Document:

exv10w1

EXHIBIT 10.1

TELECOM BUSINESS CENTER NNN LEASE

1. Basic Lease Provisions.

	 	 	 	 	 	 	 

	1.1

	 	Reference Date:
	 	December 18, 2001

	 
	 	 	 	 	 	 
	1.2

	 	Landlord:
	 	FSP Telecom Business Center Limited Partnership, a
Massachusetts limited partnership

	 
	 	 	 	 	 	 
	1.3

	 	Tenant:
	 	MD3 Incorporated, a California corporation

	 
	 	 	 	 	 	 
	1.4

	 	Premises Addresses:
	 	5751 Copley Drive, Suite B, San Diego, California

	 
	 	 	 	 	 	 
	1.5

	 	Approximate Leasable Area of Premises:
	 	12,799 square feet

	 
	 	 	 	 	 	 
	1.6

	 	Use:
	 	General office and administrative use, including
research and development laboratory testing and manufacturing.

	 
	 	 	 	 	 	 
	1.7

	 	Term:
	 	Thirty-six (36) months

	 
	 	 	 	 	 	 
	1.8

	 	Commencement Date:
	 	February 1, 2002

	 
	 	 	 	 	 	 
	1.9

	 	Monthly Base Rent:
	 	Months 1-12
	     $16,639.00
	 

	 	 	 	Months 13-24
	     $17,304.00
	 

	 	 	 	Months 25-36
	     $17,995.00
	 
	 	 	 	 	 	 
	  1.10

	 	Base Rent Paid Upon Execution:
	 	$99,834.00		 
	 
	 	 	 	 	 	 
	 

	 	Applied To:
	 	The first six months of the term
(Months 1-6)

	 
	 	 	 	 	 	 
	  1.11

	 	Tenant’s Percentage Share:
	 	12.58%	 	
	 

	 	 	 	(Based on Project Square Footage of 101,726)	 	 
	 
	 	 	 	 	 	 
	  1.12

	 	Security Deposit:
	 	Letter of Credit in the amount of the last twelve
(12) months of rent ($215,940.00)

 

 

	 	 		 	 	 
			
	1.13

	 	Number of Parking Spaces:	 	 
	 
	 		 	 	 
	 

	 	 	Unreserved:
	 	Forty-two (42)
	 
	 		 	 	 
	 

	 	 	Reserved:
	 	None
	 
	 		 	 	 
	1.14

	 	Real Estate Broker(s):	 	 
	 
	 		 	 	 
	 

	 	 	          Landlord:
	 	SENTRE Partners, Inc.
	 
	 		 	 	 
	 

	 	 	          Tenant:
	 	Irving Hughes
	 
	 		 	 	 
	1.15

	 	Exhibits Attached to Lease:
	 	Exhibit A — “Premises”;
	 

	 		 	 	Exhibit B — “Verification Letter”;
	 

	 		 	 	Exhibit C — “Rules and Regulations”;
	 

	 		 	 	Exhibit D — “Form of HazMat Certificate”
	 

	 		 	 	Exhibit E — “Work Letter Agreement”
	 

	 		 	 	Exhibit F — “Addendum to Standard Telecom Business
Center NNN Lease”
	 

	 		 	 	Exhibit G — “Irrevocable Standby Letter of Credit”
	 
	 		 	 	 

	 	 	 	 	 	 
	1.16

	 	Addresses for Notices:	 	 
	 
	 		 	 	 
	 

	 		Landlord:
	 	FSP Telecom Business Center Limited Partnership
	 

	 		 	 	401 Edgewater Place, Suite 110
	 

	 		 	 	Wakefield, Massachusetts 01880
	 

	 		 	 	Attention: Asset Manager
	 
	 		 	 	 
	 

	 		With a Copy To:
	 	SENTRE Partners
	 

	 		 	 	225 Broadway, Suite 1700
	 

	 		 	 	San Diego, California 92101
	 

	 		 	 	Attention: Property Manager
	 
	 		 	 	 
	 

	 	Tenant:
	 	MD3, Inc.
	 

	 		 	 	5751 Copley Drive, Suite B
	 

	 		 	 	San Diego, CA 92101
	 

	 		 	 	Attention: Chief Financial Officer

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2. PREMISES.

     2.1 Acceptance. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises, to have and to hold for the term of this Lease, subject to the
terms, covenants and conditions of this Lease. The Premises is depicted on Exhibit A
attached hereto. The Premises depicted on Exhibit A is all or a part of a building
(the “Building”) and may contain areas outside of the Building to the extent such areas are
specifically identified on Exhibit A as being a part of the Premises. Landlord
shall complete the Improvements, as defined in, and in accordance with the terms of the Work
Letter Agreement attached hereto as Exhibit E. Subject to the construction of the
Improvements, Tenant accepts the Premises in its condition as of the Commencement Date,
subject to all applicable laws, ordinances, regulations, covenants, conditions, restrictions
and easements, and except as may be otherwise expressly provided herein, Landlord shall not
be obligated to make any repairs or alterations to the Premises. Tenant acknowledges that
Landlord has made no representation or warranty as to the suitability of the Premises for
the conduct of Tenant’s business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant’s intended purposes. The number of square feet set forth in
Section 1.5 is an approximation, and the Base Rent shall not be changed if the actual number
of square feet in the Premises is different than the number of square feet set forth in
Section 1.5.

     2.2 Common Areas. Landlord hereby grants to Tenant for the benefit of
Tenant and its employees, suppliers, shippers, customers and invitees during the term of
this Lease, the nonexclusive right to use, in common with others entitled to such use
(including Landlord), the Common Areas (as hereinafter defined) as they exist from time to
time, subject to all rights reserved by Landlord hereunder and under the terms of all rules
and regulations promulgated by Landlord from time to time with respect thereto. Landlord
reserves the right from time to time to (a) make changes in the Common Areas, including,
without limitation, changes in location, size, shape and number of driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas and walkways; (b) close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains available;
(c) construct additional buildings, parking areas, loading dock facilities and other
improvements within the Common Areas; and (d) do and perform such other acts and make such
other changes in, to or with respect to the Common Areas as Landlord may deem appropriate.
As used herein, the term “Common Areas” means all areas and facilities outside the Premises
and within the exterior boundary lines of the land owned by Landlord that are provided and
designated by Landlord as such from time to time for general nonexclusive use of Tenant and
others, including, if designated by Landlord as Common Areas, parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways and landscaped areas.
The Premises, the Building, the Common Areas, the land upon which the same are located,
along with all other buildings and improvements thereon, are herein collectively referred to
as the “Project.” Under no circumstances shall the right herein
granted to use the Common Areas be deemed to include the right to store any property,
temporarily or permanently, in the Common Areas, including, without limitation, the storage
of trucks or other vehicles. Any such storage shall be permitted only by the prior written
consent of Landlord, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove the property and

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charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord.

3. TERM.

     3.1 Term and Commencement Date. The term and Commencement Date of
this Lease are as specified in Sections 1.7 and 1.8. The Commencement Date set forth in
Section 1.8 is an estimated Commencement Date. Subject to the limitations contained in
Section 3.3 below, the actual Commencement Date shall be the date possession of the Premises
is tendered to Tenant in accordance with Section 3.4 below; provided, however, that the term
of this Lease and the increases in Base Rent under Section 5, below, shall be computed from
the first day of the calendar month following the Commencement Date. When the actual
Commencement Date is established by Landlord, Tenant shall, within five (5) days after
Landlord’s request, complete and execute the letter attached hereto as Exhibit B and
deliver it to Landlord. Tenant’s failure to execute the letter attached hereto as
Exhibit B within said five (5) day period shall be a material default hereunder and
shall constitute Tenant’s acknowledgment of the truth of the facts contained in the letter
delivered by Landlord to Tenant.

     3.2 Delay in Possession. Notwithstanding the estimated Commencement
Date specified in Section 1.8, if for any reason Landlord cannot deliver possession of the
Premises to Tenant on said date, Landlord shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or the obligations of Tenant
hereunder; provided, however, in such a case, Tenant shall not be obligated to pay rent or
perform any other obligation of Tenant under this Lease, except as may be otherwise provided
in this Lease, until possession of the Premises is tendered to Tenant, as defined in
Section 3.4. If Landlord shall not have tendered possession of the Premises to Tenant
within one hundred twenty (120) days following the estimated Commencement Date specified in
Section 1.8, as the same may be adjusted in accordance with Section 3.3 or in accordance
with the terms of any work letter agreement entered into by Landlord and Tenant, Tenant may,
at Tenant’s option, by notice in writing to Landlord within ten (10) days after the
expiration of the one hundred twenty (120) day period, terminate this Lease. If Tenant
terminates this Lease as provided in the preceding sentence, the parties shall be discharged
from all obligations hereunder, except that Landlord shall return any money previously
deposited with Landlord by Tenant; and provided further, that if such written notice by
Tenant is not received by Landlord within said ten (10) day period, Tenant shall not have
the right to terminate this Lease as provided above unless Landlord fails to tender
possession of the Premises to Tenant within two hundred forty (240) days following the
estimated Commencement Date specified in Section 1.8, as the same may be adjusted in
accordance with Section 3.3 or in accordance with the terms of any work letter agreement
entered into by Landlord and Tenant. If Landlord is unable to deliver possession of the
Premises to Tenant on the Commencement Date due to a Force Majeure Event, the Commencement
Date shall be extended by the period of the delay caused by the Force Majeure Event. A
“Force Majeure Event” shall mean fire, earthquake, weather delays
or other acts of God, strikes, boycotts, war, riot, insurrection, embargoes, shortages
of equipment, labor or materials, delays in issuance of governmental permits or approvals,
or any other cause beyond the reasonable control of Landlord.

     3.3 Delays Caused by Tenant. There shall be no abatement of rent, and
the one hundred twenty (120) day period and the two hundred forty (240) day period specified
in

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Section 3.2 shall be deemed extended, to the extent of any delays caused by acts or
omissions of Tenant, Tenant’s agents, employees and contractors, or for Tenant delays as
defined in any work letter agreement attached to this Lease, if any (hereinafter “Tenant
Delays”). Tenant shall pay to Landlord an amount equal to one thirtieth (1/30th) of the
Base Rent due for the first full calendar month of the Lease term for each day of Tenant
Delay. For purposes of the foregoing calculation, the Base Rent payable for the first full
calendar month of the term of this Lease shall not be reduced by any abated rent,
conditionally waived rent, free rent or similar rental concessions, if any. Landlord and
Tenant agree that the foregoing payment constitutes a fair and reasonable estimate of the
damages Landlord will incur as the result of a Tenant Delay. Within thirty (30) days after
Landlord tenders possession of the Premises to Tenant, Landlord shall notify Tenant of
Landlord’s reasonable estimate of the date Landlord could have delivered possession of the
Premises to Tenant but for the Tenant Delays. After delivery of said notice, Tenant shall
immediately pay to Landlord the amount described above for the period of Tenant Delay.

     3.4 Tender of Possession. Possession of the Premises shall be deemed
tendered to Tenant when Landlord’s architect or agent has determined that (a) the
improvements to be provided by Landlord pursuant to a work letter agreement, if any, are
substantially completed, and, if necessary, have been approved by the appropriate
governmental entity, (b) the Project utilities are ready for use in the Premises, (c) Tenant
has reasonable access to the Premises, and (d) Landlord has offered Tenant possession of the
Premises. If improvements to the Premises are constructed by Landlord, the improvements
shall be deemed “substantially” completed when the improvements have been completed except
for minor items or defects which can be completed or remedied after Tenant occupies the
Premises without causing substantial interference with Tenant’s use of the Premises.

     3.5 Early Possession. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this Lease, such
occupancy shall not change the termination date, and Tenant shall pay Base Rent and all
other charges provided for in this Lease during the period of such occupancy. Provided that
Tenant does not interfere with or delay the completion by Landlord or its agents or
contractors of the construction of any tenant improvements, as reasonably determined by
Landlord, and provided Landlord has possession of the Premises, Tenant shall have the right
to enter the Premises up to fourteen (14) days prior to the anticipated Commencement Date
for the purpose of installing furniture, trade fixtures, equipment, and similar items.
Tenant shall be liable for any damages or delays caused by Tenant’s activities at the
Premises. Provided that Tenant has not begun operating its business from the Premises, and
subject to all of the terms and conditions of the Lease, the foregoing activity shall not
constitute the delivery of possession of the Premises to Tenant, and the Lease term shall
not commence as a result of said activities. Prior to entering the Premises, Tenant shall
obtain all insurance it is required to obtain by the Lease and shall provide ACORD 27
certificates of said insurance to Landlord. Tenant shall coordinate such entry with
Landlord’s manager, and such entry shall
be made in compliance with all terms and conditions of this Lease and the Rules and
Regulations attached here.

     3.6 Option To Extend For One Period. Landlord hereby grants to Tenant
the option to extend the term of the Lease for one (1) period of two (2) years (the
“Extension Option”) commencing when the initial lease term expires upon each and all of the
following terms and conditions:

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               3.6.1 Tenant shall give to Landlord on a date which is prior to the date that the option
period would commence (if exercised) by at least two hundred seventy (270) days and not more than
three hundred sixty (360) days, a written notice of the exercise of the option to extend the Lease
for said additional term, time being of the essence. If said notification of the exercise of said
option is not so given and received, this option shall automatically expire.

               3.6.2 All of the terms and conditions of the Lease except where specifically modified by this
section shall apply.

               3.6.3 The Base Rent payable during the option term shall be the Market Rate on the date the
option term commences.

               3.6.4 The term “Market Rate” shall mean the annual amount per rentable square foot that a
willing, comparable renewal tenant would pay and a willing, comparable landlord of a similar
building would accept at arm’s length for similar space, giving appropriate consideration to the
following matters: (i) annual rental rates per rentable square foot; (ii) the type of escalation
clauses (including, but without limitation, operating expense, real estate taxes, and CPI) and the
extent of liability under the escalation clauses (i.e., whether determined on a “net lease” basis
or by increases over a particular base year or base dollar amount); (iii) length of lease term;
(iv) size and location of premises being leased; and (v) other generally applicable terms and
conditions of tenancy for similar space; provided, however, Tenant shall not be entitled to any
tenant improvement or refurbishment allowance. The Market Rate may also designate periodic rental
increases, a new Base Year and similar economic adjustments. The Market Rate shall be the Market
Rate in effect as of the beginning of the option period, even though the determination may be made
in advance of that date, and the parties may use recent trends in rental rates in determining the
proper Market Rate as of the beginning of the option period.

               3.6.5 If Tenant exercises the Extension Option, Landlord shall determine the Market Rate by
using its good faith judgment. Landlord shall provide Tenant with written notice of such amount
within fifteen (15) days after Tenant exercises its Extension Option. Tenant shall have fifteen
(15) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within
which to accept such rental. In the event Tenant fails to accept in writing such rental proposal
by Landlord, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt to
agree upon such Market Rate, using their best good faith efforts. If Landlord and Tenant fail to
reach agreement within fifteen (15) days following Tenant’s Review Period (“Outside Agreement
Date”), then each party shall place in a separate sealed envelope their final proposal as to the
Market Rate, and such determination shall be submitted to arbitration in accordance with
subsections (i) through (v) below. In the event that Landlord fails to timely generate the initial
notice of Landlord’s opinion of the Market Rate, then Tenant may commence such negotiations by
providing the initial notice, in which event Landlord shall have fifteen (15) days (“Landlord’s
Review Period”) after receipt of Tenant’s notice of the new rental within which to accept such
rental.
In the event Landlord fails to accept in writing such rental proposed by Tenant, then such
proposal shall be deemed rejected, and Landlord and Tenant shall attempt in good faith to agree
upon such Market Rate, using their best good faith efforts. If Landlord and Tenant fail to reach
agreement within fifteen (15) days following Landlord’s Review Period (which shall be, in such
event, the “Outside Agreement Date” in lieu of the above definition of such date), then each party
shall place in a separate sealed envelope their final proposal as to Market Rate, and such
determination shall be submitted to arbitration in accordance with subsections (i) through
(v) below.

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                    3.6.5.1 LANDLORD AND TENANT SHALL MEET WITH EACH OTHER WITHIN FIVE (5) BUSINESS DAYS AFTER THE
OUTSIDE AGREEMENT DATE AND EXCHANGE THEIR SEALED ENVELOPES AND THEN OPEN SUCH ENVELOPES IN EACH
OTHER’S PRESENCE. IF LANDLORD AND TENANT DO NOT MUTUALLY AGREE UPON THE MARKET RATE WITHIN ONE
(1) BUSINESS DAY OF THE EXCHANGE AND OPENING OF ENVELOPES, THEN, WITHIN TEN (10) BUSINESS DAYS OF
THE EXCHANGE AND OPENING OF ENVELOPES, LANDLORD AND TENANT SHALL AGREE UPON AND JOINTLY APPOINT A
SINGLE ARBITRATOR WHO SHALL BY PROFESSION BE A REAL ESTATE BROKER OR AGENT WHO SHALL HAVE BEEN
ACTIVE OVER THE FIVE (5) YEAR PERIOD ENDING ON THE DATE OF SUCH APPOINTMENT IN THE LEASING OF
BUILDINGS SIMILAR TO THE PREMISES IN THE GEOGRAPHICAL AREA OF THE PREMISES. NEITHER LANDLORD NOR
TENANT SHALL CONSULT WITH SUCH BROKER OR AGENT AS TO HIS OR HER OPINION AS TO THE MARKET RATE PRIOR
TO THE APPOINTMENT. THE DETERMINATION OF THE ARBITRATOR SHALL BE LIMITED SOLELY TO THE ISSUE OF
WHETHER LANDLORD’S OR TENANTS SUBMITTED MARKET RATE FOR THE PREMISES IS THE CLOSEST TO THE ACTUAL
MARKET RATE FOR THE PREMISES AS DETERMINED BY THE ARBITRATOR, TAKING INTO ACCOUNT THE REQUIREMENTS
FOR DETERMINING MARKET RATE SET FORTH HEREIN. SUCH ARBITRATOR MAY HOLD SUCH HEARINGS AND REQUIRE
SUCH BRIEFS AS THE ARBITRATOR, IN HIS OR HER SOLE DISCRETION, DETERMINES IS NECESSARY. IN
ADDITION, LANDLORD OR TENANT MAY SUBMIT TO THE ARBITRATOR WITH A COPY TO THE OTHER PARTY WITHIN
FIVE (5) BUSINESS DAYS AFTER THE APPOINTMENT OF THE ARBITRATOR ANY MARKET DATA AND ADDITIONAL
INFORMATION SUCH PARTY DEEMS RELEVANT TO THE DETERMINATION OF THE MARKET RATE (“RR DATA”), AND THE
OTHER PARTY MAY SUBMIT A REPLY IN WRITING WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF SUCH RR
DATA.

                    3.6.5.2 THE ARBITRATOR SHALL, WITHIN THIRTY (30) DAYS OF HIS OR HER APPOINTMENT, REACH A
DECISION AS TO WHETHER THE PARTIES SHALL USE LANDLORD’S OR TENANT’S SUBMITTED MARKET RATE AND SHALL
NOTIFY LANDLORD AND TENANT OF SUCH DETERMINATION.

                    3.6.5.3 THE DECISION OF THE ARBITRATOR SHALL BE FINAL AND BINDING UPON LANDLORD AND TENANT.

                    3.6.5.4 IF LANDLORD AND TENANT FAIL TO AGREE UPON AND APPOINT AN ARBITRATOR, THEN THE
APPOINTMENT OF THE ARBITRATOR SHALL BE MADE BY THE PRESIDING JUDGE OF THE SAN DIEGO COUNTY SUPERIOR
COURT, OR, IF HE OR SHE REFUSES TO ACT BY ANY JUDGE HAVING JURISDICTION OVER THE PARTIES.

                    3.6.5.5 THE COST OF THE ARBITRATION SHALL BE PAID BY LANDLORD AND TENANT EQUALLY.

     NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF
THE OPTION TO EXTEND SET FORTH IN THIS SECTION 3.6 DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE

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DISPUTE LITIGATED IN
A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION OF
DISPUTES” PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU
MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

     WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE
MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION TO NEUTRAL ARBITRATION.

	 	 	 	 	 
		
	 	/s/ GJC
	 	/s/ RP /s/ VL	 
	 	 
	 	 
	 	     (Landlord initials)
	 	       (Tenant initials)

     4. Permitted Use. The Premises shall be used only for the purpose described
in Section 1.6 and for no other purpose. Landlord makes no representation or warranty that
Tenant’s use is permitted by applicable zoning laws or other laws and regulations. In no event
shall any portion of the Premises to be used for retail sales. Tenant shall not initiate, submit
an application for, or otherwise request, any land use approvals or entitlements with respect to
the Premises or any other portion of the Project, including, without limitation, any variance,
conditional use permit or rezoning, without first obtaining Landlord’s prior written consent, which
may be given or withheld in Landlord’s sole discretion. Tenant shall not (a) permit any animals or
pets other than service animals to be brought to or kept in the Premises, (b) install any antenna,
dish or other device on the roof of the Building or outside of the Premises, (c) make any
penetrations into the roof of the Building, (d) place loads upon floors, walls or ceilings in
excess of the load such items were designed to carry, (e) place or store, nor permit any other
person or entity to place or store, any property, equipment, materials, supplies or other items
outside of the Building in which the Premises is located or (f) change the exterior of the Premises
or the Building in which the Premises is located.

          4.1 Compliance With Laws. Tenant shall, at Tenant’s sole expense, promptly
comply with all applicable laws, ordinances, rules, regulations, orders, certificates of occupancy,
conditional use or other permits, variances, covenants, conditions, restrictions, easements, the
recommendations of Landlord’s engineers or other consultants, and requirements of any fire
insurance underwriters, rating bureaus or government agencies, now in effect or which may hereafter
come into effect, whether or not they reflect a change in policy from that now existing, during the
term or any part of the term hereof, relating in any manner to the Premises or the occupation and
use by Tenant of the Premises. Tenant shall, at Tenant’s sole expense, comply with all
requirements of the Americans With Disabilities Act and all other applicable laws and regulations
that relate to access by and/or accommodation of the disabled or handicapped that relate to the
Premises, and all federal, state and local laws and regulations governing occupational safety and
health. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate
from the Premises, or take any other action that would constitute a nuisance or would disturb,
unreasonably interfere with or endanger Landlord or any other tenants of the Project. Tenant shall
obtain, at its sole expense, any permit or other governmental authorization required to operate its
business from the Premises. Landlord shall not be liable for the failure of any other tenant or
person to abide by the requirements of this Section or to otherwise comply with applicable laws and

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regulations, and Tenant shall not be excused from the performance of its obligations under this
Lease due to such a failure.

     5. Base Rent. Tenant shall pay Base Rent in the amount set forth on the
first page of this Lease. The first month’s Base Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses and Real Property Taxes (as hereafter defined) shall be
due and payable on the date this Lease is executed by Tenant, and Tenant promises to pay to
Landlord in advance, without demand, deduction or set-off, monthly installments of Base Rent on or
before the first day of each calendar month succeeding the Commencement Date. Payments of Base
Rent for any fractional calendar month shall be prorated, based on the actual number of days in the
applicable month. All payments required to be made by Tenant to Landlord hereunder shall be
payable at such address as Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant shall have no right at any time to abate, reduce, or set off any rent
due hereunder except where expressly provided in this Lease.

     6. Operating Expense Payments.

          6.1 Operating Expenses. Tenant shall pay Tenant’s Percentage Share (as
defined below) of the Operating Expenses for the Project. For the purposes of this Lease, the term
“Operating Expenses” shall mean all expenses and disbursements of every kind (subject to the
limitations set forth below) which Landlord incurs, pays or becomes obligated to pay in connection
with the ownership, operation, and maintenance of the Project (including the associated Common
Areas), including, but not limited to, the following:

          6.1.1 wages and salaries (including management fees) of all employees, agents, consultants and
other individuals or entities engaged in the operation, repair, replacement, maintenance, and
security of the Project, including taxes, insurance and benefits relating thereto;

          6.1.2 all supplies and materials used in the operation, maintenance, repair, replacement, and
security of the Project;

          6.1.3 annual cost of all Capital Improvements (as defined below) made to the Project which
although capital in nature can reasonably be expected to reduce the normal operating costs of the
Project, as well as all Capital Improvements made in order to comply with any law now or hereafter
promulgated by any governmental authority, as amortized over the useful economic life of such
improvements as determined by Landlord in its reasonable discretion (without regard to the period
over which such improvements may be depreciated or amortized for federal income tax purposes);

          6.1.4 cost of all utilities paid by Landlord;

          6.1.5 cost of any insurance or insurance related expense applicable to the Project and
Landlord’s personal property used in connection therewith, including, but not limited to, the
insurance costs described in Section 10.2;

          6.1.6 cost of repairs, replacements and general maintenance of the Project (including all
truck court areas, paving and parking areas, Common Area lighting facilities, fences, gates, water
lines, sewer lines, rail spur areas and any other item Landlord is obligated to

9

 

repair or
maintain), other than costs necessary to assure the structural soundness of the roof, foundation
and exterior walls of the Project which are payable solely by Landlord under Section 11;

          6.1.7 cost of service or maintenance contracts with independent contractors for the operation,
maintenance, repair, replacement or security of the Project (including, without limitation, alarm
service, exterior painting, trash collection, snow, ice, debris and waste removal and landscape
maintenance);

          6.1.8 the cost of all accounting fees, management fees, legal fees and consulting fees
attributable to the operation, ownership, management, maintenance or repair of the Project;

          6.1.9 payments made by Landlord under any easement, license, operating agreement, declaration,
restrictive covenant or other agreement relating to the sharing of costs among property owners;

          6.1.10 reserves created by Landlord, in Landlord’s sole discretion, for future Operating
Expenses or the future replacement of Capital Improvements;

          6.1.11 the cost of all business licenses, permits or similar fees relating to the operation,
ownership, repair or maintenance of the Project; and

          6.1.12 the cost of any other item the cost of which is stated in this Lease to be an Operating
Expense.

          For purposes of this Lease, a “Capital Improvement” shall be an improvement to the Project
that Landlord is obligated to make pursuant to this Lease, the cost of which is not fully
deductible in the year incurred in accordance with generally accepted accounting principles;
provided, however, that, at Landlord’s option, the cost of painting all or part of the Project and
resurfacing and restriping roadways and parking areas shall be treated as an expense and not as a
Capital Improvement. Real Property Taxes (as defined below) shall be reimbursed to Landlord as
provided below and shall not be treated as an Operating Expense. References to facilities,
services, utilities or other items in this Section shall not impose an obligation on Landlord to
have said facilities or to provide said services unless such facilities and services already exist
at the Project.

          6.2 Operating Expense Exclusions. Notwithstanding anything to the contrary
contained herein, for purposes of this Lease, the term “Operating Expenses” shall not include the
following: (i) costs (including permit, license and inspection fees) incurred for tenant
improvements for other tenants within the Project; (ii) legal and auditing fees (other than those
fees reasonably incurred in connection with the maintenance and operation of all or any portion of
the Project), leasing commissions, advertising expenses and similar costs incurred in connection
with the leasing of the Project; (iii) depreciation of the Building or any other improvements
situated within the
Project; (iv) any items for which Landlord is actually reimbursed by insurance or by direct
reimbursement by any other tenant of the Project; (v) costs of repairs or other work necessitated
by fire, windstorm or other casualty (excluding any deductibles) and/or costs of repair or other
work necessitated by the exercise of the right of eminent domain to the extent insurance proceeds
or a condemnation award, as applicable, is actually received by Landlord for such purposes;
provided, such costs of repairs or other work shall be paid by the parties in accordance with the
provisions of Section 11 and 12, below; (vi) other than any interest charges for Capital
Improvements referred to in

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Section 6.1.3 hereinabove, any interest or payments on any financing
for the Building or the Project and interest and penalties incurred as a result of Landlord’s late
payment of any invoice; (vii) costs associated with the investigation and/or remediation of
Hazardous Materials (hereafter defined) present in, on or about any portion of the Project, unless
such costs and expenses are the responsibility of Tenant as provided in Section 27 hereof, in which
event such costs and expenses shall be paid solely by Tenant in accordance with the provisions of
Section 27 hereof; (viii) overhead and profit increment paid to Landlord or to subsidiaries or
affiliates of Landlord for goods and/or services in the Project to the extent the same exceeds the
costs of such by unaffiliated third parties on a competitive basis; (ix) any payments under a
ground lease or master lease; and (x) except as provided in Sections 6.1.3 and 6.1.10 above, the
cost of Capital Improvements.

          6.3 Payment. Tenant’s Percentage Share of Operating Expenses shall be
payable by Tenant within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Tenant by Landlord. At Landlord’s option, however, Landlord may, from time to time,
estimate what Tenant’s Percentage Share of Operating Expenses will be, and the same shall be
payable by Tenant monthly during each calendar year of the Lease term, on the same day as the Base
Rent is due hereunder. In the event that Tenant pays Landlord’s estimate of Tenant’s Percentage
Share of Operating Expenses, Landlord shall use its best efforts to deliver to Tenant within one
hundred eighty (180) days after the expiration of each calendar year a reasonably detailed
statement (the “Statement”) showing Tenant’s Percentage Share of the actual Operating Expenses
incurred during such year. Landlord’s failure to deliver the Statement to Tenant within said
period shall not constitute Landlord’s waiver of its right to collect said amounts or otherwise
prejudice Landlord’s rights hereunder. If Tenant’s payments under this Section during said
calendar year exceed Tenant’s Percentage Share as indicated on the Statement, Tenant shall be
entitled to credit the amount of such overpayment against Tenant’s Percentage Share of Operating
Expenses next falling due. If Tenant’s payments under this Section during said calendar year were
less than Tenant’s Percentage Share as indicated on the Statement, Tenant shall pay to Landlord the
amount of the deficiency within thirty (30) days after delivery by Landlord to Tenant of the
Statement. Landlord and Tenant shall forthwith adjust between them by cash payment any balance
determined to exist with respect to that portion of the last calendar year for which Tenant is
responsible for Operating Expenses, notwithstanding that the Lease term may have terminated before
the end of such calendar year, and this provision shall survive the expiration or earlier
termination of the Lease.

          6.4 Tenant’s Percentage Share. “Tenant’s Percentage Share” as used in this
Lease shall mean the percentage of the cost of Operating Expenses and Real Property Taxes (as
defined below) for which Tenant is obligated to reimburse Landlord pursuant to this Lease.
Notwithstanding anything to the contrary contained in Section 1.11, Landlord shall have the right
to determine Tenant’s Percentage Share of the cost of Operating Expenses and Real Property Taxes
using any one or more of the following three methods, and Tenant hereby agrees that any one of the
following three methods of allocation is reasonable: (a) by multiplying the cost of all Operating
Expenses or Real Property Taxes by a fraction, the numerator of which is the number of square feet
of leasable space in the Premises and the denominator of which is the number of square feet of
leasable space in all buildings in the Project; or (b) (i) with respect to an Operating
Expense or Real Property Taxes attributable solely to the Building, requiring Tenant to pay that
portion of the cost of the Operating Expense or Real Property Taxes that is obligated by
multiplying such cost by a fraction, the numerator of which is the number of square feet of
leasable space in the Premises and the denominator of which is the number of square feet of
leasable space in the entire Building and (ii) with respect to an Operating Expense or Real
Property Taxes attributable to the Common Areas of the Project, but not any particular building in
the Project, requiring Tenant to pay that portion of the cost of the Operating Expense or Real
Property Taxes that is obtained by multiplying such cost by a fraction, the numerator of which is
the number of square feet of leasable space in the Premise and the denominator of which is the
number of spare feet of leasable space in all buildings in the Project or (c) by allocating an
Operating Expense or Real Property Taxes in any other reasonable manner, as determined by Landlord.

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          6.5 Audits. If Tenant disputes the amount set forth in the Statement, Tenant
shall have the right, at Tenant’s sole expense, not later than sixty (60) days following receipt of
such Statement, to cause Landlord’s books and records with respect to the calendar year which is
the subject of the Statement to be audited by a certified public accountant mutually acceptable to
Landlord and Tenant. The audit shall take place at the offices of Landlord where its books and
records are located at a mutually convenient time during Landlord’s regular business hours.
Tenant’s Percentage Share of Operating Expenses shall be appropriately adjusted based upon the
results of such audit, and the results of such audit shall be final and binding upon Landlord and
Tenant. Tenant shall have no right to conduct an audit or to give Landlord notice that it desires
to conduct an audit at any time Tenant is in default under the Lease. The accountant conducting
the audit shall not be a former employee of Landlord or of any agent of Landlord, shall be
compensated on an hourly basis and shall not be compensated based upon a percentage of overcharges
it discovers. No subtenant shall have any right to conduct an audit, and no assignee shall conduct
an audit for any period during which such assignee was not in possession of the Premises. Tenant’s
right to undertake an audit with respect to any calendar year shall expire sixty (60) days after
Tenant’s receipt of the Statement for such calendar year, and such Statement shall be final and
binding upon Tenant and shall, as between the parties, be conclusively deemed correct, at the end
of such sixty (60) day period, unless prior thereto Tenant shall have given Landlord written notice
of its intention to audit Operating Expenses for the calendar year which is the subject of the
Statement. If Tenant gives Landlord notice of its intention to audit Operating Expenses, it must
commence such audit within sixty (60) days after such notice is delivered to Landlord, and the
audit must be completed within one hundred twenty (120) days after such notice is delivered to
Landlord. If Tenant does not commence and complete the audit within such periods, the Statement
which Tenant elected to audit shall be deemed final and binding upon Tenant and shall, as between
the parties, be conclusively deemed correct. Tenant agrees that the results of any Operating
Expense audit shall be kept strictly confidential by Tenant and shall not be disclosed to any other
person or entity.

     7. Security Deposit. Tenant shall deliver to Landlord at the time it
executes this Lease the security deposit set forth in Section 1.13 as security for Tenant’s
faithful performance of Tenant’s obligations hereunder. If Tenant fails to pay Base Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord
may use all or any portion of said deposit for the payment of any Base Rent or other charge due
hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant’s
default, or to compensate Landlord for any other sum to which Landlord may suffer thereby. If
Landlord so uses or applies all or any portion of said deposit, Tenant shall within ten (10) days
after written demand therefor deposit cash with Landlord in an amount sufficient to restore said
deposit to its full amount, Landlord shall not be
required to keep said security deposit separate from its general accounts. If Tenant performs
all of Tenant’s obligations hereunder, said deposit, or so much thereof as has not heretofore been
applied by Landlord, shall be returned, without payment of interest or other amount for its use, to
Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest hereunder) at
the expiration of the term hereof, and after Tenant has vacated the Premises. No trust
relationship is created herein between Landlord and Tenant with respect to said security deposit.
Tenant acknowledges that the security deposit is not an advance payment of any kind or a measure of
Landlord’s damages in the

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event of Tenant’s default. Tenant hereby waives the provisions of any
law which is inconsistent with this Section.

     8. Utilities.

          8.1 Payment. Tenant shall pay for all water, gas, electricity, telephone,
sewer, data access services, sprinkler services, refuse and trash collection and other utilities
and services used on the Premises, together with any taxes, penalties, surcharges or the like
pertaining thereto. Tenant shall contract directly with the applicable public utility for such
services. Tenant shall pay its share of all charges for jointly metered utilities based upon
consumption, as reasonably determined by Landlord. Tenant agrees to limit use of water and sewer
for normal restroom use, and nothing herein contained shall impose upon Landlord any duty to
provide sewer or water usage for other than normal restroom usage.

          8.2 Interruptions. Tenant agrees that Landlord shall not be liable to Tenant
for its failure to furnish water, gas, electricity, telephone, sewer, refuse and trash collection
or any other utility services or building services when such failure is occasioned, in whole or in
part, by repairs, replacements or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, telephone service or other utility at the Project, by
any accident, casualty or event arising from any cause whatsoever, including the negligence of
Landlord, its employees, agents and contractors, by act, negligence or default of Tenant or any
other person or entity, or by any other cause, and such failures shall never be deemed to
constitute an eviction or disturbance of Tenant’s use and possession of the Premises or relieve
Tenant from the obligation of paying rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for loss of property or for
injury to, or interference with, Tenant’s business, including, without limitation, loss of profits,
however occurring, through or in connection with or incidental to a failure to furnish any such
services or utilities. Landlord may comply with voluntary controls or guidelines promulgated by
any governmental entity relating to the use or conservation of energy, water, gas, light or
electricity or the reduction of automobile or other emissions without creating any liability of
Landlord to Tenant under this Lease.

          8.3 Alternative Utility Providers. If permitted by applicable laws, Landlord
shall have the right at any time and from time to time during the term of this Lease to either
contract for service from a different company or companies (each such company referred to as an
“Alternate Service Provider”) other than the company or companies presently providing electrical
service for the Project (the “Initial Service Provider”) or continue to contract for service from
the Initial Service Provider, at Landlord’s sole discretion. Tenant agrees to cooperate with
Landlord, the Initial Service Provider, and an Alternate Service Provider at all times and, as
reasonably necessary, shall allow Landlord, the Initial Service Provider, and any Alternate Service
Provider reasonable access to the Building’s electric lines, feeders, risers, wiring and any other
machinery within the Premises.

     9. Real and Personal Property Taxes.

          9.1 Payment of Taxes. Tenant shall pay to Landlord during the term of this Lease, in
addition to Base Rent and Tenant’s Percentage Share of Operating Expenses, Tenant’s Percentage
Share of all Real Property Taxes. Tenant’s Percentage Share of Real Property Taxes shall be
payable by Tenant at the same time, in the same manner and under the same terms and conditions as
Tenant pays Tenant’s Percentage Share of Operating Expenses.

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          9.2 Definition of Real Property Tax. As used herein, the term “Real Property
Taxes” shall include any form of real estate tax or assessment, general, special, ordinary or
extraordinary, improvement bond or bonds imposed on the Project or any portion thereof by any
authority having the direct or indirect power to tax, including any city, county, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Landlord in the Project or in any
portion thereof. Real Property Taxes shall not include income, inheritance and gift taxes.

          9.3 Personal Property Taxes. Tenant shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises or related to Tenant’s use of the Premises. If any of
Tenant’s personal property shall be assessed with Landlord’s real or personal property, Tenant
shall pay to Landlord the taxes attributable to Tenant within ten (10) days after receipt of a
written statement from Landlord setting forth the taxes applicable to Tenant’s property.

          9.4 Reassessments. From time to time Landlord may challenge the assessed
value of the Project as determined by applicable taxing authorities and/or Landlord may attempt to
cause the Real Property Taxes to be reduced on other grounds. If Landlord is successful in causing
the Real Property Taxes to be reduced or in obtaining a refund, rebate, credit or similar benefit
(hereinafter collectively referred to as a “reduction”), Landlord shall have the option, in its
sole discretion, to (a) retain the benefit of the reduction and to pay, at Landlord’s sole expense,
the costs incurred by Landlord in causing the reduction to be made or (b) to the extent
practicable, to credit the reduction(s) to Real Property Taxes for the calendar year to which a
reduction applies and to recalculate the Real Property Taxes owed by Tenant for years in which the
reduction applies based on the reduced Real Property Taxes. If Landlord proceeds in accordance
with (b) above, all costs incurred by Landlord in obtaining the Real Property Tax reductions shall
be considered an Operating Expense, and Landlord shall determine, in its sole discretion, to which
years any reductions will be applied. In addition, if Landlord proceeds in accordance with
(b) above, all accounting and related costs incurred by Landlord in making related accounting
adjustments shall be an Operating Expense. If Landlord proceeds in accordance with (a) above,
Landlord shall not be obligated to refund to Tenant all or any portion of the reduction or to
reduce Real Property Taxes for the years to which any reductions apply. Landlord shall have the
right to compensate a person or entity it employs to obtain a reduction in Real Property Taxes by
giving such person or entity a percentage of any reduction or credit obtained, and in this event
the reduction or credit obtained by Landlord shall be deemed to be the reduction or credit given by
the taxing authority less the compensation paid to such person or entity.

     10. Insurance.

          10.1 Insurance-Tenant.

               10.1.1 Tenant shall obtain and keep in force during the term of this Lease a commercial
general liability policy of insurance with coverages acceptable to Landlord, in
Landlord’s sole discretion, which, by way of example and not limitation, protects Tenant,
Landlord, and managing agents (as an additional insured) against claims for bodily injury, personal
injury and property damage based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing single-limit coverage in an amount not less than $3,000,000 per
occurrence, or such larger amount as Landlord may prudently require from time to time, as

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reasonably determined by Landlord, with an “Additional Insured-Managers and Landlords of Premises
Endorsement” and contain the “Amendment of the Pollution Exclusion” for damage caused by heat,
smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for liability assumed under
this Lease as an “insured contract” for the performance of Tenant’s indemnity obligations under
this Lease.

               10.1.2 Tenant shall obtain and keep in force during the term of the Lease extended coverage
property insurance with coverages acceptable to Landlord, in Landlord’s sole discretion. Said
insurance shall be written on a one hundred percent (100%) replacement cost basis on Tenant’s
personal property, all tenant improvements installed at the Premises by Landlord or Tenant,
Tenant’s trade fixtures and other property. By way of example, and not limitation, such policies
shall provide protection against any peril included within the classification “fire and extended
coverage,” against vandalism and malicious mischief, theft, sprinkler leakage, earthquake damage
and flood damage.

               10.1.3 Tenant shall, at all times during the term hereof, maintain in effect (a) workers’
compensation insurance as required by applicable law; (b) business interruption and extra expense
insurance satisfactory to Landlord with liability representing a loss of no less than twelve
(12) months of income; (c) Business Auto Liability covering owned, non-owned and hired vehicles
with a limit of not less than $1,000,000 per accident; and (d) Employees Liability with limits of
$500,000 each accident, $500,000 disease policy limit and $500,000 disease-each employee.

          10.2 Insurance-Landlord.

               10.2.1 Landlord shall obtain and keep in force a policy of commercial general liability
insurance with coverage against such risks and in such amounts as Landlord deems advisable insuring
Landlord against liability arising out of the ownership, operation and management of the Project.

               10.2.2 Landlord shall also obtain and keep in force during the term of this Lease a policy or
policies of insurance covering loss or damage to the Project in the amount of not less than eighty
percent (80%) of the full replacement cost thereof, as determined by Landlord from time to time.
The terms and conditions of said policies and the perils and risks covered thereby shall be
determined by Landlord, from time to time, in Landlord’s sole discretion. In addition, at
Landlord’s option, Landlord shall obtain and keep in force, during the term of this Lease, a policy
of rental interruption insurance, with loss payable to Landlord, which insurance shall, at
Landlord’s option, also cover all Operating Expenses and Real Property Taxes. Tenant will not be
named as an additional insured in any insurance policies carried by Landlord and shall have no
right to any proceeds therefrom. The policies purchased by Landlord shall contain such deductibles
as Landlord may determine. Tenant shall pay at Tenant’s sole expense any increase in the property
insurance premiums for the Project over what was payable immediately prior to the increase to the
extent the
increase is specified by Landlord’s insurance carrier as being caused by the nature of
Tenant’s occupancy or any act or omission of Tenant.

          10.3 Insurance Policies. Tenant shall deliver to Landlord copies of the
insurance policies required under Section 10.1 at least (15) days prior to the Commencement Date of
this Lease, and Landlord shall have the right to approve the terms and conditions of said policies.
Tenant’s insurance policies shall not be cancelable or subject to reduction of coverage or other

15

 

modification except after thirty (30) days prior written notice to Landlord. Tenant shall, at
least thirty (30) days prior to the expiration of such policies, furnish Landlord with renewals
thereof. Tenant’s insurance policies shall be issued by insurance companies authorized to do
business in the state in which the Project is located, and said companies shall maintain during the
policy term a “General Policyholders Rating” of at least A- and a financial rating of at least
“Class VIII” (or such other rating as may be required by any lender having a lien on the Project)
as set forth in the most recent edition of “Best Insurance Reports.” All insurance obtained by
Tenant shall be primary to and not contributory with any similar insurance carried by Landlord,
whose insurance shall be considered excess insurance only. Landlord and, at Landlord’s option, the
holder of any mortgage or deed of trust encumbering the Project and any person or entity managing
the Project on behalf of Landlord, shall be named as an additional insured on all insurance
policies Tenant is obligated to obtain by Section 10.1 above. Tenant’s insurance policies shall
not include deductibles in excess of Five Thousand Dollars ($5,000).

          10.4 Waiver of Subrogation. Landlord waives any and all rights of recovery
against Tenant for or arising out of damage to, or destruction of, the Project to the extent that
Landlord’s casualty insurance policies then in force insure against such damage or destruction and
permit such waiver, and only to the extent of the insurance proceeds actually received by Landlord
for such damage or destruction. Landlord’s waiver shall not relieve Tenant from liability under
Section 19 below except to the extent Landlord’s insurance company actually satisfies Tenant’s
obligations under Section 19 in accordance with the requirements of Section 19. Tenant waives any
and all rights of recovery against Landlord, Landlord’s employees, agents and contractors for
liability or damages if such liability or damage is covered by Tenant’s casualty insurance policies
then in force or the casualty insurance policies Tenant is required to obtain by Section 10.1
(whether or not the insurance Tenant is required to obtain by Section 10.1 is then in force and
effect), whichever is broader. Tenant’s waiver shall not be limited by the amount of insurance
then carried by Tenant or the deductibles applicable thereto. Tenant shall cause the casualty
insurance policies it obtains in accordance with this Section 10 to provide that the insurance
company waives all right of recovery by subrogation against Landlord in connection with any
liability or damage covered by Tenant’s insurance policies.

          10.5 Coverage. Landlord makes no representation to Tenant that the limits or
forms of coverage specified above or approved by Landlord are adequate to insure Tenant’s property
or Tenant’s obligations under this Lease, and the limits of any insurance carried by Tenant shall
not limit Tenant’s obligations or liability under any indemnity provision included in this Lease or
under any other provision of this Lease.

     11. Landlords Repairs. Landlord shall maintain, at Landlord’s expense, only the
structural elements of the roof of the Building (excluding the roof membrane), the structural
soundness of the foundation of the Building and the structural elements of the exterior walls of
the Building. Tenant shall reimburse Landlord for the cost of any maintenance, repair or
replacement of the foregoing necessitated by Tenant’s misuse, negligence, alterations to the
Premises or any breach
of its obligations under this Lease. By way of example, and not limitation, the term
“exterior walls” as used in this Section shall not include windows, glass or plate glass, doors or
overhead doors, special store fronts, dock bumpers, dock plates or levelers, or office entries.
Tenant shall immediately give Landlord written notice of any repair required by Landlord pursuant
to this Section, after which Landlord shall have a reasonable time in which to complete the repair.
Nothing contained in this Section shall be construed to obligate Landlord to seal or otherwise
maintain the surface of any foundation, floor or slab. Tenant expressly waives the benefits of any
statute now or

16

 

hereafter in effect which would otherwise afford Tenant the right to make repairs at
Landlord’s expense or to terminate this Lease because of Landlord’s failure to keep the Premises in
good order, condition and repair.

     12. Tenant’s Repairs.

          12.1 Obligations of Tenant. Subject to Section 12.2 below, Tenant shall, at
its sole cost and expense, keep and maintain all parts of the Premises (except those listed as
Landlord’s responsibility in Section 11 above) in good and sanitary condition, promptly making all
necessary repairs and replacements, including but not limited to, windows, glass and plate glass,
doors, skylights, roof membranes, any special store front or office entry, walls and finish work,
floors and floor coverings, heating and air conditioning systems, dock boards, bumpers, plates,
seals, levelers and lights, plumbing work and fixtures (including periodic backflow testing),
electrical systems, lighting facilities and bulbs, sprinkler systems, alarm systems, fire detection
systems, termite and pest extermination, sidewalks, landscaped areas, fencing tenant signage and
regular removal of trash and debris. Tenant shall notify Landlord in writing prior to making any
repair or performing any maintenance pursuant to this Section, and Landlord shall have the right to
designate the contractor Tenant shall use to make any repair or to perform any maintenance on the
roof, healing, ventilation and air conditioning systems (“HVAC”), plumbing systems, electrical
systems, sprinkler systems, fire alarm systems or fire detection systems located at the Premises.
Tenant shall not paint or otherwise change the exterior appearance of the Premises without
Landlord’s prior written consent, which may be given or withheld in Landlord’s sole discretion.
The cost of maintenance and repair of any common party wall (any wall divider, partition or any
other structure separating the Premises from any adjacent premises occupied by other tenants) shall
be shared equally by Tenant and the tenant occupying the adjacent premises; provided however if
Tenant damages a party wall the entire cost of the repair shall be paid by Tenant, at Tenant’s sole
expense. Tenant shall not damage any party wall or disturb the integrity and support provided by
any party wall. If Tenant fails to keep the Premises in good condition and repair, Landlord may,
but shall not be obligated to, make any necessary repairs. If Landlord makes such repairs,
Landlord may bill Tenant for the cost of the repairs as additional rent and said additional rent
shall be payable by Tenant within ten (10) days after demand by Landlord.

          12.2 Performance of Work by Landlord. Notwithstanding Tenant’s obligation to
keep the roof membranes, HVAC units, sprinkler systems, fire alarm systems, fire detection systems
and exterior walls of the Premises in good condition and repair, Landlord shall employ contractors
to perform all repairs maintenance and replacements of the roof membranes, HVAC units, sprinkler
systems, fire alarm systems, fire detection systems and exterior walls of the Premises. The items
described in the previous sentence that Landlord will cause to be repaired, maintained and replaced
are hereinafter referred to as the “Landlord Maintenance Items.” Tenant shall reimburse Landlord
as additional rent for all costs Landlord incurs in performing the Landlord Maintenance Items
within ten (10) days after written demand by Landlord. Landlord shall determine in its sole
discretion the scope and timing of the performance of such Landlord Maintenance Items,
and Tenant shall not perform such Landlord Maintenance Items. Landlord’s maintenance of the
exterior walls of the Premises shall include the right, but not the obligation, of Landlord to
paint from time to time all or some of the exterior walls, canopies, doors, windows, gutters
handrails and other exterior parts of the Premises with colors selected by Landlord, and Tenant
shall reimburse Landlord as provided above for all costs incurred by Landlord in painting such
items. If the Premises contains landscaped areas (“Landscaped Areas”), Landlord shall maintain the
Landscaped Areas, and Tenant shall reimburse Landlord for all costs incurred by Landlord in
maintaining the Landscaped Areas

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within ten (10) days after written demand by Landlord; provided,
however, Landlord shall have the right to estimate the monthly cost of maintaining the Landscaped
Areas, and Tenant shall pay such amount to Landlord as additional rent each month at the same time
Tenant pays Base Rent. Tenant shall immediately give Landlord written notice of any repair or
maintenance required by Landlord pursuant to this Section, after which Landlord shall have a
reasonable time in which to complete such repair or maintenance. Landlord shall have the right,
but not the obligation, to include the cost of Landlord Maintenance Items and the cost of the
maintenance of Landscaped Areas in Operating Expenses, and Tenant shall then pay Tenant’s
Percentage Share of such costs as determined by Landlord. Landlord shall have the right at any
time, and from time to time, to elect upon written notice to Tenant to have Tenant perform some or
all of the Landlord Maintenance Items and/or the maintenance of the Landscaped Areas, in which
event Tenant shall employ contractors designated by Landlord to perform such work and shall pay for
all such work at Tenant’s sole cost and expense all in accordance with the requirements of
Section 12.1.

          12.3 Maintenance Contracts. Landlord shall enter into regularly scheduled
preventative maintenance/service contracts for some or all of the following: the HVAC units
servicing the Premises, the sprinkler, fire alarm and fire detection systems servicing the
Premises, backflow testing for the plumbing servicing the Premises and for the roof membrane of the
Premises (the “Maintenance Contracts”). The Maintenance Contracts shall include maintenance
services satisfactory to Landlord, in Landlord’s sole discretion. Tenant shall reimburse Landlord
for the cost of the Maintenance Contracts within ten (10) days after written demand by Landlord;
provided, however, Landlord shall have the right to estimate the monthly cost of the Maintenance
Contracts and Tenant shall pay such amount to Landlord as additional rent each month at the same
time Tenant pays Base Rent. Landlord shall have the right, but not the obligation, to include the
cost of Maintenance Contracts in Operating Expenses, and Tenant shall then pay Tenant’s Percentage
Share of such costs as determined by Landlord. Landlord shall have the right at any time, and from
time to time, to elect upon written notice to Tenant to have Tenant purchase some or all of the
Maintenance Contracts, in which event Tenant shall purchase such contracts from persons designated
or approved by Landlord and shall pay for such Maintenance Contracts at Tenant’s sole cost and
expense.

     13. Alterations and Surrender.

          13.1 Consent of Landlord. Tenant shall not, without Landlord’s prior written
consent, which may be given or withheld in Landlord’s sole discretion, make any alterations,
improvements, additions, utility installations or repairs (hereinafter collectively referred to as
“Alterations”) in, on or about the Premises or the Project. Alterations shall include, but shall
not be limited to, the installation or alteration of security or fire protection systems,
communication systems, millwork, shelving, retrieval or storage systems, carpeting or other floor
covering, painting, window and wall coverings, electrical distribution systems, lighting fixtures,
telephone or computer system wiring, HVAC and plumbing. At the expiration of the term, Landlord
may require the removal of any Alterations installed by Tenant and the restoration of the Premises
and the Project to their prior condition, at Tenant’s expense. If, as a result of any Alteration
made by Tenant, Landlord
is obligated to comply with the Americans With Disabilities Act or any other law or
regulation, and such compliance requires Landlord to make any improvement or Alteration to any
portion of the Project, as a condition to Landlord’s consent, Landlord shall have the right to
require Tenant to pay to Landlord prior to the construction of any Alteration by Tenant the entire
cost of any improvement or alteration Landlord is obligated to complete by such law or regulation.
Should Landlord permit Tenant to make its own Alteration, Tenant shall use only such architect and
contractor as has been expressly approved by Landlord, and Landlord may require Tenant to provide
to Landlord, at

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Tenant’s sole cost and expense, a lien and completion bond in an amount equal to
one and one-half times the estimated cost of such Alterations, to insure Landlord against any
liability for mechanic’s and materialmen’s liens and to insure completion of the work. In
addition, Tenant shall pay to Landlord a fee equal to six percent (6%) of the cost of the
Alterations to compensate Landlord for the overhead and other costs it incurs in reviewing the
plans for the Alterations and in monitoring the construction of the Alterations. Should Tenant
make any Alteration without the prior approval of Landlord, or use a contractor not expressly
approved by Landlord, Landlord may, at any time during the term of this Lease, require that Tenant
remove all or part of the Alterations and return the Premise to the condition it was in prior to
the making of the Alterations. In the event Tenant makes any Alterations, Tenant agrees to obtain
or cause its contractor to obtain, prior to the commencement of any work, “builders all risk”
insurance in an amount approved by Landlord, workers compensation insurance and any other insurance
requested by Landlord, in Landlord’s sole discretion.

          13.2 Permits. Any Alterations in or about the Premises that Tenant shall
desire to make shall be presented to Landlord in written form, with plans and specifications which
are sufficiently detailed to obtain a building permit. If Landlord consents to an Alteration, the
consent shall be deemed conditioned upon Tenant acquiring a building permit from the applicable
governmental agencies, furnishing a copy thereof to Landlord prior to the commencement of the work,
and compliance by Tenant with all conditions of said permit in a prompt and expeditious manner.
Tenant shall provide Landlord with as-built plans and specifications for any Alterations made to
the Premises.

          13.3 Mechanics Liens. Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Tenant at or for use in the
Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the
Premises or the Project, or any interest therein. If Tenant shall, in good faith, contest the
validity of any such lien, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord
in an amount equal to not less than one and one-half times the amount of such contested lien claim
indemnifying Landlord against liability arising out of such lien or claim. Such bond shall be
sufficient in form and amount to free the Project from the effect of such lien. In addition,
Landlord may require Tenant to pay Landlord’s reasonable attorneys’ fees and costs in participating
in such action.

          13.4 Notice. Tenant shall give Landlord not less than ten (10) days’ advance
written notice prior to the commencement of any work in the Premises by Tenant, and Landlord shall
have the right to post notices of non-responsibility in or on the Premises and/or the Project.

          13.5 Surrender. Subject to Landlord’s right to require removal or to elect
ownership as hereinafter provided, all Alteration made by Tenant to the Premises shall be the
property of Tenant, but shall be considered to be a part of the Premises. Unless Landlord gives
Tenant written notice of its election not to become the owner of the Alterations at the end of the
term of this Lease, the Alterations shall become the property of Landlord at the end of the term of
this Lease. Landlord may require, on notice to Tenant, that some or all Alterations be removed
prior to
the end of the term of this Lease and that any damages caused by such removal be repaired at
Tenant’s sole expense. On the last day of the term hereof, or on any sooner termination, Tenant
shall surrender the Premises (including, but not limited to, all doors, windows, floors and floor
coverings, skylights, heating and air conditioning systems, dock boards, truck doors, dock bumpers,
plumbing work and fixtures, electrical systems, lighting facilities, sprinkler systems, fire
detection systems and nonstructural elements of the exterior walls, foundation and roof
(collectively the “Elements of the Premises”)) to Landlord in the same condition as received,
ordinary wear and tear and casualty

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damage excepted, clean and free of debris and Tenant’s personal
property, trade fixtures and equipment. Tenant’s personal property shall include all computer
wiring and cabling installed by Tenant. Provided, however, if Landlord has not elected to have
Tenant remove the Alterations, Tenant shall leave the Alterations at the Premises in good condition
and repair, ordinary wear and tear excepted. Tenant shall repair any damage to the Premises
occasioned by the installation or removal of Tenant’s trade fixtures, furnishings and equipment.
Damage to or deterioration of any Element of the Premises or any other item Tenant is required to
repair or maintain at the Premises shall not be deemed ordinary wear and tear if the same could
have been prevented by good maintenance practices. If the Premises are not surrendered at the
expiration of the term or earlier termination of this Lease in accordance with the provisions of
this Section, at Landlord’s option, Tenant shall continue to be responsible for the payment of Base
Rent and all other amounts due under this Lease until the Premises are so surrendered in accordance
with said provisions. Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all damages, expenses, costs, losses or liabilities arising from any delay by Tenant in so
surrendering the Premises including, without limitation, any damages, expenses, costs, losses or
liabilities arising from any claim against Landlord made by any succeeding tenant or prospective
tenant founded on or resulting from such delay and losses and damages suffered by Landlord due to
lost opportunities to lease any portion of the Premises to any such succeeding tenant or
prospective tenant, together with, in each case, actual attorneys’ fees and costs.

          13.6 Failure of Tenant to Remove Property. If this Lease is terminated due
to the expiration of its term or otherwise, and Tenant fails to remove its property, in addition to
any other remedies available to Landlord under this Lease, and subject to any other right or remedy
Landlord may have under applicable law, Landlord may remove any property of Tenant from the
Premises and store the same elsewhere at the expense and risk of Tenant.

     14. Damage and Destruction.

          14.1 Effect of Damage or Destruction. If all or part of the Project is
damaged by fire, earthquake, flood, explosion, the elements, riot, the release or existence of
Hazardous Materials (as defined below) or by any other cause whatsoever (hereinafter collectively
referred to as “damages”), but the damages are not material (as defined in Section 14.2 below),
Landlord shall repair the damages to the Project as soon as is reasonably possible, and this Lease
shall remain in full force and effect. If all or part of the Project is destroyed or materially
damaged (as defined in Section 14.2 below), Landlord shall have the right, in its sole and complete
discretion, to repair or to rebuild the Project or to terminate this Lease. Landlord shall within
one hundred twenty (120) days after the discovery of such material damage or destruction notify
Tenant in writing of Landlord’s intention to repair or to rebuild or to terminate this Lease.
Tenant shall in no event be entitled to compensation or damages on account of annoyance or
inconvenience in making any repairs, or on account of construction, or on account of Landlord’s
election to terminate this Lease. Notwithstanding the foregoing, if Landlord shall elect to
rebuild or repair the Project after material damage or destruction, but in good faith determines
that the Premises cannot be substantially repaired
within three hundred sixty (360) days after the date of the discovery of the material damage
or destruction, without payment of overtime or other premiums, and the damage to the Project will
render the entire Premises unusable during said three hundred sixty (360) day period, Landlord
shall notify Tenant thereof in writing at the time of Landlord’s election to rebuild or repair, and
Tenant shall thereafter have a period of fifteen (15) days within which Tenant may elect to
terminate this Lease, upon thirty (30) days’ advance written notice to Landlord. Tenant’s
termination right described in the preceding sentence shall not apply if the damage was caused by
the negligent or

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intentional acts of Tenant or its employees, agents, contractors or invitees.
Failure of Tenant to exercise said election within said fifteen (15) day period shall constitute
Tenant’s agreement to accept delivery of the Premises under this Lease whenever tendered by
Landlord, provided Landlord thereafter pursues reconstruction or restoration diligently to
completion, subject to delays caused by Force Majeure Events. If Landlord is unable to repair the
damage to the Premises or the Project during such three hundred sixty (360) day period due to Force
Majeure Events, the three hundred sixty (360) day period shall be extended by the period of delay
caused by the Force Majeure Events. Subject to Section 14.3 below, if Landlord or Tenant
terminates this Lease in accordance with this Section 14.1, Tenant shall continue to pay all Base
Rent, Operating Expenses and other amounts due hereunder which arise prior to the date of
termination.

          14.2 Definition of Material Damage. Damage to the Project shall be deemed
material if, in Landlord’s reasonable judgment, the uninsured cost of repairing the damage will
exceed Twenty-Five Thousand Dollars ($25,000). If insurance proceeds are available to Landlord in
an amount which is sufficient to pay the entire cost of repairing all of the damage to the Project,
the damage shall be deemed material if the cost of repairing the damage exceeds One Hundred
Thousand Dollars ($100,000). Damage to the Project shall also be deemed material if (a) the
Project cannot be rebuilt or repaired to substantially the same condition it was in prior to the
damage due to laws or regulations in effect at the time the repairs will be made, (b) the holder of
any mortgage or deed of trust encumbering the Project requires that insurance proceeds available to
repair the damage in excess of Twenty-Five Thousand Dollars ($25,000) be applied to the repayment
of the indebtedness secured by the mortgage or the deed of trust, or (c) the damage occurs during
the last twelve (12) months of the Lease term.

          14.3 Abatement of Rent. If Landlord elects to repair damage to the Project
and all or part of the Premises will be unusable or inaccessible to Tenant in the ordinary conduct
of its business until the damage is repaired, and the damage was not caused by the negligence or
intentional acts of Tenant or its employees, agents, contractors or invitees, Tenant’s Base Rent
and Tenant’s Share of Operating Expenses shall be abated until the repairs are completed in
proportion to the amount of the Premises which is unusable or inaccessible to Tenant in the
ordinary conduct of its business. Notwithstanding the foregoing, there shall be no abatement of
Base Rent or Tenant’s Share of Operating Expenses by reason of any portion of the Premises being
unusable or inaccessible for a period equal to five (5) consecutive business days or less.

          14.4 Tenant’s Acts. If such damage or destruction occurs as a result of the
negligence or the intentional acts of Tenant or Tenant’s employees, agents, contractors or
invitees, and the proceeds of insurance which are actually received by Landlord are not sufficient
to pay for the repair of all the damage, Tenant shall pay, at Tenant’s sole cost and expense, to
Landlord upon demand, the difference between the cost of repairing the damage and the insurance
proceeds received by Landlord.

          14.5 Tenant’s Property. Landlord shall not be liable to Tenant or its
employees, agents, contractors, invitees or customers for loss or damage to merchandise, tenant
improvements, fixtures, automobiles, furniture, equipment, computers, files or other property
(hereinafter collectively, “Tenant’s Property”) located at the Project. Tenant shall repair or
replace all of Tenant’s property at Tenant’s sole cost and expense. Tenant acknowledges that it is
Tenant’s sole responsibility to obtain adequate insurance coverage to compensate Tenant for damage
to Tenant’s property.

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          14.6 Waiver. Landlord and Tenant hereby waive the provisions of any present
or future statutes which relate to the termination of leases when leased property is damaged or
destroyed and agree that such event shall be governed by the terms of this Lease.

     15. Condemnation. If any portion of the Premises or the Project are taken
under the power of eminent domain, or sold under the threat of the exercise of said power (all of
which are herein called “condemnation”), this Lease shall terminate as to the part so taken as of
the date the condemning authority takes title or possession, whichever first occurs; provided that
if so much of the Premises or Project are taken by such condemnation as would substantially and
adversely affect the operation and profitability of Tenant’s business conducted from the Premises,
and said taking lasts for ninety (90) days or more, Tenant shall have the option, to be exercised
only in writing within thirty (30) days after Landlord shall have given Tenant written notice of
such taking (or in the absence of such notice, within thirty (30) days after the condemning
authority shall have taken possession), to terminate this Lease as of the date the condemning
authority lakes such possession. If a taking lasts for less than ninety (90) days Tenant’s rent
shall be abated during said period but Tenant shall not have the right to terminate this Lease. If
Tenant does not terminate this Lease in accordance with the foregoing, this Lease shall remain in
full force and effect as to the portion of the Premises remaining, except that the Base Rent and
Operating Expenses shall be reduced in the proportion that the usable floor area of the Premises
taken bears to the total usable floor area of the Premises. Common Areas taken shall be excluded
from the Common Areas usable by Tenant and no reduction of rent shall occur with respect thereto or
by reason thereof. Landlord shall have the option in its sole discretion to terminate this Lease
as of the taking of possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of a taking by condemnation of any
part of the Premises or the Project Any award for the taking of all or any part of the Premises or
the Project under the power of eminent domain or any payment made under threat of the exercise of
such power shall be the property of Landlord, whether such award shall be made as compensation for
diminution in value of the leasehold, for good will, for the taking of the fee as severance
damages, or as damages for tenant improvements; provided, however, that Tenant shall be entitled to
any separate award for loss of or damage to Tenant’s removable personal property and for moving
expenses. In the event that this Lease is not terminated by reason of such condemnation, and
subject to the requirements of any lender that has made a loan to Landlord encumbering the Project,
Landlord shall to the extent of severance damages received by Landlord in connection with such
condemnation, repair any damage to the Project caused by such condemnation except to the extent
that Tenant has been reimbursed therefor by the condemning authority. This Section 15, not general
principles of law or California Code of Civil Procedure sections 1230.010 et seq., shall govern the
rights and obligations of Landlord and Tenant with respect to the condemnation of all or any
portion of the Project.

     16. Assignment and Subletting.

          16.1 Landlord’s Consent Required. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise transfer or encumber
all or any part of Tenant’s interest in this Lease or in the Premises (hereinafter collectively a
“Transfer”), without Landlord’s prior written consent which shall not be unreasonably withheld.
Landlord shall respond to Tenant’s written request for consent hereunder within thirty (30) days
after Landlord’s receipt of the written request from Tenant. Any attempted Transfer without such
consent shall be void and shall constitute a material default and breach of this Lease. Tenant’s
written request for Landlord’s consent shall include, and Landlord’s thirty (30) day response
period referred to above shall not commence, unless and until Landlord has received from Tenant,
all of the

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following information: (a) financial statements for the proposed assignee or subtenant
for the past three (3) years prepared in accordance with generally accepted accounting principles,
(b) federal tax returns for the proposed assignee or subtenant for the past three (3) years, (c) a
TRW credit report or similar report on the proposed assignee or subtenant, (d) a detailed
description of the business the assignee or subtenant intends to operate at the Premises, (e) the
proposed effective date of the assignment or sublease, (f) a copy of the proposed sublease or
assignment agreement which includes all of the terms and conditions of the proposed assignment or
sublease, (g) a detailed description of any ownership or commercial relationship between Tenant and
the proposed assignee or subtenant, (h) a detailed description of any Alterations the proposed
assignee or subtenant desires to make to the Premises, and (i) a Hazardous Materials Disclosure
Certificate substantially in the form of Exhibit D attached hereto (the “Transferee HazMat
Certificate”). If the obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant’s written request shall not be considered complete until the information
described in (a), (b) and (c) of the previous sentence has been provided with respect to each
proposed guarantor. “Transfer” shall also include the transfer (a) if Tenant is a corporation, and
Tenant’s stock is not publicly traded over a recognized securities exchange, of more than twenty
five percent (25%) of the voting stock of such corporation during the term of this Lease (whether
or not in one or more transfers) or the dissolution, merger or liquidation of the corporation, or
(b) if Tenant is a partnership, limited liability company, limited liability partnership or other
entity, of more than twenty five percent (25%) of the profit and loss participation in such
partnership or entity during the term of this Lease (whether or not in one or more transfers) or
the dissolution, merger or liquidation of the partnership, limited liability company, limited
liability partnership or other entity. If Tenant is a limited or general partnership (or is
comprised of two or more persons, individually or as co-partners), Tenant shall not be entitled to
change or convert to (i) a limited liability company, (ii) a limited liability partnership or
(iii) any other entity which possesses the characteristics of limited liability without the prior
written consent of Landlord, which consent may be given or withheld in Landlord’s sole discretion.
Tenant’s sole remedy in the event that Landlord shall wrongfully withhold consent to or disapprove
any assignment or sublease shall be to obtain an order by a court of competent jurisdiction that
Landlord grant such consent; in no event shall Landlord be liable for damages with respect to its
granting or withholding consent to any proposed assignment or sublease. If Landlord shall exercise
any option to recapture the Premises, or shall deny a request for consent to a proposed assignment
or sublease, Tenant shall indemnify, defend and hold Landlord harmless from and against any and all
losses, liabilities, damages, costs and claims that may be made against Landlord by the proposed
assignee or subtenant, or by any brokers or other persons claiming a commission or similar
compensation in connection with the proposed assignment or sublease. Notwithstanding the foregoing
provisions of this Section 16.1, Tenant may assign the Lease in its entirety or sublease all or any
portion of the Premises without the consent of Landlord upon prior written notice to Landlord,
delivery to Landlord of current financial information for both parties, and Landlord’s reasonable
written confirmation as to the compliance with this provision, to (a) any entity resulting from a
merger or consolidation with Tenant (b) any entity succeeding to substantially all of the business
and assets of Tenant, or (c) any subsidiary or
affiliate of Tenant, so long as such subsidiary or affiliate has a Net Worth (as defined in
Section 16.2) of at least seventy-five percent (75%) of the Net Worth of Tenant as is represented
to Landlord at the time of the execution by Landlord of this Lease, or as it exists immediately
prior to said transaction, at whichever time said Net Worth of Tenant was or is greater. In the
event of an assignment or sublease to a subsidiary or affiliate with a Net Worth of less than
seventy-five percent (75%) of Tenant, Landlord reserves the right to collect from Tenant an
additional security deposit in the amount of the last two (2) months’ Base Rent.

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          16.2 Leveraged Buy-Out. The involvement by Tenant or its assets in any
transaction or series of transactions (by way of merger, sale, acquisition, financing, refinancing,
transfer, leveraged buy-out or otherwise) whether or not a formal assignment or hypothecation of
this Lease or Tenant’s assets occurs which results or will result in a reduction of the “Net Worth”
of Tenant as hereinafter defined, by an amount equal to or greater than twenty-five percent (25%)
of such Net Worth of Tenant as it is represented to Landlord at the time of the execution by
Landlord of this Lease, or as it exists immediately prior to said transaction or transactions
constituting such reduction, at whichever time said Net Worth of Tenant was or is greater, shall be
considered to be an assignment of this Lease by Tenant to which Landlord may reasonably withhold
its consent. “Net Worth” of Tenant for purposes of this Section shall be the net worth of Tenant
(excluding any guarantors) established under generally accepted accounting principles consistently
applied.

          16.3 Standard for Approval. Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has complied with each and every requirement, term and
condition of this Section 16. Tenant acknowledges and agrees that each requirement, term and
condition in this Section 16 is a reasonable requirement, term or condition. It shall be deemed
reasonable for Landlord to withhold its consent to a Transfer if any requirement, term or condition
of this Section 16 is not complied with or: (a) the Transfer would cause Landlord to be in
violation of its obligations under another lease or agreement to which Landlord is a party; (b) in
Landlord’s reasonable judgment, a proposed assignee or subtenant has a smaller net worth than
Tenant had on the date this Lease was entered into with Tenant or is less able financially to pay
the rents due under this Lease as and when they are due and payable; (c) a proposed assignee’s or
subtenant’s business will impose a burden on the Project’s parking facilities, Common Areas or
utilities that is greater than the burden imposed by Tenant, in Landlord’s reasonable judgment;
(d) the terms of a proposed assignment or subletting will allow the proposed assignee or subtenant
to exercise a right of renewal, right of expansion, right of first offer, right of first refusal or
similar right held by Tenant; (e) a proposed assignee or subtenant refuses to enter into a written
assignment agreement or sublease, reasonably satisfactory to Landlord, which provides that it will
abide by and assume all of the terms and conditions of this Lease for the term of any assignment or
sublease and containing such other terms and conditions of this Lease for the term of any
assignment or sublease and containing such other terms and conditions as Landlord reasonably deems
necessary; (f) the use of the Premises by the proposed assignee or subtenant will not be a use
permitted by this Lease; (g) any guarantor of this Lease refuses to consent to the Transfer or to
execute a written agreement reaffirming the guaranty; (h) Tenant is in default as defined in
Section 17 at the time of the request; (i) if requested by Landlord, the assignee or subtenant
refuses to sign a non-disturbance and attornment agreement in favor of Landlord’s lender;
(j) Landlord has sued or been sued by the proposed assignee or subtenant or has otherwise been
involved in a legal dispute with the proposed assignee or subtenant; (k) the assignee or subtenant
is involved in a business which is not in keeping with the then-current standards of the Project;
(1) the proposed assignee or subtenant is an existing tenant of the Project or is a person or
entity then negotiating with Landlord for the lease of space in the Project; (m) the assignment or
sublease will result in there being more than one subtenant of the Premises; (n) the
assignee or subtenant is a governmental or quasi-govern mental entity or an agency, department
or instrumentality of a governmental or quasi-governmental agency; or (o) the assignee or subtenant
will use, store or handle Hazardous Materials in or about the Premises of a type, nature, quantity
not acceptable to Landlord, in Landlord’s sole discretion.

          16.4 Additional Terms and Conditions. The following terms and conditions
shall be applicable to any Transfer:

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               16.4.1 Regardless of Landlord’s consent, no Transfer shall release Tenant from Tenant’s
obligations hereunder or alter the primary liability of Tenant to pay the rent and other sums due
Landlord hereunder and to perform all other obligations to be performed by Tenant hereunder or
release any guarantor from its obligations under its guaranty.

               16.4.2 Landlord may accept rent from any person other than Tenant pending approval or
disapproval of an assignment or subletting

               16.4.3 Neither a delay in the approval or disapproval of a Transfer, nor the acceptance of
rent, shall constitute a waiver or estoppel of Landlord’s right to exercise its rights and remedies
for the breach of any of the terms or conditions of this Section 16.

               16.4.4 The consent by Landlord to any Transfer shall not constitute a consent to any
subsequent Transfer by Tenant or to any subsequent or successive Transfer by an assignee or
subtenant. However, Landlord may consent to subsequent Transfers or any amendments or
modifications thereto without notifying Tenant or anyone else liable on the Lease and without
obtaining their consent, and such action shall not relieve such persons from liability under this
Lease.

               16.4.5 In the event of any default under this Lease, Landlord may proceed directly against
Tenant, any guarantors or anyone else responsible for the performance of this Lease, including any
subtenant or assignee, without first exhausting Landlord’s remedies against any other person or
entity responsible therefor to Landlord, or any security held by Landlord.

               16.4.6 Landlord’s written consent to any Transfer by Tenant shall not constitute an
acknowledgment that no default then exists under this Lease nor shall such consent be deemed a
waiver of any then-existing default.

               16.4.7 The discovery of the fact that any financial statement relied upon by Landlord in
giving its consent to an assignment or subletting was materially false shall, at Landlord’s
election, render Landlord’s consent null and void.

               16.4.8 Landlord shall not be liable under this Lease or under any sublease to any subtenant.

               16.4.9 No assignment or sublease may be modified or amended without Landlord’s prior written
consent.

               16.4.10 The occurrence of a transaction described in Section 16.2 shall give Landlord the
right (but not the obligation) to require that Tenant immediately provide Landlord with an
additional security deposit equal to twelve (12) times the monthly Base Rent payable under the
Lease during the last month of the term of the Lease, and Landlord may make its receipt of such
amount a condition to Landlord’s consent to such transaction.

               16.4.11 Any assignee of, or subtenant under, this Lease shall, by reason of accepting such
assignment or entering into such sublease, be deemed, for the benefit of Landlord, to have assumed
and agreed to conform and comply with each and every term, covenant, condition and obligation
herein to be observed or performed by Tenant during the term of said assignment or sublease, other
than such obligations as are contrary or inconsistent with provisions of an assignment or sublease
to which Landlord has specifically consented in writing.

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               16.4.12 At Landlord’s request, Tenant shall deliver to Landlord, Landlord’s standard consent
to assignment or consent to sublease agreement, as applicable, executed by Tenant, the assignee and
the subtenant, as applicable.

          16.5 Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in all subleases under this Lease whether or not expressly incorporated
therein:

               16.5.1 Tenant hereby absolutely and unconditionally assigns and transfers to Landlord all of
Tenant’s interest in all rentals and income arising from any sublease entered into by Tenant, and
Landlord may collect such rent and income and apply same toward Tenant’s obligations under this
Lease; provided, however, that until a default shall occur in the performance of Tenant’s
obligations under this Lease, Tenant may receive, collect and enjoy the rents accruing under such
sublease. Landlord shall not, by reason of this or any other assignment of such rents to Landlord
nor by reason of the collection of the rents from a subtenant, be deemed to have assumed or
recognized any sublease or to be liable to the subtenant for any failure of Tenant to perform and
comply with any of Tenant’s obligations to such subtenant under such sublease, including, but not
limited to, Tenant’s obligation to return any security deposit. Tenant hereby irrevocably
authorizes and directs any such subtenant, upon receipt of a written notice from Landlord stating
that a default exists in the performance of Tenant’s obligations under this Lease, to pay to
Landlord the rents due as they become due under the sublease. Tenant agrees that such subtenant
shall have the right to rely upon any such statement and request from Landlord, and that such
subtenant shall pay such rents to Landlord without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice or claim from Tenant to the contrary.

               16.5.2 In the event Tenant shall default in the performance of its obligations under this
Lease, Landlord, at its option and without any obligation to do so, may require any subtenant to
attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant under such
sublease from the time of the exercise of said option to the termination of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by
such subtenant to Tenant or for any other prior defaults of Tenant under such sublease.

          16.6 Transfer Premium from Assignment or Subletting. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of additional rent all
amounts received by Tenant from the subtenant or assignee in excess of the amounts payable by
Tenant to Landlord hereunder (“Transfer Premium”). The Transfer Premium shall be reduced by the
reasonable brokerage commissions and legal fees actually paid by Tenant in order to assign the
Lease or to sublet a portion of the Premises. “Transfer Premium” shall mean all Base Rent,
additional rent or other consideration of any type whatsoever payable by the assignee or subtenant
in excess of the Base Rent and additional rent payable by Tenant under this Lease. If less than
all of the Premises is transferred, the Base Rent and the additional rent shall be determined on a
per-leasable-square-foot basis. “Transfer Premium” shall also include, but not be limited to, key
money and bonus money paid by the assignee or subtenant to Tenant in connection with such Transfer,
and any payment in excess of fair-market value for services rendered by Tenant to the assignee or
subtenant or for assets, fixtures, inventory, equipment or furniture transferred by Tenant to the
assignee or subtenant in connection with such Transfer.

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          16.7 Landlord’s Option to Recapture Space. Notwithstanding anything to the
contrary contained in this Section 16, Landlord shall have the option, by giving written notice to
Tenant within thirty (30) days after receipt of any request by Tenant to assign this Lease or to
sublease space in the Premises, to terminate this Lease with respect to said space as of the date
thirty (30) days after Landlord’s election. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, the Base Rent, Operating Expenses
and the number of parking spaces Tenant may use shall be adjusted on the basis of the number of
rentable square feet retained by Tenant in proportion to the number of rentable square feet
contained in the original Premises, and this Lease as so amended shall continue thereafter in full
force and effect, and upon request of either party, the parties shall execute written confirmation
of the same. If landlord recaptures only a portion of the Premises, it shall construct and erect
at its sole cost such partitions as may be required to sever the space to be retained by Tenant
from the space recaptured by Landlord. Landlord may, at its option, lease any recaptured portion
of the Premises to the proposed subtenant or assignee or to any other person or entity without
liability to Tenant. Tenant shall not be entitled to any portion of the profit, if any, Landlord
may realize on account of such termination and reletting. Tenant acknowledges that the purpose of
this Section is to enable Landlord to receive profit in the form of higher rent or other
consideration to be received from an assignee or subtenant, to give Landlord the ability to meet
additional space requirements of other tenants of the Project and to permit Landlord to control the
leasing of space in the Project. Tenant acknowledges and agrees that the requirements of this
Section are commercially reasonable and are consistent with the intentions of Landlord and Tenant.

          16.8 Landlord’s Expenses. In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then Tenant shall pay
Landlord’s reasonable costs and expenses incurred in connection therewith, including, but not
limited to, attorneys’, architects’, accountants’, engineers’, or other consultants’ fees.

     17. Default; Remedies.

          17.1 Default by Tenant. Landlord and Tenant hereby agree that the occurrence
of any one or more of the following events is a material default by Tenant under this Lease and
that said default shall give Landlord the rights described in Section 17.2. Landlord or Landlord’s
authorized agent shall have the right to execute and to deliver any notice of default, notice to
pay rent or quit any other notice Landlord gives Tenant.

               17.1.1 Tenant’s failure to make any payment of Base Rent, Tenant’s Percentage Share of
Operating Expenses, Tenant’s Percentage Share of Real Property Taxes or any other payment required
to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of
three (3) business days after written notice thereof from Landlord to Tenant. In the event that
Landlord serves Tenant with a notice to pay rent or quit pursuant to applicable unlawful detainer
statues, such notice shall also constitute the notice required by this Section 17.1.1.

               17.1.2 The abandonment of the Premises by Tenant, in which event Landlord shall not be
obligated to give any notice of default to Tenant.

               17.1.3 The failure of Tenant to comply with any of its obligations under Sections 4, 10, 12,
13, 16, 19, 23, 25, 26, 27 and 28 where Tenant fails to comply with its obligations or fails to
cure any earlier breach of such obligation within ten (10) days following written notice from
Landlord to Tenant. In the event Landlord serves Tenant with a notice to quit or any other

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notice pursuant to applicable unlawful detainer statutes, said notice shall also constitute
the notice required by this Section 17.1.3.

               17.1.4 The failure by Tenant to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Tenant (other than those referenced in
Sections 17.1.1, 17.1.2 and 17.1.3, above), where such failure shall continue for a period of ten
(10) days after written notice thereof from Landlord to Tenant; provided, however, that if the
nature of Tenant’s nonperformance is such that more than ten (10) days are reasonably required for
its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within
said ten (10) day period and thereafter diligently pursues such cure to completion. In the event
that Landlord serves Tenant with a notice to quit or any other notice pursuant to applicable
unlawful detainer statutes, said notice shall also constitute the notice required by this Section
17.1.4.

               17.1.5 (i) The making by Tenant or any guarantor of Tenant’s obligations hereunder of any
general arrangement or general assignment for the benefit of creditors; (ii) Tenant or any
guarantor becoming a “debtor’ as defined in 11 U.S.C. 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant or guarantor, 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 thirty (30) days; (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 thirty (30) days; or
(v) the insolvency of Tenant. In the event that any provision of this Section 17.1.5 is
unenforceable under applicable law, such provision shall be of no force or effect.

               17.1.6 The discovery by Landlord that any financial statement, representation or warranty
given to Landlord by Tenant, or by any guarantor of Tenant’s obligations hereunder, was materially
false at the time given. Tenant acknowledges that Landlord has entered into this Lease in material
reliance on such information.

               17.1.7 If Tenant is a corporation, partnership, limited liability company or similar entity,
the dissolution or liquidation of Tenant.

               17.1.8 If Tenant’s obligations under this Lease are guaranteed: (i) the death of a guarantor,
(ii) the termination of a guarantor’s liability with respect to this Lease other than in accordance
with the terms of such guaranty, (iii) a guarantor’s becoming insolvent or the subject of a
bankruptcy filing, (iv) a guarantor’s refusal to honor the guaranty, or (v) a guarantor’s breach of
its guaranty obligation on an anticipatory breach basis.

          17.2 Remedies.

               17.2.1 In the event of any material default or breach of this Lease by Tenant, Landlord may,
at any time thereafter, with or without notice or demand, and without limiting Landlord in the
exercise of any right or remedy which Landlord may have by reason of such default:

                    17.2.1.1 terminate Tenant’s right to possession of the Premises by any lawful means, in which
case this Lease and the term hereof shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. If Landlord terminates this Lease, Landlord may recover
from Tenant (A) the worth at the time of award of the unpaid rent which had

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been earned at the time of termination; (B) the worth at the time of 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; (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 have been
reasonably avoided; and (D) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant’s failure to perform its obligations under the Lease or which in the
ordinary course of things would be likely to result therefrom, including, but not limited to, the
cost of recovering possession of the Premises, expenses of releasing, including necessary
renovation and alteration of the Premises, reasonable attorneys’ fees, any real estate commissions
actually paid by Landlord and the unamortized value of any free rent, reduced rent, tenant
improvement allowance or other economic concessions provided by Landlord. The “worth at time of
award” of the amounts referred to in Sections 17.2.1.1(A) and (B) shall be computed by allowing
interest at the lesser of ten percent (10%) per annum or the maximum interest rate permitted by
applicable law. The worth at the time of award of the amount referred to in Section 17.2.1.1(C)
shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%). For purposes of this Section 17.2.1.1,
“rent” shall be deemed to be all monetary obligations required to be paid by Tenant pursuant to the
terms of this Lease.

                    17.2.1.2 maintain Tenant’s right of possession, in which event Landlord shall have the remedy
described in California Civil Code Section 1951.4 which permits Landlord to continue this Lease in
effect after Tenant’s breach and abandonment and recover rent as it becomes due. In the event
Landlord elects to continue this Lease in effect, Tenant shall have the right to sublet the
Premises or assign Tenant’s interest in the Lease subject to the reasonable requirements contained
in Section 16 of this Lease and provided further that Landlord shall not require compliance with
any standard or condition contained in Section 16 that has become unreasonable at the time Tenant
seeks to sublet or assign the Premises pursuant to this Section 17.2.1.2.

                    17.2.1.3 collect sublease rents (or appoint a receiver to collect such rent) and otherwise
perform Tenant’s obligations at the Premises, it being agreed, however, that the appointment of a
receiver for Tenant shall not constitute an election by Landlord to terminate this Lease.

                    17.2.1.4 pursue any other remedy now or hereafter available to Landlord under the laws or
judicial decisions of the state in which the Premises are located.

               17.2.2 No remedy or election hereunder shall be deemed exclusive, but shall, wherever
possible, be cumulative with all other remedies at law or in equity. The expiration or termination
of this Lease and/or the termination of Tenant’s right to possession of the Premises shall not
relieve Tenant of liability under any indemnity provisions of this Lease as to matters occurring or
accruing during the term of the Lease or by reason of Tenant’s occupancy of the Premises.

               17.2.3 If Tenant abandons or vacates the Premises, Landlord may re-enter the Premises, and
such re-entry shall not be deemed to constitute Landlord’s election to accept a surrender of the
Premises or to otherwise relieve Tenant from liability for its breach of this Lease. No surrender
of the Premises shall be effective against Landlord unless Landlord has entered into a written
agreement with Tenant in which Landlord expressly agrees to (i) accept a surrender of the Premises
and (ii) relieve Tenant of liability under the Lease. The delivery by Tenant to Landlord of

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possession of the Premises shall not constitute the termination of the Lease or the surrender
of the Premises.

          17.3 Default By Landlord. Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within thirty (30) days after
written notice by Tenant to Landlord and to the holder of any mortgage or deed of trust encumbering
the Project whose name and address shall have therefore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord’s obligation is such that more than thirty (30) days are required for its cure,
then Landlord shall not be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently pursues the same to completion. In no event shall Tenant have the
right to terminate this Lease as a result of Landlord’s default, and Tenant’s remedies shall be
limited to damages and/or an injunction. Tenant hereby waives its right to recover consequential
damages (including, but not limited to, lost profits) or punitive damages arising out of a Landlord
default. This Lease and the obligations of Tenant hereunder shall not be affected or impaired
because Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so,
if such inability or delay is caused by reason of a Force Majeure Event, and the time for
Landlord’s performance shall be extended for the period of any such delay. Any claim, demand,
right or defense by Tenant that arises out of this lease or the negotiations which preceded this
Lease shall be barred unless Tenant commences an action thereon, or interposes a defense by reason
thereof, within six (6) months after the date of the inaction, omission, event or action that gave
rise to such claim, demand, right or defense.

          17.4 Late Charges. Tenant hereby acknowledges that late payment by Landlord
of Base Rent, Tenant’s Percentage Share of Operating Expenses and Real Property Taxes or other sums
due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on Landlord by the terms of
any mortgage or trust deed encumbering the Project. Accordingly, if any installment of Base Rent,
Tenant’s Percentage Share of Operating Expenses and Real Property Taxes or any other sum due from
Tenant shall not be received by Landlord when such amount shall be due, then, without any
requirement for notice or demand to Tenant. Tenant shall immediately pay to Landlord a late charge
equal to ten percent (10%) of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a
waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder, including the assessment of
interest under Section 17.5.

          17.5 Interest on Past-Due Obligations. Except as expressly herein provided,
any amount due to Landlord that is not paid when due shall bear interest at the lesser of ten
percent (10%) per annum or the maximum rate permitted by applicable law. Payment of such interest
shall not excuse or cure any default by Tenant under this Lease; provided, however, that interest
shall not be payable on late charges incurred by Tenant nor on any amounts upon which late charges
are paid by Tenant.

          17.6 Payment of Rent and Security Deposit After Default. If Tenant fails to
pay Base Rent, Tenant’s Percentage Share of Operating Expenses or Real Property Taxes, parking
charges or any other monetary obligation due hereunder on the date it is due, after Tenant’s third
failure to pay any monetary obligation on the date it is due, at Landlord’s option, all monetary

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obligations of Tenant hereunder shall thereafter be paid by cashier’s check, and Tenant shall,
upon demand, provide Landlord with an additional security deposit equal to the Base Rent for the
last three (3) months of the term of the Lease. If Landlord has required Tenant to make said
payments by cashier’s check or to provide an additional security deposit, Tenant’s failure to make
a payment by cashier’s check or to provide the additional security deposit shall be a material
default hereunder.

     18. Landlord’s Right to Cure Default, Payments by Tenant. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at
Tenant’s sole cost and expense and without any reduction of rent. If Tenant shall fail to perform
any of its obligations under this Lease, Landlord may, but shall not be obligated to, after three
(3) days’ prior written notice to Tenant, make any such payment or perform any such act on Tenant’s
behalf without waiving its rights based upon any default of Tenant and without releasing Tenant
from any obligations hereunder. Tenant shall pay to Landlord, within ten (10) days after delivery
by Landlord to Tenant of statements therefore, an amount equal to the expenditures reasonably made
by Landlord in connection with the remedying by Landlord of Tenant’s defaults pursuant to the
provisions of this Section.

     19. Indemnity. Tenant hereby agrees to protect, indemnify, defend and hold
harmless Landlord and its employees, partners, agents, contractors, lenders and ground lessors
(said persons and entities are hereinafter collectively referred to as the “Indemnified Parties”)
from and against any and all liability, loss, cost, damage, claims, loss of rents, liens,
judgments, penalties, fines, settlement costs, investigation costs, cost of consultants and
experts, attorneys fees, court costs and other legal expenses, effects of environmental
contamination, cost of environmental testing, removal, remediation and/or abatement of Hazardous
Materials (as said terms are defined below), insurance policy deductibles and other expenses
(hereinafter collectively referred to as “Damages”) arising out of or related to an Indemnified
Matter (as defined below). For purposes of this Section, an “Indemnified Matter” shall mean any
matter for which one or more of the Indemnified Parties incurs liability or Damages if the
liability or Damages arise out of or involve, directly or indirectly, (a) Tenant’s or its
employees’, agents’, contractors’ or invitees’ (all of said persons or entities are hereinafter
collectively referred to as “Tenant Parties”) use or occupancy of the Premises or the Project, (b)
any act, omission or neglect of a Tenant Party, (c) Tenant’s failure to perform any of its
obligations under the Lease, (d) the existence, use or disposal of any Hazardous Substance (as
defined below) brought on to the project by a Tenant Party or (e) any other matters for which
Tenant agreed to indemnify Landlord pursuant to any other provision of this Lease. Tenant’s
obligations hereunder shall include, but shall not be limited to (f) compensating the Indemnified
Parties for Damages arising out of Indemnified Matters within ten (10) days after written demand
from an Indemnified Party and (g) providing a defense, with counsel reasonably satisfactory to the
Indemnified Party, at Tenant’s sole expense, within ten (10) days after written demand from the
Indemnified Party, of any claims, action or proceeding arising out of or relating to an Indemnified
Matter whether or not litigated or reduced to judgment and whether or not well founded. If Tenant
is obligated to compensate an Indemnified Party for Damages arising out of an Indemnified Matter,
Landlord shall have the immediate and unconditional right, but not the obligation, without notice
or demand to Tenant, to pay the damages, and Tenant shall, upon ten (10) days’ advance written
notice from Landlord, reimburse Landlord for the costs incurred by Landlord. By way of example,
and not limitation, Landlord shall have the immediate and unconditional right to cause any damages
to the Common Areas, another tenant’s premises or to any other part of the Project to be repaired
and to compensate other tenants of the Project or other persons or entities for Damages arising out
of an Indemnified Matter. The Indemnified Parties need not first pay any Damages to be indemnified
hereunder. Tenant’s obligations under this Section shall not be released, reduced or otherwise

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limited because one or more of the Indemnified Parties are or may be actively or passively
negligent with respect to an Indemnified Matter or because an Indemnified Party is or was partially
responsible for the Damages incurred. This indemnity is intended to apply to the fullest extent
permitted by applicable law. Tenants obligations under this Section shall survive the expiration
or termination of this Lease unless specifically waived in writing by Landlord after said
expiration or termination.

     20. Exemption of Landlord from Liability. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant’s business or any loss of income therefrom or for loss of
or damage to the merchandise tenant improvements, fixtures, furniture, equipment, computers, files,
automobiles, or other property of Tenant, Tenant’s employees, agents, contractors or invitees, or
any other person in or about the Project, nor shall Landlord be liable for injury to the person of
Tenant, Tenant’s employees, agents, contractors or invitees, whether such damage or injury is
caused by or results from any cause whatsoever including, but not limited to, theft, criminal
activity at the Project, negligent security measures, bombings or bomb scares, Hazardous Materials,
fire, steam, electricity, gas, water or rain, flooding, breakage of pipes, sprinklers, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said damage or injury
results from conditions arising upon the Premises or upon other portions of the Project, or from
other sources or places, or from new construction or the repair, alteration or improvement of any
part of the Project, and regardless of whether the cause of the damage or injury arises out of
Landlord’s or its employees’, agents or contractors’ negligent or intentional acts. Landlord shall
not be liable for any damages arising from any act or neglect of any employees, agents, contractors
or invitees of any other tenant, occupant or user of the Project nor from the failure of Landlord
to enforce the provisions of the lease of any other tenant of the Project. Tenant, as a material
part of the consideration to Landlord hereunder, hereby assumes all risk of damage to Tenant’s
property or business or injury to persons in, upon or about the Project arising from any cause,
including Landlord’s negligence or the negligence of its employees, agents or contractors, and
Tenant hereby waives all claims in respect thereof against Landlord, its employees, agents and
contractors.

     21. Landlord’s Liability. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to assign this Lease to the
transferee. Tenant agrees that in the event of such a transfer Landlord shall automatically be
released from all liability under this Lease; and Tenant hereby agrees to look solely to Landlord’s
transferee for the performance of Landlord’s obligations hereunder after the date of the transfer.
Upon such a transfer, Landlord shall, at its option, return Tenant’s security deposit to Tenant or
transfer Tenant’s security deposit to Landlord’s transferee and, in either event, Landlord shall
have no further liability to Tenant for the return of its security deposit. Subject to the rights
of any lender holding a mortgage or deed of trust encumbering all or part of the Project, Tenant
agrees to look solely to Landlord’s equity interest in the Project for the collection of any
judgment requiring the payment of money by Landlord arising out of (a) Landlord’s failure to
perform its obligations under this Lease or (b) the negligence or willful misconduct of Landlord,
its partners, employees and agents. No other property or assets of Landlord shall be subject to
levy, execution or other enforcement procedure for the satisfaction of any judgment or writ
obtained by Tenant against Landlord. No partner, employee or agent of Landlord shall be personally
liable for the performance of Landlord’s obligations hereunder or be named as a party in any
lawsuit arising out of or related to, directly or indirectly, this Lease and the obligations of
Landlord hereunder. The obligations under this Lease do not constitute personal obligations of the
individual partners of Landlord, if any, and Tenant shall not seek recourse against the individual
partners of Landlord or their assets.

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     22. Signs. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants, banners or painting,
or erect or install any signs, windows or door lettering, placards, decorations or advertising
media of any type which can be viewed from the exterior of the Premises, without Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole discretion. Upon vacation of
the Premises, Tenant shall remove all signs and repair, paint and/or replace the building fascia
surface to Which its signs are attached. Tenant shall obtain all applicable governmental permits
and approvals for signs and exterior treatments. All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security installations visible from
outside the Premises shall be subject to Landlord’s approval and conform in all respects to
Landlord’s requirements. Subject to Landlord’s prior written consent, which shall not be
unreasonably withheld, and to compliance with all applicable laws and the requirements of the
Property Owners Association, Tenant may install, at its expense, building and monument signage at
the entrance of the Premises. At Landlord’s request, Tenant shall, prior to the expiration or
earlier termination of the Lease, cause such signage to be removed, and shall repair any damage to
the Premises and/or the Project caused thereby.

     23. Parking. During the term and subject to the rules and regulations
attached hereto as Exhibit C as modified by Landlord from time to time (the “Rules”),
Tenant shall be entitled to use the number of parking spaces set forth in Section 1.13 in the
Common Area parking lot of the Project. Tenant’s parking rights are in common with the parking
rights of any other tenants of the Project, and all of Tenant’s parking spaces are unreserved
parking spaces. Landlord reserves the right at any time to designate areas in the Common Areas
where Tenant may or may not park. If Tenant commits or allows in the parking lot any of the
activities prohibited by the Lease or the Rules, then Landlord shall have the right, without
notice, in addition to such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be immediately payable by Tenant
upon demand by Landlord. Tenant’s parking rights are the personal rights of Tenant, and Tenant
shall not transfer, assign or otherwise convey its parking rights separate and apart from this
Lease. All parking spaces may only be used for parking vehicles no larger than full-size passenger
automobiles or pick-up trucks. Landlord, in addition to its other remedies, shall have the right
to remove or tow away any other vehicles. Landlord shall not be responsible for enforcing Tenant’s
parking rights against any third parties. Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or
invitees to be loaded, unloaded or parked in areas other than those designated by Landlord for such
activities.

     24. Broker’s Fee. Tenant and Landlord each represent and warrant to the
other that neither has had any dealings or entered into any agreements with any person, entity,
broker or finder other than the persons, if any, listed in Section 1.14, in connection with the
negotiation of this Lease, and no other broker, person, or entity is entitled to any commission or
finder’s fee in connection with the negotiation of this Lease, and Tenant and Landlord each agree
to indemnify, defend and hold the other harmless from and against any claims, damages, costs,
expenses, attorneys’ fees or liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings, actions or agreements of
the indemnifying party. The commission payable to Landlord’s broker with respect to this Lease
shall be pursuant to the terms of the separate commission agreement in effect between Landlord and
Landlord’s broker. Landlord agrees to pay a brokerage fee to Tenant’s broker in an amount equal to
four percent (4%) per annum of the net aggregate Base Rent for the first sixty (60) months of the
term of the Lease. Such commission shall be payable one-half (1/2) upon the full execution and
delivery of the Lease and one-half (1/2) upon

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Tenant’s occupancy, the occurrence of the Commencement Date and Tenant’s completion and
execution of the Verification Letter in the form of Exhibit B hereto.

     25. Estoppel Certificate.

          25.1 Delivery of Certificate. Tenant shall from time to time, upon not less
than ten (10) days’ prior written notice from Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying such information as Landlord may reasonably request
including, but not limited to, the following: (a) that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect), (b) the date to which the Base Rent and other
charges are paid in advance and the amounts so payable, (c) that there are not, to Tenant’s
knowledge, any uncured defaults or unfulfilled obligations on the part of Landlord, or specifying
such defaults or unfulfilled obligations, if any are claimed, (d) that all tenant improvements to
be constructed by Landlord, if any, have been completed in accordance with Landlord’s obligations,
and (e) that Tenant has taken possession of the Premises. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Project.

          25.2 Failure to Deliver Certificate. At Landlord’s option, the failure of
Tenant to deliver such statement within such time shall constitute a material default of Tenant
hereunder, or it shall be conclusive upon Tenant that (a) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) there are no uncured defaults in
Landlord’s performance, (c) not more than one month’s Base Rent has been paid in advance, (d) all
tenant improvements to be constructed by Landlord, if any, have been completed in accordance with
Landlord’s obligations, and (e) Tenant has taken possession of the Premises.

     26. Financial Information. From time to time, at Landlord’s request, Tenant
shall cause the following financial information to be delivered to Landlord, at Tenant’s sole cost
and expense, upon not less than ten (10) days’ advance written notice from Landlord: (a) a current
financial statement for Tenant and Tenant’s financial statements for the previous two accounting
years, (b) a current financial statement for any guarantor(s) of this Lease and the guarantor’(s)
financial statements for the previous two accounting years and (c) such other financial information
pertaining to Tenant or any guarantor as Landlord or any lender or purchaser of Landlord may
reasonably request. All financial statements shall be prepared in accordance with generally
accepted accounting principals consistently applied and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant. Tenant hereby authorizes Landlord,
from time to time, without notice to Tenant, to obtain a credit report or credit history on Tenant
from any credit reporting company.

     27. Environmental Matters/Hazardous Materials.

          27.1 Hazardous Materials Disclosure Certificate. Prior to executing this
Lease, Tenant has delivered to Landlord Tenant’s executed initial Hazardous Materials Disclosure
Certificate (the “Initial HazMat Certificate”), a copy of which is attached hereto as Exhibit
D. Tenant covenants, represents and warrants to Landlord that the information in the Initial
HazMat Certificate is true and correct and accurately describes the use(s) of Hazardous Materials
which will be made and/or used on the Premises by Tenant. Tenant shall, commencing with the date
which is one year from the Commencement Date and continuing every year thereafter, deliver to
Landlord an executed Hazardous Materials Disclosure Certificate (the “HazMat Certificate”)
describing Tenant’s

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then-present use of Hazardous Materials on the Premises, and any other reasonably necessary
documents and information as requested by Landlord. The HazMat Certificates required hereunder
shall be in substantially the form attached hereto as Exhibit D.

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

          27.3 Prohibition; Environmental Laws. Tenant shall not be entitled to use or
store any Hazardous Materials on, in, or about any portion of the Premises and the Project without,
in each instance, obtaining Landlord’s prior written consent thereto. If Landlord, in its sole
discretion, consents to any such usage or storage, then Tenant shall be permitted to use and/or
store only those Hazardous Materials that are necessary for Tenant’s business and to the extent
disclosed in the HazMat Certificate and as expressly approved by Landlord in writing. Any such
usage and storage may only be to the extent of the quantities of Hazardous Materials as specified
in the then-applicable HazMat Certificate as expressly approved by Landlord. In all events such
usage and storage must at all times be in full compliance with any and all local, state and federal
environmental, health and/or safety-related laws, statutes, orders, standards, courts’ decisions,
ordinances, rules and regulations (as interpreted by judicial and administrative decisions),
decrees, directives, guidelines, permits or permit conditions, currently existing and as amended,
enacted, issued or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the “Environmental Laws”) and in compliance with the
recommendations of Landlord’s consultants Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat Certificate may be
implemented only with the prior written consent of Landlord, which consent may be given or withheld
in Landlord’s sole discretion., Tenant shall not be entitled nor permitted to install any tanks
under, on or about the Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord’s sole discretion. Landlord shall
have the right, in Landlord’s sole discretion, at all times during the Term of this Lease to (i)
inspect the Premises, (ii) conduct tests and investigations to determine whether Tenant is in
compliance with the provisions of this Section 27 or to determine if Hazardous Materials are
present in, on or about the Project, (iii) request lists of all Hazardous Materials used, stored or
otherwise located on, under or about any portion of the Premises and/or the Common Areas, and (iv)
to require Tenant to complete a survey of its use, storage and handling of Hazardous Materials in
the Premises, using a form and following procedures designated by Landlord, in Landlord’s sole
discretion (the “Survey”). Tenant shall reimburse Landlord for the cost of all such inspections,
tests and investigations, and all costs associated with any Survey. If as a result of an
inspection, test or Survey Landlord determines, in Landlord’s sole discretion, that Tenant should
implement or perform safety, security or compliance measures, Tenant shall within thirty (30) days

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after written request by Landlord perform such measures, at Tenant’s sole cost and expense.
The aforementioned rights granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord’s part to inspect, test, investigate, monitor or otherwise observe the Premises or
the activities of Tenant and Tenant Parties with respect to Hazardous Materials, including without
limitation, Tenant’s operation, use and any remediation relating thereto, or (b) liability on the
part of Landlord and its representatives for Tenant’s use, storage, disposal or remediation of
Hazardous Materials, it being understood that Tenant shall be solely responsible for all liability
in connection therewith.

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

          27.5 Environmental Indemnity. In addition to Tenant’s other indemnity
obligations under this Lease, Tenant agrees to, and shall, protect, indemnify, defend (with counsel
acceptable to Landlord) and hold Landlord and the other Indemnitees harmless from and against any
and all loss, cost, damage, liability or expense (including, without limitation, diminution in
value of any portion of the Premises or the Project, damages for the loss of or restriction on the
use of rentable or usable space, and from any adverse impact of Landlord’s marketing of any space
within the Project) arising at any time during or after the term of this Lease in connection with
or related to, directly or indirectly, the use, presence, transportation, storage, disposal,
migration, removal, spill, release or discharge of Hazardous Materials on, in or about any portion
of the Project as a result (directly or indirectly) of the intentional or negligent acts or
omissions of Tenant or Tenant Parties. Neither the written consent of Landlord to the presence,
use or storage of Hazardous Materials in, on, under or about any portion of the Project nor the
strict compliance by Tenant with all Environmental Laws shall excuse Tenant from its obligations of
indemnification pursuant hereto. Tenant shall not

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be relieved of its indemnification obligations under the provisions of this Section 27.5 due
to Landlord’s status as either an “owner” or “operator” under any Environmental Laws.

          27.6 Survival. Tenant’s obligations and liabilities pursuant to the
provisions of this Section 27 shall survive the expiration or earlier termination of this Lease.
If it is determined by Landlord that the condition of all or any portion of the Project is not in
compliance with the provisions of this Lease with respect to Hazardous Materials, including without
limitation, all Environmental Laws at the expiration or earlier termination of this Lease, then
Landlord may require Tenant to hold over possession of the Premises until Tenant can surrender the
Premises to Landlord in the condition in which the Premises existed as of the Commencement Date and
prior to the appearance of such Hazardous Materials except for reasonable wear and tear, including
without limitation, the conduct or performance of any closures as required by any Environmental
Laws. The burden of proof hereunder shall be upon Tenant. For purposes hereof, the term
“reasonable wear and tear” shall not include any deterioration in the condition or diminution of
the value of any portion of the Project in any manner whatsoever related to, directly or
indirectly, Hazardous Materials. Any such holdover by Tenant will be with Landlord’s consent, will
not be terminable by Tenant in any event or circumstance and will otherwise be subject to the
provisions of Section 33 of this Lease.

     28. Subordination.

          28.1 Effect of Subordination. This Lease, and any Option (as defined below)
granted hereby, upon Landlord’s written election, shall be subject and subordinate to any ground
lease, mortgage, deed of trust or any other hypothecation or security now or hereafter placed upon
the Project and to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Tenant’s right to quiet possession of the Premises shall not be disturbed if Tenant
is not in default and so long as Tenant shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such person or entity.
If any mortgagee, trustee or ground lessor shall elect to have this Lease and any Options granted
hereby prior to the lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Tenant, this Lease and such Options shall be deemed prior to such mortgage, deed
of trust or ground lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording there of. In the
event of the foreclosure of a security device, the new owner shall not (a) be liable for any act or
omission of any prior landlord or with respect to events occurring prior to its acquisition of
title, (b) be liable for the breach of this Lease by any prior landlord, (c) be subject to any
offsets or defenses which Tenant may have against the prior landlord or (d) be liable to Tenant for
the return of its security deposit.

          28.2 Execution of Documents. Tenant agrees to execute and acknowledge any
documents Landlord reasonable requests Tenant execute to effectuate an attornment, a subordination,
or to make this Lease or any Option granted herein prior to the lien of any mortgage, deed of trust
or ground lease, as the case may be. Tenant’s failure to execute such documents within then (10)
days after written demand shall constitute a material default by Tenant hereunder or, at Landlord’s
option, Landlord shall have the right to execute such documents on behalf of Tenant as Tenant’s
attorney-in-fact. Tenant does hereby make, constitute and irrevocably appoint Landlord as Tenant’s
attorney-in fact and in Tenant’s name, place and stead to execute such documents in accordance with
this Section

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     29. Options.

          29.1 Definition. As used in this Lease, the word “Option” has the following
meaning: (1) the right or option to extend the term of this Lease or to renew this Lease, (2) the
option or right of first refusal to lease the Premises or the right of first offer to lease the
Premises or the right of first refusal to lease other space within the Project or the right of
first offer to lease other space with in the Project, and (3) the right or option to terminate this
Lease prior to its expiration date or to reduce the size of the Premises. Any Option granted to
Tenant by Landlord must be evidenced by a written option agreement attached to this Lease as a
rider or addendum or said option shall be of no force or effect.

          29.2 Options Personal. Each Option granted to Tenant in this Lease, if any,
is personal to the original Tenant and may be exercised only by the original Tenant while occupying
the entire Premises and may not be exercised or be assigned, voluntarily or involuntarily, by or to
any person or entity other than Tenant, including, without limitation, any permitted transferee as
defined in Section 16. The Options, if any, herein granted to Tenant are not assignable separate
and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by
reservation or otherwise. If at any time an Option is exercisable by Tenant, the Lease has been
assigned or a sublease exists as to any portion of the Premises, the Option shall be deemed null
and void and neither Tenant nor any assignee or subtenant shall have the right to exercise the
Option.

          29.3 Multiple Options. In the event that Tenant has multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior Option to extend or
renew this Lease has been so exercised.

          29.4 Effect of Default on Options. Tenant shall have no right to exercise an
Option (i) during the time commencing from the date Landlord gives to Tenant a notice of default
pursuant to Section 17.1 and continuing until the noncompliance alleged in said notice of default
is cured, or (ii) if Tenant is in default of any of the terms, covenants or conditions of this
Lease. The period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant’s inability to exercise an Option because of the provisions of this
Section.

          29.5 Limitations on Options. Notwithstanding anything to the contrary
contained in any rider of addendum to this Lease, any options, rights of first refusal or rights of
first offer granted hereunder shall be subject and secondary to Landlord’s right to first offer and
lease any such space to any tenant who is then occupying or leasing such space at the time the
space becomes available for leasing and shall be subject and subordinated to any other options,
rights of first refusal or rights of first offer previously given to any other person or entity.

          29.6 Guarantees. Notwithstanding anything to the contrary contained in any
rider or addendum to this Lease, Tenant’s right to exercise and the effectiveness of an Option is
conditioned upon Landlord’s receipt frin any prior tenant that has not been expressly released from
liability under this Lease, and any guarantor of any obligation of Tenant under this Lease, of a
written agreement reaffirming such person’s obligations under this Lease or the guaranty, as
modified by Tenant’s exercise of the Option.

     30. Landlord Reservations. Landlord shall have the right: (a) to change the
name and address of the Project or Building upon not less than ninety (90) days prior written
notice; (b) to permit any tenant the exclusive right within the Project to conduct any business as
long as such

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exclusive right does not conflict with any rights expressly given herein; and (c) to place
signs, notices or displays upon the roof, interior or exterior of the Building or Common Areas of
the Project. Landlord reserves the right to use the exterior walls of the Premises, and the area
beneath, adjacent to and above the Premises together with the right to install, use, maintain and
replace equipment, machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Project provided that Landlord’s use does not unreasonably interfere with Tenant’s use
of the Premises, as reasonably determined by Landlord.

     31. Changes to Project. Landlord shall have the right, in Landlord’s sole
discretion, from time to time, to make changes to the size, shape, location, number and extent of
the improvements comprising the Project (hereinafter referred to as “Changes”) including, but not
limited to, the interior and exterior of buildings, the Common Areas, HVAC, electrical systems,
communication systems, fire protection and detection systems, plumbing systems, security systems,
parking control systems, driveways, entrances, parking spaces, parking areas and landscaped areas.
In connection with the Changes, Landlord may, among other things, erect scaffolding or other
necessary structures at the Project, limit or eliminate access to portions of the Project,
including portions of the Common Areas, or perform work in the Building, which work may create
noise, dust or leave debris in the Building. Tenant hereby agrees that such Changes and Landlord’s
actions in connection with such Changes shall in no way constitute a constructive eviction of
Tenant or entitle Tenant to any abatement of rent. Landlord shall have no responsibility or for
any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant’s
business arising from the Changes, nor shall Tenant be entitled to any compensation or damages from
Landlord for any inconvenience or annoyance occasioned by such Changes or Landlord’s actions in
connection with such Changes.

     32. Substitution of Other Premises. Landlord shall have the right at any
time to move Tenant to any other leasable space in the Project provided that said space shall be
approximately the same size as the Premises and that Landlord shall pay the cost of moving Tenant’s
furniture, equipment and trade fixtures to the new space, The new space shall include tenant
improvements that are substantially equivalent to the tenant improvements contained in the
Premises, and the cost of any required tenant improvements shall be paid by Landlord. If Landlord
elects to relocate Tenant, Landlord shall give Tenant written notice of its election, and Tenant
shall have thirty (30) days thereafter to agree to be relocated in accordance with the terms and
conditions of this Section or to elect to terminate this Lease. If Tenant elects to terminate this
Lease within said thirty (30) day period or fails to respond to Landlord’s notice within said
thirty (30) day period, this Lease shall then terminate on the date which is sixty (60) days after
the date Landlord gave Tenant its written notice electing to relocate Tenant. Landlord shall have
no liability to Tenant as a result of Tenant’s election to terminate this Lease. Prior to said
termination, Landlord and Tenant shall perform all of their obligations under this Lease. If
Tenant elects to be relocated, Landlord shall deliver substitute space to Tenant not more than one
hundred eighty (180) days after (a) Tenant agrees to be relocated and (b) Tenant approves plans for
the construction of required tenant improvements at the new space, if any. Tenant shall not
unreasonably withhold, condition or delay its approval of any plans for the construction of tenant
improvements. Landlord shall give Tenant thirty (30) days’ advance notice of the estimated move-in
date. Prior to the date that Tenant is moved to the new space, Tenant shall remain in the Premises
and shall continue to perform all of its obligations under this Lease. After Tenant moves into the
new space, this Lease shall remain in full force and effect and be deemed applicable to such new
space, except as to Base Rent, Tenant’s Percentage Share of Operating Expenses and the number of
parking spaces Tenant shall be entitled to use, all of which shall be adjusted based on the
relationship between the number of leasable square

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feet in the original Premises and the number of leasable square feet in the substituted space.
Upon Tenant’s election to be relocated, Landlord and Tenant shall amend this Lease to provide for
the relocation of the Premises.

     33. Holding Over. If Tenant remains in possession of the Premises or any
part thereof after the expiration or earlier termination of the term hereof with Landlord’s
consent, such occupancy shall be a tenancy from month to month upon all the terms and conditions of
this Lease pertaining to the obligations of Tenant, except that the Base Rent payable shall be the
greater of (a) two hundred percent (200%) of the Base Rent payable immediately preceding the
termination date of this Lease or (b) one hundred twenty-five (125%) of the fair market Base Rent
for the Premises as of the date Tenant holds over, and all Options, if any, shall be deemed
terminated and be of no Further effect. If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof without Landlord’s consent, Tenant shall, at
Landlord’s option, be treated as a tenant at sufferance or a trespasser. Nothing contained herein
shall be construed to constitute Landlord’s consent to Tenant holding over at the expiration or
earlier termination of the Lease term or to give Tenant the right to hold over after the expiration
or earlier termination of the Lease term. Tenant hereby agrees to indemnify, hold Landlord
harmless, and defend Landlord from any cost, lost, claim, or liability (including attorneys’ fees)
and/or damages Landlord may incur arising out of or related to Tenant’s failure to surrender
possession of the Premises to Landlord upon the termination of this Lease.

     34. Landlord’s Access.

          34.1 Access. Landlord and Landlord’s agents, contractors and employees shall
have the right to enter the Premises at reasonable times for the purpose of inspecting the
Premises, performing any services required of Landlord, showing the Premises to prospective
purchasers, lenders or tenants, undertaking safety measures, performing maintenance and making
alterations, repairs, improvements or additions to the Premises or to the Project, including with
respect to other portions of the Building. In the event of an emergency, Landlord may gain access
to the Premises by any reasonable means, and Landlord shall not be liable to Tenant for damage to
the Premises or to Tenant’s property resulting from such access. Landlord may at any time place on
or about the Building “for sale” or “for lease”, signs and Landlord may at any time during the last
one hundred twenty (120) days of the term hereof place on or about the Premises “for lease” signs.
Subject to the other terms and conditions of the Lease, Landlord shall use reasonable efforts to
provide Tenant with access to the Premises through the storefront entry doors twenty-four (24)
hours a day, three hundred sixty-five (365) days per year. Notwithstanding the foregoing, Tenant
acknowledges and agrees that repairs, hazardous conditions and circumstances beyond Landlord’s
control may prevent access to the Premises from time to time.

          34.2 Keys. Landlord shall have the right to retain keys to the locks on the
entry doors to the Premises and all interior doors at the Premises.

     35. Security Measures. Tenant hereby acknowledges that Landlord shall have
no obligation whatsoever to provide guard service or other security measures for the benefit of the
Premises or the Project, and Landlord shall have no liability to Tenant due to its failure to
provide such services. Tenant assumes all responsibility for the protection of Tenant, its agents,
employees, contractors and invitees and the property of Tenant and of Tenant’s agents, employees,
contractors and invitees from acts of third parties. Nothing herein contained shall prevent
Landlord, at Landlord’s sole option, from implementing security measures for the Project or any
part thereof, in

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which event Tenant shall participate in such security measures and the cost thereof shall be
included within the definition of Operating Expenses, and Landlord shall have no liability to
Tenant and its agents, employees, contractors and invitees arising out of Landlord’s negligent
provision of security measures. Landlord shall have the right, but not the obligation, to require
all persons entering or leaving the Project to identify themselves to a security guard and to
reasonably establish that such person should be permitted access to the Project.

     36. Easements. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or desirable, and to
cause the recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by
Tenant. Tenant shall sign any of the aforementioned documents within ten (10) days after
Landlord’s request, and Tenant’s failure to do so shall constitute a material default by Tenant.
The obstruction of Tenant’s view, air or light by any structure erected in the vicinity of the
Project, whether by Landlord or third parties, shall in not way affect this Lease or impose any
liability upon Landlord.

     37. Transportation Management. Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental or
quasi-governmental entity or Landlord to manage parking, transportation, air pollution or traffic
in and around the Project or the metropolitan area in which the Project is located.

     38. Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the validity of any other
provision hereof.

     39. Time of Essence. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.

     40. Definition of Additional Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base Rent, Tenant’s
Percentage Share of Operating Expenses and late charges shall be deemed to be rent.

     41. Incorporation of Prior Agreements. This Lease and the attachments listed
in Section 1.15 contain all agreements of the parties with respect to the lease of the Premises and
any other matter mentions herein. No prior or contemporaneous agreement or understanding
pertaining to any such matter shall be effective. Except as otherwise stated in this Lease, Tenant
hereby acknowledges that no real estate broker nor Landlord nor any employee or agents of any of
said persons has made any oral or written warranties or representations to Tenant concerning the
condition or use by Tenant of the Premises or the Project or concerning any other matter addressed
by this Lease.

     42. Amendments. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.

     43. Notices. All notices required or permitted by this Lease shall be in
writing and may be delivered (a) in person (by hand, by messenger or by courier service), (b) by
U.S. Postal Service regular mail, (c) by U.S. Postal Service certified mail, return receipt
requested, (d) by U.S. Postal Service Express Mail, Federal Express or other overnight courier, or
(e) by facsimile transmission, and shall be deemed sufficiently given if served in a manner
specified in this Section. Any notice permitted or required hereunder, and any notice to pay rent
or quit or similar notice, shall be deemed

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personally delivered to tenant on the date the notice is personally delivered to any employee
of Tenant at the Premises. The addresses set forth in Section 1.16 of this Lease shall be the
address of each party for notice purposes. Landlord or Tenant may by written notice to the other
specify a different address for notice purposes, except that upon Tenant’s taking possession of the
Premises, the Premises shall constitute Tenant’s address for the purpose of mailing or delivering
notices to Tenant. A copy of all notices required or permitted to be given to Landlord hereunder
shall be concurrently transmitted to such party or parties at such addresses as Landlord may from
time to time hereinafter designate by written notice to Tenant. Any notice sent by regular mail or
by certified mail, return receipt requested, shall be deemed given three (3) days after deposited
with the U.S. Postal Service. Notices delivered by U.S. Express Mail, Federal Express or other
courier shall be deemed given on the date delivered by the carrier to the appropriate party’s
address for notice purposes. If any notice is transmitted by facsimile transmission, the notice
shall be deemed delivered upon telephone confirmation of receipt of the transmission thereof at the
appropriate party’s address for notice purposes. A copy of all notices delivered to a party by
facsimile transmission shall also be mailed to the party on the date the facsimile transmission is
completed. If notice is received on Saturday, Sunday or a legal holiday, it shall be deemed
received on the next business day. Nothing contained herein shall be construed to limit Landlord’s
right to serve any notice to pay rent or quit or similar notice by any method permitted by
applicable law, and any such notice shall be effective if served in accordance with any method
permitted by applicable law whether or not the requirements of this Section have been met.

     44. Waivers. No waiver by Landlord or Tenant of any provision hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach by land lord or tenant
of thee same or any other provision. Landlord’s consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Landlord’s consent to or approval of any subsequent
act by Tenant. The acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, 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. No acceptance by Landlord of partial payment of any sum due from Tenant
shall be deemed a waiver by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be deemed an accord and
satisfaction. Tenant hereby waives California Code of Civil Procedure Section 1179 and Civil Code
Section 3275 which allow tenants to obtain relief from the forfeiture of a lease. Tenant hereby
waives for Tenant and all those claiming under Tenant all rights now or hereafter existing to
redeem by order or judgment of any court or by legal process or writ Tenant’s right of occupancy of
the Premises after any termination of this Lease.

     45. Covenants. This Lease shall be construed as though Landlord’s covenants
contained herein are independent and not dependent and Tenant hereby waives the benefit of any
statute to the contrary. All provisions of this Lease to be observed or performed by Tenant are
both covenants and conditions.

     46. Binding Effect, Choice of Law. Subject to any provision hereof
restricting assignment or subletting by Tenant, this Lease shall bind the parties, their heirs,
personal representatives, successors and assigns. This Lease shall be governed by the laws of the
state in which the Project is located, and any litigation concerning this Lease between the parties
hereto shall be initiated in the county in which the Project is located.

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     47. Attorneys’ Fees. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such action, or appeal
thereon, shall be entitled to its reasonable attorneys’ fees and court costs to be paid by the
losing party as fixed by the court in the same or separate suit, and whether or not such action is
pursued to decision or judgment. The attorneys’ fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees and court
costs reasonably incurred in good faith. Landlord shall be entitled to reasonable attorneys’ fees
and all other costs and expenses incurred in the preparation and service of notices of default and
consultations in connection therewith, whether or not a legal action is subsequently commenced in
connection with such default. Landlord and Tenant agree that attorneys’ fees incurred with respect
to defaults and bankruptcy are actual pecuniary losses within the meaning of Section 365(b)(1)(B)
of the Bankruptcy Code or any successor statute.

     48. Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction or going-out-of-business sale upon the Premises or the
Common Areas.

     49. Merger. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in the merger of
Landlord’s and Tenant’s estates and shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all
of such subtenancies.

     50. Quiet Possession. Subject to the other terms and conditions of this
Lease, and the rights of any lender, and provided Tenant is not in default hereunder, Tenant shall
have quiet possession of the Premises for the entire term hereof subject to all of the provisions
of this Lease.

     51. Authority. If Tenant is a corporation, trust, limited liability company,
limited liability partnership or general or limited partnership, Tenant, and each individual
executing this Lease on behalf of such entity, represents and warrants that such individual is duly
authorized to execute and deliver this Lease on behalf of said entity, that said entity is duly
authorized to enter into this Lease, and that this Lease is enforceable against said entity in
accordance with its terms. If Tenant is a corporation, trust, limited liability company, limited
liability partnership or other partnership, Tenant shall deliver to Landlord upon demand evidence
of such authority satisfactory to Landlord.

     52. Conflict. Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, exhibits, addenda or riders of this Lease and the
typewritten or handwritten provisions, if any, shall be controlled by the typewritten or
handwritten provisions.

     53. Multiple Parties. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility of all persons or
entities named herein as Tenant. Service of a notice in accordance with Section 43 on one Tenant
shall be deemed service of notice on all Tenants.

     54. Interpretation. This Lease shall be interpreted as if it was prepared by
both parties, and ambiguities shall not be resolved in favor of Tenant because all or a portion of
this Lease was prepared by Landlord. The captions contained in this Lease are for convenience only
and shall not be deemed to limit or alter the meaning of this Lease. As used in this Lease, the
words tenant and

43

 

landlord include the plural as well as the singular. Words used in the neuter gender include
the masculine and feminine gender.

     55. Prohibition Against Recording. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant. Landlord shall have the right to record a memorandum of
this Lease, and Tenant shall execute, acknowledge and deliver to Landlord for recording any
memorandum prepared by Landlord.

     56. Relationship of Parties. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the relationship of principal
and agent, partnership, joint venturer or any association between Landlord and Tenant.

     57. Rules and Regulations. Tenant agrees to abide by and conform to the
Rules and to cause its employees, suppliers, customers and invitees to so abide and conform.
Landlord shall have the right, from time to time, to modify, amend and enforce the Rules in a
nondiscriminatory manner. Landlord shall not be responsible to Tenant for the failure of other
persons, including, but not limited to, other tenants, their agents, employees and invitees, to
comply with the Rules.

     58. Right To Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in its sole discretion shall determine, and Tenant is
not relying on any representation that any specific tenant or number of tenants will occupy the
Project.

     59. Confidentiality. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute proprietary information of Landlord. Disclosure of the terms
hereof could adversely affect the ability of Landlord to negotiate other leases with respect to the
Project and may impair Landlord’s relationship with other tenants of the Project. Tenant agrees
that it and its partners, officers, directors, employees, brokers, and attorneys, if any, shall not
disclose the terms and conditions of this Lease to any other person or entity without the prior
written consent of Landlord, which may be given or withheld by Landlord, in Landlord’s sole
discretion. It is understood and agreed that damages alone would be an inadequate remedy for the
breach of this provision by Tenant, and Landlord shall also have the right to seek specific
performance of this provision and to seek injunctive relief to prevent its breach or continued
breach.

     60. Waiver Of Jury Trial. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY
ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST
LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANTS USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION, EMERGENCY
OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

     LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND
VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE
TERMS OF THIS LEASE ARE COMMERCIALLY

44

 

REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT OT THE
PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED
BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD’S
AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE THE
PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE PREMISES. THIS LEASE SHALL
BECOME BINDING UPON LANDLORD ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS
DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	LANDLORD:	 	 	 	TENANT:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FSP Telecom Business Center Limited 

Partnership, a Massachusetts limited
partnership	 	 	 	MD3 Incorporated

a California corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	FSP Holdings, LLC, its general partner	 	 	 	By:	 	/s/ Richard Poinsett	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	Richard Poinsett	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	VP/GM	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ George J. Carter	 	 	 	By:	 	/s/ Vicky Leptein	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	George J. Carter
	 	 	 	 	 	Name:
	 	/s/ Vicky Leptein	 	 
	 

	 	Title:
	 	President
	 	 	 	 	 	Title:
	 	VP Finance/Secretary	 	 

 

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

45

 

EXHIBIT A

PREMISES

5751 Copley Drive, Suite B

San Diego, California 92111

A-1

 

EXHIBIT B

LEASE CLARIFICATION CERTIFICATION

     This Lease Clarification Certification, dated for reference purposes as of January 23, 2002,
is entered into with reference to that certain Telecom Business Center NNN Lease (“Lease”) dated
for reference purposes as of December 18, 2001, entered into by and between FSP Telecom Business
Center Limited Partnership, a Massachusetts limited partnership (“Landlord”), as landlord and MD3,
Inc., a California corporation, as tenant, relating to the premises located at 5751 Copley Drive,
Suite B, San Diego, California.

     Although the Lease inadvertently identified the “Tenant” thereunder as “MD3, Incorporated”,
the actual identity of the Tenant under the Lease is “MD3, Inc.” The undersigned, MD3, Inc., a
California corporation hereby, represents, warrants and certifies to Landlord that the current
identity of the entity which entered into the Lease as the Tenant thereunder is MD3, Inc. The
undersigned hereby agrees to be bound by all of the provisions of the Lease, as the Tenant
thereunder.

	 	 	 	 	 
	 	MD3, Inc.

a California corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-1

 

	 	 	 	 	 

EXHIBIT C

RULES AND REGULATIONS

GENERAL RULES

     Tenant shall faithfully observe and comply with the following Rules and Regulations:

     1. Tenant shall not alter any locks or install any new or additional locks or bolts on any
doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall
bear the cost of any lock changes or repairs required by Tenant.

     2. Access to the Project may be refused unless the person seeking access has proper
identification or has a previously received authorization for access to the Project. Landlord and
its agents shall in no case be liable for damages for any error with regarding to the admission to
or exclusion from the Project of any person. In case of invasion, mob, riot, public excitement or
other commotion, Landlord reserves the right to prevent access to the Project during the
continuance thereof by any means it deems appropriate for the safety and protection of life and
property.

     3. No cooking shall be done or permitted on the Premises, nor shall the Premises be used for
any improper, objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters’
Laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and
brewing coffee, tea, hot chocolate and similar beverages for employees and visitors of Tenant,
provided that such use is in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations; and provided further that such cooking does not result in odors
escaping from the Premises.

     4. No boring or cutting for wires shall be allowed without the consent of Landlord. Tenant
shall not install any radio or television antenna, satellite dish, loudspeaker or other device on
the roof or exterior walls of the Building. Tenant shall not interfere with broadcasting or
reception from or in the Project or elsewhere.

     5. Landlord reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of these Rules and Regulations.

     6. Tenant shall store all its trash and garbage within the interior of the Premises or in
other locations approved by Landlord, in Landlord’s sole discretion. No material shall be placed
in the trash boxes or receptacles if such material is of such nature that it may not be disposed of
in the ordinary and customary manner of removing and disposing of trash in the vicinity of the
Project without violation of any law or ordinance governing such disposal.

     7. Tenant shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency.

     8. Subject to Sections 4.1 (Compliance With Laws), 13 (Alterations And Surrender), and 19
(Indemnity) and the other terms and conditions of the Lease, Tenant and Tenant’s agents,
contractors and employees shall have reasonable access to the roof for purposes of inspecting the
Premises, performing any services required of Tenant, and making alterations, repairs or

C-1

 

improvements to the equipment that specifically serves Tenant’s Premises. Tenant shall
coordinate any such roof access with Landlord or Landlord’s agent.

PARKING RULES

     1. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant’s employees suppliers, shippers, customers or invitees to be loaded, unloaded or parked in
areas other than those designated by Landlord for such activities and at times approved by
Landlord. Users of the parking area will obey all posted signs and park only in the areas
designated for vehicle parking. Tenant and its customers, employees, shippers and invitees shall
comply with all rules and regulations adopted by Landlord from time to time relating to truck
parking and/or truck loading and unloading.

     2. Landlord reserves the right to relocate all or a part of parking spaces within the parking
area.

     3. Landlord will not be responsible for any damage to vehicles, injury to persons or loss of
property, all of which risks are assumed by the party using the parking area.

     4. The maintenance, washing, waxing or cleaning of vehicles in the parking area or Common
Areas is prohibited.

     5. Tenant shall be responsible for seeing that all of its employees, agents, contractors and
invitees comply with the applicable parking rules, regulations, laws and agreements.

     6. At Landlord’s request, Tenant shall provide Landlord with a list which includes the name of
each person using the parking facilities based on Tenant’s parking rights under this Lease and the
license plate number of the vehicle being used by that person. Tenant shall provide Landlord with
an updated list within five (5) days after any part of the list becomes inaccurate.

     Landlord reserves the right at any time to change or rescind any one or more of these Rules
and Regulations, or to make such other and further reasonable Rules and Regulations as in
Landlord’s judgment may from time to time be necessary for the management, safety, care and
cleanliness of the Project, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord may waive any one or more of these
Rules and Regulations for the benefit of any particular tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor
prevent Landlord from thereafter enforcing any such Rules or regulations against any or all tenants
of the Project. Tenant shall be deemed to have read these Rules and Regulations and to have agreed
to abide by theme as a condition of its occupancy of the Premises.

C-2

 

EXHIBIT D

Form of HazMat Certificate

GENERAL INFORMATION

Name of
Responding Company: MD 3 Inc.

Mailing Address: 5751 Copley Drive, Suite B, San Diego CA 92101

Signature:
/s/ Richard Poinsett

Title: VP/GM Phone:                                         

Date: 1-3-02 Age of Facility:                      Length of Occupancy:                     

Major products manufactured and/or activities conducted on the property: Coronary artery stents, medical device manufacturing

	 	 	 

	Type of Business Activity(ies):

	 	Hazardous Materials Activities:
	 

	 	 
	(check all that apply)

	 	(check all that apply)
	 
	 	 
	þ machine shop

	 	o degreasing
	þ light assembly

	 	o chemical/etching/milling
	þ research and development

	 	o wastewater treatment
	o product service or repair

	 	o painting
	o photo processing

	 	o striping
	o automotive service and repair

	 	þ cleaning — small ultrasonic bath
	þ manufacturing

	 	o printing
	þ warehouse

	 	o analytical lab
	o integrated/printed circuit

	 	o plating
	þ chemical/pharmaceutical product

	 	o chemical/missing/synthesis
	 

	 	o silkscreen
	 

	 	o lathe/mill machining
	 

	 	o deionizer water product
	 

	 	o photo masking
	 

	 	o wave solder
	 

	 	o metal finishing

D-1

 

HAZARDOUS MATERIALS/WASTE HANDLING AND STORAGE

     A. Are hazardous material handled on any of your shipping and receiving docks in
container quantities greater than on gallon? þ Yes o No

     B. If Hazardous materials or waste are stored on the premises, please check off the
nature of the storage and type(s) of materials below:

	 	 	 

	Type of Storage Container:

	 	Type of Hazardous Materials and/or Waste Storage:
	 

	 	 
	(check all that apply)

	 	(check all that apply)
	 
	 	 
	þ 1 gallon or 3 liter bottles/cans (alcohol)

	 	o acid
	o 5 to 30 gallon carboys

	 	o phenol
	o 55 gallon drums

	 	o caustic/alkaline cleaner
	o tanks

	 	o cyanide
	þ compressed gas cylinders

	 	o photo resist stripper
	 

	 	þ paint — small quantities (maint. purposes only)
	 

	 	o flammable solvent
	 

	 	o gasoline/diesel fuel
	 

	 	þ
nonflammable/chlorinated solvent oil/cutting fluid — small
quantities

	 

	 	o (maint. purposes only)

     C. Do you accumulate hazardous waste onsite? o Yes þ No

     If yes, how is it being handled?

	 	 	 

	o on-site treatment or recovery
	 	 
	o discharged to sewer
	 	 
	o hauled offsite

	 	if hauled offsite, by whom o
	o incineration
	 	 

     D. Indicate your hazardous waste storage status with Department of Health Services:

	 	 	 

	o generator

	 	 
	o interim status facility
	 	 
	o permitted TSDF
	 	 
	þ none of the above
	 	 

D-2

 

WASTEWATER TREATMENT/DISCHARGE

     A. Do you discharge industrial wastewater to:

	 	 	 

	o sewer

	 	 
	o storm drain
	 	 
	o surface water
	 	 
	þ no industrial discharge
	 	 

     B. Is your industrial wastewater treated before discharge? N/A o Yes o No

     If yes, what type of treatment is being conducted?

	 	 	 

	o neutralization

	 	 
	o metal hydroxide formation
	 	 
	o closed-loop treatment
	 	 
	o cyanide destruct
	 	 
	o HF treatment
	 	 
	o other
	 	 

SUBSURFACE CONTAINMENT OF HAZARDOUS MATERIALS/WASTES

     A. Are buried tanks/sumps being used for any of the following: N/A

	 	 	 

	o hazardous waste storage

	 	 
	o chemical storage
	 	 
	o gasoline/diesel fuel storage
	 	 
	o waste treatment
	 	 
	o wastewater neutralization
	 	 
	o industrial wastewater treatment
	 	 
	þ none of the above
	 	 

     B. If buried tanks are located onsite, indicate their construction: N/A

	 	 	 	 	 

	o steel

	 	o fiberglass
	 	o concrete
	o inside open vault

	 	o double walled	 	 
	o

	 	o	 	 
	o

	 	o	 	 
	o

	 	o	 	 
	o

	 	o	 	 
	o

	 	o	 	 

     C. Are hazardous materials or untreated industrial wastewater transported via buried
piping to tanks, process areas or treatment areas? o Yes þ No

     D. Do you have wet floors in your process areas? o Yes þ No

D-3

 

	 	 	 

	If yes, name processes:

	 	 
	 

	 	 

     E. Are abandoned underground tanks or sumps located on the property? o Yes þ No

HAZARDOUS MATERIALS SPILLS

     A. Have hazardous materials ever spilled to:

	 	 	 

	o the sewer

	 	 
	o the storm drain
	 	 
	o onto the property
	 	 
	þ no spills have occurred
	 	 

     B. Have you experienced any leaking underground tanks or sumps? N/A oYes þ No

     C If spills have occurred, were they reported? oYes o No

     Check which the government agencies that you contacted regarding the spill(s):

	 	 	 

	o Department of Health Services

	 	 
	o Department of Fish and Game
	 	 
	o Environmental Protection Agency
	 	 
	o Regional Water Quality Control Board
	 	 
	o Fire Department
	 	 

     D. Have you been contacted by a government agency regarding soil or groundwater
contamination on your site? o Yes þ No

     Do you have exploratory wells onsite? o Yes þ No

     If yes, indicate the following:

     Number of wells: o Approximate depth of wells: o Well diameters: o

D-4

 

     PLEASE ATTACH ENVIRONMENTAL REGULATORY PERMITS, AGENCY REPORTS THAT APPLY TO YOUR OPERATION
AND HAZARDOUS WASTE MANIFESTS.

     Check off those enclosed:

	 	 	 

	o Hazardous Materials Inventory Statement, HMIS

	 	 
	o Hazardous Materials Management Plan, HMMP
	 	 
	o Department of Health Services, Generator Inspection Report
	 	 
	o Underground Tank Registrations
	 	 
	o Industrial Wastewater Discharge Permit
	 	 
	o Hazardous Waste Manifest
	 	 
	þ Health Permit
	 	 

D-5

 

D-6

 

EXHIBIT E

WORK LETTER AGREEMENT

(Improvement Allowance)

     This Work Letter Agreement (“Agreement”), dated for reference purposes only December 18, 2001,
is entered into by and between FSP TELECOM BUSINESS CENTER LIMITED PARTNERSHIP, A MASSACHUSETTS
LIMITED PARTNERSHIP (“Landlord”) and MD3, INCORPORATED, A CALIFORNIA CORPORATION
(“Tenant”). Concurrently with the execution of this Agreement, Landlord and Tenant have entered
into a Telecom Business Center NNN Lease of even date herewith (the “Lease”) covering certain
premises (the “Premises”) more particularly described in Exhibit “A” attached to the Lease. In
consideration of the mutual covenants hereinafter contained, Landlord and Tenant hereby agree as
follows:

     1. Tenant Improvement Coordinator. Within three (3) days after this Agreement is
executed by Landlord and Tenant, Landlord and Tenant shall each designate in writing the name of
one person who shall be that party’s tenant improvement representative. All communication
concerning the tenant improvements shall be directed to the appropriate party’s tenant improvement
representative. Tenant shall not have the right or authority to instruct Landlord’s contractor to
take any action. Any action Tenant desires Landlord’s contractor to take shall be communicated by
Tenant to Landlord’s tenant improvement representative, and Landlord’s tenant improvement
representative shall give the necessary instructions to the contractor.

     2. Plans And Specifications.

          2.1 Space Plan. Within ten (10) days after the execution of the Lease, Tenant shall
submit to Landlord for approval a detailed space plan (“Space Plan”) for the Premises which shall
include without limitation, the location of doors, partitions, electrical and telephone outlets,
plumbing fixtures, heavy floor loads and other special requirements. Landlord reserves the right
to require Tenant to use Landlord’s architect and/or space planner. Landlord agrees to cooperate
with Tenant and its design representatives in connection with the preparation of the Space Plan.
Within a reasonable period after receipt by Landlord of the Space Plan, Landlord (i) shall give its
written approval with respect thereto, or (ii) shall notify Tenant in writing of its disapproval
and state with specificity the grounds for such disapproval and the revisions or modifications
necessary in order for Landlord to give its approval. Within three (3) days following Tenant’s
receipt of Landlord’s disapproval, Tenant shall submit to Landlord for approval the requested
revisions or modifications. Within a reasonable period following receipt by Landlord of such
revisions or modifications, Landlord shall give its written approval with respect thereto or shall
request other revisions or modifications therein (but relating only to the extent Tenant has failed
to comply with Landlord’s earlier requests), and any time delay incurred in the approval of the
Space Plan from the date of this second notice of disapproval shall constitute Tenant Delay (as
that term is defined in section 7 hereof). The preceding sentence shall be implemented repeatedly
until Landlord gives its approval to Tenant’s Space Plan.

          2.2 Plans. Based on the approved Space Plan, Tenant shall cause to be prepared and
to be submitted to Landlord for approval detailed plans, specifications and working drawings
(“Plans”) for the construction of Tenant’s leasehold improvements to the Premises (“Improvements”).
Landlord reserves the right require Tenant to use Landlord’s space planner, architect and/or
engineer. As used herein, the term “Improvements” shall include all non-base

E-1

 

building work to be done in the Premises pursuant to the Plans, including, but not limited to:
demolition work, partitioning, doors, ceiling, floor coverings, wall finishes (including paint and
wallcoverings), window coverings, electrical (including lighting, switching, telephones, outlets,
computer and special electrical equipment, etc.), plumbing, heating, ventilating and air
conditioning, fire protection, cabinets and other millwork. If Tenant has leased an entire floor,
the Improvements shall include finished toilet rooms, corridors and elevator vestibules. Tenant
shall submit the Plans to Landlord for approval within ten (10) days following Landlord’s approval
of the Space Plan. Within a reasonable period after receipt by Landlord of the Plans, Landlord
(i) shall give its written approval with respect thereto, or (ii) shall notify Tenant in writing of
its disapproval and state with specificity the grounds for such disapproval and the revisions or
modifications necessary in order for Landlord to give its approval. Within five (5) days following
Tenant’s receipt of Landlord’s disapproval, Tenant shall submit to Landlord for approval the
requested revisions or modifications. Within a reasonable period following receipt by Landlord of
such revisions or modifications, Landlord shall give its written approval with respect thereto or
shall request other revisions or modifications therein (but relating only to the extent Tenant has
failed to comply with Landlord’s earlier requests), and any time delay incurred in the approval of
the Plans from the date of this second notice of disapproval shall constitute Tenant Delay. The
preceding sentence shall be implemented repeatedly until Landlord gives its approval to Tenant’s
Plans. After approval of the Plans by Landlord, no further changes to the Plans shall be made
without the prior written approval of Landlord and only after Tenant agreeing that any delays in
design and/or construction resulting from such change shall constitute a Tenant Delay. Tenant
acknowledges that Landlord’s review and approval of the Plans is not conducted for the purpose of
determining the accuracy and completeness of the Plans, their compliance with applicable codes and
governmental regulations or their sufficiency for purposes of obtaining a building permit, all of
which shall remain the responsibility of Tenant and Tenant’s architect. Accordingly, Landlord
shall not be responsible for any delays in obtaining the building permit due to the insufficiency
of the Plans or any delays due to changes in the Plans required by the applicable governmental
regulatory agencies reviewing the Plans, which delays shall constitute Tenant Delay.

     3. Specifications For Building Standard Improvements. Specifications and details for
building standard improvements (“Standards”) are available from Landlord. Except as specified in
section 4 below, the Space Plan and Plans shall be consistent with the Standards, and no deviations
shall be permitted from the Standards without Landlord’s consent as set forth in section 4 below.

     4. Grounds For Disapproval. Tenant may request deviations from the Standards for
Improvements provided that the deviations (“Non-Standards”) shall not be of lesser quality than the
Standards. Landlord shall not be required to approve any Non-Standards that are not acceptable to
Landlord, in Landlord’s sole and absolute discretion.

     5. Improvement Cost And Allowance.

          5.1 Cost Breakdown. Within a reasonable period following approval of the Plans,
Landlord shall provide Tenant with a breakdown of the estimated total cost of the Improvements
(“Cost Breakdown”), including, without limitation: construction cost of the Improvements;
architectural and engineering fees relating to the preparation and review of the Space Plan and the
Plans (inclusive of all design work above and below the ceiling); governmental agency plan check,
permit and other fees; sales and use taxes; testing and inspection costs; and construction fees
(including general contractor’s overhead and supervision fees and the construction supervisory

E-2

 

fee referred to in section 6.3 hereof). With five (5) days after receipt by the Tenant of the
Cost Breakdown, Tenant shall either approve the same in writing or shall provide Landlord with a
detailed list of revisions to the approved Plans, and any time delay incurred in the approval of
the Cost Breakdown from the date of Landlord’s receipt of Tenant’s list of revisions to the
approved Plans shall constitute Tenant Delay. The Cost Breakdown shall not include the cost of
computer or telephone writing or any cost of purchasing furniture, fixture or equipment
(collectively, “FF&E”), and the cost of all FF&E shall be paid by Tenant, at Tenant’s sole expense.
References to or depictions of FF&E on the space Plan or the Plans shall not be interpreted to
entitle Tenant to use any portion of the Improvement Allowance (as defined below) to pay costs or
expenses associated with the purchase or installation of FF&E.

          5.2 Improvement Allowance. Landlord hereby grants to Tenant an “Improvement
Allowance” of Twenty-Five Thousand Five Hundred Ninety-Eight dollars and No Cents ($25,598.00),
which Improvement Allowance shall be used only for the items specified in the Cost Breakdown. In
the event that the Cost Breakdown exceeds the Improvement Allowance, Tenant shall pay to Landlord
the sum in excess of the Improvement Allowance by cashier’s check, which payment shall be made
within five (5) days of Landlord’s notice to Tenant that Landlord is prepared to commence
construction.

          5.3 Cost Increases. In the event that the cost of the improvements increases
subsequent to Tenant’s approval of the Cost Breakdown due to the requirements of any governmental
agency imposed with respect to the construction of the Improvements or due to any other
unforeseeable circumstances, tenant shall pay to Landlord the amount of such increase within
five(5) days of Landlord’s written notice; provided, however, that Landlord shall first apply
toward such increase any remaining balance in the Improvement Allowance.

          5.4 Change in Plans. In the event that Tenant requests a change in the Plans
subsequent to approval of the Cost Breakdown, Landlord shall advise Tenant as to any increases in
the cost of the Improvements and as to any delay such change would cause in the construction of the
Improvements, which delay would constitute a Tenant Delay. Tenant shall approve or disapprove such
change within five (5) days of written notice. In the event that Tenant approves such change,
Tenant shall accompany its approval with payment in the amount of the increase; provided however,
that Landlord shall first apply toward such increase any remaining balance in the Improvement
Allowance. Landlord shall have the right to decline Tenant’s request for a change in the approved
Plans if the change is inconsistent with sections 2, 3 or 4 above, or if the change would, in
Landlord’s sole opinion, delay construction of the Improvements.

          5.5 No Refund. If the actual cost of the Improvements does not exceed the
Improvement Allowance, the unused portion of the of the Improvement Allowance shall not be paid or
refunded to Tenant or be available to Tenant as a credit against any obligations of Tenant under
the Lease.

     6. Construction Of Improvements.

          6.1 Construction. Within a reasonable period following approval of the cost
Breakdown by Tenant, and upon payment of any sum required under section 5.2 above, Landlord shall
instruct its contractor to secure a building permit and commence construction. Landlord shall in
its sole discretion, select the general contractor to construct the Improvements. The general
contractor shall have general conditions and fees competitive to the market.

E-3

 

          6.2 Completion. Landlord shall endeavor to cause the contractor to substantially
complete construction of the Improvements in a diligent manner, but Landlord shall not be liable
for any loss or damage as a result of delays in construction or delivery of possession of the
Premises.

          6.3 Construction Supervisory Fee. The cost of the Improvements shall include a
construction supervisory fee equal to three percent (3%) of the total cost of constructing the
Improvements.

     7. Commencement Date. The Commencement Date under the Lease shall be governed by
section 3 of the Lease. However, if there shall be a delay (“Tenant Delay”) beyond the
Commencement Date in the substantial completion of the Improvements as a result of:

          7.1 Tenant’s failure to submit or revise the Space Plan within the time limits provided
herein;

          7.2 Tenant’s failure to submit or revise the Plans within the time limits provided herein:

          7.3 Tenant’s failure to approve the Cost Breakdown or to pay the sum specified in section 5.2
above within the time limits provided herein;

          7.4 Tenant’s request for Non-Standards, whether as to materials or installation, that extend
the time it takes to obtain necessary building permits or other governmental authorizations or
construction period;

          7.5 Insufficiency of the Plans that extend the time it takes to obtain necessary building
permits or other governmental authorizations or changes in the Plans required by the applicable
governmental regulatory agencies reviewing the Plans;

          7.6 Tenant’s changes in the Plans after the approval by Landlord; or

          7.7 Any other act or omission of Tenant constituting a Tenant delay under the terms of this
Agreement.

     8. Damages for Tenant Delay. Tenant shall pay to Landlord an amount equal to one
thirtieth (1/30th) of the Base Rent due for the first full calendar moth of the Lease term for each
day of Tenant Delay. For purposes of the foregoing calculation, the Base Rent payable for the
first full calendar months of the term of this Lease shall not be reduced by any abated rent,
conditionally waived rent, free rent or similar rental concessions, if any. Landlord and Tenant
agree that the foregoing payment constitutes a fair and reasonable estimate of the damages Landlord
will incur as the result of a Tenant Delay. Within thirty (30) days after Landlord tenders
possession of the Premises to Tenant, Landlord shall notify tenant of Landlord’s reasonable
estimate of the date Landlord could have delivered possession of the Premises to Tenant but for the
Tenant Delays. After delivery of said notice, Tenant shall immediately pay to Landlord the amount
described above for the period of Tenant Delay.

     9. Incorporation. This Agreement is and shall be incorporated by reference in the
Lease, and all of the terms and conditions of the Lease are and shall be incorporated herein by
this reference.

E-4

 

Exhibit F

Addendum to Telecom Business Center NNN Lease (the “Lease”)

dated the 18th day of December, 2001 Between

FSP TELECOM BUSINESS CENTER LIMITED PARTNERSHIP (“Landlord”) and

MD3, INCORPORATED (“Tenant”)

     It is hereby agreed by Landlord and Tenant that the provisions of this Addendum are a part of
the lease. If there is a conflict between the terms and conditions of this Addendum and the terms
and conditions of the Lease, the terms and conditions of this Addendum shall control. Capitalized
terms in this Addendum shall have the same meaning as capitalized terms in the Lease, and, if a
Work Letter Agreement is attached to this Lease, as those terms have been defined in the Work
Letter Agreement.

1. Letter of Credit — Provision for Lease and Forms of Letter of Credit.

          (a) Delivery of Letter of Credit. Concurrently with Tenant’s execution and delivery
of this Lease, and as a condition to Landlord’s obligations under the Lease, Tenant covenants and
agrees to deliver to Landlord an irrevocable standby letter of credit (the “L/C”) in the form of,
and upon all of the terms and conditions contained in, Exhibit “G” attached hereto and incorporated
herein by reference. The L/C shall be issued by an institutional lender of good financial standing
(which lender shall, in any event, have assets equal to or exceeding $500,000,000 as of the date of
issuance of the L/C), having a place of business where the L/C can be presented for payment in San
Diego, California. The lender shall be subject to Landlord’s prior written approval, not to be
unreasonably withheld or delayed. The L/C shall provide for one (1) or more draws by Landlord or
its transferee up to the aggregate amount of US $215,940.00 (the “L/C Amount”) on the terms and
conditions of Exhibit “F”, which L/C shall secure the payment and performance of Tenant’s
obligations under the Lease. Partial draws shall be permitted.

          (b) Renewal of L/C. Tenant shall maintain the L/C in effect from the date of Tenant’s
execution of this Lease until Tenant shall have performed all of its obligations under the Lease
(said period is hereinafter referred to as the “L/C Term”). If the expiration date of the L/C (or
any renewal or replacement L/C provided pursuant to this Addendum section) occurs prior to the end
of the L/C Term, then Tenant shall deliver to Landlord a renewal of the L/C or a replacement L/C
meeting all of the terms and conditions of this Addendum section, not later than sixty (60) days
prior to the then-applicable expiration date. Each L/C provided pursuant to this Addendum section
shall have an expiration date of the L/C is less than one (1) year from such L/C’s date of issue
except where the then-applicable expiration date of the L/C is less than one (1) year from the end
of the L/C Term, in which case the renewal or replacement L/C shall be for such lesser period. The
issuing bank’s agreement to place an automatic renewal provision in the L/C, as required pursuant
to said Exhibit “F”, shall not relieve or release Tenant from its obligation to provide a renewal
or replacement L/C on the terms hereinabove stated, it being understood that any such automatic
renewal is an independent obligation of the issuing bank which is intended for Landlord’s sole
benefit. If Tenant fails to provide the renewal or replacement L/C not later than sixty (60) days
prior to the then-applicable, stated expiration date (excluding automatic renewal provisions), such
failure shall be a default by Tenant, and Landlord shall have the right, without notice or demand,
to draw upon the entire remaining proceeds of the L/C.

F-1

 

          (c) Breach of Lease. If Tenant fails to perform any of its obligations under the
Lease or this Addendum section, Landlord may, without notice or demand, draw upon the entire
remaining proceeds of the L/C.

          (d) Application of L/C Proceeds. All amounts drawn under the L/C may, in Landlord’s
sole discretion: (i) be held and applied by Landlord as a cash security deposit in accordance with
section 7 of the Lease and/or (ii) be applied to payment of the Base Rent, Tenant’s Share of
increases in Operating Expenses and other amounts then due and owing to Landlord pursuant to the
Lease and/or to future Base Rent, Tenant’s Share of increases in Operating Expenses and other
amounts coming due (although not presently due and owing) to Landlord under the Lease, and such
application shall be deemed a prepayment of such amounts.

          (e) Enforcement. Tenant’s obligation to furnish the L/C shall not be released,
modified or affected by any failure or delay on the part of Landlord to enforce or assert any of
its rights or remedies under the Lease, whether pursuant to the terms thereof or at law or in
equity. Landlord’s right to draw upon the L/C shall be without prejudice or limitation to
Landlord’s right to draw upon the security deposit provided by Tenant to Landlord or to avail
itself of any other rights or remedies under the Lease.

          (f) Event of Default. Tenant’s failure to perform its obligations under this Addendum
section (time being of the essence) shall constitute an event of default under the Lease, and shall
entitle Landlord to exercise all of its remedies under the Lease or at law or in equity without
future notice or demand.

2. Condition of Premises. Subject to Section 27 of the Lease, Tenant shall not be
responsible for any non-compliance with law, ordinance, rule or regulation (including the Americans
with Disability Act), or for any environmental contamination or condition, with respect to the
Premises or the Building Project that (a) existed prior to the date Landlord delivers possession of
the Premises to tenant, and (b) is not caused by Tenant or its agents, employees or contractors.

3. Landlord’s Title. Landlord represents and warrants that it holds fee title to the
Premises and Project, and that this Lease shall be binding on all persons or entities with a fee
interest in the Project.

4. Option to Extend. If Tenant elects to exercise the option to extend as set forth in
Section 3.6 of the Lease, Tenant shall provide Landlord with written notice of such election no
later than one hundred eighty (180) days (rather than 270 days) but not more than 360 days prior to
the expiration date of the then current term, failing which the term shall expire as scheduled.

5. Tenant Improvements. Landlord rather than Tenant shall be responsible, in cooperation
with Tenant, for preparation of the Space Plan and Plans under the Work Letter Agreement and shall
submit the same to Tenant for Tenant’s approval. The provisions and time limits set forth in the
Work Letter Agreement with respect to Landlord’s approval of such plans shall instead apply to
Tenant’s approval of such plans. All costs incurred by Landlord associated with the development of
the Space Plan and Plans shall be part of the Tenant Improvement Allowance.

6. Landlord Maintenance and Repair. Landlord’s maintenance and repair obligations shall
include maintenance and repair of all structural portions of the Premises and the Building,
including foundation and structural supports, exterior and load bearing walls, roof system
(including roof

F-2

 

membrane), all of which shall be Operating Expenses, to the extent defined as such in Section 6 of
the Lease.

7. Options. Section 16.7 of the Lease shall not apply to a transfer of Tenant’s interest
in the Lease to an entity identified in clauses (a), (b), or (c) of the second to last sentence of
Section 16.1 of the Lease (“Tenant Affiliate”). Furthermore, a Tenant Affiliate in connection with
such a transfer shall be deemed the original Tenant for purposes of Section 29 of the Lease.
Section 29.5 of the Lease is deleted.

8. Relocation. Section 32 of the Lease is deleted.

9. Tenant Financial Statements. Tenant shall have no obligation to provide Landlord with
any financial statements of Tenant during the term of the Lease except that, in connection with
Landlord’s intent to finance, refinance or sell the Premises, and within ten (10) days after
Landlord’s request, Tenant shall furnish to Landlord an unaudited financial statement of Tenant,
provided that (i) the financial condition of Tenant and any information in such financial
statements shall under no circumstances be the basis for a default under the Lease, except to the
extent such matters constitute a default under Section 17.1.6, and (ii) Landlord may request such
no more than twice a year.

10. Letter of Credit. The letter of credit required pursuant to the Lease shall contain
the material terms and conditions set forth in the form attached as Exhibit G to the Lease, but
shall otherwise be subject to approval by the issuer thereof. Section 1 (c) of Exhibit F to the
Lease is amended to read: “If Tenant defaults under the Lease or this Addendum, Landlord may,
without notice or demand (other than any notice required before a default may occur), draw upon the
entire remaining proceeds of the L/C.”

F-3

 

     IN WITNESS WHEREOF, the parties hereto have respectively executed this Addendum.

	 	 	 	 	 	 	 	 
	LANDLORD
	 	TENANT:
	 
	 	 	 	 	 	 
	FSP Telecom Business Center Limited	 	MD3, Incorporated
	Partnership, a Massachusetts limited partnership	 	a California corporation
	 
	 	 	 	 	 	 
	By:
	 	FSP Holdings, LLC, its general partner	 	 	 	 
	 
	 	 	 	By:	 	/s/ Richard Poinsett	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	Name: Richard Poinsett	 
	 
	 	 	 	 	 	Title:  VP/GM	 
	By:
	 	/s/ George J. Carter	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Name:  George J. Carter	 	By:	 	/s/ Vicky Leptein
	 
	 	 	 	 	 
	 
	 	Title: President	 	 	 	Name:  Vicky Leptein
	 
	 	 	 	 	 	Title: VP Finance/Secretary

F-4

 

EXHIBIT G

[NAME OF BANK]

IRREVOCABLE STANDBY LETTER OF CREDIT

	 	 	 

	Date of Issue: No.

	 	
	 
	 	 
	APPLICANT: BENEFICIARY:

	 	

AMOUNT: $

At the request and for the account of                                              , (the “Account Party”), we hereby
establish in your favor our Irrevocable Letter of Credit no.                      in the amount of
                                         ($                    ).

This Letter of Credit is issued with respect to that certain lease agreement, by and between you,
as Landlord, and the Account Party, as Tenant. Said lease agreement, and any amendments or
modifications thereof, is hereinafter referred to as the “Lease.” Our obligations under this
Letter of Credit are solely as set forth herein and are completely independent of the obligations
of the Account Party under the Lease. We do not undertake any obligation under the Lease, nor do
we undertake any responsibility to ascertain any facts, or to take any other action, with respect
to the Lease, and we acknowledge that our obligations under this Letter of Credit shall not be
affected by any circumstance, claim or defense of any party as to the enforceability of the Lease
or any dispute as to the accuracy of the Statement (as defined below). The references to the Lease
in this Letter of Credit are solely to describe the required contents of the Statement.

Funds under this Letter of Credit are available to you against presentation of the following
documents at our office at                                                             prior to close of business on
the expiration date set forth below.

1. The original of this Letter of Credit.

2. Your sight draft on us in an amount not exceeding the amount of this Letter of Credit (less sums
previously paid by us hereunder) executed by the person executing the Statement and bearing the
number of this Letter of Credit; and

3. A statement (the “Statement”) executed by a natural person, stating that such person is your
duly authorized representative, and that you are entitled to draw upon this Letter of Credit.

Facsimile demands are permitted by the delivery to us of facsimile copies of the documents
described in 1 through 3 above. Facsimile demands shall be sent to us at the following facsimile
number:                     . If a demand is made by facsimile, the original letter of credit is not
required.

The expiration date of this Letter of Credit is                     , provided, however, that the
expiration date of this Letter of Credit shall be automatically extended, without notice of
amendment,

G-1

 

for successive one (1) year periods, unless we give you written notice of our election not to
extend the expiration date (“Notice of Non-Renewal”) not later than sixty (60) days prior to the
date this Letter of Credit is scheduled to expire. A Notice of Non-Renewal shall be effective when
actually delivered by certified mail, return receipt requested, or courier service to your address
set forth above or such other address and/or person as you shall specify to us for such purpose by
written notice received by us prior to the time the Notice of Non-Renewal is sent.

This Letter of Credit is transferable in its entirety through us. Multiple transfers shall be
permitted. There will be no charge to Beneficiary or any transferee for the transfer of this
Letter of Credit. We will honor complying drafts presented hereunder by a transferee (and cease to
honor drafts presented hereunder by you) upon our receipt of the fully executed transfer form
attached hereto as Exhibit 1.

This Letter of Credit may be drawn upon in one or more drafts not exceeding in the aggregate, the
amount available hereunder. Partial draws shall be permitted.

We hereby issue this Letter of Credit in your favor, and we hereby undertake to honor all drafts
drawn under and in compliance with the terms of this Letter of Credit. This Letter of Credit shall
be governed by and construed in accordance with the Uniform Customs and Practices for Documentary
Credits (                     Revision) International Chamber of Commerce Publication 400 and, to the extent
not inconsistent therewith, the laws of the State of                      .

	 	 	 

	 

Authorized Signature

	 	 

G-2exv10w2

EXHIBIT 10.2

FIRST AMENDMENT TO LEASE

     THIS FIRST AMENDMENT TO LEASE (“First Amendment”) is made as of January 3, 2005, by and
between FSP Telecom Business Center Limited Partnership, a Massachusetts limited partnership
(“Landlord”), and Reva Medical, Inc., a California corporation formerly known as MD3, Inc.
(“Tenant”), with reference to the following facts:

RECITALS

     A. Landlord and Tenant are parties to that certain Telecom Business Center NNN Lease (“Lease”)
dated for reference purposes as of December 18, 2001, pursuant to which Landlord leased to Tenant
certain premises comprising 12,799 square feet, commonly known as 5751 Copley Drive, Suite B, San
Diego, California (“Premises”), being located at Telecom Business Center. Capitalized terms used
in this First Amendment which are not otherwise defined shall have the same meanings as in the
Lease.

     B. Tenant and Landlord desire to modify the Lease pursuant to this Amendment.

     C. Landlord and Tenant wish to extend the term of the Lease twelve (12) months.

     D. Landlord is willing to reduce the amount of the Letter of Credit.

     E. Tenant acknowledges that the Lease is in full force and effect, and each of the parties
desires to amend the Lease in the terms and conditions set forth below.

     NOW, THEREFORE, the parties agree as follows:

     1. Recitals. Tenant acknowledges that the Recitals set forth above are true and
correct and shall be part of the agreement of the parties in this First Amendment.

     2. Term. The term of the Lease shall be extended twelve (12) months and shall expire
on February 28, 2006 (“Extended Term”).

     3. Base Monthly Rent. The Base Monthly Rent due during the Extended Term shall be
Sixteen Thousand Six Hundred Thirty-Nine Dollars ($16,639) per month, commencing March 1, 2005.

     4. Reduced Letter of Credit.

     (a) Delivery of Letter of Credit. Concurrently with Tenant’s execution and
delivery of this First Amendment, and as a condition to Landlord’s obligations under the
First Amendment, Tenant covenants and agrees to deliver to Landlord an irrevocable standby
letter of credit (the “L/C”) in the form of, and upon all of the terms and conditions
contained in, Exhibit “A” attached hereto and incorporated herein by reference, which shall
otherwise be subject to the approval of the issuer thereof. The L/C
required hereunder shall supersede the letter of credit currently in place as required
by Section 1 of the Addendum to the Lease. The L/C shall be issued by an institutional
lender of good financial standing (which lender shall, in any event, have assets equal to

 

 

or
exceeding $500,000,000 as of the date of issuance of the L/C), having a place of business
where the L/C can be presented for payment in San Diego, California. The lender shall be
subject to Landlord’s prior written approval, not to be unreasonably withheld or delayed.
The L/C shall provide for one (1) or more draws by Landlord or its transferee up to the
aggregate amount of US $50,000 (the “L/C Amount”) on the terms and conditions of Exhibit
“A.” The L/C shall secure the payment and performance of Tenant’s obligations under the
Lease, as amended by this First Amendment. Partial draws shall be permitted.

     (b) Renewal of L/C. Tenant shall maintain the L/C in effect from the date of
Tenant’s execution of this First Amendment, but in no event later than January 26, 2005,
until Tenant shall have performed all of its obligations under the Lease (said period is
hereinafter referred to as the “L/C Term”). If the expiration date of the L/C (or any
renewal or replacement L/C provided pursuant to this First Amendment section) occurs prior
to the end of the L/C Term, then Tenant shall deliver to Landlord a renewal of the L/C or a
replacement L/C meeting all of the terms and conditions of this Addendum section, not later
than sixty (60) days prior to the then-applicable expiration date. Each L/C provided
pursuant to this First Amendment section shall have an expiration date which is at least one
(1) year from such L/C’s date of issue except where the then-applicable expiration date of
the L/C is less than one (1) year from the end of the L/C Term, in which case the renewal or
replacement L/C shall be for such lesser period. The issuing bank’s agreement to place an
automatic renewal provision in the L/C, as required pursuant to said Exhibit “A”, shall not
relieve or release Tenant from its obligation to provide a renewal or replacement L/C on the
terms hereinabove stated, it being understood that any such automatic renewal is an
independent obligation of the issuing bank which is intended for Landlord’s sole benefit.
If Tenant fails to provide the renewal or replacement L/C not later than sixty (60) days
prior to the then-applicable, stated expiration date (excluding automatic renewal
provisions), such failure shall be a default by Tenant, and Landlord shall have the right,
without notice or demand, to draw upon the entire remaining proceeds of the L/C.

     (c) Breach of Lease. If Tenant fails to perform any of its obligations under
the Lease or this First Amendment section, Landlord may, without notice or demand, draw upon
the entire remaining proceeds of the L/C.

     (d) Application of L/C Proceeds. All amounts drawn under the L/C may, in
Landlord’s sole discretion: (i) be held and applied by Landlord as a cash security deposit
in accordance with Section 7 of the Lease and/or (ii) be applied to payment of the Base
Rent, Tenant’s Share of increases in Operating Expenses and other amounts then due and owing
to Landlord pursuant to the Lease and/or to future Base Rent, Tenant’s Share of increases in
Operating Expenses and other amounts coming due (although not then due and owing) to
Landlord under the Lease, and such application shall be deemed a prepayment of such amounts.

     (e) Enforcement. Tenant’s obligation to furnish the L/C shall not be released,
modified or affected by any failure or delay on the part of Landlord to enforce or assert
any of its rights or remedies under the Lease, whether pursuant to the terms thereof or at

2

 

law or in equity. Landlord’s right to draw upon the L/C shall be without prejudice or
limitation to Landlord’s right to draw upon the security deposit provided by Tenant to
Landlord or to avail itself of any other rights or remedies under the Lease.

     (f) Event of Default. Tenant’s failure to perform its obligations under this
First Amendment Section 4 (time being of the essence) shall constitute an event of default
under the Lease, and shall entitle Landlord to exercise all of its remedies under the Lease
or at law or in equity without further notice or demand.

     5. Condition of Premises. Tenant accepts the Premises for the Extension Term in its
“as-is” condition.

     6. Authorized Party. If Tenant is other than a natural person, each individual
executing this First Amendment on behalf of the named Tenant represents and warrants that he is
duly authorized to execute this First Amendment on behalf of the named Tenant in accordance with a
duly adopted resolution of Tenant’s board of directors and Tenant’s bylaws (if Tenant is a
corporation) and in accordance with the agreement of partnership (if Tenant is a Partnership) and
by delivery hereto warrant that the execution by no other signatory is required and will hold
Landlord harmless from any claim to the contrary (and loss suffered by reason thereof).

     7. Confidentiality. Tenant acknowledges that the content of this First Amendment and
any related documents are confidential information. Tenant shall keep such confidential
information strictly confidential and shall not disclose such confidential information to any
person or entity other than Tenant’s financial, legal, and space planning consultants.

     8. Full Force and Effect. Except as set forth in this First Amendment, each and every
provision of the Lease shall remain in full force and effect and shall not be modified, waived or
otherwise affected by this First Amendment. In the event of any conflict between the provisions of
the Lease and this First Amendment, the terms of this First Amendment shall prevail.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment effective as of the
date first written above.

     LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS FIRST AMENDMENT TO LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE AMENDMENT, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE AMENDMENT IS
EXECUTED, THE TERMS OF THIS LEASE AMENDMENT ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT
AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.

3

 

     IF THIS LEASE AMENDMENT HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE LANDLORD, ITS COUNSEL,
ANY REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE AMENDMENT OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY
SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE AMENDMENT.

	 	 	 	 	 

	LANDLORD:

	 	TENANT:	 
	 	 
	 	 	 
	FSP Telecom Business Center Limited

	 	Reva Medical Inc., a California corporation
	 	Partnership, a Massachusetts limited 
	 	 	 
	 	partnership

	 	 	 
	 	 

	 	By: 	/s/ Robert K. Schultz
	 	 

	 	 	 
	By: 	FSP
Holdings, LLC, its general partner

	 	 	(SIGNATURE)
	 	 
	 	 	 
	By: 	/s/ George J. Carter

	 	 	Robert K. Schultz
	 	 

	 	 	 
	 	Name: George J. Carter

	 

	 	(PRINT NAME)
	 	Title: President

	 	 	
Title: President

	 	 	 	 	Date: 1/18/05
	 	 
	 	 	 
	 	 

	 	By: 	/s/ Katrina L. Thompson
	 	 

	 	 	 
	 	 

	 	 	(SIGNATURE)
	 	 
	 	 	 
	 	 

	 	 	Katrina L. Thompson
	 	 

	 	 	 
	 	 

	 	 	(PRINT NAME)
	 	 
	 	 	 
	 	 

	 	 	Title: VP Finance & Admin
	 	 
	 	 	 
	 	 	 

	 	Date: 1/18/05

4

 

EXHIBIT
A

[NAME OF BANK]

IRREVOCABLE STANDBY LETTER OF CREDIT

Date of Issue:                                                    No.                  
                       

	 	 	 	 	 
	APPLICANT:	 	BENEFICIARY:
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	AMOUNT: $                    
	 	 	 	 

     At the request and for the account of                                         , (the “Account Party”), we
hereby establish in your favor our Irrevocable Letter of Credit no.                      in the amount of
                                         ($                    ).

     This Letter of Credit is issued with respect to that certain lease agreement dated
December 18, 2001, by and between you, as Landlord, and the Account Party, as Tenant. Said lease
agreement, and any amendments or modifications thereof, is hereinafter referred to as the “Lease.”
Our obligations under this Letter of Credit are solely as set forth herein and are completely
independent of the obligations of the Account Party under the Lease. We do not undertake any
obligation under the Lease, nor do we undertake any responsibility to ascertain any facts, or to
take any other action, with respect to the Lease, and we acknowledge that our obligations under
this Letter of Credit shall not be affected by any circumstance, claim or defense of any party as
to the enforceability of the Lease or any dispute as to the accuracy of the Statement (as defined
below). The references to the Lease in this Letter of Credit are solely to describe the required
contents of the Statement.

     Funds under this Letter of Credit are available to you against presentation of the following
documents at our office at                                                              prior to close of business on
the expiration date set forth below.

     1. The original of this Letter of Credit.

     2. Your sight draft on us in an amount not exceeding the amount of this Letter of Credit (less
sums previously paid by us hereunder) executed by the person executing the Statement and bearing
the number of this Letter of Credit; and

     3. A statement (the “Statement”) executed by a natural person, stating that such person is
your duly authorized representative, and that you are entitled to draw upon this Letter of Credit.

     Facsimile demands are permitted by the delivery to us of facsimile copies of the documents
described in 1 through 3 above. Facsimile demands shall be sent to us at the

5

 

following facsimile number:                     . If a demand is made by facsimile, the original
letter of credit is not required.

     The expiration date of this Letter of Credit is                     , provided, however, that the
expiration date of this Letter of Credit shall be automatically extended, without notice of
amendment, for successive one (1) year periods, unless we give you written notice of our election
not to extend the expiration date (“Notice of Non-Renewal”) not later than sixty (60) days prior to
the date this Letter of Credit is scheduled to expire. A Notice of Non-Renewal shall be effective
when actually delivered by certified mail, return receipt requested, or courier service to your
address set forth above or such other address and/or person as you shall specify to us for such
purpose by written notice received by us prior to the time the Notice of Non-Renewal is sent.

     This Letter of Credit is transferable in its entirety through us. Multiple transfers shall be
permitted. There will be no charge to Beneficiary or any transferee for the transfer of this
Letter of Credit. We will honor complying drafts presented hereunder by a transferee (and cease to
honor drafts presented hereunder by you) upon our receipt of the fully executed transfer form
attached hereto as Exhibit 1.

     This Letter of Credit may be drawn upon in one or more drafts not exceeding in the aggregate,
the amount available hereunder.

     We hereby issue this Letter of Credit in your favor, and we hereby undertake to honor all
drafts drawn under and in compliance with the terms of this Letter of Credit.

     This Letter of Credit shall be governed by and construed in accordance with the Uniform
Customs and Practices for Documentary Credits (                     Revision) International Chamber of
Commerce Publication 400 and, to the extent not inconsistent therewith, the laws of the State of
                    .

           
                  
                               
Authorized Signature

6

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