Document:

exv10w9

 

Exhibit 10.9

NET

INDUSTRIAL SPACE LEASE

by and between

Tasman V, LLC

as Landlord

and

Adeza Biomedical Corporation

as Tenant

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I:    REFERENCES
	 	 	1	 
	 
	 	 	 	 
	1.1REFERENCES
	 	 	 1	 
	 
	 	 	 	 
	ARTICLE 2:    LEASED PREMISES, TERM AND POSSESSION
	 	 	2	 
	 
	 	 	 	 
	2.1 DEMISE OF LEASED PREMISES
	 	 	 2	 
	2.2 RIGHT TO USE COMMON AREAS
	 	 	 2	 
	2.3 LEASE COMMENCEMENT DATE AND LEASE TERM
	 	 	 2	 
	2.4 DELIVERY OF POSSESSION
	 	 	 2	 
	2.5 ACCEPTANCE OF POSSESSION
	 	 	 3	 
	2.6 SURRENDER OF POSSESSION
	 	 	 3	 
	2.7 EARLY OCCUPANCY
	 	 	 3	 
	 
	 	 	 	 
	ARTICLE 3:   RENT, LATE CHARGES AND SECURITY DEPOSITS
	 	 	3	 
	 
	 	 	 	 
	3.1 BASE MONTHLY RENT
	 	 	 3	 
	3.2 ADDITIONAL RENT
	 	 	 3	 
	3.3 YEAR-END ADJUSTMENTS
	 	 	 4	 
	3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT
	 	 	 4	 
	3.5 PAYMENT OF RENT
	 	 	 4	 
	3.6 PREPAID RENT
	 	 	 4	 
	3.7 SECURITY DEPOSIT
	 	 	 4	 
	 
	 	 	 	 
	ARTICLE 4:   USE OF LEASED PREMISE AND COMMON AREAS
	 	 	5	 
	 
	 	 	 	 
	4.1 PERMITTED USE
	 	 	 5	 
	4.2 GENERAL LIMITATIONS ON USE
	 	 	 5	 
	4.3 NOISE AND EMISSIONS
	 	 	 5	 
	4.4 TRASH DISPOSAL
	 	 	 5	 
	4.5 PARKING
	 	 	 5	 
	4.6 SIGNS
	 	 	 6	 
	4.7 COMPLIANCE WITH LAWS
	 	 	 6	 
	4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS
	 	 	 6	 
	4.9 LANDLORD’S RIGHT TO ENTER
	 	 	 6	 
	4.10 CONTROL OF COMMON AREAS
	 	 	 6	 
	4.11 RULES AND REGULATIONS
	 	 	 7	 
	4.12 ENVIRONMENTAL PROTECTION
	 	 	 7	 
	 
	 	 	 	 
	ARTICLE 5:    REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
	 	 	7	 
	 
	 	 	 	 
	5.1 REPAIRS AND MAINTENANCE
	 	 	 7	 
	5.2 SERVICES AND UTILITIES
	 	 	 7	 
	5.3 ENERGY AND RESOURCE CONSUMPTION
	 	 	 8	 
	5.4 LIMITATION OF LANDLORD’S LIABILITY
	 	 	 8	 
	 
	 	 	 	 
	ARTICLE 6:    ALTERATIONS AND IMPROVEMENTS
	 	 	8	 
	 
	 	 	 	 
	6.1 BY TENANT
	 	 	 8	 
	6.2 OWNERSHIP OF IMPROVEMENTS
	 	 	 8	 
	6.3 ALTERATIONS REQUIRED BY LAW
	 	 	 8	 
	6.4 LIENS
	 	 	 9	 
	 
	 	 	 	 
	ARTICLE 7:    ASSIGNMENT AND SUBLETTING BY TENANT
	 	 	9	 
	 
	 	 	 	 
	7.1 BY TENANT
	 	 	 9	 
	7.2 MERGER OR REORGANIZATION
	 	 	 9	 
	7.3 LANDLORD’S ELECTION
	 	 	 9	 
	7.4 CONDITIONS TO LANDLORD’S CONSENT
	 	 	 9	 
	7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTAL DEFINED
	 	 	10	 
	7.6 PAYMENTS
	 	 	10	 
	7.7 GOOD FAITH
	 	 	10	 
	7.8 EFFECT OF LANDLORD’S CONSENT
	 	 	10	 

 

 

	 	 	 	 	 
	ARTICLE 8:    LIMITATIONS ON LANDLORD’S LIABILITY AND INDEMNITY
	 	 	10	 
	 
	 	 	 	 
	8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE
	 	 	10	 
	8.2 TENANT’S INDEMNIFICATION OF LANDLORD
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 9:    INSURANCE
	 	 	11	 
	 
	 	 	 	 
	9.1 TENANT’S INSURANCE
	 	 	11	 
	9.2 LANDLORD’S INSURANCE
	 	 	12	 
	9.3 MUTUAL WAIVER OF SUBROGATION
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 10:    DAMAGE TO LEASED PREMISES
	 	 	12	 
	 
	 	 	 	 
	10.1 LANDLORD’S DUTY TO RESTORE
	 	 	12	 
	10.2 LANDLORD’S RIGHT TO TERMINATE
	 	 	12	 
	10.3 TENANT’S RIGHT TO TERMINATE
	 	 	13	 
	10.4 TENANT’S WAIVER
	 	 	13	 
	10.5 ABATEMENT OF RENT
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 11:    CONDEMNATION
	 	 	13	 
	 
	 	 	 	 
	11.1 LANDLORD’S RIGHT TO TERMINATE
	 	 	13	 
	11.2 TENANT’S RIGHT TO TERMINATE
	 	 	13	 
	11.3 TEMPORARY TAKING
	 	 	13	 
	11.4 RESTORATION AND ABATEMENT OF RENT
	 	 	13	 
	11.5 DIVISION OF CONDEMNATION AWARD
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 12:    DEFAULT AND REMEDIES
	 	 	14	 
	 
	 	 	 	 
	12.1 EVENTS OF TENANT’S DEFAULT
	 	 	14	 
	12.2 LANDLORD’S REMEDIES
	 	 	14	 
	12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES
	 	 	15	 
	12.4 LIMITATION ON TENANT’S RECOURSE
	 	 	15	 
	12.5 TENANT’S WAIVER
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 13:    GENERAL PROVISIONS
	 	 	15	 
	 
	 	 	 	 
	13.1 TAXES ON TENANT’S PROPERTY
	 	 	15	 
	13.2 HOLDING OVER
	 	 	16	 
	13.3 SUBORDINATION
	 	 	16	 
	13.4 TENANT’S ATTORNMENT UPON FORECLOSURE
	 	 	16	 
	13.5 LENDER PROTECTION
	 	 	16	 
	13.6 ESTOPPEL CERTIFICATES
	 	 	16	 
	13.7 TENANTS’ FINANCIAL INFORMATION
	 	 	16	 
	13.8 TRANSFER BY LANDLORD
	 	 	17	 
	13.9 FORCE MAJEURE
	 	 	17	 
	13.10 NOTICES
	 	 	17	 
	13.11 ATTORNEY’S FEES
	 	 	17	 
	13.12 DEFINITIONS
	 	 	17	 
	13.13 GENERAL WAIVERS
	 	 	18	 
	13.14 MISCELLANEOUS
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 14:    CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT
	 	 	19	 
	 
	 	 	 	 
	14.1 CORPORATE AUTHORITY
	 	 	19	 
	14.2 BROKERAGE COMMISSIONS
	 	 	19	 
	14.3 ENTIRE AGREEMENT
	 	 	19	 
	14.4 LANDLORD’S REPRESENTATIONS
	 	 	19	 
	 
	 	 	 	 
	ADDENDUM TO INDUSTRIAL SPACE LEASE
	 	 	20	 
	 
	 	 	 	 
	15.1 PAYMENT OF PROJECT MAINTENANCE COSTS
	 	 	20	 
	15.2 CONDITION OF THE PREMISES
	 	 	20	 
	15.3 EARLY OCCUPANCY
	 	 	20	 
	15.4 OPTION TO EXTEND
	 	 	20	 
	15.6 EFFECT OF ADDENDUM
	 	 	20	 

 

 

NET INDUSTRIAL SPACE LEASE

     THIS LEASE, dated July 1, 2005 for reference purposes only, is made by and between
Tasman V, LLC (“Landlord”) and Adeza Biomedical Corporation (“Tenant”), to be
effective and binding upon the parties as of the date of the designated signatories to the Lease
shall have executed this Lease (the “Effective Date of this Lease”).

ARTICLE I:    REFERENCES

      1.1 REFERENCES

     All references in this Lease (subject to any further clarifications contained in this Lease)
to the following terms shall have the following meaning or refer to the respective address, person,
date, time period, amount, percentage, calendar year or fiscal year as below set forth.

	 	 	 
	A. Tenant’s Address for Notices:

	 	1240 Elko Drive
	 

	 	 
	 

	 	Sunnyvale, Ca 94089
	 

	 	 
	 

	 	 
	 

	 	 
	B. Tenant’s Representative:

	 	Emory V. Anderson
	 

	 	 
	          Phone Number:

	 	408-745-0975
	 

	 	 
	 

	 	 
	 

	 	 
	C. Landlord’s Address for Notices:

	 	c/o SARATOGA MANAGEMENT CO.
	 

	 	 
	 

	 	4125 Blackford Avenue, Suite 250
	 

	 	 
	 

	 	San Jose, CA 95117
	 

	 	 
	 

	 	 
	 

	 	 
	D. Landlord’s Representative:

	 	Saratoga Management Co.
	 

	 	 
	          Phone Number:

	 	408-249-8105
	 

	 	 
	E. Intended Commencement Date:

	 	July 15, 2005
	 

	 	 
	F. Intended Term:

	 	11 months,
	 

	 	co-terminus with 1240 Elko Dr.
	 

	 	 
	G. Lease Expiration Date:

	 	September 30, 2006
	 

	 	 
	H. Tenant’s Punchlist Period:

	 	Fifteen (15) days
	 

	 	 
	I. First Month’s Prepaid Rent:

	 	$2,500.00
	 

	 	 
	J. Last Month’s Prepaid Rent:

	 	none
	 

	 	 
	K. Tenant’s Security Deposit:

	 	$2,500.00
	 

	 	 
	L. Late Charge Amount:

	 	Five-(5%) percent
	 

	 	 
	M. Real Property Tax Base Year:

	 	N/A, triple net
	 

	 	 
	N. Insurance Base Year:

	 	N/A, triple net
	 

	 	 
	O. Tenant’s Required Liability Coverage:

	 	$1,000,000 single limit
	 

	 	 
	P. Tenant’s Number of Parking Spaces:

	 	Seventeen (17)
	 

	 	 
	Q. Brokers:

	 	Saratoga Management Co., Inc.
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 

     R. Project: That certain real property situated in the City of Sunnyvale County of
Santa Clara, State of California, as presently improved
with two (2) building(s), which real property is shown on the Site Plan attached
hereto at Exhibit “A” and is commonly known as or otherwise described as follows: 5,000 square
feet, more or less, of the two (2) building complex at 1257 Tasman Drive and 1233-1239 Reamwood
Avenue consisting of 37,600 square feet.

     S. Building: That certain Building within the Project in which the leased Premises are
located, which Building is shown outlined in black on Exhibit “A” hereto.

     T. Common Areas: The “Common Areas” shall mean those areas within the Project which are
located outside the buildings and which are provided and designated by Landlord from time to time
for general use by tenants of the Project including driveways, pedestrian walkways, parking spaces,
landscaped areas and enclosed trash disposal areas.

1

 

     U. Leased Premises: That certain interior space within the Building which space is shown
outlined in black on the Floor Plan attached hereto as Exhibit “B” consisting of
approximately 5000  square feet and, for purposes of this Lease, agreed to contain
said number of square feet. The Leased Premises are commonly known as or otherwise described as
follows: that 5,000 square feet, 1237 Reamwood Avenue, of a 20,000 square foot building at
1233-1239 Reamwood Avenue, Sunnyvale CA, APN #104-58-007.

     V. Base Monthly Rent: The term “Base Monthly Rent” shall mean the following:

	 	 	 	 	 
	Period	 	Base Monthly Rent
	August 1, 2005 – September 30, 2006

	 	$	2500.00	 

     W. Permitted Use: The term “Permitted Use” shall mean the following:

     Warehouse and office

     X. Exhibits: The term “Exhibits” shall mean the Exhibits to this Lease which are described as
follows:

Exhibit “A” — Site Plan showing the Project and delineating the Building in which
the Leased Premises are located.

Exhibit “B” — Floor Plan outlining the Leased Premises.

Exhibit “C” — Improvements.

Exhibit “D” — Proposal from Contractor

     Y. Addenda: The term “Addenda” shall mean the Addendum (or Addenda) to this Lease which is (or
are) described as follows:

     Paragraph 15.1 through 15.6

ARTICLE 2:    LEASED PREMISES, TERM AND POSSESSION

      2.1 DEMISE OF LEASED PREMISES

     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for Tenant’s own use
in the conduct of Tenant’s business and not for purposes of speculating in real estate, for the
Lease Term and upon the terms and subject to the conditions of this Lease, that certain interior
space described in Article I as the Leased Premises, reserving and excepting to Landlord the
exclusive right to all profits to be derived from any assignments or sublettings by Tenant during
the Lease Term by reason of the appreciation in the fair market rental value of the Leased
Premises. Landlord further reserves the right to install, maintain, use and replace ducts, wires,
conduits and pipes leading through the Leased Premises in locations which will not materially
interfere with Tenant’s use of the Lease Premises. Tenant’s Lease of the Leased Premises, together
with the appurtenant right to use the Common Areas as described in Paragraph 2.2 below, shall be
conditioned upon and be subject to the continuing compliance by Tenant with (I) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased Premises and the Project,
(iii) all Private Restrictions, easements and other matters now of public record respecting the use
of the Leased Premises and the Project, and (iv) all reasonable rules and regulations from time to
time established by Landlord.

      2.2 RIGHT TO USE COMMON AREAS

     As an appurtenant right to Tenant’s right to the use of the Leased Premises, Tenant shall have
the non-exclusive right to use the Common Areas in conjunction with other tenants of the Project
and their invitees, subject to the limitations on such use as set forth in Article 4, and solely
for the purposes for which they were designed and intended. Tenant’s right to use the Common Areas
shall terminate concurrently with any termination of this Lease.

      2.3 LEASE COMMENCEMENT DATE AND LEASE TERM

     The term of this Lease shall begin, and the Lease Commencement Date shall be deemed to have
occurred, on the Intended Commencement Date (as set forth in Article I) unless either (i) Landlord
is unable to deliver possession of the Leased Premises to Tenant on the Intended Commencement Date,
in which case the Lease Commencement Date shall be determined pursuant to Paragraph 2.4 below or
(ii) Tenant enters into possession of the Leased Premises prior to the Intended Commencement Date,
in which case the Lease Commencement Date shall be as determined pursuant to Paragraph 2.7 below
(the “Lease Commencement Date”). The term of this Lease shall end on the Lease Expiration Date (as
set forth in Article I), irrespective of whatever date the Lease Commencement Date is determined to
be pursuant to the foregoing sentence. The Lease Term shall be that period of time commencing on
the Lease Commencement Date and ending on the Lease Expiration Date (the “Lease Term”).

      2.4 DELIVERY OF POSSESSION

     Landlord shall deliver to Tenant possession of the Leased Premises on or before the Intended
Commencement Date (as set forth in Article I) in their presently existing condition, broom clean,
unless Landlord shall have agreed, as a condition to Tenant’s obligation to accept possession of
the Leased Premises, pursuant to an Addenda attached to and made a part of this Lease to modify
existing interior improvements or to make, construct and/or install additional specified
improvements within the Leased Premises, in which case Landlord shall deliver to Tenant possession
of the Leased Premises on or before the Intended Commencement Date as so modified and/or improved.
If Landlord is unable

2

 

to so deliver possession of the Leased Premises to Tenant on or before the Intended Commencement
Date, for whatever reason, Landlord shall not be in default under this Lease, nor shall this Lease
be void, voidable or cancellable by Tenant until the lapse of one hundred twenty days after the
Intended Commencement Date (the “delivery grace period”); however, the Lease Commencement Date
shall not be deemed to have occurred until such date as Landlord notifies Tenant that the Leased
Premises are Ready for Occupancy. Additionally, the delivery grace period above set forth shall be
extended for such number of days as Landlord may be delayed in delivering possession of the Leased
Premises to Tenant by reason of Force Majeure or the actions of Tenant. If Landlord is unable to
deliver possession of the Leased Premises to Tenant within the described delivery grace period
(including any extensions thereof by reason of Force Majeure or the actions of the Tenant), then
Tenant’s sole remedy shall be to cancel and terminate this Lease, and in no event shall Landlord be
liable to Tenant for such delay. Tenant may not cancel this Lease at any time after the Landlord
notifies Tenant the Leased Premises are Ready for Occupancy.

      2.5 ACCEPTANCE OF POSSESSION

     Tenant acknowledges that it has inspected the Leased Premises and is willing to accept them in
their existing condition, broom clean, unless Landlord shall have agreed, as a condition to
Tenant’s obligation to accept possession of the Leased Premises, pursuant to an Addenda attached to
and made a part of this Lease to modify existing interior improvements or to make construction
and/or install additional specified improvements within the Leased premises, in which case Tenant
agrees to accept possession of the Leased Premises when Landlord has substantially completed such
modifications or improvements and the Leased Premises are Ready for Occupancy. If Landlord shall
have so modified existing improvements or constructed additional improvements within the Leased
Premises for Tenant, Tenant shall, within Tenant’s Punchlist Period (as set forth in Article I)
which shall commence on the date that Landlord notifies Tenant that the Leased Premises are Ready
for Occupancy, submit to Landlord a punchlist of all incomplete and/or improper work performed by
Landlord. Upon the expiration of Tenant’s Punchlist Period, Tenant shall be conclusively deemed to
have accepted the Leased Premises in their then-existing condition as so delivered by Landlord to
Tenant, except as to those items reasonably set forth in the punchlist submitted to Landlord prior
to the expiration of said period. Landlord agrees to correct all items reasonably set forth in
Tenant’s Punchlist, provided that such punchlist was submitted to Landlord within Tenant’s
Punchlist Period. Additionally, Landlord agrees to place in good working order all existing
plumbing, lighting, heating, ventilating and air conditioning systems within the Leased Premises
and all man doors and roll-up truck doors serving the Leased Premises to the extent that such
systems and/or items are not in good operating condition as of the date Tenant accepts possession
of the Leased Premises; provided that, and only if, Tenant notifies Landlord in writing of such
failures or deficiencies within five business days from the date Tenant so accepts possession of
the Lease Premises.

      2.6 SURRENDER OF POSSESSION

     Immediately prior to the expiration or upon the sooner termination of this Lease, Tenant shall
remove all of Tenant’s signs from the exterior of the Building and shall remove all of Tenant’s
equipment, trade fixtures, furniture, supplies, wall decorations and other personal property from
the Leased Premises, and shall vacate and surrender the Leased Premises to Landlord in the same
condition, broom clean, as existed at the Lease Commencement Date, reasonable wear and tear
excepted. Tenant shall repair all damage to the Leased Premises caused by Tenant’s removal of
Tenant’s property and all damage to the exterior of the building caused by Tenant’s removal of
Tenant’s signs. Tenant shall patch and refinish, to Landlord’s reasonable satisfaction, all
penetrations made by Tenant or its employees to the floor, walls or ceiling of the Leased Premises,
whether such penetrations were made with Landlord’s approval or not. Tenant shall repair or
replace all stained or damaged ceiling tiles, wall coverings and floor coverings to the reasonable
satisfaction of Landlord. Tenant shall repair all damage caused by Tenant to the exterior surface
of the Building and the paved surfaces of the outside areas adjoining the Leased Premises and,
where necessary, replace or resurface the same. Additionally, Tenant shall, prior to the
expiration or sooner termination of this Lease, remove any improvements constructed or installed by
Tenant which Landlord requests be so removed by Tenant and repair all damage caused by such
removal. If the Leased Premises are not surrendered to Landlord in the condition required by this
Paragraph at the expiration or sooner termination of this Lease, Landlord may, at Tenant’s expense,
so remove Tenant’s signs, property and/or improvements not so removed and make such repairs and
replacements not so made or hire, at Tenant’s expense, independent contractors to perform such
work. Tenant shall be liable to Landlord all costs incurred by Landlord in returning the Leased
Premises to the required condition, plus interest on all costs incurred from the date paid by
Landlord at the then maximum rate of interest not prohibited by Law until paid, payable by Tenant
to Landlord within ten days after receipt of a statement therefore from Landlord. Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in so surrendering the
Leased Premises, including, without limitation, any claims made by any succeeding tenant or any
losses to Landlord due to lost opportunities to lease to succeeding tenants.

      2.7 EARLY OCCUPANCY

     If Tenant enters into possession of the Leased Premises prior to the Intended Commencement
Date (or permits its contractors to enter the Leased Premises prior to the Intended Commencement
Date), unless otherwise agreed in writing by Landlord, the Lease Commencement Date shall be deemed
to have occurred on such sooner date, and Tenant shall be obligated to perform all its obligations
under this Lease, including the obligation to pay rent, from that sooner date.

ARTICLE 3:    RENT, LATE CHARGES AND SECURITY DEPOSITS

      3.1 BASE MONTHLY RENT

     Commencing on the Lease Commencement Date (as determined pursuant to Paragraph 2.3 above) and
continuing throughout the Lease Term, Tenant shall pay to Landlord, without prior demand therefore,
in advance on the first day of each calendar month, as base monthly rent, the amount set forth as
“Base Monthly Rent” in Article I (the “Base Monthly Rent”).

      3.2 ADDITIONAL RENT

     Commencing on the Lease Commencement Date (as determined pursuant to Paragraph 2.3 above) and
continuing throughout the Lease Term, in addition to the Base Monthly Rent, Tenant shall pay to
Landlord as additional rent (the “Additional Rent”) the following amounts:

3

 

        A. Tenant’s Proportionate share of all Project Maintenance Costs. Landlord may bill Tenant,
on a periodic basis not more frequently than monthly, Tenant’s Proportionate Share of such costs as
paid or incurred by Landlord, and Tenant shall pay to Landlord such share of such costs together
with an accounting fee equal to five percent of the amount so billed within ten days from the date
Landlord shall have billed Tenant for same.

        B. Tenant’s Proportionate Share of Landlord’s Insurance Costs and Real Property Taxes plus an
accounting fee equal to five percent of such amount. Payment shall be made by whichever of the
following methods is from time to time designated by Landlord:

           (1) Landlord may bill to tenant, on a periodic basis not more frequently than monthly,
Tenant’s Proportionate Share of Landlord’s Insurance Costs or Real Property Taxes, as paid or
incurred by Landlord during the current period together with an accounting fee equal to five
percent of the amount billed, within ten days after receipt of a written bill therefore from
Landlord; or

           (2) Landlord may deliver to Tenant Landlord’s reasonable estimate of Landlord’s Insurance
Costs and/or Real Property Taxes it anticipates will be paid or incurred for the ensuring calendar
or fiscal year, as the case requires, and Tenant shall pay its Proportionate Share for such year,
together with an accounting fee equal to five percent of the estimated amount, in equal monthly
installments during such year with the installments of Base Monthly Rent. Landlord reserves the
right to change from time to time the method of billing Tenants its Proportionate Share or the
periodic basis on which such increases are billed.

        C. Landlord’s share of the consideration received by Tenant upon certain assignments and
sublettings as required by Article 7;

        D. Any legal fees and costs that Tenant is obligated to pay or reimburse to Landlord pursuant
to Article 13; and

        E. Any other charges or reimbursements due Landlord from Tenant pursuant to the terms of this
Lease.

      3.3 YEAR-END ADJUSTMENTS

     If Landlord shall have elected to charge Tenant its Proportionate Share of Landlord’s
Insurance Costs and/or Real Property Taxes on an estimated basis in accordance with the provisions
of Paragraph 3.2B(2) above, Landlord shall furnish to Tenant within three months following the end
of the applicable calendar or fiscal year, as the case may be, a statement setting forth (i) the
amount of Landlord’s Insurance Costs and/or Real Property Taxes paid or incurred during the just
ended calendar or fiscal year, as appropriate, (ii) the amount of Landlord’s Insurance Costs and/or
Real Property Taxes paid during the applicable Base Year, and (iii) Tenant’s Proportionate Share of
Landlord’s Insurance Costs and/or Real Property taxes for the just ended fiscal or calendar year,
as appropriate. If Tenant shall have paid more than its Proportionate Share for the previous year,
Landlord shall, at its election, either (i) credit the amount of such overpayment toward the next
ensuing payment or payments of Additional Rent that would otherwise be due or (ii) refund in cash
to Tenant the amount of such overpayment. If such year-end statements shall show that Tenant did
not pay its Proportionate Share in full, then Tenant shall pay to Landlord the amount of such
underpayment, together with the accounting fee applicable thereto, within ten days from Landlord’s
billing of same to Tenant. The provisions of this Paragraph shall survive the expiration or sooner
termination of this Lease.

      3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT

     Tenant acknowledges that the late payment by Tenant of any monthly installment of Base Monthly
Rent or any Additional Rent will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amounts of which are extremely difficult or impractical to
fix. Such costs and expenses will include, without limitation, administration and collection costs
and processing and accounting expenses. Therefore, if any installment of base Monthly Rent is not
received by Landlord from Tenant within six calendar days after the same becomes due, Tenant shall
immediately pay to Landlord a late charge in an amount equal to the amount set forth in Article I
as the “Late Charge Amount”, and if any Additional Rent is not received by Landlord within six
calendar days after same becomes due, Tenant shall immediately pay to Landlord a late charge in an
amount equal to ten percent of the Additional Rent not so paid. Landlord and Tenant agree that
this late charge represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for its loss suffered by reason of Tenant’s failure to make timely
payment. In no event shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rental installment or prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant’s failure to pay each rental
installment due under this Lease when due, including the right to terminate this Lease. If any
rent remains delinquent for a period in excess of six calendar days, then, in addition to such late
charge, Tenant shall pay to Landlord interest on any rent that is not so paid from said sixth day
at the then maximum rate of interest not prohibited by Law until paid.

      3.5 PAYMENT OF RENT

     All rent shall be paid in lawful money of the United States, without any abatement, deduction
of offset for any reason whatsoever, to Landlord at such address as Landlord may designate from
time to time. Tenant’s obligation to pay Base Monthly Rent and all Additional Rent shall be
prorated at the commencement and expiration of the Lease Term. The failure by Tenant to pay any
Additional Rent as required pursuant to this Lease when due shall be treated the same as a failure
by Tenant to pay Base Monthly Rent when due, and Landlord shall have the same rights and remedies
against Tenant as Landlord would have if Tenant failed to pay the Base Monthly rent when due.

      3.6 PREPAID RENT

     Tenant has paid to Landlord the amount set forth in Article I as “First Month’s Prepaid Rent”
as prepayment of rent for credit against the first installment(s) of Base Monthly Rent due
hereunder. Additionally, Tenant has paid to Landlord the amount set forth in Article I as “Last
Month’s Prepaid Rent” as prepayment of rent for credit against the last installment(s) of Base
Monthly Rent due hereunder, subject, however, to the provisions of Paragraph 3.7 below.

      3.7 SECURITY DEPOSIT

     Tenant has deposited with Landlord the amount set forth in Article I as the “Security Deposit”
as security for the performance by Tenant of the terms of this Lease to be performed by Tenant, and
not as prepayment of rent. Landlord may apply such portion or portions of the Security Deposit as
are reasonably necessary for the following purposes: (i) to remedy any default by Tenant in the
payment of Base Monthly Rent or Additional Rent or a late charge or interest on defaulted rent;
(ii) to repair damage to the Leased Premises caused by Tenant; (iii) to clean and repair the Leased
Premises following their surrender to Landlord if not surrendered in the condition required
pursuant to the

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provisions of Article 2; and (iv) to remedy any other default of Tenant to the extent permitted by
Law including, without limitation, paying in full on Tenant’s behalf any sums claimed by
materialmen or contractors of Tenant to be owing to them by Tenant for work done or improvements
made at Tenant’s request to the Leased Premises. In this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be applied as contained in Section
1950.7(c) of the California Civil Code and/or any successor statute. In the event the Security
Deposit or any portion thereof is so used, Tenant shall pay to Landlord, promptly upon demand, an
amount in cash sufficient to restore the Security Deposit to the full original sum. If Tenant
fails to promptly restore the Security Deposit and if Tenant shall have paid to Landlord any sums
and “Last Month’s Prepaid Rent”, Landlord may, in addition to any other remedy Landlord may have
under this Lease, reduce the amount of Tenant’s Last Month’s Prepaid Rent by transferring all or
portions of such Last Month’s Prepaid Rent to Tenant’s Security Deposit until such Security Deposit
is restored to the amount set forth in Article I. Landlord shall not be deemed a trustee of the
Security Deposit. Landlord may use the Security Deposit in Landlord’s ordinary business and shall
not be required to segregate it from its general accounts. Tenants shall not be entitled to any
interest on the Security Deposit. If Landlord transfer the Building during the Lease Term,
Landlord may pay the Security Deposit to any subsequent owner in conformity with the provisions of
Section 1950.7 of the California Civil Code and/or any successor statute, in which event the
transferring Landlord shall be released from all liability for the return of the Security Deposit.
Tenant specifically grants to Landlord (and hereby waives the provisions of California Civil Code
Section 1950.7 to the contrary) a period of sixty days following a surrender of the Leased Premises
by Tenant to Landlord within which to restore the Security Deposit (less permitted deductions) to
Tenant, it being agreed between Landlord and Tenant that sixty days is a reasonable period of time
within which to inspect the Leased Premises, make required repairs, receive and verify workmen’s
billings therefore, and prepare a final accounting with respect to such deposit. In no event shall
the Security Deposit or any portion thereof, be considered prepaid rent.

ARTICLE 4:    USE OF LEASED PREMISE AND COMMON AREAS

      4.1 PERMITTED USE

     Tenant shall be entitled to use the Leased Premises solely for the “Permitted Use” as set
forth in Article I and for no other purpose whatsoever. Tenant shall continuously and without
interruption use the Leased Premises for such purpose for the entire Lease Term. Any
discontinuance of such use for a period of thirty consecutive calendar days shall be, at Landlord’s
election, a default by Tenant under the terms of this Lease. Subject to the limitations contained
in this Article 4, Tenant shall have the right to use the Common Area, in conjunction with other
tenants and during normal business hours, solely for the purposes for which they were intended and
for no other purposes whatsoever. Tenant shall not have the right to use the exterior surfaces of
exterior walls, the area beneath the floor or the area above the ceiling of the Leased Premises.

      4.2 GENERAL LIMITATIONS ON USE

     Tenant shall not do or permit anything to be done in or about the Leased Premises, the
Building, the Common Areas or the Project which does or could (i) interfere with the rights of
other tenants or occupants of the Building or the Project, (ii) jeopardize the structural integrity
of the Building or (iii) cause damage to any part of the Building or the Project. Tenant shall not
operate any equipment within the Leased Premises which does or could (i) injure, vibrate or shake
the Leased Premises or the Building, (ii) damage, overload or impair the efficient operation of any
electrical, plumbing, heating, ventilating or air conditioning systems within or servicing the
Leased Premises or the Building or (iii) damage or impair the efficient operation of the sprinkler
system (if any) within or servicing the Leased Premises or the Building. Tenant shall not install
any equipment or antennas on or make any penetrations of the exterior walls or roof of the
Building. Tenant shall not affix any equipment to or make any penetrations or cuts in the floor,
ceiling or walls of the Leased Premises. Tenant shall not place any loads upon the floors, walls,
ceiling or roof systems which could endanger the structural integrity of the Building or damage its
floors, foundations or supporting structural components. Tenants shall not place any explosive,
flammable or harmful fluids or other waste materials in the drainage systems of the Building or the
Project. Tenant shall not drain or discharge any fluids in the landscaped areas or across the
paved areas of the Project. Tenant shall not use any area located outside the Leased Premises for
the storage of its materials, supplies, inventory or equipment, and all such materials, supplies,
inventory and equipment shall at all times be stored within the Leased Premises. Tenant shall not
commit or permit to be committed any waste in or about the Leased Premises, the Common Areas or the
Project.

      4.3 NOISE AND EMISSIONS

     All noise generated by Tenant in its use of the Leased Premises shall be confined or muffled
so that it does not interfere with the business of or annoy other tenants of the Building or the
Project. All dust, fumes, odors and other emissions generated by Tenant’s use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental practices and
exhausted from the Leased Premises in such a manner so as not to interfere with the business of or
annoy other tenants of the Building or the Project, or cause any damage to the Leased Premises or
the Building or any component part thereof or the property of other tenants of the Building or the
Project.

      4.4 TRASH DISPOSAL

     Tenant shall provide trash and garbage disposal facilities inside the Leased Premises for all
of its trash, garbage and waste requirements and shall cause such trash, garbage and waste to be
regularly removed from the Leased Premises at Tenant’s sole cost. Tenant shall keep all areas
outside the Leased Premises and all fire corridors and mechanical equipment rooms in or about the
Leased Premises free and clear of all trash, garbage, waste and boxes containing same at all times.

      4.5 PARKING

     Tenant is allocated, and Tenant and its employees and invitees shall have the non-exclusive
right to use, not more than the number of parking spaces set forth in Article I as “Tenant’s Number
of Parking Spaces”. Tenant shall not, at any time, use or permit its employees or invitees to use
more parking spaces than the number so allocated to Tenant. Tenant shall not have the exclusive
right to use any specific parking space, and Landlord reserves the right to designate from time to
time the location of the parking spaces allocated for Tenant’s use. In the event Landlord elects
or is required by any Law to limit or control parking within the Project, whether by validation of
parking tickets or any other method, Tenant agrees to participate in such validation or other
programs as reasonably established by Landlord. Tenant shall not, at any time, park or permit to
be parked any trucks or

5

 

vehicles adjacent to entryways or loading areas within the Project so as to interfere in any way
with the use of such areas, nor shall Tenant, at any time, park or permit the parking of Tenant’s
trucks or other vehicles, or the trucks and vehicles of Tenant’s supplier or others, in any portion
of the Common Areas not designated by Landlord for such use by Tenant. Tenant shall not, at any
time, park or permit to be parked any recreational vehicles, inoperative vehicles or equipment on
any portion of the common parking area or other Common Areas of the Project. Tenant agrees to
assume responsibility for compliance by its employees and invitees with the parking provisions
contained herein. If Tenant or its employees park any vehicle within the Project in violation of
these provisions, then Landlord may charge Tenant, as Additional Rent, and Tenant agrees to pay, as
Additional Rent, Ten Dollars per day for each day or partial day that each such vehicle is parked
in any area other than that designated. Tenant hereby authorizes Landlord, at Tenant’s sole
expense, to tow away from the Project and store until redeemed by its owner any vehicle belonging
to Tenant or Tenant’s employees parked in violation of these provisions.

      4.6 SIGNS

     Tenant shall not place or install on or within any portion of the Lease Premises, the
Building, the Common Areas or the Project any sign (other than a business identification sign first
approved by Landlord in accordance with this Paragraph), advertisements, banners, placards or
pictures which are visible from the exterior of the Leased Premises. Tenant shall not place or
install on or within any portion of the Leased Premises, the Building, the Common Areas or the
Project any business identification sign which is visible from the exterior of the Leased Premises
until Landlord shall have first approved in writing the location, size, content, design, method of
attachment and material to be used in the making of such sign. Any signs, once approved by
Landlord, shall be installed only in strict compliance with Landlord’s approval, at Tenant’s
expense, using a person first approved by Landlord to install same. Landlord may remove any signs
(not first approved in writing by Landlord), advertisements, banners, placards or pictures so
placed by Tenant on or within the Leased Premises, the Building, the Common Areas or the Project
and charge to Tenant the cost of such removal, together with any costs incurred by Landlord to
repair any damage caused thereby, including any cost incurred to restore the surface upon which
such sign was so affixed to its original condition. Tenant shall remove any such signs, repair any
damage caused thereby, and restore the surface upon which the sign was affixed to its original
condition, all to Landlord’s reasonable satisfaction, upon the termination of this Lease.

      4.7 COMPLIANCE WITH LAWS

     Tenant shall not use or permit any person to use the Leased Premises in any manner which
violates any Laws. Tenant shall abide by and shall promptly observe and comply with, at its sole
cost and expense, all Laws respecting the use and occupancy of the Leased Premises, the Building,
the Common Areas or the Project and shall defend with competent counsel, indemnify and hold
Landlord harmless from any claims, damages or liability resulting from Tenant’s failure to do so.

      4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS

     With respect to any insurance policies carried by Landlord in accordance with the provisions
of this Lease, Tenant shall not conduct (nor permit any other person to conduct) any activities
within the Leased Premises, or store, keep or use anything within the Leased Premises which (i) is
prohibited under the terms of any such policies, (ii) could result in the termination of the
coverage afforded under any such policies, (iii) could give to the insurance carrier the right to
cancel any of such policies, or (iv) could cause an increase in the rates (over standard rates)
charged for the coverage afforded under any of such policies. Tenant shall comply with all
requirements of any insurance company, insurance underwriter, or Board of Fire Underwriters which
are necessary to maintain, at standard rates, the insurance coverages carried by either Landlord or
Tenant pursuant to this Lease.

      4.9 LANDLORD’S RIGHT TO ENTER

     Landlord and its agents shall have the right to enter the Leased Premises during normal
business hours and subject to Tenant’s reasonable security measures for the purpose of (i)
inspecting the same; (ii) supplying any services to be provided by Landlord to Tenant; (iii)
showing the Leased Premises to prospective purchasers, mortgagee or tenants; (iv) making necessary
alterations, additions or repairs; (v) performing any of Tenant’s obligations when Tenant has
failed to do so after giving Tenant reasonable written notice of its intent to do so; and (vi)
posting notices of non-responsibility. Additionally, Landlord shall have the right to enter the
Leased Premises at times of emergency. Any entry into the Leased Premises or portions thereof
obtained by Landlord in accordance with this Paragraph shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry or a detainer of the Leased Premises, or an
eviction, actual or constructive, of Tenant from the Leased Premises or any portion thereof.

      4.10 CONTROL OF COMMON AREAS

     Landlord shall at all times have exclusive control of the Common Areas. Landlord shall have
the right, without the same constituting an actual or constructive eviction and without entitling
Tenant to any reduction of or abatement of rent, to: (i) temporarily close any part of the Common
Areas to whatever extent required in the opinion of Landlord’s counsel to prevent a dedication
thereof or the accrual of any prescriptive rights therein; (ii) temporarily close all or any part
of the Common Areas to perform maintenance or for any other reason deemed sufficient by Landlord;
(iii) change the shape, size, location, number and extent of improvements within the Common Areas
including, without limitation, changing the location of driveways, entrances, exits, parking
spaces, parking areas, sidewalks, directional or locator signs, or the direction of the flow of
traffic; and (iv) to make additions to the Common Areas including, without limitation, the
construction of parking structures. Landlord shall have the right to change the name or address of
the building. Tenant, in its use of the Common Areas, shall keep the Common Areas free and clear
of all obstructions created for or permitted by Tenant. If, in the opinion of Landlord,
unauthorized persons are using any of the Common Areas by reason of, or under claim of, the express
or implied authority or consent of Tenant, then Tenant, upon demand of Landlord, shall restrain, to
the fullest extent then allowed by Law, such unauthorized use, and shall initiate such appropriate
proceedings as may be required to so restrain such use. Nothing contained herein shall affect the
right of Landlord at any time to remove any unauthorized person from the Common Areas or to
prohibit the use of the Common Areas by unauthorized persons, including, without limitation, the
right to prohibit mobile food and beverage vendors. In exercising any such right regarding the
Common Areas, Landlord shall make a reasonable effort to minimize any disruption to Tenant’s
business.

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      4.11 RULES AND REGULATIONS

     Landlord shall have the right from time to time to establish reasonable rules and regulations
and/or amendments or additions thereto respecting the use of space within the Project and the use
of the Common Areas for the care and orderly management of the Project and the safety of its
tenants, occupants and invitees. Upon delivery to Tenant of a copy of such rules and regulations
or any amendment or additions thereto, Tenant shall comply with such rules and regulations. A
violation by Tenant of any of such rules and regulations shall constitute a default by Tenant under
this Lease. If there is a conflict between the rules and regulations and any of the provisions of
this Lease, the provisions of this Lease shall prevail. Landlord shall not be responsible or
liable to Tenant for the violation of such rules and regulations by any other tenant of the
Project.

      4.12 ENVIRONMENTAL PROTECTION

     Landlord may voluntarily cooperate in a reasonable manner with the efforts of all governmental
agencies in reducing actual or potential environmental damage. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with Landlord and to abide by all rules
and regulations and requirements which Landlord may reasonably prescribe in order to comply with
the requirements and recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.

ARTICLE 5:    REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

      5.1 REPAIRS AND MAINTENANCE

     Except in the case of damage to or destruction of the Leased Premises, the Building or the
Project caused by an Act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities with respect to the
repair and maintenance of the Leased Premises, the Building and the Common Areas.

        A. Tenant’s Obligation: Tenant shall, at all times during the Lease Term at its sole cost and
expense, regularly clean and continuously keep and maintain in good order, condition and repair the
Leased Premises and every part thereof and all appurtenances thereto, including, without limiting
the generality of the foregoing, (i) all interior walls, floor and ceilings, (ii) all windows,
doors and skylights, (iii) all electrical wiring, conduits, connectors and fixtures, (iv) all
plumbing, pipes, sinks, toilets, faucets and drains, (v) all lighting fixtures, bulbs, and lamps,
(vi) all heating, ventilating and air conditions equipment located within the Leased Premises or
located outside the Leased Premises (e.g. rooftop compressors) and serving the Leased Premises
(other than Common Area HVAC as defined in Subparagraph B below), and (vii) all entranceways to the
Leased Premises. Tenant, if requested to do so by Landlord, shall hire, at Tenant’s sole cost and
expense, a licensed heating, ventilating and air conditioning contractor to regularly and
periodically inspect (not less frequently than every three months) and perform required maintenance
on the heating, ventilating and air conditioning equipment and systems serving the Leased Premises,
or alternatively, Landlord may, at its election, contract in its own name for such regular and
periodic inspections of and maintenance on such heating, ventilating and air conditioning equipment
and systems and charge to Tenant, as Additional Rent, the cost thereof. Tenant shall, at its sole
cost and expense, repair all damage to the Building, the Common Areas or the Project caused by the
activities of Tenant, its employees, invitees or contractors promptly following written notice from
Landlord to so repair such damage. If Tenant shall fail to perform the required maintenance or
fail to make repairs required of it pursuant to this Paragraph within a reasonable period of time
following notice from Landlord to do so, then Landlord may, at its election and without waiving any
other remedy it may otherwise have under this Lease or at Law, perform such maintenance or make
such repairs and charge to Tenant, as Additional Rent, the costs so incurred by Landlord for same.
All glass within or a part of the Leased Premises, both interior and exterior, is at the sole risk
of Tenant and any broken glass shall promptly be replaced by Tenant at Tenant’s expense with glass
of the same kind, size and quality.

        B. Landlord’s Obligation: Landlord shall, at all times during the Lease Term, maintain in good
condition and repair: (i) the exterior and structural parts of the Building (including the
foundation, subflooring, load-bearing and exterior walls, and roof); (ii) the Common Areas; and
(iii) the electrical and plumbing systems located outside the Leased Premises which serve the
Building. Additionally, to the extent that the Building contains central heating, ventilating
and/or air conditioning systems located outside the Leased Premises which are designed to serve,
and are then servicing, more than a single tenant within the Building (“Common HVAC”), Landlord
shall maintain in good operating condition and repair such Common HVAC equipment and systems. The
provisions of this Subparagraph B shall in no way limit the right of Landlord to charge to tenants
of the Project, as Additional Rent pursuant to Article 3, the costs incurred by Landlord in making
such repairs and/or performing such maintenance.

      5.2 SERVICES AND UTILITIES

     The parties shall have the following responsibilities and obligations with respect to
obtaining and paying the cost of providing the following utilities and other services to the Leased
Premises:

        A. Gas and Electricity: Tenant shall arrange, at its sole cost and expense and its own name,
for the supply of gas and electricity to the Leased Premises. In the event that such services are
not separately metered, Tenant shall, at its sole expense, cause such meters to be installed.
Tenant shall be responsible for determining if the local supplier of gas and/or electricity can
supply the needs of Tenant and whether or not the existing gas and/or electrical distribution
systems within the Building and the Leased Premises are adequate for Tenant’s needs. Tenant shall
pay all charges for gas and electricity as so supplied to the Leased Premises.

        B. Water: Landlord shall provide the Leased Premises with water for lavatory and drinking
purposes only. Tenant shall pay, as Additional Rent, the cost to Landlord of providing water to
the Leased Premises. In the event Landlord determines that Tenant is using more water than what
normally would be required for lavatory and drinking purposes, Landlord at its election may install
(or require Tenant to install at Tenant’s sole cost) a separate meter for purposes of measuring
Tenant’s water usage and, based upon such meter readings, periodically charge Tenant, as Additional
Rent, a sum equal to Landlord’s estimate of the cost of Tenant’s excess water usage. In the event
that Landlord shall so install such a separate meter, Tenant shall pay to Landlord, upon demand,
the cost incurred by Landlord in purchasing and installing such meter and thereafter all costs
incurred by Landlord in maintaining said meter. The cost of Tenant’s excess water usage shall
include any costs to Landlord in keeping account of such usage and all governmental fees, public
charges of the like

7

 

attributable to or based upon (such as sewer usage fees) the use of water to the extent of
such excess usage.

        C. Security Service: Tenant acknowledges that Landlord is not responsible for the security of
the Leased Premises or the protection of Tenant’s property or Tenant’s employees, invitees or
contractors, and that to the extent Tenant determines that such security or protection services are
advisable or necessary, Tenant shall arrange for and pay the costs of providing same.

        D. Trash Disposal: Tenant acknowledges that Landlord is not responsible for the disposal of
Tenant’s waste, garbage or trash and that Tenant shall arrange, in its own name and at its sole
cost, for the regular and periodic removal of such waste, garbage or trash from the Leased
Premises. In no event shall Landlord be required to provide trash bins for the disposal of
Tenant’s waste, garbage or trash.

      5.3 ENERGY AND RESOURCE CONSUMPTION

     Landlord may voluntarily cooperate in a reasonable manner with the efforts of governmental
agencies and/or utility suppliers in reducing energy or other resource consumption within the
Project. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement
of rent by reason of such compliance or cooperation. Tenant agrees at all times to cooperate fully
with Landlord and to abide by all reasonable rules established by Landlord (i) in order to maximize
the efficient operation of the electrical, heating, ventilating and air conditioning systems and
all other energy or other resource consumption systems within the Project and/or (ii) in order to
comply with the requirements and recommendations of utility suppliers and governmental agencies
regulating the consumption of energy and/or other resources.

      5.4 LIMITATION OF LANDLORD’S LIABILITY

     Landlord shall not be liable to Tenant for injury to Tenant, its employees, agents, invitees
or contractors, damage to Tenant’s property or loss of Tenant’s business or profits, nor shall
Tenant be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of
(i) Landlord’s failure to perform any maintenance or repairs to the Project until Tenant shall have
first notified Landlord, in writing, of the need for such maintenance or repairs, and then only
after Landlord shall have had a reasonable period of time following its receipt of such notice
within which to perform such maintenance or repairs, or (ii) any failure, interruption, rationing
or other curtailment in the supply of water, electric current, gas or other utility service to the
Leased Premises, the Building or the Project from whatever cause (other than Landlord’s active
negligence or willful misconduct), or (iii) the unauthorized intrusion or entry into the Leased
Premises by third parties (other than Landlord).

ARTICLE 6:    ALTERATIONS AND IMPROVEMENTS

      6.1 BY TENANT

     Tenant shall not make any alterations to or modifications of the Leased Premises or construct
any improvements to or within the Leased Premises without Landlord’s prior written approval, and
then not until Landlord shall have first approved, in writing, the plans and specifications
therefore, which approval shall not be unreasonably withheld. All such modifications, alterations
or improvements, once so approved, shall be made, constructed or installed by Tenant at Tenant’s
expense, using a licensed contractor first approved by Landlord, in substantial compliance with the
Landlord-approved plans and specifications therefore. All work undertaken by Tenant shall be done
in accordance with all Laws and in a good and workmanlike manner using new materials of good
quality. Tenant shall not commence the making of any such modifications or alterations or the
construction of any such improvements until (i) all required governmental approvals and permits
shall have been obtained, (ii) all requirements regarding insurance imposed by this Lease have been
satisfied, (iii) Tenant shall have given Landlord at least five business days prior written notice
of its intention to commence such work so that Landlord may post and file notices of
non-responsibility, and (iv) if requested by Landlord, Tenant shall have obtained contingent
liability and broad form builder’s risk insurance in an amount satisfactory to Landlord to cover
any perils relating to the proposed work not covered by insurance carried by Tenant pursuant to
Article 9. In no event shall tenant make any modifications, alterations or improvements to the
Common Areas or any areas outside of the Leased Premises. As used in this Article, the term
“modifications, alterations and/or improvements” shall include, without limitation, the
installation of additional electrical outlets, overhead lighting fixtures, drains, sinks,
partitions, doorways, or the like.

      6.2 OWNERSHIP OF IMPROVEMENTS

     All modifications, alterations and improvements made or added to the Leased Premises by Tenant
(other than Tenant’s inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Leased Premises, but shall remain the property of
Tenant during the Lease Term. Any such modifications, alterations or improvements, once completed,
shall not be altered or removed from the Leased Premises during the Lease Term without Landlord’s
written approval first obtained in accordance with the provisions of Paragraph 6.1 above. At the
expiration or sooner termination of this Lease, all such modifications, alterations and
improvements (other than Tenant’s inventory, equipment, movable furniture, wall decorations and
trade fixtures) shall automatically become the property of Landlord and shall be surrendered to
Landlord as a part of the Leased Premises as required pursuant to Article 2, unless Landlord shall
require Tenant to remove any of such modifications, alterations or improvements in accordance with
the provisions of Article 2, in which case Tenant shall so remove same. Landlord shall have no
obligation to reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All modifications,
alterations or improvements which are installed or constructed on or attached to the Leased
Premises by Landlord at Landlord’s expense shall be deemed real property and a part of the Leased
Premises and shall be the property of the Landlord. All lighting, plumbing, electrical, heating,
ventilating and air conditioning fixtures, partitioning, window coverings, wall coverings and floor
coverings installed by Tenant shall be deemed improvements to the Leased Premises and not trade
fixtures of Tenant.

      6.3 ALTERATIONS REQUIRED BY LAW

     Tenant shall make all modifications, alterations and improvements to the Leased Premises, at
its sole cost, that are required by Law because of (i) Tenant’s use or occupancy of the Leased
Premises, (ii) Tenant’s application for any permit or governmental approval, or (iii) Tenant’s
making of any modifications, alterations or improvements to or within the Leased Premises. If
Landlord shall, at any time during the Lease Term, be required by any governmental authority to
make any modifications, alterations or improvements to the Building or the Project, the cost
incurred by Landlord in making

8

 

such modifications, alterations or improvements, including an eighteen percent per annum cost of
money factor, shall be amortized by Landlord over the useful like of such modifications,
alterations or improvements, as determined in accordance with generally accepted accounting
standards, and the monthly amortized cost of such modifications, alterations and improvement as so
amortized shall be considered a Project Maintenance Costs.

      6.4 LIENS

     Tenant shall keep the Leased Premises, the Building and the Project free from any liens and
shall pay when due all bills arising out of any work performed, materials furnished, or obligations
incurred by Tenant, its agents, employees or contractors relating to the Leased Premises. If any
such claim of lien is recorded against Tenant’s interest in this Lease, the Leased Premises, the
Building or the Project, Tenant shall bond against, discharge or otherwise cause such lien to be
entirely released within ten days after the same has been so recorded.

ARTICLE 7:    ASSIGNMENT AND SUBLETTING BY TENANT

      7.1 BY TENANT

     Tenant shall not sublet the Leased Premises (or any portion thereof) or assign or encumber its
interest in this Lease, whether voluntarily or by operation of Law, without Landlord’s prior
written consent first obtained in accordance with the provisions of this Article 7. Any attempted
subletting, assignment or encumbrance without Landlord’s prior written consent, at Landlord’s
election, shall constitute a default by Tenant under the terms of this Lease. The acceptance of
rent by Landlord from any person or entity other than Tenant, or the acceptance of rent by Landlord
from Tenant with knowledge of a violation of the provisions of this Paragraph, shall not be deemed
to be a waiver by Landlord of any provision of this Article or this Lease or to be a consent to any
subletting by Tenant or any assignment

      7.2 MERGER OR REORGANIZATION

     If Tenant is a corporation, any dissolution, merger, consolidation or other reorganization of
Tenant, or the sale or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant, shall be deemed a voluntary assignment of Tenant’s
interest in this Lease. The phrase “controlling percentage” means the ownership of and the right
to vote stock possessing more than fifty percent of the total combined voting power of all classes
of Tenant’s capital stock issued, outstanding and entitled to vote for the election of directors.
If Tenant is a partnership, a withdrawl or change, voluntary, involuntary or by operation of Law,
of a general partner, or the dissolution of the partnership, shall be deemed a voluntary assignment
of Tenant’s interest in this Lease.

      7.3 LANDLORD’S ELECTION

     If Tenant shall desire to assign its interest under this Lease or to sublet the Leased
Premises, Tenant must first notify Landlord, in writing, of its intent to so assign or sublet, at
least ninety days in advance of the date it intends to so assign its interest in this Lease or
sublet the Leased Premises but not sooner than one hundred eighty days in advance of such date,
specifying in detail the terms of such proposed assignment or subletting, including the name of the
proposed assignee or sublessee, the proposed assignee’s or sublessee’s intended use of the Leased
Premises, a current financial statement of such proposed assignee or sublessee and the form of
documents to be used in effectuating such assignment or subletting. Landlord shall have a period
of fifteen days following receipt of such notice within which to do one of the following: (a)
cancel and terminate this Lease effective as of the intended subletting or assignment date set
forth in Tenant’s notice, or (b) if Landlord shall not have elected to cancel and terminate this
Lease, to either (i) consent to such requested assignment or subletting subject to Tenant’s
compliance with the conditions set forth in Paragraph 7.4 below or (ii) refuse to so consent to
such requested assignment or subletting, provided that such consent shall not be unreasonably
refused. During said fifth day period, Tenant covenants and agrees to supply to Landlord, upon
request, all necessary or relevant information which Landlord may reasonably request respecting
such proposed assignment or subletting and/or the proposed assignee or sublessee.

      7.4 CONDITIONS TO LANDLORD’S CONSENT

     If Landlord elects to consent, or shall have been ordered to so consent by a court of
competent jurisdiction to such requested assignment, subletting or encumbrance, such consent shall
be expressly conditioned upon the occurrence of each of the conditions below set forth, and any
purported assignment, subletting or encumbrance made or ordered prior to the full and complete
satisfaction of each of the following conditions shall be void and, at the election of Landlord,
which election may be exercised at any time following such a purported assignment, subletting or
encumbrance but prior to the satisfaction of each of the stated conditions, shall constitute a
material default by Tenant under this Lease giving Landlord the absolute right to terminate this
Lease unless such default is promptly cured by satisfying in full each such condition by the
assignee, sublessee or encumbrancer. The conditions are as follows:

        A. Landlord having approved in form and substance the assignment or sublease agreements (or
the encumbrance agreement), which approval shall not be unreasonably withheld by Landlord if the
requirements of this Article 7 are otherwise complied with.

        B. Each such sublessee or assignee having agreed, in writing satisfactory to Landlord and its
counsel and for the benefit of Landlord, to assume, to be bound by, and to perform the obligations
of this Lease to be performed by Tenant (or, in the case of an encumbrance, each encumbrancer
having similarly agreed to assume, be bound by and to perform Tenant’s obligations upon a
foreclosure or transfer in lieu thereof).

        C. Tenant having fully and completely performed all of its obligations under the terms of this
Lease through and including the date of such assignment or subletting.

        D. Tenant having reimbursed to Landlord all reasonable costs and attorneys’ fees incurred by
Landlord in conjunction with the processing and documentation of any such requested subletting,
assignment or encumbrance.

        E. Tenant having delivered to Landlord a complete and fully executed duplicate original of
such sublease agreement, assignment agreement or encumbrance (as applicable) and all related
agreements.

        F. Tenant having paid, or having agreed in writing to pay as to future payments, to Landlord
one hundred percent of all assignment consideration or excess rentals to be paid to Tenant or to
any other on Tenant’s behalf or for Tenant’s benefit for such assignment or subletting as follows:

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           (1) If Tenant assigns its interest under this Lease and if all or a portion of the
consideration for such assignments is to be paid by the assignee at the time of the assignment,
that Tenant shall have paid to Landlord and Landlord shall have received an amount equal to one
hundred percent of the assignment consideration so paid or to be paid (whichever is greater) at the
time of the assignment by the assignee or;

           (2) If Tenant assigns its interest under this Lease and if Tenant is to receive all or a
portion of the consideration for such assignment in future installments, that Tenant and Tenant’s
assignee shall have entered into a written agreement with and for the benefit of Landlord
satisfactory to Landlord and its counsel whereby Tenant and Tenant’s assignee jointly agree to pay
to Landlord an amount equal to one hundred percent of all such future assignment consideration
installments to be paid by such assignee as and when such assignment consideration is so paid.

           (3) If Tenant subleases the Leased Premises, that Tenant and Tenant’s sublessee shall have
entered into a written agreement with and for the benefit of Landlord satisfactory to Landlord and
its counsel whereby Tenant and Tenant’s sublessee jointly agree to pay to Landlord one hundred
percent of all excess rentals to be paid by such sublessee as and when such excess rentals are so
paid.

      7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTAL DEFINED

     For purposes of this Article, the term “assignment consideration” shall mean all consideration
to be paid by the assignee to Tenant or to any other on Tenant’s behalf or for Tenant’s benefit as
consideration for such assignment, less any commissions paid by Tenant to a licensed real estate
broker for arranging such assignment (not to exceed then standard rates), and the term “excess
rentals” shall mean all consideration to be paid by the sublessee to Tenant or to any other on
Tenant’s behalf or for Tenant’s benefit for the sublease of the Leased Premises in excess of the
rent due Landlord under the terms of this Lease for the same period, less any commissions paid by
Tenant to a licensed real estate broker for arranging such sublease (not to exceed then standard
rates). Tenant agrees that the portion of any assignment consideration and/or excess rentals
arising from any assignment or subletting by Tenant which is to be paid to Landlord pursuant to
this Article now is and shall then be the property of Landlord and not the property of Tenant.

      7.6 PAYMENTS

     All payments required by this Article to be made to Landlord shall be made in cash in full as
and when they become due. At the time when Tenant, Tenant’s assignee or sublessee makes each such
payment to Landlord, Tenant or Tenant’s assignee or sublessee, as the case may be, shall deliver to
Landlord an itemized statement in reasonable detail showing the method by which the amount due
Landlord was calculated and certified by the party making such payment as true and correct.

      7.7 GOOD FAITH

     The rights granted to Tenant by this Article are granted in consideration of Tenant’s express
covenant that all pertinent allocations which are made by Tenant between the rental value of the
Leased Premises and the value of any of Tenant’s personal property which may be conveyed or leased
generally concurrently with and which may reasonably be considered a part of the same transaction
as the permitted assignment or subletting shall be made fairly, honestly and in good faith. If
Tenant shall breach this Covenant of Good Faith, Landlord may immediately declare Tenant to be in
default under the terms of this Lease and terminate this Lease and/or exercise any other rights and
remedies Landlord would have under the terms of this Lease in the case of a material default by
Tenant under this Lease.

      7.8 EFFECT OF LANDLORD’S CONSENT

     No subletting, assignment or encumbrance, even with the consent of Landlord, shall relieve
Tenant of its personal and primary obligation to pay rent and to perform all of the other
obligations to be performed by Tenant hereunder. Consent by Landlord to one or more assignments or
encumbrances of Tenant’s interest in this Lease to one or more sublettings of the Leased Premises
shall not be deemed to be a consent to any subsequent assignment, encumbrance or subletting. If
Landlord shall have been ordered by a court of competent jurisdiction to consent to a requested
assignment or subletting, or such and assignment or subletting shall have been ordered over the
objection of Landlord, such assignment or subletting shall not be binding between the assignee (or
sublessee) and Landlord until such time as all conditions set forth in Paragraph 7.4 above have
been fully satisfied (to the extent not then satisfied) by the assignee or sublessee, including,
without limitation, the payment to Landlord of all agreed assignment considerations and/or excess
rentals then due Landlord.

ARTICLE 8:    LIMITATIONS ON LANDLORD’S LIABILITY AND INDEMNITY

      8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE

     Landlord shall not be liable to Tenant for, and Tenant hereby releases Landlord and its
partners and officers from, any and all liability, whether in contract, tort or on any other basis,
for any injury to or any damages sustained by Tenant, its agents, employees, contractors or
invitees; any damage to Tenant’s property; or any loss to Tenant’s business, loss of Tenant’s
profits or other financial loss of Tenant resulting from or attributable to the condition of, the
management of, the maintenance of, or the protection of the Leased Premises, the Building, the
Project or the Common Areas, including, without limitation, any such injury, damage or loss
resulting from (i) the failure, interruption, rationing or other curtailment or cessation in the
supply of electricity, water, gas or other utility service to the Project, the Building or the
Leased Premises; (ii) the vandalism or forcible entry into the Building or the Leased Premises;
(iv) the failure to provide security and/or adequate lighting in or about the Project, the Building
or the Leased Premises; (v) the existence of any design or construction defects within the Project,
the Building or the Leased Premises; (vi) the failure of any mechanical systems to function
property (such as the HVAC systems; or (vii) the blockage of access to any portion of the Project,
the Building or the Leased Premises, except to the extent such damage was proximately caused by
Landlord’s active negligence or willful misconduct, or Landlord’s failure to perform an obligation
expressly undertaken pursuant to this Lease but only if Tenant shall have given Landlord prior
written notice to perform such obligation and Landlord shall have failed to perform such obligation
within a reasonable period of time following receipt of written notice from Tenant to so perform
such obligation. In this regard, Tenant acknowledges that it is fully apprised of the provisions
of Law relating to releases, and particularly to those provisions contained in Section 1542 of the
California Civil Code which reads as follows:

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A general release does not extend to claims which the creditor does not know or
suspect in his favor at the time of executing this release, which, if known by him
must have materially affected his settlement with the debtor.

     Notwithstanding such statutory provision, and for the purpose of implementing a full and
complete release and discharge, Tenant hereby (i) waives the benefit of such statutory provision
and (ii) acknowledges that, subject to the exceptions specifically set forth herein, the release
and discharge set forth in this Paragraph is a full and complete settlement and release and
discharge of all claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its favor.

      8.2 TENANT’S INDEMNIFICATION OF LANDLORD

     Tenant shall defend, with competent counsel satisfactory to Landlord, any claims made or legal
actions filed or threatened by third parties against Landlord with respect to the death, bodily
injury, personal injury, damage to property or interference with contractual or other rights
suffered by any third party (including other tenants within the Project) which (i) occurred within
the Leased Premises or (ii) resulted from Tenant’s use or occupancy of the Leased Premises or the
Common Area or (iii) resulted from Tenant’s activities in or about the Leased Premises, the
Building or the Project, and Tenant shall indemnify and hold Landlord, Landlord’s principals,
employees and agents harmless from any loss (including loss of rents by reason of vacant space
which otherwise would have been leased but for such activities), liability, penalties, or expense
whatsoever (including any legal fees incurred by Landlord with respect to defending such claims)
resulting therefrom, except to the extent proximately caused by the active negligence or willful
misconduct of Landlord. This indemnity agreement shall survive until the latter to occur of (i)
the date of the expiration, or sooner termination, of this Lease, or (ii) the date Tenant actually
vacates the Leased Premises.

ARTICLE 9:    INSURANCE

      9.1 TENANT’S INSURANCE

     Tenant shall maintain insurance complying with all of the following:

        A. Tenant shall procure, pay for and keep in full force and effect, at all times during the
Lease Term, the following:

           (1) Comprehensive general liability insurance insuring Tenant against liability for personal
injury, death and damage to property occurring within the Leased Premises, or resulting from
Tenant’s use or occupancy of the Leased Premises or the Common Areas, or resulting from Tenant’s
activities in or about the Leased Premises, with combined single limit coverage of not less than
the amount of Tenant’s Required Liability Coverage (as set forth in Article I), which insurance
shall contain a “broad form liability” endorsement insuring Tenant’s performance of Tenant’s
obligation in indemnifying Landlord as contained in Article 8.2.

           (2) Fire and property damage insurance or “fire and extended coverage” insuring Tenant against
loss from physical damage to Tenant’s personal property, inventory, trade fixtures and improvements
within the Leased Premises with coverage for the full actual replacement cost thereof;

           (3) Plate-glass insurance, at actual replacement cost;

           (4) Pressure vessel insurance, if applicable;

           (5) Product Liability insurance (including, without limitation, if food and/or beverages are
distributed, sold and/or consumed within the Leased Premises, to the extent obtainable, coverage
for liability arising out of the distribution, sale or consumption of food and/or beverages
[including alcoholic beverages, if applicable] at the Leased Premises) for not less than Tenant’s
Required Liability Coverage (as set forth in Article 1);

           (6) Worker’s compensation insurance and any other employee benefit insurance sufficient to
comply with all Laws; and

           (7) With respect to making of alterations or the construction of improvements or the like
undertaken by Tenant, contingent liability and builder’s risk insurance, in an amount and with
coverage satisfactory to Landlord.

        B. Each policy of liability insurance required to be carried by Tenant pursuant to this
Paragraph or actually carried by Tenant with respect to the Leased Premises (i) shall, except with
respect to insurance required by Subparagraph A(6) above, name Landlord, and such others as are
designated by Landlord, as additional insureds; (ii) shall be primary insurance providing that the
insurer shall be liable for the full amounts of the loss, up to and including the total amount of
liability set forth in the declaration of coverage, with the right of contribution from or prior
payment by any other insurance coverage of Landlord; (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to Landlord; (v) shall provide
that such policy shall not be subject to cancellation, lapse or change except after at least thirty
days prior written notice to Landlord; and (vi) shall contain a so-called “severability” or “cross
liability” endorsement. Each policy of property insurance maintained by Tenant with respect to the
Leased Premises or any property therein (i) shall provide that such policy shall not be subject to
cancellation, lapse or change except after at least thirty days prior written notice to Landlord
and (ii) shall contain a waiver and/or a permission to waive by the insurer of any right of
subrogation against Landlord, its principals, employees, agents and contractors, which might arise
by reason of any payment under such policy or by reason of any act or omission of Landlord, its
principals, employees, agents or contractors.

        C. Prior to the time Tenant or any of its contractors enters the Leased Premises, Tenant shall
deliver to Landlord, with respect to each policy of insurance required to be carried by Tenant
pursuant to the Article, a copy of such policy (appropriately authenticated by the insurer as
having been issued, premium paid) or a certificate of the insurer certifying in form satisfactory
to Landlord that a policy has been issued, premium paid, providing the coverage required by this
Paragraph and containing the provisions specified herein. With respect to each renewal or
replacement of any such insurance, the requirements of this Paragraph must be complied with not
less than thirty days prior to the expiration or cancellation of the policy being renewed or
replaced. Landlord may, at any time and from time to time, inspect and/or copy any and all
insurance policies required to be carried by Tenant pursuant to this Article. If Landlord’s
Lender, insurance broker or advisor or counsel reasonably determines at any time that the amount of
coverage set forth in Paragraph 9.1A for any policy of insurance Tenant is required to carry
pursuant to this Article is not adequate, then Tenant shall increase the amount of coverage for
such insurance to such greater amount as Landlord’s Lender, insurance broker or advisor or counsel
reasonably deems adequate; provided, however, such increased level of coverage may not exceed the
level of coverage for such insurance

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commonly carried by comparable business similarly situated and operating under similar
circumstances.

      9.2 LANDLORD’S INSURANCE

     With respect to insurance maintained by Landlord:

        A. Landlord shall maintain, as the minimum coverage required of it by this Lease, fire and
property damage insurance in so-called “fire and extended coverage” form insuring Landlord (and
such others as Landlord may designate) against loss from physical damage to the Building with
coverage of not less than ninety percent of the full actual replacement cost thereof and against
loss of rents for a period of not less than six months. Such fire and property damage insurance,
at Landlord’s election but without any requirement on Landlord’s behalf to do so, (i) may be
written in so-called “all risk” form, excluding only those perils commonly excluded from such
coverage by Landlord’s then property damage insurer; (ii) may provide coverage for physical damage
to the improvements so insured for up to the entire full actual replacement cost thereof; (iii) may
be endorsed to cover loss or damage caused by any additional perils against which Landlord may
elect to insure, including earthquake and/or flood; (iv) may provide coverage for loss of rents for
a period of up to twelve months; and/or (v) may contain “deductibles” not exceeding One Thousand
Dollars per occurrence (or up to five percent of the Building’s replacement value in the case of
earthquake and/or flood insurance). Landlord shall not be required to cause such insurance to
cover any of Tenant’s personal property, inventory and trade fixtures, or any modifications,
alterations or improvements made or constructed by Tenant to or within the Leased Premises.

        B. Landlord shall maintain comprehensive general liability insurance insuring Landlord (and
such others as are designated by Landlord) against liability for personal injury, bodily injury,
death, and damage to property occurring in, on or about, or resulting from the use or occupancy of
the Project, or any portion thereof, with combined single limit coverage of at least Two Million
Dollars. Landlord may carry such greater coverage as Landlord or Landlord’s Lender, insurance
broker or advisor or counsel may from time to time determine is reasonably necessary for the
adequate protection of Landlord and the Project.

        C. Landlord may maintain any other insurance which in the opinion of its insurance broker or
advisor or legal counsel is prudent to carry under the given circumstances.

      9.3 MUTUAL WAIVER OF SUBROGATION

     Landlord hereby releases Tenant, and Tenant hereby releases Landlord and its respective
partners and officers, agents, employees and servants, from any and all liability for loss, damage
or injury to the property of the other in or about the Leased Premises which is caused by or
results from a peril or event or happening which would be covered by insurance required to be
carried under the terms of this Lease, or is covered by insurance actually carried and in force at
the time of the loss, by the party sustaining such loss; provided, however, that such waiver shall
be effective only to the extent permitted by the insurance covering loss and to the extent such
insurance is not prejudiced thereby.

ARTICLE 10:    DAMAGE TO LEASED PREMISES

      10.1 LANDLORD’S DUTY TO RESTORE

     If the Leased Premises are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the Leased Premises, as and when required by this Paragraph, unless this
Lease is terminated by Landlord pursuant to Paragraph 10.2 or by Tenant pursuant to Paragraph 10.3.
All insurance proceeds available from the fire and property damage insurance carried by Landlord
shall be paid to and become the property of Landlord. If this Lease is terminated pursuant to
either Paragraph 10.2 or 10.3, all insurance proceeds available from insurance carried by Tenant
which cover loss to property that is Landlord’s property or would become Landlord’s property on
termination of this Lease shall be paid to and become the property of Landlord, and the remainder
of such proceeds shall be paid to and become the property of Tenant. If this Lease is not
terminated pursuant to either Paragraph 10.2 or 10.3, all insurance proceeds available from
insurance carried by Tenant which cover loss to property that is Landlord’s property shall be paid
to and become the property of Landlord, and all proceeds available which cover loss to property
which would become the property of Landlord upon the termination of this Lease shall be paid to and
remain the property of Tenant. If this Lease is not to terminated, then upon receipt of the
insurance proceeds (if the loss is covered by insurance) and the issuance of all necessary
governmental permits, Landlord shall commence and diligently prosecute to completion then
restoration of the Leased Premises, to the extent then allowed by Law, to substantially the same
condition in which the Leased Premises existed as of the Lease Commencement Date. Landlord’s
obligation to restore shall be limited to the Leased Premises and interior improvements constructed
by Landlord. Landlord shall have no obligation to restore any other improvements to the Leased
Premises or any of Tenant’s personal property, inventory or trade fixtures. Upon completion of the
restoration by Landlord, Tenant shall forthwith replace or fully repair all of Tenant’s personal
property, inventory, trade fixtures and other improvements constructed by Tenant to like or similar
conditions at the time of such damage or destruction.

      10.2 LANDLORD’S RIGHT TO TERMINATE

     Landlord shall have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:

        A. The Building is damaged by any peril covered by valid and collectible insurance actually
carried by Landlord and in force at the time of such damage or destruction (an “insured peril”) to
such an extent that the estimated cost to restore the Building exceeds the lesser of (i) the
insurance proceeds available from insurance actually carried by Landlord, or (ii) seventy-five
percent of the then actual replacement cost thereof;

        B. The Building is damaged by an uninsured peril, which peril Landlord was required to insure
against pursuant to the provisions of Article 9 of this Lease, to such an extent that the estimated
cost to restore the Building exceeds the lesser of (i) the insurance proceeds which would have been
available had Landlord carried such required insurance, or (ii) seventy-five percent of the then
actual replacement cost thereof;

        C. The Building is damaged by an uninsured peril, which peril Landlord was not required to
insure against pursuant to the provisions of Article 9 of this Lease, to any extent.

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        D. The Building is damaged by any peril and, because of the Laws then in force, the Building
(i) can not be restored at reasonable cost or (ii) if restored, can not be used for the same use
being made thereof before such damage.

      10.3 TENANT’S RIGHT TO TERMINATE

     If the Leased Premises are damaged by any peril and Landlord does not elect to terminate this
Lease or is not entitled to terminate this Lease pursuant to this Article, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written opinion of Landlord’s
architect or construction consultant as to when the restoration work required of Landlord may be
complete. Tenant shall have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised in the case of A or B below only by delivery to Landlord of a
written notice of election to terminate within seven days after Tenant receives from Landlord the
estimate of the time needed to complete such restoration:

        A. The Leased Premises are damaged by any peril and, in the reasonable opinion of Landlord’s
architect or construction consultant, the restoration of the Leased Premises cannot be
substantially completed within nine months after the date of such damage; or

        B. The Leased Premises are damaged by any peril within nine months of the last day of the
Lease Term and, in the reasonable opinion of Landlord’s architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within ninety days after the
date such restoration is commenced; or

        C. Landlord does not complete the restoration of the Leased Premises within nine months from
the date of the damage, provided that such nine month period of time shall be extended for such
number of days as Landlord may be delayed by reason of Force Majeure.

      10.4 TENANT’S WAIVER

     Landlord and Tenant agree that the provision of Paragraph 10.3 above, captioned “Tenant’s
Right to Terminate”, are intended to supersede and replace the provisions contained in California
Civil Code, Section 1932, Subdivision 2, and California Civil Code, Section 1934, and accordingly,
Tenant hereby waives the provisions of said Civil Code Sections and the provisions of any successor
Code Sections or similar Laws hereinafter enacted.

      10.5 ABATEMENT OF RENT

     In the event of damage to the Leased Premises which does not result in the termination of this
Lease, the Base Monthly Rent (and any Additional Rent) shall be temporarily abated during the
period of restoration in proportion to the degree to which Tenant’s use of the Leased Premises is
impaired by such damage.

ARTICLE 11:    CONDEMNATION

      11.1 LANDLORD’S RIGHT TO TERMINATE

     Subject to Paragraph 11.3, Landlord shall have the option to terminate this lease if, as a
result of a taking by means of the exercise of the power of eminent domain (including inverse
condemnation and/or a voluntary sale or transfer by Landlord to an entity having the power of
eminent domain under the threat of condemnation), (i) all or any part of the Leased Premises is so
taken, (ii) more than thirty-three and one-third percent of the Building’s leasable area is so
taken, (iii) more than thirty-three and one-third percent of the Common Areas is so taken, or (iv)
because of the Laws then in force, the Leased Premises may not be used for the same use being made
thereof before such taking, whether or not restored as required by Paragraph 11.4 below. Any such
option to terminate by Landlord must be exercisable within a reasonable period of time, to be
effective as of the date possession is taken by the condemnor.

      11.2 TENANT’S RIGHT TO TERMINATE

     Subject to Paragraph 11.3, Tenant shall have the option to terminate this Lease if, as a
result of any taking by means of the exercise of the power of eminent domain (including inverse
condemnation and/or a voluntary sale or transfer by Landlord to an entity having the power of
eminent domain under threat of condemnation), (i) all of the Leased Premises is so taken, (ii)
thirty-three and one-third percent or more of the Leased Premises is so taken and the part of the
Leased Premises that remains cannot, within a reasonable period of time, be made reasonably
suitable for the continued operation of the Tenant’s business or, (iii) there is a taking of a
portion of the Common Areas, as a result of such taking, Landlord cannot provide parking spaces
within the Project (or within a reasonable distance therefrom) equal in number to at least
sixty-six and two-thirds percent of Tenant’s Number of Parking Spaces (as set forth in Article 1),
whether by rearrangement of the remaining parking areas in the Common Area (including, if Landlord
elects, construction of multi-deck parking structures or restriping for compact cars where
permitted by Law), or by providing alternative parking facilities on other land within reasonable
walking distance of the Leased Premises. Tenant must exercise such option within a reasonable
period of time, to be effective on the later to occur of (i) the date that possession of that
portion of the Common area or the Leased Premises that is condemned and taken by the condemnor or
(ii) the date Tenant vacates the Leased Premises.

      11.3 TEMPORARY TAKING

     If any portion of the Leased Premises is temporarily taken for one year or less, this Lease
shall remain in effect. If any portion of the Leased Premises is temporarily taken for a period
which either exceeds one year or which extends beyond the natural expiration of the Lease Term,
then Landlord and Tenant shall each independently have the option to terminate this Lease,
effective on the date possession is taken by the condemnor.

      11.4 RESTORATION AND ABATEMENT OF RENT

     If any part of the Leased Premises is taken by condemnation and this Lease is not terminated,
then Landlord shall repair any damage occasioned thereby to the remainder of the Leased Premises to
a condition reasonably suitable for Tenant’s continued operations and otherwise, to the extent
practicable, in the manner and to the extent provided in Paragraph 10.1. As of the date possession
is taken by the condemning authority, (i) the Base Monthly Rent shall be reduced in the same
proportion that the area of that part of the Leased Premises so taken (less any addition to the
area of the Leased Premises by reason of any construction) bears to the area of the Leased Premises
immediately prior to such taking, and (ii) Tenant’s Proportionate Share shall be appropriately
adjusted.

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      11.5 DIVISION OF CONDEMNATION AWARD

     Any award made for any condemnation of the Project, the Building, the Common Areas or the
Leased Premises, or any portion thereof, shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award; provided, however, that
Tenant shall be entitled to receive any condemnation award that is made directly to Tenant (i) for
the taking of personal property, inventory or trade fixtures belonging to Tenant, (ii) for the
interruption of Tenant’s business or its moving costs, (iii) for loss of Tenant’s goodwill, or (iv)
for any temporary taking where this Lease is not terminated as a result of such taking. The rights
of Landlord and Tenant regarding any condemnation shall be determined as provided in this Article,
and each party hereby waives the provisions of Section 1265.130 of the California Code of Civil
Procedure, and the provisions of any similar law hereinafter enacted, allowing either party to
petition the Superior Court to terminate this Lease and/or allocating condemnation awards between
Landlord and Tenant in the event of a taking of the Leased Premises.

ARTICLE 12:    DEFAULT AND REMEDIES

      12.1 EVENTS OF TENANT’S DEFAULT

     Tenant shall be in default of its obligations under this Lease if any of the following events
occur:

        A. Tenant shall have failed to pay Base Monthly Rent or any Additional Rent when due; or

        B. Tenant shall have done or permitted to have been done any act, use or thing in its use,
occupancy or possession of the Leased Premises or in its use of the Common Areas which is
prohibited by the terms of this Lease; or

        C. Tenant shall have failed to perform any term, covenant or condition of this Lease, except
those requiring the payment of Base Monthly Rent or Additional Rent, within ten days after written
notice from Landlord to Tenant specifying the nature of such failure and requesting Tenant to
perform same.

        D. Tenant shall have sublet the Leased Premises or assigned or encumbered its interest in this
Lease in violation of the provisions contained in Article 7, whether voluntarily or by operation of
Law; or

        E. Tenant shall have abandoned the Leased Premises; or

        F. Tenant or any Guarantor of this Lease shall have permitted or suffered the sequestration or
attachment of, or execution on, or the appointment of a custodian or receiver with respect to, all
or any substantial part of the property or assets of Tenant (or such Guarantor) or any property or
asset essential to the conduct of Tenant’s (or such Guarantor’s) business, and Tenant (or such
Guarantor) shall have failed to obtain a return or release of the same within thirty days
thereafter, or prior to sale pursuant to such sequestration, attachment or levy, whichever is
earlier; or

        G. Tenant or any Guarantor of this Lease shall have made a general assignment of all or a
substantial part of its assets for the benefit of its creditors; or

        H. Tenant or any Guarantor of this Lease shall have allowed (or sought) to have entered
against it a decree or order which: (i) grants or constitutes an order for relief, appointment of a
trustee, or confirmation of a reorganization plan under the bankruptcy laws of the United States;
(ii) approves as property filed a petition seeking liquidation or reorganization under said
bankruptcy laws or any other debtor’s relief law or similar statute of the United States or any
state thereof; or (iii) otherwise directs the winding up or liquidation of Tenant; provided,
however, if any decree or order was entered without Tenant’s consent or over Tenant’s objection,
Landlord may not terminate this Lease pursuant to this Subparagraph if such decree or order is
rescinded or reversed within thirty days after its original entry.

        I. Tenant or any Guarantor of this Lease shall have availed itself of the protection of any
debtor’s relief law, moratorium law or other similar Law which does not require the prior entry of
a decree or order.

      12.2 LANDLORD’S REMEDIES

     In the event of any default by Tenant, and without limiting Landlord’s right to
indemnification as provided in Article 8.2, Landlord shall have the following remedies, in addition
to all other rights and remedies provided by law or otherwise provided in this Lease, to which
Landlord may resort cumulatively, or in the alternative:

        A. Landlord may, at Landlord’s election, keep this Lease in effect and enforce, by an action
at law or in equity, all of its rights and remedies under this Lease including, without limitation,
(i) the right to recover the rent and other sums as they become due by appropriate legal action,
(ii) the right to make payments required of Tenant, or perform Tenant’s obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate of interest not
prohibited by Law from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant,
and (iii) the remedies of injunctive relief and specific performance to prevent Tenant from
violating the terms of this Lease and/or to compel Tenant to perform its obligations under this
Lease, as the case may be.

        B. Landlord may, at Landlord’s election, terminate this Lease by giving Tenant written notice
of termination, in which event this Lease shall terminate on the date set forth for termination in
such notice. Any termination under this Subparagraph shall not relieve Tenant from its obligation
to pay to Landlord all Base Monthly Rent and Additional Rent then or thereafter due, or any other
sums due or thereafter accruing to Landlord, or from any claim against Tenant for damages
previously accrued or then or thereafter accruing. In no event shall any one or more of the
following actions by landlord, in the absence of a written election by Landlord to terminate this
Lease, constitute a termination of this Lease:

           (1) Appointment of a receiver or keeper in order to protect Landlord’s interest hereunder;

           (2) Consent to any subletting of the Leased Premises or assignment of this Lease by Tenant,
whether pursuant to the provisions hereof or otherwise; or

           (3) Any other action by Landlord or Landlord’s agents intended to mitigate the adverse effects
of any breach of this Lease by Tenant, including, without limitation, any action taken to maintain
and preserve the Leased Premises or any action taken to relet the Leased Premises, or any portion
thereof, for the account of Tenant and in the name of Tenant.

        C. In the event Tenant breaches this Lease and abandons the Leased Premises, Landlord may
terminate this Lease, but this Lease shall not terminate unless Landlord gives Tenant written
notice of termination. No act by or on behalf of Landlord intended to mitigate the adverse

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effect of such breach, including those described by Subparagraphs B(1), (2) and (3)
immediately preceding, shall constitute a termination of Tenant’s right to possession unless
Landlord gives Tenant written notice of termination. If Landlord does not terminate this Lease by
giving written notice of termination, Landlord may enforce all its rights and remedies under this
lease, including the right to recover rent as it becomes due under this Lease as provided in
California Civil Code Section 1951.4, as in effect on the Effective Date of this Lease.

        D. In the event Landlord terminates this Lease, Landlord shall be entitled, at Landlord’s
election, to damages in an amount as set forth in California Civil Code Section 1951.2, an interest
rate equal to the maximum rate of interest then not prohibited by Law shall be used where
permitted. Such damages shall include, without limitation:

           (1) The worth at the time of award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided, 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; and

           (2) Any other amount necessary to compensate Landlord for all detriment proximately caused by
Tenant’s failure to perform Tenant’s obligations under this lease, or which in the ordinary course
of things would be likely to result therefrom, including, without limitation, the following (i)
expenses for cleaning, repairing or restoring the Leased Premises; (ii) expenses for altering,
remodeling or otherwise improving the Leased Premises for the purpose of reletting, including
removal of existing leasehold improvements and/or installation of additional leasehold improvements
(regardless of how the same is funded, including reduction of rent, a direct payment or allowance
to a new tenant, or otherwise); (iii) broker’s fees, advertising costs and other expenses of
reletting the Leased Premises; (iv) costs of carrying the Leased Premises, such as taxes, insurance
premiums, utility charges and security precautions; (v) expenses incurred in removing, disposing of
and/or storing any of Tenant’s personal property, inventory or trade fixtures remaining therein;
(vi) attorney’s fees, expert witness fees, court costs and other reasonable expenses incurred by
landlord (but not limited to taxable costs) in retaking possession of the Leased Premises,
establishing damages hereunder, and releasing the Leased Premises; and (vii) any other expenses,
costs or damages otherwise incurred or suffered as a result of Tenant’s default.

      12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES

     In the event Landlord fails to perform any of its obligations under this Lease, Landlord shall
nevertheless not be in default under the terms of this Lease until such time as Tenant shall have
first given Landlord written notice specifying the nature of such failure to perform its
obligations, and then only after Landlord shall have had a reasonable period of time following its
receipt of such notice within which to perform such obligations. In the event of Landlord’s
default as above set forth, then, and only then, Tenant shall have the following remedies only:

        A. Tenant may then proceed in equity or at law to compel Landlord to perform its obligations
and/or to recover damages proximately caused by such failure to perform (except as and to the
extent Tenant has waived its right to damages as provided in this Lease).

        B. Tenant, at its option, may then cure any default of Landlord at Landlord’s cost. If,
pursuant to this Subparagraph, Tenant reasonably pays any sum to any third party or does any act
that requires the payment of any sum to any third party at any time by reason of Landlord’s
default, the sum paid by Tenant shall be immediately due from Landlord to Tenant at the time Tenant
supplies Landlord with an invoice therefore (provided such invoice sets forth and is accompanied by
a written statement of Tenant setting forth in reasonable detail the amount paid, the party to whom
it was paid, the date it was paid, and the reasons giving rise to such payment), together with
interest at twelve percent per annum from the date of such invoice until Tenant is reimbursed by
Landlord. Tenant may not offset such sums against any installment of rent due Landlord under the
terms of this Lease.

      12.4 LIMITATION ON TENANT’S RECOURSE

     If Landlord is a corporation, trust, partnership, joint venture, unincorporated association,
or other form of business entity, Tenant agrees that (i) the obligations of Landlord under this
Lease shall not constitute personal obligations of the officers, directors, trustees, partners,
joint venturers, members, owners, stockholders, or other principals of such business entity and
(ii) Tenant shall have recourse only to the assets of such business entity for the satisfaction o
such obligations and not against the assets of such officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or principals (other than to the extent of their interest
in the assets owned by such business entity). Additionally, if Landlord is a partnership, then
Tenant covenants and agrees:

        A. No partner of Landlord shall be sued or named as a party in any suit or action brought by
Tenant with respect to any alleged breach of this Lease (except to the extent necessary to secure
jurisdiction over the partnership and then only for that sole purpose);

        B. No service of process shall be made against any partner of Landlord except for the sole
purpose of securing jurisdiction over the partnership; and

        C. No writ of execution shall be levied against the assets of any partner of Landlord other
than to the extent of his interest in the assets of the partnership.

      12.5 TENANT’S WAIVER

     Landlord and Tenant agree that the provisions of Paragraph 12.3 above are intended to
supersede and replace the provisions of California Civil Code 1932(1), 1941 and 1942, and
accordingly, Tenant hereby waives the provisions of Section 1932(1), 1941 and 1942 of the
California Civil Code and/or any similar or successor Law regarding Tenant’s right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the rent due under this
Lease. Tenant hereby waives any right to redemption or relief from forfeiture under the Laws of
the State of California, or under any other present or future Law, in the event Tenant is evicted
or Landlord takes possession of the Leased Premises by reason of any default by Tenant.

ARTICLE 13: GENERAL PROVISIONS

     
13.1 TAXES ON TENANT’S PROPERTY

     Tenant shall pay before delinquency any and all taxes, assessments, license fees, use fees,
permit fees and public charges of whatever nature or description levied, assessed or imposed
against Tenant or Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant’s estate in this Lease, Tenant’s ownership of property, improvements made by Tenant to
the Leased Premises, improvements made by Landlord for Tenant’s use within the Leased Premises,

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Tenants use (or estimated use) of public facilities or services or Tenant’s consumption (or
estimated consumption) of public utilities, energy, water or other resources. On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. If any such
taxes, assessments, fees or public charges are levied against Landlord, Landlord’s property, the
Building, or the Project, or if the assessed value of the Building or the Project is increased by
the inclusion therein of a value placed upon the same, then Landlord, after giving written notice
to Tenant, shall have the right, regardless of the validity thereof, to pay such taxes, assessment,
fee or public charge and bill Tenant, as Additional Rent, the amount of such taxes, assessment, fee
or public charge so paid on Tenant’s behalf. Tenant shall, within ten days from the date it
receives an invoice from Landlord setting forth the amount of such taxes, assessment, fee or public
charge so levied, pay to Landlord, as Additional Rent, the amount set forth in said invoice.
Failure by Tenant to pay the amount so invoiced within said ten day period shall be conclusively
deemed a default by Tenant under this Lease. Tenant shall have the right, and with Landlord’s full
cooperation if Tenant is not then in default under the terms of this Lease, to bring suit in any
court of competent jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.

      13.2 HOLDING OVER

     This Lease shall terminate without further notice on the Lease Expiration Date (as set forth
in Article 1). Any holding over by Tenant after expiration of the Lease Term shall neither
constitute a renewal nor extension of this Lease nor give Tenant any rights in or to the Leased
Premises except as expressly provided in this Paragraph. Any such holding over shall be deemed an
unlawful detainer of the Leased Premises unless Landlord has consented to same. Any such holding
over to which Landlord has consented shall be construed to be a tenancy from month to month, on the
same terms and conditions herein specified insofar as applicable, except that the Base Monthly Rent
shall be increased to an amount equal to one hundred fifty percent of the Base Monthly Rent payable
during the last full month immediately preceding such holding over.

      13.3 SUBORDINATION

     This Lease is subject and subordinate to all deeds of trust which affect the Building and are
of public record as of the Effective Date of this Lease, and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if any Lender holding any such deed
of trust shall advise Landlord that it desires or requires this Lease to be made prior and superior
thereto, then, upon written request of Landlord to Tenant, Tenant shall promptly execute,
acknowledge and deliver any and all documents or instruments which Landlord and such Lender deem
necessary or desirable to make this Lease prior thereto. Tenant hereby consents to Landlord’s
encumbering the Building as security for future loans on such terms as Landlord shall desire, which
future deeds of trust shall be subject and subordinate to this Lease. However, if any Lender
holding such future deed of trust shall desire or require that this Lease be made subject and
subordinate to such future deed of trust, then Tenant agrees, within ten days after Landlord’s
written request therefore, to execute, acknowledge and deliver to Landlord any and all documents or
instruments requested by Landlord or such Lender as may be necessary or proper to assure the
subordination of this Lease to such future deed of trust; but only if such Lender agrees to
recognize Tenant’s rights under this Lease and not to disturb Tenant’s quiet possession of the
Leased Premises so long as Tenant is not in default under this Lease.

      13.4 TENANT’S ATTORNMENT UPON FORECLOSURE

     Tenant shall, upon request, attorn (i) to any purchaser of the Building at any foreclosure
sale or private sale conducted pursuant to any security instrument encumbering the Building, or
(ii) to any grantee or transferee designated in any deed given in lieu of foreclosure of any
security interest encumbering the Building.

      13.5 LENDER PROTECTION

     In the event of any default on the part of the Landlord, Tenant will give notice by certified
mail to any Lender who shall have requested, in writing, to Tenant that it be provided with such
notice, and Tenant shall offer such Lender a reasonable opportunity to cure the default, including
time to obtain possession of the Leased Premises by power of sale of judicial foreclosure or other
appropriate legal proceedings if reasonably necessary to effect a cure.

      13.6 ESTOPPEL CERTIFICATES

     Tenant will, following any request by Landlord, promptly execute and deliver to Landlord an
estoppel certificate (i) certifying that this Lease is unmodified and in full force and effect, or,
if modified, stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the rent and other charges
are paid in advance, if any, (iii) acknowledging that there are not, to Tenant’s knowledge, any
uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed,
and (iv) certifying such other information about this Lease as may be reasonably requested by
Landlord. Tenant’s failure to execute and deliver such estoppel certificate within ten days after
Landlord’s request therefore shall be a material default by Tenant under this Lease, and Landlord
shall have all of the rights and remedies available to Landlord as Landlord would otherwise have in
the case of any other material default by Tenant, including the right to terminate this Lease and
sue for damages proximately caused thereby, it being agreed and understood by Tenant that Tenant’s
failure to so deliver such estoppel certificate in a timely manner could result in Landlord being
unable to perform committed obligations to other third parties which were made by Landlord in
reliance upon this covenant of Tenant. Landlord and Tenant understand that any statement delivered
pursuant to this Paragraph may be relied upon by any Lender or purchaser or prospective Lender or
purchaser of the Building, the Project, or any interest therein.

      13.7 TENANTS’ FINANCIAL INFORMATION

     Tenant shall, within ten business days after Landlord’s request therefore, deliver to Landlord
a copy of a current financial statement and any such other information reasonably requested by
Landlord regarding Tenant’s financial condition. Landlord shall be entitled to disclose such
financial statements or other information to its Lender, to any present or prospective principal of
or investor in Landlord, or to any prospective Lender or purchaser of the Building, the Project or
any portion thereof or interest therein. Any such financial statement or other information which
is marked “confidential” or “company secrets” (or is otherwise similarly marked by Tenant) shall be
confidential and shall not be disclosed by Landlord to any third party except as specifically
provided in this Paragraph, unless the same becomes a part of the public domain without the fault
of Landlord.

     
13.8 TRANSFER BY LANDLORD

     Landlord and its successors in interest shall have the right to transfer their interest in the
Building, the Project, or any portion thereof at any time and to any person or entity. In the
event of

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any such transfer, the Landlord originally named herein (and in the case of any subsequent
transfer, the transferor), from the date of such transfer, (i) shall be automatically relieved,
without any further act by any person or entity, of all liability for the performance of the
obligations of the Landlord hereunder which may accrue after the date of such transfer and (ii)
shall be relieved of all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to assume and perform all
such prior obligations of the Landlord hereunder. Tenant shall attorn to any such transferee.
After the date of any such transfer, the term “Landlord” as used herein shall mean the transferee
of such interest in the Building or the Project.

      13.9 FORCE MAJEURE

     The obligations of each of the parties under this Lease (other than the obligation to pay
money) shall be temporarily excused if such party is prevented or delayed in performing such
obligation by reason of any strikes, lockouts or labor disputes; inability to obtain labor,
materials, fuels or reasonable substitutes therefore; governmental restrictions, regulations,
controls, action or inaction; civil commotion; inclement weather, fire or other acts of God; or
other causes (except financial inability) beyond the reasonable control of the party obligated to
perform (including acts or omissions of the other party) for a period equal to the period of any
such prevention, delay or stoppage.

      13.10 NOTICES

     Any notice required or desired to be given by a party regarding this Lease shall be in writing
and shall be personally served, or in lieu of personal service may be given by depositing such
notice in the United States mail, registered or certified, postage prepaid, addressed to the other
party as follows:

        A. If addressed to Landlord, to Landlord at its Address for Notices (as set forth in Article
1).

        B. If addressed to Tenant, to Tenant at its Address for Notices (as set forth in Article 1).

     Any notice given by registered mail shall be deemed to have been given on the third business
day after its deposit in the United States mail. Any notice given by certified mail shall be
deemed given on the date receipt was acknowledged to the postal authorities. Any notice given by
mail other than registered or certified mail shall be deemed given only if received by the other
party, and then on the date of receipt. Each party may, by written notice to the other in the
manner aforesaid, change the address to which notices addressed to it shall thereafter be mailed.

      13.11 ATTORNEY’S FEES

     In the event any party shall bring any action, arbitration proceeding or legal proceeding
alleging a breach of any provision of this Lease, to recover rent, to terminate this Lease, or to
enforce, protect, determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover from the
non-prevailing party as a part of such action or proceeding, or in a separate action for that
purpose brought within one year from the determination of such proceeding, reasonable attorney’s
fees, expert witness fees, court costs and other reasonable expenses incurred by the prevailing
party. In the event that Landlord shall be required to retain counsel to enforce any provision of
this Lease, and if Tenant shall thereafter cure (or desire to cure) such default, Landlord shall be
conclusively deemed the prevailing party and Tenant shall pay to Landlord all attorney’s fees,
expert witness fees, court costs and other reasonable expenses so incurred by Landlord promptly
upon demand. Landlord may enforce this provision by either (i) requiring Tenant to pay such fees
and costs as a condition to curing its default or (ii) bringing a separate action to enforce such
payment, it being agreed by and between Landlord and Tenant that Tenant’s failure to pay such fees
and costs upon demand shall constitute a breach of this Lease in the same manner as a failure by
Tenant to pay the Base Monthly Rent, giving Landlord the same rights and remedies as if Tenant
failed to pay the Base Monthly Rent.

      13.12 DEFINITIONS

     Any term that is given a special meaning by any provision in this Lease shall, unless
otherwise specifically stated, have such meaning whenever used in this Lease or in any Addenda or
Amendment hereto. In addition to the terms defined in Article 1, the following terms shall have
the following meaning:

        A. REAL PROPERTY TAXES: The term “Real Property Tax” or “Real Property Taxes” shall each mean
(i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and
special, foreseen and unforeseen (including all installments of principal and interest required to
pay any general or special assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership or new construction), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed for whatever reason against the
Project or any portion thereof, or Landlord’s interest therein, or the fixtures, equipment and
other property of Landlord that is an integral part of the Project and located thereon, or
Landlord’s business of owning, leasing or managing the Project or the gross receipts, income, or
rentals from the Project: (ii) all charges, levies or fees imposed by any governmental authority
against Landlord by reason of or based upon the use of or number of parking spaces within the
Project, the amount of public services or public utilities used or consumed (e.g. water, gas,
electricity, sewage, or surface water disposal) at the Project, the number of persons employed by
tenants of the Project, the size (whether measured in area, volume, number of tenants or whatever)
or the value of the Project, or the type of use or uses conducted within the Project; and (iii) all
costs and fees (including attorneys’ fees) incurred by Landlord in contesting any Real Property Tax
and in negotiating with public authorities as to any Real Property Tax. If, at any time during the
Lease Term, the taxation or assessment of the Project prevailing as of the Effective Date of this
Lease shall be altered so that in lieu of or in addition to any Real Property Tax described above
there shall be levied, assessed or imposed (whether by reason of a change in the method of taxation
or assessment, creation of a new tax or charge, or any other cause) an alternate, substitute, or
additional tax or charge (i) on the value, size, use or occupancy of the Project or Landlord’s
interest therein or (ii) on or measured by the gross receipts, income or rental from the Project,
or on Landlord’s business of owning, leasing or managing the Project or (iii) computed in any
manner with respect to the operation of the Project, then any such tax or charge, however
designated, shall be included within the meaning of the terms “Real Property Tax” or “Real Property
Taxes” for purposes of this Lease. If any Real Property Tax is partly based upon property or rents
unrelated to the Project, then only that part of such Real Property Tax that is fairly allocable to
the Project shall be included within the meaning of the terms “Real Property Tax” or “Real

17

 

Property Taxes”. Notwithstanding the foregoing, the terms “Real Property Tax” or “Real
Property Taxes” shall not include estate, inheritance, transfer, gift or franchise taxes of
Landlord or the federal or state income tax imposed on Landlord’s income from all sources.

        B. LANDLORD’S INSURANCE COSTS: The term “Landlord’s Insurance Costs’ shall mean the costs to
Landlord to carry and maintain the policies of fire and property damage insurance for the Project
and general liability insurance required, or permitted, to be carried by Landlord pursuant to
Article 9, together with any deductible amounts paid by Landlord upon the occurrence of any insured
casualty or loss.

        C. PROJECT MAINTENANCE COSTS: The term “Project Maintenance Costs” shall mean all costs and
expenses (except Landlord’s Insurance Costs and Real Property Taxes) paid or incurred by Landlord
in protecting, operating, maintaining, repairing and preserving the Project and all parts thereof,
including without limitation, (i) professional management fees (not to exceed three percent of the
Project’s scheduled gross rental income), (ii) the amortizing portion of any costs incurred by
Landlord in the making of any modifications, alterations or improvements required by any
governmental authority as set forth in Article 6, which are so amortized during the Lease Term, and
(iii) such other costs as may be paid or incurred with respect to operating, maintaining and
preserving the Project, such as repairing and resurfacing the exterior surfaces of the buildings
(including roofs), repairing and resurfacing paved areas, repairing structural parts of the
building, and replacing, when necessary, electrical, plumbing, heating, ventilating and air
conditioning systems serving the buildings.

        D. READY FOR OCCUPANCY: The term “Ready for Occupancy” shall mean the date upon which (i) the
Leased Premises are available for Tenant’s occupancy in a broom clean condition and (ii) the
improvements, if any, to be made to the Leased Premises by Landlord as a condition to Tenant’s
obligation to accept possession of the Leased Premises have been substantially completed and the
appropriate governmental building department (i.e. the City building department, if the Project is
located within a City, or otherwise the County building department) shall have approved the
construction of the improvements as complete or is willing to so approve the construction of the
improvements as complete subject only to compliance with specified conditions which are the
responsibility of Tenant to satisfy.

        E. TENANT’S PROPORTIONATE SHARE: The term “Tenant’s Proportionate Share” or “Tenant’s Share”,
as used with respect to an item pertaining to the Building, shall each mean that percentage
obtained by dividing the leasable square footage contained within the Leased Premises (as set forth
in Article 1) by the total leasable square footage contained within the Building as the same from
time to time exists or, as used with respect to an item pertaining to the Project, shall each mean
that percentage obtained by dividing the leasable square footage contained within the Leased
Premises (as set forth in Article 1) by the total leasable square footage contained within the
Project as the same from time to time exists, unless, as to any given item, such a percentage
allocation unfairly burdens or benefits a given tenant(s), in which case Landlord shall have the
exclusive right to equitably allocate such item so as to not unfairly burden or benefit any given
tenant(s). Landlord’s determination of any such special allocation shall be final and binding upon
Tenant unless made in bad faith.

        F. BUILDING’S PROPORTIONATE SHARE: The term “Building’s Proportionate Share” or “Building’s
Share” shall each mean that percentage which is obtained by dividing the leasable square footage
contained within the Building by the leasable square footage contained within all buildings located
within the Project, unless, as to any given item, such a percentage allocation unfairly burdens or
benefits a given building(s), in which case Landlord shall have the exclusive right to equitably
allocate such item so as to not unfairly burden or benefit any given building(s). Landlord’s
determination of any such special allocation shall be final and binding upon Tenant unless made in
bad faith.

        G. LAW: The term “Law” shall mean any judicial decision and any statute, constitution,
ordinance, resolution, regulation, rule, administrative order, or other requirement of any
municipal, county, state, federal, or other governmental agency or authority having jurisdiction
over the parties to this Lease, the Leased Premises, the Building or the Project, or any of them in
effect either at the Effective Date of this Lease or at any time during the Lease Term, including,
without limitation, any regulation, order, or policy of any quasi-official entity or body (e.g. a
board of fire examiners or a public utility or special district).

        H. LENDER: The term “Lender” shall mean the holder of any Note or other evidence of
indebtedness secured by the Project or any portion thereof.

        I. RENT: The term “rent” shall mean collectively Base Monthly Rent and all Additional Rent.

      13.13 GENERAL WAIVERS

     One party’s consent to or approval of any act by the other party requiring the first party’s
consent or approval shall not be deemed to waive or render unnecessary the first party’s consent to
or approval of any subsequent similar act by the other party. No waiver of any provision hereof or
any breach of any provision hereof shall be effective unless in writing and signed by the waiving
party. The receipt by Landlord of any rent or payments with or without knowledge of the breach of
any other provision hereof shall not be deemed a waiver of any such breach. No waiver of any
provision of this Lease shall be deemed a continuing waiver unless such waiver specifically states
so in writing and is signed by both Landlord and Tenant. No delay or omission in the exercise of
any right or remedy or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by either party of any breach of any provision of this Lease shall not be
deemed to be a waiver of any subsequent breach of the same or any other provisions herein
contained.

      13.14 MISCELLANEOUS

     Should any provision of this Lease prove to be invalid or illegal, such invalidity or
illegality shall in no way affect, impair or invalidate any other provision hereof, and such
remaining provisions shall remain in full force and effect. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance is a factor. Any
copy of this Lease which is executed by the parties shall be deemed an original for all purposes.
This Lease shall, subject to the provisions regarding assignment, apply to and bind the respective
heirs, successors, executors, administrators and assigns of Landlord and Tenant. The term “party”
shall mean Landlord or Tenant as the context implies. If Tenant consists of more than one person
or entity, then all members of Tenant shall be jointly and severally liable hereunder. This Lease
shall be construed and enforced in accordance with the Laws of the State in which the Leased
Premises are located. The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either Landlord or Tenant.
The captions used in this Lease are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms “must”, “shall”, “will” and “agree” are
mandatory. The term “may” is permissive. When a party is required to

18

 

do something by this Lease, it shall do so at its sole cost and expense without right of
reimbursement from the other party unless specific provision is made therefore. Where Tenant is
obligated not to perform any act or is not permitted to perform any act, Tenant is also obligated
to restrain any others reasonably within its control, including agents, invitees, contractors,
subcontractors and employees, from performing said act. Landlord shall not become or be deemed a
partner or a joint venturer with Tenant by reason of any of the provisions of this Lease.

ARTICLE 14:    CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT

      14.1 CORPORATE AUTHORITY

     If Tenant is a corporation, each individual executing this Lease on behalf of said Corporation
represents and warrants that Tenant is validly formed and duly authorized and existing, that Tenant
is qualified to do business in the State in which the Leased Premises are located, that Tenant has
the full right and legal authority to enter into this Lease, that he is duly authorized to execute
and deliver this Lease on behalf of Tenant in accordance with the bylaws and/or a board of
directors’ resolution of Tenant, and that this Lease is binding upon Tenant in accordance with its
terms. Tenant shall, within thirty days after execution of this Lease, deliver to Landlord a
certified copy of the resolution of its Board of Directors authorizing or ratifying the execution
of this Lease, and if Tenant fails to do so, Landlord at its sole election may elect to (i) extend
the intended Commencement Date by such number of days that Tenant shall have delayed in so
delivering such corporate resolution to Landlord or (ii) terminate this Lease.

      14.2 BROKERAGE COMMISSIONS

     Tenant warrants that it has not had any dealings with any real estate broker(s), leasing
agent(s), finder(s) or salesmen, other than those persons or entities named in Article 1 as the
“Brokers” with respect to the Lease by it of the Leased Premises pursuant to this Lease, and that
it will indemnify, defend with competent counsel, and hold Landlord harmless from any liability for
the payment of any real estate brokerage commissions, leasing commissions or finder’s fees claimed
by any other real estate broker(s), leasing agent(s), finder(s) or salesmen to be earned or due and
payable by reason of Tenant’s agreement or promise (implied or otherwise) to pay (or have Landlord
pay) such a commission or finder’s fee by reason of its leasing the Leased Premises pursuant to
this Lease.

      14.3 ENTIRE AGREEMENT

     This Lease, the Exhibits (as described in Article 1) and the Addenda (as described in Article
1), which Exhibits and Addenda are by this reference incorporated herein, constitute the entire
agreement between the parties, and there are no other agreements, understanding or representations
between the parties relating to the Lease by Landlord of the Leased Premises to Tenant, except as
expressed herein. No subsequent changes, modifications or additions to this Lease shall be binding
upon the parties unless in writing and signed by both Landlord and Tenant.

      14.4 LANDLORD’S REPRESENTATIONS

     Tenant acknowledges that neither Landlord nor any of its agents made any representations or
warranties respecting the Project, the Building or the Leased Premises, upon which Tenant relied in
entering into this Lease, which are not expressly set forth in this Lease. Tenant further
acknowledges that neither Landlord nor any of its agents made any representations as to (i) whether
the Leased Premises may be used for Tenant’s intended use under existing Law or (ii) the
suitability of the Leased Premises for the conduct of Tenant’s business or (iii) the exact square
footage of the Leased Premises, and that Tenant relied solely upon its own investigations
respecting said matters. Tenant expressly waives any and all claims for damage by reason of any
statement, representation, warranty, promise or other agreement of Landlord or Landlord’s agent(s),
if any, not contained in this Lease or in any Addenda hereto.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the respective dates
below set forth with the intent to be legally bound thereby as of the Effective Date of this Lease
first above set forth.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	AS LANDLORD:
	 

	 	 	 	 	 	Tasman V, LLC
	 
	 	 	 	 	 	 
	Dated:

	 	9/16/05	 	 	 	/s/ Jack E. Horton 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	AS TENANT:
	 

	 	 	 	 	 	Adeza Biomedical Corporation
	 
	 	 	 	 	 	 
	Dated:

	 	9/12/05	 	 	 	/s/ Mark Fischer-Colbrie
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	VP Finance & Administration 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 

     If Tenant is a CORPORATION, the authorized officers must sign on behalf of the Corporation
and indicate the capacity in which they are signing. This Lease must be executed by the Chairman
of the Board, President or Vice-President, and the Secretary, Assistant Secretary, the Chief
Financial Officer or Assistant Treasurer, unless the bylaws or a resolution of the Board of
Directors shall otherwise provide, in which event a certified copy of the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.

19

 

ADDENDUM TO INDUSTRIAL SPACE LEASE

This Addendum relates to that Net Industrial Space Lease (“Lease”) dated July 1, 2005
for reference purposes, between Tasman V, LLC, as Landlord and Adeza Biomedical
Corporation, as Tenant.

The Addendum shall be part of the Lease and shall include the following provisions:

      15.1 PAYMENT OF PROJECT MAINTENANCE COSTS

     Landlord shall have the option to deliver to Tenant a written estimate of Tenant’s share of
the Project Maintenance Costs for the ensuing lease year. In the event that Landlord delivers such
a written estimate to Tenant, Tenant shall then pay to Landlord the estimated amount of the Project
Maintenance Costs in twelve (12) equal installments, in advance, commencing on the first day of
each month provided that such written notice shall be delivered to Tenant ten (10) days in advance
of the due date. Within sixty (60) days after the end of each lease year, Landlord shall furnish
to Tenant a statement showing in reasonable details the actual Project Maintenance Costs incurred
by Landlord during such lease year. If Tenant paid more than Tenant’s proportionate share,
Landlord shall either credit the amount of such overpayment toward the next subsequent payment or
payments due for Project Maintenance Costs that would otherwise become due, or refund in cash the
amount of such overpayment. If Tenant did not pay Tenant’s proportionate share in full, then
Tenant shall pay to Landlord the sum of such underpayment within ten (10) days from Landlord’s
written demand. Landlord reserves the right to change from time to time the method of billing
Tenant for Tenant’s proportionate share of the Project Maintenance Costs.

      15.2 CONDITION OF THE PREMISES

     Tenant has inspected the premises and agrees to accept possession of the premises in the “as
is” condition, without warranty, expressed or implied, except that Landlord shall make certain
improvements. These improvements are shown on the Exhibit  C  and the scope of the work
is limited to the proposal dated June 30, 2005 from Weigel Mechinical, attached
hereto and made a part hereof as Exhibit  D . Tenant agrees to contribute the first
$5,844.00 while Landlord shall pay for the remaining cost of the improvements outlined in
Exhibit  D.

      15.3 EARLY OCCUPANCY

     Tenant may occupy and take possession of the Premises before July 15, 2005, subject to
the following terms and conditions:

        A. Tenant’s early occupancy shall not interfere with Landlord’s obligation to complete the
work outlined in Paragraph 15.2 of this Addendum.

        B. Any early occupancy shall be subject to all of the terms and conditions of this Lease.

     Tenant shall not be required to the Base Monthly Rent and Project Maintenance Costs if Tenant
takes possession before July 15, 2005, but Tenant shall be responsible for the payment of
all utilities and other related charges.

      15.4 OPTION TO EXTEND

     Provided Tenant is not in default under any provision of the Lease, Landlord hereby grants to
Tenant an option to extend the term of this Lease for an additional term corresponding to and
co-terminus with 1240 Elko Dr., when the existing term expires, on the terms and conditions set
forth in this paragraph. Tenant may exercise this option by giving Landlord written notice of its
intention not less than one hundred eighty (180) days prior to the expiration of the existing term
of this Lease. If this Option is exercised, the Base Monthly Rent for the Premises shall equal the
then current fair market monthly rent (“Fair Market Rent”) which shall not be less than
$2500.00 per month for the Premises as of the commencement date of the applicable extended
term, and adjusted upwards each year for at least 3% per annum. If the parties cannot agree on the
amount of the “Fair Market Rent” and the annual adjustment to such Fair Market Rent within sixty
(60) days prior to the commencement of such extended term, then the Fair Market Rent and the annual
adjustment thereto shall be determined by an appraisal. All other terms and conditions contained
in the Lease and this Addendum, as the same may be amended from time to time by the parties in
accordance with the provisions of the Lease, shall remain in full force and effect and shall apply
during the Option term.

     If the fair market rental value for the Premises needs to be determined by appraisal, Landlord
and Tenant shall either agree to select one real estate appraiser or three real estate appraisers.
Any real estate appraiser selected shall be a member of the American Institute of Real Estate
Appraisers, shall have at least five (5) years experience appraising commercial space located in
the vicinity of the Premises, and shall act in accordance with the rules of the American Institute
of Real Estate Appraisers. The Fair Market Rent shall be based on rental of space of the same age,
construction, size and location as the Premises with the improvements installed therein. If only
one appraiser is selected, then each party shall pay one-half of the fees and expenses of that
appraiser. If proceeding with three appraisers, each party shall select one appraiser, who in turn
shall select the third appraiser. If three appraisers are selected, each party shall bear the fees
and expenses of the appraiser it selects and one-half of the fees and expenses of the third
appraiser.

      15.6 EFFECT OF ADDENDUM

     Each term used herein with initial capital letters shall have the meaning ascribed to such
term in the Lease unless specifically otherwise defined herein. In the event of any inconsistency
between this Addendum and the Lease, the terms of this Addendum shall prevail.

20

 

	 	 	 
	LANDLORD:

	 	TENANT:
	Tasman V, LLC

	 	Adeza Biomedical Corporation

	 	 	 	 	 	 	 
	/s/
Jack E. Horton

	 	By:	 	/s/ Mark Fischer-Colbrie
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	9-16-05	 	Date:	 	9/12/05
	 

	 	 
	 	 	 	 

21exv10w19

 

EXHIBIT 10.19

Fontanoso Lease Agreement

Basic Lease Information

	 	 	 
	Lease Date:

	 	November 15, 2005
	 
	 	 
	Landlord:

	 	Legacy Partners I SJ Fontanoso, LLC, a Delaware limited liability company
	 
	 	 
	Landlord’s Address:

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	4000 East Third Avenue, Suite 600
	 

	 	Foster City, California 94404-4805
	 
	 	 
	Tenant:

	 	VNUS Medical Technologies, Inc., a Delaware corporation
	 
	 	 
	Tenant’s Address:

	 	Until Tenant occupies the Premises
	 

	 	c/o VNUS Medical Technologies, Inc.
	 

	 	2200 Zanker Road, Suite F
	 

	 	San Jose, California 95131
	 

	 	Attn: Mr. Timothy Marcotte, CFO
	 
	 	 
	 

	 	Thereafter, to Tenant at the Premises, Attn: Mr. Timothy Marcotte, CFO
	 
	 	 
	Premises:

	 	Approximately 93,650 rentable
square feet as shown on Exhibit A
	 
	 	 
	Premises Address:

	 	5799 Fontanoso Way
	 

	 	San Jose, California 95138
	 
	 	 
	     Building:

	 	Approximately 93,650 rentable square feet
	     Lot:

	 	APN 679-001-007

Term:      The commencement date of the Lease (“Commencement Date”) shall occur on the earlier to occur
of (i) the date Tenant first occupies the Premises or (ii) the date the Tenant Improvements
(defined in Exhibit B) are Substantially Complete (defined in Exhibit B) and the
expiration date of the Lease (“Expiration Date”) shall occur on the date ninety-six (96) months
following the Commencement Date. The Commencement Date is anticipated to occur on March 1, 2006
(“Anticipated Commencement Date”).

Base Rent and Adjustments

to Base Rent(¶3):

	 	 	 	 	 
	Months of Term	 	Base Rent Per Month
	0 – 15

	 	$	0.00	 
	16 – 24

	 	$	60,872.50	 
	25 – 36

	 	$	77,261.25	 
	37 – 48

	 	$	91,777.00	 

Thereafter, commencing with the 49th month of the Term, Base Rent shall increase
annually by three percent (3%) over the Base Rent payable during the preceding year.

	 	 	 
	Advance Rent (¶3): 

	 	Eighty Thousand Nine Hundred Ninety-Eight and 63/100 Dollars ($80,998.63)
	 
	 	 
	Security Deposit (¶4):

	 	One Hundred Twenty-Six Thousand Seven Hundred Thirty-Nine and 04/100 Dollars ($126,739.04)
	 
	 	 
	Permitted Uses (¶9):

	 	General office, research and development and light manufacturing, but only to
the extent permitted by the City of San Jose and all agencies and governmental authorities having
jurisdiction thereof
	 
	 	 
	Parking Spaces: 

	 	Three Hundred thirteen (313) non-designated spaces

	 	 	 
	Brokers (¶33):

	 	CB Richard Ellis for Tenant
	 

	 	Commercial Property Services for Landlord

 

 

	 	 	 	 	 
	Exhibits:

	 	Exhibit A -
	 	Premises, Building and/or Lot
	 

	 	Exhibit B -
	 	Tenant Improvements
	 

	 	Exhibit C -
	 	Rules and Regulations
	 

	 	Exhibit D -
	 	Intentionally Omitted
	 

	 	Exhibit E -
	 	Tenant’s Initial Hazardous Materials Disclosure Certificate
	 

	 	Exhibit F -
	 	Change of Commencement Date — Example
	 

	 	Exhibit G -
	 	N/A
	 

	 	Exhibit H -
	 	Furniture, Fixtures and Equipment
	 

	 	Exhibit I -
	 	Subordination Non-Disturbance and Attornment Agreement
	 
	 	 	 	 
	Addenda:

	 	Addendum 1 -
	 	Option to Extend the Term

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	 	Page	 
	     
	1.	 	Premises
	 	 	4	 
	2.	 	Occupancy; Adjustment of Commencement Date
	 	 	4	 
	3.	 	Rent
	 	 	4	 
	4.	 	Security Deposit
	 	 	5	 
	5.	 	Condition of Premises; Tenant Improvements
	 	 	5	 
	6.	 	Additional Rent
	 	 	5	 
	7.	 	Utilities and Services
	 	 	7	 
	8.	 	Late Charges
	 	 	7	 
	9.	 	Use of Premises
	 	 	7	 
	10.	 	Alterations; and Surrender of Premises
	 	 	8	 
	11.	 	Repairs and Maintenance
	 	 	10	 
	12.	 	Insurance
	 	 	11	 
	13.	 	Limitation of Liability and Indemnity
	 	 	12	 
	14.	 	Assignment and Subleasing
	 	 	12	 
	15.	 	Subordination
	 	 	14	 
	16.	 	Right of Entry
	 	 	15	 
	17.	 	Estoppel Certificate
	 	 	15	 
	18.	 	Tenant’s Default
	 	 	15	 
	19.	 	Remedies for Tenant’s Default
	 	 	16	 
	20.	 	Holding Over
	 	 	16	 
	21.	 	Landlord’s Default
	 	 	17	 
	22.	 	Parking
	 	 	17	 
	23.	 	Transfer of Landlord’s Interest
	 	 	17	 
	24.	 	Waiver
	 	 	17	 
	25.	 	Casualty Damage
	 	 	17	 
	26.	 	Condemnation
	 	 	19	 
	27.	 	Environmental Matters/Hazardous Materials
	 	 	19	 
	28.	 	Financial Statements
	 	 	20	 
	29.	 	General Provisions
	 	 	21	 
	30.	 	Signs
	 	 	22	 
	31.	 	Mortgagee Protection
	 	 	22	 
	32.	 	Warranties of Tenant
	 	 	22	 
	33.	 	Brokerage Commission
	 	 	23	 
	34.	 	Quiet Enjoyment
	 	 	23	 
	35.	 	Existing Furniture, Systems and Equipment
	 	 	23	 

 

 

NNN (Single Tenant) Tenant Improvements

Lease Agreement

The Basic Lease Information set forth on Page 1 and this Lease are and shall be construed as a
single instrument.

1. Premises

Landlord hereby leases the Premises to Tenant upon the terms and conditions contained herein. For
purposes of this Lease, the term “Premises” shall mean and refer to the entirety of the Building
and the Lot. Additionally, for purposes of this Lease, the term “Lot” shall mean and refer to the
land upon which the Building is situated. The term “Common Areas” shall mean and refer to those
portions of the Premises exclusive of the Building and shall include but not be limited to parking
areas, access and perimeter roads, sidewalks, landscaped areas and similar areas and facilities.
Landlord and Tenant hereby agree that for purposes of this Lease, as of the Lease Date, the
rentable square footage area of each of the Premises and the Building shall be deemed to be the
number of rentable square feet as set forth in the Basic Lease Information. Tenant further agrees
that the number of rentable square feet of the Building may subsequently change after the Lease
Date commensurate with any modifications to any of the foregoing by Landlord.

2. Occupancy; Adjustment of Commencement Date

     2.1
   If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to
Tenant on the Anticipated Commencement Date in the condition specified in Section 5 hereof,
Landlord shall not be subject to any liability nor shall the validity of the Lease be affected;
provided, the Term of this Lease and the obligation to pay Rent shall commence on the date
possession is actually tendered to Tenant and the Expiration Date shall be extended commensurately.
If the commencement date and/or the expiration date of this Lease is other than the Anticipated
Commencement Date and Expiration Date specified in the Basic Lease Information, Landlord and Tenant
shall execute a written amendment to this Lease, substantially in the form of Exhibit F
hereto, wherein the parties shall specify the actual commencement date, expiration date and the
date on which Tenant is to commence paying Rent. Tenant shall execute and return such amendment to
Landlord within fifteen (15) days after Tenant’s receipt thereof. The word “Term” whenever used
herein refers to the initial term of this Lease and any valid extension(s) thereof.
Notwithstanding the foregoing, if Landlord shall not deliver the Premises to Tenant with the Tenant
Improvements Substantially Complete (as defined in Exhibit B hereto) (subject to delays on
a day for day basis due to Force Majeure Delays (defined in Section 25.1.2 below) and Tenant Delays
(as defined in Exhibit B)), on or before March 1, 2006, Tenant shall receive a credit
against Base Rent in an amount equal to one (1) day of Base Rent for each day following May 1, 2006
that the Tenant Improvements are not Substantially Complete (for example, if the Tenant
Improvements are Substantially Complete on June 1, 2006, after taking into consideration that
Tenant is not obligated to pay Base Rent for the first fifteen (15) months of the Term, Tenant
shall be obligated to commence paying Base Rent on September 1, 2007). The foregoing example is
based upon a “free rent” period of fifteen (15) months and a one-month Base Rent credit pursuant to
this Section 2.1. In addition, if the Tenant Improvements are not Substantially Complete by
September 1, 2006 (as such date may be extended by Force Majeure Delays and/or Tenant Delays) (with
any such extension(s), the “Adios Date”), Tenant may, by written notice to Landlord given at any
time after the Adios Date and prior to such Substantial Completion, terminate this Lease. If
Tenant is entitled to terminate this Lease and properly and timely does so pursuant to this
Section, then (a) this Lease shall terminate upon Landlord’s receipt of Tenant’s notice of
termination, (b) Landlord shall promptly return to Tenant all amounts deposited by Tenant with
Landlord pursuant to the terms of this Lease, (c) each party shall bear its respective fees and
costs incurred with respect to the negotiation of this Lease and performing its respective
obligations hereunder through the date of termination and (d) neither party shall have any further
rights or obligations hereunder.

     2.2    If Landlord permits Tenant to occupy the Premises prior to the actual Commencement Date,
such occupancy shall be at Tenant’s sole risk and subject to all the provisions of this Lease.
Additionally, Landlord shall have the right to impose additional reasonable conditions on Tenant’s
early occupancy.

3. Rent

On the date that Tenant executes this Lease, Tenant shall deliver to Landlord the original executed
Lease, the Advance Rent (which shall be applied against the Rent payable for the first month(s)
Tenant is required to pay Rent), the Security Deposit, and all insurance certificates evidencing
the insurance required to be obtained by Tenant under Section 12 and Exhibit B of this
Lease. Tenant agrees to pay Landlord, without prior notice or demand, abatement, offset, deduction
or claim, in advance at Landlord’s Address (i) with respect to Base Rent, on the first (1st) day of
the seventeenth (17th) month of the Term and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease and (ii) with respect to
Additional Rent, Operating Expenses, Tax Expenses, and Utility Expenses, on the Commencement Date
and thereafter on the first (1st) day of each month throughout the Term. The term
“Rent” whenever used herein refers to the aggregate of all these amounts. If Landlord permits
Tenant to occupy the Premises without requiring Tenant to pay rental payments for a period of time,
the waiver of the requirement to pay rental payments shall only apply to the waiver of the Base
Rent. The Rent for any fractional part of a calendar month at the commencement or expiration or
termination of the Lease Term shall be a prorated amount of the Rent for a full calendar month
based upon a thirty (30) day month. To the extent not already paid as part of the Advance Rent any
prorated Rent shall be paid on the first date that Tenant is obligated to make a payment of Rent
hereunder, and any prorated Rent for the final calendar month hereof shall be paid on the first day
of the calendar month in which the date of expiration or termination occurs.

 

 

4. Security Deposit

Simultaneously with Tenant’s execution and delivery of this Lease, Tenant shall deliver to
Landlord, as a Security Deposit for the faithful performance by Tenant of its obligations under
this Lease, the amount specified in the Basic Lease Information. If Tenant is in default
hereunder, Landlord may, but without obligation to do so, use all or any portion of the Security
Deposit to cure the default or to compensate Landlord for all damages sustained by Landlord in
connection therewith. Tenant shall, within ten (10) days of written demand, pay to Landlord a sum
equal to the portion of the Security Deposit so applied or used to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited with Landlord. At
any time after Tenant has materially and chronically defaulted hereunder, as determined in
Landlord’s reasonable discretion, Landlord may require an increase in the amount of the Security
Deposit required hereunder, not to exceed Two Hundred Fifty-Three Thousand Four Hundred
Seventy-Eight and 08/100 Dollars ($253,478.08) for the then balance of the Term and Tenant shall,
within fifteen (15) days of demand, pay to Landlord such additional sums. 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, as determined by Landlord, to remedy
Tenant’s default(s) hereunder or to otherwise restore the Premises to a clean and safe condition,
reasonable wear and tear excepted. If the cost to restore the Premises exceeds the amount of the
Security Deposit, Tenant shall promptly deliver to Landlord any and all of such excess sums.
Landlord shall not be required to keep the Security Deposit separate from other funds, and, unless
otherwise required by law, Tenant shall not be entitled to interest on the Security Deposit. In no
event or circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to otherwise offset any
payments required hereunder. Tenant waives (i) California Civil Code Section 1950.7 and any and
all other laws, rules and regulations applicable to security deposits in the commercial context
(“Security Deposit Laws”), and (ii) any and all rights, duties and obligations either party may now
or, in the future, will have relating to or arising from the Security Deposit Laws.
Notwithstanding anything to the contrary herein, the Security Deposit may be retained and applied
by Landlord (a) to offset Rent which is unpaid either before or after termination of this Lease,
and (b) against other damages suffered by Landlord before or after termination of this Lease.

5. Condition of Premises; Tenant Improvements

Tenant agrees to accept the Premises on the Commencement Date as then being suitable for Tenant’s
intended use and in good operating order, condition and repair in its then existing “AS IS”
condition, except as otherwise set forth in Exhibit B hereto. The Tenant Improvements
(defined in Exhibit B) shall be installed in accordance with the terms, conditions,
criteria and provisions set forth in Exhibit B or in the succeeding sentence. Landlord
shall deliver the Premises to Tenant with all Building Systems in good working order and condition.
For purposes hereof, “Building Systems” shall exclusively mean heat, ventilation and air
conditioning systems, and the electrical, plumbing and other mechanical systems (including
life/fire safety systems) that serve the Premises. By taking possession of the Premises, Tenant
shall be deemed to have accepted the Premises in good condition and state of repair, except for any
“punch list” type items as to which Tenant notifies Landlord in writing within thirty (30) days of
taking possession. Tenant expressly acknowledges and agrees that neither Landlord nor any of
Landlord’s agents, representatives or employees has made any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant’s business or for any other purpose,
including without limitation, any storage incidental thereto. Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA (defined below), and
all costs incurred for purposes of compliance therewith shall be a part of and included in the
costs of the Tenant Improvements.

6. Additional Rent

It is intended by Landlord and Tenant that this Lease be a “triple net lease.” The costs and
expenses described in this Section 6 and all other sums, charges, costs and expenses specified in
this Lease other than Base Rent are to be paid by Tenant to Landlord as additional rent
(collectively, “Additional Rent”).

     6.1    Operating Expenses

               6.1.1 Definition of Operating Expenses. Tenant shall pay to Landlord all Operating Expenses
as Additional Rent. The term “Operating Expenses” as used herein shall mean the total amounts paid
or payable by Landlord in connection with the ownership, management, maintenance, repair and
operation of the Premises. These Operating Expenses may include, but are not limited to,
Landlord’s cost of: (i) repairs to, and maintenance of, the roof membrane, the non-structural
portions of the roof and the non-structural elements of the perimeter exterior walls of the
Premises; (ii) maintaining the outside paved area, parking lot, landscaping and other portions of
the Common Areas; (iii) annual insurance premium(s) insuring against personal injury and property
damage (including, if Landlord elects, “all risk” or “special purpose” coverage) and all other
insurance, including, but not limited to, earthquake and flood for the Premises, rental value
insurance against loss of Rent for a period of at least nine (9) months commencing on the date of
loss, and subject to the provisions of Section 25 below, any deductible; (iv) (a) modifications
and/or new improvements to any portion of the Premises occasioned by any rules, laws or regulations
effective subsequent to the Lease Date; (b) reasonably necessary replacement improvements to any
portion of the Premises after the Commencement Date; and (c) new improvements to the Premises that
reduce operating costs or improve life/safety conditions, all of the foregoing as reasonably
determined by Landlord, in its sole but reasonable discretion (with respect to improvements to
life/safety conditions, such improvements shall be required by law or regulation or reasonably
determined by Landlord to be likely required in the foreseeable future, or shall be of a type or
nature then being installed by other similarly situated landlords in comparable buildings);
provided, if such costs are of a capital nature, then such costs or allocable portions thereof
shall be amortized on a straight-line basis over the estimated useful life of the capital item or
fifteen (15) years whichever is shorter, as reasonably determined by Landlord, together with
reasonable interest on the unamortized balance; (v) the management and administration of any and
all portions of the Premises, including, without limitation, a property management fee, accounting,
auditing, billing, postage, salaries and benefits for clerical and supervisory employees, whether
located on the Premises or off-site, payroll taxes and legal and accounting costs and all fees,
licenses and permits related to the ownership, operation and management of the Premises; (vi)
preventative maintenance and repair

 

 

contracts including, but not limited to, contracts for elevator systems (if any) and heating,
ventilation and air conditioning systems, lifts for disabled persons, if Landlord elects to so
procure; (vii) security and fire protection services for any portion of the Premises, if and to the
extent, in Landlord’s sole discretion, such services are provided; (viii) the creation and
modification of any rail spur or track agreements, licenses, easements or other similar
undertakings with respect to the Premises; (ix) supplies, materials, equipment, rental equipment
and other similar items used in the operation and/or maintenance of the Premises and any reasonable
reserves established for replacement or repair of any Common Area improvements or equipment with
such reserves to be only for Operating Expenses to be incurred within the current Lease year and
the next succeeding
Lease year; (x) any and all levies, charges, fees and/or assessments payable to
any applicable owner’s association or similar body; (xi) any barrier removal work or other required
improvements, alterations or work to any portion of the Premises generally required under the ADA
(defined below) (the “ADA Work”); provided, if such ADA Work is required under the ADA due to
Tenant’s use of the Premises or any Alteration (defined below) made to the Premises by or on behalf
of Tenant, then the cost of such ADA Work shall be borne solely by Tenant and shall not be included
as part of the Operating Expenses; and (xii) the repairs and maintenance items set forth in Section
11.2 below.

              6.1.2 Operating Expense Exclusions. Notwithstanding anything to the contrary contained
herein, for purposes of this Lease, the term “Operating Expenses” shall not include the following:
(i) legal and auditing fees (other than those fees reasonably incurred in connection with the
maintenance and operation of all or any portion the Premises); (ii) depreciation of the Building or
any other improvements situated within the Premises; (iii) any items for which Landlord is actually
reimbursed by insurance; (iv) costs of repairs or other work necessitated by fire, windstorm or
other casualty (excluding any deductibles) and/or costs of repair or other work necessitated by the
exercise of the right of eminent domain to the extent insurance proceeds or a condemnation award,
as applicable, is actually received by Landlord for such purposes; provided, such costs of repairs
or other work shall be paid by the parties in accordance with the provisions of Sections 25 and 26,
below; (v) other than any interest charges for capital improvements referred to in Section
6.1.1(iv) hereinabove, any interest or payments on any financing for the Building or the Premises,
interest and penalties incurred as a result of Landlord’s late payment of any invoice (provided
that Tenant pays Operating Expenses and Tax Expenses to Landlord when due as set forth herein),
and any bad debt loss, rent loss or reserves for same; (vi) costs associated with the investigation
and/or remediation of Hazardous Materials (hereafter defined) present in, on or about any portion
of the Premises, unless such costs and expenses are the responsibility of Tenant as provided in
Section 27 hereof, in which event such costs and expenses shall be paid solely by Tenant in
accordance with the provisions of Section 27 hereof; (vii) overhead and profit increment paid to
Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in the Premises to
the extent the same exceeds the costs of such by unaffiliated third parties on a competitive basis;
or any costs included in Operating Expenses representing an amount paid to a person, firm,
corporation or other entity related to Landlord which is in excess of the amount which would have
been paid in the absence of such relationship; and (viii) any payments under a ground lease or
master lease.

     6.2
     Tax Expenses. Tenant shall pay to Landlord all real property taxes applicable to the
Premises. Prior to delinquency, Tenant shall pay any and all taxes and assessments levied upon
Tenant’s Property (defined below in Section 10) located or installed in or about the Premises by,
or on behalf of Tenant. To the extent any such taxes or assessments are not separately assessed or
billed to Tenant, then Tenant shall pay the amount thereof as invoiced by Landlord. Tenant shall
also reimburse and pay Landlord, as Additional Rent, within ten (10) days after demand therefor,
one hundred percent (100%) of (i) any increase in real property taxes attributable to any and all
Alterations (defined below in Section 10), Tenant Improvements, fixtures, equipment or other
improvements of any kind whatsoever placed in, on or about the Premises for the benefit of, at the
request of, or by Tenant, and (ii) taxes and assessments levied or assessed upon or with respect to
the possession, operation, use or occupancy by Tenant of the Premises. The term “Tax Expenses”
shall mean and include, without limitation, any form of tax and assessment (general, special,
supplemental, ordinary or extraordinary), commercial rental tax, payments under any improvement
bond or bonds, license fees, license tax, business license fee, rental tax, transaction tax or levy
imposed by any authority having the direct or indirect power of tax (including any city, county,
state or federal government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the Premises or any
other tax, fee, or excise, however described, including, but not limited to, any value added tax,
or any tax imposed in substitution (partially or totally) of any tax previously included within the
definition of real property taxes, or any additional tax the nature of which was previously
included within the definition of real property taxes. The term “Tax Expenses” shall not include
any franchise, estate, inheritance, net income, or excess profits tax imposed upon Landlord, or a
penalty fee imposed as a result of Landlord’s failure to pay Tax Expenses when due.

     6.3      Payment of Expenses. Landlord shall estimate the Operating Expenses and Tax Expenses for
the calendar year in which the Lease commences. Commencing on the Commencement Date, one-twelfth
(1/12th) of this estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months of such calendar
year. Thereafter, Landlord may estimate such expenses for each calendar year during the Term of
this Lease and Tenant shall pay one-twelfth (1/12th) of such estimated amount as Additional Rent
hereunder on the first (1st) day of each month during such calendar year and for each ensuing
calendar year throughout the Term of this Lease. Tenant’s obligation to pay the Operating Expenses
and Tax Expenses shall survive the expiration or earlier termination of this Lease.

     6.4      Annual Reconciliation. By June 30th of each calendar year, Landlord shall furnish Tenant
with an accounting of actual and accrued Operating Expenses and Tax Expenses. Within thirty (30)
days of Landlord’s delivery of such accounting, Tenant shall pay to Landlord the amount of any
underpayment. Notwithstanding the foregoing, failure by Landlord to give such accounting by such
date shall not constitute a waiver by Landlord of its right to collect any underpayment by Tenant
at any time. Landlord shall credit the amount of any overpayment by Tenant toward the next monthly
installment(s) of rent falling due, or where the Term of the Lease has expired, refund the amount
of overpayment to Tenant within thirty (30) days after such amount is determined. If the Term of
the Lease expires prior to the annual reconciliation of expenses Landlord shall have the right to
reasonably estimate such expenses, and if Landlord determines that there has been an underpayment,
Landlord may deduct such underpayment from Tenant’s Security Deposit. Failure by Landlord to
accurately estimate such expenses or to otherwise perform such reconciliation of expenses shall not
constitute a waiver of Landlord’s right

 

 

to collect any of Tenant’s underpayment at any time during the Term of the Lease or at any time
after the expiration or earlier termination of this Lease, except that any such underpayment not
billed within twelve (12) months after the expiration or termination of the Lease shall be deemed
waived.

     6.5    Audit. After delivery to Landlord of at least thirty (30) days prior written notice,
Tenant, at its sole cost and expense through any accountant designated by it, shall have the right
to examine and/or audit the books and records evidencing such costs and expenses for the previous
one (1) calendar year, during Landlord’s reasonable business hours but not more frequently than
once during any calendar year. Any such accounting firm designated by Tenant may not be
compensated on a contingency fee basis. The results of any such audit (and any negotiations
between the parties related thereto) shall be maintained strictly confidential by Tenant and its
accounting firm and shall not be disclosed, published or otherwise disseminated to any other party
other than to Landlord and its authorized agents. Landlord and Tenant each shall use its best
efforts to cooperate in such negotiations and to promptly resolve any discrepancies between
Landlord and Tenant in the accounting of such costs and expenses.

7. Utilities and Services

As of the Commencement Date, Tenant shall cause all of the Utility Expenses (hereinafter defined)
for the Premises to be placed in Tenant’s name with the invoices sent directly to Tenant at the
Premises. Tenant shall be responsible for the payment of all Utility Expenses. Tenant shall pay
directly to the appropriate utility company or similar entity the cost of all water, sewer use,
sewer discharge fees and sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone, telecommunications and other utilities (collectively, the “Utility Expenses”)
billed or metered separately to the Premises and/or Tenant during the Term of the Lease. Tenant
shall also pay any and all assessments or charges for utility or similar purposes included within
any tax bill for the Lot on which the Building is situated, including without limitation,
entitlement fees, allocation unit fees and/or any similar fees or charges. At least quarterly and
at such shorter intervals of time upon Landlord’s request, Tenant shall promptly deliver to
Landlord written evidence of Tenant’s payment of the Utility Expenses. Tenant acknowledges that
the Premises may become subject to the rationing of utility services or restrictions on utility use
as required by a public utility company, governmental agency or other similar entity having
jurisdiction thereof. Tenant acknowledges and agrees that its tenancy and occupancy hereunder
shall be subject to such rationing restrictions as may be imposed upon Landlord, Tenant, or the
Premises, and Tenant shall in no event be excused or relieved from any covenant or obligation to be
kept or performed by Tenant by reason of any such rationing or restrictions. Tenant further agrees
to timely and faithfully pay, prior to delinquency, any amount, tax, charge, surcharge, assessment
or imposition levied, assessed or imposed upon the Premises, or Tenant’s use and occupancy thereof
by a public utility company, governmental agency, taxing authority or similar entity having
jurisdiction thereof.

8. Late Charges

Any and all sums or charges set forth in this Section 8 are considered part of Additional Rent.
Tenant acknowledges that late payment (the second day of each month or any time thereafter) by
Tenant to Landlord of Rent and all other sums due hereunder, will cause Landlord to incur costs not
contemplated by this Lease. Such costs may include, without limitation, processing and accounting
charges, and late charges that may be imposed on Landlord by the terms of any note secured by any
encumbrance against the Premises, and late charges and penalties due to the late payment of real
property taxes on the Premises. Therefore, if any installment of Rent or any other sum payable by
Tenant is not received by Landlord when due, Tenant shall promptly pay to Landlord a late charge,
as liquidated damages, in an amount equal to seven percent (7%) of such delinquent amount plus
interest on such delinquent amount at the rate equal to the prime rate plus three percent (3%) for
every month or portion thereof that such sums remain unpaid. Notwithstanding the foregoing,
Landlord waives the late charge for the first (1st) instance during the Term of this Lease in which
Tenant fails to timely pay Rent. If Tenant delivers to Landlord a check for which there are not
sufficient funds, Landlord may require Tenant to replace such check with a cashier’s check for the
amount of such check and all other charges payable hereunder. The parties agree that this late
charge and the other charges referenced above represent a fair and reasonable estimate of the costs
that Landlord will incur by reason of such late payment by Tenant, excluding attorneys’ fees and
costs. Acceptance of any late charge or other charges shall not constitute a waiver by Landlord of
Tenant’s default with respect to the delinquent amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord for any other breach of Tenant under this
Lease. If a late charge becomes payable for three (3) installments of Rent, then Landlord, at
Landlord’s sole option, can either require the Rent be paid monthly in advance by cashier’s check
or by electronic funds transfer.

9. Use of Premises

     9.1    Compliance with Laws, Recorded Matters, and Rules and Regulations. The Premises are to be
used solely for the purposes and uses specified in the Basic Lease Information and for no other
uses or purposes without Landlord’s prior written consent. Landlord’s consent shall not be
unreasonably withheld or delayed so long as the proposed use (i) does not involve the use of
Hazardous Materials other than as expressly permitted under the provisions of Section 27 below,
(ii) does not require any additional parking spaces, and (iii) is compatible and consistent with
the other uses then being made in other similar types of buildings in the vicinity of the Premises,
as reasonably determined by Landlord. The use of the Premises by Tenant and its employees,
representatives, agents, invitees, licensees, subtenants, customers or contractors (collectively,
“Tenant’s Representatives”) shall be subject to, and at all times in compliance with, (a) any and
all applicable laws, rules, codes, ordinances, statutes, orders and regulations as same exist from
time to time throughout the Term of this Lease (collectively, the “Laws”), including without
limitation, the requirements of the Americans with Disabilities Act, a federal law codified at 42
U.S.C. 12101 et seq., including, but not limited to Title III thereof, all regulations and
guidelines related thereto and all requirements of Title 24 of the State of California
(collectively, the “ADA”), (b) any and all documents, instruments, licenses, restrictions,
easements or similar instruments, conveyances or encumbrances which are at any time, and from time
to time, required to be made by or given by Landlord in any manner relating to the initial
development of the Premises and/or the construction from time to time of any additional buildings
or other improvements in the Premises, including without limitation any Tenant Improvements
(collectively, the “Development Documents”), (c) any and all documents, easements, covenants,
conditions and restrictions, and similar instruments,

 

 

together with any and all amendments and supplements thereto made from time to time each of which
has been or hereafter is recorded in any official or public records with respect to the Premises or
any portion thereof (collectively, the “Recorded Matters”), and (d) any and all rules and
regulations set forth in Exhibit C hereto, any other reasonable rules and regulations
promulgated by Landlord now or hereafter enacted relating to parking and the operation of the
Premises and/or any portion thereof and any and all rules, restrictions and/or regulations imposed
by any applicable owners association or similar entity or body (collectively, the “Rules and
Regulations”). Landlord reserves to itself the right, from time to time, to grant, without the
consent of Tenant, such easements, rights and dedications that Landlord deems reasonably necessary,
and to cause the recordation of parcel or subdivision maps and/or restrictions, so long as such
easements, rights, dedications, maps and restrictions, as applicable, do not materially and
adversely interfere with Tenant’s operations in the Premises. Tenant agrees to sign any documents
reasonably requested by Landlord to effectuate any such easements, rights, dedications, maps or
restrictions. Tenant agrees to, and does hereby, assume full and complete responsibility to ensure
that the Premises, exclusive of those portions of the Premises, if any, that are to be maintained
by the Landlord pursuant to Sections 11.2 and 11.3 hereof, including without limitation, the Tenant
Improvements, are in compliance with all applicable Laws throughout the Term of this Lease.
Additionally, Tenant shall be solely responsible for the payment of all costs, fees and expenses
associated with any modifications, improvements or other Alterations to the Premises and/or any
portion thereof occasioned by the enactment of, or changes to, any Laws arising from Tenant’s
particular use of the Premises or Alterations or other improvements made to the Premises regardless
of when such Laws became effective. Tenant shall not initiate, submit an application for, or
otherwise request, any land use approvals or entitlements with respect to the Premises or any
portion thereof, including without limitation, any variance, conditional use permit or rezoning,
without first obtaining Landlord’s prior written consent thereto, which consent may be given or
withheld in Landlord’s sole discretion.

     9.2    Prohibition on Use. Tenant shall not use the Premises or permit anything to be done in or
about the Premises nor keep or bring anything therein which will in any way increase the existing
rate of or affect any policy of fire or other insurance upon the Premises or any of its contents,
or cause a cancellation of any insurance policy. No auctions may be held or otherwise conducted
in, on or about any portion thereof without Landlord’s prior written consent thereto. Tenant shall
not do or permit anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of Landlord with respect to the Premises. The Premises shall not be used
for any unlawful purpose. Tenant shall not cause, maintain or permit any private or public
nuisance in, on or about any portion of the Premises including, but not limited to, any offensive
odors, noises, or fumes. Tenant shall not damage or deface or otherwise commit or suffer to be
committed any waste in, upon or about the Premises. Tenant shall not place or store, nor permit
any other person or entity to place or store, any property, equipment, materials, supplies,
personal property or any other items or goods outside of the Premises for any period of time.
Tenant shall not permit any animals, including, but not limited to, any household pets, to be
brought or kept in or about the Premises. Tenant shall not install any radio or television
antenna, satellite dish, microwave, loudspeaker or other device on the roof or exterior walls of
the Premises, except with the prior written approval of Landlord which may be given or withheld in
Landlord’s reasonable discretion. Tenant shall not interfere with radio, telecommunication, or
television broadcasting or reception from or in the Premises or elsewhere. Tenant shall place no
loads upon the floors, walls, or ceilings in excess of the maximum designed load permitted by the
applicable Uniform Building Code or which may damage the Premises. Tenant shall not place any
harmful liquids in the drainage systems or dump or store waste materials, refuse or other such
materials, or allow such materials to remain outside the Building area, except for any
non-hazardous or non-harmful materials which may be stored in refuse dumpsters.

10. Alterations; and Surrender of Premises

     10.1    Alterations: Tenant shall be permitted to make, at its sole cost and expense,
non-structural alterations and additions to the interior of the Premises without obtaining
Landlord’s prior written consent, provided said alterations are not part of Tenant’s Wi-Fi Network
(defined herein below), do not affect the Building systems and the cost of such alterations does
not exceed Fifty Thousand Dollars ($50,000.00) each job and Seventy-five Thousand Dollars
($75,000.00) cumulatively each calendar year (the “Permitted Improvements”). Tenant, however,
shall first notify Landlord of such Permitted Improvements so that Landlord may post a Notice of
Non-Responsibility on the Premises. Except for the Permitted Improvements, Tenant shall neither
install any signs, fixtures, or improvements, nor make or permit any other alterations or additions
(individually, an “Alteration”, and collectively, “Alterations”) to the Premises without the prior
written consent of Landlord, which consent shall not be unreasonably withheld so long as any such
Alteration does not affect the Building systems, structural integrity or structural components of
the Premises or Building. If any such Alteration is expressly permitted by Landlord, Tenant shall
deliver at least ten (10) days prior written notice to Landlord, from the date Tenant commences
construction, sufficient to enable Landlord to post and record a Notice of Non-Responsibility.
Tenant shall obtain all permits or other governmental approvals prior to commencing any work and
deliver a copy of same to Landlord. All Alterations shall be (i) at Tenant’s sole cost and expense
in accordance with plans and specifications which have been previously submitted to and approved in
writing by Landlord, such approval not to be unreasonably withheld, and shall be installed by a
licensed, insured (and bonded, at Landlord’s option) contractor (reasonably approved by Landlord)
in compliance with all applicable Laws, Development Documents, Recorded Matters, and Rules and
Regulations and (ii) performed in a good and workmanlike manner. Landlord’s approval of any plans,
specifications or working drawings for Tenant’s Alterations shall neither create nor impose any
responsibility or liability on the part of Landlord for their completeness, design sufficiency, or
compliance with any Laws. As Additional Rent, Tenant shall reimburse Landlord, within ten (10)
days after demand, for reasonable actual legal, engineering, architectural, planning and other
reasonable expenses incurred by Landlord in connection with Tenant’s Alterations, plus Tenant shall
pay to Landlord a fee equal to two and one-half percent (2.5%) of the total cost of the
Alterations. If Tenant makes any Alterations, Tenant shall carry “Builder’s All Risk” insurance,
in an amount reasonably approved by Landlord and such other insurance as Landlord may reasonably
require. All such Alterations shall be insured by Tenant in accordance with Section 12 of this
Lease immediately upon completion. Tenant shall keep the Premises and the Lot on which the
Premises are situated free from any liens arising out of any work performed, materials furnished or
obligations incurred by or on behalf of Tenant. Tenant shall, prior to commencing any Alterations,
(a) cause its contractor(s) and/or major subcontractor(s) to provide insurance as reasonably
required by Landlord, and (b) provide such assurances to Landlord, including without limitation,
waivers of lien, and if the work exceeds $100,000, surety company performance bonds as Landlord
shall require to assure payment of the costs thereof to protect Landlord and the Project from and
against any mechanic’s, materialmen’s or other liens.

 

 

               10.1.1 Wi-Fi Network: Without limiting the generality of the foregoing, in the event Tenant
desires to install wireless intranet, Internet and communications network (“Wi-Fi Network“) in the
Premises for the use by Tenant and its employees, then the same shall be subject to the provisions
of this Section 10.1.1 (in addition to the other provisions of this Section 10). In the event
Landlord consents to Tenant’s installation of such Wi-Fi Network, Tenant shall, in accordance with
Section 10.2 below, remove the Wi-Fi Network from the Premises prior to the termination of the
Lease. Tenant shall use the Wi-Fi Network so as not to damage the Building and Tenant hereby
agrees to indemnify, defend and hold Landlord harmless from and against any and all claims, costs,
damages, expenses and liabilities (including attorneys’ fees) arising out of Tenant’s failure to
comply with the provisions of this Section 10.1.1, except to the extent same is caused by the gross
negligence or willful misconduct of Landlord and which is not covered by the insurance carried by
Tenant under this Lease (or which would not be covered by the insurance required to be carried by
Tenant under this Lease). Should any interference occur, Tenant shall take all necessary steps as
soon as reasonably possible and no later than three (3) calendar days following such occurrence to
correct such interference. If such interference continues after such three (3) day period, Tenant
shall immediately cease operating such Wi-Fi Network until such interference is corrected or
remedied to Landlord’s satisfaction. Tenant acknowledges that Landlord has granted and/or may
grant telecommunication rights to telecommunication service providers and in no event shall
Landlord be liable to Tenant for any interference of the same with such Wi-Fi Network; provided,
however, Landlord shall use commercially reasonable efforts to require that such providers install
equipment that is compatible with and does not materially interfere with Tenant’s Wi-Fi Network.
Landlord makes no representation that the Wi-Fi Network will be able to receive or transmit
communication signals without interference or disturbance. Tenant shall (i) be solely responsible
for any damage caused as a result of the Wi-Fi Network, (ii) promptly pay any tax, license or
permit fees charged pursuant to any laws or regulations in connection with the installation,
maintenance or use of the Wi-Fi Network and comply with all precautions and safeguards recommended
by all governmental authorities, (iii) pay for all necessary repairs, replacements to or
maintenance of the Wi-Fi Network, and (iv) be responsible for any modifications, additions or
repairs to the Building systems or infrastructure which are required by reason of the installation
or operation of Tenant’s Wi-Fi Network. Should Landlord be required to retain professionals to
research any interference issues that may arise and to confirm Tenant’s compliance with the terms
of this Section 10.1.1, Landlord shall retain such professionals at commercially reasonable rates,
and Tenant shall reimburse Landlord within twenty (20) days following submission to Tenant of an
invoice from Landlord, which costs shall not exceed $1,000 per year (except in the event of a
default by Tenant hereunder). This reimbursement obligation is independent of any rights or
remedies Landlord may have in the event of a breach of default by Tenant under this Lease.

     10.2    Surrender of Premises: At the expiration of the Term or earlier termination of this
Lease, Tenant shall surrender the Premises to Landlord (a) in good condition and repair (damage by
acts of God, casualty, and normal wear and tear excepted), but with all interior walls cleaned, any
carpets cleaned, all floors cleaned and waxed, all non-working light bulbs and ballasts replaced
and all roll-up doors and plumbing fixtures in good condition and working order, and (b) in
accordance with Section 27 hereof. Normal wear and tear shall not include any damage or
deterioration that would have been prevented by proper maintenance by Tenant, or Tenant otherwise
performing all of its obligations under this Lease, or any damage or deterioration due to or
associated with prolonged hours regularly exceeding twelve (12) hours per day, non-office use other
than light manufacturing, unusually heavy people loads (defined as more than one person per two
hundred (200) rentable square feet), unusually heavy utility use, unusually heavy floor loads, or
other unusual occupancy factors. On or before the expiration or earlier termination of this Lease,
Tenant shall remove (i) all of Tenant’s Property (defined below) and Tenant’s signage from the
Premises and other portions of the Project, (ii) any Alterations Landlord may, by notice to Tenant
given at the time of approval thereof, if Tenant requested at such time that Landlord indicate
whether removal would be required or, if Tenant failed to make such request, then given not later
than ninety (90) days prior to the Expiration Date (except in the event of a termination of this
Lease prior to the scheduled Expiration Date, in which event no advance notice shall be required),
require Tenant, at Tenant’s expense, to remove, and (iii) the Removable TIs, to the extent Landlord
has advised Tenant on or about the time that the Tenant Improvements were installed in the Premises
that Tenant is to remove all or portions of the items comprising the Tenant Improvements (the
“Removable TIs”), and Tenant shall repair any damage caused by all of such removal activities.
“Tenant’s Property” means all equipment, trade fixtures, furnishings, all telephone, data, and
other cabling and wiring (including any cabling and wiring associated with the Wi-Fi Network, if
any) installed or caused to be installed by Tenant (including any cabling and wiring, installed
above the ceiling of the Premises or below the floor of the Premises), inventories, goods and
personal property of Tenant. Any of Tenant’s Property not so removed by Tenant as required herein
shall be deemed abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s
expense, and Tenant waives all claims against Landlord for any damages resulting from Landlord’s
retention and disposition of such property; provided, however, Tenant shall remain liable to
Landlord for all costs incurred in storing and disposing of such abandoned property of Tenant.
Landlord may elect to take responsibility to remove any such wiring or cabling installed above the
ceiling or beneath the floors of the Premises, in which case Tenant shall pay Landlord for the
actual cost incurred by Landlord therefor, (together with a five percent (5%)
supervision/administration fee) within thirty (30) days after being billed for the same. All
Tenant Improvements and Alterations except those which Landlord requires Tenant to remove, shall
remain in the Premises as the property of Landlord. If the Premises are not surrendered at the
expiration of the Term or earlier termination of this Lease, and in accordance with this Section 10
and Section 27 below, Tenant shall continue to be responsible for the payment of Rent (as the same
may be increased pursuant to Section 20 below) until the Premises are so surrendered in accordance
with said provisions. Tenant shall indemnify, defend and hold the Indemnitees (hereafter defined)
harmless from and against any and all Claims (defined below) (x) arising from any delay by Tenant
in so surrendering the Premises including, without limitation, any Claims made against Landlord by
any succeeding tenant or prospective tenant founded on or resulting from such delay and (y)
suffered by Landlord due to lost opportunities to lease any portion of the Premises to any such
succeeding tenant or prospective tenant. Notwithstanding anything to the contrary herein, Tenant
shall, within twenty-four (24) hours after the expiration of this Lease, at Tenant’s expense and in
compliance with the National Electric Code and other applicable laws, remove all electronic, fiber,
phone and data cabling and related equipment that has been installed by or for the exclusive
benefit of Tenant in or around the Premises (collectively, the “Cabling”); provided, however, that
Tenant shall not remove such Cabling if Tenant receives a written notice from Landlord at least
fifteen (15) days prior to the expiration of the Lease authorizing such Cabling to remain in place,
in which event the Cabling shall be surrendered with the Premises upon the expiration of this
Lease.

 

 

11. Repairs and Maintenance

     11.1    Tenant’s Repairs and Maintenance Obligations. Except for those portions of the Premises
to be maintained by Landlord, as provided in Sections 11.2 and 11.3 below, Tenant shall, at its
sole cost and expense, keep and maintain all parts of the Premises in good, clean and safe
condition and repair, promptly making all necessary repairs and replacements, whether ordinary or
extraordinary, with materials and workmanship of the same character, kind and quality as the
original thereof, all of the foregoing in accordance with the applicable provisions of Section 10
hereof, and to the reasonable satisfaction of Landlord including, but not limited to, repairing any
damage caused by Tenant or any of Tenant’s Representatives and replacing any property so damaged by
Tenant or any of Tenant’s Representatives. Without limiting the generality of the foregoing,
Tenant shall be solely responsible for promptly maintaining, repairing and replacing (a) all
mechanical systems, heating, ventilation and air conditioning systems serving the Premises, unless
maintained by Landlord, (b) all plumbing work and fixtures, (c) electrical wiring systems, fixtures
and equipment, (d) all interior lighting (including, without limitation, light bulbs and/or
ballasts) and exterior lighting adjacent to the Premises, (e) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door closers, (f) all
roll-up doors, ramps and dock equipment, including without limitation, dock bumpers, dock plates,
dock seals, dock levelers and dock lights, (g) all tenant signage, (h) lifts for disabled persons
serving the Premises, (i) sprinkler systems, fire protection systems and security systems, except
to the extent maintained by Landlord, and (j) all partitions, fixtures, equipment, interior
painting, interior walls and floors, and floor coverings of the Premises and every part thereof
(including, without limitation, any demising walls contiguous to any portion of the Premises). Any
such work shall be performed by licensed, insured and bonded (if required hereunder) contractors
and subcontractors reasonably approved by Landlord. Additionally, Tenant shall be solely
responsible for performance of the regular removal of trash and debris. Tenant shall have no right
of access to or right to install any device on the roof of the Premises nor make any penetrations
of the roof of the Premises without the express prior written consent of Landlord.

     11.2    Maintenance by Landlord. Subject to the provisions of Section 11.1, and further subject
to Tenant’s obligation under Section 6 to reimburse Landlord, in the form of Additional Rent, for
the cost and expense of the following described items, Landlord agrees to repair and maintain the
following items: fire protection services; the roof and roof coverings (provided that Tenant
installs no additional air conditioning or other equipment on the roof that damages the roof
coverings, in which event Tenant shall pay all costs relating to the presence of such additional
equipment); painting the exterior surfaces of the Building, the plumbing and mechanical systems
serving the Premises; any rail spur and rail crossing; exterior painting of the Premises; and the
parking areas, pavement, landscaping, sprinkler systems, sidewalks, driveways, curbs, and lighting
systems in the Common Areas. Notwithstanding anything in this Section 11 to the contrary, Landlord
shall have the right to either repair or to require Tenant to repair any damage to any portion of
the Premises caused by or created due to any act, omission, negligence or willful misconduct of
Tenant or any of Tenant Representatives and to restore the Premises to the condition existing prior
to the occurrence of such damage. If Landlord elects to perform such repair and restoration work,
Tenant shall reimburse Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith. Tenant shall promptly report, in writing, to Landlord any defective
condition known to it which Landlord is required to repair, and failure to so report any such
defect shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason
of such condition.

     11.3    Landlord’s Repairs and Maintenance Obligations. Subject to the provisions of Sections
11.1, 25 and 26, and except for repairs rendered necessary by the intentional or negligent acts or
omissions of Tenant or any of Tenant’s Representatives, Landlord agrees, at Landlord’s sole cost
and expense, to (a) keep in good repair the structural portions of the floors, foundations and
exterior perimeter walls of the Premises (exclusive of glass and exterior doors), and (b) replace
the structural portions of the roof of the Premises (excluding the roof membrane).

     11.4    Tenant’s Failure to Perform Repairs and Maintenance Obligations. If Tenant, after notice
from Landlord, refuses or neglects to repair and maintain the Premises and the other areas properly
as required herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant’s Property or to Tenant’s
business by reason thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. If Landlord makes such
repairs or maintenance, upon completion thereof Tenant shall pay to Landlord, as Additional Rent,
Landlord’s costs and expenses incurred therefor. The obligations of Tenant hereunder shall survive
the expiration of the Term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or hereafter in effect
with respect to the Premises.

     11.5    Tenant’s Ability to Perform Landlord’s Unperformed Obligations. Notwithstanding anything
to the contrary contained in this Lease, if Landlord shall fail to perform any of the terms,
provisions, covenants or conditions to be performed or complied with by Landlord under Section
11.2, 11.3, 25 and 26 of this Lease (such terms, provisions, covenants or conditions are referred
to herein, collectively as “Landlord Repair Obligations”) after expiration of all applicable notice
and cure periods for Landlord’s and any mortgagee’s benefit as set forth in Sections 21 and 31,
respectively, then Tenant may, at Tenant’s option and risk, but without any obligation to do so,
after delivery of an additional twenty (20) day prior written notice to Landlord, perform such
Landlord Repair Obligations on Landlord’s behalf. If Tenant so performs any of such Landlord
Repair Obligations hereunder, then Tenant will perform such Landlord Repair Obligations (1) in
compliance with all applicable Laws, regulations and requirements to which Landlord would be
subject under this Lease (if Landlord were performing such Landlord Repair Obligations), (2) in a
good workmanlike manner using materials of a quality and grade at least equal to that in place as
of the date of delivery of the Premises to Tenant, if applicable, and (3) in compliance with the
terms and provisions of Section 10.1 hereof, as applicable. Tenant will promptly assign to
Landlord any warranties or guaranties in respect of any Landlord Repair Obligations. If Tenant so
performs any of such Landlord Repair Obligations hereunder, the full amount of the fair and
reasonable costs and expenses incurred by Tenant shall be owing by Landlord to Tenant, and Landlord
shall pay to Tenant the full undisputed amount thereof within thirty (30) days of Landlord’s
receipt of Tenant’s written demand therefor together with reasonable evidence verifying the amount
of such costs and expenses.

 

 

12. Insurance

     12.1    Types of Insurance. Tenant shall maintain in full force and effect at all times during
the Term of this Lease, at Tenant’s sole cost and expense, for the protection of Tenant and
Landlord, as their interests may appear, policies of insurance issued by a carrier or carriers
reasonably acceptable to Landlord and its lender which afford the following coverages: (i) worker’s
compensation and employer’s liability, as required by law; (ii) commercial general liability
insurance (occurrence form) providing coverage against any and all claims for bodily injury and
property damage occurring in, on or about the Premises arising out of Tenant’s and Tenant’s
Representatives’ use or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises and personal injury. Such insurance shall
have a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence with
a Three Million Dollar ($3,000,000) aggregate limit and excess/umbrella insurance in the amount of
Three Million Dollars ($3,000,000). Tenant shall also maintain product liability and completed
operations insurance coverage under a separate claims made policy. Such separate policy shall have
a liability limit of not less than $3,000,000 and shall have a deductible of not more than
$100,000. If Tenant has other United States locations which it owns or leases, the commercial
general liability policy shall include an aggregate limit per location endorsement; (iii)
comprehensive automobile liability insurance with a combined single limit of at least $1,000,000
per occurrence for claims arising out of any company owned automobiles; (iv) “all risk” or “special
purpose” property insurance, including without limitation, sprinkler leakage, covering damage to or
loss of any of Tenant’s Property and the Tenant Improvements located in, on or about the Premises,
and in addition, coverage for earthquake and business interruption of Tenant, together with, if the
property of any of Tenant’s invitees, vendors or customers is to be kept in the Premises,
warehouser’s legal liability or bailee customers insurance for the full replacement cost of the
property belonging to such parties and located in the Premises. Such insurance shall be written on
a replacement cost basis (without deduction for depreciation) in an amount equal to one hundred
percent (100%) of the full replacement value of the aggregate of the items referred to in this
clause (iv); and (v) such other insurance or higher limits of liability as is then customarily
required for similar types of buildings within the general vicinity of the Premises or as may be
reasonably required by any of Landlord’s lenders.

     12.2    Insurance Policies. Insurance required to be maintained by Tenant shall be written by
companies (i) licensed to do business in the State of California, (ii) domiciled in the United
States of America, and (iii) having a “General Policyholders Rating” of at least A: VIII (or such
higher rating as may be reasonably required by a lender having a lien on the Premises) as set forth
in the most current issue of “A.M. Best’s Rating Guides.” Any deductible amounts under any of the
insurance policies required hereunder shall not exceed Twenty-five Thousand Dollars ($25,000),
except for products liability and completed operations where the deductible shall not exceed One
Hundred Thousand Dollars ($100,000) and earthquake coverage where the deductible shall not exceed
ten percent (10%) of the insured amount. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution of this Lease by
Tenant. Tenant shall, on the renewal date of each policy, furnish Landlord with certificates of
renewal or “binders” thereof. Each certificate shall expressly provide that such policies shall
not be cancelable or otherwise subject to material modification except after thirty (30) days prior
written notice to the parties named as additional insureds as required in this Lease (except for
cancellation for nonpayment of premium, in which event cancellation shall not take effect until at
least ten (10) days’ notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this Lease under a
blanket insurance policy, provided such blanket policy expressly affords coverage for the Premises
and for Landlord as required by this Lease.

     12.3    Additional Insureds and Coverage. Each of Landlord, Landlord’s property management
company or agent, and Landlord’s lender(s) having a lien against the Premises shall be named as
additional insureds or loss payees (as applicable) under all of the policies required in Section
12.1(ii) and, with respect to the Tenant Improvements, in Section 12.1(iv) hereof. Additionally,
all of such policies shall provide for severability of interest. All insurance to be maintained by
Tenant shall, except for workers’ compensation and employer’s liability insurance, be primary,
without right of contribution from insurance maintained by Landlord. Any umbrella/excess liability
policy (which shall be in “following form”) shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits of insurance
maintained by Tenant shall not limit Tenant’s liability under this Lease. It is the parties’
intention that the insurance to be procured and maintained by Tenant as required herein shall
provide coverage for any and all damage or injury arising from or related to Tenant’s operations of
its business and/or Tenant’s or Tenant’s Representatives’ use of the Premises. Notwithstanding
anything to the contrary contained herein, to the extent Landlord’s cost of maintaining insurance
with respect to the Building is increased as a result of Tenant’s acts, omissions, Alterations,
improvements, use or occupancy of the Premises, Tenant shall pay one hundred percent (100%) of, and
for, each such increase as Additional Rent.

     12.4    Failure of Tenant to Purchase and Maintain Insurance. If Tenant fails to obtain and
maintain the insurance required herein throughout the Term of this Lease, Landlord may, but without
obligation to do so, purchase the necessary insurance and pay the premiums therefor. If Landlord
so elects to purchase such insurance, Tenant shall promptly pay to Landlord as Additional Rent, the
amount so paid by Landlord, upon Landlord’s demand therefor. In addition, Landlord may recover
from Tenant and Tenant agrees to pay, as Additional Rent, any and all losses, damages, expenses and
costs which Landlord may sustain or incur by reason of Tenant’s failure to obtain and maintain such
insurance.

     12.5    Waiver of Subrogation. Landlord and Tenant hereby mutually waive their respective rights
of recovery against each other for any loss of, or damage to, either parties’ property to the
extent that such loss or damage is insured by an insurance policy required to be in effect at the
time of such loss or damage. Each party shall obtain any special endorsements, if required by its
insurer, whereby the insurer waives its rights of subrogation against the other party. This
provision is intended to waive fully, and for the benefit of the parties hereto, any rights and/or
claims which might give rise to a right of subrogation in favor of any insurance carrier.

     12.6    Landlord’s Insurance. Landlord shall maintain in full force and effect during the Term
of this Lease, subject to reimbursement as provided in Section 6, policies of insurance which
afford such coverages as are commercially reasonable and as is

 

 

consistent with other properties in Landlord’s portfolio. Notwithstanding the foregoing, Landlord
shall obtain and keep in force during the Term of this Lease, as an item of Operating Expenses, 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 Premises (“Lender(s)”), insuring loss or damage
to the Building, including all improvements, fixtures (other than trade fixtures) and permanent
additions. However, all Alterations, additions and improvements made to the Premises by Tenant
(including the Tenant Improvements) shall be insured by Tenant rather than by Landlord. The amount
of such insurance procured by Landlord shall be equal to at least eighty percent (80%) of the full
replacement cost of the Building, including all improvements and permanent additions as the same
shall exist from time to time, or the greater amount required by Lenders. Such policy or policies
shall insure against all risks of direct physical loss or damage (so called “all risk”) (including,
without limitation and at Landlord’s option, the perils of flood and earthquake), 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 reconstruction or replacement of any
undamaged sections of the Building required to be demolished or removed by reason of the
enforcement of any building, zoning, safety or land use laws as the result of a covered cause of
loss. If any such insurance coverage procured by Landlord has a deductible clause, in the event of
any casualty, the amount of such deductible shall be an item of Operating Expenses as so limited.
Any deductible shall be in a commercially reasonable amount and the carrier shall have a rating of
A-:VIII or better.

13. Limitation of Liability and Indemnity

Except to the extent of damage resulting from the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives, Tenant agrees to protect, defend (with
counsel reasonably acceptable to Landlord) and hold Landlord and Landlord’s lenders, partners,
members, property management company (if other than Landlord), agents, directors, officers,
employees, representatives, contractors, successors and assigns and each of their respective
partners, members, directors, heirs, employees, representatives, agents, contractors, heirs,
successors and assigns (collectively, the “Indemnitees”) harmless and indemnify the Indemnitees
from and against all liabilities, damages, demands, penalties, costs, claims, losses, judgments,
charges and expenses (including reasonable attorneys’ fees, costs of court and expenses necessary
in the prosecution or defense of any litigation including the enforcement of this provision)
(collectively, “Claims”) arising from or in any way related to, directly or indirectly, (i)
Tenant’s or Tenant’s Representatives’ use of the Premises , (ii) the conduct of Tenant’s business,
(iii) from any activity, work or thing done, permitted or suffered by Tenant in or about the
Premises, (iv) in any way connected with the Premises, the Alterations or with the Tenant’s
Property therein, including, but not limited to, any liability for injury to person or property of
Tenant, Tenant’s Representatives or third party persons, and/or (v) Tenant’s failure to perform any
covenant or obligation of Tenant under this Lease. Tenant agrees that the obligations of Tenant
herein shall survive the expiration or earlier termination of this Lease.

Except to the extent of damage resulting from the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives, to the fullest extent permitted by law,
Tenant agrees that neither Landlord nor any of the Indemnitees shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss, liability, injury, death
or damage to persons or property which at any time may be suffered or sustained by Tenant or by any
person(s) whomsoever who may at any time be using, occupying or visiting the Premises. Tenant
shall not, in any event or circumstance, be permitted to offset or otherwise credit against any
payments of Rent required herein for matters for which Landlord may be liable hereunder except to
the extent of any judgment obtained by Tenant that is not satisfied by Landlord within sixty (60)
days after Landlord’s receipt of written notice from Tenant requesting satisfaction of such
judgment. Landlord and its authorized representatives shall not be liable for any interference
with light or air, or for any latent defect in the Premises.

14. Assignment and Subleasing

     14.1    Prohibition. Tenant shall not, without the prior written consent of Landlord, not to be
unreasonably withheld, assign, mortgage, hypothecate, encumber, grant any license or concession,
pledge or otherwise transfer this Lease or any interest herein, permit any assignment or other such
transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any
part thereof, or permit the use of the Premises by any persons other than Tenant and Tenant’s
Representatives (all of the foregoing are sometimes referred to collectively as “Transfers” and any
person to whom any Transfer is made or sought to be made is sometimes referred to as a
“Transferee”). No consent to any Transfer shall constitute a waiver of the provisions of this
Section 14, and all subsequent Transfers may be made only with the prior written consent of
Landlord, which consent shall not be unreasonably withheld, but which consent shall be subject to
the provisions of this Section 14.

     14.2    Request for Consent. If Tenant seeks to make a Transfer, Tenant shall notify Landlord,
in writing, and deliver to Landlord at least thirty (30) days (but not more than one hundred eighty
(180) days) prior to the proposed commencement date of the Transfer (the “Proposed Effective Date”)
the following information and documents (the “Tenant’s Notice”): (i) a description of the portion
of the Premises to be transferred (the “Subject Space”); (ii) all of the terms of the proposed
Transfer including without limitation, the Proposed Effective Date, the name and address of the
proposed Transferee, and a copy of the existing or proposed assignment, sublease or other agreement
governing the proposed Transfer; (iii) current financial statements of the proposed Transferee
certified by an officer, member, partner or owner thereof, and any such other information as
Landlord may then reasonably require, including without limitation, audited financial statements
for the previous three (3) most recent consecutive fiscal years; (iv) the Plans and Specifications
(defined below), if any; and (v) such other information as Landlord may then reasonably require.
Tenant shall give Landlord the Tenant’s Notice by registered or certified mail addressed to
Landlord at Landlord’s Address specified in the Basic Lease Information. Within thirty (30) days
after Landlord’s receipt of the Tenant’s Notice (the “Landlord Response Period”) Landlord shall
notify Tenant, in writing, of its determination with respect to such requested proposed Transfer
and the election to recapture as set forth in Section 14.5 below. If Landlord does not elect to
recapture pursuant to the provisions of Section 14.5 hereof and Landlord does consent to the
requested proposed Transfer, Tenant may thereafter assign its interests in and to this Lease or
sublease all or a portion of the Premises to the same party and on the same terms as set forth in
the Tenant’s Notice. If Landlord fails to respond to Tenant’s Notice within Landlord’s Response
Period, then, after Tenant delivers to

 

 

Landlord fifteen (15) days’ written notice (the “Second Response Period”) and Landlord fails to
respond thereto prior to the end of the Second Response Period, the proposed Transfer shall then be
deemed approved by Landlord.

     14.3    Criteria for Consent. Tenant acknowledges and agrees that, among other circumstances for
which Landlord could reasonably withhold consent to a proposed Transfer, it shall be reasonable for
Landlord to withhold its consent where (a) Tenant is or has been materially and chronically in
default of its obligations under this Lease beyond applicable notice and cure periods, as
determined in Landlord’s reasonable discretion, (b) the use to be made of the Premises by the
proposed Transferee is prohibited under this Lease or differs from the uses permitted under this
Lease, (c) the proposed Transferee or its business is subject to compliance with additional
requirements of the ADA beyond those requirements which are applicable to Tenant, unless the
proposed Transferee shall (1) first deliver plans and specifications for complying with such
additional requirements (the “Plans and Specifications”) and obtain Landlord’s written consent
thereto, and (2) comply with all Landlord’s reasonable conditions contained in such consent, (d)
the proposed Transferee does not intend to occupy a substantial portion of the Premises assigned or
sublet to it, (e) Landlord reasonably disapproves of the proposed Transferee’s business operating
ability or history, reputation or creditworthiness or the character of the business to be conducted
by the proposed Transferee at the Premises, (f) the proposed Transferee is a governmental agency or
unit, (g) the proposed Transfer would cause Landlord to violate another agreement or obligation to
which Landlord is a party or otherwise subject, (h) Landlord otherwise reasonably determines that
the proposed Transfer would have the effect of decreasing the value of the Premises or increasing
the expenses associated with operating, maintaining and repairing the Premises, or (i) the proposed
Transferee will use, store or handle Hazardous Materials (defined below) in or about the Premises
of a type, nature or quantity not then acceptable to Landlord.

     14.4    Effectiveness of Transfer and Continuing Obligations. Prior to the date on which any
permitted Transfer becomes effective, Tenant shall deliver to Landlord (i) a counterpart of the
fully executed Transfer document, (ii) an executed Hazardous Materials Disclosure Certificate
substantially in the form of Exhibit E hereto (the “Transferee HazMat Certificate”), and
(iii) Landlord’s reasonable standard form of Consent to Assignment or Consent to Sublease, as
applicable, executed by Tenant and the Transferee in which each of Tenant and the Transferee
confirms its obligations pursuant to this Lease. Failure or refusal of a Transferee to execute any
such reasonable consent instrument shall not release or discharge the Transferee from its
obligation to do so or from any liability as provided herein. The voluntary, involuntary or other
surrender of this Lease by Tenant, or a mutual cancellation by Landlord and Tenant, shall not work
a merger, and any such surrender or cancellation shall, at the option of Landlord, either terminate
all or any existing subleases or operate as an assignment to Landlord of any or all of such
subleases. Each permitted assignee shall assume and be deemed to assume this Lease and shall be
and remain liable jointly and severally with Tenant for payment of Rent and for the due performance
of, and compliance with all the terms, covenants, conditions and agreements herein contained on
Tenant’s part to be performed or complied with, for the Term of this Lease. No Transfer shall
affect the continuing primary liability of Tenant (which, following assignment, shall be joint and
several with the assignee), and Tenant shall not be released from performing any of the terms,
covenants and conditions of this Lease. An assignee of Tenant shall become directly liable to
Landlord for all obligations of Tenant hereunder, but no Transfer by Tenant shall relieve Tenant of
any obligations or liability under this Lease whether occurring before or after such consent,
assignment, subletting or other Transfer. The acceptance of any or all of the Rent by Landlord
from any other person (whether or not such person is an occupant of the Premises) shall not be
deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any
Transfer. For purposes hereof, if Tenant is a business entity, direct or indirect transfer of
fifty percent (50%) or more of the ownership interest of the entity (whether in a single
transaction or in the aggregate through more than one transaction) shall be deemed a Transfer and
shall be subject to all the provisions hereof; provided, the issuance of shares of Tenant on any
national securities exchange (as defined in the Securities Exchange Act of 1934, as amended) shall
not constitute a Transfer. Any and all options, first rights of refusal, tenant improvement
allowances and other similar rights granted to Tenant in this Lease, if any, shall not be
assignable by Tenant unless expressly authorized in writing by Landlord. Any transfer made without
Landlord’s prior written consent, shall, at Landlord’s option, be null, void and of no effect, and
shall, at Landlord’s option, constitute a material default by Tenant of this Lease. As Additional
Rent hereunder, Tenant shall pay to Landlord each time it requests a Transfer, a fee in the amount
of two thousand five hundred dollars ($2,500) and, in addition, Tenant shall promptly reimburse
Landlord for actual legal and other expenses incurred by Landlord in connection with any actual or
proposed Transfer.

     14.5    Recapture. If the Transfer (i) by itself or taken together with then existing or pending
Transfers covers or totals, as the case may be, more than twenty-five percent (25%) of the rentable
square feet of the Premises, or (ii) is for a term which by itself or taken together with then
existing or pending Transfers is greater than fifty percent (50%) of the period then remaining in
the Term of this Lease as of the time of the Proposed Effective Date, then Landlord shall have the
right, to be exercised by giving written notice to Tenant, to recapture the Subject Space described
in the Tenant’s Notice. If such recapture notice is given, it shall serve to terminate this Lease
with respect to the proposed Subject Space, or, if the proposed Subject Space covers all the
Premises, it shall serve to terminate the entire Term of this Lease, in either case, as of the
Proposed Effective Date; provided, however, if Tenant elects a recapture, Tenant may withdraw
Tenant’s Notice within ten (10) days after such election and there shall be no recapture and the
Lease shall continue in full force and effect with Tenant as the tenant hereunder. However, no
termination of this Lease with respect to part or all of the Premises shall become effective
without the prior written consent, where necessary, of the holder of each deed of trust encumbering
the Premises. If this Lease is terminated pursuant to the foregoing provisions with respect to
less than the entire Premises, the Rent shall be adjusted on the basis of the proportion of
rentable square feet retained by Tenant to the rentable square feet originally demised and this
Lease as so amended shall continue thereafter in full force and effect.

     14.6    Transfer Premium. If Landlord consents to a Transfer, as a condition thereto, Tenant
shall pay to Landlord monthly, as Additional Rent, at the same time as the monthly installments of
Rent are payable hereunder, seventy-five percent (75%) of any Transfer Premium. The term “Transfer
Premium” shall mean all rent, additional rent and other consideration payable by such Transferee
which either initially or over the term of the Transfer exceeds the Rent or pro rata portion of the
Rent, as the case may be, for such space reserved in the Lease after deducting from such excess
Tenant’s reasonable expenses in connection with such Transfer, inclusive of brokerage commissions,
attorneys’ fees, free rent and tenant improvement costs, incurred with respect to such Transfer.

 

 

     14.7    Waiver. Notwithstanding any Transfer, or any indulgences, waivers or extensions of time
granted by Landlord to any Transferee, or failure by Landlord to take action against any
Transferee, Tenant agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such Transferee, except that Tenant shall have the benefit of any
indulgences, waivers and extensions of time granted to any such Transferee.

     14.8    Affiliated Companies/Restructuring of Business Organization. The assignment or
subletting by Tenant of all or any portion of this Lease or the Premises to (i) a parent or
subsidiary of Tenant, or (ii) any person or entity which controls, is controlled by or under the
common control with Tenant, or (iii) any entity which purchases all or substantially all of the
assets of Tenant, or (iv) any entity into which Tenant is merged or consolidated (all such persons
or entities described in clauses (i), (ii), (iii) and (iv) being sometimes herein referred to as
“Affiliates”) shall not be deemed a Transfer under Section 14 (hence, the aforesaid events shall
not be subject to obtaining Landlord’s prior consent; Landlord shall not have any right to receive
any Transfer Premium in connection therewith; and Landlord shall not have the recapture rights
described in Section 14.5 above), provided in all instances that:

               14.8.1 any such Affiliate was not formed as a subterfuge to avoid the obligations of this
Section 14;

               14.8.2 Tenant shall give Landlord prior notice of any such assignment or sublease to an
Affiliate;

               14.8.3 the successor Tenant has as of the effective date of any such assignment or sublease a
tangible net worth and net assets, in the aggregate, computed in accordance with generally accepted
accounting principles (but excluding goodwill as an asset), which is equal to or better than the
tangible net worth and net assets, in the aggregate, of Tenant as of the Lease Date and as of the
date of any such assignment or sublease;

               14.8.4 any such assignment or sublease shall be subject to all of the terms and provisions of
this Lease, and such assignee or sublessee (i.e. any such Affiliate), other than in the case of an
Affiliate resulting from a merger or consolidation as described in Section 14.8(iv) above, shall
assume, in a written document reasonably satisfactory to Landlord and delivered to Landlord upon or
prior to the effective date of such assignment or sublease, all the obligations of Tenant under
this Lease; and

               14.8.5 Tenant and any guarantor shall remain fully liable for all obligations to be performed
by Tenant under this Lease, except in the case of an Affiliate resulting from the acquisition of
all or substantially all of the assets of Tenant described in Section 14.8(iii) or from a merger or
consolidation as described in Section 14.8(iv) above.

15. Subordination

To the fullest extent permitted by law, this Lease, the rights of Tenant under this Lease and
Tenant’s leasehold interest shall be subject and subordinate at all times to: (i) all ground leases
or underlying leases which may now exist or hereafter be executed affecting the Premises, and (ii)
the lien of any mortgage or deed of trust which may now or hereafter exist for which the Premises,
ground leases or underlying leases or Landlord’s interest or estate in any of said items is
specified as security. Tenant hereby acknowledges that as of the date on which Landlord and Tenant
execute this Lease there is a deed of trust encumbering, in and in force against, the Premises
(i.e. the Building) in favor of Redwood Capital Finance Company, LLC (the “Current Lender”). If
Tenant so requests, within a reasonable period after the parties execute this Lease but in no event
later than forty-five (45) days after such request, Landlord shall use commercially reasonable
efforts to cause the Current Lender to execute a subordination, non-disturbance and attornment
agreement substantially in the form of Exhibit I attached hereto, entitled “Subordination,
Non-Disturbance and Attornment Agreement”. If Landlord at any time during the Term of this Lease
causes the Premises and the Building to be encumbered by a new deed of trust or mortgage pursuant
to which the beneficiary of such deed of trust or mortgage is a party or entity other than the
Current Lender, the parties acknowledge and agree that the form of any non-disturbance and
attornment agreement that may be requested to be executed and delivered by Tenant in connection
therewith will not be the “Non-Disturbance and Attornment Agreement” attached to the Lease as
Exhibit I. Notwithstanding the foregoing, Landlord or any such ground lessor, mortgagee,
or any beneficiary shall have the right to require this Lease be superior to any such ground leases
or underlying leases or any such liens, mortgage or deed of trust. If any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall attorn to and become the
Tenant of the successor in interest to Landlord, provided such successor in interest will not
disturb Tenant’s use, occupancy or quiet enjoyment of the Premises if Tenant is not in material
default of the terms and provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be: (a) liable for any act or omission of any
prior lessor or with respect to events occurring prior to acquisition of ownership; (b) subject to
any offsets or defenses which Tenant might have against any prior lessor; (c) bound by prepayment
of more than one (1) month’s Rent, then not more than three months’ Rent; or (d) liable to Tenant
for any Security Deposit not actually received by such successor in interest to the extent any
portion or all of such Security Deposit has not already been forfeited by, or refunded to, Tenant.
Landlord shall be liable to Tenant for all or any portion of the Security Deposit not forfeited by,
or refunded to Tenant, until and unless Landlord transfers such Security Deposit to the successor
in interest. Tenant covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or request by Landlord and
in the form reasonably requested by Landlord, ground lessor, mortgagee or beneficiary, any
additional documents evidencing the priority or subordination of this Lease with respect to any
such ground leases or underlying leases or the lien of any such mortgage or deed of trust.
Tenant’s agreement to subordinate this Lease to any future ground or underlying lease or any future
deed of trust or mortgage pursuant to the foregoing provisions of this Section 15
is conditioned
upon Landlord delivering to Tenant from the lessor under such future ground or underlying lease or
the holder of any such mortgage or deed of trust, a non-disturbance agreement agreeing, among other
things, that Tenant’s right to possession of the Premises pursuant to the terms and conditions of
this Lease shall not be disturbed provided Tenant is not in default under this Lease beyond any
applicable notice and cure periods hereunder.

 

 

16. Right of Entry

Landlord and its agents shall have the right to enter the Premises at all reasonable times, upon
reasonable prior notice, for purposes of inspection, exhibition, posting of notices, investigation,
replacements, repair, maintenance and alteration. It is further agreed that Landlord shall have
the right to use any and all means Landlord deems necessary to enter the Premises in an emergency.
Landlord shall have the right to place “for rent” or “for lease” signs on the outside of the
Premises, the Building and in the Common Areas. Landlord shall also have the right to place “for
sale” signs on the outside of the Building and in the Common Areas. Tenant hereby waives any Claim
from damages or for any injury or inconvenience to or interference with Tenant’s business, or any
other loss occasioned thereby except for any Claim for any of the foregoing arising out of the sole
active gross negligence or willful misconduct of Landlord or its authorized representatives. All
of the foregoing shall be done in a manner which minimizes any material impact on Tenant’s use of
the Premises.

17. Estoppel Certificate

Tenant shall execute (and acknowledge if required by any lender or ground lessor) and deliver to
Landlord, within ten (10) days after Landlord provides such to Tenant, a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification), the date to which the Rent and other charges are paid in advance, if
any, acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder or specifying such defaults as are claimed, and such other matters as Landlord
may reasonably require. Any such statement may be conclusively relied upon by Landlord and any
prospective purchaser or encumbrancer of the Premises. Tenant’s failure to deliver such statement
within such time shall be conclusive upon the Tenant that (a) this Lease is in full force and
effect, without modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord’s performance; and (c) not more than one month’s Rent has been paid in
advance.

18. Tenant’s Default

The occurrence of any one or more of the following events shall, at Landlord’s option, constitute a
material default by Tenant of the provisions of this Lease:

     18.1
   The abandonment of the Premises by Tenant or the vacation of the Premises by Tenant which
would cause any insurance policy to be invalidated or otherwise lapse;

     18.2    The failure by Tenant to make any payment of Rent, Additional Rent or any other payment
required hereunder where such failure continues for three (3) business days after written notice to
Tenant that said payment is due or past due; provided, any such written notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil Procedure Sections 1161
et seq. and all similar or successor laws;

     18.3    The failure by Tenant to observe, perform or comply with any of the conditions, covenants
or provisions of this Lease (except failure to make any payment of Rent and/or Additional Rent and
any other payment required hereunder) and such failure is not cured within (i) thirty (30) days of
the date on which Landlord delivers written notice of such failure to Tenant for all failures other
than with respect to (a) Hazardous Materials (defined in Section 27 hereof), (b) Tenant making the
repairs, maintenance and replacements required under the provisions of Section 11.1 hereof, or (c)
the timely delivery by Tenant of a subordination, non-disturbance and attornment agreement (an
“SNDA”), a counterpart of a fully executed Transfer document and a consent thereto (collectively,
the “Transfer Documents”), an estoppel certificate and insurance certificates, (ii) ten (10) days
of the date on which Landlord delivers written notice of such failure to Tenant for all failures in
any way related to Hazardous Materials or Tenant failing to timely make the repairs, maintenance or
replacements required by Section 11.1, and (iii) the time period, if any, specified in the
applicable sections of this Lease with respect to subordination, assignment and sublease, estoppel
certificates and insurance. However, Tenant shall not be in default of its obligations hereunder
if such failure (other than any failure of Tenant to timely deliver an SNDA, the Transfer
Documents, an estoppel certificate or insurance certificates, for which no additional cure period
shall be given to Tenant) cannot reasonably be cured within such thirty (30) or ten (10) day
period, as applicable, and Tenant promptly commences, and thereafter diligently proceeds with same
to completion, all actions necessary to cure such failure as soon as is reasonably possible, but in
no event shall the completion of such cure be later than sixty (60) days after the date on which
Landlord delivers to Tenant written notice of such failure, unless Landlord, acting reasonably and
in good faith, otherwise expressly agrees in writing to a longer period of time based upon the
circumstances relating to such failure as well as the nature of the failure and the nature of the
actions necessary to cure such failure. Any such written notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure Sections 1161, et seq.
and all similar or successor laws; or

     18.4    The making of a general assignment by Tenant for the benefit of creditors, the filing of
a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant’s
creditors seeking the rehabilitation, liquidation, or reorganization of Tenant under any law
relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary
action, the failure to remove or discharge the same within sixty (60) days of such filing, the
appointment of a receiver or other custodian to take possession of substantially all of Tenant’s
assets or this leasehold which appointment is not vacated within sixty (60) days, Tenant’s
insolvency or inability to pay Tenant’s debts or failure generally to pay Tenant’s debts when due,
any court entering a decree or order directing the winding up or liquidation of Tenant or of
substantially all of Tenant’s assets, Tenant taking any action toward the dissolution or winding up
of Tenant’s affairs, the cessation or suspension of Tenant’s use of the Premises, or the
attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this
leasehold unless such attachment, execution or other judicial seizure is vacated within sixty (60)
days.

 

 

19. Remedies for Tenant’s Default

     19.1    Landlord’s Rights. In the event of Tenant’s material default under this Lease, Landlord
may terminate Tenant’s right to possession of the Premises by any lawful means in which case upon
delivery of written notice by Landlord this Lease shall terminate on the date specified by Landlord
in such notice and Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not this Lease is
terminated, and if this right of re-entry is exercised following abandonment of the Premises by
Tenant, Landlord may consider any of Tenant’s Property left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant to this Section
19 shall be construed as an election to terminate this Lease unless a written notice of such
intention is given to Tenant. If Landlord relets the Premises or any portion thereof, Tenant shall
be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises or any
part thereof, including, without limitation, broker’s commissions, expenses of cleaning,
redecorating, and further improving the Premises and other similar costs (collectively, the
“Reletting Costs”). Any and all of the Reletting Costs shall be fully chargeable to Tenant and
shall not be prorated or otherwise amortized in relation to any new lease for the Premises or any
portion thereof. Reletting may be for a period shorter or longer than the remaining term of this
Lease. In no event shall Tenant be entitled to any excess rent received by Landlord. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease. Acts of
maintenance, efforts to relet the Premises or the appointment of a receiver on Landlord’s
initiative to protect Landlord’s interest under this Lease shall not constitute a termination of
Tenant’s right to possession. So long as this Lease is not terminated, Landlord shall have the
right to remedy any default of Tenant, to maintain or improve the Premises, to cause a receiver to
be appointed to administer the Premises and new or existing subleases and to add to the Rent
payable hereunder all of Landlord’s reasonable costs in so doing, with interest at the maximum rate
permitted by law from the date of such expenditure.

     19.2    Damages Recoverable. If Tenant breaches this Lease and abandons the Premises before the
end of the Term, or if Tenant’s right to possession is terminated by Landlord because of a breach
or default under this Lease, then in either such case, Landlord may recover from Tenant all damages
suffered by Landlord as a result of Tenant’s failure to perform its obligations hereunder,
including without limitation, the unamortized cost of any Tenant Improvements constructed by or on
behalf of Tenant pursuant to Exhibit B hereto to the extent Landlord has paid for such
improvements, the unamortized portion of any broker’s or leasing agent’s commission incurred with
respect to the leasing of the Premises to Tenant for the balance of the Term of the Lease remaining
after the date on which Tenant is in default of its obligations hereunder, and all Reletting Costs,
and the worth at the time of the award (computed in accordance with paragraph (3) of Subdivision
(a) of Section 1951.2 of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease Term exceeds the amount of such loss of Rent for the same
period which Tenant proves could be reasonably avoided by Landlord and in such case, Landlord prior
to the award, may relet the Premises for the purpose of mitigating damages suffered by Landlord
because of Tenant’s failure to perform its obligations hereunder; provided, however, that even
though Tenant has abandoned the Premises following such breach, this Lease shall nevertheless
continue in full force and effect for as long as Landlord does not terminate Tenant’s right of
possession, and until such termination, Landlord shall have the remedy described in Section 1951.4
of the California Civil Code (Landlord may continue this Lease in effect after Tenant’s breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable limitations) and may enforce all its rights and remedies under this
Lease, including the right to recover the Rent from Tenant as it becomes due hereunder. The “worth
at the time of the award” within the meaning of Subparagraphs (a)(1) and (a)(2) of Section 1951.2
of the California Civil Code shall be computed by allowing interest at the rate of ten percent
(10%) per annum. Tenant waives redemption or relief from forfeiture under California Code of Civil
Procedure Sections 1174 and 1179 (or any successor or substitute statute), or under any other
present or future law, in the event Tenant is evicted or Landlord takes possession of the Premises
by reason of any default of Tenant hereunder. Tenant hereby waives for Tenant and for all those
claiming under Tenant all rights now or hereafter existing to redeem by order or judgment of any
court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease.

     19.3    Rights and Remedies Cumulative. The foregoing rights and remedies of Landlord are not
exclusive; they are cumulative in addition to any rights and remedies now or hereafter existing at
law, in equity by statute or otherwise, or to any equitable remedies Landlord may have, and to any
remedies Landlord may have under bankruptcy laws or laws affecting creditors’ rights generally. In
addition to all remedies set forth above, if Tenant materially defaults under this Lease and fails
to cure such material default within applicable cure periods hereunder, all options granted to
Tenant hereunder shall automatically terminate, unless otherwise expressly agreed to in writing by
Landlord.

20. Holding Over

If Tenant holds over after the expiration of the Lease Term hereof, with or without the express or
implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not
constitute a renewal hereof or an extension for any further term, and in such case Base Rent shall
be payable at a monthly rate equal to one hundred fifty percent (150%) of the Base Rent applicable
during the last rental period of the Lease Term under this Lease. Such month-to-month tenancy
shall be subject to every other term, covenant and agreement contained herein. Landlord hereby
expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord
as provided in this Lease upon the expiration or other termination of this Lease. The provisions
of this Section 20 shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing
therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all Claims
resulting from such failure, including but not limited to, any Claims made by any succeeding tenant
founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom.

 

 

21. Landlord’s Default

Landlord shall not be considered in default of this Lease unless Landlord fails within a reasonable
time to perform an obligation required to be performed by Landlord hereunder. For purposes hereof,
a reasonable time shall not be less than thirty (30) days after receipt by Landlord of written
notice specifying the nature of the obligation Landlord has not performed; provided, however, that
if the nature of Landlord’s obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall not be in default
of this Lease if performance of such obligation is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.

22. Parking

Tenant may use the number of non-designated and non-exclusive parking spaces specified in the Basic
Lease Information. Landlord shall exercise reasonable efforts to ensure that such spaces are
available to Tenant for its use.

23. Transfer of Landlord’s Interest

If there is any sale or other transfer of the Premises by Landlord or any of Landlord’s interest
therein, Landlord shall automatically be entirely released from all liability under this Lease
after the effective date of such sale or transfer and Tenant agrees to look solely to such
transferee for the performance of Landlord’s obligations hereunder after the date of such transfer.
A ground lease or similar long term lease by Landlord of the Premises shall be deemed a sale
within the meaning of this Section 23. Tenant agrees to attorn to such new owner provided such new
owner does not disturb Tenant’s use, occupancy or quiet enjoyment of the Premises so long as Tenant
is not in material default of any of the provisions of this Lease.

24. Waiver

No delay or omission in the exercise of any right or remedy of either party on any default by the
other party shall impair such a right or remedy or be construed as a waiver. The subsequent
acceptance of Rent by Landlord after default by Tenant of this Lease shall not be deemed a waiver
of such default, other than a waiver of timely payment for the particular Rent payment involved,
and shall not prevent Landlord from maintaining an unlawful detainer or other action based on such
uncured breach. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly
Rent and other sums due hereunder shall be deemed to be other than on account of the earliest Rent
or other sums due, nor shall any endorsement or statement on any check or accompanying any check or
payment 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 such Rent or other sum or pursue any other
remedy provided in this Lease. No failure, partial exercise or delay on the part of the Landlord
in exercising any right, power or privilege hereunder shall operate as a waiver thereof.

25. Casualty Damage

       25.1    Casualty. If the Premises or any part thereof [excluding any of Tenant’s Property, any
Wi-Fi Network, any Tenant Improvements and any Alterations installed by or for the benefit of
Tenant (collectively, the “Tenant’s FF&E”)] shall be damaged or destroyed by fire or other
casualty, Tenant shall give immediate written notice thereof to Landlord. Within sixty (60) days
after receipt by Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made, as reasonably determined by Landlord: (a) within ninety
(90) days; (b) in more than ninety (90) days but in less than one hundred eighty (180) days; or (c)
in more than one hundred eighty (180) days, from the date of such notice.

                   25.1.1 Minor Insured Damage. If the Premises (other than the Tenant’s FF&E) are damaged only
to such extent that repairs, rebuilding and/or restoration can be reasonably completed within
ninety (90) days, this Lease shall not terminate and, provided that insurance proceeds are
available and paid to Landlord to fully repair the damage and/or Tenant otherwise voluntarily
contributes any shortfall thereof to Landlord, Landlord shall repair the Premises to substantially
the same condition that existed prior to the occurrence of such casualty, except Landlord shall not
be required to rebuild, repair, or replace any of Tenant’s FF&E. The Rent payable hereunder shall
be abated proportionately from the date and to the extent Tenant vacates the affected portions of
the Premises until any and all repairs required herein to be made by Landlord are substantially
completed but such abatement shall only be to the extent (i) of the portion of the Premises which
is actually rendered unusable and unfit for occupancy and only during the time Tenant is not
actually using same, and (ii) Landlord receives rental abatement insurance proceeds therefor;
provided if rental abatement insurance proceeds are not received as a result of Landlord’s failure
to pay any premiums therefor, the receipt of such proceeds shall not be a condition to rent
abatement pursuant to this sentence.

If Landlord fails to substantially complete such repairs within two hundred seventy (270) days
after the date on which Landlord is notified by Tenant of the occurrence of such casualty [such
270-day period to be extended for delays caused by Tenant or any of Tenant’s Representatives
(“Tenant Delays”) or any force majeure events, which events shall include, but not be limited to,
acts or events beyond Landlord’s and/or its contractors’ control, acts of God, earthquakes,
strikes, lockouts, riots, boycotts, casualties not caused by Landlord or Tenant, discontinuance of
any utility or other service required for performance of the work, moratoriums, governmental delays
in issuing permits, governmental agencies and weather, and the lack of availability or shortage of
materials (“Force Majeure Delays”)], Tenant may within ten (10) business days after expiration of
such two hundred seventy (270) day period (as same may be extended), terminate this Lease by
delivering written notice to Landlord as Tenant’s exclusive remedy, whereupon all rights of Tenant
hereunder shall cease and terminate ten (10) business days after Landlord’s receipt of such notice
and Tenant shall immediately vacate the Premises and surrender possession thereof to Landlord.

 

 

                25.1.2 Insured Damage Requiring More Than 90 Days To Repair. If the Premises (other than the
Tenant’s FF&E) are damaged only to such extent that (i) repairs, rebuilding and/or restoration can
be reasonably completed, as reasonably determined by Landlord, in more than ninety (90) days but in
less than one hundred eighty (180) days, and (ii) the reasonably estimated cost of such repairs,
rebuilding or restoration exceeds twenty-five percent (25%) of the then replacement cost of the
Building (as reasonably estimated by Landlord), then Landlord shall have the option of: (a)
terminating the Lease effective upon making the determination of the extent of such damage, in
which event the Rent shall be abated from the date of the occurrence of such damage, provided
Tenant diligently proceeds to and expeditiously vacates the Premises (but, in all events Tenant
must vacate and surrender the Premises to Landlord by no later than ten (10) business days
thereafter or there shall not be any abatement of Rent until Tenant so vacates the Premises); or
(b) electing to repair the Premises to substantially the same condition that existed prior to the
occurrence of such casualty, provided insurance proceeds are available and paid to Landlord and
Tenant otherwise voluntarily contributes any shortfall thereof to Landlord to fully repair the
damage (except that Landlord shall not be required to rebuild, repair, or replace any of Tenant’s
FF&E). The Rent payable hereunder shall be abated proportionately from the date and to the extent
Tenant actually vacates the affected portions of the Premises until any and all repairs required
herein to be made by Landlord are substantially completed but such abatement shall only be to the
extent (i) of the portion of the Premises which is actually rendered unusable and unfit for
occupancy and only during the time Tenant is not actually using same, and (ii) Landlord receives
rental abatement insurance proceeds therefor; provided if rental abatement insurance proceeds are
not received as a result of Landlord’s failure to pay any premiums therefor, the receipt of such
proceeds shall not be a condition to rent abatement pursuant to this sentence. If Landlord fails
to substantially complete such repairs within one hundred eighty (180) days after the date on which
Landlord is notified by Tenant of the occurrence of such casualty [such 180-day period to be
extended for delays caused by Tenant or any of Tenant’s Representatives (“Tenant Delays”) or any
force majeure events, which events shall include, but not be limited to, acts or events beyond
Landlord’s and/or its contractors’ control, acts of God, earthquakes, strikes, lockouts, riots,
boycotts, casualties not caused by Landlord or Tenant, discontinuance of any utility or other
service required for performance of the work, moratoriums, governmental delays in issuing permits,
governmental agencies and weather, and the lack of availability or shortage of materials (“Force
Majeure Delays”)], Tenant may within ten (10) business days after expiration of such one hundred
eighty (180) day period (as same may be extended), terminate this Lease by delivering written
notice to Landlord as Tenant’s exclusive remedy, whereupon all rights of Tenant hereunder shall
cease and terminate ten (10) business days after Landlord’s receipt of such notice and Tenant shall
immediately vacate the Premises and surrender possession thereof to Landlord.

                25.1.3 Major Insured Damage. If the Premises (other than the Tenant’s FF&E) are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably completed, as
reasonably determined by Landlord, within one hundred eighty (180) days, then either Landlord or
Tenant may terminate this Lease by giving written notice within twenty (20) days after notice from
Landlord regarding the time period of repair. If either party notifies the other of its intention
to so terminate the Lease, then this Lease shall terminate and the Rent shall be abated from the
date of the occurrence of such damage, provided Tenant diligently proceeds to and expeditiously
vacates the Premises (but, in all events Tenant must vacate and surrender the Premises to Landlord
by no later than ten (10) business days thereafter or there shall not be any abatement of Rent
until Tenant so vacates the Premises). If neither party elects to terminate this Lease, Landlord
shall promptly commence and diligently prosecute to completion the repairs to the Premises,
provided insurance proceeds are available and paid to Landlord to fully repair the damage or Tenant
voluntarily contributes any shortfall thereof to Landlord (except that Landlord shall not be
required to rebuild, repair, or replace any of Tenant’s FF&E). During the time when Landlord is
prosecuting such repairs to substantial completion, the Rent payable hereunder shall be abated
proportionately from the date and to the extent Tenant actually vacates the affected portions of
the Premises until any and all repairs required herein to be made by Landlord are substantially
completed but such abatement shall only be to the extent (i) of the portion of the Premises which
is actually rendered unusable and unfit for occupancy and only during the time Tenant is not
actually using same, and (ii) Landlord receives rental abatement insurance proceeds therefor;
provided if rental abatement insurance proceeds are not received as a result of Landlord’s failure
to pay any premiums therefor, the receipt of such proceeds shall not be a condition to rent
abatement pursuant to this sentence.

                25.1.4 Damage Near End of Term. Notwithstanding anything to the contrary contained in this
Lease except for the provisions of Section 25.3 below, if the Premises are substantially damaged or
destroyed during the last year of then applicable term of this Lease, either Landlord or Tenant
may, at their option, cancel and terminate this Lease by giving written notice to the other party
of its election to do so within thirty (30) days after receipt by Landlord of notice from Tenant of
the occurrence of such casualty. If either party so elects to terminate this Lease, all rights of
Tenant hereunder shall cease and terminate ten (10) days after Tenant’s receipt or delivery of such
notice, as applicable, and Tenant shall immediately vacate the Premises and surrender possession
thereof to Landlord.

     25.2    Deductible and Uninsured Casualty. Tenant shall be responsible for and shall pay to
Landlord, as Additional Rent, the deductible amounts under the insurance policies obtained by
Landlord and Tenant under this Lease if the proceeds of which are used to repair the Premises as
contemplated in this Section 25. If any portion of the Premises is damaged and is not fully
covered by the aggregate of insurance proceeds received by Landlord and any applicable deductible,
and Tenant does not voluntarily contribute any shortfall thereof to Landlord, or if the holder of
any indebtedness secured by the Premises requires that the insurance proceeds be applied to such
indebtedness, then Landlord or Tenant shall have the right to terminate this Lease by delivering
written notice of termination to the other party within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations of Tenant shall cease and
terminate hereunder, except for those obligations expressly provided for in this Lease to survive
such termination of the Lease.

     25.3    Tenant’s Fault and Lender’s Rights. Notwithstanding anything to the contrary contained
herein, if the Premises (other than Tenant’s FF&E) or any portion thereof is damaged by fire or
other casualty not covered by insurance proceeds and resulting from the intentional acts or
omissions of Tenant or any of Tenant’s Representatives, (i) the Rent shall not be diminished during
the repair of such damage, (ii) Tenant shall not have any right to terminate this Lease due to the
occurrence of such casualty or damage, and (iii) Tenant shall be liable to Landlord for the cost
and expense of the repair and restoration of all or any portion of the Premises caused thereby
(including, without limitation, any deductible) to the extent such cost and expense is not covered
by insurance proceeds. Notwithstanding

 

 

anything to the contrary contained herein, if the holder of any indebtedness secured by the
Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall
have the right to terminate this Lease by delivering written notice of termination to Tenant within
thirty (30) days after the date of notice to Tenant of any such event, whereupon all rights and
obligations of Tenant shall cease and terminate hereunder, except for those obligations expressly
provided for in this Lease to survive such termination of the Lease.

     25.4    Tenant’s Waiver. Landlord shall not be liable for any inconvenience or annoyance to
Tenant, injury to the business of Tenant, loss of use of any part of the Premises by Tenant or loss
of Tenant’s Property, resulting in any way from such damage, destruction or the repair thereof,
except that, Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are actually unusable and unfit for occupancy and Tenant is not using or
otherwise occupying same as specifically provided above in this Section 25. With respect to any
damage or destruction which Landlord is obligated to repair or may elect to repair, Tenant hereby
waives all rights to terminate this Lease or offset any amounts against Rent pursuant to rights
accorded Tenant by any law currently existing or hereafter enacted, including but not limited to,
all rights pursuant to the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of the
California Civil Code, as the same may be amended or supplemented from time to time.

26. Condemnation

If twenty-five percent (25%) or more of the Premises is condemned by eminent domain, inversely
condemned or sold in lieu of condemnation for any public or quasi-public use or purpose
(“Condemned”), then Tenant or Landlord may terminate this Lease as of the date when physical
possession of the Premises is taken and title vests in such condemning authority, and Rent shall be
adjusted to the date of termination. Tenant shall not because of such condemnation assert any
claim against Landlord or the condemning authority for any compensation because of such
condemnation, and Landlord shall be entitled to receive the entire amount of any award without
deduction for any estate of interest or other interest of Tenant; provided, however, the foregoing
provisions shall not preclude Tenant, at Tenant’s sole cost and expense, from obtaining any
separate award to Tenant for loss of or damage to Tenant’s Property or for damages for cessation or
interruption of Tenant’s business provided such award is separate from Landlord’s award and
provided further such separate award does not diminish nor otherwise impair the award otherwise
payable to Landlord. In addition to the foregoing, Tenant shall be entitled to seek compensation
for the relocation costs recoverable by Tenant pursuant to the provisions of California Government
Code Section 7262. If neither party elects to terminate this Lease, Landlord shall, if necessary,
promptly proceed to restore the Premises, to substantially its same condition prior to such partial
condemnation, allowing for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the Rent corresponding to
the time during which, and to the part of the Premises of which, Tenant is deprived on account of
such partial condemnation and restoration. Landlord shall not be required to spend funds for
restoration in excess of the amount received by Landlord as compensation awarded.

27. Environmental Matters/Hazardous Materials

     27.1    Hazardous Materials Disclosure Certificate. Prior to executing this Lease, Tenant has
delivered to Landlord Tenant’s executed initial Hazardous Materials Disclosure Certificate (the
“Initial HazMat Certificate”), a copy of which is attached hereto as Exhibit E. Tenant
covenants, represents and warrants to Landlord that the information in the Initial HazMat
Certificate is true and correct and accurately describes the use(s) of Hazardous Materials which
will be made and/or used on the Premises by Tenant. Tenant shall, commencing with the date which
is one year from the Commencement Date and continuing every year thereafter, deliver to Landlord
within twenty (20) days after written request by Landlord, an executed Hazardous Materials
Disclosure Certificate (“the “HazMat Certificate”) describing Tenant’s then present use of
Hazardous Materials on the Premises, and any other reasonably necessary documents as requested by
Landlord. The HazMat Certificates required hereunder shall be in substantially the form attached
hereto as Exhibit E.

     27.2    Definition of Hazardous Materials. As used in this Lease, the term Hazardous Materials
shall mean and include (a) any hazardous or toxic wastes, materials or substances, and other
pollutants or contaminants, which are or become regulated by any Environmental Laws; (b) petroleum,
petroleum by products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos and
asbestos containing material, in any form, whether friable or non-friable; (d) polychlorinated
biphenyls; (e) radioactive materials; (f) lead and lead-containing materials; (g) any other
material, waste or substance displaying toxic, reactive, ignitable or corrosive characteristics, as
all such terms are used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens to cause a
nuisance upon or waste to any portion of the Premises or any surrounding property; or poses or
threatens to pose a hazard to the health and safety of persons on the Premises or any surrounding
property. For purposes of this Lease, the term “Hazardous Materials” shall not include nominal
amounts of ordinary household cleaners, office supplies and janitorial supplies which are not
actionable under any Environmental Laws.

     27.3    Prohibition; Environmental Laws. Tenant shall not be entitled to use or store any
Hazardous Materials on, in, or about any portion of the Premises without, in each instance,
obtaining Landlord’s prior written consent thereto. If Landlord, in its sole discretion, consents
to any such usage or storage, then Tenant shall be permitted to use and/or store only those
Hazardous Materials that are necessary for Tenant’s business and to the extent disclosed in the
HazMat Certificate and as expressly approved by Landlord in writing. Any such usage and storage
may only be to the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord. In all events such usage and
storage must at all times be in full compliance with any and all local, state and federal
environmental, health and/or safety-related laws, statutes, orders, standards, courts’ decisions,
ordinances, rules and regulations (as interpreted by judicial and administrative decisions),
decrees, directives, guidelines, permits or permit conditions, currently existing and as amended,
enacted, issued or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the “Environmental Laws”). Tenant agrees that any changes
to the type and/or quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord, which consent may
be given or withheld in Landlord’s sole discretion. Tenant shall not be entitled nor permitted to
install any tanks under, on or about the Premises for the storage of Hazardous Materials without
the express written consent of Landlord, which may be given or withheld

 

 

in Landlord’s sole discretion. Landlord shall have the right at all times during the Term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to determine whether
Tenant is in compliance with the provisions of this Section 27 or to determine if Hazardous
Materials are present in, on or about the Premises, and (iii) request lists of all Hazardous
Materials used, stored or otherwise located on, under or about any portion of the Premises and/or
the Common Areas. The cost of all such inspections, tests and investigations shall be borne by
Tenant, if Landlord reasonably determines that Tenant or any of Tenant’s Representatives are
directly or indirectly responsible in any manner for any contamination revealed by such
inspections, tests and investigations. The aforementioned rights granted herein to Landlord and
its representatives shall not create (a) a duty on Landlord’s part to inspect, test, investigate,
monitor or otherwise observe the Premises or the activities of Tenant and Tenant’s Representatives
with respect to Hazardous Materials, including without limitation, Tenant’s operation, use and any
remediation related thereto, or (b) liability on the part of Landlord and its representatives for
Tenant’s use, storage, disposal or remediation of Hazardous Materials, it being understood that
Tenant shall be solely responsible for all liability in connection therewith. The provisions of
this Section shall not preclude (I) maintenance by Tenant of the existing generator and diesel
storage tank on the Premises or (II) replacement of such tank with a larger tank; provided however
that Tenant shall obtain Landlord’s prior approval of any such replacement, and all maintenance or
replacement activities shall be performed in full compliance with all applicable laws, statutes,
regulations and similar ordinances and directives.

     27.4    Tenant’s Environmental Obligations. Tenant shall give to Landlord immediate verbal and
follow-up written notice of any spills, releases, discharges, disposals, emissions, migrations,
removals or transportation of Hazardous Materials on, under or about any portion of the Premises or
in any Common Areas; provided that Tenant has actual, implied or constructive knowledge of such
event(s). Tenant, at its sole cost and expense, covenants and warrants to promptly investigate,
clean up, remove, restore and otherwise remediate (including, without limitation, preparation of
any feasibility studies or reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant’s Representatives
such that the affected portions of the Premises and any adjacent property are returned to the
condition existing prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed after Tenant has
obtained Landlord’s prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or short-term effect on any
portion of the Premises. Notwithstanding the foregoing, Tenant shall be entitled to respond
immediately to an emergency without first obtaining Landlord’s prior written consent. Tenant, at
its sole cost and expense, shall conduct and perform, or cause to be conducted and performed, all
closures as required by any Environmental Laws or any agencies or other governmental authorities
having jurisdiction thereof. If Tenant fails to so promptly investigate, clean up, remove,
restore, provide closure or otherwise so remediate, Landlord may, but without obligation to do so,
take any and all steps necessary to rectify the same and Tenant shall promptly reimburse Landlord,
upon demand, for all costs and expenses to Landlord of performing investigation, clean up, removal,
restoration, closure and remediation work. All such work undertaken by Tenant, as required herein,
shall be performed in such a manner so as to enable Landlord to make full economic use of the
Premises after the satisfactory completion of such work.

     27.5    Environmental Indemnity. In addition to Tenant’s obligations as set forth hereinabove,
Tenant agrees to, and shall, protect, indemnify, defend (with counsel reasonably acceptable to
Landlord) and hold Landlord and the other Indemnitees harmless from and against any and all Claims
(including, without limitation, diminution in value of any portion of the Premises, damages for the
loss of or restriction on the use of rentable or usable space, and from any adverse impact of
Landlord’s marketing of any space within the Premises) arising at any time during or after the Term
of this Lease in connection with or related to, directly or indirectly, the use, presence,
transportation, storage, disposal, migration, removal, spill, release or discharge of Hazardous
Materials on, in or about any portion of the Premises as a result (directly or indirectly) of the
intentional or negligent acts or omissions of Tenant or any of Tenant’s Representatives. Neither
the written consent of Landlord to the presence, use or storage of Hazardous Materials in, on,
under or about any portion of the Premises nor the strict compliance by Tenant with all
Environmental Laws shall excuse Tenant from its obligations of indemnification pursuant hereto.
Tenant shall not be relieved of its indemnification obligations under the provisions of this
Section 27.5 due to Landlord’s status as either an “owner” or “operator” under any Environmental
Laws.

     27.6    Survival. Tenant’s obligations and liabilities pursuant to the provisions of this
Section 27 shall survive the expiration or earlier termination of this Lease. If it is determined
by Landlord that the condition of all or any portion of the Premises is not in compliance with the
provisions of this Lease with respect to Hazardous Materials due to any act or omission of Tenant
or Tenant’s Representatives, including without limitation, all Environmental Laws at the expiration
or earlier termination of this Lease, then Landlord may require Tenant to hold over possession of
the Premises until Tenant can surrender the Premises to Landlord in the condition in which the
Premises existed as of the Commencement Date and prior to the appearance of such Hazardous
Materials except for reasonable wear and tear, including without limitation, the conduct or
performance of any closures as required by any Environmental Laws. The burden of proof hereunder
shall be upon Tenant. For purposes hereof, the term “reasonable wear and tear” shall not include
any deterioration in the condition or diminution of the value of any portion of the Premises in any
manner whatsoever related to directly, or indirectly, Hazardous Materials. Any such holdover by
Tenant will be with Landlord’s consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Section 20 of this Lease.

28. Financial Statements

Tenant and any permitted Transferee, for the reliance of Landlord, any lender holding or
anticipated to acquire a lien upon any portion of the Premises or any prospective purchaser of any
portion of the Premises within ten (10) days after Landlord’s request therefor, but not more often
than once annually so long as Tenant is not in material default of this Lease, shall deliver to
Landlord the then current audited financial statements of Tenant (including interim periods
following the end of the last fiscal year for which annual statements are available). If audited
financial statements have not been prepared, Tenant and any permitted Transferee shall provide
Landlord with unaudited financial statements and such other information, the type and form of which
are acceptable to Landlord in Landlord’s reasonable discretion, which reflects the financial
condition of Tenant and any permitted Transferee.

 

 

29. General Provisions

     29.1    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.

     29.2    Successors and Assigns. The covenants and conditions herein contained, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and
assigns of the parties hereto.

     29.3    Recordation. Tenant shall not record this Lease or a short form memorandum hereof.

     29.4    Landlord Exculpation. The liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease shall be limited to the actual interest of Landlord and its present
or future partners or members in the Building and any other assets of the Landlord entity, and
Tenant agrees to look solely to Landlord’s interest in the Building and such other entity assets
for satisfaction of any liability and shall not look to other assets of Landlord nor seek any
recourse against the assets of the individual partners, members, directors, officers, shareholders,
agents or employees of Landlord, including without limitation, any property management company of
Landlord (collectively, the “Landlord Parties”). It is the parties’ intention that Landlord and
the Landlord Parties shall not in any event or circumstance be personally liable, in any manner
whatsoever, for any judgment or deficiency hereunder or with respect to this Lease. The liability
of Landlord under this Lease is limited to its actual period of ownership of title to the Building.

     29.5    Severability and Governing Law. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other provisions hereof
and such other provision shall remain in full force and effect. This Lease shall be governed by,
and construed in accordance with, the laws of the State of California.

     29.6    Attorneys’ Fees. In the event any dispute between the parties results in litigation or
other proceeding, the prevailing party shall be reimbursed by the party not prevailing for all
reasonable costs and expenses, including, without limitation, reasonable attorneys’ and experts’
fees and costs incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be included in and made a
part of the judgment recovered by the prevailing party, if any.

     29.7    Entire Agreement. It is understood and acknowledged that there are no oral agreements
between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and any side letter or
separate agreement executed by Landlord and Tenant in connection with this Lease and dated of even
date herewith contain all of the terms, covenants, conditions, warranties and agreements of the
parties relating in any manner to the rental, use and occupancy of the Premises, shall be
considered to be the only agreement between the parties hereto and their representatives and
agents, and none of the terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto. All negotiations and oral
agreements acceptable to both parties have been merged into and are included herein. There are no
other representations or warranties between the parties, and all reliance with respect to
representations is based totally upon the representations and agreements contained in this Lease.
The parties acknowledge that (i) each party and/or its counsel have reviewed and revised this
Lease, and (ii) no rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall be employed in the interpretation or enforcement of this Lease or
any amendments or exhibits to this Lease or any document executed and delivered by either party in
connection with this Lease.

     29.8    Warranty of Authority. On the date that Tenant executes this Lease, Tenant shall deliver
to Landlord an original certificate of status for Tenant issued by the California Secretary of
State or statement of partnership for Tenant recorded in the county in which the Premises are
located, as applicable, and such other documents as Landlord may reasonably request with regard to
the lawful existence of Tenant. Each person executing this Lease on behalf of a party represents
and warrants that (1) such person is duly and validly authorized to do so on behalf of the entity
it purports to so bind, and (2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. Each party hereby warrants that this Lease is legal,
valid and binding upon such party and enforceable against such party in accordance with its terms.

     29.9    Notices. All notices, demands, statements or communications (collectively, “Notices”)
given or required to be given by either party to the other hereunder shall be in writing, shall be
sent by United States certified or registered mail, postage prepaid, return receipt requested, or
delivered personally (i) to Tenant at the Tenant’s Address set forth in the Basic Lease
Information, or to such other place as Tenant may from time to time designate in a Notice to
Landlord; or (ii) to Landlord at Landlord’s Address set forth in the Basic Lease Information, or to
such other firm or to such other place as Landlord may from time to time designate in a Notice to
Tenant. Any Notice will be deemed given on the date of receipt or refusal on the return receipt or
upon the date personal delivery is made.

     29.10    Joint and Several; Covenants and Conditions. If Tenant consists of more than one person
or entity, the obligations of all such persons or entities shall be joint and several. Each
provision to be performed by Tenant hereunder shall be deemed to be both a covenant and a
condition.

     29.11    Confidentiality. Tenant acknowledges that the content of this Lease and any related
documents are confidential information. Tenant shall keep and maintain such confidential
information strictly confidential and shall not disclose such confidential information to any
person or entity other than Tenant’s financial, legal and space planning consultants or as
otherwise required by Law.

 

 

     29.12    Landlord Renovations. Tenant acknowledges that Landlord may from time to time, at
Landlord’s sole option and expense, subject to the other terms and conditions of this Lease,
renovate, improve, develop, alter, or modify (collectively, the “Renovations”) portions of the
Premises, and Common Areas, including without limitation, systems and equipment, roof, and
structural portions of the same. In connection with such Renovations, Landlord may, among other
things, erect scaffolding or other necessary structures in the Premises, limit or eliminate access
to portions of the Premises, including portions of the Common Areas, or perform work in the
Premises, which work may create noise, dust or leave debris in or about the Premises; provided that
Landlord shall use reasonable efforts to minimize interference with Tenant’s operations and to
coordinate Renovations work with the Tenant by providing reasonable advance notice of same and the
opportunity for Tenant to reasonably request a schedule change for such work if reasonably
necessary to minimize such interference. Tenant hereby agrees that such Renovations and Landlord’s
actions in connection with such Renovations shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent. Except as otherwise provided herein, Landlord
shall have no responsibility, or for any reason be liable to Tenant, for any direct or indirect
injury to or interference with Tenant’s business arising from the Renovations, nor shall Tenant be
entitled to any compensation or damages from Landlord for loss of the use of the whole or any part
of the Premises or of Tenant’s Property, Alterations or improvements resulting from the Renovations
or Landlord’s actions in connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord’s actions in connection with such Renovations.

     29.13    Waiver of 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 related to this Lease, the relationship of
Landlord and Tenant, Tenant’s use or occupancy of the Premises or the Common Area and/or any claim
of injury, loss or damage.

     29.14    Submission of Lease. Submission of this instrument for examination or signature by
Tenant does not constitute a 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.

30. Signs

All signs and graphics of every kind visible from the exterior of the Premises shall be subject to
Landlord’s prior written approval which shall not be unreasonably withheld, and shall be subject to
and in compliance with all applicable Laws, Development Documents, Recorded Matters, Rules and
Regulations, and Landlord’s sign criteria as same may exist from time to time. Tenant shall remove
all such signs and graphics prior to the expiration or earlier termination of this Lease. Such
installations and removals shall be made in a manner as to avoid damage or defacement of the
Premises. Tenant shall repair any damage or defacement, including without limitation,
discoloration caused by such installation or removal. Landlord shall have the right, at its
option, to deduct from the Security Deposit such sums as are reasonably necessary to remove such
signs and make any repairs necessitated by such removal. Notwithstanding the foregoing, in no
event shall any neon, flashing or moving sign(s) be permitted hereunder. Tenant further agrees to
maintain each such sign and graphics, as may be approved, in good condition and repair at all
times.

31. Mortgagee Protection

Upon any default on the part of Landlord, Tenant will give written Notice by registered or
certified mail to any beneficiary of a deed of trust or mortgagee of a mortgage covering the
Premises who has provided Tenant with notice of their interest together with an address for
receiving Notice, and shall offer such beneficiary or mortgagee a reasonable opportunity to cure
the default, including time to obtain possession of the Premises by power of sale or a judicial
foreclosure, if such should prove necessary to effect a cure. If such default cannot be cured
within such time period, then such additional time as may be necessary will be given to such
beneficiary or mortgagee to effect such cure so long as such beneficiary or mortgagee has commenced
the cure within the original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being diligently pursued.
Tenant agrees that each lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than one (1) month in
advance without the prior written consent of each such lender. Tenant waives the collection of any
deposit from such lender(s) or any purchaser at a foreclosure sale of such lender(s)’ deed of trust
unless the lender(s) or such purchaser shall have actually received and not refunded the deposit.
Tenant agrees to make all payments under this Lease to the lender with the most senior encumbrance
upon receiving a direction, in writing, to pay said amounts to such lender and any such payment(s)
shall satisfy Tenant’s payment obligation hereunder but solely with respect to the payment(s) so
made. Tenant shall comply with such written direction to pay without determining whether an event
of default exists under such lender’s loan to Landlord. If, in connection with obtaining financing
for the Premises, Landlord’s lender shall request reasonable modification(s) to this Lease as a
condition to such financing, Tenant shall not unreasonably withhold, delay or defer its consent
thereto, provided such modifications do not materially and adversely affect Tenant’s rights
hereunder or the use, occupancy or quiet enjoyment of Tenant hereunder or increase Tenant’s payment
or other obligations.

32. Warranties of Tenant

Tenant hereby warrants and represents to Landlord, for the express benefit of Landlord, that Tenant
has undertaken a complete and independent evaluation of the risks inherent in the execution of this
Lease and the operation of the Premises for the use permitted hereby, and that, based upon said
independent evaluation, Tenant has elected to enter into this Lease and hereby assumes all risks
with respect thereto. Tenant hereby further warrants and represents to Landlord, for the express
benefit of Landlord, that in entering into this Lease, Tenant has not relied upon any statement,
fact, promise or representation (whether express or implied, written or oral) not specifically set
forth herein in writing and that any statement, fact, promise or representation (whether express or
implied, written or oral) made at any time to Tenant, which is not expressly incorporated herein in
writing, is hereby waived by Tenant.

 

 

33. Brokerage Commission

Landlord and Tenant each represents and warrants for the benefit of the other that it has had no
dealings with any real estate broker, agent or finder in connection with the Premises and/or the
negotiation of this Lease, except for the Broker(s) specified in the Basic Lease Information, and
that it knows of no other real estate broker, agent or finder who is or might be entitled to a real
estate brokerage commission or finder’s fee in connection with this Lease or otherwise based upon
contacts between the claimant and such party. Each party shall indemnify and hold harmless the
other from and against any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the Premises and this
Lease other than Broker(s), if any, resulting from the actions of the indemnifying party. Unless
expressly agreed to in writing by Landlord and Broker(s), no real estate brokerage commission or
finder’s fee shall be owed to, or otherwise payable to, the Broker(s) for any renewals or other
extensions of the initial Term of this Lease or for any additional space leased by Tenant other
than the Premises as same exists as of the Lease Date. Tenant further represents and warrants to
Landlord that Tenant will not receive (i) any portion of any brokerage commission or finder’s fee
payable to the Broker(s) in connection with this Lease or (ii) any other form of compensation or
incentive from the Broker(s) with respect to this Lease. Landlord shall pay all commissions due to
the Broker(s) in connection with this Lease pursuant to a separate agreement.

34. Quiet Enjoyment

Landlord covenants with Tenant, upon the paying of Rent and observing and keeping the covenants,
agreements and conditions of this Lease on its part to be kept, and during the periods that Tenant
is not otherwise in default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord’s lenders, (i) that Tenant shall and may peaceably and quietly have,
hold, occupy and enjoy the Premises and the Common Areas during the Term of this Lease, and (ii)
neither Landlord, nor any successor or assign of Landlord, shall disturb Tenant’s occupancy or
enjoyment of the Premises and the Common Areas. The foregoing covenant is in lieu of any other
covenant express or implied.

35. Existing Furniture, Systems and Equipment

Throughout the Term of this Lease, Tenant shall have the right to use the furniture, fixtures and
equipment currently located within the Premises and listed on Exhibit H attached hereto
(collectively, the “FF&E”). Tenant acknowledges and agrees that the FF&E was acquired and used by
the former tenant of the Premises, and Landlord has made no representations or warranties, express,
implied or otherwise, regarding the condition or working order of the FF&E. Tenant confirms that
it has had the reasonable opportunity to inventory and inspect the FF&E and hereby represents that
(i) it accepts the FF&E “AS IS AND WITH ALL FAULTS”, and (2) it is satisfied that all items of FF&E
listed on Exhibit H are currently located within the Premises and are hereby accepted by
Tenant, subject to and in accordance with the terms of this Section 35. Tenant acknowledges and
agrees that Landlord shall continue to own the FF&E, and Tenant shall acquire no ownership interest
therein. Throughout the Term, Tenant shall be obligated to maintain, repair and safeguard the
FF&E, and shall obtain and maintain Physical Damage Insurance with respect to the FF&E, covering
“all risks” of physical loss or damage, for the full replacement cost value new without deduction
for depreciation, as more particularly referenced in Section 12.1(iv) of this Lease. With the
exception of ordinary wear and tear, Tenant shall promptly repair or replace any FF&E that becomes
damaged, destroyed or for any reason is no longer located at the Premises, and shall keep a
detailed log of any such repairs or replacements. All replacements shall be of substantially
similar style and quality as the original items of FF&E so replaced. Tenant shall provide Landlord
with a copy of such log upon request. In no event shall Landlord have any liability or
responsibility with respect to the FF&E, and Landlord shall have no responsibility to repair or
refurbish the FF&E at any time. At the expiration of the Term, Landlord and Tenant shall jointly
inventory the FF&E then located within the Premises, and Tenant shall pay to Landlord, within
thirty (30) days following the effective date of expiration or earlier termination of this Lease,
an amount equal to the cost to repair or replace any items of the FF&E which are no longer located
at the Premises, are of inferior style or quality as compared with the original FF&E, or which
exhibit damage beyond ordinary wear and tear.

     IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease Date referenced on
Page 1 of this Lease.

Tenant:

	 	 	 
	VNUS Medical Technologies, Inc.,

a Delaware corporation
	 	 
	 
	 	 
	By: /s/ Brian E. Farley

	 	/s/ Timothy A. Marcotte
	 
	 	 
	Its: President and CEO

	 	11/15/05
	 
	 	 
	Date: 11-15-05
	 	 

	 	 	 	 	 
	By:

	 	/s/ Charlene A. Friedman
	 	 
	 
	 	 	 	 
	Its: Secretary	 	 
	 
	 	 	 	 
	Date: 11-15-05	 	 

 

 

Landlord:

	 	 	 	 	 	 	 
	LEGACY PARTNERS I SJ FONTANOSO, LLC,	 	 
	a Delaware limited liability company,	 	 
	Owner	 	 
	 
	 	 	 	 	 	 
	By:	 	LEGACY PARTNERS COMMERCIAL, L.P.,	 	 
	 	 	a California limited partnership,	 	 
	 	 	as Property Manager and Agent for Owner	 	 
	 
	 	 	 	 	 	 
	By:	 	LEGACY PARTNERS COMMERCIAL, INC.,	 	 
	 	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Debra Smith	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:
	 	Debra Smith

Executive Vice President	 	 
	 
	 	 	 	 	 	 
	Date:	 	November 17, 2005	 	 

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. The Lease must be executed by the president or
vice-president and the secretary or assistant secretary, unless the bylaws or a resolution of the
board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

 

 

Exhibit A

Premises

This exhibit, entitled “Premises”, is and shall constitute Exhibit A to that certain Lease
Agreement dated November ___, 2005 (the “Lease”), by and between Legacy Partners I SJ Fontanoso,
LLC, a Delaware limited liability company (“Landlord”), and VNUS Medical Technologies, Inc., a
Delaware corporation (“Tenant”), for the leasing of certain premises located at 5799 Fontanoso Way,
San Jose, California 95138 (the “Premises”).

The Premises consist of the rentable square footage of space specified in the Basic Lease
Information and has the address specified in the Basic Lease Information. The Premises consist of
the Building specified in the Basic Lease Information.

Exhibit A, Page 1

 

Exhibit B

Tenant Improvements

This exhibit, entitled “Tenant Improvements”, is and shall constitute Exhibit B to that
certain Lease Agreement dated November ___, 2005 (the “Lease”), by and between Legacy Partners I SJ
Fontanoso, LLC, a Delaware limited liability company (“Landlord”), and VNUS Medical Technologies,
Inc., a Delaware corporation (“Tenant”), for the leasing of certain premises located at 5799
Fontanoso Way, San Jose, California (the “Premises”). The terms, conditions and provisions of this
Exhibit B are hereby incorporated into and are made a part of the Lease. Any capitalized
terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms as
set forth in the Lease:

1. Tenant Improvements. Subject to the conditions set forth below, Landlord agrees to construct
and install certain improvements (“Tenant Improvements”) in the Premises in accordance with the
Approved Final Drawings (defined below) and pursuant to the terms of this Exhibit B.

2. Definition. “Tenant Improvements” as used in this Lease shall include only those interior
improvements to be made to the Premises as specified in the Approved Final Drawings (defined below)
and agreed to by Tenant and Landlord in accordance with the provisions hereof. “Tenant
Improvements” shall specifically not include (i) any alterations, additions or improvements
installed or constructed by Tenant, (ii) any of Tenant’s trade fixtures, racking, security
equipment, equipment, furniture, furnishings, telephone and/or data equipment, telephone and/or
data lines or other personal property (collectively, “FF&E”), and (iii) any supplemental fire
protection improvements or equipment, including without limitation, in-rack fire sprinklers, hose
racks, reels, smoke vents, and draft curtains (collectively, “Tenant’s Installations”).

3. Tenant’s Initial Plans; the Work. Tenant desires Landlord to perform certain Tenant
Improvements in the Premises. The Tenant Improvements shall be in substantial accordance with the
plan(s) and scope of work (collectively, the “Initial Plans”) which will be prepared by Legacy CDS,
Inc. after the parties meet and confer to agree upon a scope of work immediately after execution of
this Lease. Within fifteen (15) business days from the date Landlord and Tenant meet to discuss
the scope of work, Landlord shall deliver to Tenant the Initial Plans. A copy of the Initial Plans
shall be attached hereto as Schedule 1, as soon as practicable thereafter. Such work, as shown in
the Initial Plans and as more fully detailed in the Approved Final Drawings (as defined and
described in Section 4 below), shall be hereinafter referred to as the “Work”. Not later than five
(5) business days after the Initial Plans are prepared and delivered to Tenant, Tenant or Tenant’s
Representatives shall furnish to Landlord such additional plans, drawings, specifications and
finish details as Landlord may reasonably request to enable Landlord’s architects and engineers, as
applicable, to prepare mechanical, electrical and plumbing plans and to prepare the Final Drawings,
including, but not limited to, a final telephone layout and special electrical connections, if any.
All plans, drawings, specifications and other details describing the Work which have been, or are
hereafter, furnished by or on behalf of Tenant shall be subject to Landlord’s approval, which
approval shall not be unreasonably withheld. Landlord shall not be deemed to have acted
unreasonably if it withholds its approval of any plans, specifications, drawings or other details
or of any Change Request (hereafter defined in Section 11 below) because, in Landlord’s reasonable
opinion, the work as described in any such item, or any Change Request, as the case may be: (a) is
likely to adversely affect Building systems, the structure of the Building or the safety of the
Building or its occupants; (b) might impair Landlord’s ability to furnish services to Tenant; (c)
would increase the cost of operating the Building, with the exception of electrical utilities; (d)
would violate any applicable governmental, administrative body’s or agencies’ laws, rules,
regulations, ordinances, codes or similar requirements (or interpretations thereof); (e) contains
or uses Hazardous Materials; (f) would adversely affect the appearance of the Building; (g) is
prohibited by any ground lease affecting the Building and/or the Lot, any Recorded Matters or any
mortgage, trust deed or other instrument encumbering the Building and/or the Lot; (h) is likely to
be substantially delayed because of unavailability or shortage of labor or materials necessary to
perform such work or the difficulties or unusual nature of such work; (i) is not, at a minimum, in
accordance with Landlord’s Building Standards (defined below); or (j) would increase the Tenant
Improvement Costs (defined in Section 9 below) by more than ten percent (10%) from the cost
originally estimated and anticipated by the parties unless Tenant is willing to pay for such
increased costs. The foregoing reasons, however, shall not be the only reasons for which Landlord
may withhold its approval, whether or not such other reasons are similar or dissimilar to the
foregoing. Neither the approval by Landlord of the Work or the Initial Plans or any other plans,
specifications, drawings or other items associated with the Work nor Landlord’s performance,
supervision or monitoring of the Work shall constitute any warranty or covenant by Landlord to
Tenant of the adequacy of the design for Tenant’s intended use of the Premises. Tenant agrees to,
and does hereby, assume full and complete responsibility to ensure that the Work and the Approved
Final Drawings are adequate to fully meet the needs and requirements of Tenant’s intended
operations of its business within the Premises and Tenant’s use of the Premises.

4. Final Drawings and Approved Final Drawings. If necessary for the performance of the Work, and
to the extent not already included as part of the Initial Plans, Landlord shall prepare or cause to
be prepared final working drawings and specifications for the Work (the “Final Drawings”) based on
and consistent with the Initial Plans and the other plans, specifications, drawings, finish details
or other information furnished by Tenant or Tenant’s Representatives to Landlord and approved by
Landlord pursuant to Section 3 above. Tenant shall cooperate diligently with Landlord and
Landlord’s architect, engineer and other representatives and Tenant shall furnish within five (5)
business days after any request therefor, all information required by Landlord or Landlord’s
architect, engineer or other representatives for completion of the Final Drawings. So long as the
Final Drawings are substantially consistent with the Initial Plans, Tenant shall approve the Final
Drawings within five (5) business days after receipt of same from Landlord. Tenant’s failure to
approve or disapprove such Final Drawings within the foregoing five (5) business day time period,
shall be conclusively deemed to be approval of same by Tenant. If Tenant reasonably disapproves of
any matters included in the Final Drawings because such items are not substantially consistent with
the Initial Plans, Tenant shall, within the aforementioned five (5) business day period, deliver to
Landlord written notice of its disapproval and Tenant shall specify in such written notice, in
sufficient detail as Landlord may reasonably require, the matters disapproved, the reasons for such
disapproval, and the specific changes or revisions necessary to be made to the Final Drawings to
cause such drawings to substantially conform to the Initial Plans. Any additional costs associated
with such requested changes or revisions shall be included as part of the Tenant Improvement Costs
(defined below). The foregoing procedure shall be followed by the parties until the Final Drawings
are acceptable to both Landlord and Tenant. Landlord and Tenant shall indicate their approval of
the Final Drawings by initialing each sheet of the Final Drawings and delivering to one another a
true and complete copy of such

Exhibit B, Page 1

 

initialed Final Drawings (the “Approved Final Drawings”). A true and complete copy of the Approved
Final Drawings shall be attached to the Lease as Exhibit B-1 and shall be made a part
thereof. Any changes or revisions to the Approved Final Drawings requested by Tenant must first be
approved by Landlord, which approval shall not be unreasonably withheld, subject to the provisions
of Section 3 above. If Landlord approves such requested changes or revisions, Landlord shall cause
the Approved Final Drawings to be revised accordingly and Landlord and Tenant shall initial each
sheet of the Approved Final Drawings as revised and replace and attach a true and complete copy
thereof to the Lease as Exhibit B-1. Landlord and Tenant hereby covenant to each other to
cooperate with each other and to act reasonably in the preparation and approval of the Final
Drawings and the Approved Final Drawings.

5. Performance of Work. As soon as practicable after Tenant and Landlord initial and attach to the
Lease as Exhibit B-1 a true and complete copy of the Approved Final Drawings, Landlord
shall submit the Approved Final Drawings to the governmental authorities having rights of approval
over the Work and shall apply for the necessary approvals and building permits. Subject to the
satisfaction of all conditions precedent and subsequent to its obligations under this Exhibit
B, and further subject to the provisions of Section 10 hereof, as soon as practicable after
Landlord or its representatives have received all necessary approvals and building permits,
Landlord will put the Approved Final Drawings out for bid to several licensed, bonded and insured
general contractors. The Tenant Improvements shall be constructed by a general contractor selected
by Landlord (the “General Contractor”). Landlord shall commence construction, or cause the
commencement of construction by the General Contractor, of the Tenant Improvements, as soon as
practicable after selection of the General Contractor. Except as hereinafter expressly provided to
the contrary, Landlord shall cause the performance of the Work using (except as may be stated or
otherwise shown in the Approved Final Drawings) building standard materials, quantities and
procedures then in use by Landlord (“Building Standards”).

6. Substantial Completion. Landlord shall cause the General Contractor to Substantially Complete
(defined below) the Tenant Improvements in accordance with the Approved Final Drawings by the
Anticipated Commencement Date of the Lease as set forth in Section 2 of the Lease (the “Completion
Date”), subject to delays due to (a) acts or events beyond its control including, but not limited
to, acts of God, earthquakes, strikes, lockouts, boycotts, casualties, discontinuance of any
utility or other service required for performance of the Work, provided such discontinuance is not
the result of Landlord’s failure to pay any utility or service invoice(s), moratoriums,
governmental agencies, delays on the part of governmental agencies and weather, (b) the lack of
availability or shortage of specialized materials used in the construction of the Tenant
Improvements, (c) any matters beyond the control of Landlord, the General Contractor or any
subcontractors, (d) any changes required by the fire department, building and/or planning
department, building inspectors or any other agency having jurisdiction over the Building, the Work
and/or the Tenant Improvements (except to the extent such changes are directly attributable to
Tenant’s use or Tenant’s specialized tenant improvements, in which event such delays are considered
Tenant Delays) (the events and matters set forth in Subsections (a), (b), (c) and (d) are
collectively referred to as “Force Majeure Delays”), or (e) any Tenant Delays (defined in Section 7
below). The Tenant Improvements shall be deemed substantially complete on the date that the
building officials of the applicable governmental agency(s) issues its final approval of the
construction of the Tenant Improvements whether in the form of the issuance of a final permit,
certificate of occupancy or the written approval evidencing its final inspection on the building
permit(s), or the date on which Tenant first takes occupancy of the Premises, whichever first
occurs (“Substantial Completion”, or “Substantially Completed”, or “Substantially Complete”).
Tenant hereby acknowledges and agrees that the term “Substantial Completion” of the Tenant
Improvements as used herein will not include the completion of any work associated with Tenant’s
Installations, including without limitation, Tenant’s high-pile storage requirements, Tenant’s
racking systems, and work related to any requirements of governmental and regulatory agencies with
respect to any of Tenant’s Installations. If the Work is not deemed to be Substantially Completed
on or before the scheduled Completion Date, (i) Landlord agrees to use reasonable efforts to
Substantially Complete the Work as soon as practicable thereafter, (ii) the Lease shall remain in
full force and effect, (iii) Landlord shall not be deemed to be in breach or default of the Lease
or this Exhibit B as a result thereof and Landlord shall have no liability to Tenant as a
result of any delay in occupancy (whether for damages, abatement of all or any portion of the Rent,
or otherwise), and (iv) except in the event of any Tenant Delays, which will not affect the
Commencement Date but will extend the Completion Date without any penalty or liability to Landlord,
and notwithstanding anything to the contrary contained in the Lease, the Commencement Date and the
Expiration Date of the term of the Lease (as defined in Section 2 of the Lease) shall be extended
commensurately by the amount of time attributable to such Force Majeure Delays, and Landlord and
Tenant shall execute a written amendment to the Lease evidencing such extensions of time,
substantially in the form of Exhibit F to the Lease. Subject to the provisions of Section
10.2 of the Lease, the Tenant Improvements shall belong to Landlord and shall be deemed to be
incorporated into the Premises for all purposes of the Lease, unless Landlord, in writing,
indicates otherwise to Tenant.

7. Tenant Delays. There shall be no extension of the Commencement Date or Expiration Date of the
term of the Lease (as otherwise permissibly extended in accordance with the provisions of Section 6
above) if the Work has not been Substantially Completed by the date the Tenant Improvements would
otherwise have been Substantially Completed but for any delay attributable to Tenant and/or any of
Tenant’s Representatives (collectively, “Tenant Delays”), including, but not limited to, any of the
following described events or occurrences: (a) delays related to changes made or requested by
Tenant to the Work and/or the Approved Final Drawings; (b) the failure of Tenant to furnish all or
any plans, drawings, specifications, finish details or other information required under Sections 3
and 4 above; (c) the failure of Tenant to comply with the requirements of Section 10 below; (d)
Tenant’s requirements for special work or materials, finishes, or installations other than the
Building Standards or Tenant’s requirements for special construction or phasing; (e) any changes
required by the fire department, building or planning department, building inspectors or any other
agency having jurisdiction over the Building, the Work and/or the Tenant Improvements if such
changes are directly attributable to Tenant’s use or Tenant’s specialized tenant improvements; (f)
the completion of any work associated with Tenant’s Installations, including without limitation,
Tenant’s high-pile storage requirements, Tenant’s racking systems, and work related to any
requirements of governmental and regulatory agencies with respect to any of Tenant’s Installations;
(g) the performance of any additional work pursuant to a Change Request that is requested by
Tenant; (h) the performance of work in or about the Premises by any person, firm or corporation
employed by or on behalf of Tenant, including, without limitation, any failure to complete or any
delay in the completion of such work; and/or (i) any and all delays caused by or arising from acts
or omissions of Tenant and/or Tenant’s Representatives, in any manner whatsoever, including, but
not limited to, any and all revisions to the Approved Final Drawings. Any delays in the
construction of the Tenant Improvements due to any of the events described above, shall in no way
extend or affect the date on which Tenant is required to commence paying Rent under the terms of
the Lease. It is the intention of the parties that all of such delays will be considered Tenant
Delays for which

Exhibit B, Page 2

 

Tenant shall be wholly and completely responsible for any and all consequences related to such
delays, including, without limitation, any costs and expenses attributable to increases in labor or
materials.

8. Tenant Improvement Allowance. Landlord shall provide an allowance for the planning and
construction of the Tenant Improvements for the Work to be performed in the Premises, as described
in the Initial Plans and the Approved Final Drawings, in the amount of One Million Thirty Thousand
One Hundred Fifty and 00/100 Dollars ($1,030,150.00) (the “Tenant Improvement Allowance”) based
upon an allowance of Eleven and 00/100 Dollars ($11.00) per rentable square foot for 93,650
rentable square feet of the Premises to be improved, as described in the Initial Plans and the
Approved Final Drawings; provided, upon the prior written approval of Landlord, a portion of the
Tenant Improvement Allowance in the amount of Three Hundred Twenty-Three Thousand Eight Hundred
Nine and 50/100 Dollars ($323,809.50) may be used by Tenant for FF&E to be installed in the
Premises. Tenant shall not be entitled to any credit, abatement or payment from Landlord in the
event that the amount of the Tenant Improvement Allowance specified above exceeds the sum of actual
Tenant Improvement Costs and any Tenant Improvement Allowance amounts spent by Tenant for FF&E.
Except with respect to FF&E, the Tenant Improvement Allowance shall only be used for tenant
improvements typically installed by Landlord in research and development buildings. The Tenant
Improvement Allowance shall be the maximum contribution by Landlord for the Tenant Improvement
Costs and any Tenant Improvement Allowance amounts spent by Tenant for FF&E, and shall be subject
to the provisions of Section 10 below.

9. Tenant Improvement Costs. The Tenant Improvements’ cost (the “Tenant Improvement Costs”) shall
mean and include any and all costs and expenses of the Work, including, without limitation, all of
the following:

     (a) All costs of preliminary space planning and final architectural and engineering plans and
specifications (including, without limitation, the scope of work, all plans and specifications, the
Initial Plans, the Final Drawings and the Approved Final Drawings) for the Tenant Improvements, and
architectural fees, engineering costs and fees, and other costs associated with completion of said
plans;

     (b) All costs of obtaining building permits and other necessary authorizations and approvals
from the City of San Jose and other applicable agencies and jurisdictions;

     (c) All costs of interior design and finish schedule plans and specifications including
as-built drawings;

     (d) All direct and indirect costs of procuring, constructing and installing the Tenant
Improvements in the Premises, including, but not limited to, the construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office, equipment and
temporary services rendered by Landlord’s consultants and the General Contractor in connection with
construction of the Tenant Improvements, and all labor (including overtime) and materials
constituting the Work;

     (e) All fees payable to the General Contractor, architect and Landlord’s engineering firm if
they are required by Tenant to redesign any portion of the Tenant Improvements following Tenant’s
approval of the Approved Final Drawings; and

     (f) A construction management fee payable to Landlord in the amount of two and one-half
percent (2.5%) of all direct and indirect costs of procuring, constructing and installing the
Tenant Improvements, excluding the FF&E, in the Premises and the Building.

10. Excess Tenant Improvement Costs. The term “Excess Tenant Improvement Costs” as used herein
shall mean and refer to the aggregate of (i) all costs related to any and all Change
Requests/Change Orders, and (ii) the amount by which the sum of the actual Tenant Improvement Costs
(exclusive of all costs referred to in item (i) above) and any Tenant Improvement Allowance amounts
spent by Tenant for FF&E (the “Actual TI Costs”) exceed the Tenant Improvement Allowance, subject
to the remaining provisions of this Section 10. Tenant shall pay to Landlord the Excess Tenant
Improvement Costs within ten (10) days of Landlord’s delivery to Tenant of a written demand
therefor together with a reconciliation of such costs. No Work shall be commenced until Tenant has
fully complied with the preceding provisions of this Section 10. If Tenant fails to remit the sums
so demanded by Landlord pursuant to this Section 10 within the time period required, Landlord may,
at its option, declare Tenant in default under the Lease.

11. Change Requests. No changes or revisions to the Approved Final Drawings shall be made by
either Landlord or Tenant unless approved in writing by both parties. Upon Tenant’s request and
submission by Tenant (at Tenant’s sole cost and expense) of the necessary information and/or plans
and specifications for any changes or revisions to the Approved Final Drawings and/or for any work
other than the Work described in the Approved Final Drawings (“Change Requests”) and the approval
by Landlord of such Change Request(s), which approval Landlord agrees shall not be unreasonably
withheld, Landlord shall perform the additional work associated with the approved Change
Request(s), at Tenant’s sole cost and expense, subject, however, to the following provisions of
this Section 11. Prior to commencing any additional work related to the approved Change
Request(s), Landlord shall submit to Tenant a written statement of the cost of such additional work
and a proposed tenant change order therefor (“Change Order”) in the standard form then in use by
Landlord. Tenant shall execute and deliver to Landlord such Change Order and shall pay the entire
cost of such additional work in the following described manner, if and to the extent that such cost
is Excess Tenant Improvement Costs. Any costs related to such approved Change Request(s), Change
Order and any delays associated therewith, shall be added to the Tenant Improvement Costs and shall
be paid for by Tenant as and with any Excess Tenant Improvement Costs as set forth in Section 10
above. The billing for such additional costs to Tenant shall be accompanied by evidence of the
amounts billed as is customarily used in the business. Costs related to approved Change Requests
and Change Orders shall include without limitation, any architectural or design fees, Landlord’s
construction fee for overhead and profit in the amount of two and one-half percent (2.5%) of the
costs of the Change Requests and Change Orders, the cost of all on-site supervisory and
administrative staff, office, equipment and temporary services rendered by Landlord and/or
Landlord’s consultants, and the General Contractor’s price for effecting the change. If Tenant
fails to execute or deliver such Change Order, or to pay the costs related thereto to the extent
such costs are Excess Tenant Improvement Costs, then Landlord shall not be obligated to do any
additional work related to such approved Change Request(s) and/or Change Orders, and Landlord may
proceed to perform only the Work, as specified in the Approved Final Drawings. Landlord shall
equitably adjust the amount of the Tenant Improvement Costs for any deletions in the scope of the
Work.

Exhibit B, Page 3

 

12. Termination. If the Lease is terminated prior to the Completion Date, for any reason due to
the default of Tenant hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within five (5) days of
receipt of a statement therefor, any and all costs incurred by Landlord and not reimbursed or
otherwise paid by Tenant through the date of termination in connection with the Tenant Improvements
to the extent planned, installed and/or constructed as of such date of termination, including, but
not limited to, any costs related to the removal of all or any portion of the Tenant Improvements
and restoration costs related thereto. Subject to the provisions of Section 10.2 of the Lease,
upon the expiration or earlier termination of the Lease, Tenant shall not be required to remove the
Tenant Improvements it being the intention of the parties that the Tenant Improvements are to be
considered incorporated into the Building, with the exception of that portion of the Tenant
Improvement Allowance used for FF&E, if any. Notwithstanding anything to the contrary contained
herein, Landlord shall have the right to terminate the Lease, upon written notice to Tenant, if
Landlord is unable to obtain a building permit for the Tenant Improvements within one hundred
eighty (180) days from the date the Lease is signed by Tenant. From and after the date on which
the Lease is terminated, Tenant and Landlord shall have no further rights, obligations or claims
with respect to each other arising from the Lease, except for those obligations of Tenant and
Landlord under the Lease which expressly survive and continue after the termination or expiration
of the Lease.

13. Tenant Access. Landlord, in Landlord’s reasonable discretion and upon receipt of a written
request from Tenant, may grant Tenant a license to have access to the Premises prior to the
Completion Date to allow Tenant to do other work required by Tenant to make the Premises ready for
Tenant’s use and (the “Tenant’s Pre-Occupancy Work”). It shall be a condition to the grant by
Landlord and continued effectiveness of such license that:

     (a) Tenant shall give to Landlord a written request to have such access not less than five (5)
business days prior to the date on which such proposed access will commence (the “Access Notice”).
The Access Notice shall contain or be accompanied by each of the following items, all in form and
substance reasonably acceptable to Landlord: (i) a detailed description of and schedule for
Tenant’s Pre-Occupancy Work; (ii) the names and addresses of all contractors, subcontractors and
material suppliers and all other representatives of Tenant who or which will be entering the
Premises on behalf of Tenant to perform Tenant’s Pre-Occupancy Work or will be supplying materials
for such work, and the approximate number of individuals, itemized by trade, who will be present in
the Premises; (iii) copies of all contracts, subcontracts, material purchase orders, plans and
specifications pertaining to Tenant’s Pre-Occupancy Work; (iv) copies of all licenses and permits
required in connection with the performance of Tenant’s Pre-Occupancy Work; (v) certificates of
insurance (in amounts satisfactory to Landlord and with the parties identified in, or required by,
the Lease named as additional insureds) and instruments of indemnification against all claims,
costs, expenses, penalties, fines, and damages which may arise in connection with Tenant’s
Pre-Occupancy Work; and (vi) assurances of the ability of Tenant to pay for all of Tenant’s
Pre-Occupancy Work.

     (b) Such pre-term access by Tenant and Tenant’s employees, agents, contractors, consultants,
workmen, mechanics, suppliers and invitees shall be subject to scheduling by Landlord.

     (c) Tenant’s employees, agents, contractors, consultants, workmen, mechanics, suppliers and
invitees shall fully cooperate, work in harmony and not, in any manner, interfere with Landlord or
Landlord’s agents or representatives in performing the Work and any additional work pursuant to
approved Change Orders. If at any time any such person representing Tenant shall not be
cooperative or shall otherwise cause or threaten to cause any such disharmony or interference,
including, without limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke such license upon
twenty-four (24) hours’ prior written notice to Tenant.

     (d) Any such entry into and occupancy of the Premises or any portion thereof by Tenant or any
person or entity working for or on behalf of Tenant shall be deemed to be subject to all of the
terms, covenants, conditions and provisions of the Lease, excluding only the covenant to pay Rent.
Landlord shall not be liable for any injury, loss or damage that may occur to any of Tenant’s
Pre-Occupancy Work made in or about the Premises or to any property placed therein prior to the
commencement of the term of the Lease, the same being at Tenant’s sole risk and liability. Tenant
shall be liable to Landlord for any damage to any portion of the Premises, the Work or the
additional work related to any approved Change Orders caused by Tenant or any of Tenant’s
employees, agents, contractors, consultants, workmen, mechanics, suppliers and invitees. In the
event that the performance of Tenant’s Pre-Occupancy Work causes extra costs to be incurred by
Landlord or requires the use of other Building services, Tenant shall promptly reimburse Landlord
for such extra costs and/or shall pay Landlord for such other Building services at Landlord’s
standard rates then in effect, if and to the extent that such costs are Excess Tenant Improvement
Costs.

14. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar as they are
applicable, in whole or in part, to this Exhibit B, are hereby incorporated herein by
reference, and specifically including all of the provisions of Section 29 of the Lease. In the
event of any conflict between the terms of the Lease and this Exhibit B, the terms of this
Exhibit B shall prevail. Any amounts payable by Tenant to Landlord hereunder shall be
deemed to be Additional Rent under the Lease and, upon any default in the payment of same, Landlord
shall have all rights and remedies available to it as provided for in the Lease.

Exhibit B, Page 4

 

Exhibit C

Rules & Regulations

This exhibit, entitled “Rules & Regulations”, is and shall constitute Exhibit C to that
certain Lease Agreement dated for reference purposes as of November                     , 2005 (the “Lease”), by
and between Legacy Partners I SJ Fontanoso, LLC, a Delaware limited liability company (“Landlord”),
and VNUS Medical Technologies, Inc., a Delaware corporation (“Tenant”), for the leasing of certain
premises located at 5799 Fontanoso Way, San Jose, California 95138 (the “Premises”). The terms,
conditions and provisions of this Exhibit C are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined herein shall have
the meaning ascribed to such terms as set forth in the Lease:

1.    Subject to Section 30 of the Lease, no advertisement, picture or sign of any sort shall be
displayed on or outside the Premises or the Building without the prior written consent of Landlord.
Landlord shall have the right to remove any such unapproved item without Notice and at Tenant’s
expense.

2.    Tenant shall park motor vehicles in those general parking areas, as designated by Landlord,
except for loading and unloading. Tenant shall not regularly park motor vehicles in designated
parking areas after the conclusion of normal daily business activity.

3.    Tenant shall not use any method of heating or air conditioning other than that supplied by
Landlord without the prior written consent of Landlord.

4.    All window coverings installed by Tenant and visible from the outside of the Building require
the prior written approval of Landlord.

5.    Subject to Section 27 of the Lease, Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance or any flammable or combustible materials in or around the
Premises or the Building.

6.    Tenant shall not alter any lock or install any new locks or bolts on any door at the Premises
without the prior consent of Landlord.

7.    No person shall go on the roof without Landlord’s permission.

8.    Business machines and mechanical equipment belonging to Tenant which cause noise or vibration
that may be transmitted to the structure of the Building, to such a degree as to be objectionable
to Landlord, shall be placed and maintained by Tenant, at Tenant’s expense, on vibration
eliminators or other devices sufficient to eliminate noise or vibration.

9.    All goods, including material used to store goods, delivered to the Premises shall be
immediately moved into the Premises and shall not be left in parking or receiving areas overnight.
Tenant shall not store or permit the storage or placement of goods, merchandise, pallet or
equipment of any sort outside of the Premises or Building. No displays or sales of merchandise are
allowed in the parking lots.

10.    Tractor trailers which must be unhooked or parked with dolly wheels beyond the concrete loading
areas must use steel plates or wood blocks under the dolly wheels to prevent damage to the asphalt
paving surfaces. No parking or storing of such trailers will be permitted in the auto parking
areas of the Premises or on streets adjacent thereto.

11.    Forklifts which operate on asphalt paving areas shall not have solid rubber tires and shall
only use tires that do not damage the asphalt.

12.    Tenant is responsible for the storage and removal of all trash and refuse. All such trash and
refuse shall be contained in suitable receptacles and stored behind screened enclosures at
locations approved by Landlord.

13.    Tenant shall not permit any animals, including, but not limited to, any household pets, to be
brought or kept in the Premises.

14.    Tenant shall not permit (i) any motor vehicles to be washed in any portion of the Premises, and
(ii) any mechanical work or maintenance of motor vehicles to be performed in any portion of the
Premises.

Exhibit C, Page 1

 

Exhibit E

Hazardous Materials Disclosure Certificate

Your cooperation in this matter is appreciated. Initially, the information provided by you in this
Hazardous Materials Disclosure Certificate is necessary for the Landlord (identified below) to
evaluate and finalize a lease agreement with you as Tenant. After a lease agreement is signed by
you and the Landlord (the “Lease Agreement”), on an annual basis in accordance with the provisions
of Section 27 of the signed Lease Agreement, you are to provide an update to the information
initially provided by you in this certificate. The information contained in the initial Hazardous
Materials Disclosure Certificate and each annual certificate provided by you thereafter will be
maintained in confidentiality by Landlord subject to release and disclosure as required by (i) any
lenders and owners and their respective environmental consultants, (ii) any prospective
purchaser(s) of all or any portion of the property on which the Premises are located, (iii)
Landlord to defend itself or its lenders, partners or representatives against any claim or demand,
and (iv) any laws, rules, regulations, orders, decrees, or ordinances, including, without
limitation, court orders or subpoenas. Any and all capitalized terms used herein, which are not
otherwise defined herein, shall have the same meaning ascribed to such term in the signed Lease
Agreement. Any questions regarding this certificate should be directed to, and when completed, the
certificate should be delivered to:

	 	 	 
	Landlord: Legacy Partners I SJ Fontanoso, LLC, a Delaware limited liability company
	 

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	4000 East Third Avenue, Suite 600
	 

	 	Foster City, California 94404-4805
	 

	 	Attn:
	 

	 	Phone: (650) 571-2200

Name of (Prospective) Tenant: VNUS Medical Technologies, Inc., a Delaware corporation

Mailing Address: 5799 Fontanoso Way, San Jose, California 95138

Contact Person, Title and Telephone Number(s): Timothy Marcotte (408) 473-1177

Contact Person for Hazardous Waste Materials Management and Manifests and Telephone Number(s):

Timothy Marcotte (408) 473-1177

Address of (Prospective) Premises: 5799 Fontanoso Way, San Jose, California 95138

Length of (Prospective) Initial Term: Ninety-six (96) months

1. General Information:

     Describe the initial proposed operations to take place in, on, or about the Premises,
including, without limitation, principal products processed, manufactured or assembled services and
activities to be provided or otherwise conducted. Existing Tenants should describe any proposed
changes to on-going operations.

2. Use, Storage and Disposal of Hazardous Materials

     2.1    Will any Hazardous Materials be used, generated, stored or disposed of in, on or about the
Premises? Existing Tenants should describe any Hazardous Materials which continue to be used,
generated, stored or disposed of in, on or about the Premises.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Wastes
	 	 	 	Yes o
	 	 	 	No o
	 	 
	 

	 	Chemical Products
	 	Yes o
	 	 	 	No o	 	 	 	 
	 

	 	Other
	 	 	 	Yes o
	 	 	 	No o	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	If Yes is marked, please explain:	 	 
	 	 	 	 	 	 	 

     2.2    If “Yes” is marked in Section 2.1, attach a list of any Hazardous Materials to be used,
generated, stored or disposed of in, on or about the Premises, including the applicable hazard
class and an estimate of the quantities of such Hazardous Materials at any given time; estimated
annual throughput; the proposed location(s) and method of storage (excluding nominal amounts of
ordinary household cleaners and janitorial supplies which are not regulated by any Environmental
Laws); and the proposed location(s) and method of disposal for each Hazardous Material, including,
the estimated frequency, and the proposed contractors or subcontractors. Existing Tenants should
attach a list setting forth the information requested above and such list should include actual
data from on-going operations and the identification of any variations in such information from the
prior year’s certificate.

3. Storage Tanks and Sumps

     3.1    Is any above or below ground storage of gasoline, diesel, petroleum, or other Hazardous
Materials in tanks or sumps proposed in, on or about the Premises? Existing Tenants should
describe any such actual or proposed activities.

             Yes o                     No o

Exhibit E, Page 1

 

	 	 	 	 	 	 	 
	 	 	If yes, please explain:
	 

	 	 	 	 	 	 

4. Waste Management

     4.1    Has your company been issued an EPA Hazardous Waste Generator I.D. Number? Existing
Tenants should describe any additional identification numbers issued since the previous
certificate.

             Yes o                     No o

     4.2    Has your company filed a biennial or quarterly reports as a hazardous waste generator?
Existing Tenants should describe any new reports filed.

             Yes o                     No o

     If yes, attach a copy of the most recent report filed.

5. Wastewater Treatment and Discharge

     5.1    Will your company discharge wastewater or other wastes to:

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	storm drain?	 

	 	 	 	sewer?
	 

	 	 	 	 	 

	 	 	 	 
	 

	 	 	 	surface water?	 

	 	 	 	no wastewater or other wastes discharged.
	 

	 	 	 	 	 

	 	 	 	 

     Existing Tenants should indicate any actual discharges. If so, describe the nature of any
proposed or actual discharge(s).

     5.2    Will any such wastewater or waste be treated before discharge?

              Yes o                     No o

     If yes, describe the type of treatment proposed to be conducted. Existing Tenants should
describe the actual treatment conducted.

6. Air Discharges

     6.1    Do you plan for any air filtration systems or stacks to be used in your company’s
operations in, on or about the Premises that will discharge into the air; and will such air
emissions be monitored? Existing Tenants should indicate whether or not there are any such air
filtration systems or stacks in use in, on or about the Premises which discharge into the air and
whether such air emissions are being monitored.

              Yes o                     No o

	 	 	 	 	 	 	 
	 	 	If yes, please describe:
	 

	 	 	 	 	 	 

     6.2    Do you propose to operate any of the following types of equipment, or any other equipment
requiring an air emissions permit? Existing Tenants should specify any such equipment being
operated in, on or about the Premises.

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Spray booth(s)	 

	 	 	 	Incinerator(s)
	 

	 	 	 	 	 

	 	 	 	 
	 

	 	 	 	Dip tank(s)	 

	 	 	 	Other (Please describe)
	 

	 	 	 	 	 

	 	 	 	 
	 

	 	 	 	Drying oven(s)	 

	 	 	 	No Equipment Requiring Air Permits
	 

	 	 	 	 	 

	 	 	 	 

	 	 	 	 	 	 	 
	 	 	If yes, please describe:
	 

	 	 	 	 	 	 

7. Hazardous Materials Disclosures

     7.1    Has your company prepared or will it be required to prepare a Hazardous Materials
management plan (“Management Plan”) pursuant to Fire Department or other governmental or regulatory
agencies’ requirements? Existing Tenants should indicate whether or not a Management Plan is
required and has been prepared.

              Yes o                     No o

     If yes, attach a copy of the Management Plan. Existing Tenants should attach a copy of any
required updates to the Management Plan.

Exhibit E, Page 2

 

     7.2
   Are any of the Hazardous Materials, and in particular chemicals, proposed to be used in your operations in, on or about the Premises regulated under Proposition 65? Existing Tenants
should indicate whether or not there are any new Hazardous Materials being so used which are
regulated under Proposition 65.

             Yes o                     No o

	 	 	 	 	 	 	 
	 	 	If yes, please explain:
	 

	 	 	 	 	 	 

8. Enforcement Actions and Complaints

     8.1    With respect to Hazardous Materials or Environmental Laws, has your company ever been
subject to any agency enforcement actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand letters, or any other inquiries
regarding its operations? Existing Tenants should indicate whether or not any such actions, orders
or decrees have been, or are in the process of being, undertaken or if any such requests have been
received.

               Yes o                     No o

     If yes, describe the actions, orders or decrees and any continuing compliance obligations
imposed as a result of these actions, orders or decrees and also describe any requests, notices or
demands, and attach a copy of all such documents. Existing Tenants should describe and attach a
copy of any new actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 27 of the signed Lease Agreement.

     8.2    Have there ever been, or are there now pending, any lawsuits against your company
regarding any environmental or health and safety concerns?

               Yes o                     No o

     If yes, describe any such lawsuits and attach copies of the complaint(s), cross-complaint(s),
pleadings and all other documents related thereto as requested by Landlord. Existing Tenants
should describe and attach a copy of any new complaint(s), cross-complaint(s), pleadings and other
related documents not already delivered to Landlord pursuant to the provisions of Section 27 of the
signed Lease Agreement.

     8.3    Have there been any problems or complaints from adjacent Tenants, owners or other
neighbors at your company’s current facility with regard to environmental or health and safety
concerns? Existing Tenants should indicate whether or not there have been any such problems or
complaints from adjacent Tenants, owners or other neighbors at, about or near the Premises.

               Yes o                     No o

     If yes, please describe. Existing Tenants should describe any such problems or complaints not
already disclosed to Landlord under the provisions of the signed Lease Agreement.

9. Permits and Licenses

     9.1    Attach copies of all Hazardous Materials permits and licenses including a Transporter
Permit number issued to your company with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater discharge permits, air emissions permits,
and use permits or approvals. Existing Tenants should attach copies of any new permits and
licenses as well as any renewals of permits or licenses previously issued.

The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials Disclosure
Certificate is being delivered in connection with, and as required by, Landlord in connection with
the evaluation and finalization of a Lease Agreement and will be attached thereto as an exhibit;
(B) that this Hazardous Materials Disclosure Certificate is being delivered in accordance with, and
as required by, the provisions of Section 27 of the Lease Agreement; and (C) that Tenant shall have
and retain full and complete responsibility and liability with respect to any of the Hazardous
Materials disclosed in the HazMat Certificate notwithstanding Landlord’s/Tenant’s receipt and/or
approval of such certificate. Tenant further agrees that none of the following described acts or
events shall be construed or otherwise interpreted as either (a) excusing, diminishing or otherwise
limiting Tenant from the requirement to fully and faithfully perform its obligations under the
Lease with respect to Hazardous Materials, including, without limitation, Tenant’s indemnification
of the Indemnitees and compliance with all Environmental Laws, or (b) imposing upon Landlord,
directly or indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise verify the accuracy
of the representations and statements made therein or to ensure that Tenant is in compliance with
all Environmental Laws; (i) the delivery of such certificate to Landlord and/or Landlord’s
acceptance of such

Exhibit E, Page 3

 

certificate, (ii) Landlord’s review and approval of such certificate, (iii) Landlord’s failure to
obtain such certificate from Tenant at any time, or (iv) Landlord’s actual or constructive
knowledge of the types and quantities of Hazardous Materials being used, stored, generated,
disposed of or transported on or about the Premises by Tenant or Tenant’s Representatives.
Notwithstanding the foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and representatives may, and will,
rely upon the statements, representations, warranties, and certifications made herein and the
truthfulness thereof in entering into the Lease Agreement and the continuance thereof throughout
the term, and any renewals thereof, of the Lease Agreement.

I (print name)                                         , acting with full authority to bind the (proposed) Tenant and on behalf of the
(proposed) Tenant, certify, represent and warrant that the information contained in this
certificate is true and correct.

	 	 	 	 	 
	(Prospective) Tenant:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 

Exhibit E, Page 4

 

Exhibit F

First Amendment to Lease Agreement

Change of Commencement Date

This First Amendment to Lease Agreement (the “Amendment”) is made and entered into to be effective
as of                     ,20     ,by and between Legacy Partners I SJ Fontanoso, LLC, a Delaware limited
liability company (“Landlord”), and VNUS Medical Technologies, Inc., a Delaware corporation
(“Tenant”), with reference to the following facts:

Recitals

A.    Landlord and Tenant have entered into that certain Lease Agreement dated November ___, 2005 (the
“Lease”), for the leasing of certain premises containing approximately 93,650 rentable square feet
of space located at 5799 Fontanoso Way, San Jose, California 95138 (the “Premises”), as such
Premises are more fully described in the Lease.

B.    Landlord and Tenant wish to amend the Commencement Date of the Lease.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree as
follows:

     1.    Recitals: Landlord and Tenant agree that the above recitals are true and correct.

     2.    Commencement Date: The Commencement Date of the Lease shall be                                         .

     3.    Expiration Date: The last day of the Term of the Lease (the “Expiration Date”) shall be                     .

     4.    Base Rent: The dates on which the Base Rent will be adjusted are:

	 	 	 	for the period                      to                      the monthly Base Rent shall be $                    ;
	 
	 	 	 	for the period                      to                      the monthly Base Rent shall be $                    ;and
	 
	 	 	 	for the period                      to                      the monthly Base Rent shall be $                    .

     5.    Effect of Amendment: Except as modified herein, the terms and conditions of the Lease
shall remain unmodified and continue in full force and effect. In the event of any conflict
between the terms and conditions of the Lease and this Amendment, the terms and conditions of this
Amendment shall prevail.

     6.    Definitions: Unless otherwise defined in this Amendment, all terms not defined in this
Amendment shall have the meaning set forth in the Lease.

     7.    Authority: Subject to the provisions of the Lease, this Amendment shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs, legal representatives,
successors and assigns. Each party hereto and the persons signing below warrant that the person
signing below on such party’s behalf is authorized to do so and to bind such party to the terms of
this Amendment.

     8.    Incorporation: The terms and provisions of the Lease are hereby incorporated in this
Amendment.

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

Tenant:

VNUS Medical Technologies, Inc.,

a Delaware corporation

	 	 	 	 	 
	By:

	 	 	 	 
	Its:
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Its:
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

Exhibit F, Page 1

 

Landlord:

Legacy Partners I SJ Fontanoso, LLC,

a Delaware limited liability company,

Owner

	 	 	 	 	 
	By:

	 	LEGACY PARTNERS COMMERCIAL, L.P.,
	 	 
	 

	 	a California limited partnership,	 	 
	 

	 	as Property Manager and Agent for Owner	 	 
	 
	 	 	 	 
	By:

	 	LEGACY PARTNERS COMMERCIAL, INC.,	 	 
	 

	 	General Partner	 	 
	 

	 	By:	 	 
	 

	 	      Debra Smith	 	 
	 

	 	Its: Executive Vice President	 	 
	Date:
	 	 	 	 
	 

	 	 	 	 

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. The Lease must be executed by the president or
vice-president and the secretary or assistant secretary, unless the bylaws or a resolution of the
board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.

Exhibit F, Page 2

 

Exhibit G

N/A

Exhibit G, Page 1

 

Exhibit H

Furniture, Fixtures and Equipment

Exhibit H, Page 1

 

Exhibit I

Subordination, Non-Disturbance and Attornment Agreement

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

Redwood Capital Finance Company, LLC

1960 East Grand Avenue, Suite 400

El Segundo, California 90245

Attention: William R. Lindsay

	 	 	 
	 

	 	 
	 	 	Space above this line for Recorder’s use.

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (“Agreement”) is made and entered into
as of                           , 200     , by and between REDWOOD CAPITAL FINANCE COMPANY, LLC a Delaware
limited liability company (“Lender”), and                                         (“Tenant”).

RECITALS:

     A.    Pursuant to the Loan Agreement (as defined below), Lender has made, or has agreed to make,
a loan (“Loan”) to the owner of the Property,                                         (“Borrower”), evidenced by,
among other things, a promissory note executed, or to be executed, by Borrower in favor of Lender
in the principal amount of the Loan (as amended from time to time, the “Note”).

     B.    The Note and certain other obligations of Borrower under the Loan are, or will be, secured
by, among other things, a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
executed, to be executed, by Borrower in favor of Lender (as amended from time to time, the “Deed
of Trust”). The Deed of Trust, is to be recorded or on or about the date of recordation of this
Agreement and encumbers Borrower’s interest in certain real property situated in the City of
                    , County of                     , State of                                         , and more
particularly described on Exhibit A attached hereto (the “Property”). In
connection with the Loan, Borrower and Lender have executed a Loan Agreement (“Loan Agreement”),
and Borrower has executed the other documents and instruments which, together with the Loan
Agreement, are described in the Loan Agreement as the “Loan Documents.”

     C.    Pursuant to that certain Lease, dated                     , Tenant leases the portion of
the Property known as                                         (“Premises”).

     D.    As a condition to making the Loan, Lender requires that Tenant subordinate the Lease to the
Deed of Trust and the lien thereof, subject to the terms and conditions of this Agreement, and
agree to attorn to Lender as provided below. Tenant is willing to provide such subordination and
attornment on the terms and conditions contained in this Agreement. Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the same meanings as in the Lease.

NOW, THEREFORE, for valuable consideration, Tenant and Lender agree as follows:

     1.    SUBORDINATION. Tenant hereby agrees in favor of Lender:

             (a)    The rights, interests, lien and charge of Lender under the Deed of Trust and the other
Loan Documents, and all modifications, extensions, renewals or replacements thereof, as to the Note
and all other obligations now or hereafter secured thereby, including any additional advances
thereunder, and all modifications, extensions, renewals or replacements thereof, shall
unconditionally and at all times be and remain prior and superior with respect to the Property to
the rights, interests, lien and charge of Tenant under the Lease, and all modifications,
extensions, renewals or replacements thereof. Notwithstanding the foregoing subordination as to
any subsequent modifications, renewals, extensions or replacements of the Deed of Trust, the Note,
the other Loan Documents or the other obligations secured thereby, including any additional
advances thereunder, Tenant agrees to execute, acknowledge and deliver to Lender from time to time
such further subordination and/or other agreements as Lender may request in order to confirm the
continuing priority and superiority of the Deed of Trust and the other Loan Documents over the
Lease;

             (b)    Lender would not make the Loan without this agreement to subordinate;

             (c)    This Agreement shall be the whole agreement and only agreement with regard to the
subordination of the Lease to the lien of the Deed of Trust and shall supersede and cancel, but
only insofar as would affect the priority between the Deed of Trust and the Lease, any prior
agreements as to such subordination, including, without limitation, those provisions, if any,
contained in the Lease which provide for the subordination of the Lease to a deed or deeds of trust
or to a mortgage or mortgages;

             (d)    Lender, in making disbursements pursuant to the Note, the Deed of Trust or the Loan
Agreements, is under no obligation or duty to, nor has Lender represented that it will, see to the
application of such proceeds by the person or persons to whom Lender

Exhibit I, Page 1

 

disburses such proceeds, and any application or use of such proceeds for purposes other than those
provided for in such agreement or agreements shall not defeat this agreement to subordinate in
whole or in part; and

          (e)    Tenant intentionally and unconditionally waives, relinquishes and subordinates all of
Tenant’s right, title and interest in and to the Property to the lien of the Deed of Trust and
understands that in reliance upon, and in consideration of, this waiver, relinquishment and
subordination, specific loans and advances are being and will be made by Lender and, as part and
parcel thereof, specific monetary and other obligations are being and will be entered into which
would not be made or entered into but for such reliance upon this waiver, relinquishment and
subordination.

     2.    NONDISTURBANCE. Lender will not join Tenant as a party in any Foreclosure (defined
below) unless the joinder is necessary to pursue Lender’s remedies under the Deed of Trust, and
provided that such joinder shall not result in the termination of the Lease or disturb Tenant’s
possession of the Premises. In the event of a Foreclosure, Lender agrees that the leasehold
interest of Tenant under the Lease shall not be terminated by reason of the Foreclosure, but rather
the Lease shall continue in full force and effect, and Lender shall recognize and accept Tenant as
tenant under the Lease subject to the provisions of the Lease except as otherwise provided below;
provided that, if Tenant shall then be in default under the Lease beyond any notice, grace or cure
period, at Lender’s option, the Lease shall be terminated by reason of the Foreclosure and Lender
shall have no obligation to Tenant under the Lease. As used in this Agreement, “Foreclosure” means
any nonjudicial or judicial foreclosure of the Deed of Trust, or any deed or other transfer in lieu
thereof.

     3.    ATTORNMENT. In the event of a transfer of Borrower’s interest in the Property to a
Purchaser (as defined below), the Lease shall continue in full force and effect and Tenant agrees
to attorn to the Purchaser as its landlord under the Lease and to be bound by all of the provisions
of the Lease for the balance of the term thereof; provided that the Purchaser shall not be:

             (a)    Liable for any act or omission of any Prior Landlord (as defined below) or subject to any
offsets or defenses which Tenant might have against any Prior Landlord;

             (b)    Liable for the return of any rental security deposit, or bound by any payment of rents,
additional rents or other sums which Tenant may have paid more than one month in advance to any
Prior Landlord, except to the extent such sums are actually received by Purchaser;

Exhibit I, Page 2

 

          (c)    Bound by any amendment to the Lease made without the prior written consent of Lender;

          (d)    Liable for obligations under the Lease, the cost of which exceed the value of its interest
in the Property, or for obligations which first accrue after Purchaser has sold or otherwise
transferred its interest in the Property;

          (e)    Obligated to install, construct or pay for any tenant or other improvements or alterations
to or on the Premises or Property; bound to restore the Premises or Property after a casualty for a
cost in excess of any insurance proceeds received by Lender with respect to such casualty; or bound
to restore the Premises or Property after a taking in condemnation for a cost in excess of the
portion of any condemnation award made specifically for that purpose; bound by any restriction on
competition beyond the Property;

          (f)    Bound by any notice of termination, cancellation or surrender of the Lease made without
the prior written consent of Lender, except as otherwise provided in the Lease;

          (g)    Bound by any option to purchase, right of first offer to purchase or right of first
refusal to purchase with respect to the Property or any portion thereof;

          (h)    Liable for the breach of any representation or warranty made by Prior Landlord in the
Lease; or

          (i)    Liable for any indemnity obligation of Prior Landlord contained in the Lease, except with
respect to the Purchaser’s acts or omissions.

This attornment shall be immediately effective and self-operative, without the execution of any
further instrument, upon Purchaser’s acquisition of Borrower’s interest in the Property. As used
in this Agreement, “Purchaser” means any transferee, including Lender, of Borrower’s interest in
the Property pursuant to a Foreclosure and the successors and assigns of such transferee, and
“Prior Landlord” means any landlord, including Borrower, under the Lease prior in time to
Purchaser.

     4.    NOTICE TO TENANT. After written notice is given to Tenant by Lender, that Borrower
is in default under the Loan and that the rentals under the Lease are required to be paid to Lender
pursuant to the terms of the Deed of Trust, Tenant shall thereafter pay to Lender all rent and all
other sums due Borrower under the Lease.

     5.    NOTICE TO LENDER AND RIGHT TO CURE. Tenant shall provide written notice to Lender
of any default by Borrower under the Lease or any other act or omission by Borrower under the Lease
which could give Tenant the right to terminate the Lease and/or abate or make a deduction from
amounts payable by Tenant under the Lease, which notice may be a copy of Tenant’s notice to
Borrower, and Tenant agrees that no notice of termination of the Lease and no notice of abatement
of or deduction from rent shall be effective unless Lender shall have received written notice of
the default, act or omission giving rise to such termination, abatement or rent deduction and
shall have failed to cure such default, act or omission within thirty (30) days after receipt of
such notice to cure such default, act or omission or if such default, act or omission cannot be
cured within thirty (30) days, shall have failed within thirty (30) days after receipt of such
notice to commence and thereafter diligently pursue any action necessary to cure such default, act
or omission to completion, including, without limitation, any action to obtain possession of the
Property. Notwithstanding the foregoing, Lender shall have no obligation to cure any such default,
act or omission. Tenant shall give such notice to Lender at its address set forth below or at such
other address as Lender shall specify from time to time.

     6.    NOTICES. Any notice or other communication required or permitted to be given
pursuant to the provisions of this Agreement shall either be personally delivered, sent by
registered or certified U.S. mail, return receipt requested, postage prepaid, or sent by a
nationally recognized private courier service, and shall be addressed to the parties as follows:

	 	 	 	 	 	 	 
	TENANT:

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	LENDER:

	 	 	 	REDWOOD     CAPITAL     FINANCE     COMPANY,     LLC	 	 
	 

	 	 	 	1960 East Grand Avenue, Suite 400	 	 
	 

	 	 	 	El Segundo, California 90245	 	 
	 

	 	 	 	Attention: William R. Lindsay	 	 

Any such notice shall be effective upon delivery or attempted delivery.

Exhibit I, Page 3

 

     7.    MISCELLANEOUS. This Agreement shall be binding upon and inure to the benefit of
Lender and Tenant and their respective successors and assigns. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of California. This
Agreement is the entire agreement of the parties and supersedes any prior agreement with respect to
its subject matter, and no provision of this Agreement may be waived or modified except in a
writing signed by all parties. If any lawsuit, arbitration or other proceeding is brought under
this Agreement, the prevailing party shall be entitled to recover the reasonable fees and costs of
its attorneys in such proceeding. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, this Agreement shall be construed without such provision. This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original
but all of which taken together shall constitute one and the same document. Each party represents
and warrants to the other party that this Agreement is a valid and binding agreement of such party
and the person(s) executing this Agreement on their behalf have the authority to do so.

Exhibit I, Page 4

 

IN WITNESS WHEREOF, Lender and Tenant have duly executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 
	LENDER:	 	REDWOOD CAPITAL FINANCE COMPANY, LLC	 	 	 	 
	 	 	a Delaware limited liability company	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF COLORADO	 	 	)	 	 	 
	 

	 	 	 	 	  )	ss.	 	 
	COUNTY OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 

     The foregoing instrument was acknowledged before me this            day of           , 200     , by                                        .

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Notary Public	 	 
	My commission expires:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	TENANT:

	 	 
	 	 	 	 
	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 

	 	By
	 	 	 	 
	 	 
	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Title	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	  )	ss.	 	 
	COUNTY OF

	 	 	 	 	)	 	 	 
	 

	 	 	 	 	 	 	 	 

     The foregoing instrument was acknowledged before me this            day of           , 200     , by                                        .

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Notary Public	 	 
	My commission expires:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit I, Page 5

 

EXHIBIT “A”

To Subordination, Non-Disturbance and Attornment Agreement

LEGAL DESCRIPTION OF PROPERTY

Exhibit I, Page 6

 

Addendum One

Option to Extend the Term

This Addendum One (the “Addendum”) is incorporated as a part of that certain Lease Agreement dated
November ___, 2005 (the “Lease”), by and between LEGACY PARTNERS I SJ FONTANOSO, LLC, a Delaware
limited liability company (“Landlord”), and VNUS Medical Technologies, Inc., a Delaware corporation
(“Tenant”), for the leasing of certain premises located at 5799 Fontanoso Way, San Jose, California
95138 (the “Premises”). Any capitalized terms used herein and not otherwise defined herein shall
have the meaning ascribed to such terms as set forth in the Lease.

1.    Grant of Extension Option. Subject to the provisions, limitations and conditions set forth in
Paragraph 5 below, Tenant shall have an Option (“Option”) to extend the initial term of the Lease
for five (5) years (the “Extended Term”).

2.    Tenant’s Option Notice. Tenant shall have the right to deliver written notice to Landlord of
its intent to exercise this Option (the “Option Notice”). If Landlord does not receive the Option
Notice from Tenant on a date which is neither more than three hundred sixty-five (365) days nor
less than one hundred eighty (180) days prior to the end of the initial term of the Lease, all
rights under this Option shall automatically terminate and shall be of no further force or effect.
Upon the proper exercise of this Option, subject to the provisions, limitations and conditions set
forth in Paragraph 5 below, the initial term of the Lease shall be extended for the Extended Term.

3.    Establishing the Initial Monthly Base Rent for the Extended Term. The initial monthly Base Rent
for the Extended Term shall be equal to ninety-five percent (95%) of the then Fair Market Rental
Rate, as hereinafter defined. As used herein, the “Fair Market Rental Rate” payable by Tenant for
the Extended Term shall mean the Base Rent for the highest and best use for comparable space at
which non-equity tenants, as of the commencement of the lease term for the Extended Term, will be
leasing non-sublease, non-equity, unencumbered space comparable in size, location and quality to
the Premises for a comparable term, which comparable space is located in other comparable
first-class buildings in the vicinity of the Building, taking into consideration all out-of-pocket
concessions generally being granted at such time for such comparable space, including the condition
and value of existing tenant improvements in the Premises. The Fair Market Rental Rate shall
include the periodic rental increases that would be included for space leased for the period of the
Extended Term.

If Landlord and Tenant are unable to agree on the Fair Market Rental Rate for the Extended Term
within ten (10) days of receipt by Landlord of the Option Notice for the Extended Term, Landlord
and Tenant each, at its cost and by giving notice to the other party, shall appoint a competent and
impartial commercial real estate broker (hereinafter “broker”) with at least five (5) years’
full-time commercial real estate brokerage experience in the geographical area of the Premises to
set the Fair Market Rental Rate for the Extended Term. If either Landlord or Tenant does not
appoint a broker within ten (10) days after the other party has given notice of the name of its
broker, the single broker appointed shall be the sole broker and shall set the Fair Market Rental
Rate for the Extended Term. If two (2) brokers are appointed by Landlord and Tenant as stated in
this paragraph, they shall meet promptly and attempt to set the Fair Market Rental Rate. In
addition, if either of the first two (2) brokers fails to submit their opinion of the Fair Market
Rental Rate within ten (10) days after selection of the second broker, then the single Fair Market
Rental Rate submitted shall automatically be the initial monthly Base Rent for the Extended Term
and shall be binding upon Landlord and Tenant. If the two (2) brokers are unable to agree within
ten (10) days after the second broker has been appointed, they shall attempt to select a third
broker, meeting the qualifications stated in this paragraph within ten (10) days after the last day
the two (2) brokers are given to set the Fair Market Rental Rate. If the two (2) brokers are
unable to agree on the third broker, either Landlord or Tenant by giving ten (10) days’ written
notice to the other party, can apply to the Presiding Judge of the Superior Court of the county in
which the Premises is located for the selection of a third broker who meets the qualifications
stated in this paragraph. Landlord and Tenant each shall bear one-half (1/2) of the cost of
appointing the third broker and of paying the third broker’s fee. The third broker, however
selected, shall be a person who has not previously acted in any capacity for either Landlord or
Tenant. Within fifteen (15) days after the selection of the third broker, the third broker shall
select one of the two Fair Market Rental Rates submitted by the first two brokers as the Fair
Market Rental Rate for the Extended Term. The determination of the Fair Market Rental Rate by one,
two, or three brokers shall be binding upon Landlord and Tenant.

In no event shall the monthly Base Rent for any period of the Extended Term be less than the
highest monthly Base Rent charged during the initial term of the Lease. Upon determination of the
initial monthly Base Rent for the Extended Term in accordance with the terms outlined above,
Landlord and Tenant shall immediately execute an amendment to this Lease. Such amendment shall set
forth among other things, the initial monthly Base Rent for the Extended Term and the actual
commencement date and expiration date of the Extended Term. Tenant shall have no other right to
extend the term of the Lease under this Addendum unless Landlord and Tenant otherwise agree in
writing.

4.    Condition of Premises and Brokerage Commissions for the Extended Term. If Tenant timely and
properly exercises this Option, in strict accordance with the terms contained herein: (1) Tenant
shall accept the Premises in its then “As-Is” condition and, accordingly, Landlord shall not be
required to perform any additional improvements to the Premises; and (2) Tenant hereby agrees that
it will be solely responsible for any and all brokerage commissions and finder’s fees payable to
any broker now or hereafter procured or hired by Tenant or who otherwise claims a commission based
on any act or statement of Tenant (“Tenant’s Broker”) in connection with the Option. Tenant hereby
further agrees that Landlord shall in no event or circumstance be responsible for the payment of
any such commissions and fees to Tenant’s Broker, and Tenant shall indemnify, defend and hold
Landlord free and harmless against any liability, claim, judgment, or damages with respect thereto,
including attorneys’ fees and costs.

5.    Limitations On, and Conditions To, Extension Option. This Option is personal to Tenant and may
not be assigned, voluntarily or involuntarily, separate from or as part of the Lease. At
Landlord’s option, all rights of Tenant under this Option shall terminate and be of no force or
effect if any of the following individual events occur or any combination thereof occur: (1)
Tenant has been in material and chronic default at any time during the initial term of the Lease,
as determined in Landlord’s reasonable discretion, or is in default of any provision of the

Addendum One, Page 1

 

Lease on the date Landlord receives the Option Notice; and/or (2) Tenant has assigned its rights
and obligations under all or part of the Lease or Tenant has subleased all or part of the Premises
except as permitted in Section 14.8; and/or (3) Tenant has failed to exercise properly this Option
in a timely manner in strict accordance with the provisions of this Addendum; and/or (4) Tenant no
longer has possession of all or any part of the Premises under the Lease, or if the Lease has been
terminated earlier, pursuant to the terms and provisions of the Lease.

6.    Time is of the Essence. Time is of the essence with respect to each and every time period
described in this Addendum.

Addendum One, Page 2

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