Document:

Exhibit 10.1

Exhibit 10.1

OFFICE LEASE

by and between

TREA PACIFIC PLAZA, LLC,

a Delaware limited liability company

(“Landlord”)

and

SOMAXON PHARMACEUTICALS, INC.,

a Delaware corporation

(“Tenant”)

Dated as of

May 24, 2011

 

 

 

OFFICE LEASE

THIS OFFICE LEASE (this “Lease”) is made between TREA PACIFIC PLAZA, LLC, a
Delaware limited liability company (“Landlord”), and the Tenant described in Item 1 of the
Basic Lease Provisions.

LEASE OF PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, subject to all of the
terms and conditions set forth herein, those certain premises (the “Premises”) described in
Item 3 of the Basic Lease Provisions and as shown in the drawing attached hereto as Exhibit
A. The Premises are located in the Building described in Item 2 of the Basic Lease Provisions.
The Building is located on that certain land (the “Land”), which is also improved with
landscaping, parking facilities and other improvements, fixtures and common areas and appurtenances
now or hereafter placed, constructed or erected on the Land (sometimes referred to herein as the
“Project”).

BASIC LEASE PROVISIONS

	 	 	 	 	 

	1.

	 	Tenant:
	 	SOMAXON PHARMACEUTICALS, INC., a Delaware corporation
(“Tenant”)
	 
	 	 	 	 
	2.

	 	Building:
	 	10935 Vista Sorrento Parkway

San Diego, California 92130
	 
	 	 	 	 
	3.

	 	Description of Premises:
	 	Suite: 250
	 
	 	 	 	 
	 

	 	Area:
	 	12,109 rentable square feet (10,776 usable square feet)
	 
	 	 	 	 
	 

	 	Building Size:
	 	73,359 square feet (subject to
Paragraph 18)
	 
	 	 	 	 
	4.

	 	Tenant’s Proportionate Share:
	 	16.51% (12,109 rsf / 73,359 rsf) (See Paragraph 3)
	 
	 	 	 	 
	5.

	 	Base Rent:
	 	(See Paragraph 2)

	 	 	 	 	 
	Months	 	Base Rent*	 
	1 - 12
	 	$	29,667.50	**
	13 - 24
	 	$	30,705.40	**
	25 - 36
	 	$	31,780.08	 
	37 - 48
	 	$	32,892.39	 
	49 - 60
	 	$	34,043.62	 
	61 - 64
	 	$	35,235.14	 

 

	 	 	 
	*	 	Tenant shall pay for electricity separately pursuant to Paragraph 7(a) of the Standard Lease
Provisions.

 

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	**	 	Notwithstanding the foregoing, provided Tenant is not in default under this Lease beyond any
applicable notice and cure period, Landlord hereby agrees to abate Tenant’s obligation to pay
one-half (1/2) of the monthly Base Rent due during the second (2nd) through thirteenth
(13th) months of the Term (the “Abatement Period”), such that Tenant shall be
required to pay half rent amount per month towards monthly Base Rent during such months (the
aggregate amount of partially abated monthly Base Rent during the Abatement Period being
hereinafter collectively referred to as the “Abated Amount”). During such Abatement
Period, Tenant will still be responsible for the payment of all other monetary obligations due
under this Lease during such Abatement Period including, without limitation, Tenant’s Proportionate
Share of Operating Expense increases, parking charges, and the remaining one-half (1/2) of the
monthly Base Rent due during each month of the Abatement Period (i.e., $14,833.75 per month during
months 2 through 12, and $15,352.70 during month 13). Tenant acknowledges that any uncured default
by Tenant under this Lease will cause Landlord to incur costs not contemplated hereunder, the exact
amount of such costs being extremely difficult and impracticable to ascertain. Therefore, should
Tenant at any time during the Term be in default beyond any applicable notice and cure period,
then, in addition to all of Landlord’s other rights and remedies, the total unamortized sum of such
Abated Amount (amortized on a straight line basis over the Initial Term) so conditionally excused
shall be payable monthly over the remainder of the Initial Term by Tenant to Landlord; provided,
however, Tenant acknowledges and agrees that nothing in this subparagraph is intended to limit any
other remedies available to Landlord at law or in equity under applicable law (including, without
limitation, the remedies under Civil Code Section 1951.2 and/or 1951.4 and any successor statutes
or similar laws), in the event Tenant defaults under this Lease beyond any applicable notice and
cure period.

	 	 	 	 	 

	6.
	 	Installment Payable Upon Execution:	 	$29,667.50
	 
	 	 	 	 
	7.
	 	Security Deposit or other Collateral Due Upon Execution:	 	Letter of Credit in the initial
principal amount of $200,000.00, as provided in Paragraph 2(c)

	 
	 	 	 	 
	8.
	 	Base Year for Operating Expenses:	 	2011 (See Paragraph 3)
	 
	 	 	 	 
	9.
	 	Initial Term:	 	Sixty-four (64) months, commencing on the Commencement Date
and ending on the day immediately
preceding the sixty-fourth
(64th)
month anniversary of the Commencement Date
(See Paragraph 1)

	 
	 	 	 	 
	10.
	 	Estimated Commencement Date:	 	July 1, 2011 (subject to Paragraph 1 below)
	 
	 	 	 	 
	11.
	 	Estimated Termination Date:	 	October 31, 2016 (subject to Paragraph 1 below)
	 
	 	 	 	 
	12.
	 	Broker(s) (See Paragraph 19(k)):	 	 
	 
	 	 	 	 
	 
	 	Landlord’s Broker:	 	Cushman & Wakefield of San Diego, Inc.
	 
	 	 	 	4435 Eastgate Mall, 2nd Floor
	 
	 	 	 	San Diego, California  92121
	 
	 	 	 	 
	 
	 	Tenant’s Broker:	 	Studley, Inc.
	 
	 	 	 	3579 Valley Centre Drive, Suite 100
	 
	 	 	 	San Diego, California 92130

 

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	13.
	 	Number of Parking Spaces:	 	Tenant shall have the right to lease up to forty-eight (48)
 unreserved parking stalls in the Project’s garage free of
charge during the Initial Term, and thereafter at Landlord’s
then prevailing rate as the same may change from time to time.  Tenant may convert up to three (3) of said unreserved
parking spaces into reserved parking spaces with monthly
 parking charge for such reserved parking spaces payable at
 the rate of $75.00 per stall per month during the initial
 Term, but Tenant is under no obligation to rent the reserved
 spaces during the Term.  Tenant may contract directly with
 the parking garage vendor for additional stalls, all pursuant
 to the provisions of Paragraph 18(a) below.

	 
	 	 	 	 
	14.
	 	Addresses for Notices:	 	 
	 
	 	 	 	 
	 
	 	To: TENANT:	 	To: LANDLORD:
	 
	 	 	 	 
	 
	 	Prior to occupancy of the Premises:	 	 
	 
	 	 
	 	TREA Pacific Plaza, LLC
	 
	 	Somaxon Pharmaceuticals, Inc.	 	4675 MacArthur Court, Suite 1100
	 
	 	3570 Carmel Mountain Road, Suite 100	 	Newport Beach, California  92660
	 
	 	San Diego, CA 92130	 	Attn: Robert Niendorf, Director — Asset Management
	 
	 	 	 	 
	 
	 	After occupancy of the Premises:	 	With a copy to:
	 
	 	 	 	 
	 
	 	To the Premises	 	Cushman & Wakefield of San Diego, Inc.
	 
	 	 	 	4435 Eastgate Mall, Suite 200
	 
	 	 	 	San Diego, California 92121
	 
	 	 	 	Attn: Karen Christian
	 
	 	 	 	 
	15.
	 	Address for Payment of Rent:	 	All payments payable under this
Lease shall be sent to Landlord at:

	 
	 	 	 	 
	 
	 	 	 	TREA Pacific Plaza, LLC
	 
	 	 	 	P.O. Box 51114
	 
	 	 	 	Los Angeles, California 90074
	 
	 	 	 	 
	 
	 	 	 	or to such other address as Landlord may designate in writing.
	 
	 	 	 	 
	16.
	 	Guarantor:	 	None
	 
	 	 	 	 
	17.
	 	Effective Date:	 	May 24, 2011
	 
	 	 	 	 
	18.
	 	Tenant Improvement Allowance:	 	None.  Tenant Improvements shall be provided by Landlord on a
 “turnkey” basis.  (See Exhibit B)

	 
	 	 	 	 
	19.
	 	The “State” is the
state of California.	 	 

This Lease consists of the foregoing introductory paragraphs and Basic Lease Provisions, the
provisions of the Standard Lease Provisions (the “Standard Lease Provisions”) (consisting
of Paragraph 1 through Paragraph 19 which follow) and Exhibit A through
Exhibit F, and the following Riders: Rider No.1 through Rider No. 5, all
of which are incorporated herein by this reference. In the event of any conflict between the
provisions of the Basic Lease Provisions and the provisions of the Standard Lease Provisions, the
Standard Lease Provisions shall control.

 

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STANDARD LEASE PROVISIONS

1. TERM

(a) The Initial Term of this Lease and the Rent (defined below) shall commence on the earliest
of (i) the date that the Tenant Improvements are Substantially Completed, or (ii) the date the
Tenant Improvements would have been Substantially Completed except for Tenant Delays, or (iii) the
date that Tenant, or any person occupying any of the Premises with Tenant’s permission, commences
business operations from the Premises (the “Commencement Date”). Unless earlier terminated
in accordance with the provisions hereof, the Initial Term of this Lease shall be the period shown
in Item 9 of the Basic Lease Provisions. As used herein, “Lease Term” shall mean the
Initial Term referred to in Item 9 of the Basic Lease Provisions, subject to any extension of the
Initial Term hereof exercised in accordance with the terms and conditions expressly set forth
herein (the “Expiration Date”). Unless Landlord is terminating this Lease prior to the
Expiration Date in accordance with the provisions hereof, Landlord shall not be required to provide
notice to Tenant of the Expiration Date. This Lease shall be a binding contractual obligation
effective upon execution hereof by Landlord and Tenant, notwithstanding the later commencement of
the Initial Term of this Lease. The terms “Tenant Improvements” and “Substantial
Completion” or “Substantially Completed” are defined in the attached Exhibit B
Work Letter. “Tenant Delays” consist of those delays defined in Exhibit B.

(b) The Premises will be delivered to Tenant when the Tenant Improvements have been
Substantially Completed. If the Commencement Date is delayed or otherwise does not occur on the
Estimated Commencement Date, set forth in Item 10 of the Basic Lease Provisions, this Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, but provided the Commencement Date is not delayed as a result of Tenant Delays, the
Commencement Date shall be extended until it occurs as provided in Paragraph 1(a) above.
Notwithstanding the foregoing, if the Commencement Date has not occurred by September 1, 2011, for
reasons other than Tenant Delays or Force Majeure Delays (defined in Paragraph 19(w)), then
Landlord shall provide Tenant with one day of free rent, and the abated rent to be provided in
Paragraph 5 of the Basic Lease Provisions shall be extended for an additional day for each day that
the Commencement Date is delayed for such reasons other than Tenant Delays or Force Majeure Delays.
Notwithstanding the foregoing, if, for reasons other than Tenant Delays, Landlord has not
commenced construction of the Tenant Improvements by September 1, 2011, Tenant, as its sole and
exclusive remedy, shall have the right to terminate the Lease upon written notice to Landlord,
whereupon this Lease shall be deemed terminated and neither party shall thereafter have any further
liability or obligation to the other.

(c) Upon Substantial Completion of the Tenant Improvements, Landlord shall prepare and deliver
to Tenant, Tenant’s Commencement Letter in the form of Exhibit E attached hereto (the
“Commencement Letter”) which Tenant shall acknowledge by executing a copy and returning it
to Landlord. If Tenant fails to sign and return the Commencement Letter to Landlord within ten
(10) days of its receipt from Landlord, the Commencement Letter as sent by Landlord shall be deemed
to have correctly set forth the Commencement Date and the other matters addressed in the
Commencement Letter. Failure of Landlord to send the Commencement Letter shall have no effect on
the Commencement Date.

(d) Upon mutual execution and delivery of this Lease, and so long as Landlord has received
from Tenant the first month’s installment of Base Rent due pursuant to Item 6 of the Basic Lease
Provisions, certificates satisfactory to Landlord evidencing the insurance required to be carried
by Tenant under this Lease (and to the extent required by Landlord, evidence of insurance as to
Tenant’s contractors and agents), and the Letter of Credit, and so long as the Tenant and its
contractors do not cause a Tenant Delay, Landlord shall use reasonable efforts to give Tenant and
Tenant’s designated contractors access to the Premises approximately fifteen (15) days prior to the
Estimated Commencement Date (the “Early Access Period”) for purposes of installing Tenant’s
furniture, fixtures, and equipment (“Tenant’s Work”). Tenant’s Work shall be performed by
Tenant at Tenant’s sole cost and expense. Tenant’s access to the Premises during the Early Access
Period shall be subject to all terms and conditions of this Lease, except that Tenant shall not be
obligated to pay Rent during the Early Access Period until the Commencement Date. Tenant agrees to
provide Landlord with prior notice of any such intended early access and to
cooperate with Landlord during the period of any such early access so as not to interfere with
Landlord in the completion of any Landlord’s work in the Premises pursuant to the Work Letter (the
“Landlord’s Work”). Should Landlord determine such early access interferes with Landlord’s
Work, Landlord may deny Tenant access to the Premises until Landlord’s Work is substantially
completed, whereupon Tenant shall comply, including promptly surrendering any keys of other means
of access to the Premises.

 

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2. BASE RENT AND LETTER OF CREDIT

(a) Tenant agrees to pay during each month of the Lease Term as Base Rent (“Base
Rent”) for the Premises the sums shown for such periods in Item 5 of the Basic Lease
Provisions.

(b) Except as expressly provided to the contrary herein, Base Rent shall be payable in
consecutive monthly installments, in advance, without demand, deduction or offset, commencing on
the Commencement Date and continuing on the first day of each calendar month thereafter until the
expiration of the Lease Term. The first full monthly installment of Base Rent shall be payable
upon Tenant’s execution of this Lease. The obligation of Tenant to pay Rent and other sums to
Landlord and the obligations of Landlord under this Lease are independent obligations. If the
Commencement Date is a day other than the first day of a calendar month, or the Lease Term expires
on a day other than the last day of a calendar month, then the Rent for such partial month shall be
calculated on a per diem basis. In the event Landlord delivers possession of the Premises to
Tenant prior to the Commencement Date, Tenant agrees it shall be bound by and subject to all terms,
covenants, conditions and obligations of this Lease during the period between the date possession
is delivered and the Commencement Date, other than the payment of Base Rent, in the same manner as
if delivery had occurred on the Commencement Date.

(c) Letter of Credit.

(i) General Provisions. On or prior to the date Landlord commences
construction of the Tenant Improvements, Tenant shall deliver to Landlord, as additional
collateral for the full performance by Tenant of all of its obligations under this Lease and
for all losses and damages Landlord may suffer as a result of any default by Tenant under
this Lease, including, but not limited to, any post lease termination damages under section
1951.2 of the California Civil Code, a standby, unconditional, irrevocable, transferable
letter of credit (the “Letter of Credit”) in the form of Exhibit F attached hereto
and containing the terms required herein, in the face amount of $200,000.00 (the “Letter of
Credit Amount”), naming Landlord as beneficiary, issued by a financial institution
acceptable to Landlord in Landlord’s sole discretion, permitting multiple and partial draws
thereon, and otherwise in form acceptable to Landlord in its sole discretion. Tenant shall
cause the Letter of Credit to be continuously maintained in effect (whether through
replacement, renewal or extension) in the Letter of Credit Amount (as the same may be
reduced as described in Subparagraph (F) below) through the expiration date of the Lease
Term (the “Final LC Expiration Date”). If the Letter of Credit held by Landlord expires
earlier than the Final LC Expiration Date (whether by reason of a stated expiration date or
a notice of termination or non-renewal given by the issuing bank), Tenant shall deliver a
new Letter of Credit or certificate of renewal or extension to Landlord not later than
thirty (30) days prior to the expiration date of the Letter of Credit then held by Landlord.
Any renewal or replacement Letter of Credit shall comply with all of the provisions of this
Paragraph 2(c)(ii)(A), shall be irrevocable, transferable and shall remain in effect (or be
automatically renewable) through the Final LC Expiration Date upon the same terms as the
expiring Letter of Credit or such other terms as may be acceptable to Landlord in its sole
discretion.

(ii) Drawings under Letter of Credit. Landlord shall have the immediate right
to draw upon the Letter of Credit, in whole or in part, at any time and from time to time:
(i) If an event of default occurs and is not cured within the applicable cure period
provided for such default in this Lease; or (ii) If the Letter of Credit held by Landlord
expires (or is set to expire) earlier than the Final LC Expiration Date (whether by reason
of a stated expiration date or a notice of termination or non-renewal given by the issuing
bank), and Tenant fails to deliver to Landlord, at least thirty (30) days prior to the
expiration date of the Letter of Credit then held by Landlord, a renewal or substitute
Letter of Credit that is in effect and that complies with the provisions of this Paragraph
2(c)(ii). No condition or term of this Lease shall be deemed to render the Letter of Credit
conditional to justify the issuer of the Letter of Credit in failing to honor a
drawing upon such Letter of Credit in a timely manner. Tenant hereby acknowledges and
agrees that Landlord is entering into this Lease in material reliance upon the ability of
Landlord to draw upon the Letter of Credit upon the occurrence of any event of default by
Tenant under this Lease or upon the occurrence of any of the other events described above in
this Paragraph 2(c)(ii)(B).

 

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(iii) Use of Proceeds by Landlord. The proceeds of the Letter of Credit shall
constitute Landlord’s sole and separate property (and not Tenant’s property or the property
of Tenant’s bankruptcy estate) and Landlord may immediately upon any draw (and without
notice to Tenant) apply or offset the proceeds of the Letter of Credit: (i) against any
rent payable by Tenant under this Lease that is not paid when due; (ii) against all losses
and damages that Landlord has suffered or that Landlord reasonably estimates that it may
suffer as a result of any default by Tenant under this Lease, including any damages arising
under section 1951.2 of the California Civil Code following termination of the Lease; (iii)
against any costs incurred by Landlord in connection with this Lease (including attorneys’
fees); and (iv) against any other amount that Landlord may spend or become obligated to
spend by reason of Tenant’s default. Provided Tenant has performed all of its obligations
under this Lease, Landlord agrees to pay to Tenant within thirty (30) days after the Final
LC Expiration Date the amount of any proceeds of the Letter of Credit received by Landlord
and not applied as allowed above; provided, that if prior to the Final LC Expiration Date a
voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by
any of Tenant’s creditors, under the Federal Bankruptcy Code, then Landlord shall not be
obligated to make such payment in the amount of the unused Letter of Credit proceeds until
either all preference issues relating to payments under this Lease have been resolved in
such bankruptcy or reorganization case or such bankruptcy or reorganization case has been
dismissed, in each case pursuant to a final court order not subject to appeal or any stay
pending appeal.

(iv) Additional Covenants of Tenant. If, as result of any application or use
by Landlord of all or any part of the Letter of Credit, the amount of the Letter of Credit
shall be less than the Letter of Credit Amount, Tenant shall, within ten days thereafter,
provide Landlord with additional letter(s) of credit in an amount equal to the deficiency
(or a replacement letter of credit in the total Letter of Credit Amount), and any such
additional (or replacement) letter of credit shall comply with all of the provisions of this
Paragraph 2(c)(ii), and if Tenant fails to comply with the foregoing, notwithstanding
anything to the contrary contained in this Lease, the same shall, at Landlord’s election,
constitute an event of default by Tenant. Tenant further covenants and warrants that it
will neither assign nor encumber the Letter of Credit or any part thereof and that neither
Landlord nor its successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

(v) Transfer of Letter of Credit. Landlord may, at any time and without notice
to Tenant and without first obtaining Tenant’s consent thereto, transfer all or any portion
of its interest in and to the Letter of Credit to another party, person or entity, including
Landlord’s mortgagee and/or to have the Letter of Credit reissued in the name of Landlord’s
mortgagee. If Landlord transfers its interest in the Building and transfers the Letter of
Credit (or any proceeds thereof then held by Landlord) in whole or in part to the
transferee, Landlord shall, upon notice to Tenant, without any further agreement between the
parties hereto, thereupon be released by Tenant from all liability therefor. The provisions
hereof shall apply to every transfer or assignment of all or any part of the Letter of
Credit to a new landlord. In connection with any such transfer of the Letter of Credit by
Landlord, Tenant shall, at Landlord’s sole cost and expense, execute and submit to the
issuer of the Letter of Credit such applications, documents and instruments as may be
necessary to effectuate such transfer. Landlord shall be responsible for paying the
issuer’s transfer and processing fees in connection with any transfer of the Letter of
Credit and, if Tenant advances any such fees (without having any obligation to do so),
Landlord shall reimburse Tenant for any such transfer or processing fees within ten days
after Tenant’s written request therefor.

(vi) Reduction in Letter of Credit Amount. Subject to the provisions of this
Paragraph 2(c)(ii)(F), Tenant shall be entitled to cancel or reduce the Letter of Credit as
provided below. If Tenant is not then in actual default of any provision of this Lease
beyond the applicable notice and cure period, and provided Tenant has not been in monetary
default or material non-monetary default beyond any applicable notice and cure periods at
any time prior to the applicable Reduction Date (as defined below), Tenant shall
then be entitled to reduce the Letter of Credit commencing as of the twenty-fifth
(25th) month of the Initial Term, and thereafter on the thirty-seventh
(37th) and forty-ninth (49th) months of the Initial Term (each, a
“Reduction Date”), by one-fourth (1/4th) of the initial Letter of Credit Amount,
such that there shall remain

 

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at all times during the Lease Term, at least one-fourth
(1/4th) of the initial Letter of Credit Amount. For example only, if the initial
Letter of Credit Amount is $200,000.00, and Tenant has satisfied the requirements for the
reduction of the Letter of Credit (i.e., Tenant is not then in default of any provision of
this Lease beyond any applicable notice and cure period), and provided Tenant has not been
in monetary default or material non-monetary default beyond any applicable notice and cure
periods at any time prior to the applicable Reduction Date (as defined below)then as of the
25th, 37th, and 49th months of the Initial Term, the Letter
of Credit Amount shall be reduced by $50,000.00 during each such Reduction Date, such that,
as of the 50th month of the Initial Term and thereafter, the Letter of Credit
shall have a remaining balance of at least $50,000.00. If Tenant is entitled to reduce the
Letter of Credit on a Reduction Date, Landlord shall execute any documents reasonably
requested by Tenant and the issuing bank to effectuate the applicable reduction of the
Letter of Credit, within fifteen (15) days after Tenant submits such documents to Landlord
for execution provided Tenant is not then in uncured default under this Lease.

(vii) Nature of Letter of Credit. Landlord and Tenant (i) acknowledge and
agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or
substitute therefor or any proceeds thereof be deemed to be or treated as a “security
deposit” under any Law applicable to security deposits in the commercial context including
Section 1950.7 of the California Civil Code, as such section now exists or as may be
hereafter amended or succeeded (“Security Deposit Laws”), (ii) acknowledge and agree that
the Letter of Credit (including any renewal thereof or substitute therefor or any proceeds
thereof) is not intended to serve as a security deposit, and the Security Deposit Laws shall
have no applicability or relevancy thereto, and (iii) waive 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. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code and all other provisions of Law, now or hereafter in effect, which (A)
establish the time frame by which Landlord must refund a security deposit under a lease,
and/or (B) provide that Landlord may claim from the Security Deposit only those sums
reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by
Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those
sums specified in this Paragraph 2(c)(ii) and/or those sums reasonably necessary to
compensate Landlord for any loss or damage caused by Tenant’s breach of this Lease or the
acts or omissions of Tenant, including any damages Landlord suffers following termination of
this Lease.

(d) The parties agree that for all purposes hereunder the Premises shall be stipulated to
contain the number of square feet of Rentable Area described in Item 3 of the Basic Lease
Provisions. Landlord calculated the Rentable Area described in Item 3 of the Basic Lease
Provisions substantially in accordance with the “Standard Method for Measuring Floor Area in Office
Buildings,” approved as of June 7, 1996 by the American National Standards Institute, Inc.
(ANSI/BOMA Z65.1-1996; the “BOMA Standard”).

(e) Base Rent shall be paid to Landlord absolutely net of all costs and expenses. The
provisions for payment of Operating Expenses by means of periodic payment of Tenant’s Proportionate
Share of estimated Operating Expenses and the year end adjustment of such payments are intended to
pass on to Tenant and reimburse Landlord for Tenant’s Proportionate Share of all costs and expenses
of the nature described in Paragraph 3 of this Lease.

3. ADDITIONAL RENT

(a) If Operating Expenses (defined below) for the Project for any calendar year during the
Lease Term exceed Base Operating Expenses (defined below), Tenant shall pay to Landlord as
additional rent (“Additional Rent”) an amount equal to Tenant’s Proportionate Share
(defined below) of such excess. Notwithstanding the foregoing, in no event shall Tenant be
obligated to pay Tenant’s Proportionate Share of any increases in Operating Expenses during the
first twelve (12) calendar months of the Initial Term; accordingly, Tenant’s obligation to pay
Tenant’s Proportionate Share of any increases in Operating Expenses shall commence on the first day
of the thirteenth (13th) full calendar month of the Initial Term.

(b) “Tenant’s Proportionate Share” is, subject to the provisions of Paragraph
18, the percentage number described in Item 4 of the Basic Lease Provisions. Tenant’s
Proportionate Share represents, subject to the provisions of Paragraph 18, a fraction, the
numerator of which is the number of square feet of Rentable Area in the Premises and the
denominator of which is the number of square feet of Rentable Area for lease to third parties in
the Project, as determined by Landlord pursuant to Paragraph 18.

 

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(c) “Base Operating Expenses” means all Operating Expenses incurred or payable by
Landlord during the calendar year specified as Tenant’s Base Year in Item 8 of the Basic Lease
Provisions.

(d) “Operating Expenses” means all costs, expenses and obligations incurred or payable
by Landlord in connection with the operation, ownership, management, repair or maintenance of the
Building and the Project during or allocable to the Lease Term, including without limitation, the
following:

(i) Any form of assessment, license fee, license tax, business license fee, commercial
rental tax, levy, charge, improvement bond, tax, water and sewer rents and charges,
utilities and communications taxes and charges or similar or dissimilar imposition imposed
by any authority having the direct power to tax, including any city, county, state or
federal government, or any school, agricultural, lighting, drainage or other improvement or
special assessment district thereof, or any other governmental charge, general and special,
ordinary and extraordinary, foreseen and unforeseen, which may be assessed against any
legal or equitable interest of Landlord in the Premises, Building, Common Areas or Project
(collectively, (“Taxes”). Taxes shall also include, without limitation:

(A) any Tax on Landlord’s “right” to rent or “right” to other income from the Premises
or as against Landlord’s business of leasing the Premises;

(B) any assessment, tax, fee, levy or charge in substitution, partially or totally, of
any assessment, tax, fee, levy or charge previously included within the definition of real
property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted
by the voters of the State of California in the June, 1978 election and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such services as
fire protection, street, sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or occupants. It
is the intention of Tenant and Landlord that all such new and increased assessments, taxes,
fees, levies and charges be included within the definition of “Taxes” for the purposes of
this Lease;

(C) any assessment, tax, fee, levy or charge allocable to or measured by the area of
the Premises or other premises in the Building or the rent payable by Tenant hereunder or
other tenants of the Project, including, without limitation, any gross receipts tax or
excise tax levied by state, city or federal government, or any political subdivision
thereof, with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof but not on Landlord’s other
operations;

(D) any Tax upon this transaction or any document to which Tenant is a party, creating
or transferring an interest or an estate in the Premises;

(E) any assessment, tax, fee, levy or charge by any governmental agency related to any
transportation plan, fund or system (including assessment districts) instituted within the
geographic area of which the Project is a part; and/or

(F) any costs and expenses (including, without limitation, reasonable attorneys’ fees)
incurred in attempting to protest, reduce or minimize Taxes.

(ii) The cost of services and utilities (including taxes and other charges incurred in
connection therewith) provided to the Premises, the Building or the Project (excluding the
cost of electricity consumed in the Premises and the premises of other tenants of the
Building and the Other
Buildings because Tenant is separately paying for the cost of electricity consumed in
the Premises pursuant to Paragraph 7(a) below), including, without limitation, water, power,
gas, sewer, waste disposal, telephone and cable television facilities, fuel, supplies,
equipment, tools, materials, service contracts, janitorial services, waste and refuse
disposal, window cleaning, maintenance and repair of sidewalks and Building

 

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exterior and
services areas, gardening and landscaping; insurance, including, but not limited to, public
liability, fire, property damage, wind, hurricane, earthquake, terrorism, flood, rental
loss, rent continuation, boiler machinery, business interruption, contractual
indemnification and All Risk or Causes of Loss — Special Form coverage insurance for up to
the full replacement cost of the Project and such other insurance as is customarily carried
by operators of other similar class office buildings in the city in which the Project is
located, to the extent carried by Landlord in its discretion, and the deductible portion of
any insured loss otherwise covered by such insurance; the pro rata cost of compensation,
including employment, welfare and social security taxes, paid vacation days, disability,
pension, medical and other fringe benefits of all persons (including independent
contractors) who perform services connected with the operation, maintenance, repair or
replacement of the Project in proportion to the services attributable to the Project; any
association assessments, costs, dues and/or expenses relating to the Project, personal
property taxes on and maintenance and repair of equipment and other personal property used
in connection with the operation, maintenance or repair of the Project; such reasonable
auditors’ fees and legal fees as are incurred in connection with the operation, the cost of
maintenance or repair of the Project; a commercially reasonable property management fee
(which fee may be imputed if Landlord has internalized management or otherwise acts as its
own property manager), such annual fee shall not exceed five percent (5%) of the annual base
rent due to Landlord from tenants of the Project; the maintenance of any easements or ground
leases benefiting the Project, whether by Landlord or by an independent contractor; a
reasonable allowance for depreciation of personal property used in the operation,
maintenance or repair of the Project; license, permit and reasonable inspection fees; all
costs and expenses required by any governmental or quasi-governmental authority or by
applicable law, for any reason, including capital improvements, and the cost of any capital
improvements made to the Project by Landlord that improve life-safety systems or reduce
operating expenses and the costs to replace items which Landlord would be obligated to
maintain under the Lease (the cost of any capital improvements to be amortized over the
useful life thereof, as Landlord shall reasonably determine under generally accepted real
estate accounting principles, together with interest thereon as being the interest rate then
being charged for long-term mortgages by institutional lenders on like properties within the
locality in which the Project is located); the cost of air conditioning, heating,
ventilating, plumbing, elevator maintenance and repair (to include the replacement of
components) and other mechanical and electrical systems repair and maintenance; sign
maintenance and repair; and Common Area (defined below) repair, resurfacing, operation and
maintenance; and the cost of providing security services, if any, deemed appropriate by
Landlord.

The following items shall be excluded from Operating Expenses:

(A) leasing commissions, attorneys’ fees, costs and disbursements and other expenses
incurred in connection with leasing, renovating or improving vacant space in the Project for
tenants or prospective tenants of the Project;

(B) costs (including permit, license and inspection fees) incurred in renovating or
otherwise improving or decorating, painting or redecorating space for tenants or vacant
space;

(C) Landlord’s costs of any services sold to tenants for which Landlord is entitled to
be reimbursed by such tenants as an additional charge or rental over and above the Base Rent
and Operating Expenses payable under the lease with such tenant or other occupant;

(D) any depreciation or amortization of the Project except as expressly permitted
herein;

(E) costs incurred due to gross negligence, willful misconduct, a breach of any of the
terms or representation and warranty in this Lease, a violation of Law (defined below) by
Landlord relating to the Project;

(F) interest on debt or amortization payments on any mortgages or deeds of trust or any
other debt for borrowed money;

 

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(G) all items and services for which Tenant or other tenants reimburse Landlord outside
of Operating Expenses;

(H) repairs or other work occasioned by fire, windstorm or other work paid for through
insurance or condemnation proceeds (excluding any deductible);

(I) legal expenses incurred for (i) negotiating lease terms for prospective tenants,
(ii) negotiating termination or extension of leases with existing tenants, (iii) proceedings
against any other specific tenant relating solely to the collection of rent or other sums
due to Landlord from such tenant, or (iv) the development and/or construction of the
Project; and

(J) repairs resulting from any defect in the original design or construction of the
Project.

(K) Costs incurred in advertising and promotional activities for the Project.

(L) The management fee, overhead and(or) profit increments paid to subsidiaries or
affiliates of Landlord for service on or to the Project, to the extent that the costs of
such services exceed reasonable costs for such services rendered by persons or entities of
similar skill, competence and experience.

(M) Any expenses for repairs or maintenance which are reimbursed through warranties or
service contracts.

(N) Any expenses paid by any tenant directly to third parties, or as to which Landlord
is otherwise reimbursed by any third party, other tenants or insurance proceeds.

(O) Any taxes on the income of the Landlord.

(e) Operating Expenses for any calendar year during which actual occupancy of the Project is
less than one hundred percent (100%) of the Rentable Area of the Project shall be appropriately
adjusted to reflect one hundred percent (100%) occupancy of the existing Rentable Area of the
Project during such period. In determining Operating Expenses, if any services or utilities are
separately charged to tenants of the Project or others, Operating Expenses shall be adjusted by
Landlord to reflect the amount of expense which would have been incurred for such services or
utilities on a full time basis for normal Project operating hours. Operating Expenses for the
Tenant’s Base Year for Operating Expenses (as defined in Item 8 of the Basic Lease Provisions)
shall not include Operating Expenses attributable to temporary market-wide labor-rate increases
and/or utility rate increases due to extraordinary circumstances, including, but not limited to
Force Majeure, conservation surcharges, boycotts, embargoes, or other shortages. In the event (i)
the Commencement Date shall be a date other than January 1, (ii) the date fixed for the expiration
of the Lease Term shall be a date other than December 31, (iii) of any early termination of this
Lease, or (iv) of any increase or decrease in the size of the Premises, then in each such event, an
appropriate adjustment in the application of this Paragraph 3 shall, subject to the
provisions of this Lease, be made to reflect such event on a basis determined by Landlord to be
consistent with the principles underlying the provisions of this Paragraph 3. In addition,
Landlord shall have the right, from time to time, to equitably and reasonably allocate and prorate
some or all of the Operating Expenses among different tenants and/or different buildings of the
Project and/or on a building-by-building basis (the “Cost Pools”), adjusting Tenant’s
Proportionate Share as to each of the separately allocated costs based on the ratio of the Rentable
Area of the Premises to the Rentable Area of all of the premises to which such costs are allocated.
Such Cost Pools may include, without limitation, the office space tenants and retail space tenants
of the buildings in the Project.

(f) Prior to the commencement of each calendar year of the Lease Term following the
Commencement Date, Landlord shall have the right to give to Tenant a written estimate of Tenant’s
Proportionate Share of excess Operating Expenses, if any, for the Project for the ensuing year.
Tenant shall pay such estimated amount to Landlord in equal monthly installments, in advance on the
first day of each month. Within one hundred twenty (120) days after the end of each calendar year,
Landlord shall furnish Tenant a statement indicating in

 

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reasonable detail the excess of Operating
Expenses over Base Operating Expenses for such period and the parties shall, within thirty (30)
days thereafter, make any payment or allowance necessary to adjust Tenant’s estimated payments to
Tenant’s actual share of such excess as indicated by such annual statement. Any payment due
Landlord shall be payable by Tenant on demand from Landlord. Any amount due Tenant shall be
credited against installments next becoming due under this Paragraph 3(f) or refunded to
Tenant, if requested by Tenant.

(g) Tenant shall pay ten (10) days before delinquency, all taxes and assessments (i) levied
against any personal property, Alterations, tenant improvements or trade fixtures of Tenant in or
about the Premises, (ii) based upon this Lease or any document to which Tenant is a party creating
or transferring an interest in this Lease or an estate in all or any portion of the Premises, and
(iii) levied for any business, professional, or occupational license fees. If any such taxes or
assessments are levied against Landlord or Landlord’s property or if the assessed value of the
Project is increased by the inclusion therein of a value placed upon such personal property or
trade fixtures, Tenant shall upon demand reimburse Landlord for the taxes and assessments so levied
against Landlord, or such taxes, levies and assessments resulting from such increase in assessed
value. To the extent that any such taxes are not separately assessed or billed to Tenant, Tenant
shall pay the amount thereof as invoiced to Tenant by Landlord. In the event that the Project is
owned by an entity the property of which is exempt from taxation pursuant to the California Revenue
and Taxation Code, Tenant’s possessory interest may be subject to property taxation pursuant to
Section 107.6 of the California Revenue and Taxation Code and to the payment of property taxes
levied on that interest. The full cash value, as defined in Sections 110 and 110.1 of the
California Revenue and Taxation Code, of the possessory interest, upon which property taxes will be
based, shall equal the greater of (A) the full cash value of the possessory interest or (B) if
Tenant has leased less than all of the Project, Tenant’s allocable share of the full cash value of
the Project that would have been enrolled if the Project had been subject to property tax upon
acquisition by Landlord. The full cash value as provided for pursuant to either (A) or (B) of the
preceding sentence shall reflect the anticipated term of possession if, on the lien date described
in Section 2192 of the California Revenue and Taxation Code, that term is expected to terminate
prior to the end of the next succeeding fiscal year. Tenant’s allocable share shall, subject to
the preceding sentence, be the Rentable Area of the Premises divided by the Rentable Area of the
Project.

(h) Any delay or failure of Landlord in (i) delivering any estimate or statement described in
this Paragraph 3, or (ii) computing or billing Tenant’s Proportionate Share of excess
Operating Expenses shall not constitute a waiver of its right to require an increase in Rent, or in
any way impair the continuing obligations of Tenant under this Paragraph 3. In the event
of any dispute as to any Additional Rent due under this Paragraph 3, Tenant, an officer of
Tenant or Tenant’s certified public accountant (or in the event Tenant hires or employs an
independent party to perform such audit (who shall in no event be compensated or paid for such
audit on a contingency basis), Tenant shall provide Landlord with a copy of the engagement letter)
shall have the right after reasonable notice and at reasonable times to inspect but not more than
once per calendar year, Landlord’s accounting records at Landlord’s accounting office. If, after
such inspection, Tenant still disputes such Additional Rent, upon Tenant’s written request
therefor, a certification as to the proper amount of Operating Expenses and the amount due to or
payable by Tenant shall be made by an independent certified public accountant mutually agreed to by
Landlord and Tenant. If Landlord and Tenant cannot mutually agree to an independent certified
public accountant, then the parties agree that Landlord shall choose an independent certified
public accountant to conduct the certification as to the proper amount of Tenant’s Proportionate
Share of Operating Expenses due by Tenant for the period in question; provided, however, such
certified public accountant shall not be the accountant who conducted Landlord’s initial
calculation of Operating Expenses to which Tenant is now objecting. Such certification shall be
final and conclusive as to all parties. If the certification reflects that Tenant has overpaid
Tenant’s Proportionate Share of Operating Expenses for the period in question, then Landlord shall
credit such excess to Tenant’s next payment of Operating Expenses or, at the request of Tenant,
promptly refund such excess to Tenant and conversely, if Tenant has underpaid Tenant’s
Proportionate Share of Operating Expenses, Tenant shall promptly pay such additional Operating
Expenses to Landlord. Tenant agrees to pay the cost of such certification and the investigation
with respect thereto unless it is determined that Landlord’s original statement was in error in
Landlord’s favor by more
than five percent (5%). Tenant waives the right to dispute any matter relating to the
calculation of Operating Expenses or Additional Rent under this Paragraph 3 if any claim or
dispute is not asserted in writing to Landlord within one hundred eighty (180) days after delivery
to Tenant of the original billing statement with respect thereto. Notwithstanding the foregoing,
Tenant shall maintain strict confidentiality of all of Landlord’s accounting records and shall not
disclose the same to any other person or entity except for Tenant’s professional advisory
representatives (such as Tenant’s employees, accountants, advisors, attorneys and consultants) with
a need to know such accounting information, who agree to similarly maintain the confidentiality of
such financial information.

 

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(i) Even though the Lease Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant’s Proportionate Share of excess Operating Expenses for the year in
which this Lease terminates, Tenant shall immediately pay any increase due over the estimated
Operating Expenses paid, and conversely, any overpayment made by Tenant shall be promptly refunded
to Tenant by Landlord.

(j) The Base Rent, Additional Rent, late fees, and other amounts required to be paid by Tenant
to Landlord hereunder (including the excess Operating Expenses) are sometimes collectively referred
to as, and shall constitute, “Rent”.

(k) The parties acknowledge that the Building is a part of a multi-building project, and that
certain costs and expenses incurred in connection with the Project
(i.e., the Operating
Expenses) should be shared among the Building and/or the other buildings located at 10945 and 10955
Vista Sorrento Parkway (the “Other Buildings”), while certain other costs and expenses
which are solely attributable to the Building and the Other Buildings, as applicable, shall be
allocated directly to the Building and the Other Buildings, respectively. Accordingly, as set
forth in Paragraph 3(a) and 3(b) above, Operating Expenses are determined annually for the Project
as a whole, and include an equitable allocation to the Project of certain costs and expenses
(including tax expenses, assessments, charges and impositions) incurred in connection with the
Other Buildings, and a portion of the Operating Expenses, which portion shall be determined by
Landlord on an equitable basis, shall be allocated to the tenants of the Building (as opposed to
the Other Buildings), and such portion so allocated shall be the amount of Operating Expenses
payable with respect to the Building upon which Tenant’s Proportionate Share shall be calculated.
Such portion of the Operating Expenses allocated to the Building shall include all Operating
Expenses which are attributable solely to the Building, and an equitable portion of the Operating
Expenses attributable to the Project and an equitable portion of the Operating Expenses to be
shared with the Other Buildings. With respect to Taxes, only, the improvements component of Taxes
for the Building and the Other Buildings shall be calculated for and allocated separately to each
such building, while the land component of Taxes for the Project shall be aggregated and then
allocated by Landlord to the Building and Other Buildings pro-rata based upon the ratio of the
rentable square feet of such particular building to the total rentable square feet of the Building
and the Other Buildings (or allocated upon such other equitable basis as Landlord may subsequently
adopt from time to time to equitably reflect the particular building’s share of such Taxes for the
land components of the Project).

4. IMPROVEMENTS AND ALTERATIONS

(a) Landlord shall deliver the Premises to Tenant, and Tenant agrees to accept the Premises
from Landlord in its existing “AS-IS”, “WHERE-IS” and “WITH ALL FAULTS” condition, and Landlord
shall have no obligation to refurbish or otherwise improve the Premises throughout the Lease Term;
provided, however, and notwithstanding the foregoing to the contrary, Landlord’s sole construction
obligation under this Lease is set forth in the Work Letter attached hereto as Exhibit B.

(b) Any alterations, additions, or improvements made by or on behalf of Tenant to the Premises
(“Alterations”) in excess of $10,000 in cost shall be subject to Landlord’s prior written
consent. The foregoing notwithstanding, the Landlord hereby consents to: (i) any cosmetic
alterations (such as painting, carpeting or installation of wall paper) made from time to time by
Tenant in and to the Premises; and (ii) any security systems installed by Tenant in the Premises.
Landlord’s consent shall not be unreasonably withheld, conditioned or delayed with respect to
proposed Alterations that (i) comply with all applicable laws, ordinances, rules and regulations;
(ii) are compatible with the Building and its mechanical, electrical, HVAC and life safety systems;
(iii) will not interfere with the use and occupancy of any other portion of the Building by any
other tenant or their invitees; (iv) do not affect the structural portions of the Building or
require capital alterations to any other portions of the Building and/or
the Project; and, (v) do not and will not, whether alone or taken together with other
improvements, require the construction of any other improvements or alterations within the
Building. Tenant shall cause, at its sole cost and expense, all Alterations to comply with
insurance requirements and with Laws and shall construct, at its sole cost and expense, any
alteration or modification required by Laws as a result of any Alterations. All Alterations shall
be constructed at Tenant’s sole cost and expense, in a first class and good and workmanlike manner
by contractors reasonably acceptable to Landlord and only good grades of materials shall be used.
All plans and specifications for

 

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any Alterations in excess of $10,000 in cost shall be submitted to
Landlord for its approval. Landlord may monitor construction of the Alterations in excess of
$10,000 in cost and Tenant shall reimburse Landlord for the reasonable costs incurred by Landlord
in monitoring such construction, provided that Landlord provides Tenant with a reasonable
estimation of the costs to be incurred in advance. Landlord’s right to review plans and
specifications and to monitor construction shall be solely for its own benefit, and Landlord shall
have no duty to see that such plans and specifications or construction comply with applicable laws,
codes, rules and regulations. Landlord may also require that all life safety related work and all
mechanical, electrical, plumbing and roof related work be performed by contractors designated by
Landlord. Landlord shall have the right, in its sole discretion, to instruct Tenant to remove
those improvements or Alterations from the Premises which (i) were not approved in advance by
Landlord, (ii) were not built in conformance with the plans and specifications approved by
Landlord, or (iii) Landlord specified during its review of plans and specifications for Alterations
would need to be removed by Tenant upon the expiration of this Lease (all of (i) through (iii)
being “Removable Alterations”). Except for Removable Alterations, Tenant shall not be obligated to
remove Alterations at the expiration of this Lease. If upon the termination of this Lease Landlord
requires Tenant to remove any Removable Alterations from the Premises, then Tenant, at Tenant’s
sole cost and expense, shall promptly remove such Removable Alterations and Tenant shall repair and
restore the Premises to its original condition as of the Commencement Date, except for reasonable
wear and tear and any Alterations that are permitted to remain on the Premises. Any Alterations
remaining in the Premises following the expiration of the Lease Term or following the surrender of
the Premises from Tenant to Landlord, shall become the property of Landlord unless Landlord
notifies Tenant otherwise. In connection with the Alterations, Tenant shall provide Landlord with
the identities and mailing addresses of all persons performing work or supplying materials, prior
to beginning such construction, and Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable law. In connection with the Alterations, Tenant shall
assure payment for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker’s compensation and other coverage in amounts and from an
insurance company reasonably satisfactory to Landlord protecting Landlord against liability for
bodily injury or property damage during construction. Upon completion of any Alterations and upon
Landlord’s reasonable request, Tenant shall deliver to Landlord sworn statements setting forth the
names of all contractors and subcontractors who did work on the Alterations and final lien waivers
from all such contractors and subcontractors. Additionally, upon completion of any Alteration,
Tenant shall provide Landlord, at Tenant’s expense, with a complete set of plans in reproducible
form and specifications reflecting the actual conditions of the Alterations, together with a copy
of such plans on diskette in the AutoCAD format or such other format as may then be in common use
for computer assisted design purposes. Tenant shall pay to Landlord, within ten (10) business days
after completion of any Alterations, the actual, reasonable costs incurred by Landlord for services
rendered by Landlord’s management personnel and engineers to coordinate and/or supervise any of the
Alterations to the extent such services are provided in excess of or after the normal on-site hours
of such engineers and management personnel, provided that Landlord has provided Tenant with a
reasonable estimation of such costs in advance.

(c) Tenant shall keep the Premises, the Building and the Project free from any and all liens
arising out of any Alterations, work performed, materials furnished, or obligations incurred by or
for Tenant. If Tenant has not, within ten (10) days following the imposition of any such lien,
cause the same to be released of record by payment or posting of a bond in a form and issued by a
surety acceptable to Landlord, Landlord shall have the right, but not the obligation, to cause such
lien to be released by such means as it shall deem proper (including payment of or defense against
the claim giving rise to such lien); in such case, Tenant shall reimburse Landlord for all amounts
so paid by Landlord in connection therewith, together with all of Landlord’s costs and expenses,
with interest thereon at the Default Rate (defined below) and Tenant shall indemnify and defend
each and all of the Landlord Indemnitees (defined below) against any damages, losses or costs
arising out of any such claim. Tenant’s indemnification of Landlord contained in this Paragraph
shall survive the expiration or earlier termination of this Lease. Such rights of Landlord shall
be in addition to all other remedies provided herein or by law.

(d) NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING THE PREMISES THROUGH OR
UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL
ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN THE PREMISES, EXCEPT FOR TENANT IMPROVEMENTS
CONDUCTED BY THE LANDLORD PURSUANT TO THE WORK LETTER ATTACHED AS EXHIBIT B HERETO.

 

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5. REPAIRS

(a) Landlord’s obligation with respect to repair as part of Basic Services shall be limited to
(i) the structural portions of the Building, (ii) the exterior walls of the Building, including,
without limitation, glass and glazing, (iii) the roof, (iv) heating, ventilation, air conditioning,
mechanical, electrical, plumbing and life safety systems, and (v) Common Areas. Landlord shall not
be deemed to have breached any obligation with respect to the condition of any part of the Project
unless Tenant has given to Landlord written notice of any required repair and Landlord has not made
such repair within a reasonable time following the receipt by Landlord of such notice. The
foregoing notwithstanding: (i) Landlord shall not be required to repair damage to any of the
foregoing to the extent caused by the acts or omissions of Tenant or it agents, employees or
contractors, except to the extent covered by insurance carried by Landlord; and (ii) the
obligations of Landlord pertaining to damage or destruction by casualty not caused by the acts or
omissions of Tenant or its agents or employees shall be governed by the provisions of Paragraph
9. Landlord shall have the right but not the obligation to undertake work of repair that
Tenant is required to perform under this Lease and that Tenant fails or refuses to perform in a
timely and efficient manner. All reasonable costs incurred by Landlord in performing any such
repair for the account of Tenant shall be repaid by Tenant to Landlord upon demand, together with
an administration fee equal to five percent (5%) of such costs. Except as expressly provided in
Paragraph 9 of this Lease, there shall be no abatement of Rent and no liability of Landlord
by reason of any injury to or interference with Tenant’s business arising from the making of any
repairs, alterations or improvements in or to any portion of the Premises, the Building or the
Project. Tenant waives the right to make repairs at Landlord’s expense under any law, statute or
ordinance now or hereafter in effect (including the provisions of California Civil Code Section
1942 and any successive sections or statutes of a similar nature).

(b) Tenant, at its expense, (i) shall keep the Premises and all fixtures and personal property
contained therein in a safe, clean and neat condition, and (ii) shall bear the cost of maintenance
and repair, by contractors selected by Landlord, of all facilities which are not expressly required
to be maintained or repaired by Landlord and which are located in the Premises, including, without
limitation, lavatory, shower, toilet, wash basin and kitchen facilities, and supplemental heating
and air conditioning systems (including all plumbing connected to said facilities or systems
installed by or on behalf of Tenant or existing in the Premises at the time of Landlord’s delivery
of the Premises to Tenant). Tenant shall make all repairs to the Premises not required to be made
by Landlord under subparagraph 5(a) above with replacements of any materials to be made by use of
materials of equal or better quality. Tenant shall do all decorating, remodeling, alteration and
painting required by Tenant during the Lease Term. Tenant shall pay for the cost of any repairs to
the Premises, the Building or the Project made necessary by any negligence or willful misconduct of
Tenant or any of its assignees, subtenants, employees or their respective agents, representatives,
contractors, or other persons permitted in or invited to the Premises or the Project by Tenant. If
Tenant fails to make such repairs or replacements within fifteen (15) business days after written
notice from Landlord, Landlord may at its option make such repairs or replacements, and Tenant
shall upon demand pay Landlord for the cost thereof, together with an administration fee equal to
five percent (5%) of such costs.

(c) Upon the expiration or earlier termination of this Lease, Tenant shall surrender the
Premises in a safe, clean and neat condition, normal wear and tear excepted. Except as otherwise
set forth in Paragraph 4(b) of this Lease, Tenant shall remove from the Premises all trade
fixtures, furnishings and other personal property of Tenant and all computer and phone cabling and
wiring installed by or on behalf of Tenant, shall repair all damage caused by such removal, and
shall restore the Premises to its original condition, reasonable wear and tear excepted. In
addition to all other rights Landlord may have, in the event Tenant does not so remove any such
fixtures, furnishings or personal property, Tenant shall be deemed to have abandoned the same, in
which case Landlord may store or dispose of the same at Tenant’s expense, appropriate the same for
itself, and/or sell the same in its discretion.

6. USE OF PREMISES

(a) Tenant shall use the Premises only for general office uses and shall not use the Premises
or permit the Premises to be used for any other purpose. Landlord shall have the right to deny its
consent to any change in the permitted use of the Premises in its sole and absolute discretion.

 

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(b) Tenant shall not at any time use or occupy the Premises, or permit any act or omission in
or about the Premises in violation of any law, statute, ordinance or any governmental rule,
regulation or order including without limitation the Americans with Disabilities Act of 1990 as
amended, or of any certificates of occupancy issued for or restrictive covenants, conditions or
restrictions pertaining to the Building or the Premises (collectively, “Law” or
“Laws”) and Tenant shall, upon written notice from Landlord, discontinue any use of the
Premises which is declared by any governmental authority to be a violation of Law. If any Law
shall, by reason of the nature of Tenant’s use or occupancy of the Premises, impose any duty upon
Tenant or Landlord with respect to (i) modification or other maintenance of the Premises, the
Building or the Project, or (ii) the use, Alteration or occupancy thereof, Tenant shall comply with
such Law at Tenant’s sole cost and expense. This Lease shall be subject to and Tenant shall comply
with all financing documents encumbering the Building or the Project and all covenants, conditions
and restrictions affecting the Premises, the Building or the Project, including, but not limited
to, Tenant’s execution of any subordination agreements requested by a mortgagee (which for purposes
of this Lease includes any lender or grantee under a deed of trust) of the Premises, the Building
or the Project and of which Landlord has notified Tenant.

(c) Tenant shall not at any time use or occupy the Premises in violation of the certificates
of occupancy issued for or restrictive covenants pertaining to the Building or the Premises, and in
the event that any architectural control committee or department of the state or the city or county
in which the Project is located shall at any time contend or declare that the Premises are used or
occupied in violation of such certificate or certificates of occupancy or restrictive covenants,
Tenant shall, upon five (5) business days’ notice from Landlord or any such governmental agency,
immediately discontinue such use of the Premises (and otherwise remedy such violation). The
failure by Tenant to discontinue such use shall be considered a default under this Lease and
Landlord shall have the right to exercise any and all rights and remedies provided herein or by
Law. Any statement in this Lease of the nature of the business to be conducted by Tenant in the
Premises shall not be deemed or construed to constitute a representation or guaranty by Landlord
that such business is or will continue to be lawful or permissible under any certificate of
occupancy issued for the Building or the Premises, or otherwise permitted by Law.

(d) Tenant shall not do or permit to be done anything which may invalidate or increase the
cost of any fire, All Risk, Causes of Loss — Special Form or other insurance policy covering the
Building, the Project and/or property located therein and shall comply with all rules, orders,
regulations and requirements of the appropriate fire codes and ordinances or any other organization
performing a similar function. In addition to all other remedies of Landlord, Landlord may require
Tenant, promptly upon demand, to reimburse Landlord for the full amount of any additional premiums
charged for such policy or policies by reason of Tenant’s failure to comply with the provisions of
this Paragraph 6.

(e) Tenant shall not in any way interfere with the rights or quiet enjoyment of other tenants
or occupants of the Premises, the Building or the Project. Tenant shall not use or allow the
Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain, or permit any nuisance in, on or about the Premises, the Building or the Project.
Tenant shall not place weight upon any portion of the Premises exceeding the structural floor load
(per square foot of area) which such area was designated (and is permitted by Law) to carry or
otherwise use any Building system in excess of its capacity or in any other manner which may damage
such system or the Building. Tenant shall not create within the Premises a working environment
with a density of greater than the lesser of (i) five (5) persons per 1,000 square feet of Rentable
Area, or (ii) the maximum density permitted by Law. Business machines and mechanical equipment
shall be placed and maintained by Tenant, at Tenant’s expense, in locations and in settings
sufficient in Landlord’s reasonable judgment to absorb and prevent vibration, noise and annoyance.
Tenant shall not commit or suffer to be committed any waste in, on, upon or about the Premises, the
Building or the Project.

(f) Tenant shall take all reasonable steps necessary to adequately secure the Premises from
unlawful intrusion, theft, fire and other hazards, and shall keep and maintain any and all security
devices in or on the Premises in good working order, including, but not limited to, exterior door
locks for the Premises and smoke detectors and burglar alarms located within the Premises and shall
cooperate with Landlord and other tenants in the Project with respect to access control and other
safety matters. IN ALL EVENTS, EXCEPT TO THE EXTENT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF LANDLORD, LANDLORD SHALL NOT BE LIABLE TO TENANT, AND TENANT HEREBY WAIVES ANY CLAIM AGAINST
LANDLORD, FOR (I) ANY UNAUTHORIZED OR CRIMINAL ENTRY OF THIRD PARTIES INTO THE PREMISES, THE
BUILDING OR THE PROJECT, (II) ANY INJURY OR DEATH TO PERSONS RESULTING FROM ANY UNAUTHORIZED OR
CRIMINAL ACTS OF THIRD PARTIES, OR (III) ANY LOSS OF PROPERTY IN AND

 

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ABOUT THE PREMISES, THE
BUILDING OR THE PROJECT, BY OR FROM ANY UNAUTHORIZED OR CRIMINAL ACTS OF THIRD PARTIES. LANDLORD
SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY MANNER FOR FAILURE OF ANY ACCESS PERSONNEL, SERVICES,
PROCEDURES OR EQUIPMENT TO PREVENT, CONTROL, OR APPREHEND ANYONE SUSPECTED OF CAUSING PERSONAL
INJURY OR DAMAGE IN, ON OR AROUND THE PROJECT. Tenant acknowledges that it has neither received
nor relied upon any representation or warranty made by or on behalf of Landlord with respect to the
safety or security of the Premises or the Project or any part thereof or the extent or
effectiveness of any security measures or procedures now or hereafter provided by Landlord, and
further acknowledges that Tenant has made its own independent determinations with respect to all
such matters.

(g) As used herein, the term “Hazardous Material” means any (a) oil or any other
petroleum-based substance, flammable substances, explosives, radioactive materials, hazardous
wastes or substances, toxic wastes or substances or any other wastes, materials or pollutants which
(i) pose a hazard to the Project or to persons on or about the Project or (ii) cause the Project to
be in violation of any Laws; (b) asbestos in any form, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, or radon gas; (c) chemical, material or substance defined as or included in the
definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely
hazardous waste”, “restricted hazardous waste”, or “toxic substances” or words of similar import
under any applicable local, state or federal law or under the regulations adopted or publications
promulgated pursuant thereto, including, but not limited to, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801, et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. §1251, et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. §6901, et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. §300,
et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. §2601, et seq.; the Federal
Hazardous Substances Control Act, as amended, 15 U.S.C. §1261, et seq.; and the Occupational Safety
and Health Act, as amended, 29 U.S.C. §651, et seq.; Sections 25115, 25117, 25122.7, 25140,
25249.8, 25281, 25316, 25501, and 25316 of the California Health and Safety Code; (d) other
chemical, material or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety of the occupants of
the Project or the owners and/or occupants of property adjacent to or surrounding the Project, or
any other Person coming upon the Project or adjacent property; and (e) other chemicals, materials
or substances which may or could pose a hazard to the environment. The term “Permitted
Hazardous Materials” shall mean Hazardous Materials which are contained in ordinary office
supplies of a type and in quantities typically used in the ordinary course of business within
executive offices of similar size in the comparable office buildings, but only if and to the extent
that such supplies are transported, stored and used in full compliance with all applicable laws,
ordinances, orders, rules and regulations and otherwise in a safe and prudent manner. Hazardous
Materials which are contained in ordinary office supplies but which are transported, stored and
used in a manner which is not in full compliance with all applicable laws, ordinances, orders,
rules and regulations or which is not in any respect safe and prudent shall not be deemed to be
“Permitted Hazardous Materials” for the purposes of this Lease.

(i) Tenant, its assignees, subtenants, and their respective agents, servants,
employees, representatives and contractors (collectively referred to herein as “Tenant
Affiliates”) shall not cause or permit any Hazardous Material to be brought upon, kept
or used in or about the Premises by Tenant or by Tenant Affiliates without the prior written
consent of Landlord (which may be granted, conditioned or withheld in the sole discretion of
Landlord), save and except only for Permitted Hazardous Materials, which Tenant or Tenant
Affiliates may bring, store and use in reasonable quantities for their intended use in
the Premises, but only in full compliance with all applicable laws, ordinances, orders,
rules and regulations. On or before the expiration or earlier termination of this Lease,
Tenant shall remove from the Premises all Hazardous Materials (including, without
limitation, Permitted Hazardous Materials), regardless of whether such Hazardous Materials
are present in concentrations which require removal under applicable laws, except to the
extent that such Hazardous Materials were present in the Premises as of the Commencement
Date and were not brought onto the Premises by Tenant or Tenant Affiliates.

(ii) Tenant agrees to indemnify, defend and hold Landlord and its Affiliates (defined
below) harmless for, from and against any and all claims, actions, administrative
proceedings (including informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs, liabilities, interest or losses, including reasonable attorneys’
fees and expenses, court costs, consultant fees, and expert fees, together with all other
costs and expenses of any kind or nature that arise during or after the Lease Term directly
or indirectly from or in connection with the presence, suspected presence, or release of any
Hazardous Material in or into the air, soil, surface water or groundwater at, on, about,
under or within the Premises, or any portion thereof caused by Tenant or Tenant Affiliates.

 

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(iii) In the event any investigation or monitoring of site conditions or any clean-up,
containment, restoration, removal or other remedial work (collectively, the “Remedial
Work”) is required under any applicable federal, state or local Law, by any judicial
order, or by any governmental entity as the result of operations or activities upon, or any
use or occupancy of any portion of the Premises by Tenant or Tenant Affiliates, Landlord
shall perform or cause to be performed the Remedial Work in compliance with such Law or
order at Tenant’s sole cost and expense. All Remedial Work shall be performed by one or
more contractors, selected and approved by Landlord, and under the supervision of a
consulting engineer, selected by Tenant and approved in advance in writing by Landlord. All
costs and expenses of such Remedial Work shall be paid by Tenant, including, without
limitation, the charges of such contractor(s), the consulting engineer, and Landlord’s
reasonable attorneys’ fees and costs incurred in connection with monitoring or review of
such Remedial Work.

(iv) Subject to Paragraphs 8 and 17 of this Lease, Landlord shall defend, indemnify and
hold Tenant harmless from and against any and all claims, damages, judgments, suits, causes
of action, losses, liabilities, penalties or fines arising from Hazardous Materials which
are present at the Building or elsewhere within the Project unless caused and/or contributed
to by Tenant, Tenant Affiliates or any of its/their employees, agents, contractors, visitors
and/or invitees, or its/their use or occupancy of the Project or the Premises.

(v) Each of the covenants and agreements of Tenant set forth in this Paragraph
6(g) shall survive the expiration or earlier termination of this Lease.

7. UTILITIES AND SERVICES

(a) Landlord shall furnish, or cause to be furnished to the Premises, the utilities and
services described in this Paragraph 7(a) (collectively the “Basic Services”):

(i) Tepid water at those points of supply provided for general use of other tenants in
the Project;

(ii) Central heat and air-conditioning in season, at such times as Landlord normally
furnishes these services to other tenants in the Project (i.e., currently Monday through
Friday, from 7:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m. to 12 p.m., except for
Holidays), and if provided in the region, central heat and air conditioning in season, at
such temperatures and in such amounts as are considered by Landlord to be standard or as may
be permitted or controlled by Laws, and 24 hour, 7 days a week, air-conditioning in the
server room;

(iii) Routine maintenance, repairs, structural and exterior maintenance (including,
without limitation, exterior glass and glazing), painting and electric lighting service for
all Common Areas of the Project in the manner and to the extent deemed by Landlord to be
standard, subject to the limitation contained in Paragraph 5(a) above;

(iv) Janitorial service on a five (5) day week basis, Saturday through Thursday nights,
excluding Holidays;

(v) An electrical system to convey power delivered by public utility providers selected
by Landlord in amounts sufficient for normal office operations as provided in similar office
buildings, as reasonably determined by Landlord; and

 

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(vi) Public elevator service and a freight elevator serving the floors on which the
Premises are situated, during hours designated by Landlord.

	 	 	Tenant shall pay directly to the utility company pursuant to the utility company’s
separate meters, the cost of all electricity provided to and/or consumed in the
Premises (including normal and excess consumption).

(b) Landlord shall provide to Tenant at Tenant’s sole cost and expense (and subject to the
limitations hereinafter set forth) the following extra services (collectively the “Extra
Services”):

(i) Such extra cleaning and above-standard janitorial services requested by Tenant, and
agreed to by Landlord;

(ii) Subject to Paragraph 7(d) below, additional air conditioning and
ventilating capacity required by reason of any electrical, data processing or other
equipment or facilities or services required to support the same, in excess of that
typically provided by the Building, with Tenant also being responsible for any electricity
used to provide such service as set forth in the lease grammatical paragraph of Paragraph
7(a) above;

(iii) Maintaining and replacing lamps, bulbs, and ballasts;

(iv) Heating, ventilation or air conditioning service provided by Landlord to Tenant
(i) during hours other than normal business hours which are Monday through Friday 7:00 a.m.
to 6:00 p.m. and Saturday 9:00 a.m. to 12:00 p.m., (ii) on Saturdays (after normal business
hours), Sundays, or Holidays, said heating, ventilation and air conditioning or extra
service to be furnished solely upon the prior written request of Tenant given with such
advance notice as Landlord may reasonably require and Tenant shall pay to Landlord
Landlord’s standard charge for overtime HVAC on an hourly basis (currently at the rate of
$45.00 per hour in one hour increments, as the same may change from time to time), with
Tenant also being responsible for any electricity used to provide such service as set forth
in the lease grammatical paragraph of Paragraph 7(a) above; and

(v) Any Basic Service in amounts determined by Landlord to exceed the amounts
reasonably required to be provided above, but only if Landlord elects to provide such
additional or excess service. Tenant shall pay Landlord the cost of providing such
additional services (or an amount equal to Landlord’s reasonable estimate of such cost, if
the actual cost is not readily ascertainable), within ten (10) days following presentation
of an invoice therefore by Landlord to Tenant. The cost chargeable to Tenant for all extra
services shall constitute Additional Rent.

(c) Tenant agrees to cooperate fully at all times with Landlord and to comply with all
regulations and requirements which Landlord may from time to time prescribe for the use of the
utilities and Basic Services described herein. Landlord shall not be liable to Tenant for the
failure of any other tenant, or its assignees, subtenants, employees, or their respective invitees,
licensees, agents or other representatives to comply with such
regulations and requirements. The term “Holidays” shall be deemed to mean and include
New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and,
at Landlord’s discretion, other nationally, State or locally recognized holidays.

(d) If Tenant requires utilities or services in quantities greater than or at times other than
that generally furnished by Landlord as set forth above, Tenant shall pay to Landlord, upon receipt
of a written statement therefor, Landlord’s charge for such use. In the event that Tenant shall
require additional electric current, water or gas for use in the Premises and if, in Landlord’s
judgment, such excess requirements cannot be furnished unless additional risers, conduits, feeders,
switchboards and/or appurtenances are installed in the Building, subject to the conditions stated
below, Landlord shall proceed to install the same at the sole cost of Tenant, payable upon demand
in advance. The installation of such facilities shall be conditioned upon Landlord’s consent, and
a determination that the installation and use thereof (i) shall be permitted by applicable Law and
insurance regulations, (ii) shall not cause permanent damage or injury to the Building or adversely
affect the value of the Building or the Project, and (iii)

 

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shall not cause or create a dangerous or
hazardous condition or interfere with or disturb other tenants in the Building. Subject to the
foregoing, Landlord shall, upon reasonable prior notice by Tenant, furnish to the Premises
additional elevator, heating, air conditioning and/or cleaning services upon such reasonable terms
and conditions as shall be determined by Landlord, including payment of Landlord’s charge therefor.
In the case of any additional utilities or services to be provided hereunder, Landlord may require
a switch and metering system to be installed so as to measure the amount of such additional
utilities or services. The cost of installation, maintenance and repair thereof shall be paid by
Tenant upon demand. Notwithstanding the foregoing, Landlord shall have the right to contract with
any utility provider it deems appropriate to provide utilities to the Project.

(e) Landlord shall not be liable for, and Tenant shall not be entitled to, any damages,
abatement or reduction of Rent, or other liability by reason of any failure to furnish any services
or utilities described herein for any reason beyond Landlord’s reasonable control, including,
without limitation, when caused by accident, breakage, water leakage, flooding, repairs,
Alterations or other improvements to the Project, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental regulation, moratorium or other governmental action,
inability to obtain electricity, water or fuel. Landlord shall be entitled to cooperate with the
energy conservation efforts of governmental agencies or utility suppliers. No such failure,
stoppage or interruption of any such utility or service shall be construed as an eviction of
Tenant, nor shall the same relieve Tenant from any obligation to perform any covenant or agreement
under this Lease. In the event of any failure, stoppage or interruption thereof, Landlord shall
use reasonable efforts to attempt to restore all services promptly. No representation is made by
Landlord with respect to the adequacy or fitness of the Building’s ventilating, air conditioning or
other systems to maintain temperatures as may be required for the operation of any computer, data
processing or other special equipment of Tenant. Tenant hereby waives the provisions of California
Civil Code Section 1932(1) or any other applicable existing or future law, ordinance or
governmental regulation permitting the termination of this Lease due to an interruption, failure or
inability to provide any services.

(f) Landlord reserves the right from time to time to make reasonable and nondiscriminatory
modifications to the above standards for Basic Services and Extra Services as long as such
modifications are made to all tenants in the Project.

8. NON-LIABILITY AND INDEMNIFICATION OF LANDLORD AND TENANT; INSURANCE

(a) To the greatest extent permitted by Law, and except to the extent caused by Landlord’s
gross negligence or willful misconduct or a breach of the provisions of this Lease or a breach of
the representations and warranties of Landlord in this Lease, Landlord shall not be liable for any
injury, loss or damage suffered by Tenant or to any person or property occurring or incurred in or
about the Premises, the Building or the Project from any cause. Without limiting the foregoing,
neither Landlord nor any of its partners, officers, trustees, affiliates, directors, employees,
contractors, agents or representatives (collectively, “Affiliates”) shall be liable for and
there shall be no abatement of Rent (except in the event of a casualty loss or a condemnation as
set forth in Paragraph 9 and Paragraph 10 of this Lease) for (i) any damage to
Tenant’s property stored with or entrusted to Affiliates of Landlord, (ii) loss of or damage to any
property by theft or any other wrongful or illegal act, or (iii) any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain
which may leak from any part of the Building or the Project or from the pipes, appliances,
appurtenances or
plumbing works therein or from the roof, street or sub-surface or from any other place or
resulting from dampness or any other cause whatsoever or from the acts or omissions of other
tenants, occupants or other visitors to the Building or the Project or from any other cause
whatsoever, (iv) any diminution or shutting off of light, air or view by any structure which may be
erected on lands adjacent to the Building, whether within or outside of the Project, or (v) any
latent or other defect in the Premises, the Building or the Project. Tenant shall give prompt
notice to Landlord in the event of (i) the occurrence of a fire or accident in the Premises or in
the Building, or (ii) the discovery of a defect therein or in the fixtures or equipment thereof.
This Paragraph 8(a) shall survive the expiration or earlier termination of this Lease.

(b) To the greatest extent permitted by Law, Tenant hereby agrees to indemnify, protect,
defend and hold harmless Landlord and its designated property management company, and their
respective partners, members, affiliates and subsidiaries, and all of their respective officers,
trustees, directors, shareholders, employees, servants, partners, representatives, insurers and
agents (collectively, “Landlord Indemnitees”) for, from and against all liabilities,
claims, fines, penalties, costs, damages or injuries to persons, damages to property, losses,
liens, causes of

 

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action, suits, judgments and expenses (including court costs, attorneys’ fees,
expert witness fees and costs of investigation), of any nature, kind or description of any person
or entity, directly or indirectly arising out of, caused by, or resulting from (in whole or part)
(1) Tenant’s construction of, or use, occupancy or enjoyment of, the Premises, (2) any activity,
work or other things done, permitted or suffered by Tenant and its agents and employees in or about
the Premises, (3) any breach or default in the performance of any of Tenant’s obligations under
this Lease, (4) any gross negligence or willful misconduct of Tenant or any of its agents,
contractors, employees, business invitees or licensees, or (5) any damage to Tenant’s property, or
the property of Tenant’s agents, employees, contractors, business invitees or licensees, located in
or about the Premises (collectively, “Liabilities”). This Paragraph 8(b) shall
survive the expiration or earlier termination of this Lease.

(c) To the greatest extent permitted by Law, Landlord hereby agrees to indemnify, protect,
defend and hold harmless Tenant, and its partners, members, affiliates and subsidiaries, and all of
its officers, trustees, directors, shareholders, employees, servants, partners, representatives,
insurers and agents (collectively, “Tenant Indemnitees”) for, from and against all
liabilities, claims, fines, penalties, costs, damages or injuries to persons, damages to property,
losses, liens, causes of action, suits, judgments and expenses (including court costs, attorneys’
fees, expert witness fees and costs of investigation), of any nature, kind or description of any
person or entity, directly or indirectly arising out of, caused by, or resulting from (in whole or
part) (1) any breach or default in the performance of any of Landlord’s obligations under this
Lease, or (2) any gross negligence or willful misconduct of Landlord or any of its agents,
contractors, or employees, or (3) any occurrence in the Common Areas covered by Landlord’s
liability insurance for the Property or indemnification from any other tenant. This Paragraph
8(c) shall survive the expiration or earlier termination of this Lease.

(d) Each party shall promptly advise the other party in writing of any action, administrative
or legal proceeding or investigation as to which this indemnification may apply, and the
indemnifying party, at the indemnifying party’s expense, shall assume on behalf of each and every
the indemnified party and conduct with due diligence and in good faith the defense thereof with
counsel reasonably satisfactory to the indemnified party; provided, however, that any indemnified
party shall have the right, at its option, to be represented therein by advisory counsel of its own
selection and at its own expense. In the event of failure by indemnifying party to fully perform
in accordance with this Paragraph, the indemnified party, at its option, and without relieving the
indemnifying party of its obligations hereunder, may so perform, but all costs and expenses so
incurred by the indemnified party in that event shall be reimbursed by the indemnifying party to
the indemnified party, together with interest on the same from the date any such expense was paid
by the indemnified party until reimbursed by the indemnifying party, at the rate of interest
provided to be paid on judgments, by the law of the jurisdiction to which the interpretation of
this Lease is subject. The indemnification provided in Paragraphs 8(b) and 8(c) shall not
be limited to damages, compensation or benefits payable under insurance policies, workers’
compensation acts, disability benefit acts or other employees’ benefit acts.

(e) Insurance.

(i) Tenant at all times during the Lease Term shall, at its own expense, keep in full
force and effect (A) commercial general liability insurance providing coverage against
bodily injury, including death
resulting therefrom and property damage to a combined single limit of Two Million
Dollars ($2,000,000) to one or more than one person as the result of any one accident or
occurrence, which shall include provision for contractual liability coverage insuring Tenant
for the performance of its indemnity obligations set forth in this Paragraph 8 and
in Paragraph 6(g)(ii) of this Lease, with an Excess Limits (Umbrella) Policy in the
amount of Five Million Dollars ($5,000,000), (B) worker’s compensation insurance to the
statutory limit, if any, and employer’s liability insurance to the limit of Five Hundred
Thousand Dollars ($500,000) per occurrence, and (C) All Risk or Causes of Loss — Special
Form property insurance, including fire and extended coverage, sprinkler leakage (including
earthquake, sprinkler leakage), vandalism, malicious mischief, wind and/or hurricane
coverage, covering full replacement value of all of Tenant’s personal property, trade
fixtures and improvements in the Premises. Landlord, Teachers Insurance and Annuity
Association of America, its designated property management firm and such other parties as
Landlord may designate, shall be named an additional insured on each of said policies
(excluding the worker’s compensation policy and property damage policy) and said policies
shall be issued by an insurance company or companies authorized to do business in the State
of California and which have policyholder ratings not lower than “A-” and financial ratings
not lower than “VII” in Best’s Insurance Guide (latest

 

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edition in effect as of the Effective
Date and subsequently in effect as of the date of renewal of the required policies). THE
GENERAL LIABILITY POLICY SHALL ALSO INCLUDE A WAIVER OF SUBROGATION PROVISION OR ENDORSEMENT
IN FAVOR OF LANDLORD. Tenant shall provide Landlord with thirty (30) days prior written
notice of any cancellation of, non-renewal of, reduction of coverage or material change in
coverage with respect to said policies. The policies or duly executed certificates showing
the material terms for the same, together with satisfactory evidence of the payment of the
premiums therefor, shall be deposited with Landlord on the date Tenant first occupies the
Premises and upon renewals of such policies not less than fifteen (15) days prior to the
expiration of the term of such coverage. If certificates are supplied rather than the
policies themselves, Tenant shall allow Landlord, at all reasonable times, to inspect the
policies of insurance required herein.

(ii) It is expressly understood and agreed that the coverages required represent
Landlord’s minimum requirements and such are not to be construed to void or limit Tenant’s
obligations contained in this Lease, including without limitation Tenant’s indemnity
obligations hereunder. Neither shall (A) the insolvency, bankruptcy or failure of any
insurance company carrying Tenant, (B) the failure of any insurance company to pay claims
occurring nor (C) any exclusion from or insufficiency of coverage be held to affect, negate
or waive any of Tenant’s indemnity obligations under this Paragraph 8 and
Paragraph 6(g)(ii) or any other provision of this Lease. With respect to insurance
coverages, except worker’s compensation, maintained hereunder by Tenant and insurance
coverages separately obtained by Landlord, all insurance coverages afforded by policies of
insurance maintained by Tenant shall be primary insurance as such coverages apply to
Landlord, and such insurance coverages separately maintained by Landlord shall be excess,
and Tenant shall have its insurance policies so endorsed. The amount of liability insurance
under insurance policies maintained by Tenant shall not be reduced by the existence of
insurance coverage under policies separately maintained by Landlord. Tenant shall be solely
responsible for any premiums, assessments, penalties, deductible assumptions, retentions,
audits, retrospective adjustments or any other kind of payment due under its policies.
Tenant shall increase the amounts of insurance or the insurance coverages as Landlord may
reasonably request from time to time, but not in excess of the requirements of prudent
landlords or lenders for similar tenants occupying similar premises in comparable buildings
within the San Diego, California area.

(iii) Tenant’s occupancy of the Premises without delivering the certificates of
insurance shall not constitute a waiver of Tenant’s obligations to provide the required
coverages. If Tenant provides to Landlord a certificate that does not evidence the
coverages required herein, or that is faulty in any respect, such shall not constitute a
waiver of Tenant’s obligations to provide the proper insurance

(iv) Throughout the Lease Term, Landlord agrees to maintain (i) fire and extended
coverage insurance, and, at Landlord’s option, earthquake damage coverage, terrorism
coverage, wind and hurricane coverage, and such additional property insurance coverage as
Landlord deems appropriate, on the insurable portions of Building and the remainder of the
Project in an amount not less than the fair replacement value thereof, subject to reasonable
deductibles (ii) boiler and machinery insurance amounts and with deductibles
that would be considered standard for similar class office building in the San Diego,
California area in which the Premises is located, and (iii) commercial general liability
insurance with a combined single limit coverage of at least One Million Dollars
($1,000,000.00) per occurrence. All such insurance shall be obtained from insurers Landlord
reasonably believes to be financially responsible in light of the risks being insured. The
premiums for any such insurance shall be a part of Operating Expenses.

(f) Mutual Waivers of Recovery. Landlord, Tenant, and all parties claiming under
them, each mutually release and discharge each other from responsibility for that portion of any
loss or damage paid or reimbursed by an insurer of Landlord or Tenant under any fire, extended
coverage or other property insurance policy maintained by Tenant with respect to its Premises or by
Landlord with respect to the Building or the Project (or which would have been paid had the
insurance required to be maintained hereunder been in full force and effect), no matter how caused,
including negligence, and each waives any right of recovery from the other including, but not
limited to, claims for contribution or indemnity, which might otherwise exist on account thereof.
Any fire, extended coverage or property insurance policy maintained by Tenant with respect to the
Premises, or Landlord with respect to the Building or the Project, shall contain, in the case of
Tenant’s policies, a waiver of subrogation provision or endorsement in favor of Landlord, and in
the case of Landlord’s policies, a waiver of subrogation provision or

 

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endorsement in favor of
Tenant, or, if such insurers cannot or shall not include or attach such waiver of subrogation
provision or endorsement, Tenant and Landlord shall obtain the approval and consent of their
respective insurers, in writing, to the terms of this Lease. Tenant agrees to indemnify, protect,
defend and hold harmless each and all of the Landlord Indemnitees from and against any claim, suit
or cause of action asserted or brought by Tenant’s insurers for, on behalf of, or in the name of
Tenant, including, but not limited to, claims for contribution, indemnity or subrogation, brought
in contravention of this paragraph. The mutual releases, discharges and waivers contained in this
provision shall apply EVEN IF THE LOSS OR DAMAGE TO WHICH THIS PROVISION APPLIES IS CAUSED SOLELY
OR IN PART BY THE NEGLIGENCE OF LANDLORD OR TENANT.

(g) Adjustment of Claims. Tenant shall cooperate with Landlord and Landlord’s
insurers in the adjustment of any insurance claim pertaining to the Building or the Project or
Landlord’s use thereof.

(h) Increase in Landlord’s Insurance Costs. Tenant agrees to pay to Landlord any
increase in premiums for Landlord’s insurance policies resulting from Tenant’s use or occupancy of
the Premises.

(i) Failure to Maintain Insurance. Any failure of Tenant to obtain and maintain the
insurance policies and coverages required hereunder or failure by Tenant to meet any of the
insurance requirements of this Lease shall, subject to the notice and cure periods of Paragraph
12(a)(ii), constitute an event of default hereunder, and such failure shall entitle Landlord to
pursue, exercise or obtain any of the remedies provided for in Paragraph 12(b), and Tenant
shall be solely responsible for any loss suffered by Landlord as a result of such failure. In the
event of failure by Tenant to maintain the insurance policies and coverages required by this Lease
or to meet any of the insurance requirements of this Lease, Landlord, at its option, and without
relieving Tenant of its obligations hereunder, may obtain said insurance policies and coverages or
perform any other insurance obligation of Tenant, but all costs and expenses incurred by Landlord
in obtaining such insurance or performing Tenant’s insurance obligations shall be reimbursed by
Tenant to Landlord, together with interest on same from the date any such cost or expense was paid
by Landlord until reimbursed by Tenant, at the rate of interest provided to be paid on judgments,
by the law of the jurisdiction to which the interpretation of this Lease is subject.

9. FIRE OR CASUALTY

(a) Subject to the provisions of this Paragraph 9, in the event the Premises, or
access thereto, is wholly or partially destroyed by fire or other casualty, Landlord shall (to the
extent permitted by Law and covenants, conditions and restrictions then applicable to the Project)
rebuild, repair or restore the Premises and access thereto to substantially the same condition as
existing immediately prior to such destruction (excluding Tenant’s Alterations, trade fixtures,
equipment and personal property, which Tenant shall be required to restore) and this Lease shall
continue in full force and effect. Notwithstanding the foregoing, (i) Landlord’s obligation to
rebuild, repair or restore the Premises shall not apply to any personal property, Alterations or
other items installed or contained in the Premises, and (ii) Landlord shall have no obligation
whatsoever to rebuild, repair or restore the Premises with
respect to any damage or destruction occurring during the last twelve (12) months of the term
of this Lease or any extension of the term.

(b) Landlord may elect to terminate this Lease in any of the following cases of damage or
destruction to the Premises, the Building or the Project provided that Tenant does not have
reasonable access to the Premises to conduct business: (i) where the cost of rebuilding, repairing
and restoring (collectively, “Restoration”) of the Building or the Project, would,
regardless of the lack of damage to the Premises or access thereto, in the reasonable opinion of
Landlord, exceed twenty percent (20%) of the then replacement cost of the Building; (ii) where, in
the case of any damage or destruction to any portion of the Building or the Project by uninsured
casualty, the cost of Restoration of the Building or the Project, in the reasonable opinion of
Landlord, exceeds Five Hundred Thousand Dollars ($500,000); or (iii) where, in the case of any
damage or destruction to the Premises or access thereto by uninsured casualty, the cost of
Restoration of the Premises or access thereto, in the reasonable opinion of Landlord, exceeds fifty
percent (50%) of the replacement cost of the Premises; or (iv) if Landlord is not able to obtain
using commercially reasonable efforts appropriate zoning approvals for reconstruction of the
Project, Building or Premises. Any such termination shall be made by thirty (30) days’ prior
written notice to Tenant given within one hundred twenty (120) days of the date of such damage or
destruction. If this Lease is not terminated by Landlord and as the result of any damage or
destruction, the Premises, or a portion thereof, are rendered untenantable, the Base Rent shall
abate reasonably during the period of Restoration (based upon the extent to which such damage and

 

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Restoration materially interfere with Tenant’s business in the Premises). This Lease shall be
considered an express agreement governing any case of damage to or destruction of the Premises, the
Building or the Project. This Lease sets forth the terms and conditions upon which this Lease may
terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the
provisions of California Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 (and
any successor statutes thereof permitting the parties to terminate this Lease as a result of any
damage or destruction). Notwithstanding the foregoing, if in Tenant’s reasonable opinion Landlord
is unable to complete the Restoration of the Premises within one hundred eighty (180) days of the
casualty, Tenant shall have the right to terminate the Lease by providing Landlord with thirty (30)
days prior written notice.

10. EMINENT DOMAIN

In the event the whole of the Premises, the Building or the Project shall be taken under the
power of eminent domain, or sold to prevent the exercise thereof (collectively, a
“Taking”), this Lease shall automatically terminate as of the date of such Taking. In the
event a Taking of a portion of the Project, the Building or the Premises shall, in the reasonable
opinion of Landlord, substantially interfere with Landlord’s operation thereof, Landlord may
terminate this Lease upon thirty (30) days’ written notice to Tenant given at any time within sixty
(60) days following the date of such Taking. For purposes of this Lease, the date of Taking shall
be the earlier of the date of transfer of title resulting from such Taking or the date of transfer
of possession resulting from such Taking. In the event that a portion of the Premises is so taken
and this Lease is not terminated, Landlord shall, to the extent of proceeds paid to Landlord as a
result of the Taking, with reasonable diligence, use commercially reasonable efforts to proceed to
restore (to the extent permitted by Law and covenants, conditions and restrictions then applicable
to the Project) the Premises (other than Tenant’s personal property and fixtures, and
above-standard tenant improvements) to a complete, functioning unit. In such case, the Rent shall
be reduced proportionately based on the portion of the Premises so taken. If all or any portion of
the Premises is the subject of a temporary Taking for a period of ninety (90) days or less, this
Lease shall remain in full force and effect and Tenant shall continue to perform each of its
obligations under this Lease; in such case, Tenant shall be entitled to receive the entire award
allocable to the temporary Taking of the Premises. Except as provided herein, Tenant shall not
assert any claim against Landlord or the condemning authority for, and hereby assigns to Landlord,
any compensation in connection with any such Taking, and Landlord shall be entitled to receive the
entire amount of any award therefor, without deduction for any estate or interest of Tenant.
Nothing contained in this Paragraph 10 shall be deemed to give Landlord any interest in, or
prevent Tenant from seeking any award against the condemning authority for the Taking of personal
property, fixtures, above standard tenant improvements of Tenant or for relocation or moving
expenses recoverable by Tenant from the condemning authority. This Paragraph 10 shall be
Tenant’s sole and exclusive remedy in the event of a Taking. This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of a Taking. Accordingly, the parties
waive the provisions of the California Code of Civil Procedure Section 1265.130 and any successor
or similar statutes permitting the parties to terminate this Lease as a result of a Taking.

11. ASSIGNMENT AND SUBLETTING

(a) Tenant shall not directly or indirectly, voluntarily or involuntarily, by operation of law
or otherwise, assign, sublet, mortgage or otherwise encumber all or any portion of its interest in
this Lease or in the Premises or grant any license for any person other than Tenant or its
employees to use or occupy the Premises or any part thereof (except to a person or entity
affiliated with or controlled by Tenant) without obtaining the prior written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned, or delayed. Any such attempted
assignment, subletting, license, mortgage, other encumbrance or other use or occupancy without the
consent of Landlord shall, at Landlord’s option, be null and void and of no effect. Any mortgage,
or encumbrance of all or any portion of Tenant’s interest in this Lease or in the Premises and any
grant of a license for any person other than Tenant or its employees to use or occupy the Premises
or any part thereof shall be deemed to be an “assignment” of this Lease. In addition, as used in
this Paragraph 11, the term “Tenant” shall also mean any entity that has guaranteed
Tenant’s obligations under this Lease, and the restrictions applicable to Tenant contained herein
shall also be applicable to such guarantor.

 

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(b) No assignment or subletting shall relieve Tenant of its obligation to pay the Rent and to
perform all of the other obligations to be performed by Tenant hereunder. The acceptance of Rent
by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision
of this Lease or to be a consent to any subletting or assignment. Consent by Landlord to one
subletting or assignment shall not be deemed to constitute a consent to any other or subsequent
attempted subletting or assignment. If Tenant desires at any time to assign this Lease or to
sublet the Premises or any portion thereof, it shall first notify Landlord of its desire to do so
and shall submit in writing to Landlord all pertinent information relating to the proposed assignee
or sublessee, all pertinent information relating to the proposed assignment or sublease, and all
such financial information as Landlord may reasonably request concerning the Tenant and proposed
assignee or subtenant. Any assignment or sublease shall be expressly subject to the terms and
conditions of this Lease.

(c) Tenant acknowledges that it shall be reasonable for Landlord to withhold its consent to a
proposed assignment or sublease in any of the following instances:

(i) The assignee or sublessee is not, in Landlord’s reasonable opinion, sufficiently
creditworthy to perform the obligations such assignee or sublessee will have under this
Lease;

(ii) The intended use of the Premises by the assignee or sublessee is not for general
office use;

(iii) The intended use of the Premises by the assignee or sublessee would materially
increase the pedestrian or vehicular traffic to the Premises or the Building;

(iv) Occupancy of the Premises by the assignee or sublessee would, in the good faith
judgment of Landlord, violate any agreement binding upon Landlord, the Building or the
Project with regard to the identity of tenants, usage in the Building, or similar matters;

(v) The identity or business reputation of the assignee or sublessee will, in the good
faith judgment of Landlord, tend to damage the goodwill or reputation of the Building or
Project;

(vi) the proposed sublease would result in more than two subleases of portions of the
Premises being in effect at any one time during the Lease Term;

(vii) or, in the case of a sublease, the subtenant has not acknowledged that the Lease
controls over any inconsistent provision in the sublease.

The foregoing criteria shall not exclude any other reasonable basis for Landlord to refuse its
consent to such assignment or sublease. Notwithstanding any contrary provision of this Lease, if
Tenant or any proposed assignee or sublessee claims that Landlord has unreasonably withheld its
consent to a proposed assignment or
sublease or otherwise has breached its obligations under this Paragraph 11, their sole
remedy shall be to seek a declaratory judgment and/or injunctive relief without any monetary
damages, and, with respect thereto, Tenant, on behalf of itself and, to the extent permitted by
law, such proposed assignee/sublessee, hereby waives all other remedies against Landlord,
including, without limitation, the right to seek monetary damages or to terminate this Lease.

(d) If any Tenant is a corporation, partnership or other entity that is not publicly traded on
a recognized national stock exchange, any transaction or series of related or unrelated
transactions (including, without limitation, any dissolution, merger, consolidation or other
reorganization, any withdrawal or admission of a partner or change in a partner’s interest, or any
issuance, sale, gift, transfer or redemption of any capital stock of or ownership interest in such
entity, whether voluntary, involuntary or by operation of law, or any combination of any of the
foregoing transactions) resulting in the transfer of control of such Tenant, shall be deemed to be
an assignment of this Lease subject to the provisions of this Paragraph 11. The term “control” as
used in this Paragraph 11(e) means the power to directly or indirectly direct or cause the
direction of the management or policies of Tenant. Any transfer of control of a subtenant which is
a corporation or other entity shall be deemed an assignment of any sublease. Notwithstanding
anything to the contrary in this Paragraph 11(e), if the original Tenant under this Lease is a
corporation, partnership or other entity, a change or series of changes in ownership of stock or
other ownership interests which would result in direct or indirect change in ownership of less than
fifty percent (50%) of the outstanding stock of or other ownership interests in such Tenant as of
the date of the execution and delivery of this Lease shall not be considered a change of control.

 

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(e) Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of
Tenant’s obligations under this Lease shall at all times during the Initial Term and any subsequent
renewals or extensions remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant’s other obligations under this Lease. If the Rent due and payable by
a sublessee or assignee (or a combination of the rental payable under such sublease or assignment,
plus any bonus or other consideration therefor or incident thereto) exceeds the Rent payable under
this Lease, after deducting leasing commissions, marketing fees, tenant improvement costs, legal
fees, management fees, administration fees and other actual, reasonable and documented costs
related to the sublease or assignment as determined by Tenant in its reasonable discretion, then
Tenant shall be bound and obligated to pay Landlord, as additional rent hereunder, one-half (1/2)
of all such excess Rent and other excess consideration within ten (10) days following receipt
thereof by Tenant.

(f) If this Lease is assigned or if the Premises is subleased (whether in whole or in part),
or in the event of the mortgage or pledge of Tenant’s leasehold interest, or grant of any
concession or license within the Premises, or if the Premises are occupied in whole or in part by
anyone other than Tenant, then upon a default by Tenant hereunder Landlord may collect Rent from
the assignee, sublessee, mortgagee, pledgee, concessionee or licensee or other occupant and, except
to the extent set forth in the preceding paragraph, apply the amount collected to the next Rent
payable hereunder; and all such Rent collected by Tenant shall be held in deposit for Landlord and
immediately forwarded to Landlord. No such transaction or collection of Rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a release of Tenant
from the further performance by Tenant of its covenants, duties, or obligations hereunder.

(g) If Tenant effects an assignment or sublease or requests the consent of Landlord to any
proposed assignment or sublease, then Tenant shall, upon demand, pay Landlord a non-refundable
administrative fee of One Thousand Dollars ($1,500.00), to cover any reasonable attorneys’ and
paralegal fees and costs incurred by Landlord in connection with such assignment or sublease or
request for consent. Acceptance of the One Thousand Dollar ($1,500.00) fees shall in no event
obligate Landlord to consent to any proposed assignment or sublease.

(h) Notwithstanding any provision of this Lease to the contrary, in the event this Lease is
assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, any and all
monies or other consideration payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute the property of Tenant or Tenant’s estate within the meaning of
the Bankruptcy Code. All such money and other consideration not paid or delivered to Landlord
shall be held in trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord.

(i) The joint and several liability of the Tenant named herein and any immediate and remote
successor-in-interest of Tenant (by assignment or otherwise), and the due performance of the
obligations of this Lease on Tenant’s part to be performed or observed, shall not in any way be
discharged, released or impaired by any (a) agreement that modifies any of the rights or
obligations of the parties under this Lease, (b) stipulation that extends the time within which an
obligation under this Lease is to be performed, (c) waiver of the performance of an obligation
required under this Lease, or (d) failure to enforce any of the obligations set forth in this
Lease.

(j) If Tenant is any form of partnership, a withdrawal or change, voluntary, involuntary or by
operation of law of any partner, or the dissolution of the partnership, shall be deemed a voluntary
assignment. If Tenant consists of more than one (1) person, a purported assignment, voluntary or
involuntary or by operation of law from one (1) person to the other shall be deemed a voluntary
assignment. If Tenant is a corporation or limited liability entity that is not publicly traded on
a recognized stock exchange, any dissolution, merger, consolidation or other reorganization of
Tenant, or sale or other transfer of a controlling percentage of the ownership interest of Tenant,
or the sale of at least fifty-one percent (51%) of the value of the assets of Tenant shall be
deemed a voluntary assignment.

 

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(k) Notwithstanding the terms of this Paragraph 11, Tenant may effect an assignment (a
“Permitted Transfer”), without Landlord’s consent, without payment of any Transfer Premium
to Landlord, and without extending any recapture right to Landlord, to any parent, subsidiary or
affiliate entity which controls, is controlled by, or is under common control with, Tenant, or to
any entity resulting from a merger or consolidation of Tenant, or to any person or entity which
acquires all or substantially all of the assets of Tenant’s business as a going concern (a
“Permitted Transferee”), provided that (a) Tenant delivers to Landlord, substantially
concurrently with such assignment, written notice of same, (b) the assignee shall use the Premises
only for general office uses, (c) the assignee assumes in full the obligations of Tenant under this
Lease arising after the transfer, and (d) Tenant remains fully liable under this Lease.

12. DEFAULT

(a) Events of Default. The occurrence of any one or more of the following events
shall constitute an “event of default” or “default” (herein so called) under this Lease by Tenant:
(i) Tenant shall fail to pay Rent or any other payment required to be made by Tenant hereunder
where such failure continues for seven (7) business days after written notice thereof from Landlord
that such payment was not received; (ii) the failure by Tenant to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or performed by Tenant,
other than monetary failures as specified in Paragraph 12(a)(i) above, where such failure
shall continue for a period of ten (10) business days after written notice thereof from Landlord to
Tenant; provided, however, that if the nature of Tenant’s default is such that more than ten (10)
business days are reasonably required for its cure, then Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said ten (10) business day period and thereafter
diligently prosecute such cure to completion, which completion shall occur not later than sixty
(60) days from the date of such notice from Landlord; (iii) the making by Tenant or any guarantor
hereof of any general assignment for the benefit of creditors, (iv) the filing by or against Tenant
or any guarantor hereof of a petition to have Tenant or any guarantor hereof adjudged a bankrupt or
a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the
case of a petition filed against Tenant or any guarantor hereof, the same is dismissed within sixty
(60) days), (v) the appointment of a trustee or receiver to take possession of substantially all of
Tenant’s assets located at the Premises or of Tenant’s interest in this Lease or of substantially
all of guarantor’s assets, where possession is not restored to Tenant or guarantor within sixty
(60) days, (vi) the attachment, execution or other judicial seizure of substantially all of
Tenant’s assets located at the Premises or of substantially all of guarantor’s assets or of
Tenant’s interest in this Lease where such seizure is not discharged within sixty (60) days; (vii)
any material representation or warranty made by Tenant or guarantor in this Lease or any other
document delivered in connection with the execution and delivery of this Lease or pursuant to this
Lease proves to be incorrect in any material respect; (viii) Tenant or guarantor shall be
liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution; or (ix)
the vacation or abandonment of the Premises by Tenant in excess of fifteen (15) business days,
except in connection with any subleases or assignments of the Lease consented to in writing by the
Landlord.

Any notice sent by Landlord to Tenant pursuant to this Paragraph 12(a) shall be in
lieu of, and not in addition to, any notice required under California Code of Civil Procedure
Section 1161.

(b) Landlord’s Remedies; Termination. In the event of any event of default by Tenant,
in addition to any other remedies available to Landlord under this Lease, at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder
and Landlord shall have all the rights and remedies of a Landlord provided by Section 1951.2 of the
California Civil Code. If Landlord shall elect to so terminate this Lease, then Landlord may
recover from Tenant:

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

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

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

 

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(iv) any other amount reasonably necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations under this Lease
or which, in the ordinary course of things, would be likely to result therefrom including,
but not limited to: unamortized Tenant Improvement costs (such amount to be payable monthly
for the remainder of the term); unamortized Abated Amount (such amount to be payable monthly
for the remainder of the term); reasonable attorneys’ fees; brokers’ commissions; the repair
of the Premises (reasonable wear and tear excepted); and removal (including the repair of
any damage caused by such removal) and storage (or disposal) of Tenant’s personal property,
equipment, fixtures, Tenant Alterations, Tenant Improvements and any other items which
Tenant is required under this Lease to remove but does not remove.

As used in subparagraph (i) and subparagraph (ii) of Paragraph 12(b) above, the “worth
at the time of award” is computed by allowing interest at the Default Rate (as defined below). As
used in subparagraph (iii) of Paragraph 12(b) above, the “worth at the time of award” is
computed by discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

(c) Landlord’s Remedies; Re-Entry Rights. In the event of any event of default by
Tenant, in addition to any other remedies available to Landlord under this Lease, at law or in
equity, Landlord shall also have the right, with or without terminating this Lease, to re-enter the
Premises and remove all persons and property from the Premises; such property may be removed,
stored and/or disposed of pursuant to Paragraph 5(c) of this Lease or any other procedures
permitted by applicable law. No re-entry or taking possession of the Premises by Landlord pursuant
to this Paragraph 12(c), and no acceptance of surrender of the Premises or other action on
Landlord’s part, shall be construed as an election to terminate this Lease unless a written notice
of such intention be given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.

(d) Continuation of Lease. Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and
abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign,
subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this
Lease on account of any event of default by Tenant, Landlord may, from time to time, without
terminating this Lease, enforce all of its rights and remedies under this Lease, including the
right to recover all Rent as it becomes due.

(e) Landlord’s Right to Perform. Except as specifically provided otherwise in this
Lease, all covenants and agreements by Tenant under this Lease shall be performed by Tenant at
Tenant’s sole cost and expense and without any abatement or offset of Rent. If Tenant shall fail
to pay any sum of money (other than Base Rent) or perform any other act on its part to be paid or
performed hereunder and such failure shall continue for seven (7) business days with respect to
monetary obligations (or ten (10) business days with respect to non-monetary obligations, except in
case of emergencies, in which such case, such shorter period of time as is reasonable under the
circumstances) after Tenant’s receipt of written notice thereof from Landlord, Landlord may,
without waiving or releasing Tenant from any of Tenant’s obligations, make such payment or perform
such other act on behalf of Tenant. All sums so paid by Landlord and all necessary incidental
costs incurred by Landlord in performing such other acts shall be payable by Tenant to Landlord
within five (5) business days after demand therefor as Additional Rent.

(f) Interest. If any monthly installment of Rent or Operating Expenses, or any other
amount payable by Tenant hereunder is not received by Landlord by the date when due, it shall bear
interest at the Default Rate from the date due until paid. All interest, and any late charges
imposed pursuant to Paragraph 12(g) below, shall be considered Additional Rent due from
Tenant to Landlord under the terms of this Lease. The term “Default Rate” as used in this
Lease shall mean the lesser of (A) the rate announced from time to time by Wells Fargo Bank or, if
Wells Fargo bank ceases to exist or ceases to publish such rate, then the rate announced from time
to time by the largest (as measured by deposits) chartered bank operating in the State of
California, as its “prime rate” or “reference rate”, plus two percent (2%), or (B) the maximum rate
of interest permitted by Law.

 

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(g) Late Charges. Tenant acknowledges that, in addition to interest costs, the late
payments by Tenant to Landlord of any monthly installment of Base Rent, Additional Rent or other
sums due under this Lease will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such other costs include, without limitation,
processing, administrative and accounting charges and late charges that may be imposed on Landlord
by the terms of any mortgage, deed to secure debt, deed of trust or related loan documents
encumbering the Premises, the Building or the Project. Accordingly, if any monthly installment of
Base Rent, Additional Rent or any other amount payable by Tenant hereunder is not received by
Landlord by the due date thereof, Tenant shall pay to Landlord an additional sum of five percent
(5%) of the overdue amount as a late charge, but in no event more than the maximum late charge
allowed by law. The parties agree that such late charge represents a fair and reasonable estimate
of the costs that Landlord will incur by reason of any late payment as hereinabove referred to by
Tenant, and the payment of late charges and interest are distinct and separate in that the payment
of interest is to compensate Landlord for the use of Landlord’s money by Tenant, while the payment
of late charges is to compensate Landlord for Landlord’s processing, administrative and other costs
incurred by Landlord as a result of Tenant’s delinquent payments. Acceptance of a late charge or
interest shall not constitute a waiver of Tenant’s default with respect to the overdue amount or
prevent Landlord from exercising any of the other rights and remedies available to Landlord under
this Lease or at law or in equity now or hereafter in effect.

(h) Rights and Remedies Cumulative. All rights, options and remedies of Landlord
contained in this Paragraph 12 and elsewhere in this Lease shall be construed and held to
be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the
right to pursue any one or all of such remedies or any other remedy or relief which may be provided
by law or in equity, whether or not stated in this Lease. Nothing in this Paragraph 12
shall be deemed to limit or otherwise affect Tenant’s indemnification of Landlord pursuant to any
provision of this Lease.

(i) Tenant’s Waiver of Redemption. Tenant hereby waives and surrenders for itself and
all those claiming under it, including creditors of all kinds, (i) any right and privilege which it
or any of them may have under any present or future law to redeem any of the Premises or to have a
continuance of this Lease after termination of this Lease or of Tenant’s right of occupancy or
possession pursuant to any court order or any provision hereof, and (ii) the benefits of any
present or future law which exempts property from liability for debt or for distress for Rent.

(j) Costs Upon Default and Litigation. Tenant shall pay to Landlord and its
mortgagees as Additional Rent all the reasonable expenses incurred by Landlord or its mortgagees in
connection with any uncured default by Tenant hereunder or the exercise of any remedy by reason of
any uncured default by Tenant hereunder, including reasonable attorneys’ fees and expenses. If
Landlord or its mortgagees shall be made a party to any litigation commenced against Tenant or any
litigation pertaining to this Lease or the Premises, at the option of Landlord and/or its
mortgagees, Tenant, at its expense, shall provide Landlord and/or its mortgagees with counsel
approved by Landlord and/or its mortgagees and shall pay all reasonable costs incurred or paid by
Landlord and/or its mortgagees in connection with such litigation.

13. ACCESS; CONSTRUCTION

Landlord reserves from the leasehold estate hereunder, in addition to all other rights
reserved by Landlord under this Lease, the right to use the roof and exterior walls of the Premises
and the area beneath, adjacent to and above the Premises. Landlord also reserves the right to
install, use, maintain, repair, replace and relocate equipment, machinery, meters, pipes, ducts,
plumbing, conduits and wiring through the Premises, which serve other portions of the Building or
the Project in a manner and in locations which do not unreasonably interfere with Tenant’s use of
the Premises. In addition, Landlord shall have free access to any and all mechanical installations
of Landlord or Tenant, including, without limitation, machine rooms, telephone rooms and electrical
closets. Tenant agrees that there shall be no construction of partitions or other obstructions
which materially interfere with or which threaten to materially interfere with Landlord’s free
access thereto, or materially interfere with the moving of Landlord’s equipment to or from the
enclosures containing said installations. Landlord shall at all reasonable times, during normal
business hours and after reasonable written or oral notice (except in the event of an emergency
which no notice shall be necessary), Landlord reserves and shall at all times have the right to
enter the Premises to inspect the same, to supply janitorial service and any other service to be
provided by Landlord to Tenant hereunder, to exhibit the Premises to prospective purchasers,
lenders or tenants, to post notices of non-responsibility, to alter, improve, restore, rebuild or
repair the Premises or any other portion of the Building, or to do any other act permitted or
contemplated to be done by Landlord hereunder, all without being deemed guilty of an eviction
of Tenant and without liability for abatement of Rent or otherwise, provided that Tenant shall
continue to have reasonable access to the Premises. For such purposes, Landlord may also erect
scaffolding and other necessary structures where

 

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reasonably required by the character of the work
to be performed. Landlord shall conduct all such inspections and/or improvements, alterations and
repairs so as to minimize, to the extent reasonably practical and without material additional
expense to Landlord, any interruption of or interference with the business of Tenant. Tenant
hereby waives any claim for damages for any injury or inconvenience to or interference with
Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, provided that Tenant shall continue to have reasonable access to the Premises.
For each of such purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises (excluding Tenant’s vaults and safes, access to
which shall be provided by Tenant upon Landlord’s reasonable request). Landlord shall have the
right to use any and all means which Landlord may deem proper in an emergency in order to obtain
entry to the Premises or any portion thereof, and Landlord shall have the right, at any time during
the Lease Term, to provide whatever access control measures it deems reasonably necessary to the
Project, without any interruption or abatement in the payment of Rent by Tenant. Any entry into
the Premises obtained by Landlord by any of such means shall not under any circumstances be
construed to be a forcible or unlawful entry into, or a detainer of, the Premises, or any eviction
of Tenant from the Premises or any portion thereof. No provision of this Lease shall be construed
as obligating Landlord to perform any repairs, Alterations or decorations to the Premises or the
Project except as otherwise expressly agreed to be performed by Landlord pursuant to the provisions
of this Lease.

14. BANKRUPTCY

(a) If at any time on or before the Commencement Date there shall be filed by or against
Tenant in any court, tribunal, administrative agency or any other forum having jurisdiction,
pursuant to any applicable law, either of the United States or of any state, a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a receiver, trustee or
conservator of all or a portion of Tenant’s property, or if Tenant makes an assignment for the
benefit of creditors, this Lease shall ipso facto be canceled and terminated and in such event
neither Tenant nor any person claiming through or under Tenant or by virtue of any applicable law
or by an order of any court, tribunal, administrative agency or any other forum having
jurisdiction, shall be entitled to possession of the Premises and Landlord, in addition to the
other rights and remedies given by Paragraph 12 hereof or by virtue of any other provision
contained in this Lease or by virtue of any applicable law, may retain as damages any Rent,
Security Deposit or moneys received by it from Tenant or others on behalf of Tenant.

(b) If, after the Commencement Date, or if at any time during the term of this Lease, there
shall be filed against Tenant in any court, tribunal, administrative agency or any other forum
having jurisdiction, pursuant to any applicable law, either of the United States or of any state, a
petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver,
trustee or conservator of all or a portion of Tenant’s property, and the same is not dismissed
after sixty (60) calendar days, or if Tenant makes an assignment for the benefit of creditors, this
Lease, at the option of Landlord exercised within a reasonable time after notice of the happening
of any one or more of such events, may be canceled and terminated and in such event neither Tenant
nor any person claiming through or under Tenant or by virtue of any statute or of an order of any
court shall be entitled to possession or to remain in possession of the Premises, but shall
forthwith quit and surrender the Premises, and Landlord, in addition to the other rights and
remedies granted by Paragraph 12 hereof or by virtue of any other provision contained in
this Lease or by virtue of any applicable law, may retain as damages any Rent, Security Deposit or
moneys received by it from Tenant or others on behalf of Tenant.

15. SUBSTITUTION OF PREMISES

INTENTIONALLY OMITTED

16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES

(a) Tenant agrees that this Lease and the rights of Tenant hereunder shall be subject and
subordinate to any and all deeds to secure debt, deeds of trust, security interests, mortgages,
master leases, ground leases or other security documents and any and all modifications, renewals,
extensions, consolidations and replacements thereof
(collectively, “Security Documents”) which now or hereafter constitute a lien upon or
affect the Project, the Building or the Premises. Such subordination shall be effective without
the necessity of the execution by Tenant of any additional document for the purpose of evidencing
or effecting such subordination. In addition, Landlord shall have the right to subordinate or
cause to be subordinated any such Security Documents to this Lease and in such

 

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case, in the event
of the termination or transfer of Landlord’s estate or interest in the Project by reason of any
termination or foreclosure of any such Security Documents, Tenant shall, notwithstanding such
subordination, attorn to and become the Tenant of the successor-in-interest to Landlord at the
option of such successor-in-interest. Furthermore, Tenant shall within fifteen (15) days of demand
therefor execute any instruments or other documents which may be required by Landlord or the holder
of any Security Document and specifically shall execute, acknowledge and deliver within fifteen
(15) days of demand therefor a subordination of lease or subordination of deed of trust or
mortgage, in the form required by the holder of the Security Document requesting the document; the
failure to do so by Tenant within such time period shall be a material default hereunder; provided,
however, the new landlord or the holder of any Security Document shall agree that Tenant’s quiet
enjoyment of the Premises shall not be disturbed as long as Tenant is not in uncured default under
this Lease.

(b) If any proceeding is brought for default under any ground or master lease to which this
Lease is subject or in the event of foreclosure or the exercise of the power of sale under any
mortgage, deed of trust or other Security Document made by Landlord covering the Premises, at the
election of such ground lessor, master lessor or purchaser at foreclosure, Tenant shall attorn to
and recognize the same as Landlord under this Lease, provided such successor expressly agrees in
writing to be bound to all future obligations by the terms of this Lease, and if so requested,
Tenant shall enter into a new lease with that successor on the same terms and conditions as are
contained in this Lease (for the unexpired term of this Lease then remaining). Tenant hereby
waives its rights under any current or future law which gives or purports to give Tenant any right
to terminate or otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale.

(c) In addition to any statutory lien for Rent in Landlord’s favor, Landlord (the secured
party for purposes hereof) shall have and Tenant (the debtor for purposes hereof) hereby grants to
Landlord, an express contract lien and a continuing security interest to secure the payment of all
Rent due hereunder from Tenant, upon all goods, wares, equipment, fixtures, furniture, inventory
and other personal property of Tenant (and any transferees or other occupants of the Premises)
presently or hereafter situated on the Premises and upon all proceeds of any insurance which may
accrue to Tenant by reason of damage or destruction of any such property. In the event of an
uncured default under this Lease, Landlord shall have, in addition to any other remedies provided
herein or by law, all rights and remedies under the Uniform Commercial Code of the state in which
the Premises is located, including without limitation the right to sell the property described in
this paragraph at public or private sale upon ten (10) business days’ notice to Tenant, which
notice Tenant hereby agrees is adequate and reasonable. Tenant hereby agrees to execute such other
instruments necessary or desirable in Landlord’s discretion to perfect the security interest hereby
created. Any statutory lien for Rent is not hereby waived, the express contractual lien herein
granted being in addition and supplementary thereto. Landlord and Tenant agree that this Lease and
the security interest granted herein serve as a financing statement, and a copy or photographic or
other reproduction of this paragraph of this Lease may be filed of record by Landlord and have the
same force and effect as the original. Tenant warrants and represents that the collateral subject
to the security interest granted herein is not purchased or used by Tenant for personal, family or
household purposes. Tenant further warrants and represents to Landlord that the lien granted
herein constitutes a first and superior lien and that Tenant will not allow the placing of any
other lien upon any of the property described in this paragraph without the prior written consent
of Landlord. Notwithstanding the provisions of this Paragraph 16(c) to the contrary, if
Tenant desires to obtain a loan secured by Tenant’s personal property in the Premises and requests
that Landlord execute a lien waiver in connection therewith, Landlord may, in its sole discretion,
based upon Landlord’s review of Tenant’s financial condition, agree to subordinate its lien rights
to the rights of Tenant’s lender pursuant to a lien subordination on Landlord’s standard form,
provided that Tenant delivers such request in writing to Landlord together with a nonrefundable
processing fee in the amount of Three Hundred Dollars ($300.00). Notwithstanding the foregoing,
however, if Landlord incurs processing costs (including attorneys’ fees) in connection with any
such request which exceed Three Hundred Dollars ($300.00), then Tenant shall reimburse Landlord for
such excess within three (3) business days following Tenant’s receipt of invoice(s) therefor from
Landlord. Nothing in this Paragraph 16(c) shall permit Tenant to encumber its leasehold
interest in the Premises. Notwithstanding the foregoing, Landlord acknowledges that Tenant has
granted a prior security interest to Comerica Bank and Landlord’s interest is subordinate to such
security interest of Comerica Bank.

 

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(d) Tenant shall, upon not less than ten (10) days’ prior notice by Landlord, execute,
acknowledge and deliver to Landlord a statement in writing certifying to those facts for which
certification has been requested by Landlord or any current or prospective purchaser, holder of any
Security Document, ground lessor or master lessor, including, but without limitation, that (i) this
Lease is unmodified and in full force and effect (or if there have been modifications, that the
same is in full force and effect as modified and stating the modifications), (ii) the dates to
which the Base Rent, Additional Rent and other charges hereunder have been paid, if any, and (iii)
whether or not to the best knowledge of Tenant, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease and, if so, specifying each such default
of which Tenant may have knowledge. The form of the statement attached hereto as Exhibit D
is hereby approved by Tenant for use pursuant to this subparagraph (d); however, at Landlord’s
option, Landlord shall have the right to use other forms for such purpose. Tenant’s failure to
execute and deliver such statement within such time shall, at the option of Landlord, constitute a
material default under this Lease and, in any event, shall be conclusive upon Tenant that this
Lease is in full force and effect without modification except as may be represented by Landlord in
any such certificate prepared by Landlord and delivered to Tenant for execution. Any statement
delivered pursuant to this Paragraph 16 may be relied upon by any prospective purchaser of
the fee of the Building or the Project or any mortgagee, ground lessor or other like encumbrances
thereof or any assignee of any such encumbrance upon the Building or the Project.

17. SALE BY LANDLORD; TENANT’S REMEDIES; NONRECOURSE LIABILITY

(a) In the event of a sale or conveyance by Landlord of the Building or the Project, Landlord
shall be released from any and all liability under this Lease. If the Security Deposit has been
deposited by Tenant to Landlord prior to such sale or conveyance, Landlord shall transfer the
Security Deposit to the purchaser, and upon delivery to Tenant of notice thereof, Landlord shall be
discharged from any further liability in reference thereto.

(b) Landlord shall not be in default of any obligation of Landlord hereunder unless Landlord
fails to perform any of its obligations under this Lease within thirty (30) days after receipt of
written notice of such failure from Tenant; provided, however, that if the nature of Landlord’s
obligation is such that more than thirty (30) days are required for its performance, Landlord shall
not be in default if Landlord commences to cure such default within the thirty (30) day period and
thereafter diligently prosecutes the same to completion. All obligations of Landlord under this
Lease will be binding upon Landlord only during the period of its ownership of the Project and not
thereafter. All obligations of Landlord hereunder shall be construed as covenants, not conditions;
and, except as may be otherwise expressly provided in this Lease, Tenant may not terminate this
Lease for breach of Landlord’s obligations hereunder.

(c) Notwithstanding anything contained in this Lease to the contrary, the obligations of
Landlord under this Lease (including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers, trustees, members
or shareholders of Landlord or Landlord’s members or partners, and Tenant shall not seek recourse
against the individual partners, directors, officers, trustees, members or shareholders of Landlord
or against Landlord’s members or partners or against any other persons or entities having any
interest in Landlord, or against any of their personal assets for satisfaction of any liability
with respect to this Lease. Any liability of Landlord for a default by Landlord under this Lease,
or a breach by Landlord of any of its obligations under the Lease, shall be limited solely to its
interest in the Project, and in no event shall any personal liability be asserted against Landlord
in connection with this Lease nor shall any recourse be had to any other property or assets of
Landlord, its partners, directors, officers, trustees, members, shareholders or any other persons
or entities having any interest in Landlord. Tenant’s sole and exclusive remedy for a default or
breach of this Lease by Landlord shall be either (i) an action for damages, or (ii) an action for
injunctive relief; Tenant hereby waiving and agreeing that Tenant shall have no offset rights on
account of any breach or default by Landlord under this Lease. Under no circumstances whatsoever
shall Landlord ever be liable for punitive, consequential or special damages under this Lease and
Tenant waives any rights it may have to such damages under this Lease in the event of a breach or
default by Landlord under this Lease.

(d) As a condition to the effectiveness of any notice of default given by Tenant to Landlord,
Tenant shall also concurrently give such notice under the provisions of Paragraph 17(b) to
each beneficiary under a Security Document encumbering the Project of whom Tenant has received
written notice (such notice to specify the address of the beneficiary). If Landlord shall fail to
cure any breach or default within the time period specified in
subparagraph (b), then prior to the pursuit of any remedy therefor by Tenant, each such
beneficiary shall have an additional thirty (30) days within which to cure such default, or if such
default cannot reasonably be cured within such period, then each such beneficiary shall have such
additional time as shall be necessary to cure such default, provided that within such thirty (30)
day period, such beneficiary has commenced and is diligently pursuing the remedies available to it
which are necessary to cure such default (including, without limitation, as appropriate,
commencement of foreclosure proceedings).

 

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18. PARKING; COMMON AREAS

(a) Tenant shall have the right to the nonexclusive use of the number of parking spaces
located in the parking areas of the Project specified in Item 13 of the Basic Lease Provisions for
the parking of operational motor vehicles used by Tenant, its officers and employees only.
Landlord reserves the right, at any time upon written notice to Tenant, to designate the location
of Tenant’s parking spaces as determined by Landlord in its reasonable discretion. The use of such
spaces shall be subject to the rules and regulations adopted by Landlord from time to time for the
use of the parking areas. Landlord further reserves the right to make such changes to the parking
system as Landlord may deem necessary or reasonable from time to time; i.e., Landlord may provide
for one or a combination of parking systems, including, without limitation, self-parking, single or
double stall parking spaces, and valet assisted parking. Except as otherwise expressly agreed to
in this Lease, Tenant agrees that Tenant, its officers and employees shall not be entitled to park
in any reserved or specially assigned areas designated by Landlord from time to time in the
Project’s parking areas. Landlord may require execution of an agreement with respect to the use of
such parking areas by Tenant and/or its officers and employees in form reasonably satisfactory to
Landlord as a condition of any such use by Tenant, its officers and employees. A default by
Tenant, its officers or employees in the payment of such charges, the compliance with such rules
and regulations, or the performance of such agreement(s) shall constitute a material default by
Tenant hereunder. Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant’s officers, employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such activities. If Tenant
permits or allows any of the prohibited activities described in this Paragraph, then Landlord shall
have the right, without notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable upon demand by Landlord.

(b) Subject to subparagraph (c) below and the remaining provisions of this Lease, Tenant shall
have the nonexclusive right, in common with others, to the use of such entrances, lobbies, fire
vestibules, restrooms (excluding restrooms on any full floors leased by a tenant), mechanical
areas, ground floor corridors, elevators and elevator foyers, electrical and janitorial closets,
telephone and equipment rooms, loading and unloading areas, the Project’s plaza areas, if any,
ramps, drives, stairs, and similar access ways and service ways and other common areas and
facilities in and adjacent to the Building and the Project as are designated from time to time by
Landlord for the general nonexclusive use of Landlord, Tenant and the other tenants of the Project
and their respective employees, agents, representatives, licensees and invitees (“Common
Areas”). The use of such Common Areas shall be subject to the rules and regulations contained
herein and the provisions of any covenants, conditions and restrictions affecting the Building or
the Project. Tenant shall keep all of the Common Areas free and clear of any obstructions created
or permitted by Tenant or resulting from Tenant’s operations, and shall use the Common Areas only
for normal activities, parking and ingress and egress by Tenant and its employees, agents,
representatives, licensees and invitees to and from the Premises, the Building or the Project. If,
in the reasonable opinion of Landlord, unauthorized persons are using the Common Areas by reason of
the presence of Tenant in the Premises, Tenant, upon demand of Landlord, shall correct such
situation by appropriate action or proceedings against all such unauthorized persons. Nothing
herein shall affect the rights of Landlord at any time to remove any such unauthorized persons from
said areas or to prevent the use of any of said areas by unauthorized persons. Landlord reserves
the right to make such changes, alterations, additions, deletions, improvements, repairs or
replacements in or to the Building, the Project (including the Premises) and the Common Areas as
Landlord may reasonably deem necessary or desirable, including, without limitation, constructing
new buildings and making changes in the location, size, shape and number of driveways, entrances,
parking spaces, parking areas, loading areas, landscaped areas and walkways; provided, however,
that (i) there shall be no unreasonable permanent obstruction of access to or use of the Premises
resulting therefrom, and (ii) Landlord shall use commercially reasonable efforts to minimize any
interruption with Tenant’s use of the Premises. In the event that the Project is not completed on
the date of execution of this Lease, Landlord shall have the sole judgment and discretion to
determine the architecture, design,
appearance, construction, workmanship, materials and equipment with respect to construction of
the Project. Notwithstanding any provision of this Lease to the contrary, the Common Areas shall
not in any event be deemed to be a portion of or included within the Premises leased to Tenant and
the Premises shall not be deemed to be a portion of the Common Areas. This Lease is granted
subject to the terms hereof, the rights and interests of third parties under existing liens, ground
leases, easements and encumbrances affecting such property, all zoning regulations, rules,
ordinances, building restrictions and other laws and regulations now in effect or hereafter adopted
by any governmental authority having jurisdiction over the Project or any part thereof.

 

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(c) Notwithstanding any provision of this Lease to the contrary, Landlord specifically
reserves the right to redefine the terms “Building” and “Project” for purposes of
allocating and calculating Operating Expenses so as to include or exclude areas as Landlord shall
from time to time determine or specify (and any such determination or specification shall be
without prejudice to Landlord’s right to revise thereafter such determination or specification).
In addition, Landlord shall have the right to contract or otherwise arrange for amenities, services
or utilities (the cost of which is included within Operating Expenses) to be on a common or shared
basis to both the Project (i.e., the area with respect to which Operating Expenses are determined)
and adjacent areas not included within the Project, so long as the basis on which the cost of such
amenities, services or utilities is allocated to the Project is determined on an arms-length basis
or some other basis reasonably determined by Landlord. In the case where the definition of the
Project is revised for purposes of the allocation or determination of Operating Expenses, Tenant’s
Proportionate Share shall be appropriately revised to equal the percentage share of all Rentable
Area contained within the Project (as then defined) represented by the Premises. The Rentable Area
of the Project is subject to adjustment by Landlord from time to time to reflect any remeasurement
thereof by Landlord’s architect, at Landlord’s request, and/or as a result of any additions or
deletions to any of the buildings in the Project as designated by Landlord. Landlord shall have
the sole right to determine which portions of the Project and other areas, if any, shall be served
by common management, operation, maintenance and repair. Landlord shall have the exclusive rights
to the airspace above and around, and the subsurface below, the Premises and other portions of the
Building and Project.

(d) So long as there is no default by Tenant under this Lease (beyond the expiration of all
applicable notice and cure periods), Landlord acknowledges and agrees that Tenant’s employees
employed at the Premises shall have the right to utilize the Project’s fitness center, including
shower and locker facilities (“Fitness Center”) for so long as Landlord determines that
such Fitness Center will be in operation at the Project. Tenant, for Tenant and its employees,
hereby agrees that the Landlord Indemnitees shall not be liable for, and are hereby
released from, any responsibility for any loss, cost, damage, expense or liability to person or
property arising from the use of the Fitness Center by Tenant or Tenant’s employees. In connection
with the operation of the Fitness Center, Landlord reserves the right to promulgate commercially
reasonable rules and regulations applicable to all users of the Fitness Center, which rules and
regulations may include, as a condition to any person’s use of the Fitness Center, of such person’s
execution and delivery to Landlord of a release agreement in a form specified by Landlord,
releasing Landlord from any liability arising out of or in connection with such person’s use of the
Fitness Center (and upon such person’s compliance with such rules and regulations which Landlord
may specify for the use of the Fitness Center). Landlord shall have the right, from time to time,
to relocate or eliminate the Fitness Center and use such space as leasable space.

19. MISCELLANEOUS

(a) Attorneys’ Fees. In the event of any legal action or proceeding brought by either
party against the other arising out of this Lease, the prevailing party shall be entitled to
recover reasonable attorneys’ fees and costs (including, without limitation, court costs and expert
witness fees) incurred in such action. Such amounts shall be included in any judgment rendered in
any such action or proceeding.

(b) Waiver. No waiver by Landlord of any provision of this Lease or of any breach by
Tenant hereunder shall be deemed to be a waiver of any other provision hereof, or of any subsequent
breach by Tenant. Landlord’s consent to or approval of any act by Tenant requiring Landlord’s
consent or approval under this Lease shall not be deemed to render unnecessary the obtaining of
Landlord’s consent to or approval of any subsequent act of Tenant. No act or thing done by
Landlord or Landlord’s agents during the term of this Lease shall be deemed an acceptance of a
surrender of the Premises, unless in writing signed by Landlord. The delivery of the keys to any
employee or agent of Landlord shall not operate as a termination of the Lease or a surrender
of the Premises. The acceptance of any Rent by Landlord following a breach of this Lease by Tenant
shall not constitute a waiver by Landlord of such breach or any other breach unless such waiver is
expressly stated in a writing signed by Landlord.

 

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(c) Notices. Any notice, demand, request, consent, approval, disapproval or
certificate (“Notice”) required or desired to be given under this Lease shall be in writing
and given by certified mail, return receipt requested, by personal delivery or by a nationally
recognized overnight delivery service (such as Federal Express or UPS) providing a receipt for
delivery. Notices may not be given by facsimile. The date of giving any Notice shall be deemed to
be the date upon which delivery is actually made by one of the methods described in this Paragraph
19(c) (or attempted if said delivery is refused or rejected). If a Notice is received on a
Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. All
notices, demands, requests, consents, approvals, disapprovals, or certificates shall be addressed
at the address specified in Item 14 of the Basic Lease Provisions or to such other addresses as may
be specified by written notice from Landlord to Tenant and if to Tenant, at the Premises. Either
party may change its address by giving reasonable advance written Notice of its new address in
accordance with the methods described in this Paragraph; provided, however, no notice of either
party’s change of address shall be effective until fifteen (15) days after the addressee’s actual
receipt thereof. For the purpose of this Lease, Landlord’s counsel may provide Notices to Tenant
on behalf of Landlord and such notices shall be binding on Tenant as if such notices have been
provided directly by Landlord.

(d) Access Control. Landlord shall be the sole determinant of the type and amount of
any access control or courtesy guard services to be provided to the Project, if any. IN ALL
EVENTS, LANDLORD SHALL NOT BE LIABLE TO TENANT, AND TENANT HEREBY WAIVES ANY CLAIM AGAINST
LANDLORD, FOR (I) ANY UNAUTHORIZED OR CRIMINAL ENTRY OF THIRD PARTIES INTO THE PREMISES, THE
BUILDING OR THE PROJECT, (II) ANY DAMAGE TO PERSONS, OR (III) ANY LOSS OF PROPERTY IN AND ABOUT THE
PREMISES, THE BUILDING OR THE PROJECT, BY OR FROM ANY UNAUTHORIZED OR CRIMINAL ACTS OF THIRD
PARTIES, REGARDLESS OF ANY ACTION, INACTION, FAILURE, BREAKDOWN, MALFUNCTION AND/OR INSUFFICIENCY
OF THE ACCESS CONTROL OR COURTESY GUARD SERVICES PROVIDED BY LANDLORD, IF ANY. Tenant shall
provide such supplemental security services and shall install within the Premises such supplemental
security equipment, systems and procedures as may reasonably be required for the protection of its
employees and invitees, provided that Tenant shall coordinate such services and equipment with any
security provided by Landlord. The determination of the extent to which such supplemental security
equipment, systems and procedures are reasonably required shall be made in the sole judgment, and
shall be the sole responsibility, of Tenant. Tenant acknowledges that it has neither received nor
relied upon any representation or warranty made by or on behalf of Landlord with respect to the
safety or security of the Premises or the Project or any part thereof or the extent or
effectiveness of any security measures or procedures now or hereafter provided by Landlord, and
further acknowledges that Tenant has made its own independent determinations with respect to all
such matters. Except as otherwise provided in this Lease and subject to Force Majeure and any
Access Control then implemented for the Building, Tenant shall have access to the Building and the
Premises 24 hours a day, 365 days a year.

(e) Storage. Any storage space at any time leased to Tenant hereunder shall be used
exclusively for storage. Notwithstanding any other provision of this Lease to the contrary, (i)
Landlord shall have no obligation to provide heating, cleaning, water or air conditioning therefor,
and (ii) Landlord shall be obligated to provide to such storage space only such electricity as
will, in Landlord’s judgment, be adequate to light said space as storage space.

(f) Holding Over. If Tenant retains possession of the Premises after the termination
or expiration of the Lease Term, then Tenant shall, at Landlord’s election become a tenant at
sufferance (and not a tenant at will), such possession shall be subject to immediate termination by
Landlord at any time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be applicable during such
holdover period, except that Tenant shall pay Landlord from time to time, upon demand, as Base Rent
for the holdover period, an amount equal to: (i) One Hundred Fifty Percent (150%) of the Base Rent
in effect on the termination date if Tenant has provided Landlord with written notice, at least six
(6) months notice prior to the termination date, of Tenant’s intent to holdover, or (ii) without
such advance notice, at the rate of One Hundred Sixty Percent (160%) of the Base Rent in effect on
the termination date, computed on a monthly basis for each month or part thereof during such
holding over. All other payments (including payment of Additional Rent)
shall continue under the terms of this Lease. In addition, Tenant shall be liable for all
damages incurred by Landlord as a result of such holding over. Notwithstanding anything contained
herein, no holding over by Tenant, whether upon prior notice to Landlord or with or without consent
of Landlord, shall operate to extend this Lease except as otherwise expressly provided and
expressly agreed by Landlord in writing, and this Paragraph shall not be construed as consent for
Tenant to retain possession of the Premises beyond the scheduled expiration date absent such
express written consent of Landlord.

 

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(g) Condition of Premises. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE,
LANDLORD HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY THAT THE PREMISES ARE
SUITABLE FOR TENANT’S INTENDED PURPOSE OR USE, WHICH DISCLAIMER IS HEREBY ACKNOWLEDGED BY TENANT.
THE TAKING OF POSSESSION BY TENANT SHALL BE CONCLUSIVE EVIDENCE THAT TENANT:

(i) ACCEPTS THE PREMISES, THE BUILDING AND LEASEHOLD IMPROVEMENTS AS SUITABLE FOR THE
PURPOSES FOR WHICH THE PREMISES WERE LEASED;

(ii) ACCEPTS THE PREMISES AND PROJECT AS BEING IN GOOD AND SATISFACTORY CONDITION;

(iii) WAIVES ANY DEFECTS IN THE PREMISES AND ITS APPURTENANCES EXISTING NOW OR IN THE
FUTURE, EXCEPT THAT TENANT’S TAKING OF POSSESSION SHALL NOT BE DEEMED TO WAIVE LANDLORD’S
COMPLETION OF MINOR FINISH WORK ITEMS THAT DO NOT INTERFERE WITH TENANT’S OCCUPANCY OF THE
PREMISES; AND

(iv) WAIVES ALL CLAIMS BASED ON ANY IMPLIED WARRANTY OF SUITABILITY OR HABITABILITY.

(h) Quiet Possession. Upon Tenant’s paying the Rent reserved hereunder and observing
and performing all of the covenants, conditions and provisions on Tenant’s part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the term hereof without
hindrance or ejection by any person lawfully claiming under Landlord, subject to the provisions of
this Lease and to the provisions of any (i) covenants, conditions and restrictions, (ii) master
lease, or (iii) Security Documents to which this Lease is subordinate or may be subordinated.

(i) Matters of Record. Except as otherwise provided herein, this Lease and Tenant’s
rights hereunder are subject and subordinate to all matters affecting Landlord’s title to the
Project recorded in the Real Property Records of the County in which the Project is located, prior
to and subsequent to the date hereof, including, without limitation, all covenants, conditions and
restrictions. Tenant agrees for itself and all persons in possession or holding under it that it
will comply with and not violate any such covenants, conditions and restrictions or other matters
of record. Landlord reserves the right, from time to time, to grant such easements, rights and
dedications as Landlord deems necessary or desirable, and to cause the recordation of parcel maps
and covenants, conditions and restrictions affecting the Premises, the Building or the Project, as
long as such easements, rights, dedications, maps, and covenants, conditions and restrictions do
not materially interfere with the use of the Premises by Tenant. At Landlord’s request, Tenant
shall join in the execution of any of the aforementioned documents.

(j) Successors and Assigns. Except as otherwise provided in this Lease, all of the
covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal representatives, successors and
assigns. Tenant shall attorn to each purchaser, successor or assignee of Landlord.

(k) Brokers. Tenant warrants that it has had no dealings with any real estate broker
or agent in connection with the negotiation of this Lease, excepting only the brokers named in Item
12 of the Basic Lease Provisions and that it knows of no other real estate broker or agent who is
or might be entitled to a commission in connection with this Lease. Tenant hereby agrees to
indemnify, defend and hold Landlord harmless for, from and
against all claims for any brokerage commissions, finders’ fees or similar payments by any
persons other than those listed in Item 12 of the Basic Lease Provisions and all costs, expenses
and liabilities incurred in connection with such claims, including reasonable attorneys’ fees and
costs.

 

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(l) Project or Building Name and Signage.

(i) Landlord shall have the right at any time to install, affix and maintain any and
all signs on the exterior and on the interior of the Project or Building as Landlord may, in
Landlord’s sole discretion, desire. Tenant shall not use the name of the Project or
Building or use pictures or illustrations of the Project or Building in advertising or other
publicity or for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord. Additionally,
Landlord shall have the exclusive right at all times during the Lease Term to change,
modify, add to or otherwise alter the name, number, or designation of the Building and/or
the Project, and Landlord shall not be liable for claims or damages of any kind which may be
attributed thereto or result therefrom.

(ii) Landlord shall provide to Tenant, at Landlord’s sole cost and expense Building
standard suite entry and directory board identity signs; provided, however, any subsequent
change to said sign shall be at Tenant’s sole cost and expense. In addition to the
foregoing, subject to Landlord’s prior reasonable approval, the sign criteria for the
Building, all covenants, conditions, and restrictions affecting the Project and all
applicable laws, rules, regulations, and local ordinances, and subject to Landlord obtaining
all necessary permits and approvals from the City of San Diego, Tenant shall also have the
non-exclusive right, at Tenant’s sole cost and expense, to have the name “SOMAXON
PHARMACEUTICALS” including, at Tenant’s sole discretion, Tenant’s corporate logo placed on
one (1) panel on the existing monument sign in the Common Areas (“Monument Sign”); provided,
however, if Tenant does not install the Monument Sign within twelve (12) months of the
Commencement Date, such right to install the Monument Sign shall terminate. The location of
Tenant’s panel on the Monument Sign will be determined by Landlord. Tenant shall be solely
responsible for payment of all costs and expenses arising from Tenant’s panel on the
Monument Sign, including, without limitation, all design, fabrication and permitting costs,
license fees, installation, maintenance, repair and removal costs. Landlord shall maintain
and repair all of Tenant’s signs at Tenant’s expense. Upon the expiration or earlier
termination of this Lease, Landlord shall, at Landlord’s sole cost and expense (except as
otherwise set forth hereinabove), (i) cause all of Tenant’s signs to be removed from the
exterior and interior of the Building and the Common Areas, (ii) repair any damage caused by
the removal of Tenant’s signs, and (iii) restore the underlying surfaces to the condition
existing prior to the installation of Tenant’s signs. The sign rights granted herein are
personal to the original Tenant executing this Lease and may not be assigned, voluntarily or
involuntarily, to any person or entity except if Tenant is merged with or acquired by
another entity, that entity may be assigned the sign rights. The rights granted to the
original Tenant hereunder are not assignable separate and apart from the Lease, nor may any
right granted herein be separated from the Lease in any manner, either by reservation or
otherwise.

(m) Examination of Lease. Submission of this instrument for examination or signature
by Tenant does not constitute a reservation of or option for lease, and it is not effective as a
lease or otherwise until execution by and delivery to both Landlord and Tenant.

(n) Time. Time is of the essence of this Lease and each and all of its provisions.

(o) Defined Terms and Marginal Headings. The words “Landlord” and “Tenant” as used
herein shall include the plural as well as the singular and for purposes of Paragraphs 5, 7, 13 and
18, the term Landlord shall include Landlord, its employees, contractors and agents. If more than
one person or entity is named das Tenant, then the obligations of such persons and/or entities are
joint and several. The marginal headings and titles to the articles of this Lease are not a part
of this Lease and shall have no effect upon the construction or interpretation of any part hereof.

(p) Conflict of Laws; Prior Agreements; Separability. This Lease shall be governed by
and construed pursuant to the laws of the State of California. Except for the indemnity letter
dated April 29, 2011, this Lease
contains all of the agreements of the parties hereto with respect to any matter covered or
mentioned in this Lease. No prior agreement, understanding or representation pertaining to any
such matter shall be effective for any purpose. No provision of this Lease may be amended or added
to except by an agreement in writing signed by the parties hereto or their respective successors in
interest. The illegality, invalidity or unenforceability of any provision of this Lease shall in
no way impair or invalidate any other provision of this Lease, and such remaining provisions shall
remain in full force and effect.

 

-36-

 

(q) Authority. If Tenant is a corporation or limited liability company, each
individual executing this Lease on behalf of Tenant hereby covenants and warrants that Tenant is a
duly authorized and existing corporation or limited liability company, that Tenant has and is
qualified to do business in the State of California, that the corporation or limited liability
company has full right and authority to enter into this Lease, and that each person signing on
behalf of the corporation is authorized to do so. If Tenant is a partnership or trust, each
individual executing this Lease on behalf of Tenant hereby covenants and warrants that he is duly
authorized to execute and deliver this Lease on behalf of Tenant in accordance with the terms of
such entity’s partnership or trust agreement. Tenant shall provide Landlord on demand with such
evidence of such authority as Landlord shall reasonably request, including, without limitation,
resolutions, certificates and opinions of counsel. This Lease shall not be construed to create a
partnership, joint venture or similar relationship or arrangement between Landlord and Tenant
hereunder.

(r) Joint and Several Liability. If two or more individuals, corporations,
partnerships or other business associations (or any combination of two or more thereof) shall sign
this Lease as Tenant, the liability of each such individual, corporation, partnership or other
business association to pay Rent and perform all other obligations hereunder shall be deemed to be
joint and several, and all notices, payments and agreements given or made by, with or to any one of
such individuals, corporations, partnerships or other business associations shall be deemed to have
been given or made by, with or to all of them. In like manner, if Tenant shall be a partnership or
other business association, the members of which are, by virtue of statute or federal law, subject
to personal liability, then the liability of each such member shall be joint and several.

(s) Rental Allocation. For purposes of Section 467 of the Internal Revenue Code of
1986, as amended from time to time, Landlord and Tenant hereby agree to allocate all Rent to the
period in which payment is due, or if later, the period in which Rent is paid.

(t) Rules and Regulations. Tenant agrees to comply with all rules and regulations of
the Building and the Project imposed by Landlord as set forth on Exhibit C attached hereto,
as the same may be changed from time to time upon reasonable notice to Tenant, provided that the
rules are changed for all tenants in the Building and Project on an equal basis. Landlord shall
not be liable to Tenant for the failure of any other tenant or any of its assignees, subtenants, or
their respective agents, employees, representatives, invitees or licensees to conform to such rules
and regulations.

(u) Joint Product. This Agreement is the result of arms-length negotiations between
Landlord and Tenant and their respective attorneys. Accordingly, neither party shall be deemed to
be the author of this Lease and this Lease shall not be construed against either party.

(v) Financial Statements. Upon Landlord’s written request, Tenant shall promptly
furnish Landlord, from time to time, with the most current audited financial statements prepared in
accordance with generally accepted accounting principles, certified by Tenant and an independent
auditor to be true and correct, reflecting Tenant’s then current financial condition.

(w) Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, acts of war, terrorism, terrorist activities, inability to obtain services,
labor, or materials or reasonable substitutes therefore, governmental actions, civil commotions,
fire, flood, earthquake or other casualty, and other causes beyond the reasonable control of the
party obligated to perform, except with respect to the obligations imposed with regard to Rent and
other charges to be paid by Tenant pursuant to this Lease and except as to Tenant’s obligations
under Paragraphs 6, 8 and 19(f) of this Lease (collectively, a “Force Majeure”),
notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of
such party for a period equal to any
such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for
performance of an obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.

(x) Counterparts. This Lease may be executed in several counterparts, each of which
shall be deemed an original, and all of which shall constitute but one and the same instrument.

 

-37-

 

(y) Waiver of Right to Jury Trial. LANDLORD AND TENANT WAIVE THEIR RESPECTIVE RIGHTS
TO TRIAL BY JURY OF ANY CONTRACT OR TORT CLAIM, COUNTERCLAIM, CROSS-COMPLAINT, OR CAUSE OF ACTION
IN ANY ACTION, PROCEEDING, OR HEARING BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, OR
TENANT’S USE OR OCCUPANCY OF THE LEASED PREMISES, INCLUDING WITHOUT LIMITATION ANY CLAIM OF INJURY
OR DAMAGE OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY CURRENT OR FUTURE LAW, STATUTE, REGULATION,
CODE, OR ORDINANCE. Landlord and Tenant agree that this paragraph constitutes a written consent to
waiver of trial by jury within the meaning of California Code of Civil Procedure Section 631(a)(2),
and Tenant does hereby authorize and empower Landlord to file this paragraph and/or this Lease, as
required, with the clerk or judge of any court of competent jurisdiction as a written consent to
waiver of jury trial.

(z) ARBITRATION OF DISPUTES. IN THE EVENT THAT THE JURY WAIVER PROVISIONS OF SECTION
19(y) ABOVE ARE NOT ENFORCEABLE UNDER CALIFORNIA LAW, THEN THE FOLLOWING PROVISIONS OF THIS SECTION
19(z) SHALL APPLY. IT IS THE DESIRE AND INTENTION OF THE PARTIES TO AGREE UPON A MECHANISM AND
PROCEDURE UNDER WHICH CONTROVERSIES AND DISPUTES ARISING OUT OF THIS LEASE OR RELATED TO THE
PREMISES WILL BE RESOLVED IN A PROMPT AND EXPEDITIOUS MANNER. ACCORDINGLY, EXCEPT WITH RESPECT TO
ACTIONS FOR UNLAWFUL OR FORCIBLE DETAINER OR WITH RESPECT TO THE PREJUDGMENT REMEDY OF ATTACHMENT,
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR
AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR
OCCUPANCY OF THE PREMISES AND/OR ANY CLAIM OF INJURY OR DAMAGE, SHALL BE HEARD AND RESOLVED BY A
REFEREE UNDER THE PROVISIONS OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, SECTIONS 638 — 645.1,
INCLUSIVE (AS SAME MAY BE AMENDED, OR ANY SUCCESSOR STATUTE(S) THERETO) (THE “REFEREE SECTIONS”).
ANY FEE TO INITIATE THE JUDICIAL REFERENCE PROCEEDINGS SHALL BE PAID BY THE PARTY INITIATING SUCH
PROCEDURE; PROVIDED HOWEVER, THAT THE COSTS AND FEES, INCLUDING ANY INITIATION FEE, OF SUCH
PROCEEDING SHALL ULTIMATELY BE BORNE IN ACCORDANCE WITH SECTION 19(a) ABOVE. THE VENUE OF THE
PROCEEDINGS SHALL BE IN THE COUNTY IN WHICH THE PREMISES ARE LOCATED. WITHIN TEN (10) DAYS OF
RECEIPT BY ANY PARTY OF A WRITTEN REQUEST TO RESOLVE ANY DISPUTE OR CONTROVERSY PURSUANT TO THIS
SECTION 19(z), THE PARTIES SHALL AGREE UPON A SINGLE REFEREE WHO SHALL TRY ALL ISSUES, WHETHER OF
FACT OR LAW, AND REPORT A FINDING AND JUDGMENT ON SUCH ISSUES AS REQUIRED BY THE REFEREE SECTIONS.
IF THE PARTIES ARE UNABLE TO AGREE UPON A REFEREE WITHIN SUCH TEN (10) DAY PERIOD, THEN ANY PARTY
MAY THEREAFTER FILE A LAWSUIT IN THE COUNTY IN WHICH THE PREMISES ARE LOCATED FOR THE PURPOSE OF
APPOINTMENT OF A REFEREE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 AND 640, AS SAME MAY
BE AMENDED OF ANY SUCCESSOR STATUTE(S) THERETO. IF THE REFEREE IS APPOINTED BY THE COURT, THE
REFEREE SHALL BE A NEUTRAL AND IMPARTIAL RETIRED JUDGE WITH SUBSTANTIAL EXPERIENCE IN THE RELEVANT
MATTERS TO BE DETERMINED, FROM JAMS/ENDISPUTE, INC., THE AMERICAN ARBITRATION ASSOCIATION OR
SIMILAR MEDIATION/ARBITRATION ENTITY. THE PROPOSED REFEREE MAY BE CHALLENGED BY ANY PARTY FOR ANY
OF THE GROUNDS LISTED IN SECTION 641 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, AS SAME MAY BE
AMENDED OR ANY SUCCESSOR STATUTE(S) THERETO.
THE REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES OF FACT AND LAW AND REPORT HIS OR HER
DECISION ON SUCH ISSUES, AND TO ISSUE ALL RECOGNIZED REMEDIES AVAILABLE AT LAW OR IN EQUITY FOR ANY
CAUSE OF ACTION THAT IS BEFORE THE REFEREE, INCLUDING AN AWARD OF ATTORNEYS’ FEES AND COSTS IN
ACCORDANCE WITH CALIFORNIA LAW. THE REFEREE SHALL NOT, HOWEVER, HAVE THE POWER TO AWARD PUNITIVE
DAMAGES, NOR ANY OTHER DAMAGES WHICH ARE NOT PERMITTED BY THE EXPRESS PROVISIONS OF THIS LEASE, AND
THE PARTIES HEREBY WAIVE ANY RIGHT TO RECOVER ANY SUCH DAMAGES. THE PARTIES SHALL BE ENTITLED TO
CONDUCT ALL DISCOVERY AS PROVIDED IN THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE REFEREE SHALL
OVERSEE DISCOVERY AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE,
WITH RIGHTS TO REGULATE DISCOVERY AND

 

-38-

 

TO ISSUE AND ENFORCE SUBPOENAS, PROTECTIVE ORDERS AND OTHER
LIMITATIONS ON DISCOVERY AVAILABLE UNDER CALIFORNIA LAW. THE REFERENCE PROCEEDING SHALL BE
CONDUCTED IN ACCORDANCE WITH CALIFORNIA LAW (INCLUDING THE RULES OF EVIDENCE), AND IN ALL REGARDS,
THE REFEREE SHALL FOLLOW CALIFORNIA LAW APPLICABLE AT THE TIME OF THE REFERENCE PROCEEDING. IN
ACCORDANCE WITH SECTION 644 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, THE DECISION OF THE REFEREE
UPON THE WHOLE ISSUE MUST STAND AS THE DECISION OF THE COURT, AND UPON THE FILING OF THE STATEMENT
OF DECISION WITH THE CLERK OF THE COURT, OR WITH THE JUDGE IF THERE IS NO CLERK, JUDGMENT MAY BE
ENTERED THEREON IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. THE PARTIES SHALL
PROMPTLY AND DILIGENTLY COOPERATE WITH ONE ANOTHER AND THE REFEREE, AND SHALL PERFORM SUCH ACTS AS
MAY BE NECESSARY TO OBTAIN A PROMPT AND EXPEDITIOUS RESOLUTION OF THE DISPUTE OR CONTROVERSY IN
ACCORDANCE WITH THE TERMS OF THIS SECTION 19(z). TO THE EXTENT THAT NO PENDING LAWSUIT HAS BEEN
FILED TO OBTAIN THE APPOINTMENT OF A REFEREE, ANY PARTY, AFTER THE ISSUANCE OF THE DECISION OF THE
REFEREE, MAY APPLY TO THE COURT OF THE COUNTY IN WHICH THE PREMISES ARE LOCATED FOR CONFIRMATION BY
THE COURT OF THE DECISION OF THE REFEREE IN THE SAME MANNER AS A PETITION FOR CONFIRMATION OF AN
ARBITRATION AWARD PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 1285 ET SEQ. (AS SAME MAY BE AMENDED
OR ANY SUCCESSOR STATUTE(S) THERETO).

(aa) Office and Communications Services. Landlord has advised Tenant that certain
office and communications services may be offered to tenants of the Building by a concessionaire
under contract to Landlord (“Provider”). Tenant shall be permitted to contract with
Provider for the provision of any or all of such services on such terms and conditions as Tenant
and Provider may agree. Tenant acknowledges and agrees that: (i) Landlord has made no warranty or
representation to Tenant with respect to the availability of any such services, or the quality,
reliability or suitability thereof; (ii) the Provider is not acting as the agent or representative
of Landlord in the provision of such services, and Landlord shall have no liability or
responsibility for any failure or inadequacy of such services, or any equipment or facilities used
in the furnishing thereof, or any act or omission of Provider, or its agents, employees,
representatives, officers or contractors; (iii) Landlord shall have no responsibility or liability
for the installation, alteration, repair, maintenance, furnishing, operation, adjustment or removal
of any such services, equipment or facilities; and (iv) any contract or other agreement between
Tenant and Provider shall be independent of this Lease, the obligations of Tenant hereunder, and
the rights of Landlord hereunder, and, without limiting the foregoing, no default or failure of
Provider with respect to any such services, equipment or facilities, or under any contract or
agreement relating thereto, shall have any effect on this Lease or give to Tenant any offset or
defense to the full and timely performance of its obligations hereunder, or entitle Tenant to any
abatement of rent or additional rent or any other payment required to be made by Tenant hereunder,
or constitute any accrual or constructive eviction of Tenant, or otherwise give rise to any other
claim of any nature against Landlord.

(bb) OFAC Compliance.

(i) Certification. Tenant certifies, represents, warrants and covenants that:

(A) It is not acting and will not act, directly or indirectly, for or on behalf of any
person, group, entity, or nation named by any Executive Order or the United States Treasury
Department as a terrorist, “Specially Designated National and Blocked Person”, or other
banned or blocked person, entity, nation or transaction pursuant to any law, order, rule, or
regulation that is enforced or administered by the Office of Foreign Assets Control; and

(B) It is not engaged in this transaction, directly or indirectly on behalf of, or
instigating or facilitating this transaction, directly or indirectly on behalf of, any such
person, group, entity or nation.

(ii) Indemnity. Tenant hereby agrees to defend (with counsel reasonably
acceptable to Landlord), indemnify and hold harmless Landlord and the Landlord Indemnitees
from and against any and all Claims arising from or related to any such breach of the
foregoing certifications, representations, warranties and covenants.

 

-39-

 

(cc) No Easement For Light, Air And View. This Lease conveys to Tenant no rights for
any light, air or view. No diminution of light, air or view, or any impairment of the visibility
of the Premises from inside or outside the Building, by any structure or other object that may
hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of Rent
under this Lease, constitute an actual or constructive eviction of Tenant, result in any liability
of Landlord to Tenant, or in any other way affect this Lease or Tenant’s obligations hereunder.

(dd) Nondisclosure of Lease Terms. Tenant agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord, and that disclosure of the terms
hereof could adversely affect the ability of Landlord to negotiate with other tenants. Tenant
hereby agrees that Tenant and its partners, officers, directors, employees, agents, real estate
brokers and sales persons and attorneys shall not disclose the terms of this Lease to any other
person without Landlord’s prior written consent, except to any accountants of Tenant in connection
with the preparation of Tenant’s financial statements or tax returns, to an assignee of this Lease
or subtenant of the Premises, or to an entity or person to whom disclosure is require by applicable
law or in connection with any action brought to enforce this Lease.

(ee) Anti-Terrorism Representation. To the best of Tenant’s knowledge, neither Tenant
nor any of its affiliates have engaged in any dealings or transactions, directly or indirectly, (i)
in contravention of any U.S., international or other money laundering regulations or conventions,
including, without limitation, the United States Bank Secrecy Act, the United States Money
Laundering Control Act of 1986, the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001, Trading with the Enemy Act (50 U.S.C. §1 et seq., as
amended), or any foreign asset control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating
thereto, or (ii) in contravention of Executive Order No. 13,244,66 Fed. Reg. 49,079 (2001) issued
by the President of the United States (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), as may be amended
or supplemented from time to time (“Anti-Terrorism Order”) or on behalf of terrorists or
terrorist organizations, including those persons or entities that are included on any relevant
lists maintained by the United Nations, North Atlantic Treaty Organization, Organization of
Economic Cooperation and Development, Financial Action Task Force, U.S. Office of Foreign Assets
Control, U.S. Securities & Exchange Commission, U.S. Federal Bureau of Investigation, U.S. Central
Intelligence Agency, U.S. Internal Revenue Service, or any country or organization, all as may be
amended from time to time. Neither Tenant nor any of its affiliates are a person described in
section 1 of the Anti-Terrorism Order and neither Tenant nor any of its affiliates have engaged in
any dealings or transactions, or otherwise been associated with any such person. If at any time
this representation becomes false then it shall be considered a default under this Lease and
Landlord shall have the right to exercise all of the remedies set forth in this Lease in the event
of a default.

[SIGNATURE PAGE TO FOLLOW]

 

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SIGNATURE PAGE TO OFFICE LEASE

BY AND BETWEEN TREA PACIFIC PLAZA, LLC, AS LANDLORD,

AND SOMAXON PHARMACEUTICALS, INC., AS TENANT

IN WITNESS WHEREOF, the parties have executed this Lease to be effective as of the Date of this
Lease.

	 	 	 	 	 	 	 	 	 	 	 

	“LANDLORD”:	 	 	 	“TENANT”:
	 
	 	 	 	 	 	 	 	 	 	 
	TREA PACIFIC PLAZA, LLC, 

a Delaware limited liability company	 	 	 	SOMAXON PHARMACEUTICALS, INC., 

a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 		, 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 
	 	 	a	 	 	, 	 	 	By:	 	/s/ Richard W. Pascoe
	 

	 	 	 	 	 	 	 	 	 
	 	 	as agent	 	 	 	 	 	Name: Richard W. Pascoe
	 

	 	 	 	 	 	 	 	 	 	Title: President & CEO
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert E. Niendorf	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name: Robert E. Niendorf
	 	 	 	By:
	 	/s/ Tran Nguyen
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Title: Director
	 	 	 	 	 	Name: Tran Nguyen
	 

	 	 	 	 	 	 	 	 	 	Title: CFO

 

	 	 	 
	*	 	NOTE:

If Tenant is a California corporation, then one of the following alternative requirements must be
satisfied:

	 	(i)	 	This Lease must be signed by two (2) officers of such corporation: one being
the chairman of the board, the president or a vice president, and the other being the
secretary, an assistant secretary, the chief financial officer or an assistant
treasurer. If one (1) individual is signing in two (2) of the foregoing capacities,
that individual must sign twice; once as one officer and again as the other officer.

	 
	 	(ii)	 	If there is only one (1) individual signing in two (2) capacities, or if the
two (2) signatories do not satisfy the requirements of (A) above, then Tenant shall
deliver to Landlord a certified copy of a corporate resolution in a form reasonably
acceptable to Landlord authorizing the signatory(ies) to execute this Lease.

If Tenant is a corporation incorporated in a state other than California, then Tenant shall deliver
to Landlord a certified copy of a corporate resolution in a form reasonably acceptable to Landlord
authorizing the signatory(ies) to execute this Lease.

 

-41-

 

EXHIBIT A

FLOOR PLAN OF THE PREMISES

EXHIBIT A 

-1-

 

EXHIBIT B

WORK LETTER

THIS WORK LETTER is attached as Exhibit B to the Office Lease between TREA
PACIFIC PLAZA, LLC, a Delaware limited liability company, as Landlord, and SOMAXON PHARMACEUTICALS,
INC.,
 a Delaware corporation, as Tenant, and constitutes the further agreement between Landlord and
Tenant as follows:

1. TENANT IMPROVEMENTS. Landlord shall construct and, except as provided below to the
contrary, pay for the entire cost of constructing the tenant improvements (“Tenant
Improvements”) as described by the plans and specifications (including price specifications)
identified in Schedule “1” attached hereto (the “Plans”). Tenant may request
changes to the Plans prior to the Commencement Date provided that (a) the changes shall not be of a
lesser quality than Landlord’s standard specifications for tenant improvements for the Building, as
the same may be changed from time to time by Landlord (the “Standards”); (b) the changes
conform to applicable governmental regulations and necessary governmental permits and approvals can
be secured; (c) the changes do not require building service beyond the levels normally provided to
other tenants in the Building; (d) the changes do not have any adverse affect on the structural
integrity or systems of the Building; (e) the changes will not, in Landlord’s reasonable opinion,
unreasonably delay construction of the Tenant Improvements; and (f) Landlord has determined in its
sole discretion that the changes are of a nature and quality consistent with the overall objectives
of Landlord for the Building. If Landlord approves a change requested by Tenant, then, as a
condition to the effectiveness of Landlord’s approval, Tenant shall pay to Landlord upon demand by
Landlord the increased cost attributable to such change, as reasonably determined by Landlord and
which Landlord has previously provided a reasonable estimate of the cost of such change. To the
extent any such change results in a delay of completion of construction of the Tenant Improvements,
then such delay shall constitute a delay caused by Tenant as described below. Landlord’s
contractors for the Project shall bid and construct the Tenant Improvements.

2. CONSTRUCTION OF TENANT IMPROVEMENTS. Upon Tenant’s payment to Landlord of the total
amount of the cost of any changes to the Plans, if any, Landlord’s contractor shall commence and
diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as
described in Section 4 below) and Force Majeure Delays (as described in Section 5 below). Promptly
upon the commencement of the Tenant Improvements, Landlord shall furnish Tenant with a construction
schedule letter setting forth the projected completion dates therefor and showing the deadlines for
any actions required to be taken by Tenant during such construction, and Landlord may from time to
time during construction of the Tenant Improvements modify such schedule.

3. COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.

(a) Commencement Date. The Lease Term shall commence on the date (the “Commencement Date”) which
is the earlier of:

(i) the date Tenant moves into the Premises to commence operation of its business in all or any
portion of the Premises; or

(ii) the date the Tenant Improvements have been “substantially completed” (as defined below);
provided, however, that if substantial completion of the Tenant Improvements is delayed as a result
of any Tenant Delays described in Section 4 below, then the Commencement Date as would otherwise
have been established pursuant to this Section 3(a)(ii) shall be accelerated by the number of days
of such Tenant Delays.

(b) Substantial Completion; Punch-List. For purposes of Section 3(a)(ii) above, the Tenant
Improvements shall be deemed to be “substantially completed” when Landlord: (a) is able to
provide Tenant reasonable access to the Premises to conduct business; (b) has substantially
completed the Tenant Improvements in accordance with the Plans, other than decoration and minor
“punch-list” type items and adjustments which do not materially interfere with Tenant’s access to
or use of the Premises to conduct business; and (c) has obtained a temporary certificate of
occupancy or other required equivalent approval from the local governmental authority permitting
occupancy of the

EXHIBIT B 

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Premises. Within ten (10) days after such substantial completion, Tenant shall conduct a
walk-through inspection of the Premises with Landlord and provide to Landlord a written punch-list
specifying those decoration and other punch-list items which require completion, which items
Landlord shall thereafter diligently complete; provided, however, that Tenant shall be responsible,
at Tenant’s sole cost and expense, for the remediation of any items on the punch-list caused by
Tenant’s acts or omissions.

4. Delivery of Possession. Landlord agrees to deliver possession of the Premises to Tenant when
the Tenant Improvements have been substantially completed in accordance with Section (b) above.
The parties estimate that Landlord will deliver possession of the Premises to Tenant and the
Initial Term of this Lease will commence on or before the Estimated Commencement Date set forth in
Item 10 of the Basic Lease Provisions. Landlord shall use its commercially reasonable efforts to
cause the Premises to be substantially completed on or before the Estimated Commencement Date.

5. TENANT DELAYS. For purposes of this Work Letter, “Tenant Delays” shall mean any
delay in the completion of the Tenant Improvements resulting from any or all of the following: (a)
Tenant’s failure to timely perform any of its obligations pursuant to this Work Letter, including
any failure to complete, on or before the due date therefor, any action item which is Tenant’s
responsibility pursuant to the Work Schedule or any schedule delivered by Landlord to Tenant
pursuant to this Work Letter, provided, however, that Landlord has given Tenant reasonable advance
notice of such items; (b) Tenant’s changes to the Plans that cause a material delay in construction
or work schedule; (c) Tenant’s request for materials, finishes, or installations which are not
readily available or which are incompatible with the Standards, and which Landlord has promptly
notified Tenant of such fact; (d) any delay of Tenant in making payment to Landlord for Tenant’s
share of any costs in excess of the cost of the Tenant Improvements as described in the Plans; or
(e) any other act or failure to act by Tenant, Tenant’s employees, agents, architects, independent
contractors, consultants and/or any other person performing or required to perform services on
behalf of Tenant that materially delay construction or the work schedule.

6. FORCE MAJEURE DELAYS. For purposes of this Work Letter, “Force Majeure Delays”
shall mean any actual delay beyond the reasonable control of Landlord in the construction of the
Tenant Improvements, which is not a Tenant Delay and which is caused by any of the causes described
in Paragraph 19(w) of the Lease.

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

EXHIBIT B

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	“LANDLORD”:	 	 	 	“TENANT”:
	 
	 	 	 	 	 	 	 	 	 	 
	TREA PACIFIC PLAZA, LLC, 

a Delaware limited liability company	 	 	 	SOMAXON PHARMACEUTICALS, INC., 

a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 		, 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 
	 	 	a	 	, 	 	 	By:	 	/s/ Richard W. Pascoe
	 

	 	 	 	 	 	 	 	 	 
	 	 	as agent	 	 	 	 	 	Name: Richard W. Pascoe
	 

	 	 	 	 	 	 	 	 	 	Title: President & CEO
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert E. Niendorf	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name: Robert E. Niendorf
	 	 	 	By:
	 	/s/ Tran Nguyen
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Title: Director
	 	 	 	 	 	Name: Tran Nguyen
	 

	 	 	 	 	 	 	 	 	 	Title: CFO

EXHIBIT B

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SCHEDULE
“1”

PLANS AND SPECIFICATIONS

SCHEDULE “1”

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EXHIBIT C

BUILDING RULES AND REGULATIONS

1. The sidewalks, entrances, passages, courts, elevators, vestibules, stairways and
corridors of halls shall not be obstructed or used for any purpose other than ingress and egress.
The halls, passages, entrances, elevators, stairways, balconies and roof are not for the use of the
general public, and the Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence, in the judgment of the Landlord, shall be prejudicial to the
safety, character, reputation and interests of the Building and its tenants, provided that nothing
herein contained shall be construed to prevent such access to persons with whom the Tenant normally
deals only for the purpose of conducting its business in the Premises (such as clients, customers,
office suppliers and equipment vendors, and the like) unless such persons are engaged in illegal
activities. No tenant and no employees of any tenant shall go upon the roof of the Building
without the written consent of Landlord.

2. No awnings or other projections shall be attached to the outside walls of the Building. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises other than Landlord standard window coverings. All electrical
ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent,
of a quality, type, design and bulb color approved by Landlord. Neither the interior nor the
exterior of any windows shall be coated or otherwise sunscreened without the written consent of
Landlord.

3. No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or
affixed by any tenant on, about or from any part of the Premises, the Building or the Project
without the prior written consent of the Landlord. If the Landlord shall have given such consent
at the time, whether before or after the execution of this Lease, such consent shall in no way
operate as a waiver or release of any of the provisions hereof or of this Lease, and shall be
deemed to relate only to the particular sign, advertisement or notice so consented to by the
Landlord and shall not be construed as dispensing with the necessity of obtaining the specific
written consent of the Landlord with respect to each and every such sign, advertisement or notice
other than the particular sign, advertisement or notice, as the case may be, so consented to by the
Landlord. In the event of the violation of the foregoing by any tenant, Landlord may remove or
stop same without any liability, and may charge the expense incurred in such removal or stopping to
such tenant. Interior signs on doors and the directory tablet shall be inscribed, painted or
affixed for each tenant by the Landlord at the expense of such tenant, and shall be of a size,
color and style acceptable to the Landlord. The directory tablet will be provided exclusively for
the display of the name and location of tenants only and Landlord reserves the right to exclude any
other names therefrom. Nothing may be placed on the exterior of corridor walls or corridor doors
other than Landlord’s standard lettering.

4. The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air
into halls, passageways or other public places in the Building shall not be covered or obstructed
by any tenant, nor shall any bottles, parcels or other articles be placed on the window sills.
Tenant shall see that the windows, transoms and doors of the Premises are closed and securely
locked before leaving the Building and must observe strict care not to leave windows open when it
rains. Tenant shall exercise extraordinary care and caution that all water faucets or water
apparatus are entirely shut off before Tenant or Tenant’s employees leave the Building, and that
all electricity, gas or air shall likewise be carefully shut off, so as to prevent waste or damage.
Tenant shall cooperate with Landlord in obtaining maximum effectiveness of the cooling system by
closing window coverings when the sun’s rays fall directly on the windows of the Premises. Tenant
shall not tamper with or change the setting of any thermostats or temperature control valves.

5. The toilet rooms, water and wash closets and other plumbing fixtures shall not be used for
any purpose other than those for which they were considered, and no sweepings, rubbish, rags or
other substances shall be thrown therein. All damages resulting from any misuse of the fixtures
shall be borne by the tenant who, or whose subtenants, assignees or any of their servants,
employees, agents, visitors or licensees shall have caused the same.

EXHIBIT C

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6. No tenant shall mark, paint, drill into, or in any way deface any part of the Premises, the
Building or the Project, except for normal installation of artwork, AV equipment and other typical
office place fixtures. No
boring, cutting or stringing of wires or laying of linoleum or other similar floor coverings
shall be permitted, except with the prior written consent of the Landlord and as the Landlord may
direct.

7. No bicycles, vehicles, birds or animals of any kind shall be brought into or kept in or
about the Premises, and no cooking shall be done or permitted by any tenant on the Premises, except
that the preparation of coffee, tea, hot chocolate and similar items (including those suitable for
microwave heating) for tenants and their employees shall be permitted, provided that the power
required therefor shall not exceed that amount which can be provided by a 30 amp circuit. No
tenant shall cause or permit any unusual or objectionable odors to be produced or permeate the
Premises. Smoking or carrying lighted cigars, cigarettes or pipes in the Building is prohibited.

8. The Premises shall not be used for manufacturing or for the storage of merchandise except
as such storage may be incidental to the permitted use of the Premises. No tenant shall occupy or
permit any portion of the Premises to be occupied as an office for a public stenographer or typist,
or for the manufacture or sale of liquor, narcotics, or tobacco (except by a cigarette vending
machine for use by Tenant’s employees) in any form, or as a medical office, or as a barber or
manicure shop, or as an employment bureau, without the express written consent of Landlord. No
tenant shall engage or pay any employees on the Premises except those actually working for such
tenant on the Premises nor advertise for laborers giving an address at the Premises. The Premises
shall not be used for lodging or sleeping or for any immoral or illegal purposes.

9. No tenant shall make, or permit to be made any unseemly or disturbing noises or disturb or
interfere with occupants of this or neighboring buildings or premises or those having business with
them, whether by the use of any musical instrument, radio, phonograph, unusual noise, or in any
other way. No tenant shall throw anything out of doors, windows or skylights or down the
passageways.

10. No tenant, subtenant or assignee nor any of their servants, employees, agents, visitors or
licensees shall at any time bring or keep upon the Premises any inflammable, combustible or
explosive fluid, chemical or substance.

11. No additional locks or bolts of any kind shall be placed upon any of the doors or windows
by any tenant, nor shall any changes be made in existing locks or the mechanisms thereof. Each
tenant must, upon the termination of his tenancy, restore to Landlord all keys of stores, offices,
and toilet rooms, either furnished to, or otherwise procured by, such tenant and in the event of
the loss of keys so furnished, such tenant shall pay to Landlord the cost of replacing the same or
of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make
such changes.

12. All removals, or the carrying in or out of any safes, freight, furniture, or bulky matter
of any description must take place during the hours which Landlord shall determine from time to
time, without the express written consent of Landlord. The moving of safes or other fixtures or
bulky matter of any kind must be done upon previous notice to the Project Management Office and
under its supervision, and the persons employed by any tenant for such work must be acceptable to
the Landlord. Landlord reserves the right to inspect all safes, freight or other bulky articles to
be brought into the Building and to exclude from the Building all safes, freight or other bulky
articles which violate any of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part. Landlord reserves the right to prescribe the weight and position of all
safes, which must be placed upon supports approved by Landlord to distribute the weight.

13. No tenant shall purchase spring water, ice, towel, janitorial maintenance or other similar
services from any person or persons not approved by Landlord.

14. Landlord shall have the right to prohibit any advertising by any tenant which, in
Landlord’s opinion, tends to impair the reputation of the Building or the Project or its
desirability as an office location, and upon written notice from Landlord, any tenant shall refrain
from or discontinue such advertising.

EXHIBIT C

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15. Landlord reserves the right to exclude from the Building between the hours of 6:00 P.M.
and 7:00 A.M. and at all hours on Saturday, Sunday and legal holidays all persons who do not
present a pass or card key to the Building approved by the Landlord. Each tenant shall be
responsible for all persons who enter the Building with
or at the invitation of such tenant and shall be liable to Landlord for all acts of such
persons. Landlord shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of an invasion, mob riot,
public excitement or other circumstances rendering such action advisable in Landlord’s opinion,
Landlord reserves the right, without abatement of Rent, to require all persons to vacate the
Building and to prevent access to the Building during the continuance of the same for the safety of
the tenants, the protection of the Building, and the property in the Building.

16. Any persons employed by any tenant to do janitorial work shall, while in the Building and
outside of the Premises, be subject to and under the control and direction of the Project
Management Office (but not as an agent or servant of said Office or of the Landlord), and such
tenant shall be responsible for all acts of such persons.

17. All doors opening onto public corridors shall be kept closed, except when in use for
ingress and egress.

18. The requirements of Tenant will be attended to only upon application to the Project
Management Office.

19. Canvassing, soliciting and peddling in the Building are prohibited and each tenant shall
report and otherwise cooperate to prevent the same.

20. All office equipment of any electrical or mechanical nature shall be placed by Tenant in
the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise or
annoyance.

21. No air conditioning unit or other similar apparatus shall be installed or used by any
tenant without the written consent of Landlord.

22. There shall not be used in any space, or in the public halls of the Building, either by
any tenant or others, any hand trucks, except those equipped with rubber tires and rubber side
guards.

23. No vending machine or machines of any description shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.

24. The scheduling of tenant move-ins shall be subject to the reasonable discretion of
Landlord.

25. If the Tenant desires telephone or telegraph connections, the Landlord will direct
electricians as to where and how the wires are to be introduced. No boring or cutting for wires or
otherwise shall be made without direction from the Landlord.

26. The term “personal goods or services vendors” as used herein means persons who
periodically enter the Building of which the Premises are a part for the purpose of selling goods
or services to a tenant, other than goods or services which are used by the Tenant only for the
purpose of conducting its business in the Premises. “Personal goods or services” include, but are
not limited to, drinking water and other beverages, food, barbering services and shoeshining
services. Landlord reserves the right to prohibit personal goods and services vendors from access
to the Building except upon Landlord’s prior written consent and upon such reasonable terms and
conditions, including, but not limited to, the payment of a reasonable fee and provision for
insurance coverage, as are related to the safety, care and cleanliness of the Building, the
preservation of good order thereon, and the relief of any financial or other burden on Landlord or
other tenants occasioned by the presence of such vendors or the sale by them of personal goods or
services to the Tenant or its employees. If necessary for the accomplishment of these purposes,
Landlord may exclude a particular vendor entirely or limit the number of vendors who may be present
at any one time in the Building.

27. The Building is a non-smoking building. Smoking is prohibited at all times within the
entire Building, including all leased premises, as well as all public/common areas and parking
areas for the Building, including any attached parking garage structure. This prohibition applies
during business and non-business hours to restrooms, elevators, elevator lobbies, first floor
lobby, stairwells, common hallways, the lunch room and any other
public/common area, as well as to all areas within the Leased Premises by Tenants. Smoking is
only permitted in the designated smoking area outside the Building and away from the entrances to
the Building.

EXHIBIT C

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28. The Building and Project is a weapons free environment. No tenant, owner of a tenant,
officer or employee of a tenant, visitor of tenant, contractor or subcontractor of tenant, or any
other party shall carry weapons (concealed or not) of any kind in the building, or parking areas.
This prohibition applies to all public areas, including without limitation, restrooms, elevators,
elevator lobbies, first floor lobby, stairwells, common hallways, all areas within the leased
premises of tenants, all surface parking areas and the surrounding land related to the building.

EXHIBIT C

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EXHIBIT D

FORM TENANT ESTOPPEL CERTIFICATE

	TO: 	 	                      (“Landlord”)

                    

                    

	 
	and: 	 	

	 
	 	 	                     (“Third Party”)

                    

                    

	 
	Re: 	 	 Property Address:

Lease Date:                     
                    

Between                                                             , Landlord and

                                                            , Tenant

Square Footage Leased:                                         

Suite No.                     

Floor:                     

The undersigned tenant (“Tenant”) hereby certifies to Third Party and Landlord as
follows:

1. The above-described Lease has not been canceled, modified, assigned, extended or amended
except                                                             .

2. Base Rent has been paid to the first day of the current month and all additional rent has
been paid and collected in a current manner. There is no prepaid rent except $                    , and the
amount of the security deposit is $                    .

3. Base Rent is currently payable in the amount of $                      monthly exclusive of
Tenant’s Proportionate Share of Operating Expenses.

4. The
Lease terminates on                     , 20__ subject to any renewal option(s) set forth in the
Lease.

5. All work to be performed for Tenant under the Lease has been performed as required and has
been accepted by Tenant, except                                                                             
                        .

6. The Lease is: (a) in full force and effect; (b) to Tenant’s actual knowledge, free from
default; and (c) to Tenant’s actual knowledge, Tenant has no claims against the Landlord or offsets
against rent.

7. The Base Year for Operating Expenses, as defined in the said Lease, is
                                        .

8. The undersigned has no right or option pursuant to the said Lease or otherwise to purchase
all or any part of the Premises or the Building of which the Premises are a part.

9. There are no other agreements written or oral between the undersigned and the Landlord with
respect to the Lease and/or the Premises and Building.

10. The statements contained herein may be relied upon by the Landlord and by any prospective
purchaser of the property of which the Premises is a part and its mortgage lender.

EXHIBIT D

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If a blank in this document is not filled in, the blank will be deemed to read “none”.

If Tenant is a corporation, the undersigned signatory is a duly appointed Officer of the
corporation.

	 	 	 	 	 
	 	Dated this _____day of _____, 20_.

Tenant:

 	 
	 	By:  	 	 
	 	 	Name: 	                                                                                 	 
	 	 	Title: 	                                                                                 	 
	 

EXHIBIT D

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EXHIBIT E

TENANT’S COMMENCEMENT LETTER

	 
	 
	 
	 
	 
	To: 	 	                                                             (“Landlord”)

	 
	Date: 	 	                                                             

Tenant’s Commencement Letter

                                                            

The undersigned, as the Tenant under that certain Office Lease (the “Lease”) dated
                    , made and entered into between                     , a                      as
Landlord, and the undersigned, as Tenant, hereby certifies that:

	 	1.	 	The undersigned has accepted possession and entered into occupancy of the
Premises described in the Lease.

	 
	 	2.	 	The Commencement Date of the Lease was                     .

	 
	 	3.	 	The expiration date of the Lease is                     .

	 
	 	4.	 	The Lease is in full force and effect and has not been modified or amended.

	 
	 	5.	 	Landlord has performed all of its obligations to improve the Premises for
occupancy by the undersigned.

	 	 	 	 	 
	 	Very truly yours,

                                                                                ,

a                                                                               

 	 
	 	By:  	 	 
	 	 	Name: 	                                                                              
	 
	 	 	Title: 	                                                                              
	 
	 

EXHIBIT E

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EXHIBIT F

FORM OF LETTER OF CREDIT

[BANK LETTERHEAD]

                    , 200_____

IRREVOCABLE, UNCONDITIONAL LETTER OF CREDIT NO. _____

                                        

                                        

                                        

Gentlemen:

                                        , a                                          (“Bank”) [PLEASE PROVIDE NAME OF BANK], of
_____,                      hereby issues its Irrevocable, Unconditional Letter of Credit in favor of
                                        , and/or its successors and assigns (“Landlord”), for the account of
                                        , a                      (“Tenant”) up to the aggregate amount of
_____and No/100ths Dollars ($                    ) (US Dollars), available at sight by the
drafts of Landlord on the Bank. Drafts drawn on this Letter of Credit will be honored when
presented, accompanied only by a letter or certificate purportedly signed by a representative of
Landlord stating that Landlord is entitled to draw on this Letter of Credit under the terms of the
Standard Lease dated as of                     , 200_____, between Landlord and Tenant. Multiple and
partial draws shall be permitted hereunder. This Letter of Credit is transferable in whole or in
part. The Bank shall look solely to Tenant for payment of any fee for such transfer. Such payment
is not a condition to transfer.

The Bank shall be entitled (and required) to rely upon the statements contained in the
above-described letter or certificate and will have no obligation to verify the truth of any
statements set forth therein.

The Bank hereby agrees with drawers, endorsers, and bona fide holders of this Letter of Credit
that all drafts drawn by reason of this Letter of Credit and in accordance with the above
conditions, will meet with due honor when presented at the office of the Bank in                     
County, California.

The obligations of the Bank shall not be subject to any claim or defense by reason of the
invalidity, illegality, or inability to enforce any of the agreements set forth in the Lease.

This Letter of Credit is subject to the International Standby Practices—ISP98, International
Chamber of Commerce Publication 590 when not in conflict with the express terms of this Letter of
Credit.

This Letter of Credit shall terminate at 3:00 p.m. Pacific Standard [or Daylight Savings] Time
on                                          [Insert date of expiration of the Term which shall be the final
expiration date of this Letter of Credit, unless, at least 60 days prior to the then current
expiration date, we notify you in writing by certified mail, return receipt requested, at the
following address (or at such other address as you may specify by written notice to us), that this
Letter of Credit will not be extended beyond the current expiration date; provided, that our
obligation to make any payment hereunder in respect of a drawing request made prior to the expiry
hereof shall continue until payment is made:

                                        

                                        

                                        

Amounts drawn upon this Letter of Credit are to be endorsed on the reverse side of this Letter
of Credit by the negotiating bank.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	                                                                                 	 
	 	 	Title:  	                                                                                 	 
	 

EXHIBIT_______

-2-

 

EXTENSION OPTION RIDER

RIDER NO. 1 TO LEASE

This Rider No. 1 is made and entered into by and between TREA PACIFIC PLAZA, LLC,
a Delaware limited liability company (“Landlord”), and SOMAXON PHARMACEUTICALS, INC.,
a Delaware corporation (“Tenant”), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to
be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references
in the Lease and in this Rider to the “Lease” shall be construed to mean the Lease (and all
exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized
terms not defined in this Rider shall have the same meaning as set forth in the Lease.

1. Subject to Rider No. 4 entitled, “Options In General”, Landlord hereby grants to Tenant one
(1) option (the “Extension Option”) to extend the Lease Term for an additional period of
five (5) years (the “Option Term”), on the same terms, covenants and conditions as provided
for in the Lease during the Initial Term, except for the Base Rent, which shall initially be equal
to the “fair market rental rate” for the Premises for the Option Term as defined and determined in
accordance with the provisions of the Fair Market Rental Rate Rider attached to the Lease as Rider
No. 2, subject to fair market annual rent adjustments during the Option Term.

2. An Extension Option must be exercised, if at all, by written notice (“Extension
Notice”) delivered by Tenant to Landlord no sooner than that date which is twelve (12) months
and no later than that date which is eight (8) months prior to the expiration of the then current
Term of the Lease. Provided Tenant has properly and timely exercised the Extension Option, the
then current Term of the Lease shall be extended by the Option Term, and all terms, covenants and
conditions of the Lease shall remain unmodified and in full force and effect, except that the Base
Rent shall be as set forth above and in Rider. No. 2, Tenant’s Base Year for Operating Expenses
will be updated to the then current year, and except that there shall be no remaining Extension
Options.

 

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FAIR MARKET RENTAL RATE RIDER

RIDER NO. 2 TO LEASE

This Rider No. 2 is made and entered into by and between TREA PACIFIC PLAZA, LLC,
a Delaware limited liability company (“Landlord”), and SOMAXON PHARMACEUTICALS, INC.,
a Delaware corporation (“Tenant”), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to
be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references
in the Lease and in this Rider to the “Lease” shall be construed to mean the Lease (and all
exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized
terms not defined in this Rider shall have the same meaning as set forth in the Lease.

1. The term “fair market rental rate” as used in the Lease and any Rider attached to
the Lease shall mean the annual amount per square foot, projected during the Option Term (including
annual adjustments), that a willing, non-equity renewal tenant (excluding sublease and assignment
transactions) would pay, and a willing, institutional landlord of a comparable quality office
building located in the Del Mar/Torrey Hills area of San Diego would accept, in an arm’s length
transaction for space of comparable size, quality and floor height as the Premises, taking into
account the age, quality and layout of the existing improvements in the Premises, and taking into
account items that professional real estate brokers or professional real estate appraisers
customarily consider, including, but not limited to, rental rates, space availability, tenant size,
tenant improvement allowances, parking charges and any other lease considerations, if any, then
being charged or granted by Landlord or the lessors of such similar office buildings. All economic
terms other than Base Rent, such as tenant improvement allowance amounts, if any, operating expense
allowances, parking charges, etc., will be established by Landlord and will be factored into the
determination of the fair market rental rate for the Option Term. Accordingly, the fair market
rental rate will be an effective rate, not specifically including, but accounting for, the
appropriate economic considerations described above.

2. In the event where a determination of fair market rental rate is required under the Lease,
Landlord shall provide written notice of Landlord’s determination of the fair market rental rate
not later than ninety (90) days after the last day upon which Tenant may timely exercise the right
giving rise to the necessity for such fair market rental rate determination. Tenant shall have
fourteen (14) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the
fair market rental rate within which to accept such fair market rental rate or to reasonably object
thereto in writing. Failure of Tenant to so object to the fair market rental rate submitted by
Landlord in writing within Tenant’s Review Period shall conclusively be deemed Tenant’s approval
and acceptance thereof. If within Tenant’s Review Period Tenant reasonably objects to or is deemed
to have disapproved the fair market rental rate submitted by Landlord, Landlord and Tenant will
meet together with their respective legal counsel to present and discuss their individual
determinations of the fair market rental rate for the Premises under the parameters set forth in
Paragraph 1 above and shall diligently and in good faith attempt to negotiate a rental rate on the
basis of such individual determinations. Such meeting shall occur no later than ten (10) days
after the expiration of Tenant’s Review Period. The parties shall each provide the other with such
supporting information and documentation as they deem appropriate. At such meeting if Landlord and
Tenant are unable to agree upon the fair market rental rate, they shall each submit to the other
their respective best and final offer as to the fair market rental rate. If Landlord and Tenant
fail to reach agreement on such fair market rental rate within five (5) business days following
such a meeting (the “Outside Agreement Date”), Tenant’s Extension Option will be deemed
null and void unless Tenant demands appraisal, in which event each party’s determination shall be
submitted to appraisal in accordance with the provisions of Section 3 below.

3. (a) Landlord and Tenant shall each appoint one (1) independent appraiser who shall by
profession be an M.A.I. certified real estate appraiser who shall have been active over the five
(5) year period ending on the date of such appointment in the leasing of commercial (including
office) properties in the Del Mar/Torrey Hills area of San Diego. The determination of the
appraisers shall be limited solely to the issue of whether Landlord’s or Tenant’s last proposed (as
of the Outside Agreement Date) best and final fair market rental rate for the Premises is the
closest to the actual fair market rental rate for the Premises as determined by the appraisers,
taking into account
the requirements specified in Section 1 above. Each such appraiser shall be appointed within
fifteen (15) days after the request for appraisal.

 

-4-

 

(b) The two (2) appraisers so appointed shall within fifteen (15) days of the date of the
appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be
qualified under the same criteria set forth hereinabove for qualification of the initial two (2)
appraisers.

(c) The three (3) appraisers shall within thirty (30) days of the appointment of the third
appraiser reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted
best and final fair market rental rate, and shall notify Landlord and Tenant thereof. During such
thirty (30) day period, Landlord and Tenant may submit to the appraisers such information and
documentation to support their respective positions as they shall deem reasonably relevant and
Landlord and Tenant may each appear before the appraisers jointly to question and respond to
questions from the appraisers.

(d) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and
Tenant and neither party shall have the right to reject the decision or to undo the exercise of the
applicable Option. If either Landlord or Tenant fails to appoint an appraiser within the time
period specified in Section 3(a) hereinabove, the appraiser appointed by one of them shall within
thirty (30) days following the date on which the party failing to appoint an appraiser could have
last appointed such appraiser reach a decision based upon the same procedures as set forth above
(i.e., by selecting either Landlord’s or Tenant’s submitted best and final fair market rental
rate), and shall notify Landlord and Tenant thereof, and such appraiser’s decision shall be binding
upon Landlord and Tenant and neither party shall have the right to reject the decision or to undo
the exercise of the applicable Option.

(e) If the two (2) appraisers fail to agree upon and appoint a third appraiser, either party, upon
ten (10) days written notice to the other party, can apply to the Presiding Judge of the Superior
Court of San Diego County to appoint a third appraiser meeting the qualifications set forth herein.
The third appraiser, however, selected shall be a person who has not previously acted in any
capacity for ether party.

(f) The cost of each party’s appraiser shall be the responsibility of the party selecting such
appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared
equally by Landlord and Tenant.

(g) If the process described hereinabove has not resulted in a selection of either Landlord’s or
Tenant’s submitted best and final fair market rental rate by the commencement of the applicable
lease term, then the fair market rental rate estimated by Landlord will be used until the
appraiser(s) reach a decision, with an appropriate rental credit and other adjustments for any
overpayments of Base Rent or other amounts if the appraisers select Tenant’s submitted best and
final estimate of the fair market rental rate. The parties shall enter into an amendment to this
Lease confirming the terms of the decision.

RIDER NO. 2

-5-

 

RIGHT OF FIRST OFFER RIDER

RIDER NO. 3 TO LEASE

This Rider No. 3 is made and entered into by and between TREA PACIFIC PLAZA, LLC,
a Delaware limited liability company (“Landlord”), and SOMAXON PHARMACEUTICALS, INC.,
a Delaware corporation (“Tenant”), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to
be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references
in the Lease and in this Rider to the “Lease” shall be construed to mean the Lease (and all
exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized
terms not defined in this Rider shall have the same meaning as set forth in the Lease.

1. Grant of Option; Conditions. Tenant shall have the one time right of first offer
(the “Right of First Offer”) with respect to the balance of the presently available space
on the second (2nd) floor of the Building, consisting of approximately 12,898 rentable
square feet (the “First Offer Space”). Landlord shall notify Tenant (the “First Offer
Notice”) from time to time if Landlord makes or receives a written offer to lease any of the
First Offer Space from a third party or a written request for a proposal for the lease of any of
the First Offer Space from a third party. The First Offer Notice shall describe the space so
offered to Tenant and shall set forth Landlord’s proposed material economic terms and conditions
applicable to Tenant’s lease of such space (collectively, the “Economic Terms”), including the
proposed term of lease and the proposed rent payable for the First Offer Space. In the event the
commencement of Tenant’s lease of First Offer Space occurs on or before December 31, 2011, (i) the
term of the lease shall be concurrent with the original Premises, (ii) the Base Rent for the First
Offer Space shall be at the Base Rent per rentable square foot that is then payable for the
Premises as set forth in Item 5 of the Basic Lease Provisions of this Lease, subject to abatement
of Base Rent for any portion of the term of the First Offer Space occurring during the Abatement
Period, (iii) Tenant shall be entitled to a one-time tenant refurbishment allowance in an amount
adequate to refurbish the First Offer Space in a manner equivalent in lay-out and finish to the
Premises. In the event the commencement of Tenant’s lease of such First Offer Space occurs on or
after January 1, 2012, the Economic Terms shall be equal to those then being offered (not quoted)
by Landlord for the leasing of comparable space in the Building pro rated for the then remaining
term of this Lease, but in no event shall the Base Rent for such First Offer Space be less than the
then current monthly Base Rent plus Additional Operating Expenses for the Premises under this Lease
calculated on a square foot basis and the term of the lease for the First Offer Space shall expire
concurrently with the Term for the original Premises. However, such Base Rent may be subject to
abatement as the parties may agree. Notwithstanding the foregoing, Landlord’s obligation to deliver
the First Offer Notice shall not apply during the last seven (7) months of the Initial Term unless
Tenant has timely delivered the Extension Notice to Landlord pursuant to the Lease.

2. Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right of first
offer with respect to the space described in the First Offer Notice, then within ten (10) business
days after delivery of the First Offer Notice to Tenant, Tenant shall deliver an unconditional
irrevocable notice to Landlord of Tenant’s exercise of its right of first offer with respect to the
entire space described in the First Offer Notice (“ROFO Exercise Notice”), and the Economic
Terms shall be as set forth in Paragraph 1 above. If Tenant does not unconditionally exercise its
right of first offer within such ten (10) business day period, then Landlord shall be free to lease
the space described in the First Offer Notice to anyone to whom Landlord desires on any terms
Landlord desires and Tenant’s right of first offer shall terminate as to the First Offer Space
described in the First Offer Notice. Notwithstanding anything to the contrary contained herein,
Tenant must elect to exercise its right of first offer, if at all, with respect to all of the space
offered by Landlord to Tenant as being proposed to be leased by a third party at any particular
time, and Tenant may not elect to lease only a portion thereof, provided however, that Tenant will
not be required to lease the entire First Offer Space unless the third party is offering to lease
the entire First Offer Space.

3. Lease of First Offer Space. If Tenant timely and properly exercises Tenant’s right
to lease the First Offer Space as set forth herein, Landlord and Tenant shall execute an amendment
adding such First Offer Space to the Lease upon the same non-economic terms and conditions as
applicable to the initial Premises, and the Economic Terms as provided in this Rider No. 3. Unless
otherwise specified in Landlord’s Economic Terms,
Tenant shall commence payment of rent for the First Offer Space and the Term of the First
Offer Space shall commence upon the date of delivery of such space to Tenant.

 

-6-

 

4. Personal; No Defaults. The rights contained in this Rider No. 3 shall be personal
to the original Tenant executing this Lease, and may only be exercised by such original Tenant or a
Permitted Transferee (and not any other assignee, sublessee or other transferee of the original
Tenant’s interest in the Lease) if the original Tenant or a Permitted Transferee occupies the
entire Premises as of the date of the First Offer Notice. Tenant shall not have the right to lease
First Offer Space as provided in this Section 4 if, as of the date of the First Offer Notice, or,
at Landlord’s option, as of the scheduled date of delivery of such First Offer Space to Tenant,
Tenant is then in default under the Lease beyond any applicable notice and cure periods.

RIDER NO. 3

-7-

 

TERMINATION OPTION RIDER

RIDER NO. 4 TO LEASE

This Rider No. 4 is made and entered into by and between TREA PACIFIC PLAZA, LLC,
a Delaware limited liability company (“Landlord”), and SOMAXON PHARMACEUTICALS, INC.,
a Delaware corporation (“Tenant”), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to
be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references
in the Lease and in this Rider to the “Lease” shall be construed to mean the Lease (and all
exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized
terms not defined in this Rider shall have the same meaning as set forth in the Lease.

1. Subject to the terms of this Rider No. 4 and Rider No. 5, entitled “Options In General”,
and notwithstanding anything to the contrary contained in the Lease, and provided Tenant has not
exercised its Right of First Offer as provided in Rider No. 3, Tenant will have the one-time option
to terminate and cancel the Lease (“Termination Option”), effective as of 11:59 p.m. on the
last day of the thirty-sixth (36th) full calendar month of the Initial Term
(“Termination Date”), by delivering to Landlord, on or before the date which is eight (8)
months prior to the Termination Date, written notice of Tenant’s exercise of its Termination
Option. As a condition to the effectiveness of Tenant’s exercise of its Termination Option and in
addition to Tenant’s obligation to satisfy all other monetary and non-monetary obligations arising
under this Lease through to the Termination Date, Tenant shall pay to Landlord the following
“Termination Consideration”: (i) the then unamortized value of the cost of the initial Tenant
Improvements and the cost of any subsequent leasehold improvements made by Landlord at Landlord’s
expense for the benefit of Tenant, brokerage commissions, and Abated Amount, amortized with
interest at the rate of eight percent (8%) per annum; and (ii) three (3) months worth of Base Rent
at the rate then payable as of the month after the Termination Date (i.e., $32,221.12 per month,
for a total of $96,663.35). The Termination Consideration shall be due and payable by Tenant to
Landlord concurrently with Tenant’s delivery of notice to Landlord of the exercise of the
Termination Option. If Tenant properly and timely exercises its Termination Option and properly
and timely delivers the Termination Consideration to Landlord as set forth above and satisfies all
other monetary and non-monetary obligations under this Lease including, without limitation, the
provisions regarding surrender of the Premises, all of which must be accomplished on or before the
Termination Date, then the Lease will terminate as of midnight on the Termination Date.

2. Upon determination of the final unamortized value of the cost of the initial Tenant
Improvements and brokerage commissions, Landlord and Tenant shall enter into an amendment
acknowledging the total Termination Consideration.

 

-8-

 

OPTIONS IN GENERAL

RIDER NO. 5 TO LEASE

This Rider No. 5 is made and entered into by and between TREA PACIFIC PLAZA, LLC,
a Delaware limited liability company (“Landlord”), and SOMAXON PHARMACEUTICALS, INC.,
a Delaware corporation (“Tenant”), as of the day and year of the Lease between Landlord and
Tenant to which this Rider is attached. Landlord and Tenant hereby agree that, notwithstanding
anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to
be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references
in the Lease and in this Rider to the “Lease” shall be construed to mean the Lease (and all
exhibits and Riders attached thereto), as amended and supplemented by this Rider. All capitalized
terms not defined in this Rider shall have the same meaning as set forth in the Lease.

1. Definition. As used in this Lease and any Rider or Exhibit attached hereto, the
word “Option” has the following meaning:

(i) The Extension Option pursuant to Rider No. 1 herein;

(ii) The Right of First Offer pursuant to Rider No. 3 herein; and

(iii) The Termination Option pursuant to Rider No. 4 herein.

2. Options Personal. Each Option granted to Tenant is personal to the original Tenant
executing this Lease and may be exercised only by the original Tenant (or any entity merged with
Tenant or which has acquired Tenant) executing this Lease while occupying and leasing the entire
Premises and without having assigned this Lease or sublet any portion of the Premises, and/or
without the intent of thereafter assigning this Lease or subletting the Premises, and may not be
exercised or be assigned, voluntarily or involuntarily, by any person or entity other than the
original Tenant executing this Lease. The Options, if any, granted to Tenant under this Lease are
not assignable separate and apart from this Lease, nor may any Option be separated from this Lease
in any manner, either by reservation or otherwise.

3. Effect of Default on Options. Tenant will have no right to exercise any Option,
notwithstanding any provision of the grant of option to the contrary, and Tenant’s exercise of any
Option may be nullified by Landlord and deemed of no further force or effect, if (i) Tenant is in
default of any monetary obligation or material non-monetary obligation under the terms of this
Lease (or if Tenant would be in such default under this Lease but for the passage of time or the
giving of notice, or both) as of Tenant’s exercise of the Option in question or at any time after
the exercise of any such Option and prior to the commencement of the Option event, or (ii) Landlord
has given Tenant two (2) or more notices of default, whether or not such defaults are subsequently
cured, during any twelve (12) consecutive month period of this Lease.

4. Options as Economic Terms. Each Option is hereby deemed an economic term which
Landlord, in its sole and absolute discretion, may or may not offer in conjunction with any future
extensions of the Initial Term.

 

-9-

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 	 	 
	 	 	 	 
	LEASE OF PREMISES	 	 	1	 
	 	 	 
	 	 	 	 
	BASIC LEASE PROVISIONS	 	 	1	 
	 	 	 
	 	 	 	 
	STANDARD LEASE PROVISIONS	 	 	4	 
	 	 	 
	 	 	 	 
	1.	 	TERM
	 	 	4	 
	 	 	 
	 	 	 	 
	2.	 	BASE RENT AND SECURITY DEPOSIT
	 	 	5	 
	 	 	 
	 	 	 	 
	3.	 	ADDITIONAL RENT
	 	 	7	 
	 	 	 
	 	 	 	 
	4.	 	IMPROVEMENTS AND ALTERATIONS
	 	 	12	 
	 	 	 
	 	 	 	 
	5.	 	REPAIRS
	 	 	14	 
	 	 	 
	 	 	 	 
	6.	 	USE OF PREMISES
	 	 	14	 
	 	 	 
	 	 	 	 
	7.	 	UTILITIES AND SERVICES
	 	 	17	 
	 	 	 
	 	 	 	 
	8.	 	NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
	 	 	19	 
	 	 	 
	 	 	 	 
	9.	 	FIRE OR CASUALTY
	 	 	22	 
	 	 	 
	 	 	 	 
	10.	 	EMINENT DOMAIN
	 	 	23	 
	 	 	 
	 	 	 	 
	11.	 	ASSIGNMENT AND SUBLETTING
	 	 	23	 
	 	 	 
	 	 	 	 
	12.	 	DEFAULT
	 	 	26	 
	 	 	 
	 	 	 	 
	13.	 	ACCESS; CONSTRUCTION
	 	 	28	 
	 	 	 
	 	 	 	 
	14.	 	BANKRUPTCY
	 	 	29	 
	 	 	 
	 	 	 	 
	15.	 	SUBSTITUTION OF PREMISES
	 	 	29	 
	 	 	 
	 	 	 	 
	16.	 	SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
	 	 	29	 
	 	 	 
	 	 	 	 
	17.	 	SALE BY LANDLORD; TENANT’S REMEDIES; NONRECOURSE LIABILITY
	 	 	31	 
	 	 	 
	 	 	 	 
	18.	 	PARKING; COMMON AREAS
	 	 	32	 
	 	 	 
	 	 	 	 
	19.	 	MISCELLANEOUS
	 	 	33	 

LIST OF EXHIBITS

	 	 	 

	Exhibit A

	 	Floor Plan
	Exhibit B

	 	Work Letter
	Exhibit C

	 	Building Rules and Regulations
	Exhibit D

	 	Form Tenant Estoppel Certificate
	Exhibit E

	 	Tenant’s Commencement Letter
	Exhibit F

	 	Form of Letter of Credit

 

(i)

 

	 	 	 	 	 
	 	 	 	 	Page
	LIST OF RIDERS	 	 
	 
	 	 	 	 
	Rider No. 1

	 	Extension Option Rider	 	 
	Rider No. 2

	 	Fair Market Rental Rate Rider	 	 
	Rider No. 3

	 	Right of First Offer Rider	 	 
	Rider No. 4

	 	Termination Option Rider	 	 
	Rider No. 5

	 	Options in General	 	 

 

(ii)exv4w1

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is entered into as of May
19, 2011 (the “Execution Date”) among Weatherford International Ltd., a Swiss joint stock
corporation and the parent company of the Purchaser (the “Parent”), Lawrence R. Floryan,
not individually, but solely in his capacity as the representative of the Shareholders (the
“Shareholder Representative”), and any other Eligible Sellers (as defined below) who may
become a party to this Agreement on or after the Execution Date. Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Merger Agreement (as defined below).

PRELIMINARY STATEMENTS

     A. The Shareholders are acquiring all of the Share Consideration pursuant to the terms and
conditions of the agreement and plan of merger dated April 29, 2011, by and among the Purchaser,
the Parent, the Merger Sub, the Company and the Shareholder Representative (the “Merger
Agreement”).

     B. As a condition to consummate the transactions contemplated by the Merger Agreement, Parent
has agreed to enter into this Agreement with the Shareholder Representative to set forth the
registration rights to be granted by Parent to the Shareholders.

AGREEMENT

     The parties, intending to be legally bound, agree as follows:

     1. Certain Definitions. As used in this Agreement, the following terms not defined
elsewhere shall have the following respective meanings:

     “Blackout Period” shall mean, with respect to a registration, a period in each case
commencing on the day immediately after Purchaser notifies the Eligible Sellers that they are
required, pursuant to Section 4(f), to suspend offers and sales of Registrable Securities
because Parent, in the good faith judgment of its Board of Directors, has determined (because such
offer and sale of any Registrable Securities would materially interfere with any acquisition,
corporate reorganization, financing activity, or similar other transaction involving Parent, or
would require premature disclosure of material information that Parent has a bona fide business
purpose for preserving as confidential or non-public, or because of the unavailability for reasons
beyond Parent’s control of any required financial statements, or any other event or condition of
similar significance to Parent) that the registration and distribution of the Registrable
Securities to be covered by such Registration Statement, if any, would be seriously detrimental to
Parent and its shareholders and ending on the earlier of (a) the date upon which the material
non-public information commencing the Blackout Period is disclosed to the public or ceases to be
material, and (b) such time as Parent makes such Registration Statement effective again, or allows
sales pursuant to such Registration Statement to resume; provided, however, that
Parent shall limit its use of Blackout Periods described in this Section 1, in the
aggregate, to 30 trading days and Parent may not invoke a Blackout Period more than twice in any
twelve month period.

1

 

     “Eligible Seller” means the Shareholders and each of their Permitted Transferees.

     “Final Prospectus Supplement” shall mean the prospectus supplement relating to the
Registration Statement and covering the Share Consideration to be filed pursuant to Rule 424(b) of
the Securities Act, together with the base prospectus included in the Registration Statement.

     “Permitted Transferees” shall mean any Shareholder, any family member of a
Shareholder, any trust established for the benefit of a Shareholder or family member of a
Shareholder or any family limited partnership owned by a Shareholder or a family member of a
Shareholder to which any Eligible Seller transfers, sells or otherwise disposes of the Share
Consideration in accordance with applicable Laws and this Agreement.

     “Registrable Securities” shall mean (a) the shares of Parent Stock comprising the
Share Consideration delivered to the Shareholders pursuant to the terms of the Merger Agreement and
(b) any Parent Stock issued as (or issuable upon the conversion or exercise of any warrant, right,
option or other convertible security which is issued as) a dividend or other distribution with
respect to, or in exchange for, or in replacement of, such Share Consideration; provided,
however, that a Registrable Security shall cease to be a Registrable Security upon the
earlier of the time (a) the Registration Statement covering such Registrable Security has been
declared effective by the SEC and such Registrable Security has been sold or disposed of pursuant
to such effective Registration Statement, (b) such Registrable Security has been, or can be in a
single transaction and without restriction, disposed of pursuant to any section of Rule 144 under
the Securities Act (or any similar provision then in force), or (c) such Registrable Security has
been assigned, sold or otherwise transferred in a transaction in which the transferor’s rights
under this Agreement are not assigned.

     “Registration Filing Date” shall mean as soon as practicable following the Closing
Date and in any event prior to May 27, 2011 (the “Outside Date”) pursuant to Section 5.13
of the Merger Agreement.

     “Registration Statement” shall mean an “automatic shelf registration statement” on
Form S-3, as defined in Rule 405 under the Securities Act and which meets the requirements set
forth in Rule 415(a)(1)(i), including the related base prospectus, and shall also include for
purposes of this Agreement, as applicable, the Final Prospectus Supplement and any other amendments
or supplements filed pursuant to this Agreement relating to the registration of Registrable
Securities or, in the event such registration statement shall no longer be effective or shall
otherwise become unavailable for the offer and sales of the Share Consideration as contemplated by
this Agreement, a registration statement on such form as shall be appropriate for the Eligible
Sellers to offer and sell shares in the manner contemplated hereby.

     “SEC” shall mean the United States Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

     “SEC Effective Date” shall mean each date and time that the Registration Statement,
any post-effective amendment or amendments thereto first became or become effective.

     “Securities Act” shall mean the United States Securities Act of 1933, as amended.

2

 

     2. Term. The rights granted to the Eligible Sellers hereunder shall commence on the
Execution Date and continue in full force and effect until the earlier of (i) such time as there
are no Registrable Securities hereunder, (ii) Parent’s obligations under Section 4(a) have
otherwise ceased or (iii) on the Outside Date if the Registration Filing Date has not occurred by
the Outside Date and the Purchaser shall have paid the Substituted Cash Consideration to the
Shareholders in lieu of the Share Consideration pursuant to Section 1.2(b)(iii) of the Merger
Agreement, unless terminated sooner by written agreement of Parent and the Shareholder
Representative (on behalf of the Eligible Sellers) (in whole or solely regarding an applicable
Eligible Seller).

     3. Registration. Subject to Section 2(iii), no later than the Registration
Filing Date, Parent shall file with the SEC the Registration Statement and a Final Prospectus
Supplement relating to the Registration Statement and the resale by the Eligible Sellers of all of
the Share Consideration comprising the Registrable Securities and pay the registration fee with
respect thereto. Parent shall cause the Registration Statement to be automatically effective upon
filing. The plan of distribution indicated in the Registration Statement will include all such
transactions as the Eligible Sellers may reasonably request in writing prior to the filing of the
Registration Statement (other than an underwritten offering) and that can be included in the
Registration Statement under the rules and regulations of the SEC. Parent will notify the
Shareholder Representative promptly after Parent receives notice that the Registration Statement
has become effective.

     4. Registration Procedures. In the case of each registration, qualification, or
compliance effected by Parent pursuant to Section 3 or Section 4(e) hereof, Parent
will keep each Eligible Seller including securities therein reasonably advised in writing (which
may include e-mail) as to the initiation of each registration, qualification, and compliance and as
to the completion thereof. At its expense with respect to the Registration Statement and Final
Prospectus Supplement filed pursuant to Section 3, Parent will:

          (a) use its commercially reasonable efforts to cause such Registration Statement to remain
effective at least for a period ending with the first to occur of (i) the date which is six months
following the Registration Filing Date (or for such longer period if extended pursuant to
Section 5), (ii) the sale of all Registrable Securities covered by the Registration
Statement, and (iii) the date which the unsold securities covered by the Registration Statement
cease to be Registrable Securities (in any case, the “Effectiveness Period”). Parent shall
be deemed not to have used its commercially reasonable efforts to cause such Registration Statement
to remain effective during the requisite period if it voluntarily takes any action that would
result in the Eligible Sellers covered thereby not being able to offer and sell such securities
during that period, unless such action is required by applicable Law.

          (b) if the Registration Statement is subject to review by the SEC, promptly respond to all
comments and use its commercially reasonable efforts to diligently pursue resolution of any
comments to the satisfaction of the SEC;

          (c) prepare and file with the SEC such amendments and supplements to the Registration
Statement and the Final Prospectus Supplement used in connection therewith as may be necessary to
keep the Registration Statement effective during the Effectiveness Period (but in any event at
least until expiration of the 90-day period referred to in Section 4(3) of the Securities Act and
Rule 174, or any successor thereto, thereunder, if applicable), and comply

3

 

with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Registration Statement during such period in accordance with the intended method(s)
of disposition by the sellers thereof set forth in the Registration Statement;

          (d) furnish, without charge, to each Eligible Seller of Registrable Securities covered by the
Registration Statement (i) a reasonable number of copies of the Registration Statement (including
any exhibits thereto other than exhibits incorporated by reference), and of each amendment and
supplement thereto as such Eligible Seller may request, (ii) such number of copies of the
prospectus included in the Registration Statement (including each preliminary prospectus and any
other prospectus filed under Rule 424 under the Securities Act) as such Eligible Seller may
reasonably request, in conformity with the requirements of the Securities Act, and (iii) such other
documents as such Eligible Seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Eligible Seller, but only during the Effectiveness Period;

          (e) use its commercially reasonable efforts to register or qualify such Registrable Securities
under such other applicable securities or blue sky laws of such jurisdictions as any Eligible
Seller of Registrable Securities covered by the Registration Statement reasonably requests as may
be necessary for the marketability of the Registrable Securities and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Eligible Seller to consummate
the disposition in such jurisdictions of the Registrable Securities owned by such Eligible Seller;
provided that Parent shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), (ii)
subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process
in any such jurisdiction;

          (f) as promptly as practicable after becoming aware of such event, provide written notice to
each Eligible Seller of such Registrable Securities at any time when a prospectus relating thereto
is required to be delivered under the Securities Act of the happening of any event which comes to
Parent’s attention if as a result of such event the prospectus included in the Registration
Statement contains an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not misleading, and
Parent shall promptly prepare and furnish to such Eligible Seller and, if applicable, file with the
SEC under the Securities Act, a supplement or amendment to such prospectus (or prepare and file
appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein not misleading, unless suspension of the use of such prospectus otherwise is
authorized herein or in the event of a Blackout Period, in which case no supplement or amendment
need be furnished (or Exchange Act filing made) until the termination of such suspension or
Blackout Period;

          (g) comply, and continue to comply during the period that the Registration Statement is
effective under the Securities Act, in all material respects with the Securities Act and the
Exchange Act and with all applicable rules and regulations of the SEC with respect to the
disposition of all securities covered by the Registration Statement, and make available to its
security holders, as soon as reasonably practicable, an earnings statement covering the period of
at least 12 months, but not more than 18 months, beginning with the first full calendar month

4

 

after the initial SEC Effective Date, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;

          (h) as promptly as practicable after becoming aware of such event, notify each Eligible Seller
of Registrable Securities being offered or sold pursuant to the Registration Statement of the
initiation by the SEC of any proceedings with respect to, or the issuance by the SEC of any stop
order or other suspension of effectiveness of the Registration Statement;

          (i) use its commercially reasonable efforts to cause all Registrable Securities covered by the
Registration Statement to be listed on the New York Stock Exchange or such other principal
securities market on which securities of the same class or series issued by Parent are then listed
or traded;

          (j) provide a transfer agent and registrar, which may be a single entity, for the Registrable
Securities at all times;

          (k) cooperate with the Eligible Sellers that sell Registrable Securities pursuant to the
Registration Statement to issue and deliver such Registrable Securities in uncertificated
book-entry form (not bearing any restrictive notations) to be offered pursuant to the Registration
Statement and enable such book-entries to be in such denominations or amounts as the Eligible
Sellers may reasonably request, registered in such names as the Eligible Sellers may request within
the settlement period specified in Rule 15c6-1 under the Exchange Act; and

          (l) during the Effectiveness Period, refrain from bidding for or purchasing any Parent Stock
or any right to purchase Parent Stock or attempting to induce any Person to purchase any such
security or right if such bid, purchase or attempt would in any way limit the right of the Eligible
Sellers to sell Registrable Securities by reason of the limitations set forth in Regulation M under
the Exchange Act.

     5. Suspension of Offers and Sales. Each Eligible Seller of Registrable Securities
agrees that, upon receipt of any written notice from Parent of the happening of any event of the
kind described in Section 4(f) hereof or of the commencement of a Blackout Period, such
Eligible Seller shall discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such Eligible Seller’s receipt of
the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof or
notice of the end of the Blackout Period. In the event Parent shall give any such written notice,
the applicable period mentioned in Section 4(a)(i) hereof shall be extended by the greater
of (i) 10 Business Days or (ii) the number of days during the period from and including the date of
the giving of such written notice pursuant to Section 4(f) hereof, or the commencement of a
Blackout Period, to and including, as applicable, the date when each Eligible Seller of Registrable
Securities covered by the Registration Statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 4(f) hereof or termination of a Blackout
Period.

     6. Registration Expenses. Parent shall pay all required registration and filing fees
in connection with any registration of the Registrable Securities. Except as provided above or
elsewhere herein, each of Parent and the Shareholder Representative (on behalf of all Eligible
Sellers) shall pay their own other expenses incurred in connection with any Registration

5

 

Statement filed pursuant to this Agreement, including, without limitation, the fees and
disbursements of their respective counsel, accountants, and other representatives.

     7. Assignment of Rights. No Eligible Seller may assign its rights under this
Agreement to any party without the prior written consent of Parent, which approval Parent may
withhold in its sole discretion; provided, however, that an Eligible Seller may
assign its rights under this Agreement without such consent to a Permitted Transferee as long as:
(a) such transfer or assignment is effected in accordance with applicable securities Laws; (b) such
Permitted Transferee agrees in writing to become a party to, and be subject to, the terms of this
Agreement by properly executing a joinder in the form attached hereto as Exhibit A, which
shall specify the name and address of the Permitted Transferee and identify the Registrable
Securities with respect to which such rights are being transferred or assigned; and (c) such
joinder is delivered to Parent. Parent shall, upon request of the transferring Eligible Seller and
its Permitted Transferee (and after receiving such joinder), file an amendment or supplement to the
Registration Statement (or, as appropriate, to the prospectus included therein) to register sales
of Registrable Securities by such Permitted Transferees and shall bear any and all expenses
incurred by it in connection with the first two amendments or supplements so requested;
provided that, notwithstanding anything else herein to the contrary, the Shareholder
Representative (on behalf of all Eligible Sellers) shall pay any and all expenses properly incurred
by Parent in connection with any subsequent amendments or supplements so requested by the Eligible
Sellers, including, without limitation, the reasonable fees and disbursements of Company’s counsel,
accountants, and other representatives incurred in connection therein.

     8. Information by Eligible Sellers; Free Writing Prospectuses.

          (a) The Eligible Sellers or the Shareholder Representative shall furnish to Parent such
information regarding such Eligible Sellers and the distribution proposed by such Eligible Sellers
as Parent may reasonably request in writing. The Shareholder Representative (on behalf of each
Eligible Seller) agrees that each Eligible Seller’s name as it is to be listed in the Registration
Statement is accurately set forth in the Selling Shareholders Questionnaire. Notwithstanding
anything else herein to the contrary, Parent shall have no obligation to file an amendment or
supplement to the Registration Statement (or, as appropriate, to the prospectus included therein)
to register sales of Registrable Securities by any Eligible Seller until such Eligible Seller (or
the Shareholders Representative on its behalf) shall have furnished Parent with all information and
statements about or pertaining to such Eligible Seller in such reasonable detail and on such timely
basis as is reasonably deemed by Parent to be legally required with respect to the preparation of
such filing.

          (b) None of the Shareholders or any Eligible Seller (or any Person on their behalf) shall
prepare or use any Free Writing Prospectus (as such term is defined in Rule 405 under the
Securities Act) unless any and all issuer information included therein has been approved by Parent
in writing specifically for use by the Eligible Sellers in a Free Writing Prospectus, which
approval Parent may withhold in its reasonable discretion.

     9. Indemnification.

          (a) In connection with the offer and sale of Registrable Securities under the Registration
Statement, Parent shall, and hereby does, indemnify and hold harmless, to the fullest

6

 

extent permitted by Law, each Eligible Seller, its directors, officers, and each Person, if
any, who controls any such Eligible Seller against any Losses to which any such Person may become
subject under the Securities Act or the Exchange Act insofar as such Losses (or Proceedings in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (with respect to the Registration Statement) or not misleading in
light of the circumstances under which they were made (with respect to any prospectus), and Parent
shall reimburse the Eligible Seller for any legal or any other Losses reasonably incurred by them
in connection with investigating, defending or settling any such Loss or Proceeding;
provided that Parent shall not be liable in any such case (i) to the extent that any such
Loss (or Proceeding in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from such Registration
Statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with information furnished expressly for use in
connection with such registration to Parent by or on behalf of such Eligible Seller or (ii) if
Parent had provided to such Eligible Seller a copy of an amended preliminary prospectus or final
prospectus that corrected such untrue or alleged untrue statement or such omission or alleged
omission and the Person asserting any such Loss (or Proceeding in respect thereof) who purchased
the Registrable Securities that are the subject thereof did not receive a copy of such preliminary
or final prospectus at or prior to the written confirmation of the sale of such Registrable
Securities to such Person because of the failure of such Eligible Seller to so provide such amended
preliminary or final prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Eligible Seller and shall survive the transfer of
such shares by the Eligible Sellers.

          (b) As a condition to including any Registrable Securities to be offered by an Eligible
Seller in the Registration Statement filed pursuant to this Agreement, each such Eligible Seller
agrees to be bound by the terms of this Section 9(b) and to indemnify and hold harmless, to
the fullest extent permitted by Law, Parent against any Losses to which Parent may become subject
under the Securities Act or otherwise, insofar as such Losses (or Proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement in or omission or
alleged omission from such Registration Statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and in conformity with
information about such Eligible Seller furnished to Parent by or on behalf of such Eligible Seller,
and such Eligible Seller shall reimburse Parent for any legal or other expenses reasonably incurred
by it in connection with investigating, defending, or settling any such Loss or Proceeding;
provided, however, that the indemnity pursuant to this Section 9(b) shall in no event
exceed the gross proceeds from the offering received by such Eligible Seller. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on behalf of Parent and
shall survive the transfer by any Eligible Seller of such shares.

7

 

          (c) Promptly after receipt by an indemnified party of notice of the commencement of any
Proceeding involving a claim referred to in Section 9(a) or (b) hereof (including
any governmental action), such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the indemnifying party of the commencement of
such action; provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under Section 9(a) or
(b) hereof, except to the extent that the indemnifying party is prejudiced by such failure
to give notice. In case any such Proceeding is brought against an indemnified party, unless in the
reasonable judgment of counsel to such indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof, unless in such indemnified party’s reasonable judgment a
conflict of interest between such indemnified and indemnifying parties arises in respect of such
claim after the assumption of the defenses thereof or the indemnifying party fails to defend such
claim in a diligent manner, other than reasonable costs of investigation. Neither an indemnified
nor an indemnifying party shall be liable for any settlement of any Proceeding effected without its
consent. No indemnifying party shall, without the consent of the indemnified party, consent to
entry of any judgment or enter into any settlement, which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a release from all
Liability in respect of such claim. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party shall have the right to
retain, at its own expense, counsel with respect to the defense of a claim.

          (d) If the indemnification provided for in this Section 9 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any Loss referred
to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall
(i) contribute to the amount paid or payable by such indemnified party as a result of such Loss or
Proceeding as is appropriate to reflect the proportionate relative fault of the indemnifying party
on the one hand and the indemnified party on the other (determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or omission relates to
information supplied by the indemnifying party or the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by
applicable Law or provides a lesser sum to the indemnified party than the amount hereinafter
calculated, not only the proportionate relative fault of the indemnifying party and the indemnified
party, but also the relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other, as well as any other relevant equitable considerations;
provided, however, that each Eligible Seller shall not be liable for any such Loss
in an amount greater than such Eligible Seller received as gross proceeds from the sale of such
Eligible Seller’s Registrable Securities. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.

8

 

     10. Rule 144. For a period of at least twelve months following Registration, Parent
will use its commercially reasonable efforts (a) to timely file all reports required to be filed by
Parent after the date hereof under the Securities Act and the Exchange Act (including the reports
pursuant to Section 13(a) or 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule
144) and the rules and regulations adopted by the SEC thereunder), and (b) if Parent is not
required to file reports pursuant to such sections, it will prepare and furnish to the Eligible
Sellers and make publicly available in accordance with Rule 144(c) such information as is required
for the Eligible Sellers to sell Parent Stock under Rule 144, all to the extent required from time
to time to enable the Eligible Sellers to sell Parent Stock without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144.

     11. Miscellaneous.

          (a) Shareholder Representative.

          (i) By virtue of approval of the Merger or execution of the joinder to this Agreement,
each Eligible Seller designates and appoints the Shareholder Representative as such Eligible
Seller’s agent and attorney-in-fact with full power and authority to act for and on behalf
of each Eligible Seller in all matters pertaining to this Agreement following the Execution
Date. Notices or communications to or from the Shareholder Representative constitute notice
to or from each of the Eligible Sellers for all purposes under this Agreement.

          (ii) The Shareholder Representative may delegate its authority as Shareholder
Representative to any one of the Shareholders for a fixed or indeterminate period of time
upon not fewer than 10 Business Days’ prior written notice to the Parent in accordance with
Section 10.1(b) of the Merger Agreement. In the event of the death or incapacity of the
Shareholder Representative, a successor Shareholder Representative will be elected promptly
as set forth in Section 10.1(b) of the Merger Agreement. Each successor Shareholder
Representative has all of the power, authority, rights and privileges conferred by this
Agreement and the Merger Agreement upon the original Shareholder Representative, and the
term “Shareholder Representative” as used in this Agreement includes any successor
Shareholder Representative.

          (iii) A decision, act, consent or instruction of the Shareholder Representative
constitutes a decision of all the Eligible Sellers and is final, binding and conclusive upon
the Eligible Sellers and the Purchaser and Parent may rely upon any such decision, act,
consent or instruction of the Shareholder Representative as being the decision, act, consent
or instruction of the Eligible Sellers. The Purchaser and Parent are hereby relieved from
any Liability to any Person for any acts done or omissions by the Purchaser or Parent in
accordance with such decision, act, consent or instruction of the Shareholder
Representative. Without limiting the generality of the foregoing, the Purchaser and Parent
are entitled to rely, without inquiry, upon any document delivered by the Shareholder
Representative as being genuine and correct.

          (iv) This appointment and grant of power and authority by the Shareholders to the
Shareholder Representative is coupled with an interest, is in consideration of the mutual
covenants made in this Agreement, the Merger Agreement

9

 

and other Ancillary Agreements, is irrevocable and may not be terminated by the act of
any Eligible Seller or by operation of Law, whether upon the death or incapacity of any
Eligible Seller, or by the occurrence of any other event.

          (b) Governing Law. Unless an exhibit specifies a different choice of law, the
internal laws of the State of California (without giving effect to any choice or conflict of law
provision or rule (whether of the State of California or any other jurisdiction) that would cause
the application of laws of any other jurisdiction) govern all matters arising out of or relating to
this Agreement and its exhibits and all of the transactions it contemplates, including its
validity, interpretation, construction, performance and enforcement and any disputes or
controversies arising therefrom.

          (c) Assignment and Successors. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, be binding upon and be enforceable by the parties hereto and
their respective successors and Permitted Transferees.

          (d) Entire Agreement. This Agreement (together with the Selling Shareholder
Questionnaire) constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements or representations by or among the parties, or any of them, written or
oral, with respect to the subject matter of this Agreement. This Agreement may not be amended,
supplemented or otherwise modified except in a written document signed by each party to be bound by
the amendment and that identifies itself as an amendment to this Agreement. Any amendment of this
Agreement signed by the Shareholder Representative is binding upon and effective against each
Eligible Seller regardless of whether or not such Eligible Seller has in fact signed such
amendment.

          (e) Notices. All notices and other communications under this Agreement must be in
writing and are deemed duly delivered when (a) delivered if delivered personally or by nationally
recognized overnight courier service (costs prepaid), (b) sent by facsimile with confirmation of
transmission by the transmitting equipment (or, the first Business Day following such transmission
if the date of transmission is not a Business Day), (c) received or rejected by the addressee, if
sent by certified mail, return receipt requested or (d) sent by electronic email with confirmation
of delivery with a hard copy of such electronic email communication to be delivered by one of the
forms of delivery specified in clause (a), (b) or (c) hereof; in each case to the addresses,
facsimile numbers or electronic mail address and marked to the attention the individual (by name or
title) designated in Section 10.2 of the Merger Agreement or to such other address or facsimile
number and to the attention of such other Person as either party may designate by written notice.

          (f) Counterparts. The parties may execute this Agreement in multiple counterparts,
each of which constitutes an original as against the party that signed it, and all of which
together constitute one agreement. This Agreement is effective upon delivery of one executed
counterpart from each party to the other parties. The signatures of all parties need not appear on
the same counterpart. The delivery of signed counterparts by facsimile or email transmission that
includes a copy of the sending party’s signature is as effective as signing and delivering the
counterpart in person.

10

 

          (g) Severability. If any provision of this Agreement is held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions of this
Agreement are not affected or impaired in any way and the parties agree to negotiate in good faith
to replace such invalid, illegal and unenforceable provision with a valid, legal and enforceable
provision that achieves, to the greatest lawful extent under this Agreement, the economic, business
and other purposes of such invalid, illegal or unenforceable provision.

          (h) Waiver and Remedies. The parties may (a) extend the time for performance of any
of the obligations or other acts of any other party to this Agreement, (b) waive any inaccuracies
in the representations and warranties of any other party to this Agreement contained in this
Agreement or in any certificate, instrument or document delivered pursuant to this Agreement or (c)
waive compliance with any of the covenants, agreements or conditions for the benefit of such party
contained in this Agreement. Any such extension or waiver by any party to this Agreement will be
valid only if set forth in a written document signed on behalf of the party or parties against whom
the waiver or extension is to be effective. Any such extension or waiver signed by the Shareholder
Representative is binding upon and effective against each Eligible Seller regardless of whether or
not such Eligible Seller has in fact signed the extension or waiver. No extension or waiver will
apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance
with any covenant, agreement or condition, as the case may be, other than that which is specified
in the written extension or waiver. No failure or delay by any party in exercising any right or
remedy under this Agreement or any of the documents delivered pursuant to this Agreement, and no
course of dealing between the parties, operates as a waiver of such right or remedy, and no single
or partial exercise of any such right or remedy precludes any other or further exercise of such
right or remedy or the exercise of any other right or remedy. Any enumeration of a party’s rights
and remedies in this Agreement is not intended to be exclusive, and a party’s rights and remedies
are intended to be cumulative to the extent permitted by law and include any rights and remedies
authorized in law or in equity.

          (i) Interpretation. The language used in this Agreement is the language chosen by the
parties to express their mutual intent, and no provision of this Agreement will be interpreted for
or against any party because that party or its attorney drafted the provision.

          (j) Disputes. Article 10.11 (and Articles 10.12, and 10.13 to the extent applicable)
of the Merger Agreement shall govern any dispute arising out of or in relation to this Agreement.

          (k) Effective Date of this Agreement. This Agreement will be effective as of the date
hereof and shall terminate on the earliest of the dates set forth in Section 2. If this
Agreement is terminated pursuant to Section 2(iii), this Agreement shall be void and of no
force and effect with no obligation or liability to any party.

(Signature page follows)

11

 

     The parties have duly executed this Agreement as of the Execution Date.

	 	 	 	 	 	 	 

	 	 	Parent:	 	 
	 
	 	 	 	 	 	 
	 	 	Weatherford International Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Joseph C. Henry	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Joseph C. Henry	 	 
	 

	 	Title:
	 	Vice President — Legal	 	 
	 
	 	 	 	 	 	 
	 	 	Shareholders Representative:
 In its
capacity as Shareholder Representative and on
behalf of each of the Shareholders and
Eligible Sellers:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Lawrence R. Floryan	 	 
	 	 	 	 	 
	 	 	Lawrence R. Floryan	 	 

[Signature page to Registration Rights Agreement]

 

 

EXHIBIT A

FORM OF JOINDER

     Pursuant to Section 7 of the Registration Rights Agreement dated __________, 2011 (the
“Agreement”) by and between Weatherford International Ltd., a Swiss joint stock corporation
(“WIL Switzerland”) and Lawrence R. Floryan, not individually, but solely in his capacity
as the representative of the Shareholders (the “Shareholder Representative”), the
undersigned Eligible Seller and the undersigned Permitted Transferee, as those terms and any other
capitalized terms used but not defined herein are defined in the Agreement, hereby agree as
follows:

	 	1)	 	Such Eligible Seller hereby assigns its rights under the Agreement to such Permitted
Transferee solely in respect of the Registrable Securities identified on the signature page
hereto; provided, however, such Eligible Seller remains otherwise subject
to the terms and conditions of, and remains liable for any and all of its obligations
under, the Agreement;
	 
	 	2)	 	Such Permitted Transferee hereby accepts such assignment and agrees to become a party
to, and be subject to, the terms and conditions of the Agreement; and
	 
	 	3)	 	Pursuant to Section 7 of the Agreement, such Eligible Seller and such Permitted
Transferee hereby request that WIL Switzerland file an amendment or supplement to the
Registration Statement (or, as appropriate, to the prospectus included therein) to register
sales of the Registrable Securities identified below by such Permitted Transferee.

(Signature page follows)

 

 

     The undersigned have duly executed this joinder on this ___ day of ________, 201__.

	 	 	 	 	 	 	 

	 	 	Eligible Seller:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Permitted Transferee:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Registrable Securities:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

[Signature page to Form of Joinder]

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