**Exhibit 10.1**

 

 

 

**LEASE AGREEMENT**

 

 

Between 

 

 

 

 

 

**FUND VIII AND FUND IX ASSOCIATES,**

a Georgia joint venture partnership, 

as Landlord 

 

 

And 

 

 

 

 

 

**GAMBRO HEALTHCARE, INC.,**

a Tennessee corporation, 

as Tenant 

 

 

 

 

 

Dated: March 4, 2004 

**BASIC LEASE PROVISIONS**

 

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

 

1.      Building (See Section 1):
  15253 Bake Parkway   Irvine, California
Project (See Section 1):
                                                                                                                                                           
2.      Premises (See Section 1):
   
Floor:
  100% of Building
Rentable Square Feet:
  65,006
3.      Term (See Section 2):
  Approximately 123 months
4.      Base Rent (See Sections 2 and 3):

 

**Lease Months**
  
**Monthly Rate per**

**Rentable Square Foot of**

**the Premises**
  
**Annual Rate per Rentable**

**Square Foot of the**

**Premises**

0 - 3
  $0.00  $  0.00
  4 - 15
  $1.12  $13.44
16 - 27
  $1.17  $14.04
28 - 39
  $1.21  $14.52
40 - 51
  $1.26  $15.12
52 - 63
  $1.31  $15.72
64 - 75
  $1.36  $16.32
76 - 87
  $1.41  $16.92
88 - 99
  $1.46  $17.52
100 - 111
  $1.51  $18.12
112 - 123
  $1.56  $18.72
 
 5. Tenant’s Share (See Section 13): 100% 
 

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**LEASE AGREEMENT**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**8. Use of Premises.**

 

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

 

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

 

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

 

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

 

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

 

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

 

**[this provision to be further revised uponconsultation with Landlord:**

 

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

 

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

 

**11. Repairs By Tenant.**Except as described in Section 10above, Tenant shall, at its own cost and expense, maintain the Premises, the Building and the Property in good repair and in a neat and clean, first-class condition, including making all necessary repairs and replacements. Tenant shall further, atits own cost and expense, repair or restore any damage or injury to all or any part of the Premises, the Building or the Property caused by Tenant or Tenant’s agents, employees, invitees, licensees, visitors or contractors, including but notlimited to any repairs or replacements necessitated by (i) the construction or installation of improvements to the Premises by or on behalf of Tenant, (ii) the moving of any property into or out of the Premises. If Tenant fails to make such repairsor replacements promptly, Landlord may, at its option, make the repairs and replacements and the costs of such repair or replacements shall be charged to Tenant as Additional Rent and shall become due and payable by Tenant with the monthlyinstallment of Base Rent next due hereunder. 

 

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

 

**[this provision tobe further revised upon consultation with Landlord:**

 

**13. Operating Expenses.**

 

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

 

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

 

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

 

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

 

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

 

(2) Insurance premiums and deductible amounts, including, withoutlimitation, for commercial general liability, ISO Causes of Loss Special Form property, rent loss and other coverages carried by Landlord on the Building and Property (including terrorism insurance, if Landlord elects to carry it or is required tocarry it by any lender). 

 

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

 

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

 

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

 

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

 

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

 

(7) Legal and accounting costs. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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**22. Tenant’s Insurance; Waivers.**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**23. GovernmentalRequirements.** Tenant shall, at its own expense, promptly comply with all requirements of any legally constituted governmental or public authority made necessary by reason of Tenant’s occupancy of the Premises, including, withoutlimitation, the Americans with Disabilities Act. 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**28. Destruction or Damage.**

 

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

 

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

 

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

 

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

 

**31. Mortgagee’s Rights.**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**36. Waste Disposal.**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**44. Not Used.**

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

**52. Not Used.**

 

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

 

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

 

Landlord’s Notice Address:             Wells Management, Inc. 

                                    6200 The CornersParkway, Suite 250 

                                    Norcross, Georgia30092-2295 

 

                                    Attention: 15253 BakeParkway, Irvine, CA 

 

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With a copy to:
          Attention:                                                            
Tenant’s Notice Address:
     Gambro Healthcare, Inc.        Attention:                                                              
With a copy to:
          Attention:                                                              
 

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

 

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

 

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

 

LANDLORD:

**FUND VIII AND FUND IX ASSOCIATES,**

a Georgia joint venture partnership

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

Georgia limited partnership, its general

partner

By: Wells Capital, Inc., a Georgia

corporation, its general partner

By:

    Name:

    Title:

                    (CORPORATESEAL)

TENANT:

**GAMBRO HEALTHCARE, INC., a**

Tennessee corporation

By:

    Name:

    Title:
                    (CORPORATE SEAL)