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Exhibit 10.40    
  

 
 

MODIFICATION TO EMPLOYMENT AGREEMENT    
  

    This Modification to Employment Agreement ("Modification") is dated as of the 15th day of August 2000 and is made by and between STAAR Surgical Company,
a Delaware corporation, (the "Company") and William C. Huddleston (the "Executive") based on the following: 

 
 

RECITALS    
  

    A. On October 1, 1999 the Executive agreed to render services to the Company as its Executive Vice
President and Chief Financial Officer through September 30, 2005 on the terms and subject to the conditions set forth in that certain "Employment Agreement" signed by the Executive and by the
Company. 

    B. Pursuant to paragraph 14(c)(i) of the Employment Agreement, the Company and the Executive wish to modify its terms and
conditions. 

    NOW, THEREFORE, in consideration of the foregoing and of the mutual promises contained in this Modification, the Company and the
Executive agree as follows: 

 
 

AGREEMENT    
  

    1.  Change of Title.  Wherever in the Employment Agreement the Executive is referred to as "Executive
Vice President" and "Chief Operating Officer", those terms shall be replaced by the term "Interim Chief Executive Officer" and "Interim President". 

    2.  Modification to Paragraph 1.  The second paragraph of paragraph 1 shall be deleted in
its entirety. 

    3.  Modification to Paragraph 2.  The first sentence of paragraph 2 of the Employment
Agreement shall be modified to state, "Executive shall report to Company's Board of Directors." Additionally, there shall be added to paragraph 2 the following: "Executive understands that
Company intends to recruit and hire an individual as Company's President and Chief Executive Officer. Executive agrees to resign his position as President and Chief Executive Officer immediately upon
Company's employment of such an individual, however, Executive will continue to render services to Company as its Executive Vice President and Chief Operating Officer pursuant to the terms of this
Agreement. Executive agrees that such action by the Company shall be deemed to have been done with Executive's consent, and shall not constitute an alteration or diminishment of the position, nature,
status, prestige or responsibilities of Executive, or a termination of Executive's employment." 

    4.  Modification to Paragraph 5(a).  The first sentence of paragraph 5(a) of the Employment
Agreement shall be modified to state, "As of June 1, 2000, Company shall pay to Executive a base salary of Three Hundred Thousand Dollars ($300,000) per year." 

    5.  Deletion of Paragraphs 5(b) and 5(c).  Paragraphs 5(b) and 5(c) shall be deleted in their entirety. 

    6.  Modification to Paragraph 5(e).  Paragraph 5(e) shall be deleted in its entirety and
the following shall appear in its place: "Company shall forgive the payment of any and all loans made to Executive by Company if (i) Executive's employment is terminated by Company without
cause, or (ii) a Change in Control occurs during Executive's employment or within two (2) years from the date of termination of Executive's employment for any reason whatsoever,
including, but not limited to, termination by Company for cause and Executive's voluntary resignation. For purposes of this Agreement, a "Change in Control" shall be defined as any of the following
transactions: (i) the sale by Company of substantially all of its business or assets, or (ii) the acquisition of Company's capital stock by a third party in connection with the transfer
of a controlling interest of Company's capital stock to such party, or (iii) the merger or consolidation of Company with another corporation as part of a 

transfer of a controlling interest of Company's capital stock to a third party. A "controlling interest of Company's capital stock" shall be defined as a transfer or acquisition by a third party of at
least thirty percent (30%) of Company's capital stock in one or a series of transactions. A "third party" shall not include any employee benefit plan maintained by Company or any corporation or entity
in which Company holds fifty percent (50%) of more of the voting securities." 

    7.  Modification to Paragraph 10.  Paragraph 10 shall be deleted and the following shall
appear in its place: "Company reserves the right to declare Executive in default of this Agreement (i) if Executive willfully breaches or habitually neglects the duties which he is required to
perform under the terms of this Agreement, or (ii) if Executive (A) fails and/or refuses to obey any lawful and proper order or directive of the Board of Directors and/or Executive
interferes with the compliance by other employees with any such order or directive; (B) intentionally breaches his fiduciary duties to Company; (C) causes the Company to be convicted of
a crime, or to incur criminal penalties in material amounts; (D) commits
any act of fraud, theft, embezzlement or misappropriation and/or any other dishonest act against Company; or (E) commits any felony which is followed by conviction or by final action of any
court of law. In the event Executive is declared in default of this Agreement due to an event described in subparagraph (i) or in subparagraph (ii)(A) or ii(B), then the Board of Directors
shall give notice to Executive of such event of default and Executive will have a period of thirty (30) days to cure said default. If Executive's employment is terminated pursuant to this
paragraph, Company shall pay to Executive (I) Executive's accrued but unpaid Annual Salary and vacation pay through the effective date of the termination, and (II) business expenses
incurred prior to the effective date of termination. Executive shall not be entitled to continue to participate in any employee benefit plans except as may be required by applicable law. 

    8.  Modification to Paragraph 11(c).  There shall be added to paragraph 11 (c) the
following sentence, "If Executive's employment is terminated pursuant to this paragraph 11(c), Company will retain the services of Executive as a consultant for a period of
twenty-four (24) months and shall pay to Executive, in exchange for such consulting services, the sum of twenty thousand eight hundred thirty-three dollars ($20,833) per month." 

    9.  Deletion of Paragraph 11(e).  Paragraph 11(e) shall be deleted in its entirety. 

    10.  Modification to Paragraph 12.  Paragraph 12 shall be deleted in its entirety and the
following shall appear in its place: "In the event Executive's employment is terminated due to Executive's death or disability then: (a) Company shall pay Executive's accrued but unpaid Annual
Salary and vacation time through the effective date of such termination; (b) Company shall reimburse Executive for any business expenses incurred prior to the effective date of the termination;
(c) Executive, including Executive's permitted heirs, shall be entitled to continue to participate in any employee benefit plans except to the extent provided in such plans for terminated
participants, or as may be required by applicable law; and (d) subject to regulatory considerations, and irrespective of the terms of any agreement memorializing them, the vesting conditions
imposed on any stock options subject to vesting shall be accelerated and shall vest on the date of Executive's termination. Unless a greater period of time is permitted in any agreement memorializing
a stock option (in which case the stock option agreement will govern), Executive's permitted heirs shall be entitled to a period of six (6) months after the termination of Executive's
employment due to his death to exercise said stock options, provided, however, that the remaining terms and conditions of the agreements governing the
stock options shall remain in full force and effect and shall be binding upon Executive's permitted heirs." 

    11.  Modification to Paragraph 13.  Paragraph 13 shall be deleted in its entirety and the
following shall appear in its place: "If Executive's employment is terminated before the expiration of the term, and such termination is attributable to (i) a Change in Control, or
(ii) Company's election to terminate without cause, then: (a) Company shall pay Executive's accrued but unpaid Annual Salary and vacation time through the effective date of such
termination; (b) Company shall reimburse Executive for any business expenses incurred prior to the effective date of the termination; (c) at the election of Executive, Company shall
provide to Executive and his spouse and dependents, for a period of twelve (12) months, either (i) medical benefits which shall be comparable to the benefits received by Executive 

at the time of termination of his employment; or (ii) funds, payable on a monthly basis, which would approximate the cost to Executive to obtain comparable benefits; (d) Company shall
reimburse Executive for Executive's business expenses incurred through the effective date of termination; (e) pursuant to paragraph 5(e), Company shall forgive the payment of any and all
loans made by Company to Executive; and (f) subject to regulatory considerations, and irrespective of the terms of any agreement memorializing them, the vesting conditions imposed on any stock
options subject to vesting shall be accelerated and shall vest on the date of Executive's termination. Furthermore, if Executive's employment is terminated before the expiration of the term, and such
termination is attributable to Company's election to terminate without cause, then Company will retain the services of Executive as a consultant for a period of twenty-four
(24) months and shall pay to Executive, in exchange for such consulting services, the sum of twenty thousand eight hundred thirty-three dollars ($20,833) per month. Executive shall not be
required to mitigate the amount of any payment made pursuant to this paragraph 13 by seeking other employment or otherwise, and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment. The provisions of this paragraph 13 shall be in lieu of any remedy or damages to which Executive may be entitled,
whether such remedy may be recovered at law or in equity." 

    12.  All Other Terms and Conditions to Remain the Same.  The Company and the Executive agree that all
other terms and conditions of the Employment Agreement shall remain the same. 

    13.  Resignation as a Director.  In signing this Modification, Executive re-affirms his
resignation as a member of Company's Board of Directors (including as a member of all committees of the Board of Directors) and, upon request of Company, agrees to resign as a director of any
affiliate or subsidiary of Company. 

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

	 	 	"Company"
 
	

 	
 	

STAAR Surgical Company
	

 	
 	

By:	
 	

/s/ ANDREW F. POLLET   
 Andrew F. Pollet, Chairman of the Board
	

 	

 	

 "Executive"
	

 	
 	

 	
 	

/s/ WILLIAM C. HUDDLESTON   
 William C. Huddleston

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Exhibit 10.40

MODIFICATION TO EMPLOYMENT AGREEMENT

RECITALS

AGREEMENTPrepared by MERRILL CORPORATION www.edgaradvantage.com

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   EXHIBIT 10.46  

 STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE—GROSS
  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

[LOGO] 

1.  Basic Provisions  ("Basic Provisions"). 

    1.1  Parties:  This Lease ("Lease"), dated for reference
purposes only, April 5, 2000, is made by and between KILROY REALTY, L.P., a Delaware Limited Partnership, KILROY REALTY CORPORATION, a Maryland Corporation, General Partner
("Lessor") and STAAR SURGICAL COMPANY, a Delaware Corporation ("Lessee"), (collectively the
"Parties," or individually a "Party"). 

    1.2(a)  Premises:  That certain portion of the Building, including all improvements therein or to be
provided by Lessor under the terms of this Lease, commonly known by the street address of 27121 Aliso Creek Road, Suites 100, 105, 110 & 115, located in the City of Aliso Viejo, County of Orange,
State of California, with zip code 92656, as outlined on Exhibit "A" attached hereto ("Premises"). The
"Building" is that certain building containing the Premises and generally described as (describe briefly the nature of the Building): a single story
industrial/commercial/office building containing a total of approximately 15,208 rentable square feet, as depicted on Exhibit "B," attached hereto, located in a five (5) building
industrial/commercial/office Industrial Center containing a total of approximately 133,334 rentable square feet, as depicted on Exhibit "C," attached hereto. The Premises contain approximately 6,164
rentable square feet. 

In
addition to Lessee's rights to use and occupy the Premises as hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter
specified, but shall not have any rights to the roof, exterior walls or utility raceways of the Building or to any other buildings in the Industrial Center. The Premises, the Building, the Common
Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collectively referred to as the "Industrial
Center." (Also see Paragraph 2.) 

    1.2(b)  Parking:  twelve (12) unreserved vehicle parking spaces ("Unreserved
Parking Spaces"); and three (3) reserved vehicle parking spaces ("Reserved Parking Spaces"). (Also see Paragraph 2.6.) 

    1.3  Term:  three (3) years and -0- months ("Original
Term") commencing May 1, 2000 ("Commencement Date") and ending April 30, 2003 ("Expiration
Date"). (Also see Paragraph 3.) 

    1.4  Early Possession:  Lessee acknowledges that Lesee is now in possession of the Premises. See also
paragraphs 50 and 51 of the Addendum to Lease ("Early Possession Date"). (Also see Paragraphs 3.2 and 3.3.) 

    1.5  Base Rent:  $8,155.00 per month ("Base Rent"),
payable on the first day of each month commencing upon the Commencement Date (Also see Paragraph 4.) 

	/x/
	If
this box is checked, this Lease provides for the Base Rent to be adjusted per Addendum 49, attached hereto. 

    1.6(a)  Base Rent Paid Upon Execution:  $8,155.00 as Base Rent for the month of May, 2000. 

    1.6(b)  Lessee's Share of Common Area Operating Expenses:  forty and 53/100 percent (40.53%) of the
Building and four and 623/1000 percent (4.623%) of the Industrial Center ("Lessee's Share") as determined by /x/ prorata square footage
of the Premises as compared to the total square footage of the Building and the Industrial Center, respectively or / / other criteria as described in Addendum ____. 

    1.7  Security Deposit:  $8,150.00 ("Security Deposit");
see also paragraph 50 of the Addendum to Lease. (Also see Paragraph 5.) 

    1.8  Permitted Use:  Manufacture, sale, warehouse and distribution of medical devices, and office
purposes associated therewith ("Permitted Use") (Also see Paragraph 6.) 

Page 1 of 30

 

    1.9  Insuring Party.  Lessor is the "Insuring Party."
(Also see Paragraph 8.) 

    1.10(a)  Real Estate Brokers.  The following real estate broker(s) (collectively, the
"Brokers") and brokerage relationships exist in this transaction and are consented to by the Parties (check applicable boxes): 

	/
	/   ________________________
represents Lessor exclusively ("Lessor's Broker");

	/
	/   ________________________
represents Lessee exclusively ("Lessee's Broker"); or

	/
	/   ________________________
represents both Lessor and Lessee ("Dual Agency"). (Also see Paragraph 15.) 

    1.10(b)  Payment to Brokers.  Upon the execution of this Lease by both Parties, Lessor shall pay to said
Broker(s) jointly, or in such separate shares as they may mutually designate in writing, a fee as set forth in a separate written agreement between Lessor and said Broker(s) (or in the event there is
no separate written agreement between Lessor and said Broker(s), the sum of $ N/A) for brokerage services rendered by said Brokers(s) in connection with this transaction. 

    1.11  Guarantor.  The obligations of the Lessee under this Lease are to be guaranteed by N/A
("Guarantor"). (Also see Paragraph 37.) 

    1.12  Addenda and Exhibits.  Attached hereto is an Addendum or Addenda consisting of Paragraphs 49
through 53, and Exhibits "A" through "D", all of which constitute a part of this Lease. 

2.  Premises, Parking and Common Areas.  

    2.1  Letting.  Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for
the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of square footage set forth in this Lease, or that
may have been used in calculating rental and/or Common Area Operating Expenses, is an approximation which Lessor and Lessee agree is reasonable and the rental and Lessee's Share (as defined in
Paragraph 1.6(b)) based thereon is not subject to revision whether or not the actual square footage is more or less. 

    2.2  Condition.  Lessor shall deliver the Premises to Lessee clean and free of debris on the Commencement
Date and warrants to Lessee that the existing plumbing, electrical systems, fire sprinkler system, lighting, air conditioning and heating systems and loading doors, if any, in the Premises, other than
those constructed by Lessee, shall be in good operating condition on the Commencement Date. If a non-compliance with said warranty exists as of the Commencement Date, Lessor shall, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify same at Lessor's expense. If Lessee
does not give Lessor written notice of a non-compliance with this warranty within thirty (30) days after the Commencement Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee's sole cost and expense. 

    2.3  Compliance with Covenants, Restrictions and Building Code.  Lessor warrants that any improvements
(other than those constructed by Lessee or at Lessee's direction) on or in the Premises which have been constructed or installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable building codes, regulations and ordinances in effect on the Commencement Date. Lessor further warrants to Lessee that
Lessor has no knowledge of any claim having been made by any governmental agency that a violation or violations of applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be made by Lessee. If the Premises do not
comply with said warranties, Lessor shall, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee given within six (6) months following the Commencement Date
and setting forth with specificity the nature and extent of such non-compliance, take such action, at Lessor's expense, as may be reasonable or appropriate to rectify the non-compliance. Lessor makes
no warranty that the Permitted Use in Paragraph 1.8 is permitted for the Premises under Applicable Laws (as defined in Paragraph 2.4). 

Page 2 of 30

 

    2.4  Acceptance of Premises.  Lessee hereby acknowledges: (a) that it has been advised by the Broker(s)
to satisfy itself with respect to the condition of the Premises (including, but not limited to, the electrical and fire sprinkler systems, security, environmental aspects, seismic and earthquake
requirements, and compliance with the Americans with Disabilities Act and applicable zoning, municipal, county, state and federal laws, ordinances and regulations and any covenants or restrictions of
record (collectively, "Applicable Laws") and the present and future suitability of the Premises for Lessee's intended use; (b) that Lessee has made such
investigation as it deems necessary with reference to such matters, is satisfied with reference thereto, and assumes all responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of Lessor's agents, has made any oral or written representations or warranties with respect to said matters other than as
set forth in this Lease. 

    2.5  Lessee as Prior Owner/Occupant.  The warranties made by Lessor in this Paragraph 2 shall be of no
force or effect if immediately prior to the date set forth in Paragraph 1.1 Lessee was the owner or
occupant of the Premises. In such event, Lessee shall, at Lessee's sole cost and expense, correct any non-compliance of the Premises with said warranties. 

    2.6  Vehicle Parking.  Lessee shall be entitled to use the number of Unreserved Parking Spaces and
Reserved Parking Spaces specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to time by Lessor for parking. Lessee shall not use more parking spaces than said
number. Said parking spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles shall be parked and loaded or unloaded as directed by Lessor in the Rules and Regulations (as defined in Paragraph 40)
issued by Lessor. (Also see Paragraph 2.9). 

    (a) Lessee
shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee's employees, suppliers, shipper, customers, contractors or
invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities. 

    (b) If
Lessee permits or allows any of the prohibited activities described in this Paragraph 2.6, then Lessor 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 Lessee, which cost shall be immediately payable upon demand by Lessor. 

    (c) Lessor
shall at the Commencement Date of this Lease, provide the parking facilities required by Applicable Law. 

    2.7  Common Areas—Definition.  The term "Common
Areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Industrial Center and interior utility raceways within the
Premises that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and other lessees of the Industrial Center and their respective employees,
suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas. 

    2.8  Common Areas—Lessee's Rights.  Lessor hereby grants to Lessee, for the benefit of Lessee
and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas
as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the
use of the Industrial Center. 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. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time. In the event that any unauthorized
storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies
that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor. 

    2.9  Common Areas—Rules and Regulations.  Lessor or such other person(s) as Lessor may
appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time 

Page 3 of 30

 

to time, to establish, modify, amend and enforce reasonable Rules and Regulations with respect thereto in accordance with Paragraph 40. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said
rules and regulations by other lessees of the Industrial Center. 

    2.10  Common Areas—Changes.  Lessor shall have the right, in Lessor's sole discretion, from
time to time: 

    (a) To
make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking
areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways; 

    (b) To
close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; 

    (c) To
designate other land outside the boundaries of the Industrial Center to be a part of the Common Areas; 

    (d) To
add additional buildings and improvements to the Common Areas; 

    (e) To
use the Common Areas while engaged in making additional improvements, repairs or alterations to the Industrial Center, or any portion thereof; and 

    (f)  To
do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Industrial Center as Lessor may, in the exercise of
sound business judgment, deem to be appropriate. 

3.  Term.  

    3.1  Term.  The Commencement Date, Expiration Date and Original Term of this Lease are as specified in
Paragraph 1.3. 

    3.2  Early Possession.  If an Early Possession Date is specified in Paragraph 1.4 and if Lessee totally
or partially occupies the Premises after the Early Possession Date but prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early occupancy. All other
terms of this Lease, however, (including, but not limited to, the obligations to pay Lessee's Share of Common Area Operating Expenses and to carry the insurance required by Paragraph 8) shall be in
effect during such period. Any such early possession shall not affect nor advance the Expiration Date of the Original Term. 

    3.3  Delay in Possession.  If for any reason Lessor cannot deliver possession of the Premises to Lessee
by the Early Possession Date, if one is specified in Paragraph 1.4, or if no Early Possession Date is specified, by the Commencement Date, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease, or the obligations of Lessee hereunder, or extend the term hereof, but in such case, Lessee shall not, except as otherwise provided herein, be
obligated to pay rent or perform any other obligation of Lessee under the terms of this Lease until Lessor delivers possession of the Premises to Lessee. If possession of the Premises is not delivered
to Lessee within sixty (60) days after the Commencement Date, Lessee may, at its option, by notice in writing to Lessor within ten (10) days after the end of said sixty (60) day period, cancel this
Lease, in which event the Parties shall be discharged from all obligations hereunder; provided further, however, that if such written notice of Lessee is not received by Lessor within said ten (10)
day period, Lessee's right to cancel this Lease hereunder shall terminate and be of no further force or effect. Except as may be otherwise provided, and regardless of when the Original Term actually
commences, if possession is not tendered to Lessee when required by this Lease and Lessee does not terminate this Lease, as aforesaid, the period free of the obligation to pay Base Rent, if any, that
Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to the period during which the Lessee would have otherwise enjoyed under the terms
hereof, but minus any days of delay caused by the acts, changes or omissions of Lessee. 

Page 4 of 30

 

4.  Rent.  

    4.1  Base Rent.  Lessee shall pay Base Rent and other rent or charges, as the same may be adjusted from
time to time, to Lessor in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all other rent and charges for any period during the term hereof which is for less than one full month shall be prorated based
upon the actual number of days of the month involved. Payment of Base Rent and other charges shall be made to Lessor at its address stated herein or to such other persons or at such other addresses as
Lessor may from time to time designate in writing to Lessee. 

    4.2  Common Area Operating Expenses.  Lessee shall pay to Lessor during the term hereof, in addition to
the Base Rent, Lessee's Share (as specified in Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined, over Common Area Operating Expenses for the calendar year 2000, as the
"Base Year" for such Common Area Operating Expenses, during each calendar year of the term of this Lease, commending January 1, 2001 in accordance with the following provisions: 

    (a)  "Common Area Operating Expenses"  are defined, for
purposes of this Lease, as all costs incurred by Lessor relating to the ownership and operation of the Industrial Center, including, but not limited to, the following: 

     (i) The
operation, repair and maintenance, in neat, clean, good order and condition, of the following: 

   (aa) The
Common Areas, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped areas,
striping, bumpers, irrigation systems, Common Area lighting facilities, fences and gates, elevators and roof. 

   (bb) Exterior
signs and any tenant directories. 

   (cc) Fire
detection and sprinkler systems. 

    (ii) The
cost of water, gas, electricity and telephone to service the Common Areas. 

    (iii) Trash
disposal, property management and security services and the costs of any environmental inspections. 

    (iv) Reserves
set aside for maintenance and repair of Common Areas. 

    (v) Any
increase above the Base Real Property Taxes (as defined in Paragraph 10.2(b)) for the Building and the Common Areas. 

    (vi) Any
"Insurance Cost Increase" (as defined in Paragraph 8.1). 

   (vii) The
cost of insurance carried by Lessor with respect to the Common Areas. 

   (viii) Any
deductible portion of an insured loss concerning the Building or the Common Areas. 

    (ix) Any
other services to be provided by Lessor that are stated elsewhere in this Lease to be a Common Area Operating Expense. 

    (b) Any
Common Area Operating Expenses and Real Property Taxes that are specifically attributable to the Building or to any other building in the Industrial Center or
to the operation, repair and maintenance thereof, shall be allocated entirely to the Building or to such other building. However, any Common Area Operating Expenses and Real Property Taxes that are
not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the Industrial
Center. 

    (c) The
inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to either have
said improvements or facilities or to provide those services unless the Industrial Center already has the same, Lessor already 

Page 5 of 30

 

provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them. 

    (d) Lessee's
Share of Common Area Operating Expenses over the Base Year Common Area Operating Expenses shall be payable by Lessee, commencing January 1, 2001,
within ten (10) days after a reasonably detailed statement of actual expenses is presented to Lessee by Lessor setting forth the calendar year 2000 Base Year Common Area Operating Expenses and
increases thereof after January 1, 2001. At Lessor's option, however, an amount may be estimated by Lessor from time to time of Lessee's Share of annual Common Area Operating Expenses and the
same shall be payable monthly or
quarterly, as Lessor shall designate, commencing January 1, 2001, during each 12-month period of the Lease term, on the same day as the Base Rent is due hereunder. Lessor shall deliver to Lessee
within ninety (90) days after the expiration of each calendar year, or as soon thereafter as available, a reasonably detailed statement showing Base Year Common Area Operating Expenses and Lessee's
Share of increases of the actual Common Area Operating Expenses over Base Year Common Area Operating Expenses incurred during the preceding year. If Lessee's payments under this Paragraph 4.2(d)
during said preceding year exceed Lessee's Share as indicated on said statement, Lessee shall be credited the amount of such overpayment against Lessee's Share of Common Area Operating Expenses next
becoming due. If Lessee's payments under this Paragraph 4.2(d) during said preceding year were less than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to Lessee of said statement. Payment of Lessee's Share of Common Area Operating Expenses for any partial year after the Base Year shall be
prorated based upon the actual number of months or days involved in such subsequent year. 

5.  Security Deposit.  Lessee shall deposit with Lessor upon Lessee's execution hereof the Security Deposit set forth in
Paragraph 1.7 as security for Lessee's faithful performance of Lessee's obligations under this Lease. If Lessee fails to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to reimburse or compensate
Lessor for any liability, cost, expense, loss or damage (including attorneys' fees) which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefore deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. Any time
the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor as an addition to the Security Deposit so that the total
amount of the Security Deposit shall at all times bear the same proportion to the then current Base Rent as the initial Security Deposit bears to the initial Base Rent set forth in Paragraph 1.5.
Lessor shall not be required to keep all or any part of the Security Deposit separate from its general accounts. Lessor shall, at the expiration or earlier termination of the term hereof and after
Lessee has vacated the Premises, return to Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's interest herein), that portion of the Security Deposit not used or applied by
Lessor. Unless otherwise expressly agreed in writing by Lessor, no part of the Security Deposit shall be considered to be held in trust, to bear interest or other increment for its use, or to be
prepayment for any monies to be paid by Lessee under this Lease. 

6.  Use.  

    6.1  Permitted Use.  

    (a) Lessee
shall use and occupy the Premises only for the Permitted Use set forth in Paragraph 1.8, or any other legal use which is reasonably comparable thereto, and
for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates waste or a nuisance, or that disturbs owners and/or occupants of, or causes damage to
the Premises or neighboring premises or properties. 

    (b) Lessor
hereby agrees to not unreasonably withhold or delay its consent to any written request by Lessee, Lessee's assignees or subtenants, and by prospective
assignees and subtenants of Lessee, its assignees and subtenants, for a modification of said Permitted Use, so long as the same will 

Page 6 of 30

 

not impair the structural integrity of the improvements on the Premises or in the Building or the mechanical or electrical systems therein, does not conflict with uses by other lessees, is not
significantly more burdensome to the Premises or the Building and the improvements thereon, and is otherwise permissible pursuant to this Paragraph 6. If Lessor elects to withhold such consent, Lessor
shall within five (5) business days after such request give a written notification of same, which notice shall include an explanation of Lessor's reasonable objections to the change in use. 

    6.2  Hazardous Substances.  

    (a)  Reportable Uses Require Consent.  The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the
public health, safety or welfare, the environment, or the Premises; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of Lessor to any governmental
agency or third party under any applicable statute or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any products or
by-products thereof. Lessee shall not engage in any activity in or about the Premises which constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances without the express prior
written consent of Lessor and compliance in a timely manner (at Lessee's sole cost and expense) with all Applicable Requirements (as defined in Paragraph 6.3). "Reportable
Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and (iii) the presence in, on
or about the Premises of a Hazardous Substance with respect to which any Applicable Laws require that a notice be given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may, without Lessor's prior consent, but upon notice to Lessor and in compliance with all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the Permitted Use, so long as such use is not a Reportable Use and does not expose the Premises, or neighboring properties to any
meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may (but without any obligation to do so) condition its consent to any Reportable Use of any
Hazardous Substance by Lessee upon Lessee's giving Lessor such additional assurances as Lessor, in its reasonable discretion, deems necessary to protect itself, the public, the Premises and the
environment against damage, contamination or injury and/or liability therefor, including, but not limited to, the installation (and, at Lessor's option, removal on or before Lease expiration or
earlier termination) of reasonably necessary protective modifications to the Premises (such as concrete encasements) and/or the deposit of an additional Security Deposit under Paragraph 5 hereof. 

    (b)  Duty to Inform Lessor.  If Lessee knows, or has reasonable cause to believe, that a Hazardous
Substance has come to be located in, on, under or about the Premises or the Building, other than as previously consented to by Lessor, Lessee shall immediately give Lessor written notice thereof,
together with a copy of any statement, report, notice, registration, application, permit, business plan, license, claim, action, or proceeding given to, or received from, any governmental authority or
private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including, but not limited to, all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Premises (including, without limitation, through the plumbing or
sanitary sewer system). 

    (c)  Indemnification.  Lessee shall indemnify, protect, defend and hold Lessor, its agents, employees,
lenders and ground lessor, if any, and the Premises, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits and attorneys'
and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's obligations under this Paragraph
6.2(c) 

Page 7 of 30

 

shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation (including
consultants' and attorneys' fees and testing), removal, remediation, restoration and/or abatement thereof, or of any contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of such agreement. 

    6.3  Lessee's Compliance with Requirements.  Lessee shall, at Lessee's sole cost and expense, fully,
diligently and in a timely manner, comply with all "Applicable Requirements," which term is used in this Lease to mean all laws, rules, regulations,
ordinances, directives, covenants, easements and restrictions of record, permits, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's
engineers and/or consultants, relating in any manner to the Premises (including, but not limited to, matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about
the Premises, including soil and groundwater conditions, and (iii) the use, generation, manufacture, production, installation, maintenance, removal, transportation, storage, spill, or release of any
Hazardous Substance), now in effect or which may hereafter come into effect. Lessee shall, within five (5) days after receipt of Lessor's written request, provide Lessor with copies of all documents
and information, including, but not limited to, permits, registrations, manifests, applications, reports and certificates, evidencing Lessee's compliance with any Applicable Requirements specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving failure by Lessee or the Premises to comply with any Applicable Requirements. 

    6.4  Inspection; Compliance with Law.  Lessor, Lessor's agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground leases on the Premises ("Lenders") shall have the right to enter the
Premises at any time in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease
and all Applicable Requirements (as defined in Paragraph 6.3), and Lessor shall be entitled to employ experts and/or consultants in connection therewith to advise Lessor with respect to Lessee's
activities, including, but not limited to, Lessee's installation, operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a Default or Breach of this Lease by Lessee or a violation of Applicable Requirements or a contamination, caused or materially
contributed to by Lessee, is found to exist or to be imminent, or unless the inspection is requested or ordered by a governmental authority as the result of any such existing or imminent violation or
contamination. In such case, Lessee shall upon request reimburse Lessor or Lessor's Lender, as the case may be, for the costs and expenses of such inspections. 

7.  Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations.  

    7.1  Lessee's Obligations.  

    (a) Subject
to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's Obligations), 9 (Damage or
Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole cost and expense and at all times, keep the Premises and every part thereof in good order, condition and repair (whether or not such
portion of the Premises requiring repair, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of
Lessee's use, any prior use, the elements or the age of such portion of the Premises), including, without limiting the generality of the foregoing, all equipment or facilities specifically serving the
Premises, such as plumbing, heating, air conditioning, ventilating, electrical, lighting facilities, boilers, fired or unfired pressure vessels, fire hose connections if within the Premises, fixtures,
interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights, but excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2 below. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Lessee's 

Page 8 of 30

 

obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. 

    (b) Lessee
shall, at Lessee's sole cost and expense, procure and maintain a contract, with copies to Lessor, in customary form and substance for and with a contractor
specializing and experienced in the inspection, maintenance and service of the heating, air conditioning and ventilation system for the Premises. However, Lessor reserves the right, upon notice to
Lessee, to procure and maintain the
contract for the heating, air conditioning and ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor, upon demand, for the cost thereof. 

    (c) If
Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior written notice to Lessee
(except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, in accordance
with Paragraph 13.2 below. 

    7.2  Lessor's Obligations.  Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance with
Covenants, Restrictions and Building Code), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to reimbursement
pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler and/or
standpipe and hose (if located in the Common Areas) or other automatic fire extinguishing system including fire alarm and/or smoke detection systems and equipment, fire hydrants, parking lots,
walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area
Operating Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or replace
windows, doors or plate glass of the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the Building, Industrial Center or Common Areas in good order, condition and repair. 

    7.3  Utility Installations, Trade Fixtures, Alterations.  

    (a)  Definitions; Consent Required.  The term "Utility
Installations" is used in this Lease to refer to all air lines, power panels, electrical distribution, security, fire protection systems, communications systems, lighting
fixtures, heating, ventilating and air conditioning equipment, plumbing, and fencing in, on or about the Premises. The term "Trade Fixtures" shall mean
Lessee's machinery and equipment which can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification
of the improvements on the Premises which are provided by Lessor under the terms of this Lease, other than Utility Installations or Trade Fixtures. "Lessee-Owned Alterations
and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). Lessee shall
not make nor cause to be made any Alterations or Utility Installations in, on, under or about the Premises without Lessor's prior written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without Lessor's consent but upon notice to Lessor, so long as they are not visible from the outside of the Premises, do not involve
puncturing, relocating or removing the roof or any existing walls, or changing or interfering with the fire sprinkler or fire detection systems and the cumulative cost thereof during the term of this
Lease as extended does not exceed $2,500.00. 

    (b)  Consent.  Any Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. All consents given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable permits required by governmental authorities; (ii) the furnishing of copies of such permits together with a copy of the
plans and specifications for the Alteration or Utility Installation to Lessor prior to commencement of the work thereon; and (iii) the compliance by Lessee with all conditions of said permits in a
prompt and expeditious manner. Any Alterations or Utility Installations by Lessee during the term of this 

Page 9 of 30

 

Lease shall be done in a good and workmanlike manner, with good and sufficient materials, and be in compliance with all Applicable Requirements. Lessee shall promptly upon completion thereof furnish
Lessor with as-built plans and specifications therefor. Lessor may (but without obligation to do so) condition its consent to any requested Alteration or Utility Installation that costs $2,500.00 or
more upon Lessee's providing Lessor with a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alteration or Utility Installation. 

    (c)  Lien Protection.  Lessee shall pay when due all claims for labor or materials furnished or alleged
to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein. Lessee
shall give Lessor not less than ten (10) days' notice prior to the commencement of any work in, on, or about the Premises, and Lessor shall have the right to post notices of non-responsibility in or
on the Premises as provided by law. If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense, defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Premises. If Lessor shall
require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor, in an amount equal to one and one-half times the amount of such contested lien claim or demand, indemnifying Lessor
against liability for the same, as required by law for the holding of the Premises free from the effect of such lien or claim. In addition, Lessor may require Lessee to pay Lessor's attorneys' fees
and costs in participating in such action if Lessor shall decide it is to its best interest to do so. 

    7.4  Ownership, Removal, Surrender, and Restoration.  

    (a)  Ownership.  Subject to Lessor's right to require their removal and to cause Lessee to become the
owner thereof as hereinafter provided in this Paragraph 7.4, all Alterations and Utility Installations made to the Premises by Lessee shall be the property of and owned by Lessee, but considered a
part of the Premises. Lessor may, at any time and at its option, elect in writing to Lessee to be the owner of all or any specified part of the Lessee-Owned Alterations and Utility Installations.
Unless otherwise instructed per Subparagraph 7.4(b) hereof, all Lessee-Owned Alterations and Utility Installations shall, at the expiration or earlier termination of this Lease, become the property of
Lessor and remain upon the Premises and be surrendered with the Premises by Lessee. 

    (b)  Removal.  Unless otherwise agreed in writing, Lessor may require that any or all Lessee-Owned
Alterations or Utility Installations be removed by the expiration or earlier termination of this Lease, and that the area affected by the removal of the Lessee-Owned Alterations or Utility
Installations be restored to the condition that existed prior to the installation of the particular Lessee-Owned Alteration or Utility Installation, notwithstanding that their installation may have
been consented to by Lessor. Lessor may require the removal at any time of all or any part of any Alterations or Utility Installations made without the required consent of Lessor. 

    (c)  Surrender/Restoration.  Lessee shall surrender the Premises by the end of the last day of the Lease
term or any earlier termination date, clean and free of debris and in good operating order, condition and state of repair, ordinary wear and tear excepted. Ordinary wear and tear shall not include any
damage or deterioration that would have been prevented by good maintenance practice or by Lessee performing all of its obligations under this Lease. Except as otherwise agreed or specified herein, the
Premises, as surrendered, shall include the Alterations and Utility Installations. The obligation of Lessee shall include the repair of any damage occasioned by the installation, maintenance or
removal of Lessee's Trade Fixtures, furnishings, equipment, and Lessee-Owned Alterations and Utility Installations, as well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or ground water contaminated by Lessee, all as may then be required by Applicable Requirements and/or good practice. Lessee's Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee subject to its obligation to repair and restore the Premises per this Lease. 

Page 10 of 30

 

8.  Insurance; Indemnity.  

    8.1  Payment of Premium Increases.  

    (a) As
used herein, the term "Insurance Cost Increase" is defined as any increase in the actual cost of the insurance
applicable to the Building and required to be carried by Lessor pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), ("Required Insurance"), over and above
the Base Premium, as hereinafter defined, calculated on an annual basis. "Insurance Cost Increase" shall include, but not be limited to, requirements of the holder of a mortgage or deed of trust
covering the Premises, increased valuation of the Premises, and/or a general premium rate increase. The term "Insurance Cost Increase" shall not, however, include any premium increases resulting from
the nature of the occupancy of any other lessee of the Building. If the parties insert a dollar amount in Paragraph 1.9, such amount shall be considered the "Base
Premium." If a dollar amount has not been inserted in Paragraph 1.9 and if the Building has been previously occupied during the twelve (12) month period immediately preceding
the Commencement Date, the "Base Premium" shall be the annual premium applicable to such twelve (12) month period. If the Building was not fully occupied during such twelve (12) month period, the
"Base Premium" shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the Commencement Date, assuming the most nominal use possible of the Building. In no event,
however, shall Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $1,000,000 procured under Paragraph 8.2(b). 

    (b) Lessee
shall pay any Insurance Cost Increase to Lessor pursuant to Paragraph 4.2. Premiums for policy periods commencing prior to, or extending beyond, the term of
this Lease shall be prorated to coincide with the corresponding Commencement Date or Expiration Date. 

    8.2  Liability Insurance.  

    (a)  Carried by Lessee.  Lessee shall obtain and keep in force during the term of this Lease a Commercial
General Liability policy of insurance protecting Lessee, Lessor and any Lender(s) whose names have been provided to Lessee in writing (as additional insureds) 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 $2,000,000 per occurrence with an "Additional Insured-Managers or Lessors of Premises" endorsement and contain the
"Amendment of the Pollution Exclusion" endorsement 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 Lessee's indemnity
obligations under this Lease. The limits of said insurance required by this Lease or as carried by Lessee shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All insurance to be carried by Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. 

    (b)  Carried by Lessor.  Lessor shall also maintain liability insurance described in Paragraph 8.2(a)
above, in addition to and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 

    8.3  Property Insurance—Building, Improvements and Rental Value.  

    (a)  Building and Improvements.  Lessor shall obtain and keep in force during the term of this Lease a
policy or policies in the name of Lessor, with loss payable to Lessor and to any Lender(s), insuring against loss or damage to the Premises. Such insurance shall be for full replacement cost, as the
same shall exist from time to time, or the amount required by any Lender(s), but in no event more than the commercially reasonable and available insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than full replacement cost. Lessee-Owned Alterations and Utility Installations, Trade Fixtures and Lessee's personal property
shall be insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and commercially appropriate, Lessor's policy or policies shall insure against all risks of direct physical loss or
damage 

Page 11 of 30

 

(including the perils of flood and/or earthquake), including coverage for any additional costs resulting from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or
law regulating the reconstruction or replacement of any undamaged sections of the Building required to be demolished or removed by reason of the enforcement of any building, zoning, safety or land use
laws as the result of a covered loss, but not including plate glass insurance. Said policy or policies shall also contain an agreed valuation provision in lieu of any co-insurance clause, waiver of
subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index
for All Urban Consumers for the city nearest to where the Premises are located. 

    (b)  Rental Value.  Lessor shall also obtain and keep in force during the term of this Lease a policy or
policies in the name of Lessor, with loss payable to Lessor and any Lender(s), insuring the loss of the full rental and other charges payable by all lessees of the Building to Lessor for one year
(including all Real Property Taxes, insurance costs, all Common Area Operating Expenses and any scheduled rental increases). Said insurance may provide that in the event the Lease is terminated by
reason of an insured loss, the period of indemnity for such coverage shall be extended beyond the date of the completion of repairs or replacement of the Premises, to provide for one full year's loss
of rental revenues from the date of any such loss. Said insurance shall contain an agreed valuation provision in lieu of any co-insurance clause, and the amount of coverage shall be adjusted annually
to reflect the projected rental income, Real Property Taxes, insurance premium costs and other expenses, if any, otherwise payable, for the next 12-month period. Common Area Operating Expenses shall
include any deductible amount in the event of such loss. 

    (c)  Adjacent Premises.  Lessee shall pay for any increase in the premiums for the property insurance of
the Building and for the Common Areas or other buildings in the Industrial Center if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. 

    (d)  Lessee's Improvements.  Since Lessor is the Insuring Party, Lessor shall not be required to insure
Lessee-Owned Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease. 

    8.4  Lessee's Property Insurance.  Subject to the requirements of Paragraph 8.5, Lessee at its cost shall
either by separate policy or, at Lessor's option, by endorsement to a policy already carried, maintain insurance coverage on all of Lessee's personal property, Trade Fixtures and Lessee-Owned
Alterations and Utility Installations in, on, or about the Premises similar in coverage to that carried by Lessor as the Insuring Party under Paragraph 8.3(a). Such insurance shall be full replacement
cost coverage with a deductible not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property and the restoration of Trade
Fixtures and Lessee-Owned Alterations and Utility Installations. Upon request from Lessor, Lessee shall provide Lessor with written evidence that such insurance is in force. 

    8.5  Insurance Policies.  Insurance required hereunder shall be in companies duly licensed to transact
business in the state where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" of at least B+, V, or such other rating as may be required by a Lender, as
set forth in the most current issue of "Best's Insurance Guide." Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Paragraph 8. Lessee
shall cause to be delivered to Lessor, within seven (7) days after the earlier of the Early Possession Date or the Commencement Date, certified copies of, or certificates evidencing the existence and
amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such policy shall be cancelable or subject to modification except after thirty (30) days' prior written notice to Lessor. Lessee
shall at least thirty (30) days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance
and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. 

    8.6  Waiver of Subrogation.  Without affecting any other rights or remedies, Lessee and Lessor each
hereby release and relieve the other, and waive their entire right to recover damages (whether in contract or in tort) against the other, for loss or damage to their property arising out of or
incident to the perils 

Page 12 of 30

 

required to be insured against under Paragraph 8. The effect of such releases and waivers of the right to recover damages shall not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto. Lessor and Lessee agree to have their respective insurance companies issuing property damage insurance waive any right to subrogation that such companies may have
against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby. 

    8.7  Indemnity.  Except for Lessor's negligence and/or breach of express warranties, Lessee shall
indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or
damages, costs, liens, judgments, penalties, loss of permits, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the occupancy of the
Premises by Lessee, the conduct of Lessee's business, any act, omission or neglect of Lessee, its agents, contractors, employees or invitees, and out of any Default or Breach by Lessee in the
performance in a timely manner of any obligation on Lessee's part to be performed under this Lease. The foregoing shall include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims made against Lessor) litigated and/or reduced to judgment. In case any action or proceeding be brought against Lessor
by reason of any of the foregoing matters, Lessee, upon notice from Lessor, shall defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense. Lessor need not have first paid any such claim in order to be so indemnified. 

    8.8  Exemption of Lessor from Liability.  Lessor shall not be liable for injury or damage to the person
or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether said injury or damage results from conditions arising upon the Premises or upon other portions of the Building of which the Premises are a part,
from other sources or places, and regardless of whether the cause of such damage or injury or the means of repairing the same is accessible or not. Lessor shall not be liable for any damages arising
from any act or neglect of any other lessee of Lessor nor from the failure by Lessor to enforce the provisions of any other lease in the Industrial Center. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee's business or for any loss of income or profit therefrom. 

9.  Damage or Destruction.  

    9.1  Definitions.  

    (a)  "Premises Partial Damage"  shall mean damage or destruction to the Premises, other than
Lessee-Owned Alterations and Utility Installations, the repair cost of which damage or destruction is less than fifty percent (50%) of the then Replacement Cost (as defined in Paragraph
9.1(d)) of the Premises (excluding Lessee-Owned Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or destruction. 

    (b)  "Premises Total Destruction"  shall mean damage or destruction to the Premises, other than
Lessee-Owned Alterations and Utility Installations, the repair cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost of the Premises (excluding
Lessee-Owned Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or destruction. In addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any lessees of the Building, the cost of which damage or destruction is fifty percent (50%) or more of the then Replacement
Cost (excluding Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any lessees of the Building) of the Building shall, at the option of Lessor, be deemed to be Premises Total
Destruction. 

    (c)  "Insured Loss"  shall mean damage or destruction to the Premises, other than Lessee-Owned
Alterations and Utility Installations and Trade Fixtures, which was caused by an event 

Page 13 of 30

 

required to be covered by the insurance described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage limits involved. 

    (d)  "Replacement Cost"  shall mean the cost to repair or rebuild the improvements owned by Lessor at the
time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation. 

    (e)  "Hazardous Substance Condition"  shall mean the occurrence or discovery of a condition involving the
presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises. 

    9.2  Premises Partial Damage—Insured Loss.  If Premises Partial Damage that is an Insured
Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility Installations) as soon as reasonably possible and this
Lease shall continue in full force and effect. In the event, however, that there is a shortage of insurance proceeds and such shortage is due to the fact that, by reason of the unique nature of the
improvements in the Premises, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or
to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within ten (10) days following receipt of written notice
of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said ten (10) day period, Lessor shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If Lessor does not receive such funds or assurance within said period, Lessor may nevertheless elect by written notice to Lessee within ten (10) days
thereafter to make restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect. If Lessor does not
receive such funds or assurance within such ten (10) day period, and if Lessor does not so elect to restore and repair, then this Lease shall
terminate sixty (60) days following the occurrence of the damage or destruction. Unless otherwise agreed, Lessee shall in no event have any right to reimbursement from Lessor for any funds contributed
by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party. 

    9.3  Partial Damage—Uninsured Loss.  If Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense and this Lease shall continue in full force and effect), Lessor may, at
Lessor's option, either (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to
Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such damage of Lessor's desire to terminate this Lease as of the date sixty (60) days following the date of
such notice. In the event Lessor elects to give such notice of Lessor's intention to terminate this Lease, Lessee shall have the right within ten (10) days after the receipt of such notice to give
written notice to Lessor of Lessee's commitment to pay for the repair of such damage totally at Lessee's expense and without reimbursement from Lessor. Lessee shall provide Lessor with the required
funds or satisfactory assurance thereof within thirty (30) days following such commitment from Lessee. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to
made such repairs as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the funds or assurance thereof within the times specified
above, this Lease shall terminate as of the date specified in Lessor's notice of termination. 

    9.4  Total Destruction.  Notwithstanding any other provision hereof, if Premises Total Destruction occurs
(including any destruction required by any authorized public authority), this Lease shall terminate sixty (60) days following the date of such Premises Total Destruction, whether or not the damage or
destruction is an Insured Loss or was caused by a negligent or willful act of Lessee. In the event, however, that the damage or destruction was caused by Lessee, Lessor shall have the right to recover
Lessor's damages from Lessee except as released and waived in Paragraph 8.6. 

Page 14 of 30

 

    9.5  Damage Near End of Term.  If at any time during the last six (6) months of the term of this Lease
there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may, at Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's election to do so within thirty (30) days after the date of occurrence of such damage. Provided, however, if Lessee at
that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by (a) exercising such option, and (b) providing Lessor with any shortage in
insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is ten (10) days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's expense, repair such
damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this Paragraph 9.5. 

    9.6  Abatement of Rent; Lessee's Remedies.  

    (a) In
the event of (i) Premises Partial Damage or (ii) Hazardous Substance Condition for which Lessee is not legally responsible, the Base Rent, Common Area Operating
Expenses and other charges, if any, payable by Lessee hereunder for the period during which such damage or condition, its repair, remediation or restoration continues, shall be abated in proportion to
the degree to which Lessee's use of the Premises is impaired, but not in excess of proceeds from insurance required to be carried under Paragraph 8.3(b). Except for abatement of Base Rent, Common Area
Operating Expenses and other charges, if any, as aforesaid, all other obligations of Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim against Lessor for any damage
suffered by reason of any such damage, destruction, repair, remediation or restoration. 

    (b) If
Lessor shall be obligated to repair or restore the Premises under the provisions of this Paragraph 9 and shall not commence, in a substantial and meaningful way,
the repair or restoration of the Premises within ninety (90) days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice of Lessee's election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If
Lessee gives such notice to Lessor and such Lenders and such repair or restoration is not commenced within thirty (30) days after receipt of such notice, this Lease shall terminate as of the date
specified in said notice. If Lessor or a Lender commences the repair or restoration of the Premises within thirty (30) days after the receipt of such notice, this Lease shall continue in full force
and effect. "Commence" as used in this Paragraph 9.6 shall mean either the unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever occurs first. 

    9.7  Hazardous Substance Conditions.  If a Hazardous Substance Condition occurs, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by Applicable Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may at Lessor's option either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to investigate and remediate such condition exceeds twelve (12) times the
then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee within thirty (30) days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition of Lessor's desire to terminate this Lease as of the date sixty (60) days following the date of such notice. In the event Lessor elects to give such notice of Lessor's intention to terminate
this Lease, Lessee shall have the right within ten (10) days after the receipt of such notice to give written notice to Lessor of Lessee's commitment to pay for the excess costs of (a) investigation
and remediation of such Hazardous Substance Condition to the extent required by Applicable Requirements, over (b) an
amount equal to twelve (12) times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with the funds required of Lessee 

Page 15 of 30

 

or satisfactory assurance thereof within thirty (30) days following said commitment by Lessee. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such
investigation and remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the
time period specified above, this Lease shall terminate as of the date specified in Lessor's notice of termination. 

    9.8  Termination—Advance Payments.  Upon termination of this Lease pursuant to this Paragraph
9, Lessor shall return to Lessee any advance payment made by Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor under the terms of
this Lease. 

    9.9  Waiver of Statutes.  Lessor and Lessee agree that the terms of this Lease shall govern the effect of
any damage to or destruction of the Premises and the Building with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent it is
inconsistent herewith. 

10.  Real Property Taxes.  

    10.1  Payment of Taxes.  Lessor shall pay the Real Property Taxes, as defined in Paragraph 10.2(a),
applicable to the Industrial Center, and except as otherwise provided in Paragraph 10.3, any increases in such amounts over the Base Real Property Taxes shall be included in the calculation of Common
Area Operating Expenses in accordance with the provisions of Paragraph 4.2. 

    10.2  Real Property Tax Definitions.  

    (a) As
used herein, the term "Real Property Taxes" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed upon the
Industrial Center by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage, or other
improvement district thereof, levied against any legal or equitable interest of Lessor in the Industrial Center or any portion thereof, Lessor's right to rent or other income therefrom,
and/or Lessor's business of leasing the Premises. The term "Real Property Taxes" shall also include any tax, fee, levy, assessment or charge, or any
increase therein, imposed by reason of events occurring, or changes in Applicable Law taking effect, during the term of this Lease, including but not limited to a change in the ownership of the
Industrial Center or in the improvements thereon, the execution of this Lease, or any modification, amendment or transfer thereof, and whether or not contemplated by the Parties. 

    (b) As
used herein, the term "Base Real Property Taxes" shall be the amount of Real Property Taxes which are assessed
against the Premises, Building or Common Areas in the calendar year during which the Lease is executed. In calculating Real Property Taxes for any calendar year, the Real Property Taxes for any real
estate tax year shall be included in the calculation of Real Property Taxes for such calendar year based upon the number of days which such calendar year and tax year have in common. 

    10.3  Additional Improvements.  Common Area Operating Expenses shall not include Real Property Taxes
specified in the tax assessor's records and work sheets as being caused by additional improvements placed upon the Industrial Center by other lessees or by Lessor for the exclusive enjoyment of such
other lessees. Notwithstanding Paragraph 10.1 hereof, Lessee shall, however, pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in
Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee's request. 

    10.4  Joint Assessment.  If the Building is not separately assessed, Real Property Taxes allocated to the
Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from 

Page 16 of 30

 

the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor's reasonable determination thereof, in good faith, shall be
conclusive. 

    10.5  Lessee's Property Taxes.  Lessee shall pay prior to delinquency all taxes assessed against and
levied upon Lessee-Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises or stored within the Industrial
Center. When possible, Lessee shall cause its Lessee-Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within
ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessor's property. 

11.  Utilities.  Lessee shall pay directly for all utilities and services supplied to the Premises, including, but not
limited to, electricity, telephone, security, gas and cleaning of the Premises, together with any taxes thereon. If any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a reasonable proportion to be determined by Lessor of all such charges jointly metered or billed with other premises in the Building, in
the manner and within the time periods set forth in Paragraph 4.2(d). 

12.  Assignment and Subletting.  

    12.1  Lessor's Consent Required.  

    (a) Lessee
shall not voluntarily or by operation of law assign, transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or sublet all or any part
of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent given under and subject to the terms of Paragraph 36. 

    (b) A
change in the control of Lessee shall constitute an assignment requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five percent (25%) or
more of the voting control of Lessee shall constitute a change in control for this purpose. 

    (c) The
involvement of Lessee 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 Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee, as
hereinafter defined, by an amount equal to or greater than twenty-five percent (25%) of such Net Worth of Lessee as it was represented to Lessor at the time of full execution and delivery of this
Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of this Lease by Lessee to which Lessor may reasonably withhold its consent. "Net Worth of
Lessee" for purposes of this Lease shall be the net worth of Lessee (excluding any Guarantors) established under generally accepted accounting principles consistently applied. 

    (d) An
assignment or subletting of Lessee's interest in this Lease without Lessor's specific prior written consent shall, at Lessor's option, be a Default curable after
notice per Paragraph 13.1, or a non-curable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unconsented to assignment or subletting as a non-curable Breach,
Lessor shall have the right to either: (i) terminate this Lease, or (ii) upon thirty (30) days' written notice ("Lessor's Notice"), increase the monthly
Base Rent for the Premises to the greater of the then fair market rental value of the Premises, as reasonably determined by Lessor, or one hundred ten percent (110%) of the Base Rent then in effect.
Pending determination of the new fair market rental value, if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's Notice, with any overpayment credited against the next
installment(s) of Base Rent
coming due, and any underpayment for the period retroactively to the effective date of the adjustment being due and payable immediately upon the determination thereof. Further, in the event of such
Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to the then fair market value as reasonably determined
by Lessor (without the Lease being considered an 

Page 17 of 30

 

encumbrance or any deduction for depreciation or obsolescence, and considering the Premises at its highest and best use and in good condition) or one hundred ten percent (110%) of the price previously
in effect, (ii) any index-oriented rental or price adjustment formulas contained in this Lease shall be adjusted to require that the base index be determined with reference to the index applicable to
the time of such adjustment, and (iii) any fixed rental adjustments scheduled during the remainder of the Lease term shall be increased in the same ratio as the new rental bears to the Base Rent in
effect immediately prior to the adjustment specified in Lessor's Notice. 

    (e) Lessee's
remedy for any breach of this Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief. 

    12.2  Terms and Conditions Applicable to Assignment and Subletting.  

    (a) Regardless
of Lessor's consent, any assignment or subletting shall not (i) be effective without the express written assumption by such assignee or sublessee of the
obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, nor (iii) alter the primary liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by Lessee under this Lease. 

    (b) Lessor
may accept any rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a
delay in the approval or disapproval of such assignment nor the acceptance of any rent for performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for the Default
or Breach by Lessee of any of the terms, covenants or conditions of this Lease. 

    (c) The
consent of Lessor to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting by Lessee or to any subsequent or
successive assignment or subletting by the assignee or sublessee. However, Lessor may consent to subsequent sublettings and assignments of the sublease or any amendments or modifications thereto
without notifying Lessee or anyone else liable under this Lease or the sublease and without obtaining their consent, and such action shall not relieve such persons from liability under this Lease or
the sublease. 

    (d) In
the event of any Default or Breach of Lessee's obligation under this Lease, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible
for the performance of the Lessee's obligations under this Lease, including any sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor,
or any security held by Lessor. 

    (e) Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the financial and
operational responsibility and appropriateness of the proposed assignee or sublessee, including, but not limited to, the intended use and/or required modification of the Premises, if any, together
with a non-refundable deposit of $1,000 or ten percent (10%) of the monthly Base Rent applicable to the portion of the Premises which is the subject of the proposed assignment or sublease, whichever
is greater, as reasonable consideration for Lessor's considering and processing the request for consent. Lessee agrees to provide Lessor with such other or additional information and/or documentation
as may be reasonably requested by Lessor. 

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

    (g) The
occurrence of a transaction described in Paragraph 12.2(c) shall give Lessor the right (but not the obligation) to require that the Security Deposit be
increased by an amount equal to six (6) times the then monthly Base Rent, and Lessor may make the actual receipt by Lessor of the Security Deposit increase a condition to Lessor's consent to such
transaction. 

Page 18 of 30

 

    (h) Lessor, as a condition to giving its consent to any assignment or subletting, may require that the amount and adjustment schedule of the rent payable under this
Lease be adjusted to what is then the market value and/or adjustment schedule for property similar to the Premises as then constituted, as determined by Lessor. 

    12.3  Additional Terms and Conditions Applicable to Subletting.  The following terms and conditions shall
apply to any subletting by Lessee 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: 

    (a) Lessee
hereby assigns and transfers to Lessor all of Lessee's interest in all rentals and income arising from any sublease of all or a portion of the Premises
heretofore or hereafter made by Lessee, and Lessor may collect such rent and income and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach (as defined in
Paragraph 13.1) shall occur in the performance of Lessee's obligations under this Lease, Lessee may, except as otherwise provided in this Lease, receive, collect and enjoy the rents accruing under
such sublease. Lessor shall not, by reason of the foregoing provision or any other assignment of such sublease to Lessor, nor by reason of the collection of the rents from a sublessee, be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee under such Sublease. Lessee hereby irrevocably authorizes and directs any
such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor the rents and other charges due
and to become due under the sublease. Sublessee shall rely upon any such statement and request from Lessor and shall pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or claim from Lessee to the contrary. Lessee shall have no right or claim against such sublessee, or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said sublessee to Lessor. 

    (b) In
the event of a Breach by Lessee in the performance of its obligations under this Lease, Lessor, at its option and without any obligation to do so, may require
any sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any other prior defaults or breaches of such sublessor
under such sublease. 

    (c) Any
matter or thing requiring the consent of the sublessor under a sublease shall also require the consent of Lessor herein. 

    (d) No
sublessee under a sublease approved by Lessor shall further assign or sublet all or any part of the Premises without Lessor's prior written consent. 

    (e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace
period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 

13.  Default; Breach; Remedies.  

    13.1  Default; Breach.  Lessor and Lessee agree that if an attorney is consulted by Lessor in connection
with a Lessee Default or Breach (as hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence for legal services and costs in the preparation and service of a notice of Default,
and that Lessor may include the cost of such services and costs in said notice as rent due and payable to cure said default. A "Default" by Lessee is
defined as a failure by Lessee to observe, comply with or perform any of the terms, covenants, conditions or rules applicable to Lessee under this Lease. A
"Breach" by Lessee is defined as the occurrence of any one or more of the following Defaults, and, where a grace period for cure after notice is
specified herein, the failure by Lessee to cure such Default prior to the expiration of the applicable grace period, and shall entitle Lessor to pursue the remedies set forth in Paragraphs 13.2 and/or
13.3: 

Page 19 of 30

 

    (a) The
vacating of the Premises without the intention to reoccupy same, or the abandonment of the Premises. 

    (b) Except
as expressly otherwise provided in this Lease, the failure by Lessee to make any payment of Base Rent, Lessee's Share of Common Area Operating Expenses, or
any other monetary payment required to be made by Lessee hereunder as and when due, the failure by Lessee to provide Lessor with reasonable evidence of insurance or surety bond required under this
Lease, or the failure of Lessee to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of three (3) days following written
notice thereof by or on behalf of Lessor to Lessee. 

    (c) Except
as expressly otherwise provided in this Lease, the failure by Lessee to provide Lessor with reasonable written evidence (in duly executed original form, if
applicable) of (i) compliance with Applicable Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service contracts required under Paragraph 7.1(b), (iii) the rescission of an
unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or non-subordination of this Lease per Paragraph 30, (vi) the guaranty
of the performance of Lessee's obligations under this Lease if required under Paragraphs 1.11 and 37, (vii) the execution of any document requested under Paragraph 42 (easements), or (viii) any other
documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of ten (10) days following written notice by or
on behalf of Lessor to Lessee. 

    (d) A
Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that are to be observed,
complied with or performed by Lessee, other than those described in Subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of thirty (30) days after written notice thereof
by or on behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed
to be a Breach of this Lease by Lessee if Lessee commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. 

    (e) The
occurrence of any of the following events: (i) the making by Lessee of any general arrangement or assignment for the benefit of creditors; (ii) Lessee's
becoming a "debtor" as defined in 11 U.S. Code Section 101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days);
(iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where such seizure is not discharged within thirty (30) days; provided, however, in the event that any provision of this Subparagraph 13.1(e) is contrary to any applicable law, such provision
shall be of no force or effect, and shall not affect the validity of the remaining provisions. 

    (f)  The
discovery by Lessor that any financial statement of Lessee or of any Guarantor, given to Lessor by Lessee or any Guarantor, was materially false. 

    (g) If
the performance of Lessee's obligations under this Lease is 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, and Lessee's failure, within sixty (60) days following written notice by or on behalf of Lessor to
Lessee of any such event, to provide Lessor with written alternative assurances of security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 

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    13.2  Remedies.  If Lessee fails to perform any affirmative duty or obligation of Lessee under this
Lease, within ten (10) days after written notice to Lessee (or in case of an emergency, without notice), Lessor may, at its option (but without obligation to do so), perform such duty or obligation on
Lessee's behalf, including, but not limited to, the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. The costs and expenses of any such
performance by Lessor shall be due and payable by Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its
own option, may require all future payments to be made under this Lease by Lessee to be made only by cashier's check. In the event of a Breach of this Lease by Lessee (as defined in Paragraph 13.1),
with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach, Lessor may: 

    (a) Terminate
Lessee's right to possession of the Premises by any lawful means, in which case this Lease and the term hereof shall terminate and Lessee shall
immediately surrender possession of the Premises
to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the worth at the time of the award of the unpaid rent which had been earned at the time of termination; (ii) 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 the Lessee proves could have
been reasonably avoided; (iii) 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 the
Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under
this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District in which the Premises are located at the time of award plus one percent (1%). Efforts by Lessor to
mitigate damages caused by Lessee's Default or Breach of this Lease shall not waive Lessor's right to recover damages under this Paragraph 13.2. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding the unpaid rent and damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit for such rent and/or damages. If a notice and grace period required under Subparagraph 13.1(b), (c) or (d) was not previously given, a notice to pay rent or
quit, or to perform or quit, as the case may be, given to Lessee under any statute authorizing the forfeiture of leases for unlawful detainer shall also constitute the applicable notice for grace
period purposes required by Subparagraph 13.1(b), (c) or (d). In such case, the applicable grace period under the unlawful detainer statute shall run concurrently after the one such statutory notice,
and the failure of Lessee to cure the Default within the greater of the two (2) such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute. 

    (b) Continue
the Lease and Lessee's right to possession in effect (in California under California Civil Code Section 1951.4) after Lessee's Breach and recover the rent
as it becomes due, provided Lessee has the right to sublet or assign, subject only to reasonable limitations. Lessor and Lessee agree that the limitations on assignment and subletting in this Lease
are reasonable. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver to protect the Lessor's interest under this Lease, shall not constitute a
termination of the Lessee's right to possession. 

    (c) Pursue
any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state wherein the Premises are located. 

Page 21 of 30

 

    (d) The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 

    13.3  Inducement Recapture in Event of Breach.  Any agreement by Lessor for free or abated rent or other
charges applicable to the Premises, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions" shall be deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by Lessee during the term hereof as the same may be extended. Upon the occurrence of a Breach (as defined in Paragraph 13.1)
of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, and recoverable by Lessor, as additional rent due
under this Lease, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this Paragraph 13.3 shall
not be deemed a waiver by Lessor of the provisions of this Paragraph 13.3 unless specifically so stated in writing by Lessor at the time of such acceptance. 

    13.4  Late Charges.  Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other
sums due hereunder will cause Lessor 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 upon Lessor by the terms of any ground lease, mortgage or deed of trust covering the Premises. Accordingly, if any installment
of rent or other sum due from Lessee shall not be received by Lessor or Lessor's designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee,
Lessee shall pay to Lessor a late charge equal to six percent (6%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance. 

    13.5  Breach by Lessor.  Lessor shall not be deemed in breach of this Lease unless Lessor fails within a
reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable time shall in no event be less than thirty (30) days after receipt by
Lessor, and by any Lender(s) whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor's obligation is such that more than thirty (30) days after such notice are reasonably required for its performance, then Lessor shall not be
in breach of this Lease if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion. 

14.  Condemnation.  If the Premises or any portion thereof 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. If more than ten percent (10%) of the floor area of the Premises, or more than twenty-five percent (25%) of the portion of the Common Areas designated for Lessee's
parking, is taken by condemnation, Lessee may, at Lessee's option, to be exercised in writing within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee 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 shall be reduced in the
same proportion as the rentable 

Page 22 of 30

 

floor area of the Premises taken bears to the total rentable floor area of the Premises. No reduction of Base Rent shall occur if the condemnation does not apply to any portion of the Premises. Any
award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Lessor, whether such
award shall be made as compensation for diminution of value of the leasehold or for the taking of the fee, or as severance damages; provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade Fixtures. In the event that this Lease is not terminated by reason of such condemnation,
Lessor shall to the extent of its net severance damages received, over and above Lessee's Share of the legal and other expenses incurred by Lessor in the condemnation matter, repair any damage to the
Premises caused by such condemnation authority. Lessee shall be responsible for the payment of any amount in excess of such net severance damages required to complete such repair. 

15.  Brokers' Fees  

    15.1  Procuring Cause.  The Broker(s) named in Paragraph 1.10 is/are the procuring cause of this Lease. 

    15.3  Assumption of Obligations.  Any buyer or transferee of Lessor's interest in this Lease, whether
such transfer is by agreement or by operation of law, shall be deemed to have assumed Lessor's obligation under this Paragraph 15. 

    15.4  Representations and Warranties.  Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person, firm, broker or finder other than as named in Paragraph 1.10(a) in connection with the negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other than said named Broker(s) is entitled to any commission or finder's fee in connection with said transaction. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or
other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, and/or attorney's fees reasonably incurred with respect thereto. 

16.  Tenancy and Financial Statements.  

    16.1  Tenancy Statement.  Each Party (as "Responding
Party") shall within ten (10) days after written notice from the other Party (the "Requesting Party") execute, acknowledge and
deliver to the Requesting Party a statement in writing in a form similar to the then most current "Tenancy Statement" form published by the American
Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 

    16.2  Financial Statement.  If Lessor desires to finance, refinance, or sell the Premises or the
Building, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements of Lessee and such Guarantors as may be
reasonably required by such lender or purchaser, including, but not limited to, Lessee's financial statements for the past three (3) years. All such financial statements shall be received by Lessor
and such lender or purchaser in confidence and shall be used only for the purposes herein set forth. 

17.  Lessor's Liability.  The term "Lessor" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises. In the event of a transfer of Lessor's title or interest in the Premises or in this Lease, Lessor shall deliver to the
transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor at the time of such transfer or assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be
performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. 

18.  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. 

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19.  Interest on Past-Due Obligations.  Any monetary payment due Lessor hereunder, other than late charges, not received
by Lessor within ten (10) days following the date on which it was due, shall bear interest from the date due at the prime rate charged by the largest state chartered bank in the state in which the
Premises are located plus four percent (4%) per annum, but not exceeding the maximum rate allowed by law, in addition to the potential late charge provided for in Paragraph 13.4. 

20.  Time of Essence.  Time is of the essence with respect to the performance of all obligations to be performed or
observed by the Parties under this Lease. 

21.  Rent Defined.  All monetary obligations of Lessee to Lessor under the terms of this Lease are deemed to be rent. 

22.  No Prior or other Agreements; Broker Disclaimer.  This Lease contains all agreements between the Parties with respect
to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and
is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. Each Broker shall be an intended third party beneficiary of the
provisions of this Paragraph 22. 

23.  Notices.  

    23.1  Notice Requirements.  All notices required or permitted by this Lease shall be in writing and may
be delivered in person (by hand or by messenger or courier service) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission during normal business hours, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this
Lease shall be that Party's address for delivery or mailing of notice purposes. Either Party may by written notice to the other specify a different address for notice purposes, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for the purpose of mailing or delivering notices to Lessee. A copy of all notices required or permitted to be
given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by written notice to Lessee. 

    23.2  Date of Notice.  Any notice sent by registered or certified mail, return receipt requested, shall
be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail, the notice shall be deemed given forty-eight (48)
hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be
deemed given twenty-four (24) hours after delivery of the same to the United States Postal Service or courier. If any notice is transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone or facsimile confirmation of receipt of the transmission thereof, provided a copy is also delivered via delivery or mail. If notice is received on a
Saturday or a Sunday or a legal holiday, it shall be deemed received on the next business day. 

24.  Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be
deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or any other term, covenant or condition hereof. Lessor's consent to, or
approval of, any such act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such consent. Regardless of Lessor's knowledge of a Default or Breach at the time of accepting rent, the acceptance of rent by
Lessor shall not be a waiver of any Default or Breach by Lessee of any provision hereof. Any payment given Lessor by Lessee may be accepted by Lessor on account of monies or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or 

Page 24 of 30

 

conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment. 

25.  Recording.  Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a
short form memorandum of this Lease for recording purposes. The Party requesting recordation shall be responsible for payment of any fees or taxes applicable thereto. 

26.  No Right to Holdover.  Lessee has no right to retain possession of the Premises or any part thereof beyond the
expiration or earlier termination of this Lease. In the event that Lessee holds over in violation of this Paragraph 26 then the Base Rent payable from and after the time of the expiration or earlier
termination of this Lease shall be increased to two hundred percent (200%) of the Base Rent applicable during the month immediately preceding such expiration or earlier termination. Nothing contained
herein shall be construed as a consent by Lessor to any holding over by Lessee. 

27.  Cumulative Remedies.  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity. 

28.  Covenants and Conditions.  All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. 

29.  Binding Effect; Choice of Law.  This Lease shall be binding upon the Parties, their personal representatives,
successors and assigns and be governed by the laws of the state in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in
which the Premises are located. 

30.  Subordination; Attornment; Non-Disturbance.  

    30.1  Subordination.  This Lease and any Option granted hereby shall be subject and subordinate to any
ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed by Lessor
upon the real property of which the Premises are a part, to any and all advances made on the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof.
Lessee agrees that the Lenders holding any such Security Device shall have no duty, liability or obligation to perform any of the obligations of Lessor under this Lease, but that in the event of
Lessor's default with respect to any such obligation, Lessee will give any Lender whose name and address have been furnished Lessee in writing for such purpose notice of Lessor's default pursuant to
Paragraph 13.5. If any Lender shall elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device and shall give written notice thereof to Lessee, this Lease
and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof. 

    30.2  Attornment.  Subject to the non-disturbance provisions of Paragraph 30.3, Lessee agrees to attorn
to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be
liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership, (ii) be subject to any offsets or defenses which Lessee might have against any
prior lessor, or (iii) be bound by prepayment of more than one (1) month's rent. 

    30.3  Non-Disturbance.  With respect to Security Devices entered into by Lessor after the execution of
this Lease, Lessee's subordination of this Lease shall be subject to receiving assurance (a "non-disturbance agreement") from the Lender that Lessee's possession and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. 

    30.4  Self-Executing.  The agreements contained in this Paragraph 30 shall be effective without the
execution of any further documents; provided, however, that upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately document any such subordination or non-subordination, attornment and/or non-disturbance agreement as is provided for herein. 

Page 25 of 30

 

31.  Attorneys' Fees.  If any Party or Broker brings an action or proceeding to enforce the terms hereof or declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall
include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other
Party or Broker of its claim or defense. 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
reasonably incurred. Lessor shall be entitled to attorneys' fees, costs and expenses incurred in 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 or resulting Breach. Broker(s) shall be intended third party beneficiaries of this Paragraph 31. 

32.  Lessor's Access; Showing Premises; Repairs.  Lessor and Lessor's agents shall have the right to enter the Premises at
any time, in the case of an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs,
improvements or additions to the Premises or to the Building, as Lessor may reasonably deem necessary. Lessor may at any time place on or about the Premises or Building any ordinary "For Sale" signs
and Lessor may at any time during the last one hundred eighty (180) days of the term hereof place on or about the Premises any ordinary "For Lease" signs. All such activities of Lessor shall be
without abatement of rent or liability to Lessee. 

33.  Auctions.  Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction
upon the Premises without first having obtained Lessor's prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to grant such consent. 

34.  Signs.  Lessee shall not place any sign upon the exterior of the Premises or the Building, except that Lessee may,
with Lessor's prior written consent, install (but not on the roof) such signs as are reasonably required to advertise Lessee's own business so long as such signs are in a location designated by Lessor
and comply with Applicable Requirements and the signage criteria established for the Industrial Center by Lessor. The installation of any sign on the Premises by or for Lessee shall be subject to the
provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, Lessor reserves all rights to the use of the roof of
the Building, and the right to install advertising signs on the Building, including the roof, which do not unreasonably interfere with the conduct of Lessee's business; Lessor shall be entitled to all
revenues from such advertising signs. 

35.  Termination; Merger.  Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of
this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender, termination or cancellation, have the option to continue any one or all of any existing subtenancies. Lessor's failure
within ten (10) days following any such event to make a written election to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest. 

36.  Consents.  

    (a) Except
for Paragraph 33 hereof (Auctions) or as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other
Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including, but not limited to, architects', attorneys', engineers' and other
consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent pertaining to this Lease or the Premises, including, but not limited to, consents to an
assignment a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any such request by Lessee, require that Lessee deposit with Lessor an 

Page 26 of 30

 

amount of money (in addition to the Security Deposit held under Paragraph 5) reasonably calculated by Lessor to represent the cost Lessor will incur in considering and responding to Lessee's request.
Any unused portion of said deposit shall be refunded to Lessee without interest. Lessor's consent to any act, assignment of this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically
stated in writing by Lessor at the time of such consent. 

    (b) All
conditions to Lessor's consent authorized by this Lease are acknowledged by Lessee as being reasonable. The failure to specify herein any particular condition
to Lessor's consent shall not preclude the impositions by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which
consent is being given. 

37.  Guarantor.  

    37.1  Form of Guaranty.  If there are to be any Guarantors of this Lease per Paragraph 1.11, the form of
the guaranty to be executed by each such Guarantor shall be in the form most recently published by the American Industrial Real Estate Association, and each such Guarantor shall have the same
obligations as Lessee under this lease, including, but not limited to, the obligation to provide the Tenancy Statement and information required in Paragraph 16. 

    37.2  Additional Obligations of Guarantor.  It shall constitute a Default of the Lessee under this Lease
if any such Guarantor fails or refuses, upon reasonable request by Lessor to give: (a) evidence of the due execution of the guaranty called for by this Lease, including the authority of the Guarantor
(and of the
party signing on Guarantor's behalf) to obligate such Guarantor on said guaranty, and resolution of its board of directors authorizing the making of such guaranty, together with a certificate of
incumbency showing the signatures of the persons authorized to sign on its behalf, (b) current financial statements of Guarantor as may from time to time be requested by Lessor, (c) a Tenancy
Statement, or (d) written confirmation that the guaranty is still in effect. 

38.  Quiet Possession.  Upon payment by Lessee of the rent for the Premises and the performance of all of the covenants,
conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions
of this Lease. 

39.  Options.  

    39.1  Definition.  As used in this Lease, the word
"Option" has the following meaning: (a) the right to extend the term of this Lease or to renew this Lease or to extend or renew any lease that Lessee
has on other property of Lessor; (b) the 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 property of Lessor
or the right of first offer to lease other property of Lessor; (c) the right to purchase the Premises, or the right of first refusal to purchase the Premises, or the right of first offer to purchase
the Premises, or the right to purchase other property of Lessor, or the right of first refusal to purchase other property of Lessor, or the right of first offer to purchase other property of Lessor. 

    39.2  Options Personal to Original Lessee.  Each Option granted to Lessee in this Lease is personal to
the original Lessee named in Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned or exercised by any person or entity other than said original Lessee while the original Lessee is
in full and actual possession of the Premises and without the intention of thereafter assigning or subletting. The Options, if any, herein granted to Lessee are not assignable, either as a part of an
assignment of this Lease or separately or apart therefrom, and no Option may be separated from this Lease in any manner, by reservation or otherwise. 

    39.3  Multiple Options.  In the event that Lessee has any multiple Options to extend or renew this Lease,
a later option cannot be exercised unless the prior Options to extend or renew this Lease have been validly exercised. 

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    39.4  Effect of Default on Options.  

    (a) Lessee
shall have no right to exercise an Option, notwithstanding any provision in the grant of Option to the contrary: (i) during the period commencing with the
giving of any notice of Default under Paragraph 13.1 and continuing until the noticed Default is cured, or (ii) during the period of time any monetary obligation due Lessor from Lessee is unpaid
(without regard to whether notice thereof is given Lessee), or (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessor has given to Lessee three (3) or more notices
of separate Defaults under Paragraph 13.1 during the twelve (12) month period immediately preceding the exercise of the Option, whether or not the Defaults are cured. 

    (b) The
period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the
provisions of Paragraph 39.4(a). 

    (c) All
rights of Lessee under the provisions of an Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the
Option, if, after such exercise and during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii) Lessor gives to Lessee three (3) or more notices of separate Defaults under Paragraph 13.1 during any twelve (12) month
period, whether or not the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease. 

40.  Rules and Regulations.  Lessee agrees that it will abide by, and keep and observe all reasonable rules and
regulations ("Rules and Regulations") which Lessor may make from time to time for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the
preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Industrial Center and their invitees. Attached hereto as Exhibit "D" are the Rules and
Regulations currently adopted by Lessor. 

41.  Security Measures.  Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the cost
of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its
agents and invitees and their property from the acts of third parties. 

42.  Reservations.  Lessor reserves the right, from time to time, to grant, without the consent or joinder of Lessee, such
easements, rights of way, utility raceways, and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way, utility
raceways, dedications, maps and restrictions do not reasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any
such easement rights, dedication, map or restrictions. 

43.  Performance Under Protest.  If at any time a dispute shall arise as to any amount or sum of money to be paid by one
Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on
the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this
Lease. 

44.  Authority.  If either Party hereto is a corporation, trust, or general or limited partnership, each individual
executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor, deliver to Lessor evidence satisfactory to Lessor of such authority. 

45.  Conflict.  Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions
shall be controlled by the typewritten or handwritten provisions. 

Page 28 of 30

 

46.  Offer.  Preparation of this Lease by either Lessor or Lessee or Lessor's agent or Lessee's agent and submission of
same to Lessee or Lessor shall not be deemed an offer to lease. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 

47.  Amendments.  This Lease may be modified only in writing, signed by the Parties in interest at the time of the
modification. The Parties shall amend this Lease from time to time to reflect any adjustments that are made to the Base Rent or other rent payable under this Lease. As long as they do not materially
change Lessee's obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by an institutional insurance company or pension
plan Lender in connection with the obtaining of normal financing or refinancing of the property of which the Premises are a part. 

48.  Multiple Parties.  Except as otherwise expressly provided herein, if more than one person or entity is named herein
as either Lessor or Lessee, the obligations of such multiple parties shall be the joint and several responsibility of all persons or entities named herein as such Lessor or Lessee. 

    Attached
to this Lease and incorporated herein are the following: 

Addendum
paragaphs 49 through 53

Exhibits "A" through "D" 

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE 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 REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.

IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO EVALUATE THE CONDITION OF THE PROPERTY
FOR THE POSSIBLE PRESENCE OF ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL
ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY
SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE
PROPERTY IS LOCATED SHOULD BE CONSULTED.

Page 29 of 30

 

The
Parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. 

	Executed at:	 	 	Executed at:	 
	 	
	 	 	

	on:	 	 	on:	 
	 	
	 	 	

	
By LESSOR:	

 	
 	

By LESSEE:	

 
	KILROY REALTY, L.P.,
	 	STAAR SURGICAL COMPANY,

	A Delaware Limited Partnership
	 	A Delaware Corporation

	By:	KILROY REALTY CORPORATION,

A Maryland Corporation,

General Partner	 	 	 
	By:	 	 	By:	/s/ WILLIAM C. HUDDLESTON   
	 	
	 	 	

	

Name Printed:	

 	
 	

Name Printed:	

William C. Huddleston
	 	
	 	 	

	

Title:	

 	
 	

Title:	

Chief Oper. Officer
	 	
	 	 	

	

By:	

 	
 	

By:	

/s/ SANDRA K WOOD   
	 	
	 	 	

	Name Printed:	 	 	Name Printed:	Sandra K. Wood
	 	
	 	 	

	Title:	 	 	Title:	Assist VP Corp Ser
	

Address:	

2250 E. Imperial Highway, Suite 360	
 	

Address:	

 
	 	
	 	 	

	        El Segundo, CA 90245	 	 	 
	
	 	

	Telephone:	(310) 563-5500	 	Telephone:	(   )
	 	
	 	 	

	Facsimile:	(310) 416-9113	 	Facsimile:	(   )
	 	
	 	 	

	
BROKER:	

 	
 	

BROKER:	

 
	

Executed at:	

 	
 	

Executed at:	

 
	 	
	 	 	

	on:	 	 	on:	 
	 	
	 	 	

	

By:	

 	
 	

By:	

 
	 	
	 	 	

	Name Printed:	 	 	Name Printed:	 
	 	
	 	 	

	Title:	 	 	Title:	 
	 	
	 	 	

	Address:	 	 	Address:	 
	 	
	 	 	

	
	 	

	Telephone:	(   )	 	Telephone:	(   )
	 	
	 	 	

	Facsimile:	(   )	 	Facsimile:	(   )
	 	
	 	 	

    NOTE:  These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are
utilizing the most current form: 

Page 30 of 30

 

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 South Flower Street, Suite 600, Los Angeles, CA 90017 (213) 687-8777 

Page 31 of 30

 
 

RENT ADJUSTMENTS(S)
  STANDARD LEASE ADDENDUM    
  

	Dated April 5, 2000
	
By and Between (Lessor)	
 	

KILROY REALTY, L.P.,

A Delaware Limited Partnership

KILROY REALTY CORPORATION,

A Maryland Corporation, General Partner
	
(Lessee)	
 	
STAAR SURGICAL COMPANY,

A Delaware Corporation
	
Address of Premises:	
 	

27121 Aliso Creek Road, Suite 100

Aliso Viejo, California 92656

Paragraph
49 

A.  RENT ADJUSTMENTS:  

    The monthly rent for each month of the adjustment period(s) specified below shall be increased using the method(s) indicated below: 

(Check
Method(s) to be Used and Fill in Appropriately) 

/ / I. Cost of Living Adjustments(s) (COLA)  

     a. On (Fill in COLA Dates): _________________________________________________________________ _______

___________________________________________________________________________________________ _____

the Base Rent shall be adjusted by the change, if any, from the Base Month specified below, in the Consumer Price Index of the Bureau of Labor Statistics of the U.S. Department of Labor for (select
one): / / CPI W (Urban Wage Earners and Clerical Workers) or / / CPI U (All Urban Consumers), for (Fill in Urban Area): ____________________________________

All Items (1982-1984=100), herein referred to as "CPI".  

     b.  The monthly rent payable in accordance with paragraph A.I.a. of this Addendum shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the
attached Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the calendar month two months prior to the month(s) specified in paragraph A.I.a. above during which the
adjustment is to take effect, and the denominator of which shall be the CPI of the calendar month which is two months prior to (select one): / / the first month of the term of this Lease as
set forth in paragraph 1.3 ("Base Month") or / / (Fill in Other "Base Month"): ____________________________________. The sum so calculated shall constitute the new monthly rent hereunder,
but in no event, shall any such new monthly rent be less than the rent payable for the month immediately preceding the rent adjustment.  

     c.  In the event the compilation and/or publication of the CPI shall be transferred to any other governmental department or bureau or agency or shall be discontinued,
then the index most nearly the same as the CPI shall be used to make such calculation. In the event that the Parties cannot agree on such alternative index, then the matter shall be submitted for
decision to the American Arbitration Association in accordance with the then rules of said Association and the decision of the arbitrators shall be binding upon the parties. The cost of said
Arbitration shall be paid equally by the Parties.  

 RENT ADJUSTMENTS

Page 1 of 2

/ / II. Market Rental Value Adjustment(s) (MRV)  

    a.  On
(Fill in MRV Adjustment Date(s): _______________________________________________________ _____

___________________________________________________________________________________________ _____

the Base Rent shall be adjusted to the "Market Rental Value" of the property as follows: 

    1)  Four
months prior to each Market Rental Value Adjustment Date described above, the Parties shall attempt to agree upon what the new MRV will be on the adjustment
date. If agreement cannot be reached within thirty days, then: 

    (a) Lessor
and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next thirty days. Any associated costs
will be split equally between the Parties, or 

    (b) Both
Lessor and Lessee shall each immediately make a reasonable determination of the MRV and submit such determination, in writing, to arbitration in accordance
with the following provisions: 

     (i) Within
fifteen days thereafter, Lessor and Lessee shall each select an / / appraiser or / / broker ("Consultant"—check one) of their
choice to act as an arbitrator. The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to act as a third arbitrator. 

    (ii) The
Three arbitrators shall within thirty days of the appointment of the third arbitrator reach a decision as to what the actual MRV for the Premises is, and
whether Lessor's or Lessee's submitted MRV is the closest thereto. The decision of a majority of the arbitrators shall be binding on the Parties. The submitted MRV which is determined to be the
closest to the actual MRV shall thereafter be used by the Parties. 

    (iii) If
either of the Parties fails to appoint an arbitrator within the specified fifteen days, the arbitrator timely appointed by one of them shall reach a decision
on his or her own, and said decision shall be binding on the Parties. 

    (iv) The
entire cost of such arbitration shall be paid by the party whose submitted MRV is not selected, ie. the one that is NOT the closest to the actual MRV. 

    2)  Notwithstanding
the foregoing, the new MRV shall not be less than the rent payable for the month immediately preceding the rent Adjustment. 

    b.  Upon
the establishment of each New Market Rental Value: 

    1)  the
new MRV will become the new "Base Rent" for the purpose of calculating any further Adjustments, and 

    2)  the
first month of each Market Rental Value term shall become the new 'Base Month' for the purpose of calculating any further Adjustments. 

/X/ III. Fixed Rental Adjustment(s) (FRA)  

The
Monthly Base Rent shall be increased to the following amounts on the dates set forth below: 

	On (Fill in FRA Adjustment Date(s)):	 	The New Monthly Base Rent shall be:
	May 1, 2001	 	$8,560.00
	May 1, 2002	 	$8,990.00
	 	 	$
	 	 	$

B.  NOTICE  

    Unless specified otherwise herein, notice of any such adjustments, other than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of the
Lease. 

RENT ADJUSTMENTS

Page 2 of 2  

 
 

PACIFIC PARK PLAZA
  27121 ALISO CREEK ROAD    
  

 
 
 

[MAP]    

     EXHIBIT "A"  

 
 
 

EXHIBIT "B"    
  

[MAP] 

     Pacific Park Plaza  

  
 
 

    EXHIBIT "C"    
  

[MAP] 

     Pacific Park Plaza  

 
 

ADDENDUM TO THAT CERTAIN LEASE DATED
  APRIL 5, 2000
  By and Between
  KILROY REALTY, L.P.,
  A Delaware Limited Partnership
  KILROY REALTY CORPORATION
  A Maryland Corporation,
  General Partner

("Lessor")
  and
  STAAR SURGICAL COMPANY,
  A Delaware Corporation
  ("Lessee")    

 
  For that real property commonly known as
  27121 Aliso Creek Road, Suite 100, Aliso Viejo, California 92656    
  

	50.
	Existing Leases and License Agreement.  Lessee previously and/or now occupies certain premises within the Industrial
Center pursuant to Leases and a License Agreement, with Security Deposits, Base Rental and Lessee's Share of Common Area Operating Expenses ("CAM") summarized as follows: 

	Lease/License Agreement and Premises
 
	 	Monthly Base Rent

and Monthly CAM

	27141 Aliso Creek Road, Suites 200 & 250

Lease dated April 1, 1998; the Lease for this Premises has been terminated and Lessee has completely vacated the Premises	 	Base Rent

CAM	 	= N/A

= N/A
	

27121 Aliso Creek Road, Suites 100, 105 & 110

Lease dated March 2, 1993, as amended	
 	

Base Rent

CAM	
 	

= $6,258.00/mo

= $1,204.92/mo
	

27121 Aliso Creek Road, Suite 115

License Agreement dated August 15, 1999	
 	

Base Rent	
 	

= $1,118.00/mo
	

Total Security Deposits held by Lessor:	
 	

$6,778.96	
 	

 

(collectively
the "Existing Leases"). 

	50.1
	Base
Rent and CAM under the Existing Leases shall be prorated to midnight, April 30, 2000.

	50.2
	The
Security Deposits paid by Lessee pursuant to the Existing Leases in the amount of $6,778.96 shall be credited upon the Security Deposit of $8,150.00 required by
paragraph 1.7 of the Lease. The balance due of $1,371.04 shall be paid by Lessee to Lessor upon execution of this Lease.

	50.3
	The
Existing Leases shall be terminated, cancelled and surrendered to Lessor as of midnight, April 30, 2000, except that Lessee shall remain obligated for any defaults or
obligations arising under the Existing Leases and which exist as of 11:59 p.m., April 30, 2000. 

	51.
	Lessee Improvements and Allowance.

	51.1
	Lessee Improvement Allowance.  Lessee shall be entitled to a lessee improvement allowance (the "Lessee Improvement
Allowance") in the amount of $7,600.00 for costs relating to the design and construction of Lessee improvements to the Premises (the "Lessee Improvements").

	51.2
	Disbursement of the Lessee Improvement Allowance.  Except as otherwise set forth in this paragraph 51, the
Lessee Improvement Allowance shall be disbursed by Lessor to Lessee in two (2) installments, each being equal to fifty percent (50%) of the Lessee Improvement 

 

Allowance.
The first installment shall be paid by Lessor to Lessee upon Lessee's execution of a construction contract with its contractor, and the second installment shall be paid at such time as the
Lessee Improvements to the Premises have been substantially completed for costs related to the construction of the Lessee Improvements and for the following items and costs (collectively, the "Lessee
Improvement Allowance Items"): (i) payment of the fees of the architect and the engineer who shall prepare the construction drawings for the Lessee Improvements, (ii) the cost of
construction of the Lessee Improvements as set forth in the construction drawings, and (iii) the cost of other items related to the design and construction of the Lessee Improvements. 

	51.3
	Unused Lessee Improvement Allowance; Excess Costs.  In the event that, as of the Commencement Date, there remains any
unused portion of the Lessee Improvement Allowance (the "Unused Allowance"), Lessee may, at Lessee's option, either (i) credit any Unused Allowance against Base Rent payments next due under
this Lease, or (ii) receive a check from Lessor in the amount of the Unused Allowance within ten (10) days after the Lease Commencement Date. In the event that the Lessee Improvement
Allowance is insufficient to pay all of the costs of the Lessee Improvements (the "Excess Lessee Improvement Costs"), then Lessee shall advance all funds necessary to pay the Excess Lessee Improvement
Costs.

	51.4
	The
Lessee Improvements to be constructed by Lessee shall be subject to the provisions of paragraphs 7.3 and 7.4 of this Lease as if and to the same extent as if the Lessee
Improvements are "Lessee-Owned Alterations." 

	52.
	Estoppel Certificate.  The Tenancy Statement referred to in paragraph 16.1 and the "further writings" referred
to in line 3 of paragraph 30.4 of the Lease each shall be, at the option of the Lessor or a
lender or purchaser from Lessor, in the customary form of the requesting lender or a purchaser of all or a portion of the Building.

	53.
	Notices.  Copies of any notices to be given by Lessee to Lessor pursuant to paragraph 23.1 of the Lease also shall be
given to the local office of Lessor and to Lessor's attorney, as follows: 

Kilroy
Realty, L.P.

184 Technology Drive, Suite 200

Irvine, California 92618

Tel, No. (949) 790-0840

Fax No. (949) 790-0844 

Marshall
L. McDaniel

McDaniel & McDaniel

2250 E. Imperial Highway, Suite 1200

El Segundo, California 90245

Tel. No. (310) 640-1960

Fax No. (310) 322-8790 

2

  

 
 

EXHIBIT "D"    
  

 
 

RULES AND REGULATIONS
  
    MULTI-LESSEE INDUSTRIAL CENTER    

    The
following Rules and Regulations have been adopted by Lessor pursuant to paragraph 40 of the Lease: 

	1.
	Lessee
acknowledges that it is occupying space within a multi-lessee Industrial Center, and therefore any of its activities may have an affect upon the use, occupancy, and quite
enjoyment of the other lessees. As a result, Lessee shall not conduct any business or engage in any work-related activities outside of its Premises.

	2.
	Except
as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice shall be installed or
displayed on any part of the outside or inside of the Building or the Industrial Center without the prior written consent of Lessor. Lessor shall have the right to remove, at Lessee's expense and
without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls shall be printed, painted, affixed or inscribed at the expense of Lessee
by a person or company designated by Lessor.

	3.
	If
Lessor objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the
Premises, or placed on any windowsills which are visible from the exterior of the Premises, Lessee shall immediately discontinue such use. Lessee shall not place anything against or near glass
partitions or doors or windows which may appear unsightly, in Lessor's sole determination, from outside the Premises.

	4.
	Lessee
shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators, escalators or stairways of the Industrial Center. The halls, passages, exits, entrances,
elevators, escalators and stairways are not open to the general public, but are open, subject to reasonable regulations, to Lessee's business invitees. Lessor shall, in all cases, retain the right to
control and prevent access thereto of all persons whose presence, in the judgment of Lessor, would be prejudicial to the safety, character, reputation and interest of the Industrial Center and its
lessees; provided that nothing herein contained shall be construed to prevent such access to persons with whom any lessee normally deals in the ordinary course of its business, unless such persons are
engaged in illegal or unlawful activities. No lessee and no employee or invitee or any lessee shall go upon the roof(s) of any building in the Industrial Center.

	5.
	The
directory of the Building or the Industrial Center will be provided exclusively for the display of the name and location of lessees only, and Lessor reserves the right to
exclude any other names therefrom and to limit the amount of space thereon dedicated to Lessee's name.

	6.
	All
cleaning and janitorial services for the Industrial Center and the Premises shall be provided exclusively through Lessor. No person or persons other than those approved by
Lessor shall be employed by Lessee or permitted to enter the Industrial Center for the purpose of cleaning the same. Lessee shall not cause any unnecessary cleaning by carelessness or indifference to
the good order and cleanliness of the Premises. The provisions of this paragraph 6 shall not be applicable if Lessor does not provide janitorial services for the particular Premises of Lessee.

	7.
	Lessor
will furnish Lessee, free of charge, with two (2) keys or access cards to each door lock in the Premises. Lessor may make a reasonable charge for any additional keys. Lessee
shall not make or have additional keys, and Lessee shall not alter any lock or install any new additional lock or bolt on any door of the Premises. If Lessee loses any keys, Lessor may change the lock
at Lessee's 

1

 

expense.
Lessee upon termination of its tenancy, shall deliver to Lessor the keys to all doors which have been furnished to Lessee, and in the event of loss of any keys so furnished, shall pay Lessor
therefor and for the cost of replacing the lock. 

	8.
	If
Lessee requires telegraphic, telephonic, burglar alarm, satellite dishes, antennae or similar services, it shall first obtain, and comply with, Lessor's instructions in their
installation. Provided that Lessor exclusively reserves all rights to the installation of any kind of telecommunication equipment upon the roof of the Building and the exclusive right to enter into
exclusive or non-exclusive agreements with telecommunication providers for providing services to the Building and the Industrial Center.

	9.
	Lessee
shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Lessor shall
have the right to prescribe the weight, size and position of all equipment, materials, furniture or other property brought into the Building and the Premises. Heavy objects shall, if considered
necessary by Lessor, stand on such platforms as determined by Lessor to be necessary to properly distribute the weight, which platforms shall be provided at Lessee's expense. Business machines and
mechanical equipment belonging to Lessee, which cause noise or vibration that may be transmitted to the structure of the Building or to any space therein to such a degree as to be objectionable to
Lessor or to any other lessees in the Building, shall be placed and maintained by Lessee in a manner to reduce to acceptable levels such noise or vibration.

	10.
	Lessee
shall not use or keep in the Premises any kerosene, gasoline or inflammable or combustible fluid or material other than those limited quantities necessary for the operation
or maintenance of Lessee's equipment. Lessee shall not use or permit to be used in the leased Premises any foul or noxious gas or substance, or permit or allow the Premises to be occupied or used in a
manner offensive or objectionable to Lessor or other occupants of the Building by reason of noise, odors or vibrations, nor shall Lessee bring into or keep in or about the Premises any birds or
animals.

	11.
	Lessee
shall not use any method of heating or air conditioning other than that supplied by Lessor.

	12.
	Lessee
shall not waste electricity, water or air conditioning and agrees to cooperate fully with Lessor to assure the most effective operation of the Building's heating and air
conditioning and to comply with any governmental energy-saving rules, laws or regulations of which Lessee has actual notice, and shall refrain from attempting to adjust controls. Lessee shall keep
corridor doors closed.

	13.
	Lessor
reserves the right, exercisable without notice and without liability to Lessee, to change the name and street address of the Building and the Industrial Center.

	14.
	In
the event the Building containing the Premises is a multi-lessee Building with an entrance lobby for access to the Lessee's Premises, Lessor reserves the right to exclude from
the Building between the hours of 6:00 p.m. to 7:00 a.m. the following day, or such other hours as may be established from time to time by Lessor, and on Sundays and legal holidays, any person unless
that person is known to the person or employee in charge of the Building or has a pass or is properly identified. Lessee shall be responsible for all persons for whom it requests passes and shall be
liable to Lessor for all acts of such persons. Lessor shall not be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. Lessor reserves the
right to prevent access to the Building
in case of mob, riot, public excitement or demonstration or other commotion by closing the doors or by other appropriate action.

	15.
	Lessee
shall close and lock the doors of its Premises and entirely shut off all water faucets or other water apparatus, and turn off lights and apparatus consuming electricity or
gas before Lessee and its employees leave the Premises. Lessee shall be responsible for any damage or injuries sustained by other lessees or occupants of the Building or by Lessor for noncompliance
with this rule. 

2

 
	16.
	The
toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any
kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Lessee who, or whose employees or invitees
shall have caused it.

	17.
	Lessee
shall not sell, or permit the sale at retail of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the
Premises (unless Lessees' use provision specifically allows these activities). Lessee shall not make any room-to-room solicitation of business from other lessees in the Industrial Center. Lessee shall
not use the Premises for any business or activity other than that specifically provided for in the Lease.

	18.
	Lessee
shall not install any radio or television antenna, loudspeaker, satellite dishes or other devices on the roof(s) or exterior walls of the Building or the Industrial Center.
Lessee shall not interfere with radio or television broadcasting or reception from or in the Industrial Center or elsewhere.

	19.
	Lessee
shall not drive nails, screw or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof, except in accordance with the provisions
of the Lease pertaining to alterations. Lessor reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Lessee shall not cut or
bore holes for wires. Lessee shall not affix any floor covering to the floor of the Premises in any manner except as approved by Lessor. Lessee shall repair any damage resulting from noncompliance
with this rule.

	20.
	Lessee
shall not install, maintain or operate upon the Premises any vending machines without prior written consent of Lessor.

	21.
	Canvassing,
soliciting and distribution of handbills or any other written material, and peddling in the Industrial Center are prohibited, and Lessee shall cooperate with Lessor to
prevent such activities.

	22.
	Lessor
reserves the right to exclude or expel from the Industrial Center any person who, in Lessor's judgment, is intoxicated or under the influence of liquor or drugs or who is in
violation of any of the Rules and Regulations of the Building.

	23.
	Lessee
shall store all its trash and garbage within its Premises or in other facilities provided by Lessor. Lessee shall not place in any trash box or receptacle any material which
cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions issued from time to time by
Lessor.

	24.
	The
Premises shall not be used for the storage of merchandise held for sale to the general public at the Premises, (unless Lessee's Lease specifically permits on-site sales
activity) for lodging or for manufacturing of any kind (unless Lessee's Lease specifically permits manufacturing within the Premises), nor shall the Premises be used for any improper, immoral or
objectionable purpose. No cooking shall be done or permitted on the Premises without Lessor's consent, except the use by Lessee or Underwriters' Laboratory approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted, and the use of a microwave oven for employees use shall be permitted, provided that such equipment and use is in accordance with all applicable
federal, state, country and city laws, codes, ordinance, rules and regulations.

	25.
	Lessee
shall not use in any space or in the public halls of the Building any hand truck except those equipped with rubber tires and side guards or such other material-handling
equipment as Lessor may approve. Lessee shall not bring any other vehicles of any kind into the Building. 

3

 
	26.
	Without
the written consent of Lessor, Lessee shall not use the name of the Building or the Industrial Center in connection with or in promoting or advertising the business of
Lessee.

	27.
	Lessee
shall comply with all safety, fire protection and evacuation procedures and regulations established by Lessor or any governmental agency.

	28.
	Lessee
assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises
closed.

	29.
	To
the extent Lessor reasonably deems it necessary to exercise exclusive control over any portions of the Industrial Center Common Areas for the mutual benefit of the lessees in the
Industrial Center, Lessor may do so subject to nondiscriminatory additional Rules and Regulations.

	30.
	Lessee's
requirements for the use or operation of the Premises shall be attended to only upon appropriate application to Lessor's asset management office for the Industrial Center
by an authorized individual. Employees of Lessor shall not perform any work or do anything outside of their regular duties unless under special instructions from Lessor, and no employee of Lessor will
admit any person (Lessor or otherwise) to any office without specific approval from Lessor.

	31.
	Lessor
may waive any one or more of these Rules and Regulations for the benefit of Lessee or any other lessee, but no such waiver by Lessor shall be constructed as a waiver of such
rules and Regulations in favor of Lessee or any other lessee, nor prevent Lessor from thereafter enforcing any such Rules and Regulations against any or all of the Lessees of the Industrial Center.
Lessee acknowledges that it is occupying space in a mixed-use, multi-lessee commercial/industrial/office park, and that inherent in any such park is the fact that Lessor may have to waive these Rules
and Regulations selectively and on a case by case basis.

	32.
	These
Rules and Regulations are in addition to, and shall not be constructed to in any way modify or amend, in whole or part, the terms, covenants, agreements and conditions of the
Lease.

	33.
	Lessor
reserves the right to make such other and reasonable Rules and Regulations as, in its sole judgment, from time to time may be needed for safety and security, for care and
cleanliness of the Industrial Center and for the preservation of good order therein. Lessee agrees to abide by all such Rules and Regulations herein set forth and any additional rules and regulations
which are adopted.

	34.
	Lessee
shall be responsible for the observance of all of the foregoing rules by Lessee's employees, agents, clients, customers, invites, and guest. 

4

 
 
 

PARKING RULES AND REGULATIONS    
  

    The following rules and regulations shall govern the use of the parking facilities which are a part of the Industrial Center, which can be modified at any time
in the sole discretion of Lessor: 

	1.
	All
claimed damage or loss to motor vehicles must be reported, itemized in writing and delivered to Lessor within five (5) business days after any claimed damage or loss
occurs. Any claim not so made is waived. Lessor is not responsible for damage by water, fire, or defective brakes, or parts, or for the act or omissions of others, or for articles left in vehicles.

	2.
	Lessee
shall not park or permit its employees to park in any parking areas designated by Lessor as areas for parking by visitors to the Industrial Center or for the exclusive use of
lessees or other occupants of the Industrial Center. Lessee shall not leave vehicles in the parking areas overnight or park any vehicles in the parking areas other than automobiles, motorcycles, motor
driven or non-motor driven bicycles or trucks not to exceed four wheels.

	3.
	Parking
stickers or any other device or form of identification supplied by Lessor as a condition of use of the parking facilities shall remain the property of Lessor. Such parking
identification device must be displayed as requested and may not be mutilated in any manner. The serial number of the parking identification device may not be obliterated. Devices are not transferable
and any device in the possession of an unauthorized holder will be void. Lessor may charge a fee for parking stickers, card or other parking control devices supplied by Lessor.

	4.
	No
overnight or extended term storage of vehicles shall be permitted.

	5.
	Vehicles
must be parked entirely within painted stall lines of a single parking stall.

	6.
	All
direction signs and arrows must be observed.

	7.
	The
speed limit within all parking areas shall not exceed five (5) miles per hour.

	8.
	Parking
is prohibited:

	(a)
	in
areas not striped for parking;

	(b)
	in
aisles;

	(c)
	where
"no parking" signs are posted;

	(d)
	on
ramps;

	(e)
	in
cross-hatched areas;

	(f)
	in
loading areas; and

	(g)
	in
such other areas as may be designated by Lessor or Lessor's parking representative. 

	9.
	Every
parker is required to park and lock his/her own vehicle. All responsibility for damage to vehicles and the contents thereof is assumed by the parker.

	10.
	Loss
or theft of parking identification devices must be reported to Lessor immediately, and a lost or stolen report must be filed by the Lessee or user of such parking
identification device at the time. Lessor has the right to exclude any vehicle from the parking facilities that does not have an identification device.

	11.
	Any
parking identification devices reported lost or stolen found on any unauthorized car will be confiscated and the illegal holder will be subject to prosecution.

	12.
	Washing,
waxing, cleaning or servicing of any vehicle in any area not specifically reserved for such purpose is prohibited. 

5

 
	13.
	The
parking operators, managers or attendants are not authorized to make or allow any exceptions to these Parking Rules and Regulations.

	14.
	Lessee's
continued right to use any parking spaces in the parking facilities is conditioned upon the employee or agent of Lessee abiding by these Parking Rules and Regulations and
those contained in this Lease. Further, if this Lease terminates for any reason whatsoever, Lessee's right to use the parking spaces in the parking facilities shall terminate concurrently therewith.

	15.
	Lessor
may refuse to permit any person who violates these Parking Rules and Regulations to park in the parking facilities, and any violation of the Parking Rules and Regulations
shall subject the vehicle to removal, at such vehicle owner's expense. 

6

QuickLinks

RENT ADJUSTMENTS(S) STANDARD LEASE ADDENDUM

PACIFIC PARK PLAZA 27121 ALISO CREEK ROAD

EXHIBIT A MAP

EXHIBIT B MAP

EXHIBIT C MAP

ADDENDUM TO THAT CERTAIN LEASE DATED APRIL 5, 2000 By and Between KILROY REALTY, L.P., A Delaware Limited Partnership KILROY REALTY CORPORATION A Maryland Corporation, General Partner ("Lessor") and STAAR SURGICAL
COMPANY, A Delaware Corporation ("Lessee")

For that real property commonly known as 27121 Aliso Creek Road, Suite 100, Aliso Viejo, California 92656

EXHIBIT "D"

RULES AND REGULATIONS MULTI-LESSEE INDUSTRIAL CENTER

PARKING RULES AND REGULATIONS

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