyer’s Title Notice”) of Buyer’s approval or disapproval, which shall be made in Buyer’s
sole and absolute discretion, of the legal description and every item or exception disclosed
by the Title Documents. The failure of Buyer to give Buyer’s Title Notice to Seller within the
specified time period shall be deemed Buyer’s disapproval of title to the Project, in which
case the Agreement shall be canceled pursuant to the provisions of this Section. In the event
that Buyer’s Title Notice disapproves of any matter of title shown in the Title Documents,
Seller shall, within seven (7) calendar days after Buyer’s Title Notice is received by Seller,
give Buyer written notice (“Seller’s Title Notice”) of those disapproved title matters, if
any, which Seller is unable or unwilling to have eliminated from title to the Project by Close
of Escrow. In the event that Seller is unable to remove all of the title matters objected to
by Buyer in Buyer’s Title Notice, Buyer shall have three (3) calendar days from receipt of
Seller’s Title Notice to notify Seller in writing that either (1) Buyer is willing to purchase
the Project subject to such disapproved exceptions, or (2) Buyer elects to cancel this
transaction. Failure of Buyer to take either one of the actions described in Subsection (1) or
(2) above shall be deemed to be Buyer’s election to take the action described in Subsection
(2) above. In the event this Agreement is canceled or deemed canceled pursuant to this
Section, except as otherwise provided herein, the parties shall have no further obligations
under this Agreement, and all monies delivered to Escrow Holder by Buyer shall immediately be
returned to Buyer.




               (ii) Inspections
and Studies. For a period of thirty (30) days following the
Effective Date (“Contingency Period”), Buyer shall have the right to review and approve the
(A) Documents and Materials (as hereinafter defined), and
(B) conduct any and all inspections, investigations, tests and
studies (including, without limitation, investigations with
regard to zoning, building codes and other governmental
regulations, architectural inspections, engineering tests,
economic feasibility studies, soils, seismic and geologic reports
and environmental testing) with respect to the Property as Buyer
may elect to make or maintain. Prior to the expiration of the
Contingency Period, Buyer shall deliver to Seller and Escrow
Holder written notice of its approval or disapproval, which shall
be made in Buyer’s sole and absolute discretion, of the Property
and the Documents and Materials. The failure of Buyer to deliver
such notice prior to the expiration of the Contingency Period
shall be deemed to constitute Buyer’s disapproval of such
matters, in which case the Agreement shall be canceled pursuant
to the provisions of this Section. The cost of any such
inspections, tests and/or studies shall be borne by Buyer.
Between the Effective Date and the Close of Escrow, Buyer, its
agents, contractors and subcontractors shall have the right to
enter upon the Project at reasonable times during ordinary
business hours to make any and all inspections and tests as may
be necessary or desirable in Buyer’s sole judgment and
discretion. Buyer shall use its good faith efforts not to
interfere with the use of the Improvements by the Tenants (as
hereinafter defined). Buyer shall indemnify, defend (with
counsel reasonably satisfactory to Seller) and hold Seller, its
agents, employees, trustee, directors and officers, and the
Property harmless from any and all damage arising out of or in
connection with such entry and/or activities upon the Project by
Buyer, its agents, employees or contractors. In the event Buyer
disapproves or is deemed to have disapproved of the condition of
the Property and/or the Documents and Materials prior to the
expiration of the Contingency Period, except as otherwise
provided herein, the parties shall have no further obligations
under this Agreement, all monies delivered to Escrow Holder by
Buyer shall be immediately returned to Buyer, and Buyer shall
deliver to Seller copies of any and all reports, studies,



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inspections, or other materials Buyer caused to be prepared , pursuant to its
inspection right set forth in this Section.




               (iii) Tenant Estoppel Certificate. On or before the Close of Escrow, Buyer shall have
received from Seller estoppel certificates (“Tenant Estoppel Certificates”), duly executed by each
of the Tenants, to be dated not more than forty five (45) days prior to the Close of Escrow. The
Tenant Estoppel Certificate shall be in the form of Exhibit A attached hereto. In this
regard, Buyer’s failure to object to any Tenant Estoppel Certificate within five (5) days following
Buyer’s receipt thereof shall be deemed (i) Buyer’s approval of such document, and (ii) a
satisfaction of the condition precedent set forth in this
Section 6 (a) (iii) as it relates to such
Tenant.



               (iv) Title Insurance. As of the Close of Escrow,
Title Company (as hereinafter defined) shall have issued or shall
have committed to issue the Title Policy (as’hereinafter defined)
to Buyer.



               (v) Seller’s Obligations. As of the Close of Escrow, Seller shall have
performed all of the obligations required to be performed by Seller under this Agreement.



               (vi) Seller’s Representations. As of the Close of Escrow, all representations and
warranties made by Seller to Buyer in this Agreement shall be true and correct.



          (b) Conditions to Seller’s Obligations. The Close of
Escrow and Seller’s obligations to consummate the transaction
contemplated by this Agreement are subject to the satisfaction of
the following conditions (or Seller’s waiver thereof) which are
for Seller’s sole benefit, on or prior to the dates designated
below for the satisfaction of such conditions, or the Close of
Escrow in absence of a specified date:




               (i) Buyer’s Obligations. As of the Close of
Escrow, Buyer shall have timely performed all of the obligations required by the terms of
this Agreement to be performed by Buyer.



               (ii) Buyer’s Representations. As of the Close of Escrow, all representations
and warranties made by Buyer to Seller in this Agreement shall be true and correct as of the Close
of Escrow.



               (iii) Tenant Estoppel Certificates. On or before the Close of Escrow, Buyer shall
have received Tenant Estoppel Certificates duly executed by all Tenants.



               (iv) Outside Date. The Close of Escrow shall occur on or before the Outside
Date.



          (c) Failure of Condition to Close of Escrow. Except
as provided in Section 6 (a) or 6 (b), in the event any of the
conditions set forth in Section 6 (a) or 6 (b) are not timely
satisfied or waived by the appropriate benefitted party, for a
reason other than the default of Buyer or Seller, this Agreement
shall terminate, and if applicable, the Deposit, and all interest
accrued thereon, and all other monies delivered to Escrow Holder
by Buyer shall be immediately be returned to Buyer, and, except
as otherwise provided herein, the parties shall have no further
obligations hereunder.




     7. Deposits By Seller. Unless otherwise provided in this Section, at least one (1)
business day prior to the Close of Escrow, Seller shall deposit with Escrow Holder the following
documents:



          (a) Grant Deed. The Grant Deed, duly executed and acknowledged in recordable form by
Seller, conveying fee title to the Project to Buyer subject only to the Approved Conditions of
Title.




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          (b) FIRPTA Certificate. A certification, acceptable
to Escrow Holder and duly executed by Seller under penalty of
perjury setting forth Seller’s address and federal tax
identification number in accordance with and/or for the purpose
of the provisions of Sections 7701 and 1445, as may be amended,
of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.




          (c) California Franchise Tax Withholding. Evidence
satisfactory to Buyer and Escrow Holder that Seller is exempt
from the provisions of the withholding requirements of the
California Revenue and Taxation Code, as amended, and that
neither Buyer nor Escrow Holder is required to withhold any
amounts from the Purchase Price pursuant to such provisions.




          (d)
Bill of Sale. A bill of sale (“Bill of Sale”)
duly executed and acknowledged by Seller in favor of Buyer,
assigning and conveying to Buyer all of Seller’s right, title and
interest in and to the Personal Property. The Bill of Sale shall
be in the form of, and upon the terms contained in, Exhibit B
attached hereto.




          (e) Assignment of Leases. An Assignment of Leases
(“Tenant Lease Assignment”) duly executed and acknowledged by
Seller in recordable form, assigning to Buyer all of Seller’s
right, title and interest in and to all of the Leases. The
Tenant Lease Assignment shall be in the form of, and upon the
terms contained in, Exhibit C attached hereto.




          (f) General Assignment. An assignment (“General
Assignment”), duly executed by Seller, assigning to Buyer all of
Seller’s right, title and interest in the Service Contracts. The
General Assignment shall be in the form of, and upon the terms
contained in, Exhibit D attached hereto.




          (g) Tenant Notification Letter. A letter to the
Tenants (“Tenant Notification Letter”), duly executed by Seller
and dated as of the Close of Escrow, notifying each Tenant that:
(1) the Project has been sold to Buyer; (2) all of
Seller’s right, title and interest in and
to the Leases have been assigned to Buyer; and (3) commencing immediately, all rent and other
payments and any notices under the Leases are to be paid and sent to Buyer.




          (h) Lease. The original Leases.




          (i) Service Agreements. The original Service
Agreements.




          (j) Keys. Keys to all entrance doors to the Improvements and keys to all Personal
Property located on the Project, which keys shall be properly tagged for identification.




          (k) Reimbursable Operating Statement. A statement
setting forth the operating expenses incurred by Seller for the
year in which the Close of Escrow occurs, for which Tenants have
not yet been billed but for which Tenants are required to
reimburse Seller pursuant to the Leases; provided, however, if
such information is not reasonably available at Close of Escrow,
Seller may deliver such statement to Buyer as soon as practicable
after the Close of Escrow.




     8. Deposits By Buyer. At least one (1) business day prior
to the Close of Escrow, Buyer shall deposit or cause to be
deposited with Escrow Holder (a) the required funds which are to
be applied towards the payment of the Purchase Price; (b) a counterpart of the Bill of Sale executed and acknowledged by
Buyer; (c) a counterpart of the Tenant Lease Assignment executed
and acknowledged by Buyer; and (d) a counterpart of the General
Assignment executed and acknowledged by Buyer.



     9. Issuance of Title Insurance. At the Close of Escrow,
Escrow Holder’s title insurer (“Title Company”), shall issue to
Buyer its standard form California Land Title Association



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(“CLTA”) Owner’s Policy of Title Insurance showing fee title to the Project vested in
Buyer subject only to the Approved Conditions of Title (“Title Policy”). The Title Policy
shall be issued with liability in an amount equal to the Purchase Price. Seller shall pay
for the expense of the Title Policy. If Buyer elects to have Title Company issue its
American Land Title Association (“ALTA”) Owner’s Policy of Title Insurance, Buyer shall
pay for the expense of such ALTA premium increment, any indorsement thereto and any survey
costs.




     10. Costs and Expenses. Except as otherwise specified in
this Agreement, Seller and Buyer shall equally divide (a) all
escrow fees and costs; (b) any document recording charges; and
(c) documentary transfer tax charged by the County and any other
transfer tax charged by the City. All other costs and expense of
escrow and title shall be shared pursuant to the custom in the
County. Buyer and Seller shall each pay all legal and
professional fees and fees of other consultants incurred by Buyer
and Seller, respectively.



     11. Prorations.



          (a) Revenues. Rentals, revenues, and other income, if
any, from the Property, and any form operating expenses pass-throughs relating to the Leases, if any, affecting the Property
shall be prorated as of 11:59 p.m. on the day following the Close
of Escrow. “Rentals” as used herein include fixed monthly
rentals, additional rentals, percentage rentals, escalation
rentals, retroactive rentals, and any other sums and charges
payable by Tenants under the Leases.




          (b) Delinquent Rentals. Rentals are delinquent when
payment thereof is due on or prior to the Close of Escrow but has
not been made by the Close of Escrow. Delinquent Rentals shall
be prorated between Buyer and Seller as of the Close of Escrow
but not until they are actually collected by Buyer. Buyer shall
use its good faith efforts and due diligence to collect any
delinquent Rentals, if any. After the Close of Escrow, without
the prior consent of Buyer, which shall not be unreasonably
withheld, Seller shall not take any action against a Tenant owing
delinquent Rentals. Seller shall be entitled to any Rentals received by Buyer from Tenants after the Close of Escrow to the
extent such Rentals relate to amounts owing prior to the Close of
Escrow. Buyer agrees that any payments due to Seller as a result
of collected delinquent Rentals shall be payable by Buyer to Seller upon receipt
thereof, less Buyer’s reasonable cost of collection.




          (c) Operating Cost Pass-Throughs. Operating cost
pass-throughs, or charges payable by Tenants which accrue to the
Close of Escrow but which are not then due and payable, shall be
prorated as of the Close of Escrow; provided, however, no payment
thereof shall be made to Seller unless and until Buyer collects
same from the Tenants, which Buyer shall use its good faith
efforts an due diligence to collect following the Close of
Escrow. When Buyer collects such operating cost pass-throughs,
or charges from a Tenant, Buyer shall pay Seller an amount equal
to all such operating cost pass-throughs, or charges accruing
prior to the Close of Escrow. Payments of such prorated amounts
shall be made to Seller upon receipt and shall be accompanied by a report showing such amount
was calculated and such supporting documentation as Seller reasonably requests.




          (d) Tenant Deposits. Buyer shall be credited and
Seller shall be debited with an amount equal to all deposits from
Tenants (and any interest accrued thereon for the benefit of a
Tenant) being held by Seller under the Leases.




          (e) Taxes/Assessments. All non-delinquent real estate
taxes on the Project shall be prorated as of 11:59 p.m. on the
day following the Close of Escrow based on the actual current tax
bill, but if such tax bill has not yet been received by Seller by
the Close of Escrow, then the current year’s taxes shall be
deemed to be one hundred two percent (102%) of the amount of the




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previous year’s tax bill for the Project. All delinquent taxes and all assessments, if any, on the
Project shall be paid at the Close of Escrow from funds accruing to Seller.




          (f)
Other Expenses. All other expenses for the
Property shall be prorated as of 11:59 p.m. on the day following
to the Close of Escrow between the parties based upon the latest
available information.




          (g)
Corrections. If any errors or omissions are made
regarding adjustments and prorations as set forth herein, the
parties shall make the appropriate corrections promptly upon
discovery thereof. If any estimates are made at the Close of
Escrow regarding adjustments or prorations, the party shall make
the appropriate correction promptly when accurate information
becomes available. Any corrected adjustment or proration shall
be paid in cash to the party entitled thereto.




     12. Review of Documents and Materials. Within five
(5) calendar days following the Effective Date, Seller shall
deliver to Buyer, all documents and materials (collectively,
“Documents and Materials”) relating to the Property to the extent
in Seller’s possession; provided, however, in no event shall
Seller be required to disclose any “attorney-client” privileged
information or internal appraisals. Seller makes no
representation or warranty regarding the truth or accuracy of the
Documents and Materials.



     13. Condition and Inspection of Property. Seller makes no
representation or warranty regarding the condition of the
Property, its past use, or its suitability for Buyer’s intended
use, and the Property is sold AS-IS, WHERE-IS, WITH ALL FAULTS,
AND THERE IS NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
CONDITION OF THE PROPERTY. Buyer is relying solely upon, and as
of the expiration of the Contingency Period shall have conducted
its own independent inspection, investigation, and analysis of
the Property as it deems necessary or appropriate in so acquiring
the Property from Seller, including, without limitation, any and
all matters concerning the condition, use and/or sale of the
Property.



     14. Seller’s Representations and Warranties. Seller
represents and warrants to Buyer the following:



          (a) Seller has the full power to execute and deliver
and fully perform its obligations under this Agreement. This
Agreement constitutes a valid and legally binding obligation of
Seller, in accordance with its terms;




          (b) Except as disclosed in writing by Seller to Buyer
within five (5) days following the Effective Date, Seller has not
(i) made a general assignment for the benefit of creditors; (ii)
filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by Seller’s creditors; (iii) suffer
the appointment of a receiver to take possession of all or
substantially all of Seller’s asset; (iv) suffer the attachment
or other judicial seizure of all, or substantially all of
Seller’s assets; and (v) admit in writing its inability to pay
its debts as they become due;




          (c) Except as disclosed in writing by Seller to Buyer
within five (5) days following the Effective Date, Seller has not
received any written notice of pending litigation which would
adversely affect the property;




          (d) Except as disclosed in writing by Seller to Buyer
within five (5) days following the Effective Date, Seller has not
received any written notice from any governmental authority that
the Improvements are presently in violation of any applicable
building codes;




          (e) Except as disclosed in writing by Seller to Buyer
within five (5) days following the Effective Date, Seller has not
received any written notice from any governmental authority that




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eminent domain proceedings for the condemnation of the Real Property are pending;




          (f) As of the Close of Escrow, there will be no
Service Contracts relating to the Property, except for the
Service Contracts disclosed in the General Assignment; and




          (g) Seller has not entered into any Lease relating to,
the Property, except those set forth in the Tenant Lease
Assignment.




     15. Liquidated
Damage. BUYER RECOGNIZES THAT THE PROPERTY WILL BE
REMOVED BY THE SELLER FROM THE MARKET DURING THE EXISTENCE OF THIS AGREEMENT, AND THAT IF THIS
AGREEMENT IS NOT CONSUMMATED BECAUSE OF BUYER’S DEFAULT, IT WOULD BE EXTREMELY DIFFICULT AND
IMPRACTICAL TO ASCERTAIN THE EXTENT OF THE DETRIMENT TO SELLER. THE PARTIES HAVE DETERMINED
AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER AS A RESULT OF
ANY SUCH DEFAULT IS DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE DATE OF THIS AGREEMENT
AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE AMOUNT OF SUCH DAMAGES. FOR THESE
REASONS, THE PARTIES AGREE THAT IF THIS PURCHASE AND SALE IS NOT CONSUMMATED BECAUSE OF
BUYER’S DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN OF THE DEPOSIT, AS LIQUIDATED DAMAGES.
THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676
AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVlL CODE SECTION 3389. SELLER
AGREES THAT THESE LIQUIDATED DAMAGES SHALL BE IN LIEU OF ANY OTHER MONETARY RELIEF OR OTHER
REMEDY, INCLUDING, WITHOUT LIMITATION, SPECIFIC PERFORMANCE, TO WHICH SELLER MIGHT OTHERWISE
BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY, AND SHALL BE SELLER’S SOLE AND
EXCLUSIVE RIGHT AND REMEDY. NOTHING CONTAINED HEREIN SHALL IN ANY MANNER LIMIT THE AMOUNT OF
DAMAGES OBTAINABLE BY SELLER PURSUANT TO AN ACTION UNDER ANY HOLD HARMLESS, DEFENSE OR
INDEMNIFICATION PROVISION HEREOF.



Seller                                          Buyer                     




     16. Condemnation and Destruction.



          (a) Eminent Domain or Taking. If, prior to the Close
of Escrow, any material portion of the Real Property or
Improvements is taken by eminent domain or otherwise, Seller
shall immediately notify Buyer of such fact. If such taking is
“material,” Buyer shall have the option, in its reasonable
discretion, to terminate this Agreement upon written notice to
Seller given not later than ten (10) days after receipt of
Seller’s notice. If this Agreement is terminated pursuant to
this Section, the provisions of Section 6 (c) shall govern. If
Buyer does not exercise this option to terminate this Agreement,
or if there has not been a material taking by eminent domain or
otherwise to give rise to such option, neither party shall have
the right to terminate this Agreement, but the Seller shall
assign and turn over, and the Buyer shall be entitled to receive
and keep, all awards for the taking by eminent domain which
accrue to Seller and the parties shall proceed to the Close of
Escrow pursuant to the terms hereof, without modification of the
terms of this Agreement and without any reduction in the Purchase
Price. For the purpose hereof, “material” shall be deemed to be
any diminution in the value of the Property as a result of a
taking by eminent domain or otherwise which exceeds Fifty
Thousand and No/100ths Dollars ($50,000.00), as determined by
Seller using its good faith judgment.




          (b) Fire or Casualty. Prior to the Close of Escrow,
the entire risk of loss or damage by earthquake, flood,
landslide, fire or other casualty shall be borne and assumed by
Seller, except as otherwise provided in this Section. If, prior
to the Close of Escrow, any part of the Improvements are damaged
or destroyed by earthquake, flood, landslide, fire or other
casualty, Seller shall immediately notify Buyer of such fact. If





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such damage or destruction is “material”, Buyer shall have the option to
terminate this Agreement upon written notice to the Seller given not later than
ten (10) days after receipt of Seller’s notice. For purposes hereof,
“material” shall be deemed to be any uninsured damage or destruction to the
Project or any insured damage or destruction where the cost of repair or
replacement is estimated to be Fifty Thousand Dollars ($50,000.00) or more or
shall take more than ninety (90) days to repair, in Seller’s good faith
judgment; provided, however, in the case of uninsured damage or destruction,
Seller may, at Seller’s option, elect to repair such damage and destruction and
keep this Agreement in full force and effect so long, as such repair can be
and is completed by Seller prior to the Close of Escrow. If this Agreement is
so terminated, the provisions of Section 6 (c) shall govern. If Buyer does not
exercise this option to terminate this Agreement, or if the casualty
is not material, neither party shall have the right to terminate this Agreement but
Seller shall assign and turn over, and Buyer shall be entitled to receive and
keep, all insurance proceeds payable to it with respect to such destruction,
and the parties shall proceed to the Close of Escrow pursuant to the terms
hereof without modification of the terms of this Agreement and without any
reduction in the Purchase Price.




     17. Notices. All notices or other communications required or
permitted hereunder shall be in writing, and shall be personally delivered or
sent by registered or certified mail, postage prepaid, return receipt
requested, or sent by electronic facsimile and shall be deemed received upon
the earlier of (i) if personally delivered, the date of delivery to the address
of the person to receive such notice, (ii) if mailed, on the date of posting by
the United States Post Office, or (iii) if given by electronic facsimile, when
received by the other party.



	 	 	 
	TO BUYER:

	 	Endosonics Corporation
	 

	 	6616 Owens Drive
	 

	 	Pleasanton, California
	 

	 	Telephone: (510) 734-0464
	 

	 	Facsimile: (510) 734-0465
	 

	 	Attention: Donald D. Huffman
	 
	 	 
	TO SELLER:

	 	Panattoni-Catlin Venture XXVI
	 

	 	3620 Fair Oaks Boulevard, Suite 150
	 

	 	Sacramento, California
	 

	 	Telephone: (916) 920-4400
	 

	 	Facsimile: (916) 920-0854
	 

	 	Attention: Benjamin S. Catlin
	 
	 	 
	WITH COPY TO:

	 	Trainor Robertson
	 

	 	701 University Avenue, Suite 200
	 

	 	Sacramento, California 95825
	 

	 	Telephone: (916) 929-7000
	 

	 	Facsimile: (916) 929-7111
	 

	 	Attention: Jay Heckenlively
	 
	 	 
	TO ESCROW HOLDER:

	 	Stewart Title of Sacramento
	 

	 	555 Capitol Mall, Suite 280
	 

	 	Sacramento, California 95814
	 

	 	Telephone: (916) 441-4950
	 

	 	Facsimile: (916) 444-8691
	 

	 	Attention: Vince Balbi






     Notice of change of address shall be given by written notice in the
manner described in this Section.



     18. Brokers. At the Close of Escrow, and only in such event,
Seller shall pay a real estate brokerage commission to Cornish & Carey
Commercial (“Broker”) equal to two percent (2.00%) of the Purchase Price, less
any commission paid to the Broker pursuant to a result of the Lease. If any
additional claims for brokers’ or finders’ fees for the consummation of this
Agreement arise, then Buyer hereby agrees to indemnify, hold harmless and
defend Seller from and against such claims if they shall be based upon any
statement, representation or agreement by



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Buyer, and Seller hereby agrees to indemnify, hold harmless and defend Buyer if such
claims shall be based upon any statement, representation or agreement made by Seller.




     19. Exchange. The parties to this Agreement acknowledge
that either party may desire to structure the sale and/or the
purchase of the Property as an exchange for like-kind property
pursuant to Section 1031 of the Internal Revenue Code of 1986, as
amended, in order to defer recognition of income from the
disposition of the Property and other properties. The parties
agree to reasonably cooperate with each other to accomplish such
exchange(s) and each party hereby agrees that any and all costs
associated with said exchange shall be borne solely by the
exchanging party and shall in no way be attributable to the non-exchanging party. In no event shall the non-exchanging party be
required to take title to the exchanged property(ies) to
effectuate the tax deferred exchange contemplated by this
Section.



     20. Miscellaneous.



          (a) Partial Invalidity. If any term or provision of
this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby, and each such term and provision of this Agreement shall
be valid, and shall be enforced to the fullest extent permitted
by law.




          (b) Waivers. No waiver of any breach of any covenant
or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for
performance of any obligation or act shall be deemed an extension
of time for performance of any other obligation or act except
those of the waiving party, which shall be extended by a period
of time equal to the period of the delay.




          (c) Survival of Representations. The indemnification,
defense and hold harmless obligations, and the representations
and warranties made by each party herein shall survive (1) the
Close of Escrow and shall not merge into the Grant Deed and the
recordation thereof, and (2) the termination and/or cancellation
of this Agreement.




          (d) Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the permitted
successors and assigns of the parties hereto.




          (e) Professional Fees. If either party commences an
action against the other to interpret or enforce any of the terms
of this Agreement or because of the breach by the other party of
any of the terms hereof, the losing party shall pay to the
prevailing party reasonable attorneys’ fees, costs and expenses
and court costs and other costs of action incurred in connection
with the prosecution or defense of such action, whether or not
the action is prosecuted to a final judgment. For the purpose of
this Agreement, the terms, “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to the
parties hereto, which may include printing, photostating,
duplicating and other expenses, air freight charges, and fees
billed for law clerks, paralegals, librarians and others not
admitted to the bar but performing services under the supervision
of an attorney. The terms “attorneys’ fees” or “attorneys’ fees
and costs” shall also include, without limitation, all such fees
and expenses incurred with respect to appeals, arbitrations and
bankruptcy proceedings, and whether or not any action or
proceeding is brought with respect to the matter for which said
fees and expenses were incurred. The term “attorney” shall have
the same meaning as the term “counsel.”




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          (f) Entire Agreement. This Agreement (including all
Exhibits attached hereto) is the final expression of, and
contains the entire agreement between, the parties with respect
to the subject matter hereof and supersedes all prior
understandings, with respect thereto. This Agreement may not be
modified, changed, supplemented, superseded, canceled or
terminated, nor may any obligations hereunder be waived, except
by written instrument signed by the party to be charged or by its
agent duly authorized in writing or as otherwise expressly
permitted herein. The parties do not intend to confer any
benefit hereunder on any person, firm or corporation other than
the parties hereto and lawful assignees.




          (g) Assignment. Buyer may not assign its right, title
or interest in this Agreement to any other party without the
prior written consent of Seller, which determination may be
withheld in Seller’s sole and absolute discretion. Any attempted
assignment without the prior written consent, of Seller shall be
void and be deemed a default of Buyer hereunder. Any permitted
assignment shall not relieve the assigning party from any
liability under this Agreement.




          (h) Time of Essence. Seller and Buyer hereby
acknowledge and agree that time is strictly of the essence with respect to each and every term,
condition, obligation and provision hereof and that failure to timely perform any of the terms,
conditions, obligations or provisions hereof by either party shall constitute a material breach of
and a non-curable (but waivable) default under this Agreement by the party so failing to perform.




          (i) Relationship of Parties. Nothing contained in this Agreement shall be deemed or
construed by the parties to create the relationship of principal and agent, a partnership, joint
venture or any other association between Buyer and Seller.




          (j) Construction. Headings at the beginning of each paragraph and subparagraph are
solely for the convenience of the parties and are not a part of the Agreement. Whenever required
by the context of this Agreement, the singular shall include the plural and the masculine shall
include the feminine and vice versa. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if both parties had prepared the same. Unless
otherwise indicated, all references to paragraphs, sections, subparagraphs and subsections are to
this Agreement. All exhibits referred to in this Agreement are attached and incorporated by this
reference.




          (k) Governing Law. The parties hereto acknowledge that this Agreement has been
negotiated and entered into in the State of California. The parties hereto expressly agree that
this Agreement shall be governed by, interpreted under, and construed and enforced in accordance
with the laws of the State of California.




          (l) Possession of Property. Buyer shall be entitled to the possession of the
Property immediately following the Close of Escrow.




          (m) Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute one and the same
instrument.




          (n) Days of Week. If any date for performance herein falls on a Saturday, Sunday or
holiday, as defined in Section 6700 of the California Government Code, the time for such
performance shall be extended to 5:00 p.m. on the next business day.




          (o) Representation by Counsel. Notwithstanding any rule or maxim of construction to
the contrary, any ambiguity or uncertainty shall not be construed against either Seller or Buyer
based upon authorship of any of the provisions hereof. Seller




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and Buyer each hereby warrant, represent and certify to the other as follows: (a)
that the contents of this Agreement have been completely and carefully read by the
representing party and counsel for the representing party; (b) that the representing party
has been separately represented by counsel and the representing party is satisfied with such
representation; (c) that the representing party’s counsel has advised the representing party
of, and the representing party fully understands, the legal consequences of this Agreement;
and (d) that no other person (whether a party to this Agreement or not) has made any threats,
promises or representations of any kind whatsoever to induce the execution hereof, other than
the performance of the terms and provisions hereof.




     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set
forth below.



	 	 	 	 	 	 	 
	BUYER:	 	SELLER:
	 
	 	 	 	 	 	 
	ENDOSONICS CORPORATION, 


a Delaware corporation	 	PANATTONI-CATLIN VENTURE 
XXVI,

 a California general 
Partnership
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Its:

	 	 	 	Its:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 





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EXHIBIT LIST




Exhibit A          —          Estoppel Certificate




Exhibit B          —          Bill of Sale




Exhibit C          —          Tenant Lease Assignment




Exhibit D          —          General Assignment





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EXHIBIT A




ESTOPPEL CERTIFICATE




	 	 	 	 	 	 	 	 	 	 	 	 	 
	TO:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	RE:
	 	Lease Dated:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Landlord:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	(“Landlord”)	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Tenant :
	 	 	 	 	 	(“Tenant”)	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Premises:
	 	Approximately
	 	 	 	square feet	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	located at	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	(“Premises”)	 	 	 	 	 	 	 	 






Ladies and Gentlemen:




     The undersigned hereby certifies to                                          (“Buyer”), as of the date hereof as follows:



     1. The undersigned is the “Tenant” under the above-referenced lease (“Lease”); covering the
above-referenced Premises (“Premises”). A true, correct and complete copy of the Lease (including
all addenda, riders, amendments, modifications and supplements thereto); is attached hereto as
Exhibit A.



     2. The Lease constitutes the entire agreement between Landlord and Tenant with respect to the
Premises and the Lease has not been modified, changed, altered or amended in any respect except as
follows:             
             
              
             
             
            
           
               
               
              
              
           
            
              
               
              
              
            
                    
            
                    
            
              .


     3. The term of the Lease commenced on                                         , 19                     , and, including any presently exercised option or renewal

term, will expire on                                         , 19                     . Tenant has accepted full and complete possession of the Premises and is the actual occupant in possession and
has not sublet, assigned or hypothecated or otherwise transferred all or any portion of Tenant’s
leasehold interest. All improvements to be constructed on the Premises by Landlord have been
completed to the satisfaction of Tenant and accepted by Tenant and any tenant construction
allowances have been paid in full. All duties of an inducement nature required of the Landlord in
the Lease have been fulfilled. All of the Landlord’s obligations which have accrued prior to the
date hereof have been performed.



     4. There exists no breach or default, nor state of facts nor condition which, with notice, the
passage of time, or both, would result in a breach or default on the part of either Tenant or
Landlord. To the best of Tenant’s knowledge, no claim, controversy, dispute, quarrel or
disagreement exists between Tenant and Landlord.



     5. Tenant is currently obligated to pay base annual rental in monthly installments of $                                         per month and monthly
installments of annual rental have been paid through                                         , 19                     . In addition, the Lease requires rent
adjustments based on                                                                                                                         . No other rent has been paid in advance and Tenant has no claim or defense against Landlord under the
Lease and is asserting no offsets or credits against either the rent or Landlord. In addition,
Tenant is currently obligated to pay a proportionate share of common area maintenance charges equal to $                                         per month.
Tenant has no claim against Landlord for any security, rental, cleaning or other deposits, except
for a security deposit in the amount of $                                         which was paid pursuant to the Lease.



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     6. The Lease is in full force and effect in accordance with its terms and is a binding
obligation of the undersigned.



     7. The undersigned has received no notice of prior sale, transfer, assignment, hypothecation
or pledge of the Lease or of the rents secured therein, except to Buyer.



     8. This Estoppel Certificate shall remain in effect for forty-five (45) days from date hereof
provided that if there is a material change in the Lease, Tenant shall immediately notify Landlord
in writing of such change and its failure to do so shall entitle Buyer to rely on this Certificate
as certified.



     9. The undersigned acknowledges that:




     (a) Buyer is purchasing Landlord’s interest in the property which includes the
Premises and, in connection with that purchase, will be receiving an assignment of
Landlord’s interest under the Lease;




     (b) Landlord, Buyer and Buyer’s successors, agents and assigns (including, but
not limited to subsequent purchasers, lenders and title insurers) will be relying
upon each of the statements contained herein in connection with Buyer’s purchase of
the property of which the Premises is a part and but for the assurances and
agreements contained herein Buyer would not purchase the property of which the
Premises is a part; and




     (c) The undersigned will attorn to and recognize Buyer as the Landlord under
the Lease and will pay all rents and other amounts due thereunder to Buyer upon
notice to the undersigned that Buyer has become the owner of Landlord’s interest in
the Premises under the Lease.



     10. In the event any of the statements set forth herein conflicts or is inconsistent with any
provision or term contained in the Lease or any modifications thereof, the statement contained
herein shall prevail.



	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	 

	 	 
	 

	 	 	 	“Tenant”	 	 






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EXHIBIT B




BILL OF SALE




     THIS
BILL OF SALE (“Bill of Sale”), is made this
                     day of               
                                              , 1994, by and between ENDOSONICS
CORPORATION, a Delaware corporation (“Buyer”), and PANATTONI-CATLIN VENTURE XXVI, a California
general partnership (“Seller”).



W I T N E S S E T H :




     Seller and Buyer entered into that certain Agreement of Purchase and Sale dated as of                                             
          
      , 19       
             
(“Agreement”) respecting the sale of certain “Property” (as defined in the Agreement).



     Under the Agreement, Seller is obligated to transfer to certain personal property (“Personal
Property”), which is described in Exhibit A attached hereto and incorporated herein by this
reference, which is used in connection with the operation of the improvements, commonly known as                                                             , Rancho
Cordova, California, located on the real property described in Exhibit B attached hereto.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller does hereby absolutely and unconditionally give, grant,
bargain, transfer, sell, set over, assign, convey, release, confirm and deliver to Buyer all
of the Personal Property.



     Seller makes no representation or warranty regarding the condition, fitness or usefulness of
the Personal Property, and Buyer acknowledges and agrees that is acquiring the Personal Property in
its AS-IS, WHERE-IS CONDITION, WITHOUT WARRANTY, EITHER EXPRESS OR IMPLIED.



     This Bill of Sale shall be binding upon and inure to the benefit of the successors, assigns,
personal representatives, heirs and legatees of Buyer and Seller.



     This Bill of Sale shall be governed by, interpreted under, and construed and enforced in
accordance with, the laws of the State of California.



     IN WITNESS WHEREOF, the parties have executed this Bill of Sale as of the dates below.



	 	 	 	 	 	 	 	 	 	 	 
	BUYER:	 	 	 	SELLER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ENDOSONICS CORPORATION,	 	 	 	PANATTONI-CATLIN VENTURE XXVI,	 	 
	a Delaware corporation	 	 	 	a California general Partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 





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EXHIBIT C




	 	 	 	 	 	 	 
	RECORDING REQUESTED BY


AND WHEN RECORDED MAIL TO:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	Attention:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	MAIL TAX STATEMENTS TO:	 	 	 	 
	SAME AS ABOVE	 	 	 	 
	 





SPACE ABOVE THIS LINE FOR RECORDER’S USE




TENANT LEASE ASSIGNMENT




     THIS
TENANT LEASE ASSIGNMENT (“Assignment”) is made this
___ day of______, 19___ by and between PANATTONI-CATLIN VENTURE XXVI, a California general partnership
(“Assignor”), and ENDOSONICS CORPORATION, a Delaware corporation
(“Assignee”).



W I T N E S S E T H:




     Under that certain Agreement of Purchase and Sale dated
______, 19___ (“Agreement”), Assignor is obligated to
assign to Assignee any and all of Assignor’s right, title and interest in and to all leases, licenses, tenancy agreements or occupancy agreements (collectively, “Leases”) relative to the improved real property (“Real Property”) described in Exhibit A attached hereto and incorporated herein by this reference. The Leases are set forth on Exhibit B attached hereto which is incorporated herein by this reference.



     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, sells, transfers, sets over and delivers unto Assignee all of the Assignor’s estate, right, title and interest in and to the Leases and Assignee hereby accepts such assignment.



     Assignee hereby assumes the performance of all of the terms, covenants and conditions imposed upon Assignor as landlord under the Leases accruing or arising on or after the date of recordation of this Assignment in the Official Records of Sacramento County.



     In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on the part of the other party arising out of this Assignment, then in that event the prevailing party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, including reasonable attorneys’ fees.



     Assignee
agrees to indemnify, defend (with counsel satisfactory to Assignor)
and hold Assignor, its partners, officers, directors, shareholders,
trustees, employees and agents harmless from and against any and all
litigation, loss cost, damage, claim, demand, expense or liability
whatsoever (including without limitation), attorneys’ fees,
charges and costs) (hereinafter “Damages”)
arising out of the Leases. Such indemnification, defense and hold harmless obligation under this Section shall be inapplicable to any Damages which occur prior to the date that this Assignment is recorded in the Official Records of Sacramento County.



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     This Agreement shall not become effective as between the parties until it is
recorded in the Official Records of Sacramento County.



     This Assignment shall be binding upon and inure to the benefit of the successors,
assignees, personal representatives, heirs and legatees of all the respective parties hereto.



     This Assignment shall be governed by, interpreted under, and construed and enforceable
in accordance with, the laws of the State of California.



     IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as
of the dates set forth below.



	 	 	 	 	 	 	 
	 	 	ASSIGNOR:
	 
	 	 	 	 	 	 
	 	 	PANATTONI-CATLIN VENTURE XXVI,
	 	 	a California general partnership
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE:
	 
	 	 	 	 	 	 
	 	 	ENDOSONICS CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 
	 

	 	 	 	 	 	 





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EXHIBIT D




GENERAL ASSIGNMENT




          THIS
GENERAL ASSIGNMENT (“Assignment”), dated                                         , 199_, is entered into by and between
PANATTONI-CATLIN VENTURE XXVI, a California general partnership (“Assignor”), and ENDOSONICS
CORPORATION, a Delaware corporation (“Assignee”).




W I T N E S S E T H:




          Assignor, as seller, and Assignee, as buyer, entered
into that certain Agreement of Purchase and Sale, dated                                         ,
19___ (“Agreement”), regarding the purchase and sale of certain “Property” (as such term is defined
in the Agreement).



          Under the Agreement, Assignor is obligated to assign to Assignee, all of Assignor’s right,
title and interest in and to the Service Agreement (as such terms are defined in the Agreement).



          NOW, THEREFORE, for good and valuable consideration; the receipt and sufficiency of which are
hereby acknowledged, , Assignor hereby assigns, sells, transfers, sets over and delivers unto
Assignee, all of Assignor’s estate, right, title and interest in and to the Service Agreements and
Assignee hereby accepts such assignment and assumes the obligations thereunder.



          In the event of the bringing of any action or suit by a party hereto against another party
hereunder by reason of any breach of any of the covenants, conditions, agreements or provisions on
the part of the other party arising out of this Assignment, then in that event the prevailing party
shall be entitled to have and recover of and from the other party all costs and expenses of the
action or suit, including reasonable attorneys’ fees.



          This Assignment shall be binding upon and inure to the benefit of the successors, assignees,
personal representatives, heirs and legatees of all the respective parties hereto.



          This Assignment shall be governed by, interpreted under, and construed and enforceable in
accordance with, the laws of the State of California.



          Assignee agrees to indemnify, defend (with counsel satisfactory to Assignor) and hold
Assignor, its partners, officers, directors, shareholders, trustees, employees and agents harmless
from and against any and all litigation, loss cost, damage, claim, demand, expense or liability
whatsoever (including without limitation), attorneys’ fees, charges and costs) (hereinafter
“Damages”) arising out of the Leases. Such indemnification, defense and hold harmless obligation
under this Section shall be inapplicable to any Damages which occur prior to the date that this
Assignment is recorded in the Official Records of Sacramento County.



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     IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered this Assignment as of
the dates set forth below.



	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 	 
	 
	 	 	 	 	 	 
	 	 	PANATTONI-CATLIN VENTURE XXVI,
	 	 	a California general partnership
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE:
	 
	 	 	 	 	 	 
	 	 	ENDOSONICS CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 





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EXHIBIT F




	 	 	 
	RECORDING REQUESTED BY
 AND
WHEN RECORDED MAIL TO:	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 





SPACE ABOVE THIS LINE FOR RECORDER’S USE




MEMORANDUM OF NET LEASE AGREEMENT





     This
Memorandum of Net Lease Agreement (“Memorandum”),
dated for reference purposes as ______, 19___, is entered
into by and between PANATTONI-CATLIN VENTURE XXVI, a California general partnership
(“Landlord”), and ENDOSONICS CORPORATION, a Delaware corporation (“Tenant”).



RECITALS




     A. On or about December ___, 1995, Landlord and Tenant entered into a certain Net Lease Agreement (“Lease”), pursuant to which Landlord leases to Tenant
approximately 43,000 square feet of a building located at                      Kilgore Road, Rancho Cordova,
California (“Premises"). The real property, on which the Premises is located, is more
particularly described in Exhibit “A” attached hereto and incorporated herein by this reference.



     B. Tenant and Landlord now desire to execute this Memorandum to provide constructive knowledge
of Tenant’s lease of the Premise.



     NOW,
THEREFORE, in consideration of the foregoing, the parties agree as follows:



AGREEMENT




     1. Lease of Premises. Landlord hereby leases to Tenant, and Tenant leases from
Landlord, the Premises for a term commencing on                                          , 1996, and terminating on
                                         , 2006, upon the terms and conditions set forth in
the Lease. Pursuant to the provisions of the Lease, Tenant has an option to extend the term of the
Lease for three (3) consecutive five (5)-year periods, which would extend the term of the Lease to
                                         , 20___.



     2. Incorporation. All of the terms and conditions of the Lease are incorporated by
reference herein.



     3. Provisions Binding on Landlord. The Lease shall be binding upon and inure to the
benefit of the parties and their respective heirs, successors and assigns, subject to the
provisions of the Lease.



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     4. Governing Law. This Memorandum and the Lease are governed by the laws of the
State of California.



     NOW, THEREFORE, the parties have executed this Memorandum as of the dates set forth
below.



	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ENDOSONICS
CORPORATION,	 	 	 	PANATTONI-CATLIN
VENTURE XXVI,
	a Delaware corporation	 	 	 	a California general partnership
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Its:

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 




(NOTARIAL ACKNOWLEDGMENTS ATTACHED)




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CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT






	 	 	 	 	 	 	 
	STATE
OF CALIFORNIA  
	 	 )
	 

	 	 	 	 	 	 ) SS.
	COUNTY OF

	 	 	 	 	 	 )
	 

	 	 	 	 	 	 




On
                                                            , 1996 before me,
                                                            ,
Notary Public, personally appeared                                                             ,




	 	 	 	 	 	 	 	 	 
	o

	 	personally known to me
	 	- OR -
	 	o
	 	proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	WITNESS my hand and official seal.
	 
	 	 	 	 	 	 	 	 


	 

	 	 	 	 	 	 	 	 
                     (SIGNATURE
OF NOTARY)





 

 




OPTIONAL SECTION




	 	 	 	 	 	 	 	 	 
	THIS
CERTIFICATE MUST BE
ATTACHED TO THE
DOCUMENT DESCRIBED
AT RIGHT:
	 	TITLE OR TYPE OF DOCUMENT	 	MEMORANDUM OF NET LEASE AGREEMENT
	 

	 	NUMBER OF PAGES
	 	 	 	DATE OF DOCUMENT	 	 
	 

	 	 	 	 
	 	 	 	 
	Though the data
requested here is
not required
by
law,
it could
prevent
fraudulent
reattachment of
this form.
	 	 	 	 	 	 	 	 







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CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT






	 	 	 	 	 	 	 
	STATE
OF CALIFORNIA  
	 	 )
	 

	 	 	 	 	 	 ) SS.
	COUNTY OF

	 	 	 	 	 	 )
	 

	 	 	 	 	 	 




On
                                                             , 1996 before me,                                                             , Notary Public, personally appeared                                                             ,




	 	 	 	 	 	 	 	 	 
	o

	 	personally known to me
	 	- OR -
	 	o
	 	proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	WITNESS my hand and official seal.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
                     (SIGNATURE
OF NOTARY)





 

 




OPTIONAL SECTION




	 	 	 	 	 	 	 	 	 
	THIS
CERTIFICATE MUST BE
ATTACHED TO THE
DOCUMENT DESCRIBED
AT RIGHT:
	 	TITLE OR TYPE OF DOCUMENT	 	MEMORANDUM OF NET LEASE AGREEMENT
	 

	 	NUMBER OF PAGES
	 	 	 	DATE OF DOCUMENT	 	 
	 

	 	 	 	 
	 	 	 	 
	Though the data
requested here is
not required
by
law,
it could
prevent
fraudulent
reattachment of
this form.
	 	 	 	 	 	 	 	 








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\




FIRST AMENDMENT TO NET LEASE AGREEMENT

(2870 Kilgore Road, Rancho Cordova, California)




     This First Amendment to Net Lease Agreement (“First Amendment”), dated for reference purposes
as April 30, 1997, is entered into by and between PANATTONI-CATLIN VENTURE XXVI, a California
general partnership (“Landlord”), and ENDOSONICS CORPORATION, a Delaware corporation (“Tenant”).



Recitals




     A. On or about January 10, 1996, Landlord and Tenant
entered into that certain Net Lease Agreement (“Lease”)
concerning the lease of the “Premises”, as more particularly
described therein, located in the “Building,” to be constructed
by Landlord at 2870 Kilgore Road, Rancho Cordova, California.



     B. Landlord and Tenant now desire to amend the terms and
conditions of the Lease in accordance with the provisions of this
First Amendment.



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



Agreement




     1. Definitions. Unless otherwise specified herein, all
capitalized terms used in this First Amendment are used as
defined in the Lease.



     2. Effective Date. This First Amendment shall become
effective on date it is executed by both Landlord and Tenant,
which date is hereinafter referred to as the “Effective
Date.”



     3. Square Footage Determination. In conjunction with
Tenant and Landlord agreeing upon the “Final Plans,” as set forth
in Section 2(b) of the Lease, Landlord and Tenant acknowledge and
agree upon the following matters:



          (i) The usable and rentable square footage of the Premises is forty five thousand five
hundred ninety seven (45,597) square feet.




          (ii) The total usable and rentable square footage of the Building is seventy five thousand six
hundred twenty six (75,626) square feet.




          (iii) The Tenant’s Proportionate Share is sixty and 29/100ths percent (60.29%).




          (iv) The total rentable and usable square footage of the Expansion Premises is six thousand
(6,000) square feet.




     4. Section 7(b) of the Lease. As a result of the
adjustments to the square footages set forth in Section 3 of this
First Amendment, Landlord and Tenant hereby agree that the first
paragraph of Section 7(b) of the Lease is deleted in its entirety
and replaced with the following:



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          7(b) The Base Rent shall be increased during the Term of this Lease as follows:




	 	 	 
	Months during Term	 	 
	(from Commencement Date)	 	Base Rent
	01 through 06

	 	Free
	 
	 	 
	07 through 18

	 	$39,307.66 ($.862 per rentable square foot)
	 
	 	 
	19 through 50

	 	$42,499.45 ($.932 per rentable square foot)
	 
	 	 
	51 through 90

	 	$44,232.13 ($.970 per rentable square foot)
	 
	 	 
	91 through 120

	 	$46,922.36 ($1.029 per rentable square foot)






          Additionally, in the first sentence of the second paragraph of Section 7(b) of the Lease,
reference to “Twenty Three Thousand Eight Hundred Twenty Seven
and No/100ths Dollars ($23,827.00)”,
shall be amended to “Twenty Six Thousand Two Hundred Five and 11/100ths Dollars ($26,205.11).”




     5. Address of Building. Landlord and Tenant acknowledge
and agree that the address of the Building has been changed to
“2870 Kilgore Road, Rancho Cordova, California.”



     6. Ratification. Except as modified by this First
Amendment, the Lease is ratified, affirmed, in full force and
effect, and incorporated herein by this reference.



     NOW, THEREFORE, the parties have executed this First Amendment as of the date set
forth below.



	 	 	 
	TENANT:

	 	LANDLORD:
	 
	 	 
	ENDOSONICS CORPORATION,

	 	PANATTONI - CATLIN VENTURES
	a Delaware corporation

	 	XXVI, a California general partnership
	 
	 	 
	By: /s/ [ILLEGIBLE]

	 	By: /s/ [ILLEGIBLE]
	 

	 	 


	Its:
V.P. & CFO

	 	Its: General Partner
	Date: April 30, 1997

	 	Date: 5/14/97






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SECOND AMENDMENT TO NET LEASE AGREEMENT

(2870 Kilgore Road, Rancho Cordova, California)




     This Second Amendment to Net Lease Agreement (“Second Amendment”), dated for
reference purposes as May 8, 1997, is entered into by and between PANATTONI-CATLIN VENTURE
XXVI, a California general partnership (“Landlord”), and ENDOSONICS CORPORATION, a Delaware
corporation (“Tenant”).



Recitals




     A. On or about January 10, 1996, Landlord and Tenant
entered into that certain Net Lease Agreement (“Original Lease”)
concerning the lease of the “Premises”, as more particularly
described therein, located in the “Building,” to be constructed
by Landlord at 2870 Kilgore Road, Rancho Cordova, California.



     B. On or about April 30, 1997, Landlord and Tenant amended
the provisions of the Original Lease pursuant, to that certain
First Amendment to Net Lease Agreement (“First Amendment”). The
Original Lease, as amended by the First Amendment, is hereinafter
referred to as the “Lease.”



     C. Landlord and Tenant now desire to amend the terms and
conditions of the Lease in accordance with the provisions of this
Second Amendment.



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



Agreement




     1. Definitions. Unless otherwise specified herein, all
capitalized terms used in this Second Amendment are used as
defined in the Lease.



     2. Effective Date. This Second Amendment shall become
effective on date it is executed by both Landlord and Tenant,
which date is hereinafter referred to as the “Effective Date.”



     3. Expansion of Premises. Tenant desires to expand the
Premises to include an additional thirteen thousand two hundred
twenty eight (13,228) usable and rentable square feet (“Expansion
Area”), which area is described in Exhibit A-1 attached hereto,
to the existing Premises, which area contains forty five thousand
five hundred ninety seven (45,597) usable and rentable square
feet. Landlord is willing to lease the Expansion Area to Tenant
upon the terms and conditions of this Second Amendment, which are
as follows:



          (i) Landlord shall, at Landlord’s sole cost, cause those certain improvements (“Expansion
Area Improvements”), described in Exhibit B-1 attached hereto, to be substantially
completed (i.e., Landlord has obtained for the Expansion Area a certificate of occupancy (temporary
or final)) within the Expansion Area on or before July 1, 1997, subject only to delays caused by
Force Majeure Events, which date shall hereinafter be referred to as
the “Expansion Area Occupancy
Date.”




          (ii) On the Expansion Area Occupancy Date, the Lease shall be amended as follows:





               (a) Any and all referenced to “Premises” in the
Lease shall be deemed to include the “Expansion Area.”




                      (b) The usable and rentable square footage of the
Premises shall be increased to fifty eight thousand eight hundred
twenty five (58,825) square feet.



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               (c) The Tenant’s Proportionate Share shall be
increased to seventy seven and 78/100ths percent (77.78%).




               (d) The Base Rent during the Term, as shown in
Section 7(b), as amended, of this Lease is as follows:



	 	 	 
	Months during Term	 	 
	(from Commencement Date)	 	Base Rent
	01 through 06

	 	Free
	 
	 	 
	07 through 18

	 	$53,854.29 ($.9155 per  rentable square foot)
	 
	 	 
	19 through 50

	 	$57,972.04 ($.9855 per rentable square foot)
	 
	 	 
	51 through 90

	 	$60,207.39 ($1.0235 per rentable square foot)
	 
	 	 
	91 through 120

	 	$63,678.06 ($1.0825 per rentable square foot)






          Additionally, in the first sentence of the second paragraph of Section
7(b) of the Lease, as amended, reference to “Twenty Six Thousand Two Hundred
Five and 11/100ths Dollars ($26,205.11)”, shall be amended to “Thirty Five
Thousand Nine Hundred Two and 86/100ths Dollars ($35,902.86).”




     4. Section 38 of the Lease. Section 38 of the Lease is hereby deleted in its
entirety.



     5. Section 40 of the Lease. Section 40 of the Lease and Exhibit E to the Lease
are hereby deleted in their entirety.



     6. Section 41 of the Lease. In the second sentence of Section 41,
reference to “Three Hundred Fifty Thousand and No/100ths Dollars ($350,000.00)”
is hereby increased to “Four Hundred Fifteen Thousand and No/100ths Dollars
($415,000.00)”.



     7. Ratification. Except as modified by this Second Amendment , the
Lease is ratified, affirmed, in full force and effect, and incorporated herein
by this reference.



     NOW, THEREFORE, the parties have executed this Second Amendment as of the date
set forth below.



	 	 	 
	TENANT:

	 	LANDLORD :
	 
	 	 
	ENDOSONICS CORPORATION,

	 	PANATTONI-CATLIN VENTURES
	a Delaware corporation

	 	XXVI, a California general partnership
	 
	 	 
	By: /s/ [ILLEGIBLE]

	 	By: /s/ [ILLEGIBLE]
	 

	 	 


	Its:
VPHR and [ILLEGIBLE]

	 	Its: General Partner
	Date:
5/12/97

	 	Date: 5/14/97






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THIRD AMENDMENT TO NET LEASE AGREEMENT

(2870 Kilgore Road, Rancho Cordova, California)




     This Third Amendment to Net Lease Agreement (“Second Amendment”), dated for reference
purposes as August 23, 1999, is entered into by and between PANATTONI-CATLIN VENTURE XXVI, a
California general partnership (“Landlord”), and ENDOSONICS CORPORATION, a Delaware, corporation (“Tenant”).



Recitals




     A. On or about January 10, 1996, Landlord and Tenant
entered into that certain Net Lease Agreement (“Original Lease”)
concerning the lease of the “Premises”, as more particularly
described therein, located in the “Building,” to be constructed
by Landlord at 2870 Kilgore Road, Rancho Cordova, California.



     B. On or about April 30, 1997, Landlord and Tenant amended
the provisions of the Original Lease pursuant to that certain
First Amendment to Net Lease Agreement (“First Amendment”).
Thereafter, on or about May 8, 1997, Landlord and Tenant further
amended the provisions of the Original Lease pursuant to that
certain Second Amendment to Net Lease Agreement (“Second
Amendment”). The Original Lease, as amended by the First
Amendment and Second Amendment, is hereinafter referred to as the
“Lease.”



     C. Landlord and Tenant now desire to amend the terms and
conditions of the Lease in accordance with the provisions of this
Second Amendment.



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



Agreement




     1. Definitions. Unless otherwise specified herein, all
capitalized terms used in this Third Amendment are used as
defined in the Lease.



     2. Effective Date. This Third Amendment shall become
effective on date it is executed by both Landlord and Tenant,
which date is hereinafter referred to as the “Effective Date.”



     3. Term. The “Term” of the Lease, as set forth in the
Basic Lease Information, is hereby amended to expire on
August 31, 2009.



     4. Expansion of Premises. Tenant desires to expand the
Premises to include the remaining sixteen thousand eight hundred
one (16,801) usable and rentable square feet (“Expansion Area”),
which area is described in Exhibit A-1 attached hereto, to the
existing Premises, which area currently contains forty five
thousand five hundred ninety seven (45,597) usable and rentable
square feet. The usable rentable area of the Expansion Area on
the Premises total seventy-five thousand six hundred twenty-six
(75,626). Landlord is willing to lease the Expansion Area to
Tenant upon the terms and conditions of this Second Amendment,
which are as follows:



          (i) The Expansion Area is currently leased to GAB Robins North America, Inc., a Delaware
corporation (“GAB”), pursuant to separate lease documentation (“GAB Lease”). On or about the
Effective Date of this Third Amendment, Landlord and GAB are entering into a “Termination of
Lease” concerning the GAB Lease. Notwithstanding any other provisions of this Third Amendment to
the contrary, Tenant acknowledges and agrees that Landlord has made no representations or
warranties concerning the likelihood of Landlord and GAB finalizing the Termination of Lease and
Tenant agrees that if such Termination of Lease for the GAB Lease is not effectuated for any
reason, upon Tenant’s





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receipt of written notice from Landlord staring that the Termination of Lease is no longer
effective, this Third Amendment shall automatically become null and void, the Lease (excluding the
provisions of this Third Amendment) shall be in full force and effect, and neither party shall be
deemed in breach of any obligations as a result of the failure of this Third Amendment to become
effective. Provided that Landlord and GAB enter into the Termination of Lease for the GAB Lease,
the date on which GAB vacates the Expansion Area, which is anticipated to be no later than November
1, 1999, is referred to as the “GAB Vacation Date.” Immediately following the GAB Vacation Date, Landlord shall, at its cost, clean the Premises,
which includes steam cleaning of the carpets and paint touch-ups of walls, for Tenant’s
fixturization and installation of furniture, equipment and trade fixtures. The date which is seven
(7) days following Landlord’s tender of possession of the Expansion Area to Tenant, following the
completion of Landlord’s obligations in the preceding sentence, shall be referred to as the
“Expansion Area Occupancy Date”.




          (ii) On the Expansion Area Occupancy Date, the Lease shall be amended as follows:




               (a) Any and all referenced to “Premises” in the
Lease shall be deemed to include the “Expansion Area.”



               (b) The usable and rentable square footage of the
Premises shall be increased to seventy-five thousand six hundred
twenty-six (75,626) square feet.



               (c) The Tenant’s Proportionate Share shall be increased to one hundred percent
(100.00%).



               (d) The Base Rent during the Term, as shown in Section 7(b), as amended, of this Lease
is as follows:



	 	 	 
	Expansion Area	 	 
	Commencement Date	 	Base Rent 
	through April 30, 2002

	 	$74, 869.74 ($.99 per rentable
square foot)
	 
	 	 
	May 1, 2002 through November 30, 2005

	 	$77,138.52 ($1.02 per
rentable square foot)
	 
	 	 
	December 1, 2005 through
April 30, 2008

	 	$81, 676.08 ($1.08 per
rentable square foot)
	 
	 	 
	May 1, 2008 through
October 31, 2009

	 	$86, 213.64 ($1.14 per
rentable square foot)






     5. Section 41 and 42 of the Lease. Section 41 and 42 of the Lease is hereby deleted
in its entirety.



     6. Option to Extend. The following paragraph is hereby added to the Lease as
Section 45 of the Lease:




     “45.
Option to Extend. Tenant shall have the right to extent this Lease
for one (1) five (5) year period by giving Landlord written notice of its intention to do
so at least nine (9) months prior to the expiration of the original term; provided,
however, that Tenant is not in material default beyond any applicable cure period under the
Lease on the date of giving such notice or on the date of commencement of the extended
term. The extended term shall be upon all of the terms and conditions of this Lease,
except that the following rights of Tenant shall not apply during




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such extension terms: (a) any right to rent-free possession, (b) any right to further
extension of the term of the Lease (except as already provided in this Lease), and (c) any right to
continue to pay the same Base Rent. Landlord and Tenant hereby acknowledge and agree that the Base
Rent during each extended term shall be ninety-five percent (95%) of the “Fair Market Rental” for
the Premises, as determined in accordance with this Section. The parties shall have until the date
that is six (6) months prior to the date that the original term will expire in order to agree on
Base Rent during the extension term. If the parties agree on the Base Rent for the extension term
during that period, they shall immediately execute an amendment to this Lease stating the Base
Rent. If the parties are unable to agree on Base Rent for the extended term during that period,
then the Fair Market Rental shall be established by appraisal.




     Landlord and Tenant shall each appoint one appraiser at least five (5) months prior to the
expiration of the original term or then extension term, as applicable; provided, however, that if
either party fails to designate an appraiser within the time period specified, then the appraiser
who is designated shall conclusively determine the Fair Market Rental. If two (2) appraisers are
designated, then they shall submit within thirty (30) days after the second thereof has been
designated their appraisals of the Fair Market Rental. Each appraiser shall prepare a written
appraisal report that shall conform with the standards of professional practice of the American
Institute of Real Estate Appraisers. Landlord and Tenant intend that the “Fair Market Rental”
shall be deemed to be the rent per square foot of Rentable Area of office space that is then being
charged for office space located in office buildings in the immediate vicinity (defined as the
Rancho Cordova-California Highway 50 Corridor area) of the Building that are comparable in quality
and offer similar amenities to the Building and involving leases with similar terms and conditions
(including, but not limited to, free rent, brokerage commissions, and all other monetary and
nonmonetary concessions) , and involving the use of the premises for general office purposes, but
shall not include value added by alterations and/or improvements made by Tenant, at Tenant’s
expense. The office spaces used for comparison shall be comparable in size, quality and design to
the Premises, and such office spaces used for comparison shall be comparable to the Premises with
respect to their location within such buildings, the quality and quantity of tenant improvements
installed at each landlord’s expense, the services provided by each landlord to such tenant, and
the financial strength of Tenant.




     Should the two appraisers be unable to agree within said thirty (30) days, the two appraisers
shall each submit an independent written appraisal and together they shall designate one (1)
additional person as appraiser within five (5) days following the expiration of said thirty
(30)-day period: provided, however, that if the difference between the two appraisals is five
percent (5%) or less of the lowest appraisal, then an additional appraiser shall not be designated
and the Fair Market Rental shall equal the average of the two (2) appraisals that are submitted.
The third appraiser shall submit an independent written appraisal within thirty (30) days
following his or her appointment. If the two appraisers cannot agree upon a third appraiser, then
either party hereunder may request that the Presiding Judge of the Sacramento




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FOURTH AMENDMENT TO NET LEASE AGREEMENT




(2870
Kilgore Road, Rancho Cordova, California)




     This Fourth Amendment to Net Lease Agreement (“Fourth Amendment”), dated for reference
purposes only as October 11, 2000, is entered into by and between PANATTONI-CATLIN VENTURE XVI, a
California general partnership (“Landlord”), and ENDOSONICS CORPORATION, a Delaware corporation
(“Tenant”).



Recitals




     A. On or about January 10, 1996, Landlord and Tenant entered into that
certain Net Lease Agreement (the “Original Lease”) concerning the Lease of the
“Premises”, as more particularly described therein,
located in the “Building” to be
constructed by Landlord at 2870 Kilgore Road, Rancho Cordova,
California.



     B. On or about April 30, 1997, Landlord and Tenant amended the provisions
of the Original Lease pursuant to the terms of that certain First Amendment to Net
Lease Agreement (“First Amendment”), which Amendment confirmed the useable and
rentable square footage of the Premises and amended the amount of the Base Rent
payable by Tenant. On or about May 8, 1997, Landlord and Tenant further amended the
provisions of the Original Lease pursuant to the terms of that certain Second Amendment
to Net Lease Agreement (“Second Amendment”) whereby the size of the Premises was
expanded to include an additional 13,228 usable and rentable square feet. Thereafter, on
or about July 13, 1999, the Lease was amended a third time pursuant to the terms of that
Third Amendment to Net Lease Agreement (“Third Amendment”) whereby, among
other things, the term of the Lease was extended to August 31, 2009, and the size of the
Premises was expanded to include the entire Building located at 2870 Kilgore Road,
Rancho Cordova, California. The Original Lease, as amended by the First Amendment,
Second Amendment, and Third Amendment, is hereinafter referred to as
the “Lease”.



     C. As Tenant occupies the entire Project, Landlord and Tenant now desire to amend the
terms and conditions of the Lease to enable the Tenant to fully maintain the Project in a first
class condition and to reflect a true triple net lease in accordance with the provisions of this
Fourth Amendment.



     NOW, THEREFORE, in consideration of the foregoing and of the mutual agreement of the
parties hereto to the terms and conditions set forth below, the parties agree as follows:



     1. Definitions and Recitals. Except as noted to the contrary in this
Fourth Amendment, the terms used in this Fourth Amendment shall be defined as provided in the
Lease, and the Lease is incorporated herein by reference. The parties acknowledge the
truthfulness of the foregoing Recitals, which are hereby incorporated into this Fourth Amendment.



     2. Effective Date. This Fourth Amendment shall become effective on the date it
is executed by both Landlord and Tenant, which date is hereinafter referred to as the “Effective
Date”.



     3. Tenant’s Maintenance Obligations. Except for Landlord’s obligations set
forth in Paragraph 4, below, Tenant, at Tenant’s sole cost and expense, shall at all times keep
the Project, including the Premises, the Building Common Areas and the Project Common Areas, and
every part thereof, in good, clean and safe condition and repair, whether or not such
portion of the Project requiring repairs or replacement, or the means of repairing or replacing
the same are reasonably or readily accessible to Tenant, and whether or not the need for such
repairs occurs as a result of Tenant’s use, the elements, or age of such portion of the Project
requiring repairs or replacements, including, without




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limiting the generality of the foregoing, all equipment or facilities serving the Premises,
the Building Common Areas, and the Project Common Areas, such as plumbing, heating, air
conditioning, ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire sprinklers, and/or stand pipe and hose or other automatic fire extinguishing system,
fire alarm and/or smoke detection systems and equipment, fire hydrants, fixtures, walls, ceilings,
windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs and sidewalks located in, on, or about the Project. Tenant shall also be obligated to
perform any modifications to the Building occasioned by any rules, regulations, laws or
governmental authority effective subsequent to the Commencement Date, whether or not such
modifications are caused by the Tenant’s use of the Premises, or any other reason.




          Tenant shall, at Tenant’s sole cost and expense, procure and maintain contracts, and provide
copies to Landlord, in customary form and substance for and with contractors specializing and
experienced in the inspection, maintenance and service of the following equipment and
improvements, if any, located on the Premises or within the Building or Project Common Areas: (i)
Heating, air conditioning and ventilation equipment, (ii) boiler, fired or unfired pressure
vessels, (iii) fire sprinkler and/or stand pipe and hose or other automatic fire extinguishing
systems, including the fire alarm and/or smoke detection system, (iv) landscaping and irrigation
systems, (v) roof covering and drain maintenance, and (vi) asphalt and parking lot maintenance.




     4. Landlord’s Maintenance Obligations. Except for Landlord’s obligation to
replace (but not repair) the roof, maintain the structural portions of the building limited to the
foundation and exterior walls, correct any defect in design, materials or workmanship of the
Building or Property constructed by Landlord, its agents or contractors, or to comply with any
existing requirements of any governmental authority in effect as of the Commencement Date, and
Landlord’s obligations under Paragraphs 24 and 25 of the Lease, it is intended by the parties
hereto that this Lease shall be a triple net Lease and Landlord shall have no obligation, in any
manner whatsoever, to repair and maintain the Project, including the Building and the Project
Common Areas, the improvements located thereon, or the equipment therein, all of which obligations
are intended to be that of the Tenant. It is the intention of the parties that the terms of this
Fourth Amendment govern the respective obligations of the parties as to maintenance and repair of
the Project. Landlord and Tenant expressly waive the benefit of any statute now or hereafter in
effect to the extent it is inconsistent with the terms of the this Fourth Amendment with respect
to, or which affords Tenant the right to make repairs at the expense of Landlord or to terminate
this Lease by reason of any needed repairs.



     5. Project Insurance. In addition to the insurance obligations of the Tenant as
set forth in Paragraph 21 of the Lease, Tenant shall procure and maintain, at all times during the
Lease term, including any extension or renewals thereof, a policy or policies in the name of
Landlord, with, loss payable to Landlord and to the holders of any mortgages, deeds of trust, or
ground leases on the Project (“Lender”), insuring loss or damage to the Premises. The amount of
such insurance shall be equal to the full replacement cost of the Premises, as the same shall
exist from time to time, or the amount required by Lender. Such policy or policies shall insure
against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake, unless required by Lender), including coverage for any additional costs resulting
from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or
law regulating the construction or replacement of any undamaged sections of the Premises required
to be demolished or removed by reason of the enforcement of any building, zoning, safety or land
use laws and the result of a covered cause of loss. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance coverage amount
by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for all
urban consumers for the city nearest to where the Premises are
located. If such insurance
coverage has a deductible clause, the deductible amount shall not




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exceed $1,000.00 per occurrence, and Tenant shall be liable for such deductible amount
in the event of an insured loss.




          Tenant shall, in addition, obtain and keep in force during the term of this Lease, including
any extension or renewals thereof, a policy or policies in the name of Landlord with loss payable
to Landlord and Lenders, insuring the loss of the full rental and other charges payable by Tenant
to Landlord under this Lease for one year (including all real estate taxes, insurance costs, and
any scheduled rental increase). Said insurance shall provide that in the event the Lease is
terminated by any reason of an insured loss the period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs or replacement of the Premises, to provide
for one full year’s loss of rental revenues from the date of any such loss. Said insurance shall
contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of such
coverage shall be adjusted annually to reflect the projected rental income, property taxes,
insurance premium costs, and other expenses, if any, otherwise payable by Tenant, for the next 12
months. Tenant shall be Liable for any deductible amount in the event of such loss.




          The insurance required hereunder shall be issued by companies duly licensed to transact
business in the State of California, and such companies must maintain
during the policy term a
general policyholder’s rating of at least A:VII, or such other rating as may be required by a
Lender having a lien on the Premises, as set forth in the most current issue of Best’s Insurance
Guide. Tenant shall not do or permit anything to be done which shall invalidate the insurance
policies required hereunder. Tenant shall cause to be delivered to Landlord certified copies of
such policies of insurance and certificates evidencing the existence and amounts of such insurance
with the insured and loss payable clauses as required by this Fourth Amendment. No such policy
shall be cancelable or subject to modification except after 30 days prior written notice to
Landlord. Tenant shall, at least 30 days prior to the expiration of such policies, furnish Landlord
with evidence of renewals, or “insurance binders” evidencing the renewal thereof, or Landlord may
order such insurance coverage and charge the cost thereof to Tenant, which amount shall be payable
by Tenant to Landlord, upon demand.




     6. Operating Expense, Repairs and Maintenance. To the extent that Paragraphs 9
and 15 of the Original Lease are inconsistent with the terms and conditions of this Amendment,
Paragraphs 9 and 15 are hereby amended such that any inconsistent terms and conditions set forth
in this Fourth Amendment supersede the provisions set forth in Paragraphs 9 and 15 of the Original
Lease.



     7. Taxes. Tenant shall pay, as additional rent, 100 percent of the taxes as
defined in Paragraph 10 of the Original Lease. All such payments
shall be made at least
10 days prior to the delinquency date of the applicable installment. Tenant shall
promptly furnish Landlord with satisfactory evidence that such taxes have been paid. If
any such Taxes to be paid by Tenant shall cover any period of time prior to or after the
expiration or earlier termination of the term hereof, Tenant’s share of such Taxes shall be
equitably prorated to cover only the period of time within the tax fiscal year this Lease
is in effect, and Landlord shall reimburse Tenant for any overpayment after such proration.
If Tenant shall fail to pay any Taxes required by this Lease to be paid by Tenant,
Landlord shall have the right to pay the same, and Tenant shall reimburse Landlord upon
demand. To the extent the provisions of Paragraph 10 of the Original Lease are not
inconsistent with this Paragraph 7 of the Fourth Amendment, such terms and conditions
shall continue in full force and effect.



     8. Utilities. Paragraph 11 of the Original Lease is hereby amended to reflect
that Tenant shall be solely responsible for paying the cost of all Utilities provided to the
Project.



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     9. Successors
and Assigns. Except as provided in the Lease, this Fourth
Amendment shall be binding upon and inure to the benefit of the parties hereto, their
heirs, personal representatives, successors, transferees, and assigns.



     10. Ratification. In all other respects, the Lease is hereby
ratified and affirmed, and remains in full force and effect.



     IN WITNESS THEREOF, the undersigned have executed this Fourth Amendment on the day and
year set forth below:



	 	 	 
	LANDLORD:

	 	TENANT:
	 
	 	 
	PANATTONI-CATLIN VENTURE XVI,

	 	ENDOSONICS CORPORATION,
	A California General Partnership
	 	A Delaware Corporation
	 
	 	 
	By:
/s/ [ILLEGIBLE]


	 	By: /s/ [ILLEGIBLE]


	Its: [ILLEGIBLE]

	 	Its: VPHR & Admin.
	Date: [ILLEGIBLE]

	 	Date: November 20, 2000







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LEASE ASSUMPTION AGREEMENT




[2870 Kilgore Road, Rancho Cordova]




     This
Lease Assumption Agreement (“Agreement”) , dated for reference purposes only as of June
1, 2001, is entered into by and among CARL D. PANATTONI, BENJAMIN S. CATLIN, IV, NORTH SACRAMENTO
LAND COMPANY, a California corporation, and BLUE LAKE ENTERPRISES, a California general partnership
(collectively, “Landlord”), JOMED INC., a Delaware corporation (“Jl”), and JOMED NV, a Netherlands
corporation . (“JNV”), with respect to the following facts:



RECITALS




     A. Landlord’s predecessor-in-interest, Panattoni-Catlin Venture XXVI, a California
general partnership, and EndoSonics Corporation, a Delaware corporation (“EndoSonics”), have
entered into that certain Net Lease Agreement (Office), dated January 10, 1996 (the “Original
Lease”), as amended by that certain First Amendment to Net Lease Agreement dated April 30,
1997 (the “First Amendment”), that certain Second Amendment to Net Lease Agreement, dated May 8,
1997 (the “Second Amendment”), that certain Third Amendment to Net Lease Agreement dated August 23,
1999 (the “Third Amendment”), that certain letter agreement dated August 23, 1999 between Landlord
and Tenant (the “Letter Agreement”            ), and that certain Fourth Amendment to Net Lease Agreement dated
October 11, 2000 (the “Fourth Amendment”) (the Original Lease, First Amendment, Second Amendment,
Third Amendment, Letter Agreement, and Fourth Amendment are collectively hereinafter referred to as
the “Lease”). A complete and accurate copy of the Lease is attached hereto as Exhibit A.



     B. Pursuant to the Lease, EndoSonics leased the premises located at 2870 Kilgore Road,
Rancho Cordova, California, and more particularly described in the Lease (the “Premises”).



     C. JI now wishes to acknowledge that JI has assumed all the obligations of EndoSonics
under the Lease, on the terms set forth in this Agreement.



Agreement




     NOW THEREFORE, in consideration of the mutual covenants contained in this Consent, and for
valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, the
parties agree as follows.



     1. Definitions; Recitals. All terms spelled with an initial capital letter in this
Agreement that are not expressly defined in this Agreement shall have the meanings given to such terms
under the Lease. The parties acknowledge the truthfulness of the foregoing Recitals, which are
hereby incorporated into this Agreement.



     2. Status of EndoSonics. JI and JNV have previously advised Landlord that, and hereby
warrant and represent to Landlord that: (i) Jomed Acquisition Corp., a Delaware corporation
(“JA”), and a wholly-owned subsidiary of JNV, acquired a majority of the outstanding shares of
EndoSonics as of September 21, 2000 (the “Effective
Date”); (ii) immediately thereafter, JA
and EndoSonics merged and the corporation formerly known as “EndoSonics Corporation” survived
as a corporation formed under the laws of Delaware, but it changed its name to “JOMED Inc.”
(the acquisition of such shares and the merger of JA and EndoSonics shall hereinafter be
referred to as the “Acquisition and Merger”); (iii) JI has succeeded to all of EndoSonics’ right, title
and interest under the Lease; (iv) JI and JNV have not previously assigned or encumbered any
interest they have in the Lease to any other party; and (v) there have been and will be no
additional consideration paid to EndoSonics or any other party that one-half of which,
pursuant to the terms of 18.b of the Original Lease, would be payable to Landlord as a result of the
Acquisition and Merger or any other agreement.



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     3. Assumption and No Release.



          (a) JI expressly assumes and agrees for the benefit of Landlord to be bound by, and to perform and comply with, every obligation of the “Tenant” under the Lease, from and after
the Effective Date.




          (b) Landlord hereby consents to the Acquisition and Merger and the assumption
under Section 3(a) above, provided, however, that neither such Acquisition and Merger nor this
Agreement shall: (i) release EndoSonics from any liability, whether past, present or future,
under the Lease; or (ii) constitute any amendment or modification to the Lease. JI and JNV
acknowledge that the representations and warranties set forth in Section 3(a) above are a
material inducement to Landlord’s agreement to consent to the Acquisition and Merger.




     4. Subsequent Assignments; Recapture. This Agreement does not constitute a consent to
any subsequent subletting, assignment or other transfer and does not relieve JI or any person
claiming under or through JI of the obligation to obtain the consent of Landlord under Section
18 of the Original Lease to any future assignment, sublease or other transfer. This Agreement
will not be construed to limit Landlord’s right, in the event of a future proposal to assign the
Lease, to terminate the Lease, as stated in Section 18 of the Original Lease.



     5. Guaranty by JNV.



          (a) JNV unconditionally guarantees to Landlord and its successors and assigns the
full and punctual payment, and the performance and observance by JI, of all the sums, terms,
covenants and conditions in the Lease to be paid, kept, performed or observed by JI.




          (b) If JI shall at any time default in the performance or observance of any of the
terms, covenants or conditions of the Lease to be kept, performed or observed by JI, JNV will
keep, perform and observe same, as the case may be, in the place and stead of JI. JNV has the
right to cure any default of JI, provided such cure is performed in accordance with the terms
and within the time periods set forth in the Lease. If JI fails to pay or perform any obligations
as and when due under the Lease, Landlord shall notify JNV in writing (a “Demand”) at the address set
forth below. A Demand shall identify the Lease provisions under which demand is being made
and identify the amount and the basis of the demand and shall contain a statement that
Landlord is calling upon JNV under the guaranty in this Agreement. A Demand conforming to the
foregoing requirements shall be sufficient notice to JNV to pay and perform under the guaranty
in this Agreement.




          (c) Any act of Landlord, or of its successors or assigns, consisting of a waiver of any
of the terms or conditions of the Lease, or the giving of any consent on any manner or thing
relating to the Lease, or the granting of any indulgences or extensions of time to JI, may be
done without notice to JNV and without releasing JNV from any of its obligations hereunder.




          (d) The obligations of JNV hereunder shall not be released by Landlord’s receipt,
application or release of any security given for the performance and observance of any
covenant or condition of the Lease to be performed or observed by JI, nor by any modification of the
Lease, regardless of whether JNV consents thereto or receives notice thereof.




          (e) The liability of JNV hereunder shall in no way be affected by (i) the release or
discharge of JI in any creditor’s receivership, bankruptcy or other proceeding; (ii) the
impairment, limitation or modification of the liability of JI or the estate of JI in
bankruptcy, or of any remedy for the enforcement of JI’s liability under the Lease resulting from the operation
of any present or future provision of any federal or state bankruptcy or insolvency law or other
statute or from the decision of any court; (iii) the rejection or disaffirmance of the Lease
in any such proceedings; (iv) the assignment or transfer of the Lease by JI; (v) any disability or
other defense of JI; (vi) the cessation from any cause whatsoever of the liability of JI; or (vii)
the exercise by Landlord of any of its rights or remedies reserved under the Lease or by law.




          (f) JNV further agrees that it may be joined in any action against JI in connection
with the said obligations of JI and recovery may be had against JNV in any such action.
Landlord may enforce the obligations of JNV hereunder without first taking any action
whatsoever against JI or its successors and assigns, or pursue any other remedy or apply any
security it may hold, and JNV hereby waives (i) notice of acceptance of this Agreement, (ii)





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demand of payment, presentation and protest, except as required herein, (iii) any right to require
Landlord to proceed against JI or any other JNV or any other person or entity liable to Landlord,
(iv) any right to require Landlord to apply to any default any security deposit or other security
it may hold under the Lease, (v) any right to require Landlord to proceed under any other remedy
Landlord may have before proceeding against JNV, (vi) any right of subrogation, and (vii) and
any and all surety or other defenses in the nature thereof including, without limitation, the
provisions of California Civil Code sections 2819 and 2845 or any similar, related or successor
provisions of law.




          (g) Until all the covenants and conditions in the Lease on JI’s part to be performed and
observed are fully performed and observed, JNV (i) shall have no right to enforce or receive any
payment by way of subrogation against JI by reason of any payments or acts of performance by JNV
hereunder; and (ii) subordinates any liability or indebtedness of JI now or hereafter held by JNV
to the obligations of JI to Landlord under the Lease.




          (h) This Agreement shall apply to the Lease, any extension, renewal, modification or amendment
thereof and to any assignment, subletting or other tenancy thereunder or to any holdover term
following the term granted under the Lease or any extension or renewal thereof. It is specifically
agreed and understood that the terms of the Lease may be altered, affected, modified or changed by
agreement between Landlord and JI, or by a course of conduct, and said Lease may be assigned by
Landlord or any assignee of Landlord without consent or notice to JNV and that this Agreement
shall thereupon and thereafter guarantee the performance of said Lease as so changed, modified,
altered or assigned.




          (i) No delay on the part of Landlord in exercising any right hereunder or under the Lease
shall operate as a waiver of such right or of any other right of Landlord under the Lease or
hereunder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or a
waiver of the same or any other right on any future occasion. This Agreement shall not be released,
modified or affected by failure or delay on the part of Landlord to enforce any of the rights or
remedies of JI under the Lease, whether pursuant to the terms thereof or at law or in equity.




          (j) If Landlord desires to sell, finance or refinance the Premises demised under the Lease,
JNV hereby agrees to deliver to any lender or buyer designated by Landlord such estoppel statements
and financial statements of JNV as may be reasonably required by such lender or buyer. Such
financial statements shall include the past three (3) years’ financial statements of JNV. All such
statements shall be received by any such lender or buyer in confidence and shall be used only for
the foregoing purposes, and such lender or buyer shall acknowledge the same to JNV in writing
(should JNV require such an acknowledgment) as a precondition to JNV’s obligations under this
Section 5(j). In addition, JNV shall not be obligated to deliver estoppel statements or financial
statements hereunder more frequently than two (2) times in any calendar year.




          (k) The term “Landlord” whenever hereinabove used refers to and means the Landlord
specifically named above and also any assignee of said Landlord, whether by outright assignment or
by assignment for security, and also any successor to the interest of said Landlord or of any
assignee in such Lease or any part thereof, whether by assignment or otherwise. So long as the
Landlord’s interest in or to the leased Premises or the rents, issues and profits therefrom, or in,
to or under said Lease, are subject to any mortgage or deed of trust or assignment for security, no
acquisition by JNV of Landlord’s interest in the leased Premises or under said Lease shall affect
the continuing obligation of JNV under this Agreement which shall nevertheless continue in full
force and effect for the benefit of the mortgagee, beneficiary, trustee or assignee under such
mortgage, deed of trust or assignment, of any purchase at sale by judicial foreclosure or under
private power of sale, and of the successors and assigns of any such mortgagee, beneficiary,
trustee, assignee or purchaser.




          (l) Notwithstanding anything to the contrary herein, JNV reserves the right to assert defenses
that JI may have under the Lease to payment or performance of any obligation under the Lease other
than defenses arising from the bankruptcy, insolvency, incapacity, liquidation or dissolution of
JI.





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     6. General Provisions



          (a) Notices. Any notice that may or must be given by any party under this Agreement
will be delivered (i) personally, (ii) by certified mail, return receipt requested, or (iii) by a
nationally recognized overnight courier, addressed to the party to whom it is intended. Any notice
given to Landlord, JI or JNV shall be sent to the respective address set forth below, or to such
other address as that party may designate for service of notice by a notice given in accordance
with the provisions of this Section 6(a). A notice sent pursuant
to the terms of this Section 6 (a)
shall be deemed delivered (A) when delivery is attempted, if delivered personally, (B) if within
the United States, three (3) business days after deposit into first class mail, postage prepaid,
return receipt requested, or if overseas, seven (7) business days after deposit into first class
mail, postage prepaid, return receipt requested, or (C) if within the United States, the business
day following deposit with a nationally recognized overnight courier, or if overseas, the third
business day following deposit with a nationally recognized overnight courier.




	 	 	 
	Notices to Landlord shall be sent to:

	 	c/o Catlin Properties, Inc.
	 

	 	3620 Fair Oaks Boulevard, Suite 150
	 

	 	Sacramento, California 95864
	 
	 	 
	Notices to JI shall be sent to:

	 	The Premises
	 
	 	 
	Notices to JNV shall be sent to:

	 	JOMED NV
	 

	 	Drottninggatan 94
	 

	 	252 21 Helsingborg
	 

	 	Sweden 
Attention: Mr. Antti
Ristinmaa, Chief Financial Officer






          (b) Brokerage Commissions. JI and JNV agree that Landlord will not be liable
for any brokerage commission or finder’s fee in connection with the consummation of the
Acquisition and Merger or this Agreement. JI and JNV will protect, defend, indemnify and hold
Landlord harmless from any brokerage commission or finder’s fee in connection with the
consummation of the Acquisition and Merger or this Agreement, and from any cost or expense
(including attorney fees) incurred by Landlord in resisting any claim for any such brokerage
commission or finder’s fee. The provisions of this Section 6(b) shall survive the expiration
or earlier termination of this Agreement or the Lease.




          (c) Controlling Law. The terms and provisions of this Agreement will be construed
in accordance with and will be governed by the laws of the State of California.




          (d) Captions. Captions to the sections in this Agreement are included for convenience
only and do not modify any of the terms of this Agreement.




          (e) Entire Agreement. This Agreement constitutes the final, complete and exclusive
statement between the parties to this Agreement pertaining to the terms of Landlord’s consent
to the Acquisition and Merger, supersedes all prior and contemporaneous understandings or
agreements of the parties, and is binding on and inures to the benefit of their respective
heirs, representatives, successors and assigns. No party has been induced to enter into this
Agreement by, nor is any party relying on, any representation or warranty outside those expressly set
forth in this Agreement. Any agreement made after the date of this Agreement is ineffective to modify,
waive, or terminate this Agreement, in whole or in part, unless that agreement is in writing,
is signed by the parties to this Agreement, and specifically states that agreement modifies this
Agreement.




          (f) Waiver of Jury Trial; Attorneys’ Fees. If any party commences litigation against
any other party for the specific performance of this Agreement, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties waive any right to a
trial by jury and, in the event of any commencement of litigation, the prevailing party shall
be entitled to recover from the applicable party such costs and reasonable attorneys’ fees as may
have been incurred.





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          (g) No Waiver. Except as explicitly stated in this Agreement, nothing contained in
this Agreement will be deemed or construed to modify, waive, impair, or affect any of the
covenants, agreements, terms, provisions, or conditions contained in the Lease. In addition, the
acceptance of rents by Landlord from JI, JNV or anyone else liable under the Lease will not be
deemed a waiver by Landlord of any provisions of the Lease.




          (h) Successors and Assigns. This Agreement is binding upon the parties hereto and
their respective successors and assigns (including, without limitation, any party that
succeeds to Landlord’s interest as owner of the Premises).




          (i)
Counterparts: Facsimile Receipt of Signed Agreement. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall not be effective until
the execution and delivery between each of the parties of at least one set of counterparts. The
parties authorize each other to detach and combine original signature pages and consolidate them
into a single identical original. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement. Each party agrees to accept by facsimile transmission a signed
counterpart of this Agreement from the other parties as proof that this Agreement has been signed
by such parties, provided, however, that an original, signed document is subsequently received in
accordance with the terms of Section 6(a) above.




     7. Landlord’s
Attorneys’ Fees. JI shall, concurrently with JI’s delivery to Landlord
of an executed counterpart of this Agreement, pay Landlord in immediately available funds, the fees
owed Landlord under Section 18.f of the Original Lease (i.e., Landlord’s attorneys’ fees in the
amount of Five Hundred Dollars ($500)).



BALANCE OF PAGE IS INTENTIONALLY BLANK





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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.



	 	 	 	 	 	 	 
	JNV:

	 	 	 	JI:	 	 
	 
	 	 	 	 	 	 
	JOMED NV, a Netherlands corporation	 	JOMED INC., a Delaware corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/ [ILLEGIBLE]
	 	By:
	 	/s/ [ILLEGIBLE]
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Its:

	 	CFO
	 	Its:
	 	Executive Vice President
	 
	 	 	 	 	 	 
	Date:

	 	25 June 2001
	 	Date:
	 	07/03/01
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:
	 	/s/ [ILLEGIBLE]
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Its:

	 	 	 	Its:
	 	V. P. of Finance
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:
	 	7/5/01
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	LANDLORD:
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	CARL D. PANATTONI
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	BENJAMIN S. CATLIN, IV
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	BLUE LAKE ENTERPRISES, a California general partnership
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	NORTH SACRAMENTO LAND COMPANY, a California corporation
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 
	 

	 	 	 	 	 	 






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