Document:

Exhibit 10.1

 

EXHIBIT 10.1

LEASE AGREEMENT

for

SORRENTO SUMMIT

     This
Office Lease Agreement (this “Lease”) is entered into as of
November 6, 2007, (the
“Effective Date”) between HCPI/Sorrento, LLC, a Delaware limited liability company (“Landlord”),
and NuVasive, Inc., a Delaware corporation (“Tenant”), who agree as follows:

     1. Agreement to Let. Beginning on the applicable Commencement Date and terminating on
the Expiration Date, subject to earlier termination in accordance with this Lease (the “Term”),
Landlord leases to Tenant, and Tenant leases from Landlord, the applicable portion of the Premises,
along with the non-exclusive right to use the Common Area. Appurtenant to Tenant’s interest in the
Premises are Tenant’s Parking Spaces, Tenant’s right to use the Special Common Facilities and other
portions of the Common Area, along with Tenant’s signage rights and roof rights for its
Communications Equipment granted herein, at no additional charge during the Term.

     2. Principal Lease Provisions and Definitions. The following are the definitions and
principal provisions of this Lease. Other portions of this Lease explain these principal lease
provisions in more detail and should be read in conjunction with this Article 2.

          2.1. “Basic Monthly Rent” means the following sum, as increased by 3.0% on each
anniversary of the Commencement Date for the Phase 2 Premises: (a) the product of $2.50 multiplied
by the Rentable Square Feet of the Phase 1 Premises and the Phase 2 Premises, plus (b) the Phase 3
Basic Monthly Rent, if applicable, in accordance with the Phase 3 Provisions, plus (c) the product
of 0.012 multiplied by the Additional Allowance, if any, as defined by the attached Exhibit B, plus
(d) the additional Basic Monthly Rent determined in accordance with Addendum No. 1 arising out of
the expansion of the Premises. Notwithstanding the foregoing: (a) during the first 365 days after
the Commencement Date for the Phase 1 Premises, Basic Monthly Rent on account of the third floor
and basement portions of Lusk 2 will be $75,000 per month (but Tenant’s obligation to pay Operating
Expenses will not be affected by such discount and Tenant will pay the Property Management Fee
based on the Basic Monthly Rent that would be payable on the entire Phase 1 Premises absent such
discount); (b) from the Commencement Date for the Phase 1 Premises until November 1, 2008, no Basic
Monthly Rent will be payable on account of the first or second floor portions of Lusk 2 (but
Tenant’s obligation to pay Operating Expenses will not be affected by such abatement and Tenant
will pay the Property Management Fee based on the Basic Monthly Rent that would be payable on the
entire Phase 1 Premises as if there were no such abatement), and (c) during the first 180 days
after the Commencement Date for the Phase 2 Premises, no Basic Monthly Rent will be payable for the
Phase 2 Premises (but Tenant’s obligation to pay Operating Expenses will not be affected by such
abatement and Tenant will pay the Property Management Fee based on the Basic Monthly Rent that
would be payable on the entire Premises as if there were no such abatement). Notwithstanding the
foregoing, the portion of Basic Monthly Rent on account of any Additional Allowance is due and
payable on the Commencement Date for the Phase 2 Premises, without any abatement or discount.

          2.2. “BOMA Standard” means (a) with respect to measurements of the existing Buildings
and the Premises within them, the standard of measuring floor area of the Building Owners and
Managers Association, ANSI Z65. 1-1996, revised and readopted June 7, 1996; and (b) with respect to
measurements of any Buildings or improvements constructed after the Effective Date and the Premises
within them (and the Project as affected by such new improvements), the then-current standard of
measuring floor area of the Building Owners and Managers Association.

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          2.3. Buildings/Project/Common Area: The “Buildings,” each of which are located on
Lusk Boulevard in San Diego, California, 92121, include (a) the building located at 7475 Lusk
Boulevard (“Lusk 1”), (b) the building located at 7475B Lusk Boulevard, which includes the Special
Common Facilities (“Lusk 1-B”), (c) the building located at 7473 Lusk Boulevard (“Lusk 2”), and, if
and when constructed, Lusk 3 (described below). The “Project” is comprised of the Buildings, a
parking structure, pad for additional improvements, and the land on which the foregoing are
located, including the surface parking and landscaped areas on the following real property: PARCEL
1 OF PARCEL MAP NO. 12736, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 27,
1983, AS RECORDER’S FILE NO. 83-178570. The “Common Area” is comprised of those portions of the
Project designated by Landlord for common use by tenants of the Project, including common lobbies
(of which there is none in Lusk 2), elevators, driveways, sidewalks, parking areas and structures,
landscaped areas, common passageways and service corridors, stairways, elevators, common restrooms,
the Special Common Facilities and the Project’s emergency backup generator (if any) (but this Lease
confers no rights to either the subsurface of the land below the ground level of the Project or
with regard to the air space above the ceiling of the Premises, or to parking spaces not assigned
or allocated to Tenant, nor, except as may be provided in the Article below entitled “Communication
Equipment,” to the roof, exterior walls, or utility raceways of any Building).

          2.4. “Brokers” means Cresa Partners-West, Inc. (“Tenant’s Broker”), as Tenant’s
broker, and Colliers International San Diego Office (“Landlord’s Broker”), as Landlord’s broker.
In no way is either Broker or any of its agents authorized to take any action or make any
representations or statements on behalf of Landlord or Tenant. Landlord shall compensate the
Brokers in accordance with Article 29.

          2.5. “Building Service Hours” means Monday through Friday 7:00 a.m. to 6:00 p.m., and
Saturdays 7:00 a.m. to 1:00 p.m., with no hours on Sundays or holidays. (When Tenant leases an
entire Building under this Lease, the Building Service Hours for that Building are 24 hours per
day, seven days per week.)

          2.6. “Commencement Date” means: (a) as to the Phase 1 Premises, the date on which the
TI Work for the third floor of Lusk 2 is Substantially Completed and Tenant has at least temporary
access to such third floor (or, in the event of any Tenant Delay, the earlier date on which such TI
Work would have been Substantially Completed if not for Tenant Delay); and (b) as to the Phase 2
Premises, the latest of (i) Substantial Completion of the New Parking Deck, (ii) Substantial
Completion of the Lusk 1 Demolition Work (as defined in Article 22 below), and (iii) the date on
which the TI Work for the Phase 2 Premises and the second floor and basement of Lusk 2 are
Substantially Completed (or, in the event of any Tenant Delay, the earlier date on which such TI
Work would have been Substantially Completed if not for Tenant Delay). The terms “Substantially
Completed” and “Tenant Delay” are defined in the attached Exhibit B. If the parking structure is
not open for use by the later of the Phase 2 Commencement Date and February 28, 2008, as extended
on account of force majeure delays, then Tenant may terminate this Lease effective on the
90th day following Tenant’s written notice to Landlord made after such deadline but
before the parking structure is open for use; provided, however, such termination will not be
effective if, within 60 days after Landlord’s receipt of Tenant’s termination notice, the parking
structure is open for use. The date of completion of the portion of the TI Work that relates to
the lobby of Lusk 2 (the “Lusk 2 Lobby TI Work”) does not affect any Commencement Date; but, for
each day that Substantial Completion of the Lusk 2 Lobby TI Work exceeds 30 days (as extended by
any force majeure delays) beyond the later of Substantial Completion of the Phase 2 Premises and
Landlord’s (or the Contractor’s) receipt of possession of the elevator specified in the Preliminary
Plans for the Lusk 2 Lobby TI Work, rent under this Lease will be abated by $1,000.00. Until
completion of the Lusk 2 Lobby TI Work, Landlord shall provide alternative access through the
existing lobby for Tenant and Tenant’s Invitees, excluding construction personnel, to the completed
portions of the Phase 1 Premises.

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          2.7. Delivery of Premises. The parties acknowledge that the Phase 2 Premises are
currently occupied by another tenant of the Project (the “Existing Tenant”). If Landlord fails to
cause the Existing Tenant to vacate the Phase 2 Premises along with all of its personal property by
January 1, 2008, then Tenant may terminate this Lease effective on the 90th day
following Tenant’s written notice to Landlord made after such deadline but before the vacation of
the Phase 2 Premises by the Existing Tenant is completed; provided, however, such termination will
not be effective if, within 90 days after Landlord’s receipt of Tenant’s termination notice, the
vacation is completed. The foregoing deadline is in addition to the deadline for Substantial
Completion described in Section 2.6 above. Concurrent with Landlord’s delivery of possession to
Tenant of the Phase 2 Premises, Landlord shall convey to Tenant substantially all of the Existing
Tenant’s office furnishings, cubicles, and trade fixtures located in the Premises, at no additional
cost to Tenant, which Landlord shall cause to be conveyed by the Existing Tenant to Landlord upon
the Existing Tenant’s vacation of the Phase 2 Premises.

          2.8. Expansion Right. During the Term, Landlord grants Tenant certain expansion
rights strictly in accordance with, and subject to the conditions of, the attached Addendum No. 1.

          2.9. “Expiration Date” means the date that is the last day of the 132nd calendar month
following the Commencement Date for the Phase 2 Premises. The Expiration Date may automatically be
extended in accordance with the Phase 3 Provisions. During the Term, and only while Tenant is not
in default under this Lease, Tenant may extend the Expiration Date strictly in accordance with, and
subject to the conditions of, the attached Addendum No. 2.

          2.10. “Laws” means all statutes, codes, ordinances, orders, rules and regulations of
any municipal or governmental entity whether in effect now or later, including the Americans with
Disabilities Act, and all private covenants, conditions and restrictions governing the Premises.

          2.11. Letter of Credit. Within 30 days after the mutual execution of this Lease,
Tenant shall deliver to Landlord the Letter of Credit contemplated by the Article below entitled
“Letter of Credit Obligations.”

          2.12. Memorandum. Promptly after mutual execution of this Lease and Landlord’s
receipt of the Letter of Credit, Landlord and Tenant shall execute a Memorandum of this Lease
substantially in the form of the attached Exhibit C (the “Memorandum”) and have their signatures
acknowledged by a notary public. Tenant shall cause the Memorandum to be recorded in the real
property records of San Diego County, California, within ten days after execution by Landlord.

          2.13. Notice Address for Tenant:

	 	 	 
	Prior to the Commencement Date
	 	 
	For the Phase 1 Premises:

	 	NuVasive, Inc.
	 

	 	4545 Towne Centre Court
	 

	 	San Diego, CA 92121
	 

	 	Attn: Jason Hannon
	 

	 	Email: jhannon@nuvasive.com
	 
	 	 
	Following the Commencement Date
	 	 
	For the Phase 1 Premises:

	 	NuVasive, Inc.
	 

	 	7475 Lusk Boulevard
	 

	 	San Diego, CA 92121
	 

	 	Attn: Jason Hannon
	 

	 	Email: jhannon@nuvasive.com

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	With a copy of notices of default to:

	 	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
	 

	 	9255 Towne Centre Drive, Suite 600
	 

	 	San Diego, CA 92121
	 

	 	Attn: Scott Biel
	 

	 	Email: sbiel@mintz.com

          2.14. Notice and Payment Address for Landlord: c/o Landlord’s property manager,
Veralliance Properties, Inc., Attn: Daniel Ryan, 8910 University Center Lane, Suite 630, San Diego,
California, 92122, email dryan@veralliance.com; with a copy of each notice to Landlord c/o
Health Care Property Investors, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, California
90806, Attn: Legal Department, email legaldept@hcpi.com.

          2.15. “Operations Plan” means a plan prepared by Tenant in reasonable detail
describing Tenant’s intended use of each area of the Premises, including detailed lists of
chemicals (including all codes and classifications) and equipment (including specific make, model,
and specifications) to be used or located in each such area of the Premises or to be used or
transported by Tenant or any of Tenant’s Invitees on or around the Project. Tenant shall deliver
the Operations Plan to Landlord for its approval (which may not unreasonably be withheld or
delayed) within 45 days after the Effective Date to facilitate appropriate incorporation into the
TI Work. The Operations Plan must include the Lusk 2 basement layout and provide that the
equipment in the Lusk 2 basement that may cause the highest levels of sound transmission to the
first floor of Lusk 2 will be located in the northeastern-most portion of the Lusk 2 basement and
that air compressors will need to be located at designated locations on the roof (or at another
location outside the Building acceptable to Landlord). With respect to activities in the Lusk 2
basement, the Operations Plan additionally must incorporate sound mitigation improvements and
operations procedures (to be implemented with the cooperation o f Landlord) such that noise
transmission from the Lusk 2 basement portion of the Premises to all vivarium portions of the first
floor of Lusk 2 is at all times limited to a Noise Criteria (NC) value of NC-40 (with the
modifications and specifications set forth in the attached Exhibit H). If, at any time during the
Term, Tenant desires to modify the Operations Plan, Tenant must first obtain Landlord’s written
approval (which approval may not unreasonably be withheld).

          2.16. “Permitted Use” means Tenant’s use of the Premises for general office use (which
may include employee training, employee lunch room and kitchen facilities with vending machines for
Tenant’s exclusive use) and for research and surgical activities associated with its spinal and
other neurological and orthopedic surgical products, and for the storage and use of medical,
biological and other materials incidental to such activities, and for light manufacturing of
prototype products, shipping, receiving, warehousing, and distribution, and for such other uses
reasonably consistent with the foregoing, all in strict compliance with the Operations Plan, this
Lease and all Laws. Neither Landlord nor Tenant may institute a zoning change or encumber the
Project with any additional restrictions on the use thereof that materially affect Tenant’s
Permitted Use. So long as the original Tenant occupies all of the Premises and has not committed a
default under this Lease more than twice in any 12-month period, Landlord may not lease any other
premises within the Project to a tenant (nor authorize the subletting or assignment of any portion
of the Project to any subtenant or assignee) whose primary business is the sale, manufacture,
distribution, or research related to the development of, spinal and other neurological and
orthopedic surgical products and equipment that directly competes with NuVasive at the time of such
lease or sublease or assignment.

          2.17. “Phase 3 Provisions” means the provisions of the attached Addendum No. 3,
pursuant to which Tenant may require Landlord to construct Lusk 3 or to lease portions of Lusk 3 to
Tenant.

          2.18. “Premises” means the Phase 1 Premises, as of the Phase 1 Commencement Date, and
both the Phase 1 Premises and the Phase 2 Premises, as of the Phase 2 Commencement Date. (The
Premises may be

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modified in accordance with the Phase 3 Provisions to include the Phase 3 Premises
and to remove a portion of
the Phase 1 Premises.) The “Phase 1 Premises” is the portion of Lusk 2, including all of the
rentable premises within the third floor as depicted on the attached Exhibit A-1 (“Lusk 2.3”), the
western space on the second floor as depicted on the attached Exhibit A-2 (“Lusk 2.2”), the space
on the westerly portion of the first floor of the Building to serve as Tenant’s exclusive
entrance/lobby as depicted on the attached Exhibit A-4 (the “Lusk 2 Lobby”), and the portion of the
basement depicted on the attached Exhibit A-3 (the “Lusk 2 Basement Premises”). The “Phase 2
Premises” consists of all of Lusk 1 as depicted on the attached Exhibit A-5 and the portion of Lusk
1-B depicted on the attached Exhibit A-6. The attached Exhibit A-7 identifies the sizes of the
Project, Buildings, and various premises as of the date of this Lease. The Premises may be
expanded or contracted in accordance with this Lease. Additionally, at Tenant’s written election
(which must be received by Landlord along with Tenant’s space plans for such space concurrent with
Tenant’s other proposed space plans for the Phase 2 TI Work), the portion of the Lusk 2 Basement
Premises planned for Tenant’s machine shop may be relocated to the Project’s parking structure in a
location and orientation reasonably acceptable to Landlord and Tenant and approved by all
applicable governing authorities under all applicable Laws (the “New Machine Shop Space”), in which
case the Phase 2 Premises will be expanded to include the New Machine Shop Space and Landlord will
construct such space expeditiously to completion after receipt of the applicable building permit
for the New Machine Shop Space (at Landlord’s cost to the extent of $180.00 per Rentable Square
Foot of the New Machine Shop Space or such lesser amount necessary to improve the New Machine Shop
Space to a warm vanilla shell) and further improvement of the New Machine Shop Space will be
subject to the same process and TI Allowance as for the balance of the Phase 2 Premises. If
Landlord does not timely complete the work required of it under the preceding sentence, Tenant may
do so.

          2.19. Rentable Square Feet. The “Rentable Square Feet” of the Project and Premises
are approximately as indicated on the attached Exhibit A-7. The Rentable Square Feet of the Phase
2 Premises shall be adjusted upon any reduction to Lusk 1 to accommodate construction of Lusk 3, if
such construction occurs at any time after the Effective Date. Rentable Square Feet shall be
measured throughout the Term in accordance with the BOMA Standard. Until Landlord provides the
initial notice of Rentable Square Feet described below, the “Rentable Square Feet” of the Premises,
Buildings and Project will be deemed to be the approximations referenced above in this Lease and
Monthly Base Rent and Tenant’s Building Share and Tenant’s Pro Rata Share will be based on these
approximate sizes. The Project includes land that may be developed with an additional Building
containing additional rentable space, the result of which could be a substantial increase in the
Rentable Square Feet of the Project (and, because of an increase in Common Area, a possible change
to the Rentable Square Feet of the Premises and Tenant’s Pro Rata Share of the Project). Within 30
days after Substantial Completion of the TI Work of the Phase 1 Premises, the Phase 2 Premises, and
if applicable, the Phase 3 Premises and any expansion space, Landlord shall give Tenant written
notice of the Rentable Square Feet of the respective portion of the Project included in the
Premises as determined in accordance with the BOMA Standard and the resulting Tenant’s Building
Share for each Building in which the Premises are located and Tenant’s Pro Rata Share, along with a
copy of the plans and drawings (including access to electronic CAD format, if available) on which
such determination was based (the “RSF Notice”). Tenant shall have the right to review Landlord’s
Rentable Square Feet calculation for the applicable portion of the Premises, applicable Building(s)
and Project (and Landlord shall reasonably cooperate in making Landlord’s space planner/architect
available to Tenant’s space planner/architect for discussion of such calculation) during the 30-day
period following Landlord’s delivery of each RSF Notice, and to reasonably object to such
determination by written notice to Landlord within such 30-day period. Unless Tenant objects to
Landlord’s calculation of Rentable Square Feet in the RSF Notice within 30 days after the date of
the RSF Notice by delivering written notice to Landlord stating that Landlord’s measurement of the
Rentable Square Feet of the respective Premises or Project is inaccurate, accompanied by reasonable
evidence of such inaccuracy certified by an unaffiliated architect or space planner, Landlord’s
determination set forth in the RSF Notice will be binding on both Landlord and Tenant throughout
the Term, unless and until a physical change to the Rentable Square Feet of the Premises any
Building or Project occurs (at which time Landlord

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will measure the modified portions of the
Premises, Building(s) and/or Project, as applicable in accordance with the BOMA Standard and give
Tenant written notice of the Rentable Square Feet of the Premises and Tenant’s Building Share and
Tenant’s Pro Rata Share and, unless Tenant objects and establishes in the manner described
above within 30 days after the date of Landlord’s notice of the foregoing that Landlord’s
measurement of the Rentable Square Feet of the Premises, Building or Project is inaccurate,
Landlord’s determination will be binding on both Landlord and Tenant throughout the Term unless and
until another physical change to the Rentable Square Feet of the Premises or Project occurs, etc.)
Tenant acknowledges that Rentable Square Feet includes Tenant’s allocable share of certain Common
Area, including the Special Common Facilities, in accordance with the applicable provisions of the
BOMA Standard. If Tenant timely objects to Landlord’s determination of Rentable Square Feet in any
RSF Notice, Landlord’s space planner/architect and Tenant’s space planner/architect shall promptly
meet and attempt to agree upon the mutually-acceptable Rentable Square Feet of the Premises. If
Landlord’s space planner/architect and Tenant’s space planner/architect cannot agree on the
Rentable Square Feet of the Premises within thirty (30) days after Tenant’s delivery of its written
notice objecting thereto, Landlord shall select an independent third party space measurement
professional to field measure the Premises under the BOMA Standard. Such third party independent
measurement professional’s determination shall be conclusive and binding on Landlord and Tenant,
and Landlord and Tenant shall each pay one-half of the fees and expenses of the independent
third-party space measurement professional.

          2.20. Right of First Offer to Purchase. During the Term, Landlord grants Tenant the
rights to receive the first opportunity to purchase the Project strictly in accordance with, and
subject to the conditions of, the attached Addendum No. 4.

          2.21. Signage. Tenant may install (in accordance with the Article below entitled
“Alterations”) in a manner reasonably prescribed by Landlord, and maintain throughout the Term: (a)
signage on the side of each Building occupied by Tenant under this Lease, to the extent of Tenant’s
Building Share of the allowable signage on the Building subject to Landlord’s reasonable approval
(and if Tenant occupies more than half of a Building, it will be permitted to have its signage
above all other tenants’ signage on such Building); (b) signage on the side of Lusk 1-B to the
extent of Tenant’s Pro Rata Share of the allowable signage on Lusk 1-B; (c) signage identifying
Tenant’s name and corporate logo on the existing Project monument sign at Lusk Boulevard of a size
no greater than Tenant’s Pro Rata Share of the monument signage (and Tenant’s signage on the
monument will be the most prominent while Tenant leases at least 50% of the Rentable Square Feet of
the Project); and (d) signage identifying Tenant’s name and corporate logo on the entrance doors to
Tenant’s Lusk 2 lobby and within the Lusk 2 lobby, which signage rights will be exclusive to Tenant
while Tenant leases all of the Phase 1 Premises; and (e) signage identifying Tenant’s name and
corporate logo on the main entrance to Lusk 1, which signage rights will be exclusive to Tenant
while Tenant leases all of Lusk 1. Tenant’s signage shall comply with all applicable Laws and the
size and location of which shall be subject to Landlord’s reasonable approval (provided that
Tenant’s signage shall not be required to be substantially smaller than its share of the size of
signage permitted by applicable Laws). Tenant is responsible for all costs associated with the
fabrication, installation, permitting, maintenance, and removal of its signage (but may apply its
TI Allowance to such costs as part of the TI Work).

          2.22. “Special Common Facilities” means a cafeteria (operated by a third-party
food-service operator) and a gym facility, each located within the Project. During the Term,
Landlord shall (or shall cause its affiliate to) maintain these facilities on the Project in
substantially the same size and condition as those existing as of the Commencement Date and shall
use commercially reasonable efforts to retain food-service operators at the cafeteria reasonably
acceptable to tenants of the Project for breakfast and lunch service, but Landlord (or its
affiliate providing such services) may discontinue food service upon not less than 30 days advance
notice in writing to Tenant (the “Cafeteria Closure Notice”), if such food service operations fail
to be economically self-sufficient, Neither Landlord nor its affiliate is obligated to subsidize
such service; provided, however, if a subsidy is necessary in order for food service operations to
continue to be made available to

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occupants of the Project, Landlord shall provide notice of the
approximate amount necessary to subsidize the food service operations at that time in the Cafeteria
Closure Notice, and within 30 days following receipt of the Cafeteria Closure Notice, Tenant may
elect to assume the Landlord’s food service operations with a food service
operator reasonably acceptable to Landlord (and with services and prices reasonably acceptable
to Landlord) at Tenant’s sole cost and expense for any costs in excess of the revenues received by
Tenant for such operations. If Tenant does not elect to subsidize or assume the food service
operations within such 30-day period following receipt of the Cafeteria Closure Notice, then such
food service operations may be terminated by Landlord, and the cafeteria shall be converted to a
Common Area meeting space, which shall continue to be available to the tenants of the Project for
meetings and events or Landlord may elect to subsidize the cafeteria services, in which case the
subsidy will constitute an Operating Expense under this Lease to be allocated among tenants of the
Project in accordance with Tenant’s Pro Rata Share. Scheduling of use of the cafeteria when no
food service is operating will be managed by Landlord’s property manager in accordance with
reasonable rules and regulations, on a first-come, first-served reservation basis, with time and
availability of use equitably allocated among the tenants of the Project in proportion with their
respective Pro Rata Shares.

          2.23. “Tenant’s Parking Spaces”: four parking spaces per 1,000 useable square feet of
the Premises (calculated in accordance with BOMA Standard as reasonably determined by Landlord),
including Tenant’s Pro Rata Share of visitors and handicap spaces, some or all of which may be
assigned by Landlord to Tenant, a portion of which may be designated by Tenant as reserved for the
use of Tenant and Tenant’s Invitees in accordance with Section 4.2 below. If the Phase 2 Premises
are expanded to include the New Machine Shop Space, Tenant’s Parking Spaces will be reduced by the
number of parking spaces lost within the parking structure as the result of construction of the New
Machine Shop Space.

          2.24. “Tenant’s Building Share” means the ratio of the Rentable Square Feet of the
Premises within a Building to the Rentable Square Feet of the Building, and “Tenant’s Pro Rata
Share” means the ratio of the Rentable Square Feet of the Premises to the Rentable Square Feet
of the Project (in each case as the size of the Premises, Buildings, and Project may be changed
from time to time).

          2.25. “TI Allowance” means: (a) as to the Phase 1 Premises, (i) the sum of (A) the
product of $21.00 multiplied by the number of Rentable Square Feet of the Phase 1 Premises, plus
(B) one-half of the Lobby Cost (as defined below in this paragraph); minus (ii) the sum of
$263,000, plus an amount equal to the cost that Landlord reasonably incurs to construct and install
restrooms elsewhere on the second floor of Lusk 2 substantially the same as the existing restrooms
on that floor, including the same level of specifications for improvements, hardware, equipment,
and finishes; (b) as to the Phase 2 Premises, the product of $56.00 multiplied by the number of
Rentable Square Feet of the Phase 2 Premises; and (c) as to the Phase 3 Premises, if any, the
amount indicated in the Phase 3 Provisions. The TI Allowance is to be used exclusively for the
design and construction of the TI Work in accordance with the attached Exhibit B. Notwithstanding
anything to the contrary in this Lease, Landlord maintains the right to reasonably allocate the TI
Allowance among the TI Costs of its choosing, for tax purposes. The “Lobby Cost” means the hard
and soft costs to construct the following portions of the Lusk 2 Lobby TI Work by the Contractor to
Project standard finish (or its equivalent) as reasonably determined by Landlord: Tenant’s
dedicated entry, lobby, lobby-stairs, and lobby elevator.

          2.26. TI Work: Landlord shall (at Tenant’s cost to the extent exceeding the TI
Allowance) improve the Premises with the improvements (the “Tenant Improvements”) described in, and
designed and completed in accordance with, the attached Exhibit B (the “TI Work”). All Tenant
Improvements are and will remain part of the Premises and owned by Landlord, and shall not be
required to be removed by Tenant upon the expiration or earlier termination of the Lease except for
any Industry Improvements (as defined in the attached Exhibit B and addressed in Article 13 below).

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     3. Possession and Occupancy. Tenant is entitled to possession of the applicable
portion of the Premises on the applicable Commencement Date. Tenant also will have access to the
applicable Premises during normal business hours during the 60 days preceding the applicable
Commencement Date solely for purposes of coordinating the installation of Tenant’s cabling,
equipment and other Tenant’s Property, but Tenant may not do so to the extent such access
interferes with or delays the TI Work, and Landlord shall direct its contractors
to coordinate their TI Work with Tenant’s relocation during the 10 days preceding the
applicable Commencement Date (and shall provide reasonable advance notice to Tenant of the start of
such 10-day period). Tenant’s early access to the Premises shall include the right to access
portions of the applicable Building not included in the Premises as reasonably required for
Tenant’s coring and installation of cabling to the Premises. Tenant has thoroughly inspected the
Premises and, subject to Landlord’s Warranty Obligations, accepts the Premises in its as-is
condition as of the Effective Date with no right to require Landlord to perform any work to the
Premises other than the TI Work in accordance with this Lease (and Landlord’s maintenance and
repair obligations under Section 8.2 and Article 18). With the exception of the following
(“Landlord’s Warranty Obligations”), Tenant waives all warranties, whether express or implied
(including any warranties of merchantability or fitness for a particular purpose), with respect to
the Premises: (a) at Landlord’s sole cost, Landlord shall correct structural defects in the core or
shell of any Building leased by Tenant; (b) Landlord is responsible for remediating pre-existing
Hazardous Materials on, about or under the Project as described in Article 25 below; (c) Landlord
represents that, as of the Commencement Date for the Phase 1 Premises and the Phase 2 Premises, the
Project exterior and Common Area comply with all Laws in all material respects such that any
non-compliance will not prevent the issuance of a certificate of occupancy for the applicable
Premises; provided, however, Landlord’s Warranty Obligations do not cover any matters caused or
permitted by Tenant or any Tenant Invitee. The cost of Landlord to comply with Landlord’s Warranty
Obligations will not be included in the TI Costs or Operating Expenses.

     4. Use of Premises and Common Area.

          4.1. In General. The Premises may be used only for the Permitted Use. Tenant shall
comply with all Laws regarding the operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises. Additionally, to the extent the obligations are
triggered by Tenant’s particular use of the Premises or Alterations or improvements in the Premises
performed or requested by Tenant, (other than any TI Work) Tenant shall pay Landlord all costs it
incurs to cause compliance with such Laws as they may relate to the Project after first being
notified in writing of such expense. Tenant shall promptly provide Landlord with copies of each
notice it receives regarding an alleged violation of Law and shall immediately cure all such
violations for which Tenant is responsible under this Lease. Tenant and its employees, agents,
guests, invitees, customers, service-providers, and licensees (collectively, “Tenant’s Invitees”)
shall comply with the rules and regulations of the Project attached as Exhibit D and such other
reasonable rules and regulations adopted by Landlord from time to time. Notwithstanding the
foregoing, Tenant may not change the use on the second floor or basement of Lusk 2 (or add new
equipment to either locale) that materially increases sound generation without Landlord’s prior
approval, which approval will be based on the Permitted Use provisions of this lease and the sound
generation of the use of such space.

          4.2. Parking. Tenant’s Parking Spaces are included as a benefit ancillary to its
interest in the Premises under this Lease without any additional charge. Neither Tenant nor
Tenant’s Invitees may use the parking area within the Project (the “Parking Area”) except for
Tenant’s Parking Spaces and the driveways leading to them. Tenant may designate reserved parking
spaces at locations within the Parking Area mutually acceptable to Landlord and Tenant for up to
10% of Tenant’s Parking Spaces (in which case Landlord shall cause the spaces to be labeled as
reserved, at Tenant’s sole cost); provided that Landlord shall not unreasonably withhold, condition
or delay its approval of the reserved parking spaces designated by Tenant as its reserved parking
spaces, and such reserved parking spaces may be relocated by Tenant (at Tenant’s cost) within the
parking areas of the Project from time to time, based on changes in the parking structure and other
parking spaces of the Project, subject to Landlord prior approval, which shall not be unreasonably
withheld, conditioned

8

 

or delayed. Tenant acknowledges that Landlord will be adding an additional
deck (the “New Parking Deck”) to the existing parking structure at the Project and that the
existing parking structure will not be available for parking during such construction. Until
Landlord completes the New Parking Deck, Tenant shall accept reasonable alternative parking
arrangements, such as off-site parking with valet or shuttle service to the Project.

     5. Monthly Rent. Tenant shall pay to Landlord as minimum monthly rent, without
deduction, setoff, prior notice, or demand, the Basic Monthly Rent in advance, on or before the
first day of each calendar month throughout the Term commencing on the Commencement Date with
appropriate proration in the event of a partial month at the beginning of the Lease Term.
Concurrent with execution of this Lease, Tenant shall deposit with Landlord $75,000.00 to be
credited to Tenant’s first full month’s Basic Monthly Rent (and any excess applied toward the next
month’s Basic Monthly Rent obligation). This Lease is intended to be a “Triple-net lease” and,
except as expressly provided to the contrary in this Lease, Tenant is solely responsible for the
care, maintenance, taxes, insurance, utilities, repair and operating expenses of the Premises,
including all costs thereof, as though Tenant were the owner of the Premises, plus payment of
Tenant’s pro rata share of Operating expenses and the Property Management Fee. All monetary
obligations of Tenant under this Lease constitute “rent” under this Lease. All payments received by
Landlord from Tenant must be applied to the oldest payment obligation owed by Tenant to Landlord.
No designation by Tenant (whether on a check or otherwise in writing or orally) will be of any
effect. No endorsement or statement on a check or letter accompanying payment shall be considered
an accord and satisfaction. Tenant’s covenant to pay rent is independent of every other covenant
in this Lease. Until changed by reasonable advance written notice to Tenant, Basic Monthly Rent
and such other sums to be paid by Tenant to Landlord shall be paid to Landlord at the address of
Landlord set forth in Section 2.13 above.

     6. Operating Expenses.

          6.1. Definition of Operating Expenses. Beginning on the Commencement Date, Tenant is
responsible for payment of the Property Management Fee plus Tenant’s Pro Rata Share of all
Operating Expenses of the Project. As used in this Lease, the term “Operating Expenses” means
(subject to the express limitations set forth elsewhere in this lease) all costs and expenses paid
or incurred (or reasonably reserved) by Landlord or its property manager relative to the operation,
repair, restoration, replacement, maintenance, and management of the Project, including:
(i) water, sewage disposal, drainage, refuse collection and disposal, gas, electricity, and other
utility services, and the maintenance of all components, systems, and apparatus by which such
utilities and services are provided (but Landlord may allocate utilities in a manner equitably
prescribed by Landlord rather than based on Tenant’s Pro Rata Share or Tenant’s Building Share,
such as estimated share of usage), but excluding the costs of utilities to the extent exclusively
serving the Premises and separately metered or sub-metered (for which Tenant is solely
responsible), (ii) general maintenance and repair of the landscaping and improvements located on
the Project, and any janitorial or security services, including all personnel costs associated with
the maintenance, repair, security, or management of the Project, and including the rental and
purchase costs of parts, supplies, tools and equipment, (iii) expenses payable by Landlord pursuant
to the provisions of any recorded covenants, conditions, and restrictions, reciprocal easement
agreements, and any other recorded documents affecting the Project (other than any ground lease or
any Landlord’s loan(s) secured by the Premises), (iv) all real property or real estate taxes,
assessments, association dues, and other impositions, whether general, special, ordinary, or
extraordinary, and of every kind and nature, which may be levied, assessed, imposed on the Project
or against Landlord on account of the Project, including gross receipts taxes, assessments for
special improvement districts and building improvement districts, governmental charges, fees and
assessments for police, fire, traffic mitigation or other governmental service of purported benefit
to the Project, taxes and assessments levied substitution or supplementation in whole or in part of
any such taxes or assessment, and all costs and fees incurred in connection with seeking reductions
in any tax liabilities described above (“Real Estate Taxes”), (v) any personal property taxes,
assessments, or other impositions levied, assessed, or imposed upon any personal property of
Landlord used

9

 

in connection with the Project, (vi) all insurance premiums, costs, fees, and
deductibles, (vii)  all labor and labor related costs for the personnel below the level of asset
manager, including wages, salaries, bonuses, burden, overhead, taxes, insurance, uniforms,
training, retirement plans, pension plans, and other employee benefits; provided that if any
employee performs services in connection with the Project and any other property, costs associated
with such employee may be proportionally included in Operating Expenses based on the percentage of
time the employee devotes to the
Project versus the other properties, and all legal, accounting, inspection, consultation,
janitorial, and other service fees and costs (collectively, “Labor Costs”); (viii) the fair market
rent for any management office established at the Project (not to exceed 2,000 Rentable Square
Feet); and (ix) capital improvements or structural modifications required by any change in Laws
occurring after the Effective Date or by normal wear and tear, or other capital improvements or
structural modifications deemed reasonably necessary by Landlord or appropriate to reduce other
Operating Expenses (but excluding any of the TI Work); provided, however, any costs of such capital
improvements to structural portions of the Project shall be amortized (including an interest factor
reasonably determined by Landlord) over the anticipated useful life of such capital improvements or
structural modifications at an interest rate of 9.0% per annum. The “Property Management Fee” is
payable to Landlord or its agent in the amount of 4.0% of gross rent due from the Premises (which
includes Basic Monthly Rent and Tenant’s Pro Rata Share of Operating Expenses), in addition to
reimbursement of Tenant’s Pro Rata Share of Landlord’s and its agent’s actual costs described
above; provided, however, if the cost of a management office is included in Operating Expenses, the
4.0% fee will not apply to the cost of the management office. During any period of vacancy at the
Project, Operating Expenses will be determined as if the Project had been fully occupied and
Landlord had been supplying services to the entire Project during the applicable period (in
accordance with the methodology specified by the Building Owners and Managers Association). The
expenses described in clauses (ii), (vii), and (viii) above along with operating reserves are
referred to as “Controllable Expenses”. Tenant will not be responsible for paying Tenant’s Pro
Rata Share of Controllable Expenses for any given calendar year after 2009 to the extent the
Controllable Expenses for the year on a Rentable Square Foot Basis exceed Tenant’s Pro Rata Share
of Controllable Expenses on a Rentable Square Foot Basis for calendar year 2009 by more than 5.0%
per year, compounded.

	 	 	 	Notwithstanding the foregoing, Operating Expenses will not include any of the following:
	 
	 	(a)	 	legal fees, brokerage commissions, advertising costs, and any transfer taxes incurred
in connection with the sale, financing or refinancing of any portion of the Project, the
ground lease thereof, or the leasing of any space within the Project;
	 
	 	(b)	 	costs incurred in connection with damage or repairs to the extent reimbursed from any
insurance policy carried by Landlord in connection with the Project, or any deductible
payable by another tenant of the Project for damages attributable to its negligence or
willful misconduct;
	 
	 	(c)	 	expenses for repair or replacement paid by condemnation awards;
	 
	 	(d)	 	executive salaries for positions equal or higher than asset manager;
	 
	 	(e)	 	the cost of offsite service personnel to the extent that such personnel are not engaged
in the management, operation, repair or maintenance of the Project;
	 
	 	(f)	 	Landlord’s general overhead expenses to the extent not reasonably related or allocated
to the Project;
	 
	 	(g)	 	Any fee to Landlord or its property manager beyond the Property Management Fee for
general supervision of maintenance or repairs;

10

 

	 	(h)	 	all principal, interest, loan fees, and other carrying costs related to any mortgage or
deed of trust, or any base rent payable pursuant to any ground lease encumbering the
Project, unless such costs are directly attributable to Tenant’s, its agents’ or employees’
activities in, on or about the Project, or as a result of a Tenant’s breach or default
under this Lease;
	 
	 	(i)	 	legal fees, accountant fees and other expenses incurred in disputes regarding or
associated with the enforcement or defense of Landlord’s title to or interest in the
Project or any part thereof, or pursuant to any disputes with or claims made against Landlord by any ground lessors, lenders,
brokers, tenants or prospective tenants;
	 
	 	(j)	 	costs incurred in connection with the original construction of the Project, in
connection with any major new development at the Project unrelated to the Premises (i.e.,
any development of the New Parking Deck, Lusk 3, the Lusk 1 Demolition Work, the New
machine Shop Space, or any other new building(s) or new floors to existing buildings or
major expansions to existing buildings to create new rentable space), or any depreciation
or amortization of any portion of the Project, except as provided in Section 6.1(ix) above;
	 
	 	(k)	 	costs of improving the interior of any tenant’s premises, including permit, license and
inspection costs incurred with respect to the installation of tenant improvements made for
new tenants in the Project or incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant rentable space for other tenants or other occupants of the
Project, including the TI Allowance;
	 
	 	(l)	 	costs for which Landlord is reimbursed by any other tenant (other than through payment
of the other tenant’s share of Operating Expenses);
	 
	 	(m)	 	fines, penalties, and interest incurred because of Landlord’s gross negligence or
willful failure to make any payment owed by Landlord, or to file any tax return, when due;
	 
	 	(n)	 	costs arising from Hazardous Materials that were generated, released or brought upon
the Project by Landlord, its agents, or employees, except for normal and customary uses of
Hazardous Materials in buildings and projects similar to the Buildings or Project (such as
hydraulic fluid in an elevator or cleaning and maintenance supplies), or which are covered
by any policy of environmental insurance insuring Landlord against the cost of
contamination arising from the use of the Project by any prior occupant;
	 
	 	(o)	 	with respect to the amortized cost of capital improvements or structural modifications
made for the purpose of reducing other Operating Expenses, that portion of such costs
exceeding the cost-savings resulting from the improvement or modification unless either (a)
the improvement or modification is made at a time when Tenant leases less than 2/3rds of
the Rentable Square Feet of the Project, or (b) Tenant approves of the improvement or
modification (which approval may not unreasonably be withheld or delayed);
	 
	 	(p)	 	costs to repair the Structural Components and the costs to maintain the structural
integrity of the Structural Components (but not cosmetic or routine maintenance);
	 
	 	(q)	 	notwithstanding the definition of “Real Estate Taxes,” the additional real estate taxes
resulting from a re-assessment of the entire Project if such reassessment is triggered by
development of Lusk 3, unless Lusk 3 is constructed in accordance with the Phase 3
Provisions or is otherwise occupied in whole or in part by Tenant;

11

 

	 	(r)	 	costs arising from Landlord’s charitable or political contributions
	 
	 	(s)	 	costs for acquisition of sculpture, paintings or other extraordinary objects of art;
and
	 
	 	(t)	 	any other costs expressly excluded from Operating Expenses elsewhere in this Lease.

          Any costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred in
attempting to protest, reduce or minimize Real Estate Taxes included in Operating Expenses shall be
included
in Operating Expenses in the calendar year in which such expenses are paid. Tenant’s Pro Rata
Share of any Real Estate Taxes paid by Tenant as an Operating Expense that are refunded to Landlord
shall be refunded to Tenant regardless of when received, based on the calendar year to which the
refund is applicable. There shall be excluded from Real Estate Taxes: (i) all excess profits
taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate
taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord’s (or
any of its affiliates’) net income (as opposed to rents, receipts or income attributable to
operations at the Project), and (ii) any taxes paid directly by Tenant pursuant to this Lease. If
any special assessment included in Real Estate Taxes is permitted to be paid without penalties or
interest in more than two installments, and Landlord pays the assessment in a lump sum, Landlord
may not include in Operating Expenses the lump-sum payment (but rather must charge to Operating
Expenses the installments that would have been paid, over the period they would have been paid, as
if the lump sum payment was not made). Additionally, during the period beginning on the Effective
Date and ending on the last day of the 36th month following the Commencement Date for the Phase 2
Premises (the “Tax Protection Period”), Operating Expenses will not include the additional Real
Estate Taxes, if any, resulting from the re-assessment of the Project based on Landlord’s sale of
the Project during the Tax Protection Period. The preceding sentence has no effect on Operating
Expenses for any period after the Tax Protection Period.

          6.2. Payment of Operating Expenses. Landlord shall deliver to Tenant an annual
statement setting forth the estimated Property Management Fee and Operating Expenses Landlord
expects to incur for the applicable year (“Expense Statement”). Tenant shall pay one-twelfth of
the Property Management Fee and one-twelfth Tenant’s Pro Rata Share of the amount set forth in the
Expense Statement with each payment of Basic Monthly Rent. Tenant’s payment obligations under this
paragraph constitute additional rent under this Lease. If the sum of Tenant’s payments on account
of Operating Expenses and Property Management Fees during any calendar year exceeds the actual
Operating Expenses and Property Management Fees for the calendar year, then the excess will be
credited against future Operating Expenses due from Tenant, or paid directly to Tenant. If the sum
of Tenant’s Operating Expense and Property Management Fee payments for any calendar year is less
than the actual Operating Expenses and Property Management Fee for the calendar year, then Tenant
shall pay Landlord the amount of the deficiency within 10 days after delivery of Landlord’s
statement reconciling the year’s Operating Expenses. Landlord’s delay in delivering any Expense
Statement or reconciliation statement will not release Tenant of its obligation to pay any portion
of the Operating Expenses or Property Management Fee. If at any time Landlord incurs an
unanticipated Operating Expense (or any other expense to be borne by Tenant under this Lease),
Landlord may invoice Tenant for reimbursement of such expense any time after the expense is
incurred, in which case Tenant shall pay the amount so invoiced within 10 days after Landlord
delivers the invoice.

          6.3. Audit. If Tenant disputes the amount set forth in any reconciliation statement
within 90 days after receipt, then Tenant’s employees or an independent certified public accountant
designated by Tenant, may, after reasonable notice to Landlord and at reasonable times, inspect
Landlord’s records at Landlord’s offices pertaining to Landlord’s calculation of Operating
Expenses. If, after such inspection, Tenant notifies Landlord in writing that Tenant still
disputes such amounts, a certification as to the proper amount shall be made, at Tenant’s expense
(except as set forth below), by an independent certified public accountant selected by Tenant and
reasonably approved by Landlord and who is a member of a nationally or regionally recognized
accounting firm. If such certification by the accountant proves that the Operating

12

 

Expenses set
forth in the reconciliation statement were overstated by more than 5.0%, then Tenant’s audit costs,
including the cost of such certification, shall be promptly paid for by Landlord. Promptly
following the parties receipt of such certification, the parties shall make such appropriate
payments or reimbursements, as the case may be, to each other, as are determined to be owing
pursuant to such certification. Tenant’s failure to dispute the amount of any Operating Expense or
reconciliation statement within 90 days after Tenant’s receipt of a reconciliation statement for
the applicable calendar year, is deemed Tenant’s waiver to ever make a claim based on Operating
Expenses for that applicable year.

     7. Utilities and Services. Tenant shall pay the cost of all utilities and services
(including any connection charges and taxes thereon) furnished to the Premises or used by Tenant,
including electricity, water, heating, ventilating, air-conditioning, oil, sewer, gas, telephone,
communication services, trash collection, and janitorial services. Landlord may furnish to the
Premises any of the utilities and services set forth in the preceding sentence, in which case
Tenant shall reimburse Landlord for Landlord’s cost of furnishing such utilities and services.
Tenant may receive HVAC service during hours other than Building Service Hours by paying Landlord’s
then standard charge for additional HVAC service (which must be Landlord’s reasonable estimate of
the costs of such service without profit to Landlord) and providing such prior notice as is
reasonably specified by Landlord). At Tenant’s request, from time to time, Landlord shall provide
Tenant a schedule of such then-current charges. For Premises in any Building entirely leased by
Tenant, Tenant may operate HVAC service 24 hours per day/7 days per week without the obligation to
pay any additional charge for HVAC services after normal business hours, and without prior notice
to Landlord for such operation. Landlord may not be held liable for failure to furnish any
utilities or services to the Premises unless the failure results from Landlord’s gross negligence
or willful misconduct. If Landlord constructs new or additional utility facilities, including
wiring, plumbing, conduits, or mains, resulting from Tenant’s changed or increased utility
requirements, Tenant shall promptly pay to Landlord the total cost of such items. Landlord’s
failure to furnish, or any interruption, diminishment or termination of services due to the
application of Laws, the failure of any equipment, the performance of repairs, improvements or
alterations, utility interruptions or the occurrence of an event of force majeure (collectively a
“Service Failure”) will not render Landlord liable to Tenant, constitute a constructive eviction of
Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any
covenant or agreement; but, if the Premises, or a material portion of the Premises, are made
untenantable for more than one business day because of a Service Failure that is the result of
Landlord’s gross negligence or willful misconduct, then Tenant, as its sole remedy, will be
entitled to abatement of Basic Monthly Rent during the period beginning on the second consecutive
business day of the Service Failure and ending on the day the service has been restored. If the
Service Failure has not rendered the entire Premises untenantable, the amount of abatement must be
equitably prorated. Landlord shall use commercially reasonable efforts to notify Tenant in advance
of and to cause any intentional Service Failures to occur outside of normal business hours.

     8. Maintenance.

          8.1. Tenant’s Maintenance Obligations. Tenant shall at its sole cost (i) maintain,
repair, replace, and repaint, all in first class condition, subject to normal wear and tear, all
internal, non-structural portions of the Premises other than those for which Landlord is
responsible under Section 8.2 below, (ii) arrange for the removal of trash from the Premises to the
Common Area dumpster(s), (iii) maintain service agreements reasonably satisfactory to Landlord
relative to maintenance, repair, and replacement of security systems exclusively serving the
Premises, (vi) maintain janitorial and pest and termite control service agreements with respect to
the Premises, reasonably acceptable to Landlord (which contracts must at least include semi-annual
floor waxing, HVAC grill, and carpet cleaning). Tenant shall provide Landlord with current copies
of all maintenance, service and cleaning contracts throughout the Term, each of which must be
reasonably acceptable to Landlord. Subject to Article 10 below, Tenant is additionally liable for
any damage to the Premises or the Project resulting from the acts or omissions of Tenant,
Tenant’s Invitees or any other person not controlled by Landlord, and for any damage to the Project
resulting from the acts or omissions of Tenant

13

 

or Tenant’s Invitees. If Tenant fails to maintain,
repair, replace, or repaint any portion of the Premises as provided above or if the Premises suffer
any damage, then Landlord may maintain, repair, replace, or repaint any such portion of the
Premises or Project and Tenant shall promptly reimburse Landlord for Landlord’s actual cost
thereof, plus a supervisory fee in the amount of ten percent of such actual cost, which sum
constitutes additional rent under this Lease. Landlord, at Landlord’s sole discretion, may require
Tenant to use specific contractors or construction techniques for the purpose of maintaining
warranties or the integrity of the Premises.

          8.2. Landlord’s Maintenance Obligations. Landlord shall, subject to reimbursement in
accordance with Article 6 above, maintain, repair, and replace (a) the Common Area, (b) all
foundations, footings, concrete
floor/ceiling slabs (but not interior flooring), roof supports (excluding the roof membrane),
load-bearing walls, columns and beams, shafts (including elevator shafts), stairs and stairwells
within Common Area of the Project (“Structural Components”), (c) exterior walls, elevator cabs,
roofs, exterior glass and moldings, and (d) all mechanical, electrical and plumbing systems of the
Project residing outside of the Premises (“Building Systems”). Landlord’s failure to perform its
obligations set forth in the preceding sentence will not release Tenant from its obligations under
this Lease, including Tenant’s obligation to pay rent; but if Landlord fails, within 30 days after
receipt of written notice of such failure or within such longer period of time if such failure is
not reasonably susceptible to cure within a 30-day period, to perform any of its material
obligations hereunder to Tenant and such failure is material and adverse to Tenant, then Tenant
may, as its sole remedies, either (a) compel Landlord to perform its obligations or obtain an order
of the applicable court authorizing Tenant to perform the unfulfilled maintenance or repair
obligation at Landlord’s expense, or (b) perform such obligation on behalf of Landlord and recover
from Landlord an amount equal to the out-of-pocket costs reasonably incurred by Tenant to do so
(but in no event may Tenant deduct such amount from rent under this Lease). Should Tenant be the
prevailing party in such process to compel or to recover such costs, then Landlord will pay Tenant
upon demand all reasonable out-of-pocket costs incurred by Tenant pursuing such preceding remedy,
including but not limited to reasonable attorneys’ fees. Tenant waives the provisions of
California Civil Code Section 1942 (or any successor statute), and any similar principals of law
with respect to Landlord’s obligations for tenantability of the Premises and Tenant’s right to make
repairs and deduct the expense of such repairs from rent.

     9. Insurance. Landlord shall maintain so-called “All Risk” property insurance on the
Buildings at replacement cost value reasonably estimated by Landlord with a commercially reasonable
deductible. Landlord may also maintain any other insurance with respect to the Project as it or
its lender(s) deem appropriate. Beginning on the earlier of 60 days preceding the initial
Commencement Date and the date Tenant first conducts any work or business on or from any portion of
the Project, and until expiration the Term, Tenant shall maintain the following insurance
(“Tenant’s Insurance”): (a) Commercial General Liability Insurance applicable to the Premises and
its appurtenances providing, on an occurrence basis, a minimum combined single limit of $2 million;
(b) an All Risk or Special Perils form, with coverage for broad form water damage including
earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement
covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture,
merchandise and other personal property within the Premises (“Tenant’s Property”) and any
improvements performed by or for the benefit of Tenant; (c) Workers’ Compensation Insurance in
amounts required by Law; (d) Employers Liability Coverage of at least $1 million per occurrence;
and (e) umbrella coverage of at least $3 million. By notice to Tenant at least 30 days in advance,
Landlord may increase these limits during the Term to reflect reasonable and customary limits at
the time. Any company writing Tenant’s Insurance shall have an A.M. Best rating of not less than
A-VIII. All Commercial General Liability Insurance policies shall name as additional-insureds
Landlord (or its successors and assignees), the managing agent for the Project (or any successor),
Health Care Property Investors, Inc., Landlord’s lender(s), and to the extent identified in writing
to Tenant, their other designees of Landlord and its successors as the interest of such designees
shall appear. All policies of Tenant’s Insurance shall contain endorsements that the insurer(s)
shall give Landlord and its designees at least 30 days’ advance written notice of any cancellation,
termination,

14

 

material change or lapse of insurance (to the extent reasonably available in the
insurance market at the relevant time). Within five days after Landlord’s request, from time to
time, Tenant shall provide Landlord with a certificate of insurance evidencing Tenant’s Insurance.

          The minimum limit of the Tenant’s Commercial General Liability insurance coverage and umbrella
policy shall be adjusted upward or downward at the expiration of each third full calendar year of
the Term as follows: Not less than 60 days prior to the relevant adjustment date, Landlord shall
request such insurance brokerage firm as is then placing insurance for Landlord (the “Reviewing
Broker”) to review Tenant’s then existing liability insurance coverage, to review the then use of
the Premises and the claims history with respect thereto and to recommend, in writing, the amount
of coverage to be carried by Tenant pursuant to division (ii). Such recommendation shall be based
upon the then use of the Premises and the liability claims history with
respect to the Premises and shall be certified by the Reviewing Broker to be consistent with
amounts of coverage generally recommended by such Reviewing Broker for similar types of tenants or
users of property with uses similar to that of the Premises in the geographical area which includes
the Premises. If the Reviewing Broker recommends a reasonable increase in the amount of coverage
then provided by Tenant under division (ii), Tenant shall promptly increase its coverage to such
reasonable recommended amount. If the Reviewing Broker reasonably recommends a decrease in the
amount of coverage then provided by Tenant, Tenant may decrease its coverage to the recommended
amount, provided, however, that in no event shall there be any reduction in the amount of coverage
provided by Tenant under division (ii) below the initial amount set forth herein, notwithstanding
any recommendation by the Reviewing Broker. Any insurance required to be maintained by Tenant may
be maintained pursuant to so called “blanket” policies of insurance so long as the Premises are
specifically identified therein (by endorsement or otherwise) as included in the coverage provided
and such policies otherwise comply with the provisions of this Lease.

     10. Waiver of Subrogation. Landlord and Tenant waive and shall cause their respective
insurance carriers to waive any and all rights of recovery, claims, actions or causes of action
against the other for any loss or damage with respect to Tenant’s Personal Property, the Project,
the Premises, or any contents thereof, including rights, claims, actions and causes of action based
on negligence, which loss or damage is (or would have been, had the insurance required by this
Lease been carried) covered by insurance (including pollution coverage), and Landlord and Tenant
hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in
the event of a property loss to the extent that such coverage is agreed to be provided hereunder.
Each party shall obtain any special endorsements, if required by the insurer, whereby the insurer
waives its right of subrogation against the other party hereto.

     11. Taxes. Tenant shall pay before delinquency all taxes, assessments, license fees,
and other charges that are levied or assessed against, or based on the value of, Tenant’s personal
property installed or located in or on the Premises including trade fixtures, furnishings,
equipment, and inventory (collectively, “Tenant’s Personal Property”) and any real property or real
estate taxes, assessments, and other impositions, whether general, special, ordinary, or
extraordinary, and of every kind and nature, which may be separately levied, assessed, imposed upon
or with respect to Tenant’s Alterations. On receipt of written notice by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of such payments. If any such taxes, assessments,
license fees, or other charges are levied against Landlord or Landlord’s property, or if the
assessed value of the Project is increased by the inclusion of a value placed on Tenant’s Personal
Property, then Tenant, on demand, shall immediately reimburse Landlord for the sum of such taxes,
assessments, license fees, and other charges so levied against Landlord, or the proportion of taxes
resulting from such increase in Landlord’s assessment, which amounts constitute additional rent
under this Lease; provided, however, that Landlord, if requested by Tenant, shall, at Tenant’s
cost, reasonably cooperate with Tenant in contesting the amount or validity of such levy or
assessment, and any tax refund received by Landlord pursuant to such contest (or otherwise
attributable to any payment made by Tenant for Tenant’s Personal Property) shall be promptly paid
to Tenant. Landlord may pay such taxes, assessments, license fees, or other charges or such
proportion, and receive such reimbursement, regardless of the validity of the levy.

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     12. Alterations. Tenant may not make any alterations, improvements, additions,
installations, or changes of any nature in or to the Premises (any of the preceding, “Alterations”)
unless Tenant first obtains Landlord’s written consent, which may not unreasonably be withheld or
delayed, and such Alterations are performed in accordance with all applicable Laws and with
Landlord’s reasonably prescribed methods and, if reasonably requested by Landlord, contractors
approved by Landlord. Notwithstanding the foregoing, Tenant may make cosmetic alterations to the
Premises, the individual cost of which does not exceed $25,000.00, and in no event more than an
aggregate cost of $75,000.00 during any 12-month period (“Cosmetic Alterations”), without
Landlord’s consent as long as (i) Tenant provides Landlord with at least 30 days’ notice of the
Alterations (or 10 days’ notice in the case of Cosmetic Alterations) and (ii) the changes are not
visible from outside the Premises and do not affect in any way a Building’s exterior, structural
components or life-safety systems of the Building.
Tenant shall, prior to the commencement of any Alterations, at Tenant’s sole cost, (i) if
required by applicable Law, acquire (and deliver to Landlord a copy of) a permit from appropriate
governmental agencies to make such Alterations (any conditions of which permit Tenant shall comply
with, at Tenant’s sole cost, in a prompt and expeditious manner), (ii) with the exception of
Cosmetic Alterations, obtain Landlord’s approval of Tenant’s contractor(s), form of contract and
method of payment and satisfy any other reasonable requirements of Landlord; (iii) if the cost of
the Alteration exceeds three months’ Basic Monthly Rent, obtain and deliver to Landlord (unless
this condition is waived in writing by Landlord) a lien and completion bond in an amount equal to
150 percent of the estimated cost of the proposed Alterations, to insure Landlord against any
liability for mechanics’ liens and to insure completion of the work, (iv) provide Landlord with
10 days’ prior written notice of the date the installation of the Alterations is to commence
advising Landlord to post and record an appropriate notice of non-responsibility, and (iv) obtain
(and deliver to Landlord proof of) reasonably adequate workers compensation insurance with respect
to any of Tenant’s employees or Tenant’s Invitees installing or involved with such Alterations
(which insurance Tenant shall ensure is maintained in force until completion of the Alterations).
All Alterations shall upon installation become the property of Landlord and must remain on and be
surrendered with the Premises on the Expiration Date or earlier termination of this Lease unless
Landlord gives written notice to Tenant to remove the same at the time Landlord consents to such
Alterations (or unless no Landlord consent is required for Alterations, in which case, Tenant may
seek Landlord’s determination, in writing, prior to the expiration of the Term, as to whether any
such Alterations are to be removed prior to the expiration or earlier termination of the Term,
which determination shall be made by Landlord, in Landlord’s sole and absolute discretion, within
ten days after Landlord receives Tenant’s written request for such determination). Notwithstanding
anything to the contrary herein, Tenant’s removable trade fixtures and personal property shall be
and remain Tenant’s property, and shall be removed by Tenant from the Premises, at Tenant’s sole
cost, on or before the Expiration Date or earlier termination of this Lease, repair and restore the
Premises to the condition the Premises would have been in without the installation and removal of
the Alterations which are to be removed. All signage Alterations must be removed (and the portion
of the Project affected by the signage or its removal fully restored to the condition it would have
been in if the signage had not been installed or removed) before the Expiration Date or earlier
termination of this Lease. Tenant shall pay all costs for Alterations and other construction done
or caused to be done by Tenant and Tenant shall keep the Premises free and clear of all mechanics’
and materialmen’s lien’s resulting from or relating to any Alterations (or other construction
performed by Tenant or any Tenant’s Invitee at the Project). Landlord may require Tenant to use
specific contractors or construction techniques in constructing or installing the Alterations, but
only to the extent necessary to maintain any existing warranties or to comply with any existing
insurance requirements for the Premises or conform to other Landlord or Lender policies.
Notwithstanding the foregoing, Tenant may not conduct any construction activities on the second
floor of Lusk 2 without obtaining the prior consent of Landlord, which will not unreasonably be
withheld, but will be conditioned on an appropriate logistics plan to eliminate unacceptable noise
levels (including limitation of powder activated fasteners, miter saws, and similar noisy
equipment). Furthermore, the flooring on the second floor must always include carpeting of a
28-ounce per square yard or higher density.

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     13. Surrender of Premises and Holding Over. On the Expiration Date or earlier
termination of this Lease, Tenant shall (i) execute a Quitclaim Deed substantially in the form of
the attached Exhibit G and termination of the Memorandum in favor of Landlord with respect to the
Project in form and substance reasonably acceptable to Landlord and record them in the real
property records of the County of San Diego, California; (ii) surrender to Landlord the Premises in
good and clean condition along with all keys to the Premises (including any keys to any exterior or
interior doors), normal wear and tear excepted (and subject to any repair or restoration
obligations of Landlord under Section 8.2 or Articles 18 and 19); (iii) remove all of Tenant’s
Personal Property (other than its cabling) and perform all repairs and restoration required by the
removal of any Alterations or Tenant’s Personal Property; (iv) remove all Industry Improvements (as
defined in the attached Exhibit B) and restore the area that included the Industry Improvements to
generic office space consistent with the balance of the Premises and in accordance with plans
approved in writing by Landlord (which approval may not unreasonably be withheld or delayed); and
(v) take all action, and pay all costs,
necessary to provide Landlord with an environmental site assessment in accordance with the
ASTM Standards for Phase I Environmental Assessments most recently adopted at the time, subject to
follow-up testing if recommended by such assessment, effective as of the Expiration Date, from a
reputable, licensed environmental engineering company acceptable to Landlord in form and substance
reasonably acceptable to Landlord establishing that the Premises are free of any Hazardous
Materials (other than those for which Landlord is responsible for remediating under Article 25
below) or otherwise recommending that no further action be taken with respect o the Premises as to
Hazardous Materials, and all materials and permits have been properly decommissioned. Tenant is
considered to remain in possession of the Premises until each of the foregoing is satisfied, during
which period all Tenant obligations under this Lease remain in effect, including payment of rent at
the holdover rate(s) described below, if applicable. Landlord may elect to retain or dispose of
in any manner any Alterations or Tenant’s Personal Property that Tenant does not remove from the
Premises on the Expiration Date or earlier termination of this Lease as required by this Lease by
giving written notice to Tenant. Any such Alterations or Tenant’s Personal Property that Landlord
elects to retain or dispose of will vest in Landlord immediately on notice to Tenant. Tenant
waives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or
disposition of any such Alterations or Tenant’s Personal Property. Tenant is liable to Landlord
for Landlord’s costs of storing, removing or disposing of any such Alterations or Tenant’s Personal
Property. If Tenant fails to surrender the Premises to Landlord on the Expiration Date or earlier
termination of this Lease, Tenant shall indemnify Landlord against all liabilities, damages,
losses, costs, expenses, attorneys’ fees and claims resulting from such failure, including any
claim for damages made by a succeeding tenant. If Tenant, with Landlord’s consent, remains in
possession of the Premises after the Expiration Date or earlier termination of this Lease, such
possession by Tenant shall be deemed to be a month-to-month tenancy terminable on 30-days’ written
notice given at any time by Landlord or Tenant. During any such month-to-month tenancy, Tenant
shall pay, as Basic Monthly Rent, 150% of the Basic Monthly Rent in effect immediately before the
Expiration Date or earlier termination of this Lease, as the case may be, unless Landlord and
Tenant mutually agree otherwise in writing. All provisions of this Lease other than those
pertaining to Term apply to any such month-to-month tenancy. (Note that a 60-day extension option
is available to Tenant under Addendum No. 2 to this Lease.) Notwithstanding anything to the
contrary herein, Tenant’s surrender obligations shall not include restoration of Lusk 2 Lobby TI
Work to the condition preceding such work.

     14. Tenant Default. Each of the following occurrences constitutes a default by Tenant
under this Lease: (a) Tenant’s failure to pay any portion of rent when due, if the failure
continues for five days after written notice to Tenant (“Monetary Default”); (b) Tenant’s failure
(other than a Monetary Default) to comply with any term, provision, condition or covenant of this
Lease, if the failure is not cured within 10 days after written notice to Tenant; provided,
however, if Tenant’s failure to comply cannot reasonably be cured within 10 days, Tenant will be
allowed additional time (not to exceed 60 days, as may be extended by force majeure) as is
reasonably necessary to cure the failure so long as Tenant begins the cure within 10 days and
diligently pursues the cure to completion; (c) Tenant’s default under any material debt obligation
to a third-party (evidencing or resulting in a material adverse change to Tenant’s financial
condition) or Tenant becomes

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insolvent, makes a transfer in fraud of creditors, makes an assignment
for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits
or loses its right to conduct business; (d) Tenant’s failure to provide an estoppel or SNDA as
required under this Lease within two days after notice from Landlord of Tenant’s failure to timely
do so, (e) termination or expiration of the Letter of Credit without prior or concurrent
replacement, or (f) a Transfer in violation of Article 20. If Landlord provides Tenant with notice
of Tenant’s failure to pay any rent under this Lease on two separate occasions during any 12-month
period, Tenant’s subsequent violation of any violation of this Lease will be, at Landlord’s option,
an incurable default by Tenant. All notices sent under this Section shall be in satisfaction of,
and not in addition to, notice required by Law.

     15. Landlord’s Remedies. Landlord is entitled to the following remedies if Tenant
commits a default or breach under this Lease; these remedies are not exclusive, but are cumulative
and in addition to any remedies provided elsewhere in this Lease, or now or later allowed by Law.

          15.1. Continuation of Lease. No act by Landlord (including the acts set forth in the
next sentence) terminates Tenant’s right to possession unless Landlord notifies Tenant in writing
that Landlord elects to terminate Tenant’s right to possession. As long as Landlord does not
terminate Tenant’s right to possession, Landlord may (i) continue this Lease in effect,
(ii) continue to collect rent when due and enforce all the other provisions of this Lease, (iii) if
Tenant has vacated the Premises, enter the Premises and relet them, or any part of them, to third
parties for Tenant’s account, for a period shorter or longer than the remaining term of this Lease,
and (iv) have a receiver appointed to collect rent on behalf of Tenant. Tenant shall immediately
pay to Landlord all costs Landlord incurs in such reletting, including brokers’ commissions,
attorneys’ fees, advertising costs, and expenses of remodeling the Premises for such reletting. If
Landlord elects to relet all or any portion of the Premises as permitted above, rent that Landlord
receives from such reletting will be applied to the payment of, in the following order and
priority, (i) any indebtedness from Tenant to Landlord other than Basic Monthly Rent due from
Tenant, (ii) all costs incurred by Landlord in the reletting, and (iii) Basic Monthly Rent due and
unpaid under this Lease. After applying the payments as referred to above, any sum remaining from
the rent Landlord receives from the reletting will be held by Landlord and applied in payment of
future rent as it becomes due under this Lease. Tenant will not be entitled to any excess rent
received by Landlord unless and until all obligations of Tenant under this Lease, including all
future obligations, are satisfied in full.

          15.2. Termination of Tenant’s Right to Possession. In the event of such breach or
default by Tenant, Landlord may terminate Tenant’s right to possession of the Premises at any time,
by notifying Tenant in writing that Landlord elects to terminate Tenant’s right to possession. On
termination of this Lease, Landlord has the right to recover from Tenant (i) the worth at the time
of the award of the unpaid rent which had been earned at the time of such termination, (ii) the
worth at the time of the award of the amount by which the unpaid rent which would have been earned
after such termination until the time of award exceeds the amount of such loss of rent that Tenant
proves could have been reasonably avoided, (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 (had there been no
such termination) exceeds the amount of such loss of rent that Tenant proves could be reasonably
avoided, and (iv) any other amount necessary to compensate Landlord for all detriment proximately
caused by Tenant’s failure to perform Tenant’s obligations under this Lease or in the ordinary
course of things would be likely to result therefrom. The “worth at the time of the award” of the
amounts referred to in Clauses (i) and (ii) above is to be computed by allowing interest at the
Default Rate, as set forth below. The “worth at the time of the award” of the amount referred to
in Clause (iii) above is to be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award.

          15.3. Landlord’s Right to Cure Default. Landlord, at any time after Tenant commits a
default or breach under this Lease, may cure the default or breach on Tenant’s behalf. Tenant
shall reimburse Landlord

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for the cost of such performance upon demand, together with an
administrative charge equal to 10% of the cost of the work performed or the expenditures made by
Landlord (all of which constitutes additional rent under this Lease).

          15.4. Enforcement Costs. On demand, Tenant shall pay Landlord all costs and expenses
incurred by Landlord in connection with collecting any amounts and damages owing by Tenant under
this Lease, or to enforce any provision of this Lease, including reasonable attorneys’ fees,
whether or not Landlord commences any action.

     16. Interest/Late Charges and Quarterly Payments. Late payment by Tenant to Landlord
of rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of
which would be impracticable or extremely difficult to fix. Costs include processing, collection
and accounting charges, and late charges that may be imposed on Landlord by the terms of any deeds
of trust covering the Premises. Therefore, if any rent is not received by Landlord within five
days after its due date, then, without any requirement for notice to Tenant, Tenant shall pay to
Landlord an additional sum of 6.0% of the overdue amount as a late
charge (provided, however, no late charge will be due for a late payment that is made within
five days after notice from Landlord of the delinquency, so long as no rent was paid more than five
days late during the 12-month period preceding the subject late payment). In addition, past due
rent accrues interest at 12% per year beginning 30 days after the due date (the “Default Rate”).
All late charges and interest under this paragraph constitute additional rent under this Lease. If
a late charge is payable under this Lease, whether or not collected, for two installments of Basic
Monthly Rent or other rent due under this Lease during any 12-month period, then Tenant’s monthly
payments will automatically become due and payable quarterly in advance, rather than monthly. All
monies paid to Landlord under the preceding sentence may be commingled with other monies of
Landlord and will not bear interest; if Tenant breaches any provision of this Lease, then any
balance remaining from such funds may, at Landlord’s election, be applied to the payment of any
monetary default of Tenant.

     17. Letter of Credit Obligations. Tenant shall provide Landlord with a clean,
unconditional, irrevocable, transferable standby letter of credit in the amount of $3.1 million
(the “Letter of Credit”), in form and issued by a financial institution (“Issuer”) satisfactory to
Landlord in its reasonable discretion. A form substantially similar to that attached to this Lease
as Exhibit H is acceptable to Landlord. The Issuer must be a solvent, nationally-recognized bank
with a long term rating of BBB or higher, under the supervision of the Superintendent of Banks of
the State of California or a national banking association and the Letter of Credit must be payable
at an office of the Issuer in San Diego County, California. The Letter of Credit must permit
partial draws, and provide that draws will be honored on receipt by Issuer of the original or a
certified copy of the Letter of Credit accompanied by a written statement signed by Landlord or its
authorized agent certifying that Landlord is entitled to draw on the Letter of Credit pursuant to
the terms of this Lease. The Letter of Credit must have an initial term of no less than a year and
must automatically extend for minimum one-year periods unless, at least 45 days prior to
expiration, Landlord receives written notice from the issuer of the Letter of Credit that the
Letter of Credit will not be extended for at least a one-year period (a “Non-Renewal Notice”).
Landlord may draw the Letter of Credit in part or in full in the event of any default by Tenant
under this Lease or in the event Landlord receives a Non-Renewal Notice (and may use any such
proceeds to fulfill any Tenant obligations under this Lease, but such application will not
constitute a cure of Tenant’s default). To the extent Landlord draws more funds on the Letter of
Credit than can be applied to obligations then due or payable to Landlord, the excess will be held
by Landlord as security for Tenant’s obligations to Landlord under this Lease until the Lease is
terminated and all obligations under the Lease are satisfied (the “Security Deposit”); provided,
however, if the reason for Landlord’s draw-down is its receipt of a Non-Renewal Notice and Tenant
replaces the Letter of Credit with an adequate substitute before the expiration of the expiring
Letter of Credit, then Landlord shall refund the balance drawn to Tenant promptly after receipt of
the replacement Letter of Credit. Within 10 days after Landlord’s request, Tenant shall cause the
Letter of Credit to be re-issued or transferred to any buyer or lender, provided that Landlord
shall be responsible for

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reimbursing Tenant for the Issuer’s transfer and processing fees in
connection with any such transfer (and such amount will not be included in Operating Expenses).

At any time that the Premises are expanded or the Term is extended or Tenant elects to use the
Additional Allowance (as contemplated in the attached Exhibit B), Tenant shall increase the amount
of the Letter of Credit to six months gross rent that would be payable under this Lease (on account
of the Premises as expanded) during the midpoint between the date of such expansion or extension or
election and the Expiration Date (as it may have been previously or concurrently extended). At
Tenant’s written request to Landlord, Landlord shall allow a reduction of the amount of the Letter
of Credit to an amount equal to three months gross rents rather than six months, but only if the
request is accompanied by evidence satisfactory to Landlord that for each of the eight calendar
quarters preceding such request, Tenant has earned positive net income and cash flow from
operations in accordance with generally accepted accounting principles or another accounting
methodology reasonably acceptable to Landlord. If the amount of the Letter of Credit is reduced
because Tenant met the standard described in the preceding sentence, but Tenant thereafter fails to
maintain such positive net income and cash flow from operations for any four-quarter period, then
within 10 days after Landlord’s written request, Tenant shall cause the amount of the Letter of
Credit to be increased to an amount equal to the six months
gross rents amount after Landlord’s request. Tenant may, from time to time, replace any existing
Letter of Credit with a new Letter of Credit if the new Letter of Credit: (w) becomes effective at
least 30 days before expiration of the Letter of Credit that it replaces; (x) is in the required
Letter of Credit amount; (y) is issued by a qualified Issuer in accordance with this Article 17;
and (z) otherwise complies with the requirements of this Article 17.

The Security Deposit secures the performance by Tenant of its obligations under this Lease,
including Tenant’s obligations (i) to pay rent, (ii) to repair damages caused by Tenant or Tenant’s
Invitees, (iii) to clean the Premises on the termination of this Lease, and (iv) to remedy any
other defaults by Tenant in the performance of any of its obligations under this Lease. If Tenant
commits any default under this Lease, Landlord may use the Security Deposit to cure such defaults,
and to compensate Landlord for damage suffered by Landlord from such defaults, including attorneys’
fees and costs incurred by Landlord. Following the Expiration Date or earlier termination of this
Lease, and within the time frame required by applicable law, Landlord shall deliver to Tenant, at
Tenant’s last known address, any portion of the Security Deposit not used by Landlord in accordance
with this paragraph. If Landlord transfers the Project, Landlord shall transfer the Security
Deposit to the transferee. Landlord may commingle the Security Deposit with Landlord’s other funds
and Landlord will not pay interest on such Security Deposit to Tenant.

     18. Destruction If the Premises are totally or partially destroyed during the Term,
rendering the Premises totally or partially inaccessible or unusable, then (i) Landlord shall
restore the Premises, including the Tenant Improvements, to substantially the same condition as it
was in immediately before such destruction, (ii) Landlord shall not be required to restore Tenant’s
Alterations or Tenant’s Personal Property unless they are an integral part of the Premises and
specifically covered by insurance proceeds received by Landlord, such excluded items being the sole
responsibility of Tenant to restore, (iii) the destruction will not terminate this Lease, and
(iv) all obligations of Tenant under this Lease shall remain in effect, except that the Basic
Monthly Rent will be abated or reduced, between the date of the destruction and the date of
completion of restoration, by the ratio of (a) the area of the Premises rendered unusable or
inaccessible by the destruction to (b) the area of the Premises before the destruction, but only to
the extent of Tenant’s Pro Rata Share of rental interruption insurance proceeds. Notwithstanding
the foregoing, Tenant may terminate this Lease by so notifying Landlord in writing within 45 days
after a material destruction of the Premises if (x) then-existing Laws do not permit (i)
restoration of the Premises (including, but not limited to, the Tenant Improvements therein) to
substantially the same condition they existed in prior to such destruction, (ii) restoration of
Tenant’s Alterations or Tenant’s Personal Property in the Premises as required for Tenant’s
business operations in the Premises prior to the date of such destruction, or (iii) the continued
use of the Premises for Tenant’s business operations, (y) the destruction occurs during the last
year of the Term (as extended by any

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then-exercised renewal option), or (z) substantial completion
of the restoration is not reasonably likely to occur within nine months after the date of the
destruction; provided, however, that the 45-day period for Tenant’s right to elect termination
pursuant to clause (z) shall run from the date that Landlord notifies Tenant of its reasonable
estimate of the time for completing the repairs to the Premises. Conversely, notwithstanding
anything to the contrary in this Lease, Landlord may terminate this Lease by so notifying Tenant in
writing on or before the 90th day after the destruction if (A) then-existing Laws do not permit
such restoration, (B) the destruction occurs during the last year of the Term (as extended by any
then-exercised renewal option, including an exercise timely issued by Tenant after the
destruction), (C) the destruction exceeds 25% of the then-replacement value of the Project or any
Building in which any Premises are located, or (D) Landlord reasonably determines that the cost of
the restoration exceeds (by more than $250,000) the amount of insurance proceeds relating to the
destruction actually received by Landlord (with any application of insurance proceeds to any loan
secured by the Project being deemed received by Landlord); provided that Tenant may negate
Landlord’s termination right under clause (D) of the preceding sentence by electing to pay the
amount in excess of $250,000 by which the cost of restoration exceeds the insurance proceeds of
insurance received (or deemed received) by Landlord, by written notice delivered to Landlord not
later than thirty (30) days after Tenant’s receipt of notice of Landlord’s decision to terminate
the Lease. If Tenant or Landlord terminates this Lease under this paragraph, then
(1) Landlord has no obligation to restore the Project, (2) Landlord retains all insurance
proceeds relating to such destruction (although Tenant is entitled to the proceeds of Tenant’s
insurance on its tangible personal property), and (3) this Lease terminates as of 30 days after the
appropriate notice of termination. If Landlord restores the Premises as provided above, then
Tenant waives the provisions of California Civil Code Sections 1932(2) and 1933(4) or any successor
statute with respect to any destruction of the Premises. If Landlord restores the Premises
following any such destruction, Tenant shall immediately refixturize and re-equip the Premises and
shall re-open the Premises for business as soon thereafter as is reasonably practicable.

     19. Condemnation. Either party may terminate this Lease if any material part of the
Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or
private purchase in lieu thereof (a “Taking”). Landlord also may terminate this Lease if there is
a Taking of any portion of the Project that would have a material adverse effect on Landlord’s
operation of the remainder of the Project. The terminating party shall provide written notice of
termination to the other party within 45 days after it first receives notice of the Taking. The
termination shall be effective on the date the Taking becomes effective. If this Lease is not
terminated, Basic Monthly Rent and Tenant’s Pro Rata Share must be appropriately adjusted to
account for any reduction in the square footage of the applicable Building or Premises. All
compensation awarded for a Taking will be the property of Landlord. The right to receive
compensation or proceeds are expressly waived by Tenant; however, Tenant may file a separate claim
for Tenant’s Personal Property and Tenant’s reasonable relocation expenses, provided the filing of
the claim does not diminish the amount of Landlord’s award on account of its interests. If only a
part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with
reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable
to the condition immediately prior to the Taking. Tenant waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any
similar or successor Laws.

     20. Assignment and Other Transfers. Without Landlord’s prior written consent, which
may not unreasonably be withheld or delayed, none of the following may occur (or be permitted by
Tenant to occur), voluntarily, involuntarily, by operation of law, or otherwise (any of the
following, a “Transfer”): (i) any assignment, sublease, disposition, sale, concession, license,
mortgage, encumbrance, hypothecation, pledge, collateral assignment, lien, appointment of a
receiver, or other transfer, by or on behalf of Tenant of this Lease, any interest in this Lease,
or all or any portion of the Premises, whether voluntary or involuntary; or (ii) unless Tenant’s
stock is publicly traded on a U.S. national stock exchange at the time or in the case of a merger
where the surviving entity (which assumes all obligations under this Lease) has a debt-to-equity
ratio of no more than 65% and at least as great a net worth, cash flow and operating income as
Tenant, any

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assignment, disposition, sale, transfer, acquisition, or issuance of equitable
interests (whether stock, partnership or otherwise) in Tenant or any entity controlling Tenant, to
or by any person, entity, or group of related persons or affiliated entities, whether in a single
transaction or in a series of related or unrelated transactions, which results in such person,
entity, or group holding (or assigning, transferring, disposing of, or selling) 50% or more of the
aggregate legal or beneficial interests in Tenant or any entity controlling Tenant.
Notwithstanding the foregoing, Tenant may make a Transfer, with at least 15 days prior written
notice to Landlord, but without Landlord’s consent, to any proposed subtenant, assignee or other
transferee (any of the preceding a “Proposed Transferee”) which is a corporation that controls, is
controlled by or is under common control with Tenant, or which is a corporation resulting from a
merger or consolidation with Tenant, or is a person or entity who acquires all or substantially all
of the assets of Tenant’s business (or all or substantially all of the equity interests in Tenant)
as a going concern (each, a “Permitted Transferee”). None of the foregoing restrictions on
Transfers shall be interpreted to preclude Tenant permitting the use or occupancy of minor portions
of the Premises by representatives or employees of any entity which is then performing services
related to Tenant’s business operations in the Premises (as long as the use or occupancy of the
Premises by such representatives or employees is not otherwise a subterfuge to avoid Tenant’s
assignment and subletting obligations under this Article 20), including, but not limited to vendors
providing outsourced services, such as employee travel services or educational support services at
the Premises (a “Permitted Concession”).

          Landlord’s disapproval of a proposed Transfer is deemed reasonable if the proposed Transfer,
in Landlord’s determination, could jeopardize Landlord’s (or any of its owner’s) tax status
(whether as a REIT, ERISA plan, or otherwise) or results in a change of use if Landlord determines
that such change materially affects the Premises or any portion of the Project or the marketability
for lease or sale of any portion of the Project. Landlord will not be liable in damages to Tenant
or to any proposed subtenant, assignee or other transferee (any of the preceding a “Proposed
Transferee”) if such consent is adjudicated to have been unreasonably withheld, in which case
Tenant’s sole remedy is to have the proposed Transfer declared valid as if Landlord’s consent had
been given (although Tenant will be entitled to reasonable attorney’s fees if Tenant is the
prevailing party in such litigation). No Transfer releases or discharges Tenant from any
liability, whether past, present, or future, under this Lease and Tenant continues to remain
primarily liable under this Lease. Tenant shall promptly reimburse Landlord for Landlord’s
reasonable costs of reviewing, consenting to, rejecting or consummating any proposed Transfer,
including reasonable attorneys’ fees. Tenant shall promptly pay to Landlord half of all rents and
other consideration, of whatever nature, payable by the Proposed Transferee (or receivable by
Tenant) pursuant to any Transfer, which exceeds the following, after amortizing at 9.0% annual
interest over the remaining Term the leasing commissions, legal fees, and tenant improvement costs
(e.g., architectural, engineering, space planning, and construction costs) incurred by Tenant as
the result of the Transfer: (1) if a sublease of a portion of the Premises, the portion of the
Basic Monthly Rent that is allocable to the portion of the Premises subleased (such allocation
based on the area of the portion subleased), or (2) if any other Transfer, the Basic Monthly Rent.
Tenant may not market or offer any portion of its Premises for sublease or assignment to any
tenants of the Project (or affiliates of any such tenants) except during periods when no vacancy
exists at the Project and no lease within the Project is scheduled to expire within nine months
after the date of such marketing; provided however, with Landlord’s prior written consent (which
may not unreasonably be withheld or delayed) Tenant may offer space with in its Premises to tenants
of the Project if Landlord cannot offer similar or competitive space. Anything contained herein to
the contrary notwithstanding, Landlord may not withhold or delay its consent to Tenant’s request to
assign all of its rights and interests under this Lease (i) to the transferee in a sale of all or
substantially all of the assets of Tenant, (ii) to the surviving entity in a merger, (iii) to a
sale of all of the stock in Tenant, or (iv) an assignment to an entity controlled by or under
common control with Tenant.

     21. Status Protection. Notwithstanding anything to the contrary in this Lease, no
Transfer may be made or service rendered in a manner that (i) the rental or other amounts to be
paid by the Proposed Transferee would be based, in whole or in part, on the income or profits
derived by the business activities of the Proposed Transferee; (ii) would result in Landlord
rendering any services to Tenant or the Proposed

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Transferee with respect to whom a payment under
this Article is required to be paid or manage or operate the Property or any capital additions so
transferred with respect to which such a payment is being paid; (iii) would result in Landlord
owning an interest in the Proposed Transferee, directly or indirectly (by applying constructive
ownership rules set forth in Section 856(d)(5) of the Internal Revenue Code); and (iv) could cause
any portion of the amounts received by Landlord under this Lease to fail to qualify as “rents from
real property” within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto or which could cause any other income of Landlord to fail to qualify as income
described in Section 856(c)(2) of the Code.

     22. Common Area Changes and New Development. Landlord may (i) close any of the Common
Area to the extent required in the opinion of Landlord’s legal counsel to prevent a dedication of
any of the Common Area or the accrual of any rights to any person or to the public in and to any
portion of the Common Area, (ii) close, temporarily, any of the Common Area for maintenance
purposes, but only to the extent and for the duration reasonably required to perform such
maintenance, (iii) designate other property outside the boundaries of the Project to become part of
the Common Area, (iv) close off or otherwise utilize portions of the Common Area while constructing
improvements or making repairs or alterations to any portion of the Project, as long as Landlord
endeavors to minimize the time of closure, and (v) make any changes to the Common Area, or any part
of the Project, including changes to buildings or other improvements, the addition of new buildings
or other improvements, or changes in the location of driveways, entrances, exits, vehicular
parking spaces, or the direction of the flow of traffic (as long as such activities do not
materially and adversely affect Tenant’s use of the Premises). Landlord shall mitigate the
consequences of any closure or reduction of parking areas at Landlord’s expense so that Tenant has
reasonable alternative parking arrangements during such closure or reduction, Tenant acknowledges
and agrees that Landlord may develop areas within the Project with new and additional buildings and
other improvements and that the consequence of such development will likely include inconvenience
and disturbance to Tenant and Tenant’s Invitees, including those resulting from noise, dust,
traffic, delays, etc. Tenant agrees to accept such inconvenience and disturbance and waives any
claims against Landlord resulting therefrom, except to the extent resulting from Landlord’s gross
negligence or willful misconduct. Landlord may from time to time grant such easements, rights and
dedications, and cause the recordation of parcel maps, easement and operating agreements, and
restrictions affecting the Premises and the Project, except to the extent materially and adversely
affecting Tenant’s use of the Premises. At Landlord’s request, Tenant shall participate in
Landlord’s meetings with governmental representatives and staff to help facilitate entitlements and
permit approval and issuance. Tenant shall promptly sign any documents or instruments to
accomplish the foregoing upon request by Landlord. Landlord shall, at its cost, demolish and
restore for occupancy a portion of Lusk 1 (the “Lusk 1 Demolition Work”) to provide adequate
separation, as determined by Landlord, between Lusk 1 and the proposed Lusk 3 (which work must be
completed no later than completion of the TI Work for Phase 2).

     23. Access by Landlord. Landlord and any of Landlord’s agents or employees may enter
the Premises with 24 hour notice during normal business hours if feasible under the circumstances
(except no notice is required in case of emergencies), subject to Tenant’s reasonable safety and
security requirements, (i) to determine whether the Premises are in good condition and whether
Tenant is complying with its obligations under this Lease, (ii) to do any necessary maintenance or
make any restoration to the Premises that Landlord has the right or obligation to perform, (iii) to
serve, post, or keep posted any notices required or allowed under this Lease, (v) to post “for
sale” or “for rent” or, during the final year of the Term for any portion of the Premises, “for
lease” signs, (vi) to show the Premises to brokers, agents, prospective buyers, prospective
tenants, or other persons interested in a listing of, financing, purchasing, or occupying the
Project, the Premises or any portion of the Project or the Premises, and (vii) to shore the
foundations, footings, and walls of the Project, and to erect scaffolding and protective barricades
around and about the Premises, but not so as to prevent entry to the Premises, and to do any other
act or thing necessary for the safety or preservation of the Premises if any excavation or other
construction is undertaken or is about to be undertaken on any

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adjacent property or nearby street.
In the event of an emergency Landlord may enter the Premises at any time, without prior notice to
Tenant. Landlord will not be liable for any inconvenience, disturbance, loss of business,
nuisance, or other damage arising out of any entry on the Premises as provided in this paragraph
except to the extent of Landlord’s Retained Liability (as defined in Article 24 below).

     24. Indemnities and Liability of Landlord and Tenant. Subject to Article 31 below,
Landlord shall hold harmless and defend Tenant, its officers, agents and employees, at Landlord’s
sole cost with counsel reasonably satisfactory to Tenant, from and against any and all claims,
damages or causes of action for damages or other remedies against Tenant on account of any injury
to or death of any person or any loss of or damage to property occurring on or around the Project
to the extent caused by the grossly negligent act or willful misconduct of Landlord. Tenant shall
defend, indemnify, and hold harmless Landlord against all Claims (as defined below) and all costs,
expenses, and attorneys’ fees incurred in the defense or handling of any such Claims or any action
or proceeding brought on any of such Claims. For purposes of this Lease, “Claims” means all
liabilities, damages, losses, costs, expenses, attorneys’ fees, and claims (except to the extent
otherwise indemnified by Landlord elsewhere in this Lease, or to the extent they result from
Landlord’s or any of its officers’, agents’ or employees’ grossly negligent acts or willful
misconduct [“Landlord’s Retained Liability”]; provided, however, that Landlord’s Retained Liability
shall not include any negligent acts covered by a standard form of Commercial General Liability
Insurance Policy, in which case Tenant’s liability insurance is intended to be primary and to cover
such negligent acts of Landlord and its officers, agents and employees in the Premises,
but Landlord shall indemnify Tenant for the commercially reasonable deductible amount
associated with Claims arising from the covered acts of Landlord’s Retained Liability, not to
exceed $10,000 per occurrence) arising from or which seek to impose liability under or because of
(i) any acts or omissions of occurring at or arising out of the Premises during the Term, (ii) the
conduct of Tenant’s business, (iii) any activity, work, or things done, permitted, or suffered by
Tenant or any of Tenant’s Invitees in or about the Premises or elsewhere, (iv) any breach or
default in the performance of any obligation to be performed by Tenant under this Lease, or (v) any
negligence of Tenant or any of Tenant’s Invitees. Except to the extent of Landlord’s Retained
Liability, Tenant assumes all risk of, Tenant waives all claims against Landlord in respect of, and
Landlord is not liable for, any of the matters set forth above in this paragraph or any of the
following: injury to Tenant’s business, loss of income from such business, or damage or injury to
the goods, wares, merchandise, or other property or the person of Tenant, Tenant’s Invitees, or any
other persons in, on, or about the Premises, whether such damage, loss, or injury is caused by or
results from criminal acts, fire, steam, electricity, gas, water, rain, the breakage, leakage,
obstruction or other defects of pipes, sewer lines, sprinklers, wires, appliances, plumbing,
air-conditioning or lighting fixtures, or any other cause, conditions arising on the Project, or
other sources or places, and regardless of whether the cause of such damage, loss, or injury or the
means of repairing such damage, loss, or injury is inaccessible to Tenant.

     25. Hazardous Substances. Although Tenant has reviewed the Phase I Environmental Site
Assessment dated February 27, 2007 (the “Entrance Assessment”) with respect to the Premises (and
Landlord makes no representation or warranty regarding such report; provided, however, that
Landlord has no actual knowledge that anything contained in the Entrance Assessment is materially
incorrect), Landlord shall indemnify Tenant for losses incurred by Tenant resulting from the
contamination of the Premises of Hazardous Materials to the extent Tenant establishes that the
contamination existed on the Premises before the Commencement Date. Additionally, Landlord is
fully responsible for causing the remediation (including Landlord’s investigatory and legal costs)
of all Hazardous Materials released on, from or onto the Project in violation of applicable Law,
(except for Hazardous Materials arising out of the Premises after the date of Tenant’s initial
occupancy thereof, unless within Landlord’s Retained Liability) and except for Hazardous Materials
introduced to the Project by, or released by, Tenant or any Tenant Invitee. Neither Tenant nor
any of Tenant’s Invitees may use, manufacture, store, or dispose of any pollutants, contaminants,
herbicides, pesticides, insecticides, or hazardous or toxic wastes, substances, or other materials
regulated by any applicable Law (“Hazardous Materials”) anywhere within or around the Premises or
the Project, except in accordance with the Operations Plan and all Laws, and only if all claims,
liabilities and damages arising from such Hazardous Materials are

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either adequately covered (and
the Hazardous Materials permitted) by Landlord’s insurance or covered (and the Hazardous Materials
permitted) by supplemental insurance or endorsements appropriate to such use reasonably acceptable
to Landlord. If the Premises are contaminated (or, due to the acts or omissions of Tenant or
Tenant’s Invitees, any other portion of the Project is contaminated) by any Hazardous Material
during the Term (except for contamination for which Landlord is responsible for remediating as
described above in this paragraph), then Tenant shall promptly notify Landlord in writing of such
contamination and immediately cause such investigation, clean-up, and remediation work to be
performed as required by Landlord to Landlord’s satisfaction and at Tenant’s sole cost, and return
the Premises (and the Project) to the condition they would have been if not for the introduction
and remediation of the Hazardous Materials. If Tenant does not promptly commence and diligently
pursue such investigation, clean-up, and remediation work, then Landlord may perform or cause to be
performed such remediation and Tenant shall immediately, upon demand, pay the cost thereof, plus a
supervisory fee in the amount of 10% of the cost. Tenant’s obligations and liability under this
paragraph shall survive the termination of Tenant’s tenancy and the Term of this Lease, except that
nothing contained in this paragraph shall be deemed to impose liability on Tenant for any problem
arising after the Term of this Lease provided neither Tenant nor Tenant’s Invitees contributed to
such problem during the Term of the Lease. If at any time during or after the Term, it is found
that Tenant contaminated or subjected the Premises to Hazardous Substances (or that contamination
occurred on or from the Premises during the Term other than contamination for which Landlord is
responsible as described above), Tenant shall defend, indemnify and hold Landlord harmless from
all claims, demands, actions, liabilities, costs, expenses, damages and obligations of any
nature arising from or as a result of such contamination or Hazardous Substance.

     26. Subordination and Attornment. This Lease and Tenant’s rights under this Lease are
subject and subordinate to any mortgage, deed of trust, ground lease, or underlying lease (and to
all renewals, modifications, consolidations, replacements, or extensions thereof), now or hereafter
affecting the Project. The provisions of this paragraph are self-operative, and no further
instrument of subordination is required. In confirmation of such subordination, however, Tenant
shall, within eight days after written request from Landlord, execute and deliver any instruments
that Landlord, any lender of Landlord or lessor under any ground or underlying lease (each, a
“Lender”), may reasonably request to evidence such subordination (an “SNDA”), so long as the SNDA
includes customary non-disturbance protection for Tenant (including its extension, expansion, and
purchase rights under this Lease) or is substantially in the form of the attached Exhibit E.
Conversely, at Tenant’s request, Landlord shall diligently seek an SNDA from its Lender(s) and, by
execution of this Lease, Tenant requests Landlord to do so with respect to any existing Lender(s)
as of the Commencement Date. Notwithstanding the preceding provisions of this paragraph, if any
Lender elects to have this Lease prior to the lien of its ground lease, deed of trust, or mortgage,
and gives written notice thereof to Tenant, then this Lease is deemed to be prior to the lien of
such ground lease or mortgage and such ground lease, deed of trust, or mortgage shall be deemed to
be subordinate to this Lease, and thereafter if the Lender succeeds to the rights of Landlord under
this Lease, whether by foreclosure, deed in lieu of foreclosure or otherwise, then (i) such
successor landlord will not be subject to any offsets or defenses which Tenant might have against
Landlord, (ii) such successor landlord will not be bound by any prepayment by Tenant of more than
one month’s installment of rent, (iii) such successor landlord will not be subject to any liability
or obligation of Landlord except those arising after such succession and except for completion of
the Phase 1 TI Work, Phase 2 TI Work, and, if the successor comes to title after the commencement
of construction of Phase 3, fulfillment of Landlord’s construction obligations under the Phase 3
Provisions, (iv) Tenant shall attorn to and recognize such successor landlord as Tenant’s landlord
under this Lease, (v) Tenant shall promptly execute and deliver any instruments that may be
necessary to evidence such attornment, and (vi) on such attornment, this Lease shall continue in
effect as a direct lease between such successor landlord and Tenant.

     27. Estoppel Certificates. Within eight days after notice from Landlord, Tenant shall
execute and deliver to Landlord, substantially in the form of the attached Exhibit F or such other
form reasonably

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requested by Landlord or its prospective lender, investor, or purchaser, stating
(i) that this Lease is unmodified and in full force and effect, or in full force and effect as
modified, and stating all modifications, (ii) the then-current Basic Monthly Rent (and percentage
rent, if applicable), (iii) the dates to which Basic Monthly Rent has been paid in advance,
(iv) the amount of any security deposit, prepaid rent or other payment constituting rent which has
been paid (including Reimbursable Expenses), (v) whether or not Tenant or Landlord is in default
under this Lease and whether there currently exist any defenses or rights of offset under the
Lease, and (vi) such other factual matters as Landlord shall reasonably request. Tenant’s failure
to deliver the certificate within the 8-day period shall be conclusive upon Tenant for the benefit
of Landlord and any successor in interest to Landlord, any lender or proposed lender, and any
purchaser of the Project as to the factual information set forth in the requested certificate, and
that, except as may be represented by Landlord, this Lease is unmodified and in full force and
effect, no rent has been paid more than 30 days in advance, and neither Tenant nor Landlord is in
default under this Lease.

     28. Waiver. No delay or omission in the exercise of any right or remedy of Landlord
or Tenant in the event of any default by the other party to this Lease shall impair such right or
remedy or be construed as a waiver. The receipt and acceptance by Landlord of delinquent rent does
not constitute a waiver of any default other than the particular rent payment accepted. Landlord’s
receipt and acceptance from Tenant, on any date (the “Receipt Date”), of an amount less than the
amount due on such Receipt Date, or to become due at a later date but applicable to a period before
the Receipt Date, does not release Tenant of its obligation (i) to pay the full amount due on such
Receipt Date or (ii) to pay when due the full amount to become due at a later date but
applicable to a period before such Receipt Date. No act or conduct of Landlord (other than an
express written confirmation of acceptance), including the acceptance of the keys to the Premises,
constitutes an acceptance by Landlord of the surrender of the Premises by Tenant before the
Expiration Date. Only a written notice from Landlord to Tenant stating Landlord’s election to
terminate Tenant’s right to possession of the Premises constitutes acceptance of the surrender of
the Premises and accomplishes a termination of this Lease. Landlord’s consent to or approval of
any act by Tenant requiring Landlord’s consent or approval may not be deemed to waive or render
unnecessary Landlord’s consent to or approval of any other or subsequent act by Tenant. No written
waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this
Lease by either party shall be construed as a waiver of any succeeding breach of the same or other
covenants, agreements, restrictions and conditions hereof. Tenant represents and warrants that if
Tenant breaches this Lease and, as a result, this Lease is terminated, Tenant will not suffer any
undue hardship as a result of the termination and, during the Term, will make such alternative or
other contingency plans to provide for its vacation of the Premises and relocation in the event of
such termination. TENANT WAIVES ALL RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF
CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY
AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT PROVIDING THAT TENANT MAY REDEEM,
REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S BREACH. Tenant
acknowledges that Tenant’s waivers set forth in this paragraph are a material part of the
consideration for Landlord’s entering into this Lease and that Landlord would not have entered into
this Lease in the absence of such waivers.

     29. Brokers. Landlord and Tenant each represents to the other that no real estate
broker, agent, finder, or other person is responsible for bringing about or negotiating this Lease
other than the Brokers identified in Article 2 above and neither Landlord nor Tenant has dealt with
any real estate broker, agent, finder, or other person, relative to this Lease in any manner, other
than the Brokers. Landlord is solely responsible for compensating Landlord’s Broker in accordance
with a separate written agreement between Landlord and Landlord’s Broker. Landlord also shall pay
Tenant’s Broker a commission equal to $8.63 per Rentable Square Foot of the Premises (excluding any
extensions or expansions), all to be paid one-half at execution of this Lease and issuance of the
Letter of Credit, and the other half to be paid on the date Tenant occupies and Basic Monthly Rent
commences on the Phase 1 Premises. Additionally, if and when Tenant occupies the

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Phase 3 Premises
pursuant to the attached Addendum No. 3, Landlord shall pay Tenant’s Broker an additional
commission of $150,000 (“Tenant Broker’s Phase 3 Commission”). Landlord and Tenant shall defend,
indemnify, and hold harmless the other party against all liabilities, damages, losses, costs,
expenses, attorneys’ fees and claims arising from any claims that may be made against the other
party by any real estate broker, agent, finder, or other person (other than as to the commissions
payable by Landlord to Tenant’s Broker in accordance with this paragraph), alleging to have acted
on behalf of or to have dealt with the indemnifying party.

     30. Communication Equipment. Strictly in accordance with all applicable Laws, Tenant
and Tenant’s contractors (who must first be reasonably approved by Landlord) may have access to
install, repair, replace, remove, operate and maintain satellite dishes or other similar devices,
such as antennae or similar devices, together with all cable, wiring, conduits and related
equipment (collectively, “Communication Equipment”), for the non-commercial (i.e., non-revenue
generating) purpose of receiving and sending radio, television, other communication signals to and
from the Premises in connection with Tenant’s use of the Premises, at a location designated by
Landlord on the roof of the Building(s) in which the Premises are located. Tenant shall ensure
that any Communication Equipment installed by Tenant does not unreasonably interfere with any other
equipment installed on the roof of any Building. Tenant shall retain Landlord’s designated roofing
contractor to make any necessary penetrations and associated repairs to the roof in order to
preserve Landlord’s roof warranty. All plans and specifications for the Communication Equipment
are subject to Landlord’s prior written approval (which shall not be unreasonably withheld,
conditioned or delayed) and all costs of installation, operation and maintenance of the
Communication Equipment and any necessary related equipment (including,
without limitation, costs of obtaining any necessary permits and connections to the applicable
Building’s electrical system) must be borne by Tenant. Landlord retains the right to use the roof
of each Building for any purpose whatsoever provided that Landlord does not unduly interfere with
Tenant’s use of the Communication Equipment. Tenant shall use the Communication Equipment so as
not to cause any interference or danger to other tenants in the Project or with any other tenant’s
or licensee’s communication equipment installed on the roof, and not to damage any Building or
interfere with the normal operation of any Building. Landlord will have no obligations with
respect to the Communication Equipment. Tenant shall remove the Communication Equipment and
related equipment at Tenant’s sole cost and expense before the expiration or sooner termination of
this Lease or upon the imposition of any Law requiring removal, and shall repair the Building(s)
upon such removal to the extent required by such work of removal. The Communication Equipment
constitutes a portion of the Premises for purposes of the Articles in this Lease entitled
“Insurance” and “Indemnity and Liabilities of Landlord and Tenant” and “Hazardous Substances.”
Tenant may, at no additional charge, use its Building Share of the existing risers of each Building
to install its Communications Equipment; provided that Landlord makes no representation regarding
the capacity of such risers. If additional capacity is needed, Tenant may provide such additional
capacity, subject to Landlord’s prior written approval of the methods and manner of providing such
additional capacity, which consent may be withheld in Landlord’s reasonable discretion. Tenant
represents and warrants that the operation of the Communications Equipment will not cause the
Building rooftop to violate the maximum permissible exposure rules established by OSHA. At
Landlord’s option (to be exercised only if reasonable), Tenant shall (i) pay the cost of a study of
each applicable Building rooftop to ensure that Tenant’s Communications Facilities will not cause
the rooftop to be in violation of any RF emissions requirements, which study shall be performed by
a contractor reasonably approved by Landlord, and (ii) take any steps required by any applicable
laws to cause the use of the Communications Equipment to comply with such laws, including
implementation of an RF safety program.

          Tenant, as the tenant of multiple Buildings in the Project, may in accordance with Article 12
and such other restrictions reasonably prescribed by Landlord, trench between the Buildings in the
Common Area and install, maintain, replace, remove or use communications or computer wires and
cables (collectively, the “Lines”) at the Project in or serving the Premises, provided that (i)
Tenant shall use an experienced and qualified contractor in making any such Alterations to the
Common Areas, (ii) an acceptable number of spare

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Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in Landlord’s reasonable
opinion, (iii) the Lines (including riser cables) shall be appropriately insulated to prevent
excessive electromagnetic fields or radiation, and shall be surrounded by a protective conduit
reasonably acceptable to Landlord, (iv) any new or existing Lines servicing the Premises shall
comply with all applicable governmental laws and regulations, and (v) Tenant shall pay all costs in
connection therewith. Furthermore, Tenant shall have the exclusive right to use the existing cable
date main point of entry located in Lusk 1-B.

     31. Limitations on Landlord’s Liability. If Landlord is in default of this Lease, and
as a consequence Tenant recovers a money judgment against Landlord, such money judgment shall be
limited to its ownership interest in the Project or the proceeds of a public sale of such interest
pursuant to foreclosure of a judgment against Landlord, plus any insurance proceeds, proceeds of
Landlord’s claims against any other tenant or person, and all rights of action of Landlord with
respect to the Project. Neither Landlord nor Landlord’s affiliates, members, managers,
shareholders, officers, directors, agents, or employees shall be personally liable for any
deficiency. If Landlord sells or transfers any portion of the Premises, Landlord, on consummation
of the sale or transfer, will automatically be released from any liability thereafter accruing
under this Lease.

     32. No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation of this Lease, or a termination by Landlord, shall not work a merger, and shall, at
the option of Landlord, terminate any existing subleases or may, at the option of Landlord, operate
as an assignment to Landlord of any such subleases.

     33. Financial Statements. Upon Landlord’s written request, Tenant shall promptly
furnish to Landlord, from time to time, financial statements certified by Tenant to be correct and
complete, reflecting Tenant’s then-current financial condition. Such financial statements shall
include a current balance sheet and a profit and loss statement covering the most recent 12-month
period available. In addition, upon Landlord’s written request, Tenant shall allow Landlord or a
certified public accountant of Landlord’s choosing, to determine Tenant’s current financial
condition by reviewing Tenant’s current financial books, records, and accounts. This paragraph
does not apply to Tenant during any period that Tenant’s stock is publicly-traded on a U.S.
national stock exchange and is a reporting company with the Securities Exchange Commission.

     34. Security Measures. Landlord shall use commercially reasonable efforts to provide
a security guard at the Project during traditional “second shifts” throughout the Term and shall
install a closed-circuit security system that can be periodically monitored off-site 24-hours per
day. Tenant shall pay Tenant’s Pro Rata Share of the cost of installing such system through
Tenant’s initial TI Allowance. Tenant acknowledges (i) that Landlord has no other obligation to
provide any security measures and that Landlord is in no way responsible for the acts or omissions
of any security personnel, (ii) that Landlord has made no representation to Tenant regarding the
safety or security of the Project, and (iii) that Tenant is solely responsible for providing any
additional security it deems necessary to protect itself, its property, and Tenant’s Invitees in,
on, or about the Project. If Landlord provides any security measures at any time, then the cost
thereof will be included in the Project Expenses, but Landlord will not be obligated to continue
providing such security measures beyond those specified above for any period of time, Landlord may
discontinue such service without notice and without liability to Tenant, and Landlord will not be
obligated to provide such security measures with any particular standard of care. Landlord has no
duty to warn Tenant of any criminal acts or dangerous conduct that has occurred in or near the
Project, regardless of Landlord’s knowledge of such crimes or conduct.

     35. Back-up Generator. Landlord shall permit Tenant to share in the usage of the
existing emergency electrical backup generator of the Project throughout the Term of this Lease.
Such backup generator shall, subject to compliance with all laws, be used by Tenant only during (i)
testing and regular maintenance, and (ii) any period of electrical power outage in the Project.
Tenant shall be entitled to operate the generator for testing and regular maintenance only upon
notice to Landlord and at times reasonably approved by Landlord.

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In addition, Tenant shall ensure
that its use of the backup generator does not result in any Hazardous Materials being introduced to
the Project (other than lubricants and fuel to the extent required for the operation of such
generator). Tenant may not load the generator with more than Tenant’s Pro Rata Share of the
existing generator capacity (but Landlord shall cooperate with Tenant’s reasonable efforts to
establish a back-up power solution acceptable to Tenant). Any repairs and maintenance of such
backup generator shall be responsibility Landlord as an Operating Expense. Tenant’s reliance on
any back-up generators will be entirely at its own risk, without any liability or obligation of
Landlord.

     36. Governing Law, Venue and Jurisdiction. This Lease is governed by and construed in
accordance with the laws of the State of California, irrespective of California’s choice-of-law
principles. All actions and proceedings arising in connection with this Lease must be tried and
litigated exclusively in the State and Federal courts located in the County of San Diego, State of
California, which courts have personal jurisdiction and venue over each of the parties to this
Lease for the purpose of adjudicating all matters arising out of or related to this Lease. Each
party authorizes and accepts service of process sufficient for personal jurisdiction in any action
against it as contemplated by this paragraph by registered or certified mail, return receipt
requested, postage prepaid, to its address for the giving of notices set forth in this Lease. EACH
PARTY TO THIS LEASE WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN
ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

     37. Further Assurances. Each party to this Lease shall execute and deliver all
instruments and documents and take all actions as may be reasonably required or appropriate to
carry out the purposes of this Lease.

     38. Attorney’s Fees. The prevailing party in any litigation, arbitration, mediation,
bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the enforcement or
interpretation of this Lease may recover from the unsuccessful party all costs, expenses, and
actual attorney’s fees (including expert witness and other consultants’ fees and costs) relating to
or arising out of (a) the Proceeding (whether or not the Proceeding proceeds to judgment), and
(b) any post-judgment or post-award proceeding including, without limitation, one to enforce or
collect any judgment or award resulting from the Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred costs, expenses,
and actual attorney’s fees.

     39. Force Majeure. Any prevention, delay or stoppage of work to be performed by
Landlord or Tenant which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental restrictions or regulations
or controls, judicial orders, enemy or hostile government actions, civil commotion, fire or other
casualty, or other causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performance of the work by that party for a period equal to the duration of
that prevention, delay or stoppage.  No such event will, however, excuse or delay Tenant’s
obligation to pay rent or other charges under this Lease.

     40. Interpretation. Time and strict and punctual performance are of the essence with
respect to each provision of this Lease. This Lease contains the entire and final agreement of the
parties to this Lease with respect to the subject matter of this Lease, and supersedes all
negotiations, stipulations, understandings, agreements, representations and warranties, if any,
with respect to such subject matter, which precede or accompany the execution of this Lease. Each
Exhibit and Addendum attached to this Lease is a part of and incorporated into this Lease. All
references in this Lease to “Articles,” “Sections,” ”Addenda,” and Exhibits” means those in this
Lease (unless expressly provided to the contrary). The terms “includes” and “including” do not
imply any limitation. No remedy or election under this Lease is exclusive, but rather, to the
extent permitted by applicable law, each such remedy and election is cumulative with all other
remedies at law or in equity. All provisions, whether covenants or conditions, to be performed or
observed by Tenant shall be deemed to be both covenants and conditions. Each provision of this
Lease is valid and enforceable to the

29

 

fullest extent permitted by law; if any provision of this
Lease (or the application of such provision to any person or circumstance) is or becomes invalid or
unenforceable, the remainder of this Lease, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable, are not affected by
such invalidity or unenforceability. Each party to this Lease and its legal counsel have reviewed
and revised this Lease. The rule of construction that ambiguities are to be resolved against the
drafting party or in favor of the party receiving a particular benefit under an agreement may not
be employed in the interpretation of this Lease or any amendment to this Lease. This Lease may be
modified only by a contract in writing executed by the party to this Lease against whom enforcement
of the modification is sought.

     41. Notices. Each notice and other communication required or permitted to be given
under this Lease (“Notice”) must be in writing. Notice is duly given to another party upon: (a)
hand delivery to the other party, (b) three business days after the Notice has been deposited with
the United States postal service as first class certified mail, return receipt requested, postage
prepaid, and addressed to the party as set forth in Article 2 (except that notices of default will
not be deemed received when sent by regular mail unless or until received or deemed received under
another method permitted under this paragraph), (c) the next business day after the Notice has
been deposited with a reputable overnight delivery service, postage prepaid, addressed to the party
as set forth in Article 2 with next-business-day delivery guaranteed, provided that the sending
party receives a confirmation of delivery from the delivery-service-provider, (d) by facsimile,
with a copy by one of the other methods permitted in this paragraph, provided receipt of
confirmation of transmission thereof is obtained (in which case, such notice shall be deemed to
have been received on receipt of confirmation of transmission), or (e) by email when successfully
transmitted to the email address specified in Article 2 (except that notices of default may not be
sent solely by email). Each party shall make a reasonable, good faith effort to ensure that it
will accept or receive Notices to it that are given in accordance with this paragraph. A party may
change its address for purposes of this paragraph by giving the other party(ies) written notice of a new
address in the manner set forth above.

     42. Fixture Financing. Tenant may encumber or lease its trade fixtures, furniture and
equipment (including its Communications Equipment) to secure financing of such items (including
with lines of credit and other financing mechanisms). In either event, upon request, Landlord
agrees to execute an agreement with the applicable lessor(s) and/or lender(s) in a form reasonably
satisfactory to Landlord and such lessor(s) and/or lender(s) which permits such secured parties to
remove the trade fixtures, equipment and furniture prior to the expiration of the term of this
Lease; provided, however, that in any event, such lessor or lender shall repair any damage
occasioned by such removal and such agreement must be in a form and substance typically accepted by
landlord’s of similar projects to the Project.

     43. Nondisclosure of Confidential Materials. The parties acknowledge that Landlord
may be exposed to Tenant’s confidential proprietary materials in connection with this Lease.
Landlord may not disclose any Confidential Information (as defined below) other than (a) to
employees, agents, lenders, investors, prospective buyers, consultants, or affiliates of Landlord
who have a reasonable need for such information, or (b) in response to lawful process or subpoena
or other valid or enforceable order of a court of competent jurisdiction. “Confidential
Information” means Tenant’s proprietary plans for Tenant’s operating theater and other specialized
proprietary improvements and all confidential financial information marked with “Confidential” on
its face, except to the extent such information or materials can be obtained through
non-confidential means. Tenant shall use reasonable efforts to maintain the details of this Lease
confidential, other than to (a) to employees, agents, lenders, investors, consultants, or
affiliates of Tenant who have a reasonable need for such information, or (b) in response to lawful
process or subpoena or other valid or enforceable order of a court of competent jurisdiction.
Landlord acknowledges that Tenant may be required to provide a copy of this Lease to the U.S.
Securities and Exchange Commission. Before doing so, however, Tenant shall give Landlord the
opportunity to redact from the copy of this Lease (and each amendment) to be made publicly
available those portions that Landlord desires to remain confidential.

30

 

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	HCPI/Sorrento, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	By:	 	HCP, Inc., a Maryland corporation,
its managing member
	 
	 
	 	 	 	 	 	By:	 	/s/ Susan M. Tate	 	 
	 

	 	 	 	 	 	 	 	 
	 	 
	 
	 
	 
	 	 	 	 	 	 	 	Susan M. Tate, Senior Vice President 
	 	 
	 
	 	 	 	 	 	 	 	Print name and title	 	 

	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	 NuVasive, Inc., a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Alexis Lukianov	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Alexis Lukianov, Chairman and CEO 

	 	 
	 

	 	 	 	 	 	Print name and title	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Jason Hannon	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Jason Hannon, SVP, General Counsel & Secretary 

	 	 
	 

	 	 	 	 	 	Print name and title	 	 

31

 

Addendum No. 1 to Lease – Expansion Right of First Offer

     This Addendum applies to the following vacant space within the Project that, during the Term,
Landlord intends to lease or market to lease (the “Refusal Space”): (a) space anywhere in the
Project comprised of at least 15,000 contiguous Rentable Square Feet, or (b) space that is
contiguous to Premises then occupied by Tenant under this Lease. If and when Landlord intends to
market or lease any Refusal Space during the Term, Landlord shall first give written notice to
Tenant of Landlord’s intent to do so along with the material terms Landlord intends to offer with
respect to such lease, such as rent, tenant improvement allowance, and rental increases (the
“Trigger Notice”). If Tenant gives written notice to Landlord within 15 days after receiving the
Trigger Notice irrevocably electing to lease the entire Refusal Space (Tenant’s “Exercise Notice”),
then this Lease automatically will be amended to include the Refusal Space as part of the Premises
(accordingly increasing the Rentable (and useable) Square Feet of the Premises, Tenant’s Pro Rata
Share, etc.), and the terms included in the Trigger Notice will apply to the Refusal Space. If
Tenant does not timely give its Exercise Notice, Landlord may enter into a lease of all or any
portion of the Refusal Space at any time on any terms until the Refusal Space is leased and
occupied; provided, however, before Landlord leases the Refusal Space at a Net Effective Rent that
is more than 7.5% below the Net Effective Rent included in the Trigger Notice, Landlord must first
issue another Trigger Notice and provide Tenant another opportunity to issue an Exercise Notice in
accordance with the preceding procedures, except that in such case the 15-day response period is
reduced to five business days. As used in this paragraph, “Net Effective Rent” means the present
value (applying a 6.5% annual discount rate) on a per square foot basis of the proposed rent
payments as such payments are reduced by the value of all monetary concessions (specifically
including, without limitation, any tenant improvement allowance, free rental period and payment of
tenant relocation costs), where the value of such concessions are amortized over the entire lease
term based on a 6.5% interest rate. This paragraph does not apply to any space within the Project
that is subject to another right of Tenant to lease, such as any Phase 3 Premises under the Phase 3
Provisions, provided, however, Tenant’s rights under this paragraph will apply to subsequent
marketing of any portions of Lusk 3 that already have been leased to another tenant.

     The expansion rights under leases with third-parties entered into by Landlord after offering
Tenant the right to lease under this Addendum will be subordinate to Tenant’s other expansion
rights except with respect to space that was previously offered to and rejected by Tenant under
this Addendum or otherwise under this Lease.

     Concurrent with Tenant’s exercise of its right to lease additional space under this Addendum,
Tenant shall increase the Letter of Credit to an amount equal to six months (or three months, if
applicable under the Article in this Lease entitled “Letter of Credit Obligations”) gross rents
under the Lease that will be payable when rent begins on account of the expanded space.

     All of Tenant’s rights under this Addendum are subject to the prior rights of the tenant under
the Expansion Right of First Offer contained in the lease between Landlord and Helicon
Therapeutics, Inc. for premises within Lusk 2, which provides: “If and when Landlord intends to
lease vacant space within the Building (the “Refusal Space”) during the Term, Landlord shall first
give written notice to Tenant of its intent to do so along with the terms Landlord intends to offer
with respect to such lease, such as rent, tenant improvement allowance, and rental increases (the
“Trigger Notice”). If Tenant gives written notice to Landlord within two (2) weeks after receiving
the Trigger Notice irrevocably electing to lease the entire Refusal Space (Tenant’s “Exercise
Notice”), then this Lease automatically will be amended to include the Refusal Space as part of the
Premises (accordingly increasing the Rentable (and useable) Square Feet of the Premises, Tenant’s
Pro Rata Share, etc.), and the terms included in the Trigger Notice will apply to the Refusal
Space; provided however, Tenant’s Parking Spaces on account of the Refusal Space will be 3.5
parking spaces per 1000 useable square of the Refusal space (as calculated in accordance with BOMA
Standard as reasonably determined by Landlord), including Tenant’s Pro Rata Share of visitors and
handicap spaces, some or all of which may be assigned by Landlord to Tenant. If Tenant does not
timely give its Exercise Notice, Landlord may enter into a lease of all or any portion of the
Refusal Space at any time on any terms until the

32

 

Refusal Space is leased and occupied. After the
Refusal Space is leased and occupied and then again rendered vacant during the Term, the new
vacancy will be subject to Tenant’s same expansion rights under this Addendum and Landlord
would again be obligated to give Tenant another Trigger Notice before re-marketing the Refusal
Space.”

     Tenant’s rights under this Addendum automatically terminate and become void if twice in any
12-month period Tenant defaults under any monetary provision or other material provision of this
Lease or if Tenant fails to maintain a tangible net worth of $75 million, or if Tenant assigns or
subleases more than 25% of the Premises (except to a Permitted Transferee).

33

 

Addendum
No. 2 to Lease – Extension Options

     Extension Option #1. So long as Tenant is not in default under this Lease at the time
of exercise, and the original Tenant named in this Lease remains the Tenant under this Lease of the
entire Premises at the time of exercise and the time of extension, Tenant may once extend the Term
by an additional four years, in which case the reference to “$2.50” in Section 2.1 of the Lease
automatically will be reduced to “$2.43” (and Basic Monthly Rent during the period of extension
under this paragraph will continue as contemplated under Section 2.1, including the annual 3.0%
increases during such extension period). Tenant may exercise the option granted in this paragraph
only by giving to Landlord Tenant’s irrevocable written election to extend the Term under this
Extension Option #1, which election must be received by Landlord on or before December 31, 2007.

     Extension Option #2 . So long as Tenant is not in default under this Lease at the
time of exercise and the time of extension, and the original Tenant named in this Lease (or a
Permitted Transferee) remains the Tenant under this Lease and continues to occupy and operate out
of at least 100,000 Rentable Square Feet at the time of exercise and the time of extension, then
Tenant may once extend the Term by an additional seven years (the “Extension Period”), at an
initial Basic Monthly Rent equal to 95% of the fair market rent of the Premises (“FMR”) determined
in accordance with this Addendum. The Basic Monthly Rent for the Extension Period will increase by
3.0% on each anniversary of the first day of the Extension Period. Tenant may exercise the option
granted in this paragraph only by giving Landlord Tenant’s irrevocable written election to extend
the Term, which election must be received by Landlord at least nine months (but no more than 14
months) before the then-current Expiration Date. Thereafter, Landlord and Tenant shall use good
faith efforts to arrive at a mutually acceptable FMR by the date that is at least 100 days before
the then-current Expiration Date. If, however, Landlord and Tenant do not timely agree on the FMR,
the FMR for the applicable Extension Period will be determined in accordance with the following
procedures:

     1. On or before the date that is 100 days before the Extension Period, Landlord and Tenant
each shall deliver written notice to Landlord’s counsel, in a sealed envelope, of its own best
estimate of the fair market monthly rental value for the Premises during the first year of the
applicable Extension Period (each party’s “Offer”). Promptly after such deadline, Landlord’s
counsel shall open the sealed Offers and notify each party of the other’s Offer. Either party may
accept the other party’s Offer within five days after its receipt thereof by giving the other
party its written notice of acceptance, in which case the accepted Offer becomes the FMR. If the
Offers are within ten percent of each other, the FMR will be the average of the two Offers. If
only one of the parties timely delivers an Offer, that Offer will be the FMR.

     2. If the FMR is not timely established under the preceding paragraph, the FMR will be
determined as follows: On or before the ninetieth day before the Extension Period, Landlord and
Tenant each shall appoint a California-licensed MAI appraiser (with at least five years of
full-time experience in appraising properties and leases in San Diego County, California, of which
time at least half is devoted to office leases and properties) and give written notice of the name
and address of such appraiser to the other party. If either party fails to appoint an appraiser
as required by the preceding sentence, the appraiser appointed by the other party shall appoint
the second appraiser. The parties shall instruct the two appraisers to determine the fair market
monthly rental value for the Premises as Class “A” office space of comparable size and quality in
the Sorrento Mesa/Del Mar Heights/Torrey Hills submarkets of San Diego, California, during the
first year of the Extension Period in light of all other terms of this Lease within three weeks
after both appraisers are selected. If the fair market monthly rental values determined by the
appraisers fall within ten percent of each other, the FMR is the average of those two values.
Otherwise, within ten days after the expiration of the 3-week appraisal period, the two appraisers
shall appoint a third California licensed MAI appraiser (with at least five years of full-time
experience in appraising properties and leases in San Diego County, California, of which time at
least half is devoted to office leases and properties) and deliver written

34

 

notice of the name and address of the third appraiser to Landlord and Tenant. If the two
appraisers fail to appoint a third appraiser within the time required, either Landlord or Tenant
may petition the Superior Court of San Diego County, California, for the appointment of the third
appraiser. The parties shall instruct the third appraiser to determine the fair market monthly
rental value for the Premises as Class “A” office space of comparable size and quality in the
Sorrento Mesa/Del Mar Heights/Torrey Hills submarkets of San Diego, California during the first
year of the Extension Period in light of all other terms of this Lease within three weeks after
his or her appointment. The FMR will be the average of the rental value determined by the third
appraiser and the rental value of the one prior appraiser whose rental value is closest by dollar
amount to that of the third appraiser. For example, if the appraiser selected by Landlord
determines that the fair market rent is $100, the appraiser selected by Tenant determines that the
fair market rent is $85, and the third appraiser determines that the fair market rent is $90, then
the FMR would be $87.50 (i.e.,, the average of $85 and $90).

The fees and costs of both/all of the appraisers must be paid by the party whose Offer differs
from the FMR by the largest dollar amount, provided, however, that if the FMR is an average of the
parties’ Offers, then such fees and costs shall be shared equally by the parties.

Before Landlord is obligated to honor the extension, Tenant shall adjust the face amount of the
Letter of Credit to an amount equal to six months (or three months, if applicable under the
Article in this Lease entitled “Letter of Credit Obligations”) of gross rents that will be payable
under the Lease during the first year of the Extension Period.

     Extension Option #3. In addition to the foregoing, so long as Tenant is not in
default under this Lease at the time of exercise and the time of extension, Tenant may once extend
the Term (as it already may have been extended by Option #1 or Option #2 described above) by 60
days, on the same terms, conditions, and rent applicable under this Lease as of the day preceding
the then-current Expiration Date. To exercise the 60-day extension option under this Extension
Option #3, Tenant must give Landlord Tenant’s irrevocable written election to so extend the Term,
which election must be received by Landlord at least six months (but no more than nine months)
before the then-current Expiration Date.

     These extension options automatically terminate and become void if twice in any 12-month
period Tenant defaults under any monetary provision or other material provision of this Lease or if
Tenant fails to maintain a tangible net worth of $75 million, or if Tenant assigns or subleases
more than 25% of the Premises (except to a Permitted Transferee).

35

 

Addendum No. 3 to Lease – Phase 3 Provisions

     The parties acknowledge that the Project may be further developed to include, among other
things, an additional office building on the existing vacant pad within the Project (“Lusk 3”).
Landlord is not obligated to develop the pad (except as specifically provided below) and, if
Landlord does develop the pad, Landlord is under no obligation as to what Landlord may or may not
develop. This Addendum addresses Tenant’s rights to (a) require Landlord to build Lusk 3 and lease
at least 50% of Lusk 3 to Tenant; and (b) require Landlord to offer to Tenant a first right to
lease all of Lusk 3 if Landlord unilaterally elects to build Lusk 3. Space within Lusk 3 added to
the Premises under this Addendum is referred to as the “Phase 3 Premises.”

     1. Tenant’s Right to Require Landlord to Build Lusk 3.

          1.1. Lusk 3 Trigger Notice. So long as Tenant is not in default and has never
committed a default under this Lease extending beyond the applicable cure period, and the original
Tenant named in this Lease (or a Permitted Transferee) remains the Tenant under this Lease and
continues to occupy and operate out at least 75% of the Premises, Tenant may require that Landlord
develop Lusk 3 by giving Tenant’s irrevocable written commitment to Landlord (the “Lusk 3 Trigger
Notice”) to expand the Premises to include at least 50% of the Rentable Square Feet of Lusk 3 at
the additional Phase 3 Basic Monthly Rent (defined below). The Lusk 3 Trigger Notice must include
(a) the number of Rentable Square Feet to which Tenant is specifically committed or state that the
commitment is for all of Lusk 3; (b) identification of those items from the attached Addendum No.
3-A that Tenant requires to be incorporated into the Phase 3 Premises (the “Required Elements”);
(c) a description of items or concepts Tenant would like to be incorporated into Lusk 3 or the Lusk
3 Premises (“Non-Required Elements”); (d) a list of at least four general contractor candidates for
the Lusk 3 construction (the “Contractor Candidates”), each of which must be based in San Diego,
California (or be a national construction company with a substantial physical presence in San
Diego), with substantial recent experience as general contractor for projects in San Diego of the
type and size of Lusk 3, with the capacity and availability to construct Lusk 3, a bondable rate of
0.5% or better, a bonding capacity sufficient for the proposed project, and with good reputations,
each of whom must be reasonably acceptable to Landlord; and (e) a $150,000 deposit to be used by
Landlord for the costs for which Tenant is responsible under this Addendum (the “Trigger Deposit”).
To be effective, the Lusk 3 Trigger Notice must be received by Landlord before the earliest of (i)
the date Landlord executes a lease or letter of intent to lease any portion of Lusk 3 (so long as
Landlord did not violate the paragraph in this Addendum governing Tenant’s right of first offer to
lease Lusk 3); (ii) the date Landlord begins development of Lusk 3; and (iii) 36 months after the
Commencement Date for the Phase 2 Premises. The Lusk 3 Trigger Notice must be accompanied by
evidence reasonably acceptable to Landlord that Tenant has sufficient creditworthiness, cash flow,
net operating income, equity/debt ratio, and net worth to satisfy the obligations of this Lease as
expanded to include the Phase 3 Premises. Landlord’s obligation to develop Lusk 3 on receipt of
the Lusk 3 Trigger Notice is conditioned on Landlord’s ability to obtain all governmental and
private (e.g., owners’ association) approvals to complete Lusk 3 and on the availability of
materials and labor and on all other conditions outside of Landlord’s reasonable control.

          1.2. Initial Lusk 3 Package. Within 90 days after Landlord’s receipt of the Lusk 3
Trigger Notice, Landlord shall provide Tenant with the following (the “Initial Lusk 3 Package”):
(a) a schematic design and descriptions of the mechanical, electrical, plumbing, and life-safety
systems of Lusk 3 (the “Preliminary Plans”) incorporating the Required Elements (and Landlord may
or may not, in its sole discretion, include some or all of the Non-Required Elements); (b)
depiction of the location of the Phase 3 Premises within Lusk 3; (c) an estimated budget of the
Lusk 3 Premises Costs and an estimated construction schedule (commencing with building permits);
and (d) selection of the general contractor from the Contractor Candidates (the “Contractor”) and
an indication of any bonding that will be required. Tenant may investigate and analyze the Initial
Lusk 3 Package, including the basis on which the estimate was established. On or before the
30th day
after Tenant’s receipt of the Initial Lusk 3 Package, Tenant may disapprove of the Initial
Lusk 3 Package by

36

 

giving written notice of such disapproval to Landlord along with a detailed
explanation of its reasons for disapproval (the “Disapproval Notice”), in which case Landlord and
Tenant will meet to attempt to agree on mutually acceptable revisions to the Initial Lusk 3
Package. If Landlord and Tenant fail to agree in writing on a revised Initial Lusk 3 Package
within 21 days after Landlord’s receipt of the Disapproval Notice, then: (x) the Lusk 3 Trigger
Notice automatically will be deemed rescinded, (y) Tenant shall, within 10 days after invoice from
Landlord, reimburse Landlord for all costs incurred by Landlord in connection with the Lusk 3
Trigger Notice and preparation of the Initial Lusk 3 Package to the extent not paid from the
Trigger Deposit (and Landlord shall refund to Tenant any remaining balance of the Trigger Deposit),
and (z) Tenant will not be entitled to issue any subsequent Lusk 3 Trigger Notice.

          1.3. Deviations from Preliminary Plans. Unless the Lusk 3 Trigger Notice is rescinded
strictly in accordance with this Addendum, Landlord shall use its commercially reasonable efforts
to cause Lusk 3 to be developed substantially in accordance with the Preliminary Plans and to
demise the Phase 3 Premises for Tenant within Lusk 3 of a size that is within 10% of the size to
which Tenant committed in the Lusk 3 Trigger Notice. If, at any time, Landlord believes that it
cannot reasonably achieve substantial conformance to the Preliminary Plans for reasons not caused
by Landlord, Landlord shall give written notice to Tenant of the material deviations, in which case
Tenant may, by written notice to Landlord within 10 days after receipt of Landlord’s notice,
rescind the Lusk 3 Trigger Notice. In the event of such rescission, Tenant shall, within 10 days
after invoice from Landlord, reimburse Landlord for all costs incurred by Landlord in connection
with the Lusk 3 Trigger Notice and preparation of the Initial Lusk 3 Package and all subsequent
pre-construction work to the extent not paid from the Trigger Deposit (and Landlord shall refund to
Tenant any remaining balance of the Trigger Deposit), and Tenant will not be entitled to issue any
subsequent Lusk 3 Trigger Notice. Unless Tenant timely rescinds the Trigger Notice in accordance
with this paragraph, the Initial Lusk 3 Package will be deemed modified by the deviations included
in Landlord’s notice. If Landlord requests Tenant to confirm that a deviation or specification
substantially conforms to the Initial Lusk 3 Package, as it may be modified from time to time,
Tenant shall do so (or object) in writing within five days after Landlord’s request (and Tenant may
not unreasonably withhold its confirmation of substantial conformance). Elimination of any of the
Required Elements is deemed a deviation from substantial conformance to the Preliminary Plans.

          1.4. Construction. Landlord shall retain the Contractor, under a written guaranteed
maximum price construction contract, to construct Lusk 3. The construction contract shall require
the Contractor to competitively bid all subcontracts (with minor exceptions as reasonably permitted
by Landlord and except for prime design-build contractors). Tenant will be permitted to
participate in all construction-related meetings with Landlord and Contractor and to consult with
Landlord throughout the construction process to help ensure the efficient construction of Lusk 3.
Landlord shall also cause to be constructed tenant improvements in the Phase 3 Premises in
accordance with the procedures set forth on the attached Exhibit B, with a TI Allowance of $55.00
per Rentable Square Foot (as increased by an inflation factor of 3.0% per year since the date of
this Lease). The general contractor for the tenant improvements may be Contractor or another
appropriate contractor selected by Landlord after soliciting proposals for construction of the
Phase 3 TI Work based on personnel, profit/overhead/general conditions, schedule, and availability
from DPR, Reno Construction, or another a licensed, reputable and experienced general contractor
reasonably acceptable to Tenant (each a “Potential Contractor”) and shall retain the Potential
Contractor with the superior proposal as reasonably determined by Landlord (unless mutually agreed
by Landlord and Tenant) to construct and install the Phase 3 TI Work.

          1.5. Phase 3 Basic Monthly Rent. Tenant shall be permitted to occupy the Phase 3
Premises upon Substantial Completion of the tenant improvements to the Phase 3 Premises, at which
time the Basic Monthly Rent will be increased to include the Phase 3 Basic Monthly Rent (or, in the
event of any Tenant Delay, rent will be increased based on the Phase 3 Premises on the date
Substantial Completion would have occurred if
not for the Tenant Delay). The Trigger Deposit will be credited to the first rent due on
account of the Phase

37

 

3 Premises. “Phase 3 Basic Monthly Rent” means the product of the Rate
multiplied by the Lusk 3 Premises Cost, defined as follows:

     The “Rate” means the greater of 8.75% and 350 basis points above the 10-year U.S. Treasury
yield as of the date Landlord receives the building permit for Lusk 3; provided, however, if the
Lusk 3 Trigger Notice is appropriately issued within the first 24 months after the Commencement
Date for the Phase 1 Premises, the Rate may not exceed 9.0%.

     The “Lusk 3 Premises Cost” means, regardless of the estimate included in the Initial Lusk 3
Package, the sum of the TI Allowance for the Phase 3 Premises and all other costs in connection
with the leasing, occupancy and improvement of the Phase 3 Premises (but leasing commissions may
not exceed 7.0% of the Basic Monthly Rent for the Phase 3 Premises for the first five years of the
Term for the Phase 3 Premises plus 5.0% of the Basic Monthly Rent for the Phase 3 Premises for the
remaining Term for the Phase 3 Premises, as reduced by any offset given by a broker on account of
prior commissions for other portions of the Premises), plus Tenant’s Building Share of Lusk 3 of
the following sum:

     (a) all hard and soft costs and expenses incurred in connection with the entitlement, design,
permitting, demolition, development, construction, completion, marketing and leasing of Lusk 3 and
requisite parking structure (other than the New Parking Deck) and all on and off site improvements
(excluding tenant improvements), landscaping and hardscaping, including, for example, amounts paid
for labor, materials, supplies, equipment, tool or other equipment rentals, planning, design,
engineering, surveys, soils reports, traffic studies or other studies or reports required by
cognizant governmental agencies, construction supervision, interest, loan fees, points and other
charges on development, construction and take-out loans, guard services, trash disposal, off-site
parking costs, building and other permit fees, plan check fees, builders risk and other insurance
customarily carried during the course of construction, school and other community or district fees,
required off-site work and mitigation, utilities and utility connection fees and costs, insurance
costs, and legal and accounting expenses; plus

     (b) 83% of all of the costs and expenses described in the preceding clause (a) incurred in
connection with the entitlement, design, permitting, demolition, development, construction, and
completion of the New Parking Deck; plus

     (c) to the extent the amounts in clauses (a) and (b) above do not include interest and other
charges paid on development, construction and take-out loans, an amount equal to the interest, loan
fees, points and other charges that Landlord would have paid on loans for such costs at
then-current market rates and conditions assuming customary loan underwriting criteria in
connection with the Lusk 3 project (but not including any such deemed financing costs on the land
value described in clause (d) below); plus

     (d) a deemed land value calculated at $100.00 (as increased by an inflation factor of 3.0% per
year since the date of this Lease) multiplied by the number of Rentable Square Feet of Lusk 3; plus

     (e) a developer fee of 5.0% of all of the foregoing, other than the deemed land valued under
clause (d).

     Notwithstanding the foregoing, the Lusk 3 Premises Costs shall not include any of the
following:

                              (A) financing costs after the Commencement Date for the Phase 3 Premises;

                              (B) costs payable to affiliates of Landlord to the extent that they are higher than the costs
would be for independent third parties performing the same work (except for the 5.0% developer fee
described above);

38

 

                              (C) costs that result from the gross negligence or willful misconduct of Landlord or any of
its affiliates, except for the failure of Landlord to prevent Tenant or any third party (including
contractors and consultants) from taking any action or to cause them to take any action;

                              (D) Landlord’s overhead;

                              (E) travel costs for Landlord, its affiliates and their employees, officers, or directors;

                              (F) any amounts for which any other person reimburses Landlord (including, but not limited
to, insurance proceeds, condemnation proceeds and amounts rebated to Landlord by any contractor or
consultant);

                              (G) additional costs incurred as a result of Landlord’s failure to make a payment on a timely
basis to its contractors, consultants or lenders;

                              (H) Operating Expense items paid by Tenant pursuant to the Article 6 of this Lease; and

                              (I) Costs to remediate pre-existing Hazardous Materials;

                              (J) Discretionary change orders entered into by Landlord after commencement of construction
that exceed $50,000 individually or $150,000 in the aggregate or that provide a bonus to the
General Contractor for early completion, but excluding change orders approved by Tenant (which
approval may not unreasonably be withheld or delayed); or

                              (K) The Tenant Broker’s Phase 3 Commission (as defined in Article 29 of the Lease).

     Tenant understands and agrees that Landlord does not, by submitting the Initial Lusk 3
Package, guaranty the accuracy of completeness of the estimated budget included in the Initial Lusk
3 Package. Such budget does not in any way limit or affect the Lusk 3 Premises Cost used to
calculate the Phase 3 Basic Monthly Rent (and Tenant is responsible for conducting its own due
diligence with respect to such costs before the deadline for issuing its Disapproval Notice).

     Landlord shall keep detailed and accurate books and records (including financial records) in
connection with the construction of the Phase 3 Premises, and in accordance with customary
standards for similar projects. Landlord shall provide to Tenant a schedule showing the
calculation of Total Project Costs and Tenant or its architects or other agents shall have the
right to inspect and audit Landlord’s books and records relating thereto, so long as Tenant
requests such inspection or audit within 60 days after receipt from Landlord of Landlord’s
calculation of Total Project Costs. Tenant shall pay to Landlord the Basic Monthly Rent based upon
Landlord’s calculation of Total Project Costs beginning with the Phase 3 Premises Commencement
Date. In the event that Tenant’s inspection and/or audit of Landlord’s books and records
determines that Total Project Costs have been miscalculated, (1) there shall be an appropriate
adjustment of Basic Monthly Rent previously paid and a payment by either Landlord to Tenant or
Tenant to Landlord of the amount of any overpayment or underpayment, as the case may be and (2) if
Landlord overstated Total Project Costs by more than 5.0%, then Landlord shall pay all of Tenant’s
reasonable out-of-pocket costs of its audit
or inspection. If the parties are unable to agree upon an adjusted Basic Monthly Rent, the
parties agree that arbitration shall constitute the exclusive remedy for settlement of any such
dispute. If either Landlord or Tenant desires to exercise its right pursuant to this paragraph,
such party shall deliver written demand for

39

 

arbitration to the other party, setting out the basis
for the controversy. Any arbitration proceeding undertaken pursuant to this paragraph shall be
held in front of a retired judge working with JAMS or another similar group, or if no such groups
exists, a single neutral arbitrator shall be chosen by mutual agreement or, if the parties fail to
agree, by the presiding judge of the San Diego Superior Court upon ex parte application. The
arbitration shall take place in San Diego, California. The decision of the arbitrator shall be
conclusive, final and binding upon Landlord and Tenant. Judgment upon the decision of the
arbitrator may be entered in any court of competent jurisdiction. The cost of such arbitration
(including any attorneys’ fees incurred therein) shall be borne by the losing party as determined
by the arbitrator. As soon as reasonably available, Landlord shall deliver to Tenant an accounting
of the Lusk 3 Premises Costs, together with reasonable back-up information requested by Tenant.

     If Landlord develops Lusk 3 pursuant to a Lusk 3 Trigger Notice, the Expiration Date will be
extended until the last day of the 120th calendar month following Substantial Completion
of the tenant improvements for the Lusk 3 premises (unless the Expiration Date already had been
extended beyond such date in accordance with Extension Option #1 under Addendum No. 2).

     If Tenant commits to lease the entirety of Lusk 3 in the Lusk 3 Trigger Notice, Tenant may, by
making its irrevocable election to do so in the Lusk 3 Trigger Notice, eliminate up to half of the
Premises located within Lusk 2 concurrent with Substantial Completion of the tenant improvements
for the Phase 3 Premises, in which case the Expiration Date will be extended until the last day of
the 138th calendar month (or, if Tenant exercised Extension Option #1 under Addendum No.
2, the 186th calendar month) following Substantial Completion of the tenant improvements
for the Lusk 3 premises.

     2. Tenant’s First Right to Lease Lusk 3.

     If and when Landlord unilaterally elects to build Lusk 3 (i.e., not as the result of Tenant’s
Lusk 3 Trigger Notice described above in this Addendum), before entering into its first lease or
letter of intent to lease all or a portion of Lusk 3, Landlord shall first give written notice to
Tenant of its intent to develop and lease Lusk 3, along with the terms on which Landlord would
lease all of Lusk 3 to Tenant, including rent, tenant improvement allowance, and rental increases
(the “Lusk 3 Offer”). If Tenant unconditionally accepts the Lusk 3 Offer in writing within 30 days
after its receipt of the Lusk 3 Offer, this Lease will be amended to include all of Lusk 3 as part
of the Premises and to incorporate the terms of the Lusk 3 Offer as to the Phase 3 Premises.
Otherwise, this paragraph expires and becomes void in its entirety; provided, however, if
Landlord’s initial lease of Lusk 3 is for less than all of Lusk 3 (with the balance of Lusk 3
referred to as the Lusk 3 Remainder Space”), then before entering into its first lease or letter of
intent to lease all or a portion of the Lusk 3 Remainder Space, Landlord shall first give written
notice to Tenant of its intent to lease the Lusk 3 Remainder Space, along with the terms on which
Landlord would lease all of the Lusk 3 Remainder Space to Tenant, including rent, tenant
improvement allowance, and rental increases (the “Lusk 3 Remainder Offer”). If Tenant
unconditionally accepts the Lusk 3 Remainder Offer in writing within 15 days after its receipt of
the Lusk 3 Remainder Offer, this Lease will be amended to include all of the Lusk 3 Remainder Space
as part of the Premises and to incorporate the terms of the Lusk 3 Remainder Offer as to the Phase
3 Premises. If Tenant does not do so, this paragraph expires and becomes void in its entirety
(but Tenant’s expansion rights under Addendum No. 1 are not affected by such expiration).

     3.
Generally

40

 

     If Tenant issues the Lusk 3 Trigger Notice or accepts the Lusk 3 Offer in accordance with this
Addendum, Landlord shall use commercially reasonable efforts to promptly develop Lusk 3 (but
Landlord will have no obligation to do so if such development is or becomes infeasible for any
reason outside Landlord’s control, such as governmental restrictions and unknown or unexpected site
conditions).

     Tenant shall be deemed to have accepted the Phase 3 Premises and related tenant improvements
in the condition delivered to it “as is,” and Landlord will have no liability to correct any
defects; provided, however, Landlord shall use commercially reasonable efforts to cause the general
contractor to remedy all defects in the construction of the Lusk 3 Building and the Phase 3
Premises tenant improvements as to which Tenant notifies Landlord in writing. Nevertheless,
because Landlord is not the contractor or architect, the parties agree that Landlord will have no
liability or responsibility for any defects in the design or construction, or delays in completion,
of Lusk 3 (but Landlord will cooperate in seeking redress from the actual contractor(s) and
material providers in the case of any such defects).

     Concurrent with Tenant’s exercise of its right to lease additional space under this Addendum,
Tenant shall increase the Letter of Credit to an amount equal to six months (or three months, if
applicable under the Article in this Lease entitled “Letter of Credit Obligations”) gross rents
under the Lease that will be payable when rent begins on account of the expanded space.

     Tenant may specifically enforce its rights under this Addendum.

     Tenant’s rights under these Phase 3 Provisions automatically terminate and become void if
twice in any 12-month period Tenant defaults under any monetary provision or other material
provision of this Lease or if Tenant fails to maintain a tangible net worth of $75 million, or if
Tenant assigns or subleases more than 25% of the Premises (except to a Permitted Transferee).

41

 

Addendum No. 3-A to Lease – Potential Required Elements of Lusk 3

1. Reception Area. A significant space on the ground floor of Lusk 3 as a
reception area consistent with multi-tenant Class A office projects in the Sorrento
Mesa/Del Mar Heights/Torrey Hills submarkets of San Diego. (Tenant will not be entitled
to keep a receptionist or reception desk in the reception area unless Tenant leases the
entirety of Lusk 3.)

2. Auditorium/Meeting Space. A large auditorium/meeting room (approximately 5,000
– 7,000 square feet) within the Lusk 3 Premises to provide seating for several hundred
people.

3. Meeting/Training Rooms. Multiple meeting/training rooms within the Lusk 3
Premises.

4. Research Space. Research and laboratory space within the Lusk 3 Premises
designed and constructed in a manner to eliminate noise, odors, fumes, vibrations, and
other externalities from beyond the confines of such space.

5. Operating Room. A training facility within the Lusk 3 Premises in an operating
room-style with adjacent training rooms designed and constructed in a manner to eliminate
noise, odors, fumes, vibrations, and other externalities from beyond the confines of the
operating room space. The operating room/training facility must be designed to provide
that all deliveries and services to it are unobtrusive and hidden from public view.

     With respect to items 2 through 5 above, each such space must be limited to
single-level rooms readily convertible to general office space and, before expiration or
earlier termination of the Lease, Tenant must, at its sole cost, restore each such area to
generic office space similar to and consistent with the balance of the Lusk 3 Premises
offices and in accordance with plans approved in writing by Landlord (which approval may
not unreasonably be withheld or delayed).

42

 

Addendum No. 4 to Lease – Tenant’s Right of First Offer to Purchase the Project

     So long as Tenant is not in default and has never committed a default under this Lease, and
the original Tenant named in this Lease remains the Tenant under this Lease and continues to occupy
and operate out of at least 50% of the Project at the time, Landlord shall offer Tenant the right
to purchase the Project (or any substantial portion of the real estate within the Project) in
accordance with this Addendum before committing to sell the Project or portion of the Project.
Notwithstanding the foregoing, unless the sale is made after Landlord’s issuance of a Sale Notice
in accordance with the following paragraph, this Addendum does not apply to the sale or offer of a
sale of all or any portion of the Project to an affiliate of Landlord or any of its owners,
investors, lenders, or partners (a “Landlord-Related Party”) or to a portfolio sale of properties
including more than the Project by Landlord or a Landlord-Related Party. If the sale of the
Project is made to a Landlord-Related Party without the Sale Notice, then the Landlord-Related
Party purchasing the Project will be subject to the continued rights of Tenant under this Addendum.
If the sale is made as part of a portfolio sale, this Addendum becomes void.

     If and when Landlord intends to sell all or a substantial portion of the real estate
comprising the Project (the “For Sale Property”) during the Term, Landlord shall first give written
notice to Tenant of its intent to do so along with the price (and any other fundamental provisions,
such as seller-financing or assumption of existing financing and the intended status of title) that
Landlord intends to offer with respect to such sale (the “Sale Notice”). If Tenant gives written
notice to Landlord within ten business days after receiving the Sale Notice irrevocably electing to
purchase the For Sale Property (Tenant’s “Purchase Notice”), then Tenant shall purchase from
Landlord and Landlord shall sell to Tenant the For Sale Property on the terms stated in the Sale
Notice within 60 days after the date of the Sale Notice.

LIQUIDATED DAMAGES. LANDLORD AND TENANT HAVE DISCUSSED AND NEGOTIATED IN GOOD FAITH THE
QUESTION OF THE DAMAGES THAT WOULD BE SUFFERED BY LANDLORD IF TENANT ISSUES A PURCHASE NOTICE BUT
FAILS TO PURCHASE THE FOR SALE PROPERTY IN ACCORDANCE WITH THIS ADDENDUM AND HAVE ENDEAVORED TO
REASONABLY ESTIMATE SUCH DAMAGES AND THEY AGREE THAT (I) SUCH DAMAGES ARE AND WILL BE IMPRACTICABLE
OR EXTREMELY DIFFICULT TO FIX, (II) LIQUIDATED DAMAGES IN THE AMOUNT OF 3.0% OF THE PURCHASE PRICE
STATED IN THE SALE NOTICE (THE “LD AMOUNT”) WILL BE REASONABLE, (III) IN THE EVENT OF SUCH BREACH,
LANDLORD IS ENTITLED TO THE LD AMOUNT AS SUCH LIQUIDATED DAMAGES, AND (IV) IN CONSIDERATION OF THE
PAYMENT OF SUCH LIQUIDATED DAMAGES, LANDLORD SHALL BE DEEMED TO HAVE WAIVED ALL OTHER CLAIMS FOR
DAMAGES OR RELIEF AT LAW OR IN EQUITY ON ACCOUNT OF THE FAILURE OF TENANT TO PURCHASE THE FOR SALE
PROPERTY, BUT NOT INCLUDING ANY: (A) ACTIONS TO EXPUNGE A LIS PENDENS OR OTHER CLOUDS ON TITLE
CAUSED BY TENANT; (B) CLAIMS ON ACCOUNT OF TENANT’S OTHER OBLIGATIONS UNDER THIS LEASE; AND (C)
ATTORNEYS’ FEES AND COSTS INCURRED BY SELLER INCIDENT TO CLAUSES (A) AND (B) OR TO COLLECT THE
LIQUIDATED DAMAGES DESCRIBED ABOVE.

LANDLORD’S INITIALS TENANT’S INITIALS

/s/ SMT                    /s/ AL

If Tenant does not timely give its Purchase Notice, Landlord may enter into a sale transaction of
all or any portion of the For Sale Property at any time with any buyer, free of any rights of
Tenant under this Addendum; provided however, (a) before Landlord sells the For Sale Property at a
price that is more than

43

 

7.5% below the price included in the Sale Notice, Landlord must first issue another Sale Notice and
provide Tenant another opportunity to issue a Purchase Notice in accordance with the preceding
procedures; and (b) if Landlord withdraws the Project from the market (except during negotiations
or contract periods relating to the sale or potential sale), Landlord must again issue a Sale
Notice before again actively marketing the Project.

     If and when Landlord sells the For Sale Property (except to a Landlord-Related Party when no
Sale Notice is issued), this Addendum expires and becomes void.

     Tenant may specifically enforce its rights under this Addendum.

     This right of first offer is not transferable or assignable whatsoever (except to a Permitted
Transferee in conjunction with an assignment of all of Tenant’s rights under this Lease to the
Permitted Transferee) and automatically terminates and becomes void if (a) Tenant otherwise
attempts to assign such rights, directly, indirectly, or as collateral, or (b) twice in any
12-month period Tenant defaults under any monetary provision or other material provision of this
Lease or if Tenant assigns or subleases more than 25% of the Premises (except to a Permitted
Transferee).

44

 

Exhibit “A-1”

Space Plan for Lusk 2.3 (part of Phase 1 Premises)

45

 

Exhibit “A-2”

Space Plan for Lusk 2.2 (part of Phase 1 Premises)

46

 

Exhibit “A-3”

Space Plan for Lusk 2 Basement Premises (part of Phase 1 Premises)

47

 

Exhibit “A-4”

Depiction of Lusk 2 Lobby (part of Phase 1 Premises)

48

 

Exhibit “A-5”

Floor Plan for Lusk 1 (part of Phase 2 Premises)

 – Floor 3

49

 

Exhibit
“A-5” - continued

Floor Plan for Lusk 1 (part of Phase 2 Premises)

– Floor 2

50

 

Exhibit
“A-5” - continued

Floor Plan for Lusk 1(part of Phase 2 Premises)

 – Floor 1

51

 

Exhibit “A-6”

Floor Plan for Portion of Lusk 1-B (part of Phase 2 Premises)

 - Floor 2

52

 

Exhibit “A-6”

Floor Plan for Portion of Lusk 1-B (part of Phase 2 Premises)

 - Floor 1

53

 

Exhibit “A-7”

Spreadsheet Identifying Rentable Square Feet of Components of Project

Sorrento Summit

7473-7475 Lusk Blvd.

San Diego, CA

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Lusk 1 - Nuvasive	 	 	 	 	 	 	Lusk 2 - Nuvasive	 	 	Lusk 2 Common	 	 	Project Common	 	 	 	 
	 	 	Phase 2	 	 	Lusk 2 - Helicon	 	 	Phase 1	 	 	Area	 	 	Area	 	 	Total Rentable	 
	Lusk 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
1st Floor
	 	 	28,146	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	28,146	 
	1st Floor -Mid Level
	 	 	1,009	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,009	 
	2nd Floor
	 	 	24,652	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	24,652	 
	3rd Floor
	 	 	9,320	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9,320	 
	 
	Total Lusk 1
	 	 	63,127	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	63,127	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lusk 1-B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1st Floor
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Warehouse
	 	 	3,591	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,591	 
	Cafeteria, Miscellaneous
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	7,351	 	 	 	7,351	 
	2nd Floor
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fitness room/locker room
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,965	 	 	 	4,965	 
	Conference/Bridge/Stair
	 	 	1,611	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	1,611	 
	 
	Total Lusk 1-B
	 	 	5,202	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	12,316	 	 	 	17,518	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lusk 2
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basement
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mechanical/Electrical/Trash
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6,623	 	 	 	 	 	 	 	6,623	 
	Facilities Offices
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	0	 
	Tenant Area, North
	 	 	 	 	 	 	2,955	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	2,955	 
	Tenant Area, South
	 	 	 	 	 	 	0	 	 	 	6,979	 	 	 	 	 	 	 	 	 	 	 	6,979	 
	 
	Total Basement
	 	 	 	 	 	 	2,955	 	 	 	6,979	 	 	 	6,623	 	 	 	0	 	 	 	16,557	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1st Floor
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common areas
	 	 	 	 	 	 	0	 	 	 	0	 	 	 	987	 	 	 	 	 	 	 	987	 
	Remainder
	 	 	 	 	 	 	43,125	 	 	 	1,282	 	 	 	0	 	 	 	 	 	 	 	44,407	 
	 
	Total 1st Floor
	 	 	 	 	 	 	43,125	 	 	 	1,282	 	 	 	987	 	 	 	 	 	 	 	45,394	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2nd Floor
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Common areas
	 	 	 	 	 	 	0	 	 	 	0	 	 	 	718	 	 	 	 	 	 	 	718	 
	Remainder
	 	 	 	 	 	 	23,982	 	 	 	17,150	 	 	 	0	 	 	 	 	 	 	 	41,132	 
	 
	Total 2nd Floor
	 	 	 	 	 	 	23,982	 	 	 	17,150	 	 	 	718	 	 	 	 	 	 	 	41,850	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3rd Floor
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Remainder
	 	 	 	 	 	 	0	 	 	 	37,883	 	 	 	0	 	 	 	 	 	 	 	37,883	 
	 
	 
	 	 	 	 	 	 	0	 	 	 	37,883	 	 	 	0	 	 	 	0	 	 	 	37,883	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Project
	 	 	68,329	 	 	 	70,062	 	 	 	63,294	 	 	 	8,328	 	 	 	12,316	 	 	 	222,329	 

RENTABLE AREA CALCULATION

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Lusk 2 R/U	 	Project R/U	 	 
	 	 	Pro Rata Share	 	Usable	 	factor	 	factor	 	Rentable
	Lusk 1 - Nuvasive Phase 2
	 	 	32.61	%	 	 	68,329	 	 	 	n/a	 	 	 	6.11	%	 	 	72,502	 
	Lusk 2 - Helicon
	 	 	35.41	%	 	 	70,062	 	 	 	6.24	%	 	 	6.11	%	 	 	78,716	 
	Lusk 2 - Nuvasive Phase 1
	 	 	31.98	%	 	 	63,294	 	 	 	6.24	%	 	 	6.11	%	 	 	71,112	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	222,329	 

54

 

Exhibit “B” – TI Work

     The Tenant Improvements for all of the Phase 1 Premises other than the Lusk 2 Lobby are the
improvements contemplated by the Space Plans attached to this Lease as Exhibits A-1 through A-3
(and the Space Plans for the Phase 2 Premises, the Lusk 2 Lobby, and, if added pursuant to the
Phase 3 Provisions, the Lusk 3 Tenant Improvements, are to be established as described in Section
3(a) of this Exhibit). The Tenant Improvements are intended to include (a) the Lusk 2 Lobby TI
Work; (b) improvements reasonably necessary for Tenant and future tenants to conduct their
businesses on the Premises, designed and constructed in a manner that, in Landlord’s reasonable
opinion, are readily re-usable by the general population of office tenants, including internal
security systems and an emergency back-up generator, battery system and other electrical power
reliability improvements (“Generic Improvements”); (c) improvements necessary or appropriate to
Tenant’s business that are not Generic Improvements and are reasonably acceptable to Landlord under
the standards of Article 12 of the Lease (“Industry Improvements”); (d) with respect to the Phase 1
Tenant Improvements, and to be included in the Phase 1 TI Costs, all work necessary and appropriate
in and around the Lusk 2 Basement Premises to comply with the sound mitigation measures recommended
by the report issued as of September 4, 2007, by Rothermel Associates Architectural Acoustics
Collaborative, which recommendations are intended to minimize noise transmission to the first floor
of Lusk 2 above the Lusk 2 Basement Premises (which first-floor space is to be used as a vivarium
by another tenant of the Project), and (e) the flooring of Lusk 2.2 must include carpeting of a
weight of at least 28 ounces per yard. Notwithstanding the foregoing, Tenant Improvements that
are contemplated by Landlord-approved Space Plans are deemed Generic Improvements unless Landlord
notifies Tenant at the time of approval that they are Industry Improvements (the consequence of
which is addressed in Article 13 of the Lease). The areas marked with hatching in the space plan
attached as Exhibits A-1 through A-3 constitute Industry Improvements.

     1. TI Architect. Tenant shall retain HOK Interiors, or another architect reasonably
acceptable to Landlord (the “TI Architect”) to design the Tenant Improvements consistent with the
applicable Space Plan, which shall be compatible with the design, construction and equipment of the
existing building shells, comply with all applicable Laws, be capable of logical measurement and
construction, contain all such information as may be required for the construction of the Tenant
Improvements and the preparation of the Engineering Drawings (as defined below), and contain all
partition locations, plumbing locations, HVAC requirements and duct work, and ceiling plans.
Tenant shall retain the engineering consultants designated by Landlord and reasonably approved by
Tenant (the “Engineers”) to prepare all plans and engineering working drawings relating to the
structural, mechanical, electrical, plumbing, HVAC, life-safety, and sprinkler work of the Tenant
Improvements (“Engineering Drawings”) as part of the Working Drawings. Tenant shall, prior to
delivering the Preliminary Plans to Landlord for Landlord’s approval, deliver to Landlord
certificates evidencing that TI Architect and all Engineers have in force, with insurance companies
reasonably acceptable to Landlord, (i) Professional Liability Insurance with limits of not less
than $1 million per claim and annual aggregate, with a retention of not more than $25,000 per
claim, (ii) Workers Compensation Insurance as required by state and federal statutes,
(iii) Commercial General Liability Insurance in the amount of not less than $1 million per
occurrence, $1 million annual general aggregate and $1 million completed operations aggregate, and
(iv) Commercial Automobile Liability Insurance for all owned and non-owned automobiles utilized in
connection with the services performed by the TI Architect and Engineers under this Exhibit in the
amount of not less than $1 million per occurrence combined single limit for bodily injury and
property damage combined. All such insurance must be maintained for the entire period during which
services are performed under TI Architect’s and Engineers’ contracts, with the exception of the
Professional Liability Insurance policy, which must be maintained in force for at least five years
following completion of the Tenant Improvements. Landlord must be named as an additional-insured
on all required Commercial General Liability policies, and the required certificates of insurance
shall include an additional insured endorsement ISO form number CG 20 10 11 85, or equivalent,
evidencing such additional insured status. All insurance of

55

 

the TI Architect and Engineers must be primary as respects any insurance of Landlord, which
insurance shall be non-contributing.

     2. Landlord’s Approval. Although the plans for the TI Work will be based on Tenant’s
input, Landlord retains the ultimate rights of approval. If Landlord disapproves of any plans or
drawings or specifications submitted by Tenant under this Exhibit, Landlord’s written notice to
Tenant disapproval must include (i) a description of the disapproved elements, (ii) the reasons for
Landlord’s disapproval, and (iii) at Landlord’s option, suggested modifications. Landlord may
withhold approval, in Landlord’s sole and absolute discretion, to any plans, drawings, or
specifications that are incompatible with applicable laws or the applicable Building’s shell or
core construction or its mechanical, electrical, plumbing or life-safety system, or will require
any modification to the Building’s shell or core. Otherwise, Landlord may not unreasonably
withhold its approval to Tenant’s requested plans that are consistent with the prior approved
plans. Failure of Tenant or the TI Architect to timely and in good faith attempt to make all
revisions and address all concerns raised by Landlord constitutes Tenant Delay. If Landlord fails
to disapprove of Tenant’s plan submittal under this Exhibit within eight business days after
Landlord’s receipt of Tenant’s request, and Tenant thereafter gives Landlord a written notice that
Landlord’s failure to disapprove of such plans within two business days from such second notice
will constitute Landlord’s deemed approval, then Landlord’s failure to disapprove within such
two-business-day period will be deemed Landlord’s approval of the submittal.

     3. Plans and Specifications for the TI Work. Tenant shall diligently work to cause
the TI Architect to complete plans and specifications for TI Work as soon as reasonably possible,
and in any event must meet the deadlines described at the bottom of this Exhibit (the “Tenant
Deadlines”). Promptly after mutual execution of this Lease, Landlord shall advance to the TI
Architect on Tenant’s behalf from the applicable TI Allowance $3.00 per Rentable Square Foot of the
Phase 1 Premises and the Phase 2 Premises on account of the design services (payable in draws as
earned by the TI Architect as indicated in invoices or draw requests submitted to Landlord by
Tenant). (The parties acknowledge that Landlord previously advanced Tenant $10,000 towards these
costs, which amount is part of the TI Allowance and is to be credited to the foregoing advance to
the TI Architect.)

          (a) Space Plans for Second Floor and Basement of Lusk 2 and Phases 2 and 3. With
respect to any Space Plans for the Phase 2 Premises, the Lusk 2 Lobby, and, following any addition
thereof pursuant to the Phase 3 Provisions, the Phase 3 Premises, Tenant shall cause the TI
Architect to prepare Space Plan(s) for Tenant Improvements of the nature described in the
introductory paragraph of this Exhibit and submit them to Landlord for Landlord’s review and
approval on or before the Space Plan Deadline. If Landlord properly disapproves of the Space Plans
in accordance with Section 2 of this Exhibit, Tenant shall cause the TI Architect to revise the
Space Plans to address Landlord’s comments or incorporate Landlord’s suggested modifications (if
any) and resubmit the Space Plans to Landlord for Landlord’s review and approval within five
business days after Landlord’s disapproval. Such procedure shall be repeated until Landlord grants
approval of the Space Plans.

          (b) Preliminary Plans. Tenant shall cause the TI Architect to prepare preliminary
plans and specifications of the proposed Tenant Improvements, based on the applicable approved
Space Plan(s) (the “Preliminary Plans”) and submit the Preliminary Plans to Landlord for Landlord’s
review and approval on or before the Preliminary Plan Deadline. If Landlord properly disapproves
of the Preliminary Plans in accordance with Section 2 of this Exhibit, Tenant shall cause the TI
Architect to revise the Preliminary Plans to address Landlord’s comments or incorporate Landlord’s
suggested modifications (if any) and resubmit the Preliminary Plans to Landlord for Landlord’s
review and approval within five business days after Landlord’s disapproval. Such procedure shall
be repeated until Landlord grants approval of the Preliminary Plans.

56

 

          (c) Working Drawings. After obtaining Landlord’s approval of the Preliminary Plans,
and before the Working Drawing Deadline, Tenant shall cause the TI Architect and Tenant’s Engineers
to prepare working drawings and specifications, including the Engineering Drawings and all
architectural, mechanical, electrical, plumbing, sprinkler/life safety and other shop drawings for
the Tenant Improvements in form and substance from which all permits can be issued (the “Working
Drawings”). The Working Drawings must be based on the Preliminary Plans approved by Landlord and
not include material deviations or additions. If Landlord properly disapproves of the Working
Drawings in accordance with Section 2 of this Exhibit, Tenant shall arrange for Tenant’s Architect
and engineers to revise the Working Drawings to address Landlord’s comments or incorporate
Landlord’s proposed changes (if any) and resubmit the Working Drawings to Landlord for Landlord’s
review and approval within five business days after Landlord’s disapproval. Such procedure shall
be repeated until Landlord grants approval of the Working Drawings.

          (d) Permits and Final Plans. Immediately after Landlord’s approval of the Working
Drawings, Tenant and the TI Architect shall submit them for all necessary building permits and
shall diligently pursue such permits. Tenant shall make all changes to the Working Drawings that
are required by law or any governmental agency and shall obtain all necessary permits for the TI
Work before the Permit Deadline. All changes to the Working Drawings, including those required by
law or any governmental agency, require Landlord’s prior written approval.

          (e) Change Orders. In the event Tenant desires to change the Landlord-approved
Working Drawings, Tenant shall deliver Notice (the “Drawing Change Notice”) of the same to
Landlord, setting forth in detail the changes (the “Tenant Change Order”) Tenant desires to make to
the Working Drawings. Landlord shall, within a reasonable period based on the nature of the
requested changes, either (i) approve the Tenant Change Order, or (ii) disapprove the Tenant Change
Order and deliver a Notice to Tenant specifying in reasonably sufficient detail the reasons for
Landlord’s disapproval; provided, however, that Landlord may not unreasonably disapprove of the
Tenant Change Order. Any delay to Substantial Completion resulting from Tenant’s Drawing Change
Notice or Tenant Change Order constitutes Tenant Delay and any additional costs that arise in
connection with the Drawing Change Notice or Tenant Change Order shall be paid by Tenant; provided,
however, that to the extent the TI Allowance or Additional Allowance has not been depleted, such
payment shall be made out of the TI Allowance or Additional Allowance, as Tenant may elect.

     4. Construction. Landlord and Tenant have agreed upon DPR Construction as the general
contractor (the “Contractor”) to construct and install the TI Work for Phase 1 and Phase 2
(including, without limitation, the Lusk 2 Lobby TI Work) and to prepare the Premises for
occupancy, and who shall provide Landlord and Tenant with the TI Cost Estimate in accordance with
this Section 4 below; provided, however, if following receipt of the TI Cost Estimate, Landlord or
Tenant reasonably believes that the Contractor’s TI Cost Estimate is substantially higher than is
reasonable based on the scope, design, materials of and schedule for the TI Work, then Tenant or
Landlord may solicit proposals for construction of the TI Work based on personnel,
profit/overhead/general conditions, schedule, and availability from Reno Construction or Prevost
Construction (each a “Potential Contractor”) and if a Potential Contractor provides Tenant or
Landlord with a superior proposal for the TI Work, as reasonably determined by the party requesting
such alternative TI Cost Estimate, then such alternative TI Cost Estimate shall be submitted to the
other party for approval, which approval shall not be unreasonably withheld, conditioned or
delayed; and if the alternative TI Cost Estimate is approved by the other party, then the
“Contractor” shall mean the Potential Contractor submitting the superior proposal for the TI Work.
Notwithstanding the foregoing, the failure by either party to provide written notice to the other
party of its decision to seek an alternative TI Cost Estimate within five business days following
receipt of the TI Cost Estimate from DPR Construction, and the failure by such party to submit an
alternative TI Cost Estimate as a superior proposal by a Potential Contractor within ten days
following delivery of such notice, shall be deemed to mean that the parties mutually consent to the
TI Cost Estimate submitted by DPR Construction. Landlord shall cause the Contractor to submit the
names of all prime subcontractors (e.g., electrical, mechanical, plumbing, fire sprinkler, etc.) as
part of the TI Cost

57

 

Estimate, who shall also be subject to approval, deemed approval or an alternative proposal in
accordance with the foregoing procedure. Landlord may require the Contractor to adhere to certain
construction guidelines to ensure quality workmanship at competitive pricing. As part of
Contractor’s obligations, Contractor shall cause the Premises to be cleaned upon Substantial
Completion of the Tenant Improvements for the applicable phase of the Premises.

          The TI Costs include, without limitation, all costs and fees of the TI Architect, Contractor’s
cost of work, overhead and profit, all planning, design, architectural, engineering, consulting,
construction, permitting, segregation, utility segregation, connection and “tap-in” fees and costs,
as well as all other fees and costs incurred by Landlord in having plans reviewed and the TI Work
constructed, inspected, tested and operational (whether incurred before or after the date of this
Lease), Tenant’s Pro Rata Share of all costs to design and install the security system described in
the Article of the Lease entitled “Security measures,” plus a TI supervision fee payable to
Landlord or its managing agent in the amount of 3.0% of the TI Costs (the “Construction Management
Fee”) and the TI Costs may include, at Tenant’s request, a Tenant construction supervision fee
payable to Tenant’s designated construction manager (the “Tenant’s Construction Manager”) in an
amount not to exceed 3.0% of the TI Costs. The Construction Management Fee described above shall
cover all of Landlord’s cost incurred in approving the Preliminary Plan, Working Drawings and
constructing the TI Work, and Landlord shall not receive any fee described for profit, overhead or
general conditions in connection with the construction of the Tenant Improvements.

          Landlord hereby designates Daniel Ryan or Rodney Hunt as its authorized representative and
agent for the purpose of receiving construction notices and approving Tenant submittals under this
Exhibit; and Tenant hereby designates Ron Sutcliff as its authorized representative and agent for
the purpose of receiving notices and issuing and approving submittals and issuing requests for
Change Orders; and Landlord shall be entitled to rely upon authorizations and directives from the
representative of the other party as if given directly by such party. Either party may amend the
designation of its construction representative(s) at any time upon delivery of written notice to
the other party. Electronic mail constitutes valid notice for purposes of this Exhibit.

          Landlord will notify Tenant of the anticipated TI Costs as soon as reasonably possible, which
notification must consist of (i) an estimate from the Contractor, and (ii) as nearly as possible,
all other TI Costs to be incurred by Landlord in connection with the TI Work (the “TI Cost
Estimate”). If the TI Cost Estimate indicates that the TI Costs are estimated to exceed the TI
Allowance, then within three business days after Tenant’s receipt of such notice, Tenant may, by
written notice to Landlord (the “Value Engineering Request”), elect to perform value engineering to
reduce the TI Costs, pursuant to discussions with the TI Architect and Contractor during a
10-business day period following delivery of such notice to Landlord (and Landlord shall cause the
TI Architect and General Contractor to reasonably cooperate with Tenant in such value engineering
efforts). All such time relating to the value engineering constitutes Tenant Delay to the extent
resulting in delay to the critical path of the TI Work. Within ten business days after Tenant’s
receipt of the TI Cost Estimate (or a revised TI Cost Estimate resulting from value engineering
efforts): (a) Tenant may, by written notice to Landlord, increase the TI Allowance by an amount
equal to the lesser of (i) $35.00 per Rentable Square Foot of the applicable Premises, and (ii) the
positive difference, if any, between the TI Costs minus the existing TI Allowance for the Premises
(the “Additional Allowance”); and (b) Tenant shall deposit with Landlord funds in an amount equal
to the positive difference, if any, between the TI Costs minus the sum of the TI Allowance and any
Additional Allowance (“Tenant’s Improvement Deposit”), payment of which amount is the sole
responsibility of Tenant; provided that if Tenant or Landlord timely submits the written notice of
its intention to submit an alternative TI Cost Estimate to a Potential Contractor, and timely
submits the alternative TI Cost Estimate as provided above, then Tenant’s right to increase the TI
Allowance shall be extended to ten business days after mutual approval of the alternative TI Cost
Estimate by Landlord and Tenant.

58

 

          If Landlord reasonably determines at any time that the actual TI Costs exceed or will exceed
the amount previously anticipated, Tenant shall immediately pay Landlord the difference promptly
after such determination. Tenant is not entitled to receive any portion of the TI Allowance, as a
credit or otherwise, for any purpose other than for use towards the TI Work completed in accordance
under this Exhibit; provided, however, Tenant may use up to that portion of the TI Allowance equal
to $3.00 per Rentable Square Foot of the applicable Premises, for the costs of installing its data
wiring, security systems, and signage at the Premises, and up to up to that portion of the TI
Allowance equal to $3.00 per Rentable Square Foot of the applicable Premises, for its out-of-pocket
space planning costs, which shall be reimbursed to Tenant within ten business days following
Tenant’s delivery of a copy of the invoice(s) for such services.

          Tenant shall appropriately respond within five days after Landlord’s written request for
information relating to the TI Work and Tenant shall cause its authorized representative to attend
each weekly construction meeting relating to the TI Work (and information requested from Tenant in
any such meeting and included in the minutes for the meeting constitutes written request for
information contemplated by this sentence).

          Because Landlord is not the Contractor or architect, the parties agree that Landlord will have
no liability or responsibility for any defects in the design or construction, or delays in
completion, of the TI Work (but Landlord will cooperate in seeking redress from the actual
contractor(s) and material providers in the case of any such defects). Landlord will also endeavor
to cause Tenant to be named as a third party beneficiary of all warranties for the construction of
the Tenant Improvements. At Landlord’s cost (not be included in the TI Costs), Landlord shall
cause each separate Premises to be separately metered or sub-metered for utilities (to the extent
reasonably practicable). This paragraph does not modify Landlord’s Warranty Obligations.

     5. Substantial Completion and Tenant Delay. For purposes of this Lease,
“Substantially Completed” means the date on which the earliest of the following has occurred, but
only if and when all governmental requirements relating to the close-out the prior use of the
applicable Premises has been obtained, if any (such as termination of any radioactive material
license previously issued for the Premises or any legally required hazardous materials closure
permit has been obtained): (i) the City of San Diego Building Inspector gives its final sign-off on
any building inspection record card for the TI Work, (ii) a temporary certificate of occupancy is
issued for the Tenant Improvements such that the Premises may legally be occupied, or (iii) the
Tenant Improvements are in a condition that Tenant may begin operations from the applicable portion
of the Premises, subject only to minor punch-list items (as evidenced by a certificate of
substantial completion by the TI Architect). Within three days after Substantial Completion of the
TI Work, Landlord and Tenant shall: (a) participate in a joint walk through of the Premises for
the purpose of preparing a punch-list of items of required repair or other deficiencies in
construction (and Landlord shall use commercially reasonable efforts to cause the punch-list items
to be corrected as soon as possible); and (b) acknowledge, in a mutually executed instrument, the
applicable Commencement Date, Tenant’s acceptance of the Premises including the Tenant
Improvements, and the Expiration Date. “Tenant Delay” means delays to the Substantial Completion
of any portion of the TI Work caused by Tenant or its agents, such as delays for long lead-time
items requested by Tenant, delays resulting from Tenant or its agents interference with the
construction process, delays resulting from requests by Tenant to make changes to the TI Work after
submittal of the relevant plans or specifications to Landlord for approval, delays resulting from
Tenant’s failure to meet any of the Tenant Deadlines, and delays resulting from Tenant’s failure to
appropriately respond within two business days after Landlord’s written request for information
relating to the TI Work. Tenant shall cause its authorized representative to attend each
construction meeting relating to the TI Work (and information requested from

59

 

Tenant in any such meeting and included in the minutes for the meeting constitutes written
request for information contemplated by the preceding sentence so long as Tenant or its
representative is given reasonable advance notice of the meeting).

     6. Tenant Deadlines:

     “Space Plan Deadline” means: for the Lusk 2 Lobby, and Phase 2 Premises, October 31,
2007; and for the Phase 3 Premises, 45 days after the later of the date Landlord provides Tenant
preliminary plans for Lusk 3 and the date Tenant gives its written election under Addendum No. 3 to
lease the Phase 3 Premises.

     “Preliminary Plan Deadline” means: October 31, 2007, for the Phase 1 Premises;
November 30, 2007 for the Phase 2 Premises; and for the Phase 3 Premises, 30 days after Landlord’s
approval of the applicable Space Plan.

     “Working Drawing Deadline” means 15 business days after Landlord’s approval of the
applicable Preliminary Plans

     “Permit Deadline” means 45 days after Landlord’s approval of the applicable Working
Drawings.

60

 

Exhibit “C” – Memorandum of Lease

	 	 	 
	RECORDING REQUESTED BY:
	 	 
	 
	 	 
	WHEN RECORDED RETURN TO
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	 

	 	 

MEMORANDUM OF LEASE 

     THIS MEMORANDUM OF LEASE is made as of October ___, 2007, between HCPI/Sorrento, LLC, a
Delaware limited liability company (“Landlord”), and NuVasive, Inc., a Delaware corporation
(“Tenant”), who agree as follows

     1. Landlord leases to Tenant, and Tenant leases from Landlord, certain premises within the
real property (the “Property”) described as follows, pursuant to the Lease Agreement for Sorrento
Summit between Landlord and Tenant dated as of the date of this Memorandum (the “Lease”):

PARCEL 1 OF PARCEL MAP NO. 12736, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY, MAY 27, 1983, AS RECORDER’S FILE NO. 83-178570.

     2. The Lease provides for certain rights of Tenant to expand its leased premises under the
Lease and to be given a priority opportunity to purchase the Property. The Lease may be amended by
the parties from time to time.

     3. Other terms and conditions pertaining to the Lease are set forth in the Lease, all of which
are incorporated into this Memorandum by this reference. To the extent of any inconsistencies
between the language of this Memorandum and the language of the Lease, the language of the Lease
prevails.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	HCPI/Sorrento, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Health Care Property Investors, Inc., a Maryland corporation,	 	 
	 

	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 

Print name and title
	 	 

61

 

	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	NuVasive, Inc., a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Print name and title
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Print name and title
	 	 

62

 

	 	 	 	 	 	 	 
	State of California

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of San Diego

	 	 	)	 	 	 

     On this                      day of                      2007, before me,        
               
                                      , a Notary Public,
personally appeared                                                             , personally known to me or proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.

	 	 	 	 	 
	 

	 	WITNESS my hand and official seal.	 	 
	 
	 	 	 	 
	 

	 	 

Signature of Notary Public
	 	 
	 
	 	 	 	 
	 

	 	My Commission Expires:                                        	 	 

	 	 	 	 	 	 	 	 	 
	State of California
	 	 	)	 	 	 	 	 
	 
	 	)	ss.	 	 	 
	County of San Diego
	 	 	)	 	 	 	 	 

     On
this
                    
day of _______ 2007, before me,                                          
                   , a Notary Public,
personally appeared                                                             , personally known to me or proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacities, and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.

	 	 	 	 	 
	 

	 	WITNESS my hand and official seal.	 	 
	 
	 	 	 	 
	 

	 	 

Signature of Notary Public
	 	 
	 
	 	 	 	 
	 

	 	My Commission Expires:
                                	 	 

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Exhibit D

RULES

     1. General Covenants and Limitations on Use. Tenant may not do, bring, or keep
anything in or about the Premises that will cause a cancellation of any insurance covering the
Premises or the Project. If the rate of any insurance carried by Landlord is increased as a result
of Tenant’s use, Tenant shall pay to Landlord, within 10 days after Landlord delivers to Tenant a
notice of such increase, the amount of such increase. No noxious or offensive activity may be
carried on, in, on, or around the Premises, nor may anything be done or kept in, on, or around the
Premises which may be or become a public nuisance or which may cause embarrassment, disturbance, or
annoyance to others in the Project, or on adjacent or nearby property. For example, no light may
be emitted from the Premises which is unreasonably bright or causes unreasonable glare; no sounds
may be emitted from the Premises which are unreasonably loud or annoying; and no odor may be
emitted from the Premises which is or might be noxious or offensive to others in the Project, or on
adjacent or near-by property; and no unsightliness is permitted in, on or around the Premises.
Without limiting the generality of the foregoing, all unsightly equipment, objects, and conditions
shall be kept enclosed within the Premises and screened from view; no refuse, scraps, debris,
garbage, trash, bulk materials, or waste shall be kept, stored, or allowed to accumulate except as
may be properly enclosed within the Premises; and all pipes, wires, poles, antennas, and other
facilities for utilities or the transmission or reception of audio or visual signals shall be kept
and maintained enclosed within the Premises. Tenant may not keep or permit to be kept any bicycle,
motorcycle, or other vehicle, nor any animal (excluding certified service dogs), bird, reptile, or
other exotic creature in, on or around the Premises. Neither Tenant nor Tenant’s Invitees may do
anything that will cause damage or waste to the Project. No machinery, apparatus, or other
appliance may be used or operated in or on the Premises that will in any manner injure, vibrate, or
shake all or any part of the Project. Tenant shall ensure that none of its employees, agents or
Tenant’s Invitees prop open any external doors or windows or circumvent any security for the
Project. Tenant acknowledges that the Common Area will not be accessible to the public except
during Business Service Hours for the multi-tenant Buildings. In no event may Tenant use any
portion of the Common Area for loading, unloading, or parking, except in those areas specifically
designated by Landlord for such purposes, nor for any sidewalk sale, advertising, or similar
commercial purpose.

     2. Signs and Advertising. No Tenant may place, construct, or maintain any sign,
advertisement, awning, banner, or other exterior decoration in its Premises that is visible from
the exterior of the Premises (including inside the windows of the Premises), or on the Project
without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole and
absolute discretion (subject to Tenant’s specific signage rights under the Lease). Tenant, at its
cost, is entitled to have its name included on a multi-tenant directory within the Project. Tenant
shall, at Tenant’s sole cost, make any changes to any of Tenant’s signage on the Project as
required by any new or revised applicable Laws. Tenant shall pay all costs to install, maintain,
repair, and replace its signs and to remove them before expiration of the Term (at which time it
must restore the Project to its pre-sign condition, subject to normal wear and tear).

     3. Landlord’s Reserved Rights. Landlord, as owner of the Project, reserves the right
from time to time, to use portions of the Common Area for, among other things, entertainment,
advertising, displays, the leasing of kiosks, or such other uses, commercial or otherwise, so long
as such uses do not materially adversely affect Tenant’s use of the Premises or the Project and is
consistent with a first-class office project.

     4. Parking.

	 	a.	 	Tenant may not store or permit its Invitees to store any automobiles in the
parking area without the prior written consent of the operator. Except for emergency
repairs, Tenant and its Invitees

64

 

	 	 	 	may not perform any work on any automobiles while located in the parking area, or on the
Project. No vehicle may be parked over night.
	 
	 	b.	 	Cars must be parked entirely within the stall lines painted on the floor, and
only small cars may be parked in areas reserved for small cars.
	 
	 	c.	 	All directional signs and arrows must be observed.
	 
	 	d.	 	The speed limit shall be 5 miles per hour.
	 
	 	e.	 	Parking spaces reserved for handicapped persons must be used only by vehicles
properly designated.
	 
	 	f.	 	Parking is prohibited in all areas not expressly designated for parking,
including without limitation:

	 	(i)	 	Areas not striped for parking
	 
	 	(ii)	 	Aisles
	 
	 	(iii)	 	Where “no parking” signs are posted
	 
	 	(iv)	 	Ramps
	 
	 	(v)	 	Loading zones

	 	g.	 	No personal property of any type may be stored or located in the parking area
and the parking spaces may only be occupied by appropriately-sized vehicles.
	 
	 	h.	 	Every parker is required to park and lock his/her own car.
	 
	 	i.	 	Washing, waxing, cleaning or servicing of any vehicle by the customer and/or
his agents is prohibited. Parking spaces may be used only for parking automobiles.
	 
	 	j.	 	Tenant agrees to acquaint all persons to whom Tenant assigns a parking space
with these Rules.

LANDLORD IS NOT RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT’S PROPERTY (INCLUDING,
WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT’S AUTOMOBILE OR THE CONTENTS THEREOF DUE TO
THEFT, VANDALISM OR ACCIDENT) ARISING FROM OR RELATED TO TENANT’S USE OF THE PARKING FACILITY,
WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM LANDLORD’S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION.
THE LIMITATION ON LANDLORD’S LIABILITY UNDER THE PRECEDING SENTENCE DOES NOT APPLY, HOWEVER, TO
LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD’S WILLFUL MISCONDUCT. Without limiting the
foregoing, Tenant hereby voluntarily releases, discharges, waives and relinquishes any and all
actions or causes of action for personal injury or property damage occurring to Tenant arising as a
result of parking in the Parking Facility, or any activities incidental thereto, wherever or
however the same may occur, and further agrees that Tenant will not prosecute any claim for
personal injury or property damage against Landlord or any of its officers, agents, servants or
employees for any said causes of action. It is the intention of Tenant by this instrument, to
exempt and relieve Landlord from liability for personal injury or property damage caused by
negligence.

65

 

Exhibit “E” —  Sample SNDA

	 	 	 
	After recordation, return to:
	 	 
	 
	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 

	 	 
	 
	 	 
	Loan No.
	 	 

[Above space reserved for recording information.]

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

     THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (“Agreement”) is made and
entered into as of the                      day of                                         , 20 
                   , by and among NuVasive, Inc., a Delaware
corporation (“Tenant”),                                         , a                      (“Borrower”), and
                                         (“Lender”).

RECITALS

	 	A.	 	Tenant is the lessee and Borrower is the lessor under the Lease Agreement for
Sorrento Summit dated October ___, 2007, as amended by                                         
(collectively, the “Lease”).
	 
	 	B.	 	Borrower has requested that Lender make a loan to Borrower to be secured by a
Mortgage or Deed of Trust from Borrower to Lender (“Security Instrument”), and
an Assignment of Rents and Leases from Borrower to Lender (“Assignment”),
covering the property wherein the premises (“Premises”) covered by the Lease
are located, which property is described more fully in Exhibit A attached
hereto (“Property”).
	 
	 	C.	 	Lender is willing to make the requested loan, provided that, as one of the
conditions precedent thereto, Borrower and Tenant execute this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce Lender to make the requested loan, Tenant, Borrower, and Lender hereby
agree and covenant as follows:

	 	1.	 	Assignment. Borrower shall absolutely grant, transfer, and assign to
Lender the Lease and all rents and other sums payable under the Lease; provided,
however, that until written demand is made by Lender to Tenant, all rents and other
sums payable under the Lease shall be paid to Borrower, but only as they accrue.
Borrower covenants and agrees that upon Tenant’s receipt of written notice from Lender
to pay the rent to Lender and its successors and assigns, Tenant shall pay the rent and
all other sums due under the Lease as such rent and other sums become due to the Lender
and shall have no liability to Borrower for such rent and other sums due under the
Lease which are paid to Lender and its successors and assigns. Tenant hereby
recognizes the

66

 

	 	 	 	Assignment made by Borrower to Lender and agrees to pay, upon receipt of written
demand from Lender, all rents and other sums as directed by Lender.
	 
	 	2.	 	Subordination. Borrower, Tenant and Lender hereby agree that the Lease
and all of its terms and provisions (including, without limitation, any option or
options to purchase or rights of first refusal affecting the Property, or any portion
thereof, contained therein) is and shall at all times be subject and subordinate in all
respects to the Security Instrument and to all supplements, amendments and
modifications thereto, and to all extensions, substitutions, rearrangements and/or
replacements thereof.
	 
	 	3.	 	Nondisturbance and Attornment. If Tenant is not in default beyond
applicable cure period(s) under any of the terms, covenants or conditions contained in
the Lease or this Agreement, Lender agrees that in the event of foreclosure of the
Security Instrument, trustee’s sale, deed in lieu of foreclosure, or other enforcement
of the terms and conditions of the Security Instrument, or the exercise by Lender of
its rights under the Assignment, or in the event Lender comes into possession or
acquires title to the Property as a result of foreclosure or the threat thereof, or as
a result of other means, such action shall not result in either a termination of the
Lease, or a diminution or impairment of any of the rights granted to Tenant in the
Lease, except as hereinafter provided.

     If the interest of Borrower in the Property shall be transferred to Lender or any transferee
of Lender by reason of foreclosure, trustee’s sale, deed in lieu of foreclosure or other proceeding
for the enforcement of the Security Instrument or rights of Lender under the Assignment (such
transferee, its successors and assigns, including, but not limited to, Lender, shall hereinafter be
referred to as “Purchaser”), and Tenant is not in default beyond applicable cure period(s)
of its obligations under the Lease, Purchaser shall not name or join Tenant in any foreclosure,
trustee’s sale or other proceeding to enforce the Security Instrument or Assignment, unless
required by applicable law to do so, and Purchaser shall be bound to Tenant, except as provided in
Section 4 below, and Tenant shall be bound to Purchaser, under all of the terms, covenants and
conditions of the Lease for the balance of the term thereof, and any extensions thereof with the
same force and effect as if Purchaser were the original landlord under the Lease. Tenant does
hereby attorn to Purchaser, including Lender if Lender is such Purchaser, as the landlord under the
Lease, said attornment to be effective and self-operative without the execution of any further
instruments upon Purchaser’s succeeding to the interest of the Borrower under the Lease.

	 	4.	 	Limitation on Purchaser Obligations. Notwithstanding anything to the
contrary contained in Section 3 hereof, Purchaser shall not be:

     4.1 liable for any damages or other relief attributable to any act or omission of any
prior lessor under the Lease (including, without limitation, Borrower);

     4.2 subject to any offsets or defenses that Tenant may have against a prior lessor
under the lease (including, without limitation, Borrower);

     4.3 liable for any damages or other relief attributable to any latent or patent defects
in construction with respect to the Property;

     4.4 liable for the return of any security deposit under the Lease unless such security
deposit shall have been actually deposited with Purchaser;

     4.5 bound by any rent or additional rent that Tenant might have paid in advance to any
prior lessor under the Lease (including, without limitation, Borrower), for any period
beyond the month in which Purchaser succeeds to the interest of Borrower under the Lease;

67

 

     4.6 bound by any waiver or forbearance by any prior lessor under the Lease (including,
without limitation, Borrower) or bound by any agreement or modification of the Lease made
without the prior written consent of Lender; or

     4.7 bound by any covenant made by any prior lessor under the Lease (including, without
limitation, Borrower) to complete any construction on the Property covered by the lease or
to pay any sums to Tenant in connection therewith, unless Purchaser shall have expressly
consented thereto in writing [except for completion of the Phase 1 TI Work, Phase 2 TI Work,
and, if the Purchaser comes to title after the commencement of construction of Phase 3,
fulfillment of Landlord’s construction obligations under the Phase 3 Provisions] ; or

     4.8 liable for the performance of any obligations that the Borrower may have had as
lessor under the Lease whether such obligations arise prior to or subsequent to such fee
title ownership being obtained by Purchaser and it is further agreed that Purchaser shall be
liable for only such obligations under the Lease that are incurred after Purchaser acquires
fee title ownership of the Property.

	 	5.	 	Further Actions. Tenant covenants and agrees from time to time to do
all acts and execute such instruments as it shall be requested by Lender to do or
execute for the purposes of carrying out and effectuating this Agreement and the intent
hereof, and evidencing this Agreement, whether by filing with any public office, or
agency or otherwise.
	 
	 	6.	 	Covenants of Tenant. Tenant agrees that during the term of the Lease:

     6.1 Tenant will not pay any rent or additional rent more than one (l) month in advance
to any lessor (including, but not limited to, Borrower); or

     6.2 Tenant will not cancel, surrender, amend or modify the Lease without Lender’s prior
written consent nor terminate the Lease because of a default thereunder by Borrower unless
Tenant shall have first given Lender written notice thereof and a reasonable opportunity to
cure such default, but in no event shall such opportunity to cure exceed thirty (30) days;
unless the nature of the default is such that it cannot reasonably be cured within such
thirty (30) day period then Lender shall have such additional time as is reasonably required
to cure such default provided Lender commences to cure such default within such thirty (30)
day period and proceeds to prosecute such cure to its completion; provided that Tenant’s
exercise of any option or other right granted in the Lease shall not be prohibited by the
foregoing covenant; or

     6.3 in the event the Lease is rejected or deemed rejected in any bankruptcy proceeding
with respect to landlord, Tenant shall not exercise any right it may have to treat the Lease
as terminated under 11 U.S.C. § 365(h), as amended.

	 	7.	 	Merger. Borrower, Tenant and Lender agree that unless Lender shall
otherwise consent in writing, the fee title to the Property and the leasehold estate
created by the Lease shall not merge but shall remain separate and distinct,
notwithstanding the union of said estates either in Borrower or Tenant or any
third-party by purchase, assignment or otherwise.
	 
	 	8.	 	Limitation on Liability. Notwithstanding anything to the contrary
contained herein or in the Lease, in the event that Lender shall acquire title to the
Property, Lender shall have no obligation, nor incur any liability, beyond the then
interest if any, of Lender in the Property, and Tenant shall look exclusively to such
interest of Lender if any, in the Property for the payment and discharge of any

68

 

	 	 	 	obligations imposed upon Lender hereunder or under the Lease, and Lender is hereby
released and relieved of any other liability hereunder and under the Lease. As regards
Lender, Tenant shall look solely to the estate or interest owned by Lender in the
Property and Tenant will not collect or attempt to collect any such obligation or
liabilities or any judgment therefor, out of any other assets of Lender. By executing
this Agreement, Borrower specifically acknowledges and agrees that nothing contained in
this paragraph shall impair, limit, offset, lessen, abrogate or otherwise modify the
obligations of Borrower to Tenant under the Lease.
	 
	 	9.	 	Modification of Agreement. This Agreement may not be modified orally
or in any other manner except by an agreement in writing signed by the parties hereto
or their respective successors in interest.
	 
	 	10.	 	Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors and
assigns.
	 
	 	11.	 	Governing Law. This Agreement shall be governed by and construed under
the laws of the State in which the Property is located.
	 
	 	12.	 	Integration. This Agreement shall be the whole and only agreement with
regard to the subjection and subordination of the Lease and the leasehold estate
created thereby, together with all rights and privileges of Tenant thereunder, to the
lien or charge of the Security Instrument and shall supersede and cancel, but only
insofar as would affect the priority between the Lease and the Security Instrument any
prior agreements as to such subjection or subordination, including, but not limited to,
those provisions contained in the Lease that provide for the subjection or
subordination of the Lease and the leasehold estate created thereby to a deed or deeds
of trust or to a mortgage or mortgages.
	 
	 	13.	 	Notices. Wherever in this instrument it shall be required or permitted
that notice be given by any party to the other, such notice shall be in writing. Any
notice shall be deemed to have been given: (i) if mailed, no later than five (5)
business days after the date the same is deposited as certified or registered mail in
the United States mail, postage prepaid; or (ii) if sent by overnight courier, one (1)
business day after the same is deposited, delivery charges prepaid and specifying
overnight delivery, with a reputable, nationally recognized courier service which
guarantees overnight delivery. Notices shall be addressed to:

	 	 	 	 	 
	If to Lender:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	If to Tenant:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	If to Borrower:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 

or at such other address as either party may from time to time designate in writing in lieu
thereof. The address may be changed by notices given as provided herein.

	 	14.	 	Captions. The captions and headings of the paragraphs of this
Agreement are for convenience only and are not to be used in construing this Agreement.

69

 

	 	15.	 	Counterparts. This Agreement may be executed in counterparts, and all
counterparts together shall be construed as one document.

	 	 	 	 	 	 	 
	TENANT:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	
Name:
	 	 
	 	 
	 

	 	
Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	
Name:
	 	 

	 	 
	 

	 	
Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	BORROWER:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	LENDER:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	
Name:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

[Attach notarial acknowledgements and Exhibit A, legal description]

70

 

Exhibit “F”

ESTOPPEL CERTIFICATE

	 	 	 
	To:

	 	                                                             and its lenders and their assignees (collectively, “Beneficiaries”)
	 
	 	 
	From:

	 	NuVasive, Inc., a Delaware corporation (“Tenant”)

Re: Lease dated October                     , 2007, between HCPI/Sorrento, LLC, a Delaware limited liability
company, as Landlord, and Tenant, as Tenant, as amended by                                                             
(collectively, the “Lease”), with respect to the premises (the “Premises”) commonly known as Suites
                     in the building located at 7473 Lusk Boulevard, San Diego, California, 92121, more
particularly described as PARCEL 1 OF PARCEL MAP NO. 12736, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY, MAY 27, 1983, AS RECORDER’S FILE NO. 83-178570 (“Property”).

Tenant represents and warrants for the benefit of Beneficiary that as of                     , 20___:

     1. Tenant is the present owner and holder of the tenant’s interest under the Lease and the
interest of Tenant in the Lease has not been assigned, sublet, or encumbered. A correct and
complete copy of the Lease (including all modifications, amendments, supplements, side letters,
guaranties, addenda and riders of and to it) is attached to this Certificate as Schedule 1.
The Lease constitutes the entire agreement between Tenant and Landlord with respect to the
Premises. Tenant’s current notice address is set forth in the Lease. The size of the Premises is
approximately                      rentable square feet. No person or entity other than Tenant is in possession
of the Premises or any portion of the Premises. Tenant has not assigned the Lease or subleased the
Premises or any portion of the Premises and has not committed or agreed to enter into any such
assignment or sublease.

     2. The Commencement Date for the Phase 1 Premises was                                         , 200___, and the
Commencement Date for the Phase 2 Premises was                                         , 200___, and the Term of the Lease will
expire on                                         , 200___, including any presently exercised option or renewal term. Tenant
has no option or right to renew, extend or cancel the Lease, or to lease additional space in or
around the Premises, or to use any parking, other than Tenant’s right to extend the Term in
accordance with Addenda 1 and 2 of the Lease.

     3. The Basic Monthly Rent currently payable under the Lease is $                                         and such rent
has been paid through                                         , 200___. Tenant has paid operating expense charges of $
                                         for year-to-date 200___, and pays $                      per month for such estimated charges along
with each month’s base rent payment. Tenant is not entitled to any credit against any rent or
other charge or rent concession under the Lease. No rental payments have been made more than one
month in advance. Landlord has not, as an inducement, assumed any of Tenant’s lease obligations
and has made no agreements with Tenant covering free rent, partial rent, rebate of rental payments
or any other type of rental concession. Tenant has obtained all insurance required of Tenant under
the Lease, and all premiums have been paid. The balance of the current security deposit is $
                     and the amount of the Letter of Credit is $                     .

     4. All of Landlord’s construction obligations have been fully performed and Tenant has
accepted the Premises, subject to no conditions, except as follows:                                         . No
party is in default under the Lease and no event has occurred which, with the giving of notice or
passage of time, or both, would constitute such a default. Tenant is not the subject of any
bankruptcy or other voluntary or involuntary

71

 

proceeding, in or out of court, for the adjustment of debtor-creditor relationships. The
undersigned is unaware of any leaks, defects, malfunctions, or other problems with the Property,
other than                                         .

     5. Tenant acknowledges the right of the Beneficiaries and their respective successors and assigns
to rely on the statements and representations of Tenant contained in this Certificate, and further
understands that the purchase and financing of the Property will be made in material reliance on
this Certificate. The undersigned is authorized by all necessary action of Tenant to execute this
Tenant Estoppel Certificate on behalf of Tenant. For the next 60 days, Tenant may permit any
change to the foregoing information without first notifying Beneficiary in writing.

	 	 	 	 	 	 	 
	Tenant:

	 	 	 	NuVasive, Inc., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

                                                            , President
	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

                                                            , Secretary
	 	 

[Attach Schedule 1 to Certificate: Lease with all amendments, side-letters, etc.]

72

 

Exhibit “G”

	 	 	 
	Recording Requested by:
	 	 
	 
	 	 
	When Recorded Mail to:
	 	 
	HCPI/Sorrento, LLC
	 	 
	c/o Veralliance Properties, Inc.
	 	 
	8910 University Center Lane, #630
	 	 
	San Diego CA 92122
	 	 
	 

	 	Space Reserved for Recorder’s Use Only

QUITCLAIM DEED

The undersigned grantor declares that documentary transfer tax zero based on the full value of the
property conveyed.

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, NuVasive, Inc., a
Delaware corporation (“Tenant”), remises, releases, and forever quitclaims to HCPI/Sorrento,
LLC, a Delaware limited liability company (“Landlord”), the real property located in the
County of San Diego, State of California, described as follows (including all leasehold interests,
rights to purchase, rights to possession, and all other rights ever owned or held by Tenant in the
following property):

PARCEL 1 OF PARCEL MAP NO. 12736, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 27,
1983, AS RECORDER’S FILE NO. 83-178570.

This Quitclaim Deed terminates the Memorandum of Lease between Landlord and Tenant recorded in the
real property records on                     , 2007, as file no.                                         , and all rights of Tenant
under the Lease referenced in the Memorandum.

Dated:                                         , 20___.

NuVasive, Inc., a Delaware corporation

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	                                                            , President
	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	                                                            , Secretary
	 	 

[attach notarial acknowledgments]

73

 

Exhibit “G”

BENEFICIARY:

HCP/SORRENTO, LLC

C/O VERALLIANCE PROPERTIES, INC.

8910 UNIVERSITY CENTER LANE, SUITE 630

SAN DIEGO, CALIFORNIA, 92122

ATTENTION: DANIEL RYAN

LADIES AND GENTLEMEN:

AT THE REQUEST OF:

APPLICANT:

NUVASIVE, INC.

WE HEREBY ISSUE IN YOUR FAVOR OUR IRREVOCABLE CREDIT NO.                                               
               FOR THE ACCOUNT OF
NUVASIVE, INC. FOR AN AMOUNT OF $3,100,000.00 (TWO MILLION FOUR HUNDRED FIFTY THOUSAND DOLLARS)
AVAILABLE BY YOUR DRAFTS AT SIGHT ON                                          BANK, N.A. EFFECTIVE IMMEDIATELY AND EXPIRING
AT OUR OFFICE ON DECEMBER 31, 2008.

WE ARE INFORMED THIS LETTER OF CREDIT IS ISSUED RELATIVE TO THE LEASE AGREEMENT FOR SORRENTO SUMMIT
DATED OCTOBER                     , 2007, INCLUDING ANY AMENDMENTS AND RESTATEMENTS THERETO, BETWEEN NUVASIVE,
INC., AS TENANT, AND HCP/SORRENTO, LLC AS LANDLORD (THE “LEASE”) FOR PREMSIES LOCATED AT 7473 AND
7475 LUSK BOULEVARD, SAN DIEGO, CALIFORNIA 92121.

FUNDS UNDER THIS CREDIT ARE AVAILABLE AGAINST YOUR DRAFT(S) MARKED “DRAWN UNDER                      BANK,
N.A. LETTER OF CREDIT NO.                                         ” ACCOMPANIED BY THE FOLLOWING:

BENEFICIARY’S SIGNED AND DATED STATEMENT READING AS FOLLOWS:

“IN ACCORDANCE WITH THE LEASE AGREEMENT FOR SORRENTO SUMMIT DATED OCTOBER                     , 2007, INCLUDING
ANY AMENDMENTS AND RESTATEMENTS THERETO, BETWEEN NUVASIVE, INC., AS TENANT, AND HCP/SORRENTO, LLC
AS LANDLORD (THE “LEASE”), THE UNDERSIGNED AS THE CURENT LANDLORD UNDER THE LEASE IS ENTITLED TO
AND HEREBY DEMANDS PAYMENT UNDER                                          BANK, N.A. LETTER OF CREDIT NO                         
                IN THE AMOUNT OF U.S. $                                         .” OR

“THE UNDERSIGNED, [SUCCESSOR TO] HCP/SORRENTO, LLC (“CREDITOR”) IS IN RECEIPT OF NOTICE FROM
                                         BANK, N.A. THAT LETTER OF CREDIT NO.                                    
      WILL NOT BE EXTENDED
BEYOND ITS CURRENT EXPIRATION DATE AND THE UNDERSIGNED HAS NOT RECEIVED ACCEPTABLE REPLACEMENT
SECURITY. THE UNDERSIGNED IS ENTITLED TO AND HEREBY DEMANDS PAYMENT UNDER                                          BANK,
N.A. LETTER OF CREDIT NO.                                          IN THE AMOUNT OF U.S. $                                 
       .”

PARTIAL AND MULTIPLE DRAWINGS UNDER THIS LETTER OF CREDIT ARE PERMITTED.

74

 

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED FOR ONE
YEAR FROM THE PRESENT OR ANY FUTURE EXPIRATON DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THIS
OR ANY FUTURE EXPIRATION DATE WE SEND NOTICE TO YOU BY REGISTERED MAIL, RETURN RECEIPT REQUESTED,
OR BY HAND DELIVERED COURIER THAT WE ELECT NOT TO CONSIDER THIS LETTER OF CREDIT EXTENDED FOR ANY
SUCH ADDITIONAL PERIOD.

THIS LETTER OF CREDIT IS TRANSFERRABLE ONE OR MORE TIMES AND ONLY IN ITS ENTIRETY IN ACCORDANCE
WITH THE ICC PUBLICATION NO. 590. ANY TRANSFER REQUEST MUST BE EFFECTED BY PRESENTING TO US THE
ATTACHED FORM TOGETHER WITH THE ORIGINAL OR CERTIFIED COPY OF THE LETTER OF CREDIT. TRANSFERS TO
DESIGNATED FOREIGN NATIONALS AND/OR SPECIALLY DESIGNATED NATIONALS ARE NOT PERMITTED AS BEING
CONTRARY TO THE U.S. TREASURY DEPARTMENT OR FOREIGN ASSETS CONTROL REGULATIONS.

WE HEREBY ENGAGE WTH YOU THAT DRAFTS DRAWN UINDER AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS
OF THIS CREDIT WILL BE DULY HONORED UPON PRESENTATION AT OUR COUNTERS AT
                                                             ON OR BEFORE THE EXPIRATION DATE HEREOF. THE ORIGINAL LETTER
OF CREDIT OR A CERTIFIED COPY MUST ACCOMPANY THE DOCUMENTS PRESENTED UNDER THIS LETTER OF CREDIT.

THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING, AND SUCH UNDERTAKING SHALL
NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE TO ANY DOCUMENT, INSTRUMENT OR
AGREEMENT REFERRED TO HEREIN OR IN WHICH THIS LETTR OF CREDIT REFERRED TO OR TO WHICH THIS LETTER
OF CREDIT RELATES, AND ANY REFERENCES SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY
DOCUMENT, INSTRUMENT OR AGREEMENT. THE OBLIGATION OF                      BANK, N.A. UNDER THIS LETTER OF
CREDIT IS THE INDIVIDUAL OBLIGATION OF                      BANK, N.A. AND IS IN NO WAY CONTINGENT UPON
REIMBURSEMENT WITH RESPECT THERETO.

EXCEPT AS EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY
PRACTICE 1998, INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO 590 (“ISP98”).

PLEASE ADDRES ALL CORRESPODENCE REGARDING THIS LETTER OF CREDIT TO THE ATTENTION OF THE STANDBY
LETTER OF CREDIT UNIT                                                                                 , INCLUDING THE LETTER OF
CREDIT NUMBER MENTIONED ABOVE. FOR TELEPHONE ASSISTANCE, PLEASE CONTACT THE STANDBY CLIENT SERVICE
UNIT AT                                                             .

VERY TRULY YOURS,

75

 

Exhibit H

NC-40 Description

Noise shall be measured in 1/3 octave bands extrapolated from 25 Hz to 80,000 Hz. Specifically,
the 1/3 octave band sound pressure levels shown in the following table are the levels not be
exceeded in outside Tenant’s Premises due to Tenant’s operations. Noise level measurements to
demonstrate compliance with the required limits shall be made using a calibrated system capable of
sound pressure level measurements over the frequency range of interest, accurate to within
+1 dB in each 1/3 octave band. A ‘fast’ time weighting shall be used with a time constant
of 125 ms.)

	 	 	 
	One-Third Octave	 	 
	Band Center Frequency (Hz)	 	Noise Intrusion Limit in dB
	25
	 	68
	32
	 	66
	40
	 	64
	50
	 	62
	63
	 	59
	80
	 	57
	100
	 	54
	125
	 	52
	160
	 	50
	200
	 	47
	250
	 	45
	315
	 	43
	400
	 	42
	500
	 	40
	630
	 	39
	800
	 	37
	1,000
	 	36
	1,250
	 	35
	1,600
	 	34
	2,000
	 	34
	2,500
	 	34
	3,150
	 	33
	4,000
	 	33
	5,000
	 	32
	6,300
	 	32
	8,000
	 	32
	10,000
	 	32
	12,500
	 	31
	16,000
	 	31
	20,000
	 	30
	25,000
	 	30
	31,500
	 	30
	40,000
	 	29
	50,000
	 	29
	63,000
	 	28
	80,000
	 	28

76Exhibit 10.3

 

EXHIBIT 10.3

MULTI-TENANT INDUSTRIAL LEASE 

(TRIPLE NET)

LANDLORD:

AEW/LBA ACQUISITION CO. II, LLC,

a California limited liability company

TENANT:

AURORA BIOSCIENCES CORPORATION,

a Delaware corporation

 

 

STANDARD FORM MULTI-TENANT INDUSTRIAL LEASE

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	Title	 	Page	 
	 	 	 
	 	 	 	 
	1.	 	Premises
	 	 	1	 
	2.	 	Term
	 	 	2	 
	3.	 	Rent
	 	 	3	 
	4.	 	Common Area; Operating Expenses
	 	 	3	 
	5.	 	Security Deposit
	 	 	6	 
	6.	 	Use
	 	 	7	 
	7.	 	Payments and Notices
	 	 	9	 
	8.	 	Brokers
	 	 	9	 
	9.	 	Surrender; Holding Over
	 	 	10	 
	10.	 	Taxes
	 	 	10	 
	11.	 	Possession; Condition of Premises; Repairs
	 	 	11	 
	12.	 	Alterations
	 	 	12	 
	13.	 	Liens
	 	 	13	 
	14.	 	Assignment and Subletting
	 	 	13	 
	15.	 	Entry by Landlord
	 	 	15	 
	16.	 	Utilities and Services
	 	 	15	 
	17.	 	Indemnification and Exculpation
	 	 	15	 
	18.	 	Damage or Destruction
	 	 	16	 
	19.	 	Eminent Domain
	 	 	17	 
	20.	 	Tenant’s Insurance
	 	 	18	 
	21.	 	Landlord’s Insurance
	 	 	19	 
	22.	 	Waivers of Subrogation
	 	 	19	 
	23.	 	Tenant’s Default and Landlord’s Remedies
	 	 	19	 
	24.	 	Landlord’s Default
	 	 	21	 
	25.	 	Subordination
	 	 	21	 
	26.	 	Estoppel Certificate
	 	 	21	 
	27.	 	Intentionally Omitted
	 	 	22	 
	28.	 	Modification and Cure Rights of Landlord’s Mortgagees and Lessors
	 	 	22	 
	29.	 	Quiet Enjoyment
	 	 	22	 
	30.	 	Transfer of Landlord’s Interest
	 	 	22	 
	31.	 	Limitation on Landlord’s Liability
	 	 	22	 
	32.	 	Miscellaneous
	 	 	22	 
	33.	 	Lease Execution
	 	 	24	 
	34.	 	Intentionally Omitted
	 	 	24	 
	 	 	 
	 	 	 	 
	EXHIBITS	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	EXHIBIT “A”	 	Project Site Plan
	 	 	 	 
	EXHIBIT  “B”	 	Floor Plan
	 	 	 	 
	EXHIBIT  “C”	 	Work Letter Agreement
	 	 	 	 
	EXHIBIT  “D”	 	Sample Form of Notice of Lease Term Dates
	 	 	 	 
	EXHIBIT  “E”	 	Rules and Regulations
	 	 	 	 
	EXHIBIT  “F”	 	Sample Form of Tenant Estoppel Certificate
	 	 	 	 
	EXHIBIT  “G”	 	Tenant Environmental Questionnaire
	 	 	 	 

-i-

 

STANDARD FORM MULTI-TENANT INDUSTRIAL LEASE 

INDEX OF DEFINED TERMS

	 	 	 	 	 
	Term	 	Page	 
	 	 	 	 	 
	Abandonment

	 	 	19	 
	Acceptance

	 	 	6	 
	Act

	 	 	12	 
	Actual Statement

	 	 	5	 
	Applicable Laws

	 	 	7	 
	Applicable Reassessment

	 	 	11	 
	Audit Notice

	 	 	5	 
	BMS

	 	 	6	 
	BOMA

	 	 	1	 
	Common Area

	 	 	3	 
	Construction Allowance

	 	Exhibit C	 
	Declaration

	 	 	3	 
	Draw Request

	 	Exhibit C	 
	Election Date

	 	 	1	 
	Estimate Statement

	 	 	5	 
	Evidence of Completion

	 	Exhibit C	 
	Extension Option

	 	 	2	 
	Extension Options

	 	 	2	 
	Fair Market Rental

	 	 	2	 
	First Refusal Notice

	 	 	1	 
	First Refusal Space

	 	 	1	 
	Force Majeure Delays

	 	 	23	 
	Hazardous Materials

	 	 	8	 
	Increase Date

	 	 	6	 
	Indemnified Claims

	 	 	15	 
	Initial Reduction Date

	 	 	6	 
	Landlord

	 	 	1	 
	Landlord Delay

	 	Exhibit C	 
	Landlord Indemnified Parties

	 	 	8	 
	LC Delivery Date

	 	 	6	 
	Lease

	 	 	1	 
	Letter of Credit

	 	 	6	 
	Lilly

	 	 	6	 
	Management Fee

	 	 	3	 
	Nondisturbance Condition

	 	 	21	 
	Option Period

	 	 	2	 
	PCBs

	 	 	8	 
	Permitted Business

	 	 	14	 
	Permitted Transfer

	 	 	14	 
	Permitted Transferee

	 	 	14	 
	Pre-Approved Change

	 	 	12	 
	Preliminary Plans

	 	Exhibit C	 
	Proposition 13 Protection Amount

	 	 	11	 
	Proposition 13 Purchase Price

	 	 	11	 
	Real Property Taxes

	 	 	10	 
	Reassessment

	 	 	11	 
	Summary

	 	 	1	 
	Tax Increase

	 	 	11	 
	Tenant

	 	 	1	 
	Tenant Change

	 	 	12	 
	Tenant Changes

	 	 	12	 
	Tenant Improvement Allowance Items

	 	Exhibit C	 
	Tenant Improvements

	 	Exhibit C	 
	Tenant Indemnified Parties

	 	 	15	 
	Tenant Parties

	 	 	15	 
	Tenant’s Election Notice

	 	 	1	 
	Tenant’s Monthly Operating Expense Charge

	 	 	5	 
	Tenant’s Parties

	 	 	8	 
	Tenant’s Share

	 	 	1	 
	Transfer

	 	 	13	 
	Transfer Date

	 	 	14	 
	Transfer Notice

	 	 	14	 
	Transferee

	 	 	14	 

-ii-

 

SUMMARY
OF BASIC LEASE INFORMATION AND DEFINITIONS

This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS “Summary”) is hereby incorporated into and
made a part of the attached Multi-Tenant Industrial Lease which pertains to the Building described
in Section 1.4 below. All references in the Lease to the “Lease” shall include this Summary. All
references in the Lease to any term defined in this Summary shall have the meaning set forth in
this Summery for such term. Any Initially capitalized terms used in this Summary and any Initially
capitalized terms in the Lease which are not otherwise defined in this Summary shall have the
meaning given to such terms in the Lease. If there is any inconsistency between this Summary end
the Lease, the provisions of the Lease shall control.

	 	 	 	 	 
	1.1

	 	Landlord’s Address:
	 	AEW/LBA Acquisition Co., LLC
	 
	 	 	 	 
	 

	 	 	 	c/o Layton Bulling Associates
	 

	 	 	 	10251 Vista Sorrento Parkway, Suite 100
	 

	 	 	 	Attn: Mr. David C. Thomas
	 

	 	 	 	Telephone: (619) 597-8795
	 
	 	 	 	 
	1.2

	 	Tenants Address:
	 	Before Commencement Date:
	 
	 	 	 	 
	 

	 	 	 	Aurora Biosciences Corporation
	 

	 	 	 	11149 North Torrey Pines Road
	 

	 	 	 	Suite 200
	 

	 	 	 	La Jola, California 02037
	 

	 	 	 	Attn: Ms. Deborah Tower
	 

	 	 	 	Telephone: (619) 452-5000
	 
	 	 	 	 
	 

	 	 	 	After Commencement Date:
	 
	 	 	 	 
	 

	 	 	 	Aurora Biosciences Corporation
	 

	 	 	 	11010 Torreyana Road
	 

	 	 	 	La Jola, California 02037
	 

	 	 	 	Attn: Mr. Deborah Tower
	 

	 	 	 	Telephone: (819)452-5000

	1.3	 	Project: The Industrial development located at 11010
Torreyana Road in the City of La Jolla,
County of San Diego, State of California. as shown on the site plan attached hereto as Exhibit
“A” The Project includes all buildings, improvements and facilities, now or subsequently
located within such development from time to time, including, without limitation, the Building
currently located within the Project, as depicted on the site plan attached hereto as
Exhibit “A”.
	 
	1.4	 	Building: A multi-tenant Industrial building located in the Project, containing 81,204
rentable square feet, the address of which is 11010 Torreyana Road, La Jolla, California
02037.
	 
	1.5	 	Premises: Those certain premises within the Building shown on the floor plan attached hereto
as Exhibit “B”, containing approximately 55,000 rentable square feet on the ground
and third floors.
	 
	1.6	 	Monthly Operating Expense Charge: Tenants Share of Operating Expenses as provided in Section
4. Tenant’s Share is initially 67.73% (see Section 1.3).
	 
	1.7	 	Commencement Data: The earner to occur of (i) September 15,1997 or (ii) the data Tenant
commences business operations in the entire Premises. Subject to Section 11.1, Landlord will
deliver the Premises to Tenant within two (2) business days following the full execution and
delivery of this Lease.
	 
	1.8	 	Term: Eleven (11) years.
	 
	1.9	 	Rent:

	 	 	 	 	 	 	 	 	 
	Year	 	Annual Basic Rent	 	Monthly Basic Rent
	1	 	$	1,287,000.00	 	 	$	107,250.00	 
	2	 	$	1,325,010.00	 	 	$	110,487.60	 
	3	 	$	1,385,378.20	 	 	$	113,781.52	 
	4	 	$	1.408,339.50	 	 	$	117,194.98	 
	5	 	$	1,448,529.60	 	 	$	120,710.80	 
	6	 	$	1,491,985.40	 	 	$	124,332.12	 
	7	 	$	1,536,744.90	 	 	$	128,062.08	 
	8	 	$	1,582,847.20	 	 	$	131,903.04	 
	9	 	$	1,630,332.60	 	 	$	135,861.05	 
	10	 	$	1,679,242.50	 	 	$	139,936.88	 
	11	 	$	1,729,619.70	 	 	$	144,134.98	 

-iii-

 

	1.10	 	[Intentionally Omitted]
	 
	1.11	 	Security Deposit: See Section 5.
	 
	1.12	 	Permitted Use: General office, research and development, screen development and screening
services and the assembly and integration of Tenant’s ultra-high throughput screening system,
and any other lawful use Incidental thereto.
	 
	1.13	 	Brokers: John Bumham & Company representing
Landlord and John Bumham & Company representing
Tenant.
	 
	1.14	 	Interest Rate: 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 operating bank
operating in California, as its “prime rate” or “reference rate”, plus two percent (2%); or
(b) the maximum rate permitted by law.
	 
	1.15	 	Tenant Improvements: The tenant improvements to be installed in the Premises by Tenant as
described in the Work Letter Agreement attached hereto as Exhibit “C”.

	 	 	 	 	 	 	 	 	 
	 
	 

	 	/s/ Illegible
	 	 
	 	/s/ Illegible
	 	 
	 
	 	Landlord’s Initials
	 	 	 	Tenants Initials	 	 

-iv-

 

MULTI-TENANT INDUSTRIAL LEASE

This LEASE (“Lease”), which includes the preceding Summary of Basic Lease information and
Definitions (“Summary”) attached hereto and
Incorporated herein by this reference, is made as of the 7th day of APRIL, 1997,
by and between AEW/LBA ACQUISITION CO. II, LLC, a California limited
liability company (“Landlord”),
and AURORA BIOSCIENCES CORPORATION, a Delaware corporation (“Tenant”).

1. Premises.

1.1 Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises upon and subject to the terms, covenants and conditions contained in this Lease to be
performed by each party.

1.2 Landlord’s Reservation of Rights. Provided Tenant’s use of and access to the Premises is not
interfered with in an unreasonable manner, Landlord reserves the right from time to time to
install, use, maintain, repair, replace and relocate pipes, ducts, conduits, wires and appurtenant
meters and equipment above the celling surfaces, below the floor
surfaces and within the walls of
the Building and the Premises.

1.3
Tenant’s Share. “Tenant’s Share” means a fraction, the numerator of which is the total
rentable square footage of the Premises and the denominator of which is the total rentable square
footage of all buildings in the Project, including the Premises, which from time to time have been
constructed within the Project (commencing at such time as the occupants of such buildings commence
to pay rent or Operating Expenses or open for business, whichever is earlier). From time to time
at Landlord’s option, Landlord’s architect may determine and redetermine the actual rentable
square footage of the Premises and other building(s) in question
(calculated in accordance with
ANSI/BOMA Z65.1-1996), and thereupon Tenant’s Share will be adjusted accordingly.

1.4 Right of First Refusal. In the event that at any time during the first two (2) years of the
Term, Landlord receives a bona fide offer to lease any space on the second (2nd) floor of the
Building (“First Refusal Space”) that Landlord desires to accept, Landlord shall give Tenant
written notice (“First Refusal Notice”) of such offer. The First Refusal Notice shall set forth the
offer and the terms thereof. On or before the date which is five (5) days after Tenant’s receipt of
the First Refusal Notice (the “Election Data”), Tenant shall deliver written notice to Landlord
(“Tenant’s Election Notice”) pursuant to which Tenant shall elect either to (i) lease the entire
First Refusal Space described in the First Refusal Notice upon the terms set forth in the First
Refusal Notice; (ii) decline to lease such First Refusal Space Identified in the First Refusal
Notice, specifying that such decline is not based upon the terms set forth in the First Refusal
Notice, but upon Tenant’s lack of need for such First Refusal Space, in which event Landlord may
lease such First Refusal space to any entity on any terms Landlord desires and Tenant’s right of
first refusal with respect to the First Refusal Space specified in the First Refusal Notice shall
thereupon terminate and be of no further force or effect; or (iii) decline to lease the First
Refusal Space, specifying that such decline is based upon the terms set forth in the First Refusal
Notice, in which event Tenant shall also specify in Tenant’s Election Notice revised terms upon
which Tenant would be willing to lease such First Refusal Space. If Tenant does not so respond in
writing to the First Refusal Notice by the Election Date. Tenant shall be deemed to have elected
the option described in clause (ii) above. If Tenant timely delivers to Landlord Tenant’s Election
Notice pursuant to clause (III) above, Landlord may elect either to: (a) lease such First Refusal
Space to Tenant upon the revised terms specified by Tenant in Tenant’s Election Notice; or (b)
lease the First Refusal Space to any person or entity upon any terms Landlord desires; provided,
however, If (1) the terms of Landlord’s proposed lease to said third party are more favorable in
any material way to the third party than those terms proposed by Tenant in Tenant’s Election
Notice, or (2) the size of the First Refusal Space to be leased to such third party is less than
the size of the First Refusal Space offered to Tenant, before entering into such third party lease,
Landlord shall notify Tenant of such move favorable terms (or such reduced size) and Tenant shall
have the right to lease the First Refusal Space upon such more favorable terms (or as to such
reduced size) by delivering written notice thereof to Landlord within five (6) days after Tenant’s
receipt of Landlord’s notice. If Tenant does not elect to lease such space from Landlord within
said five (5) day period, Tenant shall be deemed to have elected the option described in clause (ii)
above. In determining whether the terms of Landlords proposed lease to a third party are more
favorable to the third party than those terms proposed by Tenant in Tenant’s Election Notice, all
concessions shall be blended into an effective rental rate over the term of the proposed lease to
said third party and such effective rental rate shall be compared with the effective rental rate of
the terms proposed by Tenant in Tenants Election Notice. If Tenant leases any First Refusal Space
pursuant to this Section 1.4, as soon as reasonably possible
after the Election Date, Landlord and
Tenant shall enter into a lease Incorporating the terms of Tenant’s lease of the First Refusal
space. The right of first refusal set forth in this Section 1.4 shall be exercisable by the
original Tenant and a Permitted Transferee only If the original Tenant or Permitted Transferee, as
applicable, occupies the entire Premises as of the data it exercises
its right in accordance with
the terms of this Section 1.4. Tenant shall not have the right to exercise its right of first
refusal if, as of the date of the attempted exercise of such right by Tenant, Tenant is in default
under this Lease after the expiration of all applicable cure periods.

1.5 Verification of Rentable Square Feet of Premises and Building. For purposes of this Lease,
“rentable square feet” shall be calculated pursuant to the Standard Method for Measuring Floor Area
in Office Buildings, ANSI/BOMA Z65.1—1996 for rentable area
(“BOMA”), and Tenant acknowledges that
the rentable square footage of the Building may include all of, and the rentable square footage of
the Premises therefore may include a portion of, the square footage of the ground floor Common
Areas located within the Building and the Common Area and other space in the Building dedicated to
the service of the Building. At either party’s election by giving written notice thereof to the other within sixty
(60) days following the date hereof, the number of rentable square feet of the Premises end the
Building shall be subject to verification in accordance with the
provisions of this Section 1.5 by
Stevenson Systems. In the event that Stevenson Systems determines that the amounts thereof shall be
different from those set forth in this Lease, the parties shall modify all amounts, percentages and figures appearing or
referred to in this Lease to confirm to such corrected rentable square

 

 

footage, including Tenant’s Share of Operating Expenses, Basic Rent, the Management Fee and the
Construction Allowance.

2. Term.

2.1 Term; Notice of Lease Dates. The Term of this Lease shall be for the period designated in
Section 1.8 of the Summary commencing on the Commencement Date, and ending on the expiration of
such period, unless the Term is sooner terminated or extended as provided in this Lease.
Notwithstanding the foregoing, if the Commencement Date falls on any day other than the first day
of a calendar month then the term of this Lease will be measured from the first day of the month
following the month in which the Commencement Date occurs. Within ten (10) days after Landlord’s
written request, Tenant shall execute a written confirmation of the Commencement Date and
expiration date of the Term in the form of the Notice of Lease Term Dates attached hereto as
Exhibit “D”.

2.2 Early Occupancy of the Ground Floor. It is contemplated that Tenant may complete the Tenant
Improvements and commence business operations in a portion of the ground floor of the Premises
prior to the Commencement Date. In such event, Tenant shall provide Landlord with prior notice of
the date of completion of such Tenant Improvements and commencement of business operations in that
portion of the ground floor of the Premises. Such early occupancy prior to the Commencement Date
shall be subject to all of the provisions of this Lease, except that Tenant shall have no
obligation to pay Monthly Basic Rent, the Management Fee or Tenant’s Share of Operating Expenses
during such period, but Tenant shall pay the water and utility charges set forth in Section 3.6.

2.3 Options to Extend. Tenant shall have two (2) options (individually, an “Extension Option” and
collectively, the “Extension Options”) to extend the Term for a period (individually, an “Option
Period”) of five (5) years each, commencing upon the expiration of the initial Term and the
expiration of the first (1st) Option Period, as the case may be, upon the same terms and conditions
previously applicable, except for the grant of any exercised Extension Option and Annual Basic Rent
(which shall be determined as set forth below). Each Extension Option may be validly exercised only
by notice in writing received by Landlord not later than six (6) months prior to commencement of
the Option Period; provided, however, that the Extension Option may be validly exercised only if no
material default (which default is continuing after notice and the expiration of any applicable
grace period provided for in this Lease) exists as of the date of exercise and, at Landlord’s
option, as of the commencement of the Option Period. If Tenant does not exercise an Extension
Option during the exercise period set forth above in strict accordance with the provisions hereof,
the Extension Options shall forever terminate and be of no further force or effect. The Extension
Options are personal to the original Tenant and any Permitted Transferee, may not be exercised by
any person or entity other than the original Tenant or any Permitted Transferee, and shall become
null and void if the original Tenant assigns its Interest in this Lease or sublets any portion of
the Premises to anyone other than a Permitted Transferee.

Annual Basic Rent during each Option Period shall be equal to Fair Market Rental as of the
commencement of such Option Period. For purposes hereof, “Fair Market Rental” shall mean the base
rent, including escalators, payable during the relevant Option Period to a willing landlord by a
willing tenant having a similar financial responsibility, credit rating and capitalization as
Tenant then has, taking into account all other relevant factors for like and comparable
laboratory/office space improved with tenant improvements of like and comparable quality to those
then existing in the Premises in the Torrey Pines/University Towne Centre market, but excluding
the then-existing value of any Tenant Improvements or Tenant Changes paid for by Tenant in excess
of the Construction Allowance. At least five (5) months prior to the Option Period, Landlord shall
notify Tenant of the Fair Market Rental as determined by Landlord. Any dispute between the parties
hereto with respect to the amount so determined shall be resolved by appraisal, as set forth
below; provided, however, that there shall be deemed not to be such a dispute unless Tenant
notifies Landlord thereof in writing within two (2) months after Landlord so notifies Tenant of
the Fair Market Rental and Tenant sets forth in such notice Tenant’s determination of Fair Market
Rental. If, in the event of a dispute, the appraisers have not determined the Fair Market Rental
by commencement of the Option Period, Tenant shall pay as Annual Basic Rent the amount determined
by Landlord until such time as the Fair Market Rental has been determined by appraisal, whereupon
Tenant shall pay any additional amount due to Landlord based upon such subsequent determination of
Fair Market Rental. If the Annual Basic Rent so paid by Tenant is higher than that ultimately
determined by the appraisal process, then Landlord shall reimburse such difference to Tenant.

If Tenant timely notifies Landlord in writing of Tenant’s dispute regarding Landlord’s
determination of the Fair Market Rental, then Fair Market Rental shall be determined as follows.
Landlord and Tenant shall each appoint one appraiser who shall by profession be a real estate
appraiser active over the five (5) year period ending on the date of such appointment in the
appraisal of commercial properties in San Diego County and who shall not have been employed or
engaged by either party during said five (5) year period. Each such appraiser shall be appointed
within fifteen (15) days after Tenant notifies Landlord of Tenant’s dispute of Landlord’s
determination of Fair Market Rental. The two 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 above. The three 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 Fair Market Rental for the
Premises, and shall notify Landlord and Tenant thereof. Such decision shall be based upon the
criteria and variables set forth above. The new Annual Basic Rent shall thereafter be equal to the
Fair Market Rental of the Premises so selected by the appraisers. The decision of the majority of
the three appraisers shall be binding upon Landlord and Tenant. If either Landlord or Tenant falls
to appoint an appraiser within the time period specified hereinabove, the appraiser appointed by
one of them shall reach a decision, notify Landlord and Tenant thereof, and such appraiser’s
decision shall be binding upon Landlord and Tenant, If the two appraisers fail to agree upon and
appoint a third appraiser, the two appraisers shall request the presiding judge of the Superior
Court of San Diego, acting in his private capacity, or the head of the local chapter of the
leading appraisal group, to appoint the third appraiser. Each party shall pay for its own
appraiser and
one-half (1/2) of the cost of the third appraiser.

-2-

 

3. Rent.

3.1 Basic Rent. Tenant agrees to pay Landlord, as basic rent for the Premises, the Annual Basic
Rent designated in Section 1.9 of the Summary. The Annual Basic Rent shall be paid by Tenant in
twelve (12) equal monthly installments of Monthly Basic Rent in the amounts designated in Section
1.9 of the Summary in advance on the first day of each and every calendar month during the Term,
except that the first full month’s Monthly Basic Rent shall be paid upon execution of this Lease
by Tenant. Monthly Basic Rent for any partial month shall be prorated in the proportion that the
number of days this Lease is in effect during such month bears to the actual number of days in
such month.

3.2 Additional Rent. All amounts and charges payable by Tenant under this Lease in addition to
the Annual Basic Rent described in Section 3.1 above shall be considered additional rent for the
purposes of this Lease, and the word “rent” in this Lease shall include such additional rent
unless the context specifically or clearly implies that only the Annual Basic Rent is referenced.
The Annual Basic Rent and additional rent shall be paid to Landlord as provided in Section 7,
without any prior demand therefor and without any deduction or offset except as otherwise
provided herein, in lawful money of the United States of America.

3.3 Late Payments. Late payments of Monthly Basic Rent and/or any item of additional rent will be
subject to interest and a late charge as provided in Section 23.7 below.

3.4
Management Fee. Tenant shall pay to Landlord
as additional rent an annual management fee
equal to [to be based upon .48/rsf when rsf is determined
prior to Lease execution] (the
“Management Fee”). The Management Fee shall be increased on each anniversary of the Commencement
Date (or the first day of the month following the anniversary of the Commencement Date if the
Commencement Date is not the first day of a month) by an amount equal to three percent (3%) of
the Management Fee payable immediately prior to such adjustment. In the event tenant exercises
the First Negotiation Right under Section 1.4 and leases the entire Building, the Management Fee
shall thereafter be equal to two percent (2%) of the Annual Basic Rent for the Premises (taking
into account the annual increases in Annual Basic Rent and the fair market value increases in
Annual Basic Rent during the Extension Options). The Management Fee
shall be payable in twelve
(12) equal monthly installments together with Monthly Rent.

3.5 Triple-Net Lease. Except as specifically set forth herein, all rent shall be absolutely net
to Landlord so that this Lease shall yield net to Landlord, the rent to be paid each month during
the Term of this Lease. Accordingly, except as specifically set forth herein, all costs, expenses
and obligations of every kind or nature whatsoever relating to the Premises, and Tenant’s Share
of all costs, expenses and obligations of every kind or nature whatsoever relating to the
remaining portion of the Project, which may arise or become due during the Term of this Lease
shall be paid by Tenant. Nothing herein contained shall be deemed to require Tenant to pay or
discharge any liens or mortgages of any character whatsoever which may exist or hereafter be
placed upon the Project by an affirmative act or omission of Landlord.

3.6 Pre-Commencement Date Charges. From and after the delivery of the Premises to Tenant and
continuing until the Commencement Date, Tenant shall pay to Landlord, as additional rent and
within thirty (30) days following receipt of an Invoice therefor, all water and utility charges
for the Project.

4. Common
Area: Operating Expenses.

4.1 Definition of Common Area. The term “Common Area,” as used in this Lease means all areas and
the improvements thereon within the exterior boundaries of the Project now or later made
available for the general use of Landlord, Tenant and other persons entitled to occupy floor area
in the Project and their customers, including, without limitation, the parking facilities of the
Project, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
driveways, landscaped areas, and similar areas and facilities situated within the Project which
are not reserved for the exclusive use of any Project occupants and the exterior surfaces and
roofs of all buildings (including the Building) located within the Project. Common Area shall not
include (i) the entryway to a tenant’s premises, (ii) any improvements installed by a tenant
outside of its premises, whether with or without Landlord’s knowledge or consent, or (iii) any
areas or facilities that are included in the description of premises leased to a tenant, but
Common Area shall include the ground floor entryway threshold, ground floor lobby, elevators and
all stairwells (except the middle stairwell).

4.2 Maintenance and Use of Common Area. The manner in which the Common Area shall be maintained
shall be solely determined by Landlord, but shall be consistent with the standard of such space
in similar office and research and development projects in the vicinity. If any owner or tenant
of any portion of the Project maintains Common Area located upon its parcel or demised premises
(Landlord shall have the right in its sole discretion to allow any purchaser or tenant to so
maintain Common Area located upon its parcel or demised premises and to be excluded from
participation in the payment of Common Area Expenses as provided below). Landlord shall not have
any responsibility for the maintenance of that portion of the Common Area and Tenant shall have
no claims against Landlord arising out of any failure of such owner or tenant to so maintain its
portion of the Common Area. The use and occupancy by Tenant of the Premises shall include the
right to use the Common Area (except areas used in the maintenance or operation of the Project),
in common with Landlord and other tenants of the Project and their customers and invitees,
subject to (i) any covenants, conditions and restrictions now or hereafter of record (the
“Declaration”), and (ii) such reasonable, non-discriminatory rules and regulations concerning the
Project as may be established by Landlord from time to time including, without limitation, the
Rules and Regulations attached hereto as Exhibit “E”. Tenant agrees to promptly comply
with all such rules and regulations and any reasonable, non-discriminatory amendments thereto
upon receipt of written notice from Landlord. Notwithstanding anything herein to the contrary,
Landlord agrees that the Rules and Regulations attached to this Lease
as Exhibit “E” shall not be modified or added to by Landlord in such a way as to
unreasonably interfere with Tenant’s permitted use of the Premises as set forth in this Lease.

4.3 Control of and Changes to Common Area. Landlord shall have the sole and exclusive control of
the Common Area, as well as the right to make reasonable changes to the Common Area. Provided
Landlord does not materially interfere with Tenant’s use of and access to the Premises,
Landlord’s rights shall include, but not be limited to, the right to

-3-

 

(a) restrain the use of the Common Area by unauthorized persons; (b) cause Tenant to remove or
restrain persons from any unauthorized use of the Common Area if they are using the Common Area by
reason of Tenant’s presence in the Project; (c) utilize from time to time any portion of the
Common Area for promotional, entertainment, and related matters; (d) temporarily close any portion
of the Common Area for repairs, improvements or alterations, to discourage non-customer use, to
prevent public dedication or an easement by prescription from arising, or for any other reason
deemed appropriate in Landlord’s judgment; and (e) reasonably change the shape and size of the
Common Area, add, eliminate or change the location of improvements to the Common Area, including,
without limitation, buildings, lighting, parking areas, landscaped areas, roadways, walkways,
drive aisles and curb cuts.

4.4 Operating Expenses. Throughout the Term of this Lease, commencing on the Commencement Date,
Tenant agrees to pay Landlord as additional rent in accordance with the terms of this Section 4,
Tenant’s Share of Operating Expenses for the taxes and insurance for the Project and for all costs
and expenses for the operation, maintenance, repair, and replacement of the Project including,
without limitation: (i) any form of real property tax, assessment, license fee, license tax,
business license fee, commercial rental tax, levy, charge, improvement bond or similar imposition
of any kind or nature 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; (ii) any and all assessments under any
covenants, conditions and restrictions affecting the Project; (iii) water, sewer and other utility
charges; (iv) costs of insurance obtained by Landlord pursuant to Section 21 of this Lease; (v)
waste disposal and janitorial services; (vi) security; (vii) labor; (viii) management costs
including, without limitation: (A) wages and salaries (and payroll taxes and similar charges) of
property management employees, and (B) management office rental, supplies, equipment and related
operating expenses and commercially reasonable management/administrative fees; (ix) supplies,
materials, equipment and tools including rental of personal property; (x) repair and maintenance of
the structural portions of the buildings within the Project, including the plumbing, heating,
ventilating, air-conditioning and electrical systems installed or furnished by Landlord; (xi)
maintenance, sweeping, repairs, resurfacing, and upkeep of all parking and other Common Areas;
(xii) amortization on a straight line basis over the useful life [together with Interest at the
Interest Rate on the unamortized balance] of all capitalized expenditures which are: (A) reasonably
intended to produce a reduction in operating charges or energy consumption; or (B) required under
any governmental law or regulation that was not applicable to the Project as of the Commencement
Date (however, if such expenditure by Landlord is required solely due to Tenant’s particular use,
occupancy or alteration of the Premises, then regardless of when such law or regulation became in
effect, Tenant shall be responsible for all of such expenditure); or (C) for replacement or
restoration of any Project equipment and/or Improvements needed to operate and/or maintain the
Project at the same quality levels as prior to the replacement or restoration; (xiii) gardening and
landscaping; (xiv) maintenance of signs (other than signs of tenants of the Project); (xv) personal
property taxes levied on or attributable to personal property used in connection with the Common
Areas; (xvi) reasonable accounting, audit, verification, legal and other consulting fees; and
(xvii) any other costs and expenses of repairs, maintenance, painting, lighting, cleaning, and
similar items, including appropriate reserves.

Notwithstanding anything to the contrary in the definition of Operating Expenses set forth in this
Lease, Operating Expenses shall not include the following:

	(a)	 	depreciation on the Building and Project;
	 
	(b)	 	interest, principal, points and fees on debt or amortization on any mortgages and deeds of
trust or other debt instruments secured by the Building or the Project or any underlying
ground lease;
	 
	(c)	 	costs of repairs and general maintenance paid from insurance proceeds but excluding the
amount of any deductibles paid by Landlord;
	 
	(d)	 	repairs and replacements covered by warranties or guaranties (to the extent actually
collected by Landlord); and the cost of any repairs, alterations and additions made to
rectify or correct any major defects or significant design errors relating to the initial
design or construction of the Building and Project;
	 
	(e)	 	costs of items considered capital repairs, replacements, improvements and equipment under
generally accepted accounting principles consistently applied except for those items
expressly permitted in clause (xii) above;
	 
	(f)	 	costs of special services rendered to individual tenants (including Tenant) for which a
special charge is made to the tenant(s) receiving such special services;
	 
	(g)	 	costs of improvements for other tenants in the Building or Project;
	 
	(h)	 	costs of the Landlord for which a tenant is obligated to separately reimburse Landlord (as
opposed to reimbursement of a pro rata share thereof as an Operating Expense), including, for
example, taxes and property insurance premiums on improvements for tenants of the Building
and Project that are above the building standard;
	 
	(i)	 	costs incurred by Landlord in connection with the enforcement of the terms and conditions of
any lease in the Building or Project;
	 
	(j)	 	all costs, expenses, penalties, damages, fines and judgments from any investigation, site
monitoring, containment, cleanup, removal, restoration or other remedial work of any kind or
nature required under any local, state or federal law or regulation, any judicial order, or
by any governmental or nongovernmental entity or person as a result of or in connection with
any Hazardous Material or Hazardous Materials contamination;
	 
	(k)	 	Landlord’s general corporate overhead and general and administrative expenses;

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	(l)	 	Marketing costs, including, without limitation, leasing commissions, attorneys’ fees,
space planning costs and other costs and expenses incurred in connection with the leasing of
the Building or Project; and
	 
	(m)	 	Overhead and profit increment paid to Landlord and Landlord’s subsidiaries for goods and/or
services in or to the Building or Project to the extent the same exceeds the costs of such
goods and/or services rendered by unaffiliated third parties on a competitive basis.

4.5 Tenant’s Monthly Operating Expense Charge. From and after the Commencement Date, Tenant shall
pay to Landlord, on the first day of each calendar month during the
Term of this Lease. Tenant’s
share of an amount estimated by Landlord to be the Monthly Operating Expenses for the Project for
that month (“Tenant’s Monthly Operating Expense
Charge”).

4.6 Estimate Statement. Prior to the Commencement Date and on or about March 1st of each subsequent
calendar year during the Term of this Lease, Landlord will endeavor to deliver to Tenant a
statement (“Estimate Statement”) wherein Landlord will estimate both the Operating Expenses and
Tenant’s Monthly Operating Expense Charge for the then current calendar year. Tenant agrees to pay
Landlord, as additional rent, Tenant’s estimated Monthly Operating Expense Charge each month
thereafter, beginning with the next installment of rent due, until such time as Landlord issues a
revised Estimate Statement or the Estimate Statement for the succeeding calendar year; except that,
concurrently with the regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly installment of
Tenant’s estimated Monthly Operating Expense Charge (less any applicable Operating Expenses already
paid) multiplied by the number of months from January, in the current calendar year, to the month
of such rent payment next due, all months inclusive. If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that Tenant’s Share of Operating
Expenses for the current calendar year will be greater than the amount set forth in the then
current Estimate Statement, Landlord may issue a revised Estimate Statement and Tenant agrees to
pay Landlord, within ten (10) days of receipt of the revised
Estimate Statement, the difference
between the amount owed by Tenant under such revised Estimate Statement and the amount owed by
Tenant under the original Estimate Statement for the portion of the then current calendar year
which has expired. Thereafter Tenant agrees to pay Tenant’s Monthly Operating Expense Charge based
on such revised Estimate Statement until Tenant receives the next calendar year’s Estimate
Statement or a new revised Estimate Statement for the current calendar year.

4.7 Actual Statement. By March 1st of each calendar year during the Term of this Lease, Landlord
will also endeavor to deliver to Tenant a statement (“Actual
Statement”) which states Tenant’s
Share of the actual Operating Expenses for the preceding calendar year. If the Actual Statement
reveals that Tenant’s Share of the actual Operating Expenses is more than the total Additional
Rent paid by Tenant for Operating Expenses on account of the preceding calendar year, Tenant
agrees to pay Landlord the difference in a lump sum within ten (10) days of receipt of the Actual
Statement. If the Actual Statement reveals that Tenant’s Share of the actual Operating Expenses is
less than the Additional Rent paid by Tenant for Operating Expenses on account of the preceding
calendar year, Landlord will credit any overpayment toward the next monthly installment(s) of
Tenant’s Share of the Operating Expenses due under this Lease. Such obligation will be a
continuing one which will survive the expiration or earlier termination of this Lease. Prior to
the expiration or sooner termination of the Lease Term and Landlord’s acceptance of Tenant’s
surrender of the Premises, Landlord will have the right to estimate the actual Operating Expenses
for the then current Lease Year and to collect from Tenant prior to Tenant’s surrender of the
Premises, Tenant’s Percentage of any excess of such actual Operating Expenses over the estimated
Operating Expenses paid by Tenant in such Lease Year.

4.8 Miscellaneous. Any delay or failure by Landlord in delivering any Estimate Statement or Actual
Statement pursuant to this Section 4 will not constitute a waiver of its right to require an
increase in additional rent for Operating Expenses nor will it relieve Tenant of its obligations
pursuant to this Section 4, except that Tenant will not be obligated to make any payments based on
such Estimate Statement or Actual Statement until ten (10) days after receipt of such Estimate
Statement or Actual Statement. If Tenant does not object to any Actual Statement within ninety
(90) days after Tenant receives any such statement, such statement will be deemed final and
binding on Tenant. Even though the Term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant’s Share of the actual Operating Expenses for the year in
which this Lease terminates. Tenant agrees to promptly pay any increase due over the estimated
expenses paid and, conversely, any overpayment made in the event said expenses decrease shall
promptly be rebated by Landlord to Tenant. Such obligation will be a continuing one which will
survive the expiration or termination of this Lease. Prior to the expiration or sooner termination
of the Lease Term and Landlord’s acceptance of Tenant’s surrender of the Premises, Landlord will
have the right to estimate the actual Operating Expenses for the then current Lease Year and to
collect from Tenant prior to Tenant’s surrender of the Premises, Tenant’s Share of any excess of
such actual Operating Expenses over the estimated Operating Expenses paid by Tenant in such Lease
Year.

4.9 Books and Records; Audit. Landlord shall maintain books and records of the Operating Expenses
in accordance with sound accounting and management practices. If Tenant wishes to audit the amount
of Operating Expenses or any component thereof as to a particular year, Tenant must deliver to
Landlord written notice of Tenant’s desire to audit
Landlord’s books and records (“Audit Notice”).
Such audit will be conducted (i) within sixty (60) days following delivery of the Audit Notice,
(ii) during normal business hours at Landlord’s business offices or at the management office of
the Building; (iii) on consecutive business days until completed; (iv) in an expeditious manner so
as to minimize interference with Landlord’s books and records at Tenant’s sole cost and expense;
and (v) by an auditor reasonably acceptable to Landlord and Tenant (without limiting other
reasons, it will be reasonable for Landlord to disapprove an auditor on the basis that the auditor
is paid on a contingency fee basis). Tenant shall pay in a timely manner as required by this Lease
any amounts stated as due on the Actual Statement, provided that such payment shall not waive any
right to audit and/or dispute by Tenant as set forth herein. Tenant agrees to deliver to Landlord
the results of any such audit within ninety (90) days of completion of the audit. If Tenant does
not deliver an Audit Notice as to any Actual Statement within the time frames set forth
hereinabove, then such Actual Statement will be conclusively binding on Tenant.

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If Tenant’s audit reveals that Landlord has overcharged Tenant, then within thirty (30) days after
the results of such audit are made available to Landlord, Landlord shall reimburse Tenant the
amount of such overcharge. If the audit reveals that Tenant was undercharged, then within thirty
(30) days after the results of the audit are made available to Tenant, Tenant shall reimburse
Landlord the amount of such undercharge. Tenant shall pay the cost of such audit, provided that if
the audit reveals that Landlord’s determination of Tenant’s Share of Operating Expenses as set
forth in an Actual Statement was in error in Landlord’s favor by more than five percent (5%) of
the amount paid by Tenant prior to delivering the Audit Notice, then Landlord shall pay the
reasonable, third-party cost of such audit incurred by Tenant within thirty (30) days of demand by
Tenant. To the extent Landlord must pay the cost of such audit, such cost shall not exceed a
reasonable hourly charge for a reasonable amount of hours spent by such third-party in connection
with the audit. Landlord shall not be liable for any contingency fee payments to any consultants
of Tenant. Tenant agrees to keep the results of the audit and any settlement resulting therefrom
confidential and will cause its agents, employees and contractors to keep the same confidential.

5. Security Deposit.

5.1 Delivery of Letter of Credit. Within ten
(10) days following the delivery of the Premises to
Tenant (“LC Delivery Date”), and again within ten (10) days following the date Landlord gives
Tenant written notice that Landlord has disbursed $1,250,000.00 of the Construction Allowance (the
“Increase Date”), Tenant shall deliver to Landlord the Security Deposit in the form of an
unconditional, irrevocable and renewable letter of credit
(“Letter of Credit”) in favor of Landlord
in form and issued by a bank with an office (capable of honoring a demand on the Letter of Credit)
located in Orange County or San Diego County, California, reasonably satisfactory to Landlord, in
the applicable principal amount specified in Section 5.2 below, as security for the faithful
performance and observance by Tenant of the terms, provisions and conditions of this Lease. The
Letter of Credit shall state that an authorized officer or other representative of Landlord may
make demand on Landlord’s behalf for the amount owed by Tenant to Landlord, and that the issuing
bank must immediately honor such demand, without qualification or satisfaction of any conditions,
except the proper identification of the party making such demand and a certification that Tenant is
in default under this Lease, which default is continuing after notice and expiration of any
applicable grace period required by this Lease. In addition, the Letter of Credit shall Indicate
that it is transferable in its entirety by Landlord as beneficiary and that upon receiving written
notice of transfer, and upon presentation to the Issuer of the original Letter of Credit, the
issuer will reissue the Letter of Credit naming such transferee as the beneficiary. If the term of
the Letter of Credit held by Landlord will expire prior to the last
day of the Term and it is not
extended, or a new Letter of Credit for an extended period of time is not substituted, within
thirty (30) days prior to the expiration of the Letter of Credit, then Landlord may deliver written
notice of such fact to Tenant and if Tenant does not extend the
Letter of Credit or substitute a
new Letter of Credit within ten (10) days after Tenant’s receipt of such notice from Landlord,
Landlord shall be entitled to make demand for the principal amount of said Letter of Credit and,
thereafter, to hold such funds in accordance with Section 5.3
below. Tenant may, at any time,
substitute the Letter of Credit by delivering to Landlord cash in the amount of the required
principal of the Letter of Credit.

5.2 Increase and Reduction In Principal Amount of Letter of Credit. The principal amount of the
Letter of Credit shall be as follows:

	 	 	 	 	 
	Portion of Term	 	Required Principal Amount
	LC Delivery Date — Increase Date*
	 	$	1,250,000.00	 
	Increase Date — Initial Reduction Date
	 	$	2,500,000.00	 
	First year following Initial Reduction Date
	 	$	1,000,000.00	 
	Second year following Initial Reduction Date
	 	$	666,666.00	 
	Third Year following Initial Reduction Date
	 	$	333,333.00	 
	Remaining Term
	 	Equal to then-current
	 
	 	Monthly Basic Rent

The “Initial Reduction Date”
shall be the date that the satisfaction of the conditions described in
clause (a) below and either of clauses (b) and (c) below occur

	(a)	 	Tenant’s receipt of payment from Eli Lilly (“Lilly”) and Bristol Myers Squibb (“BMS”) upon
Acceptance by each company of the Automated Storage and Retrieval module for the Ultra-High
Throughput Screening System. Evidence of payment will be provided by Tenant and will include
a copy of the check or wire transfer notification and written confirmation by Lilly and BMS
that such payment is made for Acceptance of the Automated Storage and Retrieval module.
“Acceptance” is defined per existing contract language with BMS and Lilly, which Tenant
represents and warrants to Landlord is accurately described as follows:

	 	(i)	 	BMS: When BMS has determined that all Deliverables for the Automated
Storage and Retrieval Module have successfully conformed to or satisfied the
Specifications in all material respects, BMS shall give Aurora written notice thereof
(“Acceptance”), in which event BMS shall become obligated to pay such amounts as
triggered under this Agreement as a result hereof.
	 
	 	(ii)	 	LILLY: When the LILLY UHTSS Steering Committee has determined that the
Automated Storage and Retrieval module meet the Specifications for such module. Upon
Completion (Acceptance) of the Automated Storage and retrieval module at Lilly, Aurora
shall give Lilly written notice and Lilly shall become obligated to pay such amounts
provided for in the
agreement.

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	(b)	 	Tenant’s entering into an agreement with another major pharmaceutical company that is
similar in scope and nature to Tenant’s existing agreements with
BMS and Eli Lilly
concerning the production of Tenant’s Ultra-HTS system.
	 
	(c)	 	Completion of an initial public offering of securities in Tenant traded on a United States
stock exchange raising at least Ten Million Dollars ($10,000,000.00) in equity.

Notwithstanding the foregoing, if as of the applicable reduction date set forth above, (i) Tenant
is in material default under this Lease, or (ii) Landlord has given Tenant written notice that
circumstances exist that would, with notice or lapse of time, or both, constitute a material
default, then the principal amount shall not be reduced, unless and until such default or
circumstances shall have been fully cured, at which time the principal amount may be reduced as
hereinabove described.

5.3 Application of Letter of Credit. The Letter of Credit shall be held by Landlord as security for
the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease. If
Tenant commits a default with respect to any provision of this Lease, Landlord may (but shall not
be required to) draw upon the Letter of Credit and use, apply or retain all or any part of the
proceeds for the payment of any sum which is in default, or for the payment of any other amount
which Landlord may spend or become obligated to spend by reason of Tenant’s default or to
compensate Landlord for any loss or damage which Landlord may suffer by reason of Tenant’s default.
If any portion of the Letter of Credit is so used or applied, Tenant shall, within ten (10) days
after demand therefor, post an additional Letter of Credit in an amount sufficient to restore the
Letter of Credit to the principal amount required under Section 5.2 above. Landlord shall not be
required to keep any proceeds from the Letter of Credit separate from its general funds and Tenant
shall not be entitled to any interest on such proceeds. Should Landlord sell its interest in the
Premises during the Term and if Landlord deposits with the purchaser thereof the Letter of Credit
or any proceeds of the Letter of Credit, thereupon Landlord shall be discharged from any further
liability with respect to the Letter of Credit and said proceeds.

6. Use.

6.1 General. Tenant shall use the Premises solely for the Permitted Use specified in Section 1.12
of the Summary, and shall not use or permit the Premises to be used for any other use or purpose
whatsoever without Landlord’s consent, which shall not be unreasonably withheld. Tenant shall
observe and comply with the “Rules and Regulations”
attached hereto as Exhibit “E”, and all
reasonable non-discriminatory modifications thereof and additions thereto from time to time put
into effect and furnished to Tenant by Landlord. Landlord shall endeavor to uniformly enforce the
Rules and Regulations, but shall have no liability to Tenant for the violation or non-performance
by any other tenant or occupant of the Project of any such Rules and Regulations. Tenant shall, at
its sole cost and expense, observe and comply with all requirements of any board of fire
underwriters or similar body relating to the Premises, and all laws, statutes, codes, rules and
regulations now or hereafter in force relating to or affecting the use, occupancy, alteration or
improvement (whether structural or non-structural) of the Premises, including, without limitation,
the provisions of Title III of the Americans with Disabilities Act of 1990 as it pertains to
Tenant’s use, occupancy, improvement and alteration of the Premises. Tenant shall not use or allow
the Premises to be used (a) in violation of the Declaration or any other recorded covenants,
conditions and restrictions affecting the Project or of any law or governmental rule or regulation,
or of any certificate of occupancy issued for the Premises or the Building, or (b) for any
improper, immoral, unlawful or reasonably objectionable purpose. Tenant shall not do or permit to
be done anything which will obstruct or unreasonably interfere with the rights of other tenants or
occupants of the Project, or Injure or annoy them. Tenant shall not cause, maintain or permit any
nuisance in, on or about the Premises, the Building or the Project, nor commit or suffer to be
committed any waste in, on or about the Premises. Tenant and Tenant’s employees and agents shall
not solicit business in the Common Area, nor shall Tenant distribute any handbills or other
advertising matter in the Common Area.

Notwithstanding the foregoing or anything to the contrary contained in this Lease, Tenant shall
not be responsible for compliance with any laws, statutes, codes, ordinances, rules, regulations
or other governmental directives (collectively, “Applicable Laws”) where such compliance is not
specifically related to or required by Tenant’s particular use, occupancy or alteration of the
Premises. For example, if any governmental authority should require the Building or the Premises
to be structurally strengthened against earthquake, or should require the removal of asbestos from
the Premises and such measures are imposed as a general requirement applicable to all tenants
rather than as a condition to or a result of Tenant’s particular use, occupancy or alteration of
the Premises, such work shall be performed by and (except to the extent such cost is a permissible
Operating Expense) at the sole cost of Landlord.

6.2 Parking. Tenant and its employees shall park their vehicles only in those portions of the
Common Area from time to time designated for such purpose by Landlord. Subject to Sections 18 and
19, Landlord shall maintain a parking ratio at the Project of at least 3.5 spaces per 1000
rentable square feet of leased space at the Project, and shall designate five (5) spaces near the
front entrance of the Building for use by visitors of the Building. The use of the parking area
shall be subject to the Parking Rules and Regulations attached hereto as Exhibit “E” and
any other reasonable, non-discriminatory rules and regulations adopted by Landlord from time to
time. Tenant shall be responsible for ensuring that its employees comply with all the provisions
of this Section and such other parking rules and regulations as may be adopted and implemented by
Landlord from time to time.

6.3 Signs, Awnings and Canopies. Tenant will not place or suffer to be placed or maintained on the
roof or on any exterior door, wall or window (or within 48 inches of any window) of the Premises
any sign, awning or canopy, or advertising matter on the glass of any window or door of the
Premises without Landlord’s prior written consent which shall not be unreasonably withheld. Tenant
agrees to maintain any such sign, awning, canopy, decoration, lettering or advertising matter as
may be approved by Landlord in good condition and repair at all times. At the expiration or
earlier termination of this Lease, at Landlord’s election, Tenant shall remove all signs, awnings,
canopies, decorations, lettering and advertising and shall repair any damage to the Building, the
Premises or the Project resulting therefrom
all at Tenant’s sole cost and expense. If Tenant fails to maintain any such approved sign, awning,
decoration, lettering, or advertising, Landlord may do so and Tenant shall reimburse Landlord for
such cost. If, without Landlord’s prior written

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consent. Tenant installs any sign, awning, decoration, lettering or advertising, or falls to
remove any such item(s) at the expiration or earlier termination of this Lease, Landlord may have
such item(s) removed and stored and may repair any damage to the Building, the Premises or the
Project at Tenant’s expense. The removal, repair and/or storage
costs shall bear interest until
paid at the maximum rate allowed by law.

Notwithstandting the foregoing, Tenant shall have the non-exclusive right to place its name on the
monument sign at the Project and the non-exclusive right to place its name on a sign on the
Building, all in compliance with applicable laws and subject to Landlord’s reasonable approval.
Subject to compliance with all applicable laws and Landlord’s reasonable approval, Tenant may
replace the existing monument sign with a larger one, and upon the lien-free completion thereof
Landlord will reimburse Tenant one-third (1/3) of the pre-approved actual costs thereof. Tenant’s
signage on the monument sign will be in a priority position over other tenants of the Project
Tenant’s rights under this paragraph shall be personal to Tenant and any Permitted Transferee.

6.4 Hazardous Materials.

	(a)	 	Except for ordinary and general office supplies, such as copier toner, liquid paper, glue,
ink and common household cleaning materials (some or all of which may constitute “Hazardous
Materials’ as defined in this Lease), Tenant agrees not to cause or permit any Hazardous
Materials to be brought upon, stored, used, handled, generated, released or disposed of on,
in, under or about the Premises, the Building, the Common Areas or any other portion of the
Project by Tenant, its agents, employees, subtenants, assignees, licensees, contractors or
invitees (collectively, Tenant’s Parties”), without the prior written consent of Landlord,
which consent Landlord may withhold in its sole and absolute discretion. Concurrently with
the execution of this Lease, Tenant agrees to complete and deliver to Landlord an
Environmental Questionnaire in the form of Exhibit
“G” attached hereto. Upon the
expiration or earlier termination of this Lease, Tenant agrees to promptly remove from the
Premises, the Building and the Project, at its sole cost and expense, any and all Hazardous
Materials, including any equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in, under or about the
Premises, the Building and/or the Project or any portion thereof by Tenant or any of Tenant’s
Parties. To the fullest extent permitted by law, Tenant agrees to
promptly indemnify,
protect, defend and hold harmless Landlord and Landlord’s partners, officers, directors,
employees, agents, successors and assigns (collectively, landlord indemnified Parties”) from
and against any and all claims, damages, judgments, suits, causes or action, losses,
liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up,
removal, remediation and restoration costs, sums paw in settlement of claims, attorneys’
fees, consultant fees and expert fees and court costs) which arise or result from the
presence of Hazardous Materials on, in, under or about the Premises, the Building or any
other portion of the Project and which are caused or permitted by Tenant or any of Tenant’s
Parties. Tenant agrees to promptly notify Landlord of any release of
Hazardous Materials in
the Premises, the Building or any other portion of the Project which Tenant becomes aware of
during the Term of this Lease, whether caused by Tenant or any other
persons or entities. In
the event of any release of Hazardous Materials caused or permitted by Tenant or any of
Tenant’s Parties, Landlord shall have the right, but not the obligation, to cause Tenant to
immediately take all steps Landlord deems necessary or appropriate to remediate such release
and prevent any similar future release to the satisfaction of
Landlord. At all times during
the Term of this Lease. Landlord will have the right, but not the obligation, to enter upon
the Premises to Inspect, Investigate, sample and/or monitor the Premises to determine if
Tenant is in compliance with the terms of this Lease regarding Hazardous Materials. As used
in this Lease, the term “Hazardous Materials” shall mean and include any hazardous or toxic
materials, substances or wastes as now or hereafter designated under any law, statute,
ordinance, rule, regulation, order or ruling of any agency of the State, the United States
Government or any local governmental authority, Including, without limitation, asbestos,
petroleum, petroleum hydrocarbons and petroleum based products, urea formaldehyde foam
Insulation, polychlorinated biphenyis (PCBs”), and freon and
other chlorofluorocarborns. The provisions of
this Section 6.4 will survive the expiration or earlier termination of this Lease.
	 
	(b)	 	Landlord represents and warrants to Tenant that as of the date of this Lease and to
Landlord’s actual knowledge and except as disclosed in that certain Phase 1 dated December 18,
1996, prepared by Dames & Moore (i) there are no Hazardous Materials in, on, under, below or
otherwise located on or about the Premises in violation of applicable
law, and (ii) there has
been no release or migration of any Hazardous Materials in violation of applicable law onto,
beneath, upon or about the Premises.
	 
	(c)	 	Notwithstanding the foregoing, Landlord consents to the
storage and use at the Premises, and disposal from the
Premises, of certain Hazardous Materials upon the following conditions:

	 	(i)	 	The Hazardous Materials are only those materials that are necessary from time to
time for the Initial Permitted Use described in Section 1.12 of the Summary;
	 
	 	(ii)	 	The storage, use and disposal of the Hazardous Materials complies with all
applicable laws, and Tenant provides to Landlord promptly following the preparation
thereof a copy of Tenant’s quarterly injury and illness prevention program inspection
(which inspection Tenant agrees to perform on at least a quarterly basis);
	 
	 	(iii)	 	The storage, use and disposal of the Hazardous Materials does not result in
objectionable odors or health hazards to other tenants or occupants of the Project;
	 
	 	(iv)	 	Tenant obtains and maintains all permits and approvals necessary for the
storage, use and disposal of the Hazardous Materials:
	 
	 	(v)	 	Tenant has not assigned this Lease to any third Party (other than to a Permitted
Transferee);

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	 	(vi)	 	On the first day of each calendar year during the Term, Tenant shall deliver
to Landlord a disclosure statement containing the following:

	 	(1)	 	A list containing all Hazardous
Materials and the quantities thereof stored, used or disposed from  the Premises during
the preceding calendar year;
	 
	 	(2)	 	A statement that (A) the use, storage and disposal of such
Hazardous Materials complies with all applicable laws,
(B) Tenant has all
necessary permits and approvals for the use, storage and disposal thereof, and
(C) Identifies the method of disposal of such Hazardous
Materials; and
	 
	 	(3)	 	Copies of all necessary permits and approvals relating to the
use, storage and disposal of such Hazardous Materials to the extent not
previously delivered to Landlord;

	 	(vii)	 	Tenant shall immediately advise Landlord in writing of, and provide Landlord a copy
of:

	 	(1)	 	Any notice of violation or potential or alleged violation of any
law concerning Hazardous Materials received by Tenant from any governmental
agency;
	 
	 	(2)	 	Any and all inquiry, Investigation, enforcement, clean-up, removal
or governmental or regulatory actions instituted or threatened relating to Tenant
or the Premises; and
	 
	 	(3)	 	All claims made or threatened by any third party against Tenant or
the Premises relating to any Hazardous Materials.

	 	(viii)	 	The provisions of this subparagraph (c) shall not apply to the storage, use
and disposal of Hazardous Materials by a subtenant, unless the subtenant is a
Permitted Transferee.

In the event any of the preceding conditions are not satisfied, Tenant shall immediately cease the
use, storage and disposal of Hazardous Materials until all such conditions are satisfied.
Landlord’s consent to the use, storage and disposal of such Hazardous Materials shall not
constitute an assumption of the risk respecting the same and Tenant shall indemnify, protect,
defend and hold the Landlord Indemnified Parties harmless from and against the same as required by
this Section 6.4.

6.5 Refuse and Sewage. Tenant agrees not to Keep any trash, garbage, waste or other refuse on the
Premises except in sanitary containers and agrees to regularly and frequently remove same from the
Premises. Tenant shall keep all containers or other equipment used for storage of such materials in
a clean and sanitary condition. Tenant shall properly dispose of all sanitary sewage end shall not
use the sewage disposal system for the disposal of anything except as permitted by law. Tenant
shall keep the sewage disposal system free of all obstructions and in good operating condition. If
the volume of Tenant’s trash becomes excessive in Landlord’s judgment, Landlord shall have the
right to charge Tenant for additional trash disposal services and/or to require that Tenant
contract directly for additional trash disposal services at Tenant’s sole cost and expense.

6.6 Pest Control. Tenant shall, at its own cost, retain a licensed, bonded professional pest and
sanitation control service to perform inspections of the Premises as needed for the purpose of
eliminating Infestation by and controlling the presence of insects, rodents and vermin and shall
promptly cause any corrective or extermination work recommended by such service to be performed.
Such work shall be performed pursuant to a written contract, a copy of which shall be delivered to
Landlord by Tenant upon request.

6.7 Extraordinary Services. If Landlord incurs Operating Expenses or other costs for any increase
in services provided to or for the benefit of Tenant above those services normally provided by
Landlord to the other tenants in the Project and such increased services or costs result from any
act, conduct, extraordinary use and/or special request by Tenant or its employees or customers,
Tenant agrees to reimburse Landlord for the costs of such extraordinary services, within thirty
(30) days of delivery to Tenant of written invoice for such
extraordinary services. By way of example only, if Tenant should request or if Tenant’s
business operation should require extraordinary security services, lighting, cleaning and/or
repair, such extraordinary services may be billed directly to Tenant as provided in this Section
6.7 and shall be reimbursed by Tenant to Landlord as provided herein.

7. Payments
and Notices. All rent and other sums payable by Tenant to Landlord hereunder shall be
paid to Landlord at the address designated in Section 1.1 of the Summary, or to such other persons
and/or at such other places as Landlord may hereafter designate in writing. Any notice required or
permitted to be given hereunder must be in writing and may be given by personal delivery
(including delivery by nationally recognized overnight courier or express mailing service), or by
registered or certified mail, postage prepaid, return receipt requested, addressed to Tenant at
the address(es) designated in Section 1.2 of the Summary, or to
Landlord at the address(es)
designated in Section 1.1 of the Summary. Either party may, by
written notice to the other,
specify a different address for notice purposes.

8. Brokers. The parties recognize that the broker(s) who negotiated this Lease are stated in
Section 1.13 of the Summary, and agree that Landlord shall be solely responsible for the payment
of brokerage commissions to said broker(s), and that Tenant shall have no responsibility therefor
unless written provision to the contrary has been made. Each party represents and warrants to the
other, that, to its knowledge, no other broker, agent or finder (a) negotiated or was instrumental
in negotiating or consummating this Lease on its behalf, and (b) is or might be entitled to a
commission or compensation in connection with this Lease. Any broker, agent or finder of Tenant
whom Tenant has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify, protect,
defend (by counsel reasonably approved in writing by Landlord) and hold Landlord harmless from and
against any and all claims, judgments, suits, causes of action,
damages, losses, Liabilities and
expenses (including attorneys’ fees and court costs) resulting from any breach by Tenant of the
foregoing representation, including, without limitation, any claims that may be asserted against
Landlord by any broker.

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agent or finder undisclosed by Tenant herein. Landlord shall Indemnify, protect, defend (by counsel
reasonably approved in writing by Tenant) and hold Tenant harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including
attorneys’ fees and court costs) resulting from any breach by Landlord of the foregoing
representation, including, without limitation, any claims that may be asserted against Tenant by
any broker, agent or finder undisclosed by Landlord herein. The foregoing indemnities shall survive
the expiration or earlier termination of this Lease.

9.
Surrender; Holding Over.

9.1 Surrender of Premises. Upon the expiration or sooner termination of this Lease, Tenant shall
surrender all keys for the Premises to Landlord, and Tenant shall deliver exclusive possession of
the Premises to Landlord broom clean and in good condition and repair, reasonable wear and tear and
casualty damage excepted), with all of Tenant’s personal property (and those items, if any, of
Tenant Improvements and Tenant Changes identified by Landlord pursuant to Section 12.2 below)
removed therefrom and all damage caused by such removal repaired, as required pursuant to Sections
12.2 and 12.3 below. If, for any reason, Tenant falls to surrender the Premises on the expiration
or earlier termination of this Lease (including upon the expiration of any subsequent
month-to-month tenancy consented to by Landlord pursuant to Section 9.2 below), with such removal
and repair obligations completed, then, in addition to the provisions of Section 9.3 below and
Landlord’s rights and remedies under Section 12.4 and the other provisions of this Lease, Tenant
shall Indemnify, protect, defend (by counsel reasonably approved in writing by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes of action, damages,
losses, liabilities and expenses (including reasonable attorneys’ fees and court costs) resulting
from such failure to surrender, including, without limitation, any claim made by any succeeding
tenant based thereon. The foregoing Indemnity shall survive the expiration or earlier termination
of this Lease.

9.2 Holding Over. If without Landlord’s consent, Tenant holds over after the expiration or earlier
termination of the Lease Term, Tenant shall become a tenant at sufferance only, upon the terms and
conditions set forth in this Lease so far as applicable (Including Tenant’s obligation to pay all
Common Area Expenses and any other additional rent under this Lease), but at a Monthly Basic Rent
equal to one hundred twenty-five percent (125%) of the Monthly Basic Rent applicable to the
Premises immediately prior to the date of such expiration or earlier termination. Acceptance by
Landlord of rent after such expiration or earlier termination shall not constitute a consent to a
hold over hereunder or result in an extension of this Lease.

9.3 No Effect on Landlord’s Rights. The foregoing provisions of this Section 9 are in addition to,
and do not affect, Landlord’s right of re-entry or any other rights of Landlord hereunder or
otherwise provided at law or in equity.

10. Taxes.

10.1 Real Property Taxes. Tenant agrees to pay its pro rata share of all general and special real
property taxes, assessments (including, without limitation, change in ownership taxes or
assessments), liens, bond obligations, license fees or taxes and any similar impositions in-lieu of
other impositions now or previously within the definition of real property taxes or assessments
(collectively “Real Property Taxes”) which may be levied or assessed by any lawful authority
against the Project applicable to the period from the Commencement Date until the expiration or
sooner termination of this Lease. Tenant’s pro rata share shall be apportioned according to the
floor area of the Premises as it relates to the total leasable floor area of the Building or
buildings located within the Project (including the Premises). Notwithstanding the foregoing
provisions, if the Real Property Taxes are not levied and assessed against the entire Project by
means of a single tax bill (i.e., if the Project is separated into two (2) or more separate tax
parcels for purposes of levying and assessing the Real Property Taxes), then, at Landlord’s option,
Tenant shall pay Tenant’s pro rata share of all Real Property Taxes which may be levied or assessed
by any lawful authority against the land and improvements of the separate tax parcel on which the
Building containing the Premises is located. Tenant’s pro rata share under such circumstances shall
be apportioned according to the floor area of the Premises as it relates to the total leasable
floor area of the Building or buildings situated in the separate tax parcel in which the Premises
is located.

All Real Property Taxes for the tax year in which the Commencement Date occurs and for the tax
year in which this Lease terminates shall be apportioned and adjusted so that Tenant shall not be
responsible for any Real Property Taxes for a period of time occurring prior to the Commencement
Date or subsequent to the expiration of the Term.

The amount to be paid pursuant to the provisions of this Section 10.1 shall be paid monthly in
advance as part of Tenant’s Monthly Operating Expense Charge as estimated by Landlord based on the
most recent tax bills and estimates of reappraised values (if reappraisal is to occur), commencing
with the month (or partial month on a prorated basis if such be the case) that the Commencement
Date occurs. The initial estimated monthly charge for Tenant’s pro rata share of Real Property
Taxes is Included in the Monthly Operating Expense Charge as provided in Section 4.

If at any time during the Term under the laws of the United States, or the state, county,
municipality, or any political subdivision thereof in which the Project is located, a tax or
excise on rent or any other tax however described is levied or assessed by any such political body
against Landlord on account of rent payable to Landlord hereunder or any tax based on or measured
by expenditures made by Tenant on behalf of Landlord, such tax or excise shall be considered “Real
Property Taxes” for purposes of this Section 10.1, and shall be payable in full by Tenant. At
Landlord’s option, such taxes or excises shall be payable monthly in advance on an estimated basis
as provided in this Section 10.1 or shall be payable within ten (10) days after Tenant’s receipt
of the tax bill therefor from Landlord.

10.2 Personal Property Taxes. Tenant shall be liable for, and shall pay before delinquency, all
taxes and assessments (real and personal) levied against (a) any personal property or trade
fixtures placed by Tenant in or about the Premises (including any increase in the assessed value
of the Premises based upon the value of any such personal property or trade fixtures); and (b) any
Tenant Improvements or alterations in the Premises (whether installed and/or paid for by Landlord
or Tenant). If any such taxes or assessments are levied against Landlord or Landlord’s property,

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Landlord may, after written notice to Tenant (and under proper protest if requested by Tenant)
pay such taxes and assessments, and Tenant shall reimburse Landlord therefor within ten (10)
business days after demand by Landlord; provided, however, Tenant, at its sole cost and expense,
shall have the right, with Landlord’s cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes and assessments so paid under protest.

10.3 Tenant’s Payment of Certain Tax Expenses. Notwithstanding anything to the contrary contained
in this Lease, in the event that, at any time during the Initial Term, a change in ownership of
the Project is consummated, and as a result thereof, and to the extent that in connection
therewith, the Project is reassessed (the “Reassessment”) for real estate tax purposes by the
appropriate governmental authority pursuant to the terms of Proposition 13, then the terms of this
Section 10.3 shall apply to such Reassessment. This Section 10.3 shall not apply during any Option
Period.

	(a)	 	The Tax Increase. For purposes of this Article 10, the term “Tax Increase” shall mean that
portion of the Real Property Taxes, as calculated immediately following the Reassessment,
which is attributable solely to the Reassessment. Accordingly, the term Tax Increase shall
not include any portion of the Real Property Taxes, as calculated immediately following the
Reassessment, which (i) is attributable to the initial assessment of the value of the
Project, (ii) is attributable to assessments which were pending immediately prior to the
Reassessment which assessments were conducted during, and included in, such Reassessment, or
which assessments were
otherwise rendered unnecessary following the Reassessment, or (iii) is attributable to the
annual inflationary
increase of Real Property Taxes.
	 
	(b)	 	Protection. Tenant shall be obligated to pay Tenant’s pro rata share of the first Tax
Increase, but Tenant shall not be obligated to pay any portion of any subsequent Tax
Increase.
	 
	(c)	 	Landlord’s Right to Purchase the Proposition 13 Protection Amount Attributable to a
Particular Reassessment. The amount of Real Property Taxes which Tenant is not obligated to
pay or will not be obligated to pay during the Term in connection with a particular
Reassessment pursuant to the terms of Section 10.3 shall be sometimes referred to hereafter
as a “Proposition 13 Protection Amount.” If the occurrence of a Reassessment is reasonably
foreseeable by Landlord and the Proposition 13 Protection Amount attributable to such
Reassessment can be reasonably quantified or estimated for each year commencing with the
year in which the Reassessment will occur, the terms of this Section 10.3(c) shall apply to
each such Reassessment. Upon notice to Tenant, Landlord shall have the right to purchase the
Proposition 13 Protection Amount relating to the applicable Reassessment (the “Applicable
Reassessment”), at any time, by paying to Tenant an amount equal to the “Proposition 13
Purchase Price,” as that term is defined below. As used herein, “Proposition 13 Purchase
Price” shall mean the present value of the Proposition 13 Protection Amount remaining during
the Term, as of the date of payment of the Proposition 13 Purchase Price by Landlord. Such
present value shall be calculated (I) by using the portion of the Proposition 13 Protection
Amount attributable to each remaining year during the Term that such protection is available
(as though the portion of such Proposition 13 Protection Amount benefited Tenant at the end
of each year), as the amounts to be discounted, and (ii) by using discount rates for each
amount to be discounted equal to (A) the prime interest rate, as reported in the Wall Street
Journal as of the date of Landlord’s exercise of its right to purchase plus (B) two percent
(2%) per annum. Upon such payment of the Proposition 13 Purchase Price, the provisions of
Section 10.3(b) shall not apply to any Tax Increase attributable to the Applicable
Reassessment. As Landlord will estimate the Proposition 13 Purchase Price because a
Reassessment has not yet occurred, then when such Reassessment occurs, if Landlord has
underestimated the Proposition 13 Purchase Price, then upon notice by Landlord to Tenant,
Tenant’s rent next due shall be credited with the amount of such underestimation, and if
Landlord overestimates the Proposition 13 Purchase Price, then upon notice by Landlord to
Tenant, rent next due shall be increased by the amount of the overestimation.

11.
Possession; Condition of Premises: Repairs.

11.1 Delivery of Possession. Landlord will deliver possession of the Premises to Tenant in its
current “as-is” condition (subject, however, to Section 11.2) on or before the date required by
Section 1.7 of the Summary. If, for any reason not caused by Tenant, Landlord cannot deliver
possession of the Premises to Tenant by the date required by Section 1.7 of the Summary, this
Lease will not be void or voidable, nor will Landlord be liable to Tenant for any loss or damage
resulting from such delay. If the delay in possession is caused by Tenant, then the Term and
Tenant’s obligation to pay rent will commence as of the date the Commencement Date would have
occurred but for Tenant’s delay, even though Tenant does not yet have possession. Notwithstanding
the foregoing, Landlord will not be obligated to deliver possession of the Premises to Tenant
(but Tenant will be liable for rent if Landlord can otherwise deliver the Premises to Tenant)
until Landlord has received from Tenant all of the following: (i) a copy of this Lease fully
executed by Tenant; (ii) the first installment of Monthly Basic Rent; and (iii) copies of policies
of insurance or certificates thereof as required under Section 21 of this Lease. Notwithstanding
anything to the contrary contained herein, if Landlord has not delivered the Premises to Tenant
within fifteen (15) days from the date hereof for any reason, including but not limited to force
majeure delays, Tenant shall have the right thereafter (but prior to delivery of the Premises) to
cancel this Lease by giving Landlord written notice thereof, and upon such cancellation, Landlord
shall return all sums theretofore deposited by Tenant with Landlord, and neither party shall have
any further liability to the other hereunder.

11.2 Condition of Premises. Tenant acknowledges that, except as otherwise expressly set forth in
this Lease, neither Landlord nor any agent of Landlord has made any representation or warranty
with respect to the Premises, the Building or the Project or their condition, or with respect to
the suitability thereof for the conduct of Tenant’s business. The taking of possession of the
Premises by Tenant shall
conclusively establish that the Project, the Premises, the Tenant improvements therein, the
Building and the Common Areas were at such time complete and in good, sanitary and satisfactory
condition and repair and without any obligation on Landlord’s part to make any alterations,
upgrades or improvements thereto. Notwithstanding anything to the contrary in Section 11.1 or
this Section 11.2, as of the Commencement Date (i) all plumbing, electrical, HVAC and mechanical
systems in the Premises shall be in good working order (with the exception of failures to such
systems caused by Tenant and the repairs needed to the HVAC

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system
identified in the Due Diligence Report dated December 11, 1996 prepared by Weather
Engineering, the responsibility of which will be Tenant’s at its cost and expense, but with
respect to the HVAC repairs, subject to reimbursement by Landlord from the Construction Allowance)
and (ii) the Common Areas shall comply with Title III of the Americans with Disabilities Act of
1990 (the “Act”) and all other laws applicable thereto (but without regard to the Tenant
Improvements, for which Tenant shall be responsible to ensure compliance with the Act and all
other laws applicable thereto). In the event it is determined that the condition of the Premises
or Common Areas is not as required by this Section 11.2, then it shall be the obligation of
Landlord, after written notice from Tenant, to promptly, at Landlord’s sole cost and expense,
rectify any such condition, In the event Tenant does not give Landlord written notice that any of
the plumbing, electrical, HVAC or mechanical systems are not in good working order within eighteen
(18) days from the Commencement Date, the correction of same shall be the responsibility of Tenant
at Tenant’s cost.

Landlord
warrants that: (i) as of the date hereof and as of the Commencement Date Landlord has no
actual knowledge of any material defects in the Premises or Building which could reasonably be
expected by Landlord to unreasonably interfere with Tenant’s use and enjoyment of the Premises
(however, this warranty shall not apply to defects caused by Tenant); (ii) as of the date hereof,
Landlord is the fee owner of the Premises and has the right and authority to lease the Premises to
Tenant on the terms and conditions set forth in the Lease; and (iii) as of the Commencement Date,
or as soon thereafter as is reasonably practicable, Landlord shall complete its currently planned
improvements to the exterior of the Building. As the exclusive remedy for a breach of the foregoing
warranties, Landlord shall, promptly following written notice thereof from Tenant, correct any
violation of the foregoing warranties at Landlord’s sole cost and expense. Subject to the foregoing
warranties, by entry upon the Premises, Tenant agrees to accept the Premises in their “as is”
condition.

Notwithstanding the foregoing, Tenant acknowledges that certain repairs to the Premises are needed
due to vandalism, and that Tenant will be responsible for the repair of same, subject to
reimbursement by Landlord from the Construction Allowance.

11.3 Landlord’s Repair Obligations. Except as provided in Section 11.2 above, Landlord shall, as
part of the Operating Expenses, repair, maintain and replace, as necessary, (a) the Building shell
and other structural portions of the Building (including the roof and foundations), (b) the basic
plumbing, heating, ventilating, air conditioning, sprinkler and electrical systems within the
Building core (but not any conduits or connections thereto or distribution systems thereof within
the Premises or any other tenant’s premises), and (c) the Common Areas of the Project; provided,
however, to the extent such maintenance or repairs are required as a result of any act, neglect,
fault or omission of Tenant or any of Tenant’s agents, employees, contractors, licensees or
invitees, Tenant shall pay to Landlord, as additional rent, the costs of such maintenance and
repairs. Landlord shall not be liable to Tenant for failure to perform any such repairs or
maintenance, unless Landlord shall fail to make such repairs and such failure shall continue for an
unreasonable time following written notice from Tenant to Landlord of the need for such repairs.
Without limiting the foregoing, 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).

11.4 Tenant’s Repair Obligations. Except for Landlord’s obligations specifically set forth in
Sections 11.2, 11.3, 18.1 and 19.2 hereof, Tenant shall at all times and at Tenant’s sole cost and
expense, keep, maintain, clean, repair and preserve and replace, as necessary, the Premises and
all parts thereof including, without limitation, all Tenant Improvements, Tenant Changes, utility
meters, pipes and conduits, all heating, ventilating and air conditioning systems located within
the Premises, all fixtures, furniture and equipment, Tenant’s storefront and signs, if any, locks,
closing devices, security devices, windows, window sashes, casements and frames, floors and floor
coverings, shelving, restrooms, if any, and any alterations, additions and other property located
within the Premises in good condition and repair, reasonable wear and tear excepted. Tenant shall
replace, at its expense, any and all plate and other glass in and about the Premises which is
damaged or broken from any cause whatsoever except due to the gross negligence or willful
misconduct of Landlord, its agents or employees. Such maintenance and repairs shall be performed
with due diligence, lien-free and in a good and workmanlike manner,
by licensed contractor(s) which
are selected by Tenant and approved by Landlord, which approval Landlord shall not unreasonably
withhold or delay. Except as otherwise expressly provided in this Lease, Landlord shall have no
obligation to alter, remodel, improve, repair, renovate, redecorate or paint all or any part of
the Premises.

12. Alterations.

12.1 Tenant Changes; Conditions.

	(a)	 	Tenant shall not make any alterations, additions, improvements or decorations to the
Premises (collectively, “Tenant Changes,” and
individually, a “Tenant Change”) unless Tenant
first obtains Landlord’s prior written approval thereof, which approval Landlord shall not
unreasonably withhold. Notwithstanding the foregoing, Landlord’s prior approval shall not be
required for any Tenant Change which satisfies all of the following conditions (hereinafter a
“Pre-Approved Change”): (i) the costs of such Tenant Change does not exceed Twenty-Five
Thousand Dollars ($25,000.00) Individually; (ii) the costs of such Tenant Change when
aggregated with the costs of all other Tenant Changes made by Tenant during the Term of this
Lease do not exceed One Hundred Thousand Dollars ($100,000.00); (iii) Tenant delivers to
Landlord final plans, specifications and working drawings for such Tenant Change at least ten
(10) days prior to commencement of the work thereof; (iv) the Tenant Change does not affect
the mechanical, electrical, plumbing or life safety systems of the Premises, the roof or
structural components of the Premises or the exterior of the Premises; and (v) Tenant and
such Tenant Change otherwise satisfy all other conditions set forth in this Section 12.1.
	 
	(b)	 	All Tenant Changes shall be performed: (i) in accordance with the approved plans,
specifications and working drawings; (ii) lien-free and in a good and workmanlike manner;
(iii) in compliance with all
laws, rules and regulations of all governmental agencies and authorities including, without
limitation, the provisions of Title III of

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	 	 	the Americans with Disabilities Act of 1990; (iv) in such a manner so as not to unreasonably
interfere with the occupancy of any other tenant in the Building or any other building
located within the Project, nor impose any additional expense upon nor delay Landlord in
the maintenance and operation of the Building or any other building located within the
Project; and (v) at such times, in such manner and subject to such rules and regulations as
Landlord may from time to time reasonably designate.
	 
	(c)	 	Throughout the performance of the Tenant Changes, Tenant shall obtain, or cause its
contractors to obtain, workers compensation insurance and commercial general liability
insurance in compliance with the provisions of Section 20 of this Lease.

12.2 Removal of Tenant Changes and Tenant Improvements. All Tenant Changes and the initial Tenant
Improvements in the Premises (whether installed or paid for by Landlord or Tenant), shall become
the property of Landlord and shall remain upon and be surrendered with the Premises at the end of
the Term of this Lease; provided, however, Landlord may, by written notice delivered to on or
before the expiration of the Lease Term (or upon any sooner termination of this Lease) identify
those items of the initial Tenant Improvements and Tenant Changes which Landlord shall require
Tenant to remove at the end of the Term of this Lease. If Landlord requires Tenant to remove any
such Items as described above, Tenant shall, at its sole cost, remove the Identified items on or
before the expiration or sooner termination of this Lease and repair any damage to the Premises
caused by such removal (or, at Landlord’s option, shall pay to Landlord all of Landlord’s costs of
such removal and repair).

Notwithstanding anything to the contrary contained herein, Tenant shall not be required to remove
(i) any of the initial Tenant Improvements constructed by or on behalf of Tenant, and (ii) any
Tenant Change for which Tenant has obtained Landlord’s consent (unless at the time of Landlord’s
granting of such consent, Landlord required the removal of such Tenant Change as a condition to
such consent). Tenant shall be entitled, but not required, to remove the following described
items, provided Tenant repairs any damage to the Premises caused by such removal: phone system and
security system (if Tenant elects to remove any such system, Tenant shall also remove all wiring
associated with such system.

12.3 Removal of Personal Property. All articles of personal property owned by Tenant or installed
by Tenant at its expense in the Premises (including business and trade fixtures, furniture and
movable partitions) shall be, and remain, the property of Tenant, and shall be removed by Tenant
from the Premises, at Tenant’s sole cost and expense, on or before the expiration or sooner
termination of this Lease. Tenant shall repair any damage caused by such removal.

12.4 Tenant’s Failure to Remove. If Tenant fails to remove by the expiration or sooner termination
of this Lease all of its personal property, or any items of Tenant Improvements or Tenant Changes
identified by Landlord for removal pursuant to Section 12.2 above, Landlord may, (without
liability to Tenant for loss thereof), at Tenant’s sole cost and in addition to Landlord’s other
rights and remedies under this Lease, at law or in equity: (a) remove and store such items in
accordance with applicable law; and/or (b) upon ten (10) days’ prior notice to Tenant, sell all or
any such items at private or public sale for such price as Landlord may obtain as permitted under
applicable law. Landlord shall apply the proceeds of any such sale to any amounts due to Landlord
under this Lease from Tenant (including Landlord’s reasonable attorneys’ fees and other costs
incurred in the removal, storage and/or sale of such items), with any remainder to be paid to
Tenant.

13. Liens. Tenant shall not permit any mechanic’s, materialmen’s or other liens to be
filed against all or any part of the Project, the Building or the Premises, nor against Tenant’s
leasehold interest in the Premises, by reason of or in connection with any repairs, alterations,
improvements or other work contracted for or undertaken by Tenant or any other act or omission of
Tenant or Tenant’s agents, employees, contractors, licensees or invitees. Tenant shall, at
Landlord’s request, provide Landlord with enforceable, conditional and final lien releases (and
other reasonable evidence reasonably requested by Landlord to demonstrate protection from liens)
from all persons furnishing labor and/or materials with respect to the Premises. Landlord shall
have the right at all reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If any such liens are
filed, Tenant shall, at its sole cost, immediately cause such lien to be released of record or
bonded so that it no longer affects title to the Project, the Building or the Premises. If Tenant
fails to cause such lien to be so released or bonded within twenty (20) days after filing thereof,
Landlord may, without waiving its rights and remedies based on such breach, and without releasing
Tenant from any of its obligations, cause such lien to be released by any means it shall deem
proper, including payment in satisfaction of the claim giving rise to such lien. Tenant shall pay
to Landlord within five (5) days after receipt of invoice from Landlord, any sum paid by Landlord
to remove such liens, together with interest at the Interest Rate from the date of such payment by
Landlord.

14. Assignment and Subletting.

14.1 Restriction on Transfer. Tenant will not assign or encumber this Lease in whole or in part,
nor sublet all or any part of the Premises (collectively and
individually, a “Transfer”), without
the prior written consent of Landlord, which consent Landlord will not unreasonably withhold,
except as provided in this Section 14. The consent by Landlord to any Transfer shall not
constitute a waiver of the necessity for such consent to any subsequent Transfer. This prohibition
against Transfers shall be construed to include a prohibition against any assignment or subletting
by operation of law. If this Lease is Transferred by Tenant, or if the Premises or any part
thereof are Transferred or occupied by any person or entity other than Tenant, Landlord may
collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the
rent herein reserved during any time that a default (after notice and expiration of applicable
grace periods) exists hereunder. No such Transfer, occupancy or collection shall be deemed a
waiver on the part of Landlord, or the acceptance of the assignee, subtenant or occupant as
Tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of
Tenant herein
contained unless expressly made in writing by Landlord. Irrespective of any Transfer, Tenant shall
remain fully liable under this Lease and shall not be released from performing any of the terms,
covenants and conditions of this Lease. Without limiting in any way Landlord’s right to withhold
its consent on any reasonable grounds, it is agreed that Landlord will not be acting unreasonably
in refusing to consent to a

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Transfer if, in Landlord’s opinion, (i) the net worth or financial capabilities of such assignee
or subtenant is less than that of Tenant at the date hereof, (ii) the proposed assignee or
subtenant does not have the financial capability to fulfill the obligations imposed by the
Transfer, (iii) the proposed Transfer involves a change of use of the Premises from that specified
herein, or (iv) the proposed assignee or subtenant is not, in Landlord’s reasonable opinion, of
reputable or good character or consistent with Landlord’s desired tenant mix for the Project. Any
proposed assignee or subtenant which Landlord does not disapprove shall be deemed a “Permitted
Business.” If Tenant is a corporation, or is an unincorporated association or partnership, the
transfer, assignment or hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate in excess of fifty percent (50%) shall be deemed an assignment within
the meaning and provisions of this Section 14.1.

Notwithstanding anything to the contrary contained in this Lease, Landlord agrees that Tenant may
assign this Lease or sublet the Premises, or any portion thereof, without Landlord’s consent, to
any entity which controls, is controlled by, or is under common control with Tenant; to any entity
which results from a reincorporation, merger or consolidation with Tenant; to any entity engaged in
a joint venture with Tenant; or to any entity that acquires all or substantially all of the stock
or assets of Tenant, (hereinafter each a “Permitted
Transfer” or “Permitted Transferee,” as
applicable), provided (i) with respect to any entity that acquires all or substantially all of the
stock or assets of Tenant or an entity that results from a merger or consolidation (i.e., where
Tenant is not the surviving entity), such Permitted Transferee has a net worth equal to Tenant’s as
of the date hereof, (ii) Tenant gives Landlord written notice of the Permitted Transfer at least
ten (10) days prior to the effective date thereof, which notice provides Landlord with sufficient
information to verify the satisfaction of the criteria for a Permitted Transfer, (iii) in the case
of an assignment of this Lease, the Permitted Transferee assumes the obligations of Tenant
hereunder pursuant to an instrument reasonably acceptable to Landlord, and (iv) the Permitted
Transfer is effectuated for a bona fide business purpose and not as a means to avoid Tenant’s
obligations under this Lease. In addition, any sale or transfer of the capital stock of Tenant
shall be deemed a Permitted Transfer if (1) such sale or transfer occurs in connection with any
bona fide financing or capitalization for the benefit of Tenant, or (2) Tenant becomes a publicly
traded corporation, or (3) such sale or transfer is made to any publicly traded corporation.
Without limiting the generality of the foregoing, Landlord shall have no right to any sums or other
economic consideration resulting from any Permitted Transfer as otherwise permitted in Section 14.4
and shall have no right to terminate this Lease as a result of any Permitted Transfer as otherwise
permitted in Section 14.3.

14.2 Transfer Notice. If Tenant desires to effect a Transfer, then at least thirty (30) days prior
to the date when Tenant desires the Transfer to be effective (the “Transfer Date”), Tenant agrees
to give Landlord a notice (the “Transfer Notice”), stating the name, address and business of the
proposed assignee, sublessee or other transferee (sometimes referred to hereinafter as
“Transferee”), reasonable information (including references) concerning the character, ownership,
and financial condition of the proposed Transferee, the Transfer Date, any ownership or commercial
relationship between Tenant and the proposed Transferee, and the consideration and all other
material terms and conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.

14.3 Landlord’s Options. Within fifteen (15) days of Landlord’s receipt of any Transfer Notice,
and any additional information requested by Landlord concerning the proposed Transferee’s
financial responsibility, Landlord will notify Tenant of its election to do one of the following:
(i) consent to the proposed Transfer subject to such reasonable conditions as Landlord may impose
in providing such consent; or (ii) refuse such consent, which refusal shall be on reasonable
grounds.

14.4 Additional Conditions: A condition to Landlord’s consent to any Transfer of this Lease will
be the delivery to Landlord of a true copy of the fully executed instrument of assignment,
sublease, transfer or hypothecation, in form and substance reasonably satisfactory to Landlord.
Tenant agrees to pay to Landlord, as additional rent, one-half
(1/2) of all sums and other
consideration payable to and for the benefit of Tenant by the Transferee in excess of the rent
payable under this Lease for the same period and portion of the Premises. In calculating excess
rent or other consideration which may be payable to Landlord under this Section, Tenant will be
entitled to deduct commercially reasonable third party brokerage commissions and attorneys’ fees
and other amounts reasonably and actually expended by Tenant in connection with such assignment or
subletting (together with the unamortized cost of any Tenant improvements or Tenant Changes paid
by Tenant in excess of the Construction Allowance, which unamortized cost shall be amortized over
the remaining term of this Lease) if acceptable written evidence of such expenditures is provided
to Landlord. No Transfer (including a Permitted Transfer) will release Tenant of Tenant’s
obligations under this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. During any time that a default
(after notice and expiration of applicable grace periods) exists hereunder, Landlord may require
that any Transferee remit directly to Landlord on a monthly basis, all monies due Tenant by said
Transferee. Consent by Landlord to one Transfer will not be deemed consent to any subsequent
Transfer. In the event of default by any Transferee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such Transferee or successor. If Tenant effects a
Transfer (including a Permitted Transfer) or requests the consent of Landlord to any Transfer
(including a Permitted Transfer) (whether or not such Transfer is consummated), then, upon demand,
and as a condition precedent to Landlord’s consideration of the proposed assignment or sublease,
Tenant agrees to pay Landlord’s reasonable attorneys’ fees and costs and other costs actually
incurred by Landlord in reviewing such proposed assignment or sublease.

15. Entry by Landlord. Landlord and its employees and agents shall at all reasonable times
have the right to enter the Premises to inspect the same, to supply any service required to be
provided by Landlord to Tenant under this Lease, to exhibit the Premises to prospective lenders or
purchasers (or during the last year of the Term, to prospective tenants), to post notices of
non-responsibility, and/or to alter, improve or repair the Premises or any other portion of the
Building, all without being deemed guilty of or liable for any breach of Landlord’s covenant of
quiet enjoyment or any eviction of Tenant, and without abatement of rent. In exercising such entry
rights, Landlord shall endeavor to minimize, as reasonably
practicable, the interference with Tenant’s business, and shall provide Tenant with reasonable
advance written notice of such entry (except in emergency situations). Landlord shall have the
means which Landlord may deem proper to open Tenant’s doors in an emergency in order to obtain
entry to the Premises. Any entry to the Premises obtained by Landlord by any of said means or
otherwise shall not under any circumstances be construed or deemed to be

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a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from
the Premises or any portion thereof, or grounds for any abatement or reduction of rent and
Landlord shall not have any liability to Tenant for any damages or losses on account of any such
entry by Landlord except, subject to the provisions of Section 22.1, to the extent of Landlord’s
gross negligence or willful misconduct, but Landlord shall promptly repair, at its sole cost, all
damage caused by Its entry to the extent such damage is not covered by insurance Tenant carries or
is required to carry hereunder.

16. Utilities and Services. Tenant shall be solely responsible for and shall promptly pay
all charges for heat, air conditioning, water, gas, electricity or any other utility used, consumed
or provided in, furnished to or attributable to the Premises at the rates charged by the supplying
utility companies and/or Landlord. Should Landlord elect to supply any or all of such utilities,
Tenant agrees to purchase and pay for the same as additional rent as apportioned by Landlord. The
rate to be charged to Landlord to Tenant shall not exceed the rate charged to Landlord by any
supplying utility. Tenant shall reimburse Landlord within ten (10) days of billing for fixture
charges and/or water tariffs, if applicable, which are charged to Landlord by local utility
companies. Landlord will notify Tenant of this charge as soon as it becomes known. This charge will
increase or decrease with current charges being levied against Landlord, the Premises or the
Building by the local utility company, and will be due as additional rent. In no event shall
Landlord be liable for any interruption or failure in the supply of any such utility services to
Tenant unless such interruption or failure is caused by a default hereunder by Landlord or by
Landlord’s gross negligence or willful misconduct, in which event Landlord will be liable for
damages caused by such interruption to the extent such damages are not covered by the insurance
Tenant maintains or is required to maintain hereunder.

17. Indemnification and Exculpation.

17.1 Tenant’s Assumption of Risk and Waiver. Except to the extent such matter is not covered by
the insurance required to be maintained by Tenant under this Lease and such matter is attributable
to the gross negligence or willful misconduct of Landlord, Landlord shall not be liable to Tenant,
Tenant’s employees, agents or invitees for: (i) any damage to property of Tenant, or of others,
located in, on or about the Premises, (ii) the loss of or damage to any property of Tenant or of
others by theft or otherwise, (iii) any injury or damage to persons or property resulting from
fire, explosion, falling plaster, steam, gas, electricity, water, rain or leaks from any part of
the Premises or from the pipes, appliance of plumbing works or from the roof, street or subsurface
or from any other places or by dampness or by any other cause of whatsoever nature, or (iv) any
such damage caused by other tenants or persons in the Premises, occupants of adjacent property of
the Project, or the public, or caused by operations in construction of any private, public or
quasi-public work. Landlord shall in no event be liable for any consequential damages or loss of
business or profits and Tenant hereby waives any and all claims for any such damages. All property
of Tenant kept or stored on the Premises shall be so kept or stored at the sole risk of Tenant and
Tenant shall hold Landlord harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant’s insurance carriers, unless such damage shall be caused by the
negligence or willful misconduct of Landlord or a breach by Landlord of its obligations under the
lease and is not covered by insurance Tenant carries or is required to carry hereunder. Landlord
or its agents shall not be liable for interference with the light or other intangible rights.

17.2 Tenant’s Indemnification of Landlord. Tenant shall be liable for, and shall indemnify,
defend, protect and hold Landlord and Landlord’s partners, officers, directors, employees, agents,
successors and assigns (collectively, “Landlord Indemnified
Parties”) harmless from and against,
any and all claims, damages, judgments, suits, causes of action, losses, liabilities and expenses,
including reasonable attorneys’ fees and court costs
(collectively, “Indemnified Claims”), arising
or resulting from (a) any negligent or willful act or omission of Tenant or any of Tenant’s
agents, employees, contractors, subtenants, assignees, licensees or with respect to acts or
omissions within the Premises only, Tenant’s invitees
(collectively, “Tenant Parties”); (b) the
use of the Premises and Common Areas and conduct of Tenant’s business by Tenant or any Tenant
Parties, or any other activity, work or thing done, permitted or suffered by Tenant or any Tenant
Parties, in or about the Premises, the Building or elsewhere on the Project; and/or (c) any
default by Tenant of any obligations on Tenant’s part to be performed under the terms of this
Lease. In case any action or proceeding is brought against Landlord or any Landlord Indemnified
Parties by reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall defend
the same at Tenant’s expense by counsel approved in writing by Landlord, which approval shall not
be unreasonably withheld.

17.3 Landlord’s Indemnification of Tenant. Except for matters (i) covered by insurance obtained or
required to be obtained by Tenant under this Lease or (ii) the negligence or willful misconduct of
the Tenant Parties, Landlord will be liable for, and shall indemnify, protect, defend and hold
harmless Tenant and Tenant’s partners, officers, directors, employees, agents, successors and
assigns (collectively, “Tenant Indemnified Parties”), from and against, any Indemnified Claims, to
the extent any such Indemnified Claim arises or results from (a) any negligent or willful act or
omission of Landlord or any Landlord Parties; (b) any default by Landlord of any obligations on
Landlord’s part to be performed under the terms of this Lease; and (c) to the extent covered by
the insurance required to be maintained by Landlord under this Lease (or which would have been
covered if Landlord had carried such required insurance), any acts or omissions of any third
parties occurring in the Common Areas. In case any action or proceeding is brought against Tenant
or any Tenant Indemnified Parties by reason of any such injury or damage indemnified by Landlord
as set forth hereinabove,
Landlord, upon notice from Tenant, agrees to defend the same at Landlord’s expense by counsel
approved in writing by Tenant, which approval Tenant will not unreasonably withhold.

17.4 Survival; No Release of Insurers. The respective indemnification obligations of Tenant and
Landlord under Sections 17.2 and 17.3, shall survive the expiration or earlier termination of this
Lease. The respective covenants, agreements and indemnification in Sections 17.1, 17.2 and 17.3
above, are not intended to and shall not relieve any insurance carrier of its obligations under
policies required to be carried by Tenant or Landlord, pursuant to the provisions of this Lease.

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18. Damage or Destruction.

18.1 Landlord’s Rights and Obligations. In the event the Premises are damaged by fire or other
casualty that is not required to be insured hereunder by Landlord, which damage does not exceed
ten percent (10%) of the full replacement cost thereof, or, regardless of the amount of damage, if
Landlord will receive insurance proceeds sufficient to cover the costs of such repairs,
reconstruction and restoration (or Landlord would have received sufficient proceeds had Landlord
maintained the insurance required of Landlord hereunder) and if Landlord’s contractor estimates in
a writing delivered to the parties that the damage is such that the Premises may be repaired,
reconstructed or restored to substantially its condition immediately prior to such damage within
one hundred eighty (180) days from the date of such damage, then Landlord shall commence and
proceed diligently with the work of repair, reconstruction and restoration of the Premises
(including the Tenant Improvements but excluding Tenant Changes unless Tenant delivers sufficient
proceeds therefor) and this Lease shall continue in full force and effect. If Landlord is not
required to repair, reconstruct or restore the Premises pursuant to the prior sentence, then
Landlord may elect to either:

	(a)	 	promptly repair, reconstruct and restore the portion of the Premises damaged by such
casualty (including the Tenant Improvements but excluding Tenant Changes unless Tenant
delivers sufficient proceeds therefor), In which case this Lease shall continue in full force
and effect; or
	 
	(b)	 	terminate this Lease effective as of the date which is thirty (30) days after Tenant’s
receipt of Landlord’s election to so terminate.

Under any of the conditions of this Section 18.1, Landlord shall give written notice to Tenant of
its intention to repair or terminate within the earlier of forty-five (45) days after the
occurrence of such casualty, or fifteen (15) days after Landlord’s receipt of the estimate from
Landlord’s contractor. If Landlord’s contractor’s written estimate of the time to complete the
repair or restoration exceeds one hundred eighty (180) days from the date Landlord has knowledge of
the casualty, Tenant shall also have the right to terminate this Lease by giving written notice to
Landlord within thirty (30) days after Tenant’s receipt of such written estimate.

If Landlord elects to terminate this Lease because of insufficient insurance proceeds, Tenant
shall have the right within ten (10) days after the receipt of such notice to give notice to
Landlord of Tenant’s intention to fund such insufficiency in insurance proceeds, in which event
this Lease shall continue in full force and effect, and Tenant shall promptly deposit such funds
with Landlord and thereafter Landlord shall restore the Premises. If Tenant does not give such
notice within such ten (10) day period this Lease shall be terminated as of the date of Landlord’s
termination.

Upon termination of this Lease pursuant to this Section 18, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Tenant to Landlord. Landlord shall, in
addition, return to Tenant within fifteen (15) days following such termination so much of Tenant’s
security deposit as has not theretofore been applied by Landlord.

18.2
Tenant’s Costs and Insurance Proceeds. In the event of any damage or destruction of all or
any part of the Premises, Tenant shall immediately: (a) notify Landlord thereof; and (b) deliver
to Landlord all insurance proceeds received by Tenant with respect to the Tenant Improvements and
Tenant Changes in the Premises to the extent such items are not covered by Landlord’s casualty
insurance obtained by Landlord pursuant to Section 21 below (excluding proceeds for Tenant’s
furniture and other personal property), whether or not this Lease is terminated as permitted in
this Section 18, and Tenant hereby assigns to Landlord all rights to receive such insurance
proceeds; provided, however, with respect to proceeds of insurance for those Tenant Changes paid
for by Tenant, in the event of a termination of this Lease, Tenant may retain a portion of the
insurance proceeds applicable to such Tenant Changes based upon a fraction, the numerator of which
is the number of months remaining in the Term (had this Lease not been terminated), and the
denominator of which is the number of months remaining in the Term at the time the Tenant Change
was installed in the Premises.

18.3 Abatement of Rent. In the event that as a result of any such damage, repair, reconstruction
and/or restoration of the Premises, Tenant’s use of the Premises or any portion thereof is
impaired, then the rent shall be equitably abated during the period that Tenant’s use of the
Premises is impaired based upon the degree of such impairment. Notwithstanding the foregoing to
the contrary, if the damage is due to the negligence or willful misconduct of Tenant or any Tenant
Parties, there shall be no abatement of rent. Except for abatement of rent as provided
hereinabove, Tenant shall not be entitled to any compensation or damages for loss of, or
interference with, Tenant’s business or use or access of all or any part of the Premises resulting
from any such damage, repair, reconstruction or restoration.

18.4 Inability to Complete. Notwithstanding anything to the contrary contained in this Section 18,
if Landlord is obligated or elects to repair, reconstruct and/or restore the damaged portion of
the Premises pursuant to Section 18.1 above, but is delayed from completing such repair,
reconstruction and/or restoration beyond the date which is four (4) months after the date
estimated by Landlord’s contractor for completion thereof pursuant to Section 18.1, by reason of
any causes beyond the reasonable control of Landlord (Including, without limitation, any delay due
to Force Majeure as defined in Section 32.16, and delays caused by Tenant or any Tenant Parties),
then either party may elect to terminate this Lease upon thirty (30) days’ prior written notice to
the other given prior to completion of such repair, reconstruction and/or restoration; provided,
however, (i) Tenant may not make such election if the delay was caused by Tenant or Tenant’s
Parties or if the remaining damage does not materially impair Tenant’s use of the Premises and
(ii) if Tenant is permitted to and does make such election, Landlord may rescind such election by
completing the repairs, reconstruction and/or restoration within thirty (30) days following
Tenant’s election. In addition, if Landlord is required or elects to restore the Premises under
the provisions of this Section 18 and does not commence such restoration within one hundred twenty
(120) days of the date Landlord has knowledge of the damage, and if such damage material impairs
Tenant’s use of the Premises,
Tenant may, at Tenant’s option, terminate this Lease by giving Landlord notice thereof at any time
prior to the commencement of such restoration. In such event, this Lease shall terminate as of the
date of such

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notice: provided, however, Landlord may rescind such termination by commencing such restoration
within thirty (30) days following such termination.

18.5 Damage to the Project. If there is a total destruction of the Project or a partial
destruction of the Project, the cost of restoration of which would exceed one-third (1/3) of the
then replacement value of the Project, by any cause whatsoever, whether or not insured against and
whether or not the Premises are partially or totally destroyed, Landlord may within the earlier of
fifteen (15) days after Landlord’s receipt of the estimate from Landlord’s contractor or
forty-five (45) days after the occurrence of such destruction, notify Tenant in writing that it
elects not to so reconstruct or restore the Project, In which event this Lease shall cease and
terminate as of the date of such destruction.

18.6 Damage Near End of Term. In addition to the termination rights in Sections 18.1 and 18.4
above, Landlord and Tenant shall have the right to terminate this Lease if any damage to the
Building or Premises occurs during the last twelve (12) months of the Term of this Lease and
Landlord’s contractor estimates In a writing delivered to the parties that the repair,
reconstruction or restoration of such damage cannot be completed within the earlier of (a) the
scheduled expiration date of the Lease Term, or (b) sixty (60) days after the date of such
casualty, provided Landlord so notifies Tenant within the earlier of fifteen (15) days after
Landlord’s receipt of the estimate from Landlord’s contractor or forty-five (45) days of the
casualty, and provided further that Tenant’s termination right under this Section 18.6 shall apply
only to damage to the Premises or material damage to the parking areas or access to the Premises.
In addition, in the event of damage to the Premises during the second (2nd) to the last year of the
Term that is not required to be insured by Landlord hereunder and which will require more than
ninety (90) days to repair, Landlord shall have the right to terminate this Lease by giving Tenant
written notice thereof within the same time period required In the preceding sentence; provided,
however, if Landlord does so terminate this Lease, Tenant shall have the right within ten (10) days
after the receipt of such notice to give notice to Landlord of Tenant’s intention to pay for the
cost of such repair, in which event this Lease shall continue in full force and effect and Tenant
shall promptly deposit such funds with Landlord and thereafter Landlord shall repair the Premises.

Notwithstanding anything to the contrary in this Lease, if, at the time of such damage, Tenant has
an Extension Option and the time for the exercise of the Extension Option has not then expired,
Tenant shall have a period of ten (10) days from Landlord’s election to terminate this Lease
pursuant to this Section 18.6 in which to elect to exercise the Extension Option. If Tenant
exercises such Extension Option during said ten (10) day period, Landlord’s election to terminate
this Lease under this Section 18.6 shall be rescinded and the other relevant provisions of Section
18 shall govern the respective rights and obligations of the parties with respect to such damage.

18.7 Waiver of Termination Right. 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).

19. Eminent Domain.

19.1 Substantial Taking. Subject to the provisions of Section 19.4 below, in case the whole of the
Premises, or such part thereof as shall substantially interfere with Tenant’s use and occupancy of
the Premises as reasonably determined by Landlord, shall be taken for any public or quasi-public
purpose by any lawful power or authority by exercise of the right of appropriation, condemnation
or eminent domain, or sold to prevent such taking, either party shall have the right to terminate
this Lease effective as of the date possession is required to be surrendered to said authority.

19.2 Partial Taking; Abatement of Rent. In the event of a taking of a portion of the Premises
which does not substantially interfere with the conduct of Tenant’s business, then, except as
otherwise provided In the immediately following sentence, neither party shall have the right to
terminate this Lease and Landlord shall thereafter proceed to make a functional unit of the
remaining portion of the Premises (but only to the extent Landlord receives proceeds therefor from
the condemning authority), and rent shall be abated with respect to the part of the Premises which
Tenant shall be so deprived on account of such taking. Notwithstanding the immediately preceding
sentence to the contrary, if any part of the Building or the Project shall be taken (whether or
not such taking substantially interferes with Tenant’s use of the Premises), Landlord may
terminate this Lease upon thirty (30) days’ prior written notice to Tenant as long as Landlord
also terminates leases of all other tenants leasing comparably sized space within the Building for
comparable lease terms.

19.3 Condemnation Award. Subject to the provisions of Section 19.4 below, in connection with any
taking of the Premises or the Building, Landlord shall be entitled to receive the entire amount of
any award which may be made or given in such taking or condemnation, without deduction or
apportionment for any estate or interest of Tenant, it being expressly understood and agreed by
Tenant that no portion of any such award shall be allowed or paid to Tenant for any so-called
bonus or excess value of this Lease, and such bonus or excess value shall be the sole property of
Landlord. Tenant shall not assert any claim against Landlord or the taking authority for any
compensation because of such taking (including any claim for bonus or excess value of this Lease);
provided, however, if any portion of the Premises is taken, Tenant shall be granted the right to
recover from the condemning authority (but not from Landlord) any compensation as may be
separately awarded or recoverable by Tenant for the taking of Tenant’s furniture, fixtures,
equipment and other personal property within the Premises, for Tenant’s relocation expenses, and
for any loss of goodwill or other damage to Tenant’s business by reason of such taking and for a
prorata share of the value of that portion of the Tenant Improvements and Tenant Changes paid for
by Tenant in excess of the Construction Allowance, which prorata share shall be based upon a
fraction, the numerator of which is the number of months remaining in the Term (had this Lease not
been terminated), and the denominator of which is the number of months remaining in the term at
the time the Tenant Improvements and Tenant Changes were installed in the Premises.

19.4 Temporary Taking. In the event of a taking of the Premises or any part thereof for temporary
use, (a) this Lease shall be and remain unaffected thereby and rent shall not abate, and (b)
Tenant shall be entitled to receive for

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itself such portion or portions of any award made for such use with respect to the period of the
taking which is within the Term, provided that if such taking shall remain in force at the
expiration or earlier termination of this Lease, Tenant shall perform its obligations under
Section 9 with respect to surrender of the Premises and shall pay to Landlord the portion of any
award which is attributable to any period of time beyond the Term expiration date. For purpose of
this Section 19.4, a temporary taking shall be defined as a taking for a period of one hundred
twenty (120) days or less.

19.5 Waiver of Termination Right. 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.

20. Tenant’s Insurance.

20.1 Types of Insurance. On or before the earlier of the Commencement Date or the date Tenant
commences or causes to be commenced any work of any type in or on the Premises pursuant to this
Lease, and continuing during the entire Term, Tenant shall obtain and keep in full force and
effect, the following insurance:

	(a)	 	All Risk insurance, including fire and extended coverage, sprinkler leakage, vandalism and
malicious mischief upon property of every description and kind owned by Tenant and located in
the Premises or the Building, or for which Tenant is legally liable or installed by or on
behalf of Tenant including, without limitation, furniture, equipment and any other personal
property, and any Tenant Changes (but excluding the initial Tenant Improvements previously
existing or installed in the Premises), in an amount not less then the full replacement cost
thereof.
	 
	(b)	 	Commercial general liability insurance coverage, including personal injury, bodily injury
(including wrongful death), broad form property damage, operations hazard, owner’s protective
coverage, contractual liability (including Tenant’s indemnification obligations under this
Lease, including Section 17 hereof), liquor liability (if Tenant serves alcohol on the
Premises), and owned/non-owned auto liability,
with a general aggregate of not less than Two Million Dollars
($2,000,000.00), The general aggregate amount of such commercial general liability insurance shall be increased
every five (5) years during the, Term of this Lease to an amount reasonably required by
Landlord and prudent industry practice.
	 
	(c)	 	Worker’s compensation and employer’s liability insurance, in statutory amounts and limits.
	 
	(d)	 	Loss of income, extra expense and business interruption insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of access to the Premises,
Tenant’s parking areas or to the Building as a result of such perils. Tenant may elect to
self-insure this risk.
	 
	(e)	 	Any other form or forms of insurance as Tenant or Landlord or the mortgagees of Landlord may
reasonably require from time to time, in form, amounts and for insurance risks against which
a prudent tenant would protect itself, but only to the extent such risks and amounts are
available in the insurance market at commercially reasonable costs.

20.2 Requirements. Each policy required to be obtained by Tenant hereunder shall: (a) be issued by
insurers authorized to do business in the state in which the Building is located and rated not
less than financial class X, and not less than policyholder rating A in the most recent version of
Best’s Key Rating Guide (provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1(a) and 20.1(d) above); (b) be in form reasonably satisfactory
from time to time to Landlord; (c) name Tenant as named insured thereunder and shall name Landlord
and, at Landlord’s request, Landlord’s mortgagees and ground lessors of which Tenant has been
informed in writing, as additional insureds thereunder, all as their respective interests may
appear; (d) shall not have a deductible amount exceeding Five Thousand Dollars ($5,000.00); (e)
specifically provide that the insurance afforded by such policy for the benefit of Landlord and
Landlord’s mortgagees and ground lessors shall be primary, and any insurance carried by Landlord
or Landlord’s mortgagees and ground lessors shall be excess and non-contributing; (f) except for
worker’s compensation insurance, contain an endorsement that the insurer waives its right to
subrogation as described in Section 22 below; and (g) contain an undertaking by the insurer to
notify Landlord (and the mortgagees and ground lessors of Landlord who are named as additional
insureds) in writing not less than thirty (30) days prior to any material change, reduction in
coverage, cancellation or other termination thereof. Tenant agrees to deliver to Landlord, as soon
as practicable after the placing of the required insurance, but in no event later than ten (10)
days after the date Tenant takes possession of all or any part of the Premises, certificates from
the insurance company evidencing the existence of such insurance and Tenant’s compliance with the
foregoing provisions of this Section 20). Tenant shall cause replacement certificates to be
delivered to Landlord not less than thirty (30) days prior to the expiration of any such policy or
policies. If any such initial or replacement certificates are not furnished within the time(s)
specified herein, Tenant shall be deemed to be in default under this Lease, and Landlord shall
have the right, but not the obligation, to procure such policies and certificates at Tenant’s
expense.

20.3 Effect on Insurance. Tenant shall not do or permit to be done anything which will (a) violate
or invalidate any Insurance policy maintained by Landlord or Tenant hereunder, or (b) increase the
costs of any insurance policy maintained by Landlord pursuant to Section 21 or otherwise with
respect to the Building or the Project. If Tenant’s occupancy or conduct of its business in or on
the Premises results in any increase in premiums for any insurance carried by Landlord with
respect to the Building or the Project, Tenant shall pay such increase as additional rent within
ten (10) days after being billed therefor
by Landlord. If any insurance coverage carried by Landlord pursuant to Section 21 or otherwise
with respect to the Building or the Project shall be cancelled or reduced (or cancellation or
reduction thereof shall be threatened) by reason of the use or occupancy of the Premises by Tenant
or by anyone permitted by Tenant to

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be upon the Premises, and if Tenant falls to remedy such condition within five (5) days after
notice thereof, Tenant shall be deemed to be in default under this Lease, and Landlord shall have
all remedies provided in this Lease, at law or in equity, including, without limitation, the right
(but not the obligation) to enter upon the Premises and attempt to remedy such condition at
Tenant’s cost.

21. Landlord’s Insurance. During the Term, Landlord shall insure the Common Area
improvements, the Building, the Premises and the Tenant Improvements initially installed in the
Premises pursuant to Exhibit “C” (excluding, however, Tenant’s furniture, equipment and
other personal property and Tenant Changes) at their full replacement cost against damage by fire
and standard extended coverage perils and with vandalism and malicious mischief endorsements,
rental loss coverage, at Landlord’s option, earthquake damage coverage, and such additional
coverage as Landlord deems appropriate. Landlord shall also carry commercial general liability
insurance (in an amount not less than required of Tenant under Section 20.1(b) above) and with such
reasonable deductibles as would be carried by a prudent owner of a similar building in the state in
which the Building is located. At Landlord’s option, all such insurance may be carried under any
blanket or umbrella policies which Landlord has in force for other buildings and projects. In
addition, at Landlord’s option, Landlord may elect to self-insure all or any part of such required
insurance coverage. Landlord may, but shall not be obligated to, carry any other form, or forms of
insurance as Landlord or the mortgagees or ground lessors of Landlord may reasonably determine is
advisable, The cost of insurance obtained by Landlord pursuant to this Section 21 (Including
self-insured amounts and deductibles) shall be included in Operating Expenses, except that any
increase in the premium for the property Insurance attributable to the replacement cost of the
Tenant Improvements In excess of the Construction Allowance shall not be included as Operating
Expenses, but shall be paid by Tenant concurrently with Tenant’s monthly installment of its share
of Operating Expenses.

22. Waivers of Subrogation.

22.1 Mutual Waiver of Parties. Landlord and Tenant hereby waive their rights against each other
with respect to any claims or damages or losses which are caused by or result from (a) property
damage insured against under any property insurance policy carried by Landlord or Tenant (as the
case may be) pursuant to the provisions of this Lease and enforceable at the time of such damage
or loss, or (b) property damage which would have been covered under any insurance required to be
obtained and maintained by Landlord or Tenant (as the case may be) under Sections 20 and 21 of
this Lease (as applicable) had such insurance been obtained and maintained as required therein.
The foregoing waivers shall be in addition to, and not a limitation of, any other waivers or
releases contained in this Lease.

22.2 Waiver of Insurers. Each party shall cause each property insurance policy required to be
obtained by it pursuant to Sections 20 and 21 to provide that the insurer waives all rights of
recovery by way of subrogation against either Landlord or Tenant, as the case may be, in
connection with any claims, losses and damages covered by such policy. If either party fails to
maintain property insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation as set forth in the immediately preceding sentence.

23. Tenant’s Default and Landlord’s Remedies.

23.1 Tenant’s Default. The occurrence of any one or more of the following events shall constitute a
default under this Lease by Tenant:

	(a)	 	the abandonment of the Premises by Tenant. “Abandonment” is herein defined to include, but is
not limited to, any absence by Tenant from the Premises for fourteen (14) business days or longer
while in default of any monetary provision of this Lease;
	 
	(b)	 	the failure by Tenant to make any payment of rent or additional rent or any other payment
required to be made by Tenant hereunder, within seven (7) days of when due;
	 
	(c)	 	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 as specified in
Sections 23.1(a) or (b) above, where such failure shall continue for a period of thirty (30) days
after written notice thereof from Landlord to Tenant; however, that any such notice shall be in
lieu of, and not in addition to, any notice required under California Code of Civil Procedure,
Section 1161 and provided further that, if the nature of Tenant’s default is such that more than
thirty (30) 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 thirty (30) day period and thereafter
diligently prosecute such cure to completion; and
	 
	(d)	 	(i) the making by Tenant of any general assignment for the benefit of creditors, (ii) the
filing by or against Tenant of a petition to have Tenant 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 the Tenant, the same is dismissed within sixty (60) days), (iii) 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, where possession is not restored to
Tenant within sixty (60) days, or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease
where such seizure is not discharged within sixty (60) days.

23.2 Landlord’s Remedies; Termination. In the event of any such 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. In the event
that Landlord shall elect to so terminate this Lease, then Landlord may recover from Tenant:

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

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	(b)	 	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
	 
	(c)	 	the worth at the time of award of the amount by which the unpaid rent for the balance of the
term after the time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
	 
	(d)	 	any other amount necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom including, but not limited to: unamortized Tenant
Improvement costs; attorneys’ fees; unamortized brokers’ commissions; the costs of refurbishment,
renovation and repair of the Premises; and removal (including the repair of any damage caused by
such removal) and storage (or disposal) of Tenant’s personal property, equipment, fixtures, Tenant
Changes, Tenant Improvements and any other Items which Tenant is required under this Lease to
remove but does not remove.

As used in Sections 23.2(a) and 23.2(b) above, the “worth at the time of award” is computed by
allowing interest at the Interest Rate set forth in Section 1.14 of the Summary. As used in
Section 23.2(c) 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%).

23.3 Landlord’s Remedies; Re-Entry Rights. In the event of any such 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 Section 12.4 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 Section 23.3, 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.

23.4 Landlord’s Remedies; Continuation of Lease. In the event of any such default by Tenant, in
addition to any other remedies available to Landlord under this Lease, at law or in equity,
Landlord shall have the right to continue this Lease in full force and effect, whether or not
Tenant shall have abandoned the Premises. The foregoing remedy shall also be available to Landlord
pursuant to California Civil Code Section 1951.4 and any successor statute thereof in the event
Tenant has abandoned the Premises. In the event Landlord elects to continue this Lease in full
force and effect pursuant to this Section 23.4, then Landlord shall be entitled to enforce all of
its rights and remedies under this Lease, including the right to recover rent as it becomes due.
Landlord’s election not to terminate this Lease pursuant to this Section 23.4 or pursuant to any
other provision of this Lease, at law or in equity, shall not preclude Landlord from subsequently
electing to terminate this Lease or pursuing any of its other remedies.

23.5 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 fall to pay any sum
of money (other than Annual Basic Rent) or perform any other act on its part to be paid or
performed hereunder and such failure shall continue for seven (7) days with respect to monetary
obligations (or thirty (30) days with respect to non-monetary obligations or, in the event of an
emergency, such shorter period of time as may be 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 ten (10) days
after demand therefor as additional rent.

23.6 Interest. If any monthly installment of Annual Basic Rent or Common Area 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 Interest Rate set forth in Section 1.14 of the Summary from the date’
due until paid. All Interest, and any late charges imposed pursuant to Section 23.7 below, shall
be considered additional rent due from Tenant to Landlord under the terms of this Lease.

23.7 Late Charges. Tenant acknowledges that, in addition to interest costs, the late payments by
Tenant to Landlord of any Annual Basic 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 of trust or related loan documents encumbering the Premises, the Building or
the Project. Accordingly, if any monthly installment of Annual Basic Rent or Operating Expenses, or
any other amount payable by Tenant hereunder is not received by Landlord within ten (10) days of
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.

23.8 [Intentionally Omitted].

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23.9 Rights and Remedies Cumulative. All rights, options and remedies of Landlord contained in
this Section 23 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 Section 23 shall be deemed to limit or
otherwise affect Tenant’s indemnification of Landlord pursuant to any provision of this Lease.

24. Landlord’s Default. Landlord shall not be in default in the performance of any
obligation required to be performed by Landlord under this Lease unless Landlord has failed to
perform such obligation within thirty (30) days after the receipt of written notice from Tenant
specifying in detail Landlord’s failure to perform; provided however, that if the nature of
Landlord’s obligation is such that more than thirty
(30) days are required for its performance,
then Landlord shall not be deemed in default if it commences such performance within such thirty
(30) day period and thereafter diligently pursues the same to completion. Upon any such uncured
default by Landlord, Tenant may exercise any of its rights provided in law or at equity; provided,
however: (a) Tenant shall have no right to offset or abate rent in the event of any default by
Landlord under this Lease, except to the extent offset rights are specifically provided to Tenant
in this Lease; (b) Tenant shall have no right to terminate this Lease; and (c) Tenant’s rights and
remedies hereunder shall be limited to the extent (i) Tenant has expressly waived in this Lease
any of such rights or remedies and/or (ii) this Lease otherwise expressly limits Tenant’s rights
or remedies, including the limitation on Landlord’s liability contained in Section 31 hereof.

25. Subordination. Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of Landlord or any
mortgagee of a mortgage or a beneficiary of a deed of trust now or hereafter encumbering all or any
portion of the Building or the Project, or any lessor of any ground or master lease now or
hereafter affecting all or any portion of the Building or the Project, this Lease shall be subject
and subordinate at all times to such ground or master leases (and such extensions and modifications
thereof), and to the lien of such mortgages and deeds of trust (as well as to any advances made
thereunder and to all renewals, replacements, modifications and extensions thereof).
Notwithstanding the foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any or all ground or master leases or the lien of any or all mortgages or deeds of
trust to this Lease. In the event that any ground or master lease terminates for any reason or any
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, at the election of Landlord’s successor in interest, Tenant shall attorn to and become the
tenant of such successor, provided such successor assumes in full and in writing Landlord’s
obligations under this Lease accruing subsequent to the date such successor acquires Landlord’s
interest. 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. Tenant covenants and
agrees to execute and deliver to Landlord within ten (10) days after receipt of written demand by
Landlord and in the form reasonably required by Landlord, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground or master lease or the lien
of any such mortgage or deed of trust.

Notwithstanding the foregoing, in consideration of, and as a condition precedent to, the
subordination of this Lease to any ground Lease or the lien of any mortgage or deed of trust not
in existence as of the date hereof, Landlord shall have provided Tenant with a commercially
reasonable non-disturbance agreement in favor of Tenant, in form reasonably acceptable to Tenant,
from the ground lessor or holder of the mortgage or deed of trust, as applicable. Said
non-disturbance agreement shall be in recordable form.

Tenant’s obligations under this Lease are subject to Landlord providing to Tenant within thirty
(30) days following the full execution and delivery of this Lease by the parties, a
non-disturbance and attornment agreement, in a recordable form reasonably acceptable to Tenant,
from any ground lessor or any lender that has a mortgage, deed of trust or other security device
encumbering any portion of the Project as of the date of this Lease (the “Nondisturbance
Condition”). Landlord shall exercise good faith efforts to assist in the satisfaction of the
Nondisturbance Condition. If the Nondisturbance Condition is not satisfied within such thirty (30)
day period, Tenant may, within ten (10) days thereafter, terminate this Lease (as Tenant’s sole
remedy) by giving Landlord written notice thereof prior to the date Landlord delivers such
non-disturbance agreement to Tenant. If Tenant does not elect to terminate this Lease within said
ten (10) day period, then Tenant shall be deemed to have waived the Nondisturbance Condition and
this Lease shall no longer be subject to termination pursuant to this Section 25.

26. Estoppel Certificate.

26.1 Obligations. Within ten (10) business days following a party’s written request, the other
party shall execute and deliver to the requesting party an estoppel certificate, in a form
substantially similar to the form of Exhibit “F” attached hereto (if Landlord is the
certifying party, the provisions of Exhibit “F” will be modified as appropriate),
certifying: (a) the Commencement Date of this Lease; (b) that this Lease is unmodified and in full
force and effect (or, if modified, that this Lease is in full force and effect as modified, and
stating the date and nature of such modifications); (c) the date to which the rent and other sums
payable under this Lease have been paid; (d) that there are not, to the best of the certifying
party’s knowledge, any defaults under this Lease by either Landlord or Tenant, except as specified
in such certificate; and (e) such other matters as are reasonably requested by the requesting
party. Any such estoppel certificate delivered pursuant to this Section 26.1 may be relied upon by
any mortgagee, beneficiary, purchaser or prospective purchaser of any portion of the Project or
Tenant’s leasehold estate therein, as well as their assignees.

26.2 Failure to Deliver. In addition to constituting a default hereunder, a party’s failure to
deliver such estoppel certificate within such time shall be conclusive upon the certifying party
that: (a) this Lease is in full force and effect without modification, except as may be
represented by the requesting party; (b) there are no uncured defaults in Landlord’s or Tenant’s
performance (other than the certifying party’s failure to deliver the estoppel certificate); and
(c) not more than one (1) month’s rental has been paid in advance.

27. Intentionally Omitted.

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28. Modification and Cure Rights of Landlord’s Mortgagees and Lessors.

28.1 Modifications. If, in connection with Landlord’s obtaining or entering into any financing or
ground lease for any portion of the Building or the Project, the lender or ground lessor shall
request modifications to this Lease, Tenant shall, within ten (10) days after request therefor,
execute an amendment to this Lease including such modifications, provided such modifications are
reasonable, do not increase the obligations of Tenant hereunder, or adversely affect the leasehold
estate created hereby or Tenant’s rights hereunder.

28.2 Cure Rights. In the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgagee covering the
Premises or ground lessor of Landlord whose address shall have been furnished to Tenant, and shall
offer such beneficiary, mortgagee or ground lessor the same opportunity to cure the default as is
provided to Landlord hereunder.

29. Quiet Enjoyment. Landlord covenants and agrees with Tenant that, upon Tenant
performing all of the covenants and provisions on Tenant’s part to be observed and performed under
this Lease (including payment of rent hereunder), Tenant shall and may peaceably and quietly have,
hold and enjoy the Premises in accordance with and subject to the terms and conditions of this
Lease as against all persons lawfully claiming the Premises.

30. Transfer of Landlord’s Interest. The term “Landlord” as used in this Lease, so far as
covenants or obligations on the part of the Landlord are concerned, shall be limited to mean and
include only the owner or owners, at the time in question, of the fee title to, or a lessee’s
interest in a ground lease of, the Project. In the event of any transfer or conveyance of any such
title or interest (other than a transfer for security purposes only), the transferor shall be
automatically relieved of all covenants and obligations on the part of Landlord contained in this
Lease accruing after the date of such transfer or conveyance. Landlord and Landlord’s transferees
and assignees shall have the absolute right to transfer all or any portion of their respective
title and interest in the Project, the Building, the Premises and/or this Lease without the consent
of Tenant, and such transfer or subsequent transfer shall not be deemed a violation on Landlord’s
part of any of the terms and conditions of this Lease.

31. Limitation on Landlord’s Liability. 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 or shareholders of Landlord or Landlord’s partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of Landlord or
Landlord’s partners, or any of their personal assets for satisfaction of any liability with respect
to this Lease. In addition, in consideration of the benefits accruing hereunder to Tenant and
notwithstanding anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of Its successors and assigns that the liability of Landlord for its
obligations under this Lease (including any liability as a result of any actual or alleged failure,
breach or default hereunder by Landlord), shall be limited solely to, and Tenant’s and its
successors’ and assigns’ sole and exclusive remedy shall be against, Landlord’s interest in the
Project, and no other assets of Landlord.

32. Miscellaneous.

32.1 Governing Law. This Lease shall be governed by, and construed pursuant to, the laws of the
state in which the Project is located.

32.2 Successors and Assigns. Subject to the provisions of Section 30 above, and 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 and permitted successors and assigns; provided, however, no rights
shall inure to the benefit of any Transferee of Tenant unless the Transfer to such Transferee is
made in compliance with the provisions of Section 14, and no options or other rights which are
expressly made personal to the original Tenant hereunder or in any rider attached hereto shall be
assignable to or exercisable by anyone other than the original Tenant under this Lease, except as
otherwise provided herein.

32.3 No Merger. The voluntary or other surrender of this Lease by Tenant or a mutual termination
thereof shall not work as a merger and shall, at the option of Landlord, either (a) terminate all
or any existing subleases, or (b) operate as an assignment to Landlord of Tenant’s interest under
any or all such subleases.

32.4 Professional Fees. If either Landlord or Tenant should bring suit against the other with
respect to this Lease, including for unlawful detainer or any other relief against the other
hereunder, then all costs and expenses Incurred by the prevailing party therein (Including,
without limitation, Its actual appraisers’, accountants’, attorneys’ and other professional fees,
expenses and court costs), shall be paid by the other party.

32.5 Waiver. The waiver by either party of any breach by the other party of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same
or any other term, covenant and condition herein contained, nor shall any custom or practice which
may become established between the parties in the administration of the terms hereof be deemed a
waiver of, or in any way affect, the right of any party to insist upon the performance by the
other in strict accordance with said terms. No waiver of any default of either party hereunder
shall be implied from any acceptance by Landlord or delivery by Tenant (as the case may be) of any
rent or other payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and no express waiver
shall affect defaults other than as specified in said waiver. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of
acceptance of such rent.

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32.6 Terms and Headings. The words “Landlord” and “Tenant” as used herein shall include the plural
as well as the singular. Words used in any gender Include other genders. The Section headings of
this Lease are not a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.

32.7 Time. Time is of the essence with respect to performance of every provision of this Lease in
which time or performance is a factor. All references in this Lease to “days” shall mean calendar
days unless specifically modified herein to be “business” days.

32.8 Prior Agreements; Amendments. This Lease, including the Summary and all Exhibits and Riders
attached hereto contains all of the covenants, provisions, agreements, conditions and
understandings between Landlord and Tenant concerning the Premises and any other matter covered or
mentioned in this Lease, and no prior agreement or understanding, oral or written, express or
implied, pertaining to the Premises or any such other 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 parties acknowledge that all prior
agreements, representations and negotiations are deemed superseded by the execution of this Lease
to the extent they are not expressly incorporated herein.

32.9 Separability. The invalidity or unenforceability of any provision of this Lease (except for
Tenant’s obligation to pay Annual Basic Rent and Operating Expenses under Sections 3 and 4 hereof)
shall in no way affect, impair or invalidate any other provision hereof, and such other provisions
shall remain valid and in full force and effect to the fullest extent permitted by law.

32.10 Recording. Neither Landlord nor Tenant shall record this Lease. However, either party may
record a short form memorandum of this Lease provided the form and substance thereof is reasonably
acceptable to the other party, and provided that prior to recordation Tenant executes and delivers
to Landlord, In recordable form, a properly acknowledged quitclaim deed or other instrument
extinguishing all of the Tenant’s rights and interest in and to the Project, the Building and the
Premises, and designating Landlord as the transferee, which deed or other instrument shall be held
by Landlord and may be recorded by Landlord once this Lease terminates or expires (but not prior
thereto). If such short form memorandum is recorded in accordance with the foregoing, the party
requesting the recording shall pay for all costs of or related to such recording, including, but
not limited to, recording charges and documentary transfer taxes.

32.11 Exhibits and Riders. All Exhibits and Riders attached to this Lease are hereby incorporated
in this Lease for all purposes as though set forth at length herein.

32.12 Auctions. Tenant shall have no right to conduct any auction in, on or about the Premises,
the Building or the Project.

32.13 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than
the rent payment herein stipulated shall be deemed to be other than on account of the rent, nor
shall any endorsement or statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy
provided in this Lease. Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease or imposed by any
statute or at common law.

32.14 Financial Statements. Upon ten (10) days prior written request from Landlord (which Landlord
may make at any time during the Term but no more often than once in any calendar year), Tenant
shall deliver to Landlord a current financial statement of Tenant and any guarantor of this Lease.
Such statements shall be prepared in accordance with generally acceptable accounting principles
and certified as true in all material respects by Tenant (if Tenant is an individual) or by an
authorized officer or general partner of Tenant (if Tenant is a corporation or partnership,
respectively).

32.15 No Partnership. Landlord does not, in any way or for any purpose, become a partner of Tenant
in the conduct of its business, or otherwise, or joint venturer or a member of a joint enterprise
with Tenant by reason of this Lease. The provisions of this Lease relating to Percentage Rent
payable hereunder, if any, are included solely for the purpose of providing a method whereby rent
is to be measured and ascertained.

32.16 Force Majeure. In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of strikes, lock-outs,
labor troubles, inability to procure materials, failure of power, governmental moratorium or other
governmental action or inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war, fire, earthquake,
flood or other natural disaster or other reason of a like nature not the fault of the party
delaying in performing work or doing acts required under the terms of this Lease (but excluding
delays due to financial inability) (herein collectively,
“Force Majeure Delays”), then performance
of such act shall be excused for the period of the delay and the period for the performance of any
such act shall be extended for a period equivalent to the period of such delay. The provisions of
this Section 32.16 shall not apply to nor operate to excuse Tenant from the payment of Monthly
Basic Rent, Operating Expenses, percentage rent, if any, additional rent or any other payments
strictly in accordance with the terms of this Lease.

32.17
Counterparts. This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement.

32.18 Nondisclosure of Lease Terms. Tenant acknowledges and agrees that the terms of this Lease
are confidential and constitute proprietary information of Landlord. Disclosure of the terms could
adversely affect the ability of Landlord to negotiate other leases and impair Landlord’s
relationship with other tenants. Accordingly, Tenant agrees that it,
and its

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partners, officers, directors, employees, agents and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any newspaper or other publication
or any other tenant or apparent prospective tenant of the Building or other portion of the Project,
or real estate agent, either directly or indirectly, without the prior written consent of Landlord,
provided, however, that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease or as otherwise required by law.

32.20 Non-Discrimination. Tenant acknowledges and agrees that there shall be no discrimination
against, or segregation of, any person, group of persons, or entity on the basis of race, color,
creed, religion, age, sex, marital status, national origin, or ancestry in the leasing, subleasing,
transferring, assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.

33. Lease Execution.

33.1 Tenant’s Authority. If Tenant executes this Lease as a partnership or corporation, then
Tenant and the persons and/or entities executing this Lease on behalf of Tenant represent and
warrant that: (a) Tenant is a duly authorized and existing partnership or corporation, as the case
may be, and is qualified to do business in the state in which the Building is located; (b) such
persons and/or entities executing this Lease are duly authorized to execute and deliver this Lease
on Tenant’s behalf in accordance with the Tenant’s partnership agreement (if Tenant is a
partnership), or a duly adopted resolution of Tenant’s board of directors and the Tenant’s by-laws
(if Tenant is a corporation); and (c) this Lease is binding upon Tenant in accordance with its
terms.

33.2 Joint and Several Liability. If more than one person or entity executes this Lease as Tenant;
(a) each of them is and shall be jointly and severally liable for the covenants, conditions,
provisions and agreements of this Lease to be kept, observed and performed by Tenant; and (b) the
act or signature of, or notice from or to, any one or more of them with respect to this Lease
shall be binding upon each and all of the persons and entities executing this Lease as Tenant with
the same force and effect as if each and all of them had so acted or signed, or given or received
such notice.

33.3 Landlord’s Authority. Landlord represents and warrants to Tenant that: (a) Landlord is a duly
authorized and existing limited liability company and is qualified to do business in California;
(b) the persons and entities executing this Lease are duly authorized to execute and deliver this
Lease on Landlord’s behalf in accordance with Landlord’s operating agreement; and (c) this Lease
is binding upon Landlord in accordance with its terms.

33.4 No Option. The submission of this Lease for examination or execution by Tenant does not
constitute a reservation of or option for the Premises and this Lease shall not become effective
as a Lease until it has been executed by Landlord and delivered to Tenant.

34. [Intentionally Omitted].

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

	 	 	 	 	 
	“TENANT” 	AURORA BIOSCIENCES CORPORATION,

a Delaware corporation

 	 
	 	By:  	/s/
Timothy J. Rink	 
	 	 	Name:  	Timothy J. Rink	 
	 	 	Title:  	CEO President 	 
	 
	 	By:  	/s/
Deborah J. Tower
 	 
	 	 	Name:  	Deborah J. Tower	 
	 	 	Title:  	Sr. Director, Finance and Administration 	 
	 
	“LANDLORD” 	AEW/LBA ACQUISITION CO. II, LLC,

a California limited liability company

 	 
	 	By:  	LBA, Inc., a California corporation, 
its agent
 	 
	 
	 	By:  	/s/
Phil A. Belling
 	 
	 	 	Name:  	Phil A. Belling	 
	 	 	Title:  	 	 
	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

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