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EXHIBIT 10.3

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

     1. Purposes of the Plan. The purposes of this 2004 Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants and to promote the success of the Company’s
business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations and interpretations
promulgated thereunder. Stock purchase rights may also be granted under the Plan.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or its Committee appointed pursuant to Section 4
of the Plan.

          (b) “Affiliate” means an entity other than a Subsidiary (as defined below) which,
together with the Company, is under common control of a third person or entity.

          (c) “Applicable Laws” means the legal requirements relating to the administration of
stock option and restricted stock purchase plans, including under applicable U.S. state corporate
laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the
Code, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any
other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as
such laws, rules, regulations and requirements shall be in place from time to time.

          (d) “Board” means the Board of Directors of the Company.

          (e) “Change of Control” means (1) a sale of all or substantially all of the Company’s
assets, or (2) any merger, consolidation or other business combination transaction of the Company
with or into another corporation, entity or person, other than a transaction in which the holders
of at least a majority of the shares of voting capital stock of the Company outstanding immediately
prior to such transaction continue to hold (either by such shares remaining outstanding or by their
being converted into shares of voting capital stock of the surviving entity) a majority of the
total voting power represented by the shares of voting capital stock of the Company (or the
surviving entity) outstanding immediately after such transaction, or (3) the direct or indirect
acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a
group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a
majority of the voting power of the then outstanding shares of capital stock of the Company.

          (f) “Code” means the Internal Revenue Code of 1986, as amended.

          (g) “Committee” means one or more committees or subcommittees of the Board appointed
by the Board to administer the Plan in accordance with Section 4 below.

 

 

          (h) “Common Stock” means the Common Stock of the Company.

          (i) “Company” means Orexigen Therapeutics, Inc., a Delaware corporation.

          (j) “Consultant” means any person, including an advisor, who is engaged by the Company
or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and
any director of the Company whether compensated for such services or not.

          (k) “Continuous Service Status” means the absence of any interruption or termination
of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant
shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any
other leave of absence approved by the Administrator, provided that such leave is for a period of
not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed
by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time
to time; or (iv) in the case of transfers between locations of the Company or between the Company,
its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an
Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of
Continuous Service Status.

          (l) “Corporate Transaction” means a sale of all or substantially all of the Company’s
assets, or a merger, consolidation or other capital reorganization or business combination
transaction of the Company with or into another corporation, entity or person, or the direct or
indirect acquisition (including by way of a tender or exchange offer) by any person, or persons
acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares
representing a majority of the voting power of the then outstanding shares of capital stock of the
Company.

          (m) “Director” means a member of the Board.

          (n) “Employee” means any person employed by the Company or any Parent, Subsidiary or
Affiliate, with the status of employment determined based upon such factors as are deemed
appropriate by the Administrator in its discretion, subject to any requirements of the Code or the
Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be
sufficient to constitute “employment” of such Director by the Company.

          (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (p) “Fair Market Value” means, as of any date, the fair market value of the Common
Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and
applied consistently with respect to Participants. Whenever possible, the determination of Fair
Market Value shall be based upon the closing price for the Shares as reported in The Wall Street
Journal for the applicable date.

          (q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code, as designated in the applicable Option
Agreement.

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          (r) “Listed Security” means any security of the Company that is listed or approved for
listing on a national securities exchange or designated or approved for designation as a national
market system security on an interdealer quotation system by the National Association of Securities
Dealers, Inc.

          (s) “Named Executive” means any individual who, on the last day of the Company’s
fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among
the four most highly compensated officers of the Company (other than the chief executive officer).
Such officer status shall be determined pursuant to the executive compensation disclosure rules
under the Exchange Act.

          (t) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option, as designated in the applicable Option Agreement.

          (u) “Option” means a stock option granted pursuant to the Plan.

          (v) “Option Agreement” means a written document, the form(s) of which shall be
approved from time to time by the Administrator, reflecting the terms of an Option granted under
the Plan and includes any documents attached to or incorporated into such Option Agreement,
including, but not limited to, a notice of stock option grant and a form of exercise notice.

          (w) “Option Exchange Program” means a program approved by the Administrator whereby
outstanding Options are exchanged for Options with a lower exercise price or are amended to
decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

          (x) “Optioned Stock” means the Common Stock subject to an Option.

          (y) “Optionee” means an Employee or Consultant who receives an Option.

          (z) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code, or any successor provision.

          (aa) “Participant” means any holder of one or more Options or Stock Purchase Rights,
or the Shares issuable or issued upon exercise of such awards, under the Plan.

          (bb) “Plan” means this 2004 Stock Plan.

          (cc) “Reporting Person” means an officer, Director, or greater than ten percent
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required
to file reports pursuant to Rule 16a-3 under the Exchange Act.

          (dd) “Restricted Stock” means Shares of Common Stock acquired pursuant to a grant of a
Stock Purchase Right under Section 11 below.

          (ee) “Restricted Stock Purchase Agreement” means a written document, the form(s) of
which shall be approved from time to time by the Administrator, reflecting the terms

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of a Stock Purchase Right granted under the Plan and includes any documents attached to such
agreement.

          (ff) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from
time to time, or any successor provision.

          (gg) “Share” means a share of the Common Stock, as adjusted in accordance with Section
14 of the Plan.

          (hh) “Stock Exchange” means any stock exchange or consolidated stock price reporting
system on which prices for the Common Stock are quoted at any given time.

          (ii) “Stock Purchase Right” means the right to purchase Common Stock pursuant to
Section 11 below.

          (jj) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code, or any successor provision.

          (kk) “Ten Percent Holder” means a person who owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary.

     3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan,
the maximum aggregate number of Shares that may be sold under the Plan is 6,318,550 Shares of
Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock. If an award
should expire or become unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject
thereto shall, unless the Plan shall have been terminated, become available for future grant under
the Plan. In addition, any Shares of Common Stock which are retained by the Company upon exercise
of an award in order to satisfy the exercise or purchase price for such award or any withholding
taxes due with respect to such exercise or purchase shall be treated as not issued and shall
continue to be available under the Plan. Shares issued under the Plan and later repurchased by the
Company pursuant to any repurchase right which the Company may have shall be available for future
grant under the Plan.

     4. Administration of the Plan.

          (a) General. The Plan shall be administered by the Board or a Committee, or a
combination thereof, as determined by the Board. The Plan may be administered by different
administrative bodies with respect to different classes of Participants and, if permitted by the
Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

          (b) Committee Composition. If a Committee has been appointed pursuant to this Section
4, such Committee shall continue to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of a Committee and
thereafter directly administer the Plan, all to the extent permitted by the

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Applicable Laws and, in the case of a Committee administering the Plan in accordance with the
requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by
such provisions. The Committee shall in all events conform to any requirements of the Applicable
Laws.

          (c) Powers of the Administrator. Subject to the provisions of the Plan and in the
case of a Committee, the specific duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:

                (i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(p) of
the Plan, provided that such determination shall be applied consistently with respect to
Participants under the Plan;

               (ii) to select the Employees and Consultants to whom Plan awards may from time to time be
granted;

                (iii) to determine whether and to what extent Plan awards are granted;

               (iv) to determine the number of Shares of Common Stock to be covered by each award granted;

                (v) to approve the form(s) of agreement(s) used under the Plan;

                (vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any award granted hereunder, which terms and conditions include but are not limited to the exercise
or purchase price, the time or times when awards may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata
adjustment to vesting as a result of a Participant’s transitioning from full- to part-time service
(or vice versa), and any restriction or limitation regarding any Option, Optioned Stock, Stock
Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its
sole discretion, shall determine;

                (vii) to determine whether and under what circumstances an Option may be settled in cash under
Section 10(c) instead of Common Stock;

                (viii) to implement an Option Exchange Program on such terms and conditions as the
Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an
Option that would materially and adversely affect the rights of any Optionee shall be made without
the prior written consent of the Optionee;

                (ix) to adjust the vesting of an Option held by an Employee or Consultant as a result of a
change in the terms or conditions under which such person is providing services to the Company;

                (x) to construe and interpret the terms of the Plan and awards granted under the Plan, which
constructions, interpretations and decisions shall be final and binding on all Participants; and

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                (xi) in order to fulfill the purposes of the Plan and without amending the Plan, to modify
grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed
outside of the United States in order to recognize differences in local law, tax policies or
customs.

     5. Eligibility.

          (a) Recipients of Grants. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees,
provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

          (b) Type of Option. Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option.

          (c) ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b), to
the extent that the aggregate Fair Market Value of Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(c),
Incentive Stock Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of
the date of the grant of such Option.

          (d) No Employment Rights. The Plan shall not confer upon any Participant any right
with respect to continuation of an employment or consulting relationship with the Company, nor
shall it interfere in any way with such Participant’s right or the Company’s right to terminate the
employment or consulting relationship at any time for any reason.

     6. Term of Plan. The Plan shall become effective upon its adoption by the Board of
Directors. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 16 of the Plan.

     7. Term of Option. The term of each Option shall be the term stated in the Option
Agreement; provided that the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement and provided further that,
in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten
Percent Holder, the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.

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     8. [Reserved.]

     9. Option Exercise Price and Consideration.

          (a) Exercise Price. The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Administrator and set forth in
the Option Agreement, but shall be subject to the following:

                (i) In the case of an Incentive Stock Option

                     (A) granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share
exercise price shall be no less than one hundred ten percent (110%) of the Fair Market Value per
Share on the date of grant; or

                     (B) granted to any other Employee, the per Share exercise price shall be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.

                (ii) In the case of a Nonstatutory Stock Option

                     (A) granted on any date on which the Common Stock is not a Listed Security to a person who at
the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of grant if required by
the Applicable Laws and, if not so required, shall be such price as is determined by the
Administrator;

                     (B) granted on any date on which the Common Stock is not a Listed Security to any other
eligible person, the per Share exercise price shall be no less than eighty-five percent (85%) of
the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not
so required, shall be such price as is determined by the Administrator; or

                     (C) granted on any date on which the Common Stock is a Listed Security to any eligible person,
the per share Exercise Price shall be such price as determined by the Administrator provided that
if such eligible person is, at the time of the grant of such Option, a Named Executive of the
Company, the per share Exercise Price shall be no less than one hundred percent (100%) of the Fair
Market Value on the date of grant if such Option is intended to qualify as performance-based
compensation under Section 162(m) of the Code.

                (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price
other than as required above pursuant to a merger or other Corporate Transaction.

          (b) Permissible Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of
grant) and may consist entirely of (1) cash; (2) check; (3) subject to any requirements of the
Applicable Laws (including without limitation Section 153 of the Delaware General

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Corporation Law), delivery of Optionee’s promissory note having such recourse, interest,
security and redemption provisions as the Administrator determines to be appropriate after taking
into account the potential accounting consequences of permitting an Optionee to deliver a
promissory note; (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option
is exercised, provided that in the case of Shares acquired, directly or indirectly, from the
Company, such Shares must have been owned by the Optionee for more than six (6) months on the date
of surrender (or such other period as may be required to avoid the Company’s incurring an adverse
accounting charge); (6) if, as of the date of exercise of an Option the Company then is permitting
employees to engage in a “same-day sale” cashless brokered exercise program involving one or more
brokers, through such a program that complies with the Applicable Laws (including without
limitation the requirements of Regulation T and other applicable regulations promulgated by the
Federal Reserve Board) and that ensures prompt delivery to the Company of the amount required to
pay the exercise price and any applicable withholding taxes; or (7) any combination of the
foregoing methods of payment. In making its determination as to the type of consideration to
accept, the Administrator shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept
a particular form of consideration at the time of any Option exercise.

     10. Exercise of Option.

          (a) General.

                     (i) Exercisability. Any Option granted hereunder shall be exercisable at such times
and under such conditions as determined by the Administrator, consistent with the term of the Plan
and reflected in the Option Agreement, including vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee; provided however that, if required under the
Applicable Laws, the Option (or Shares issued upon exercise of the Option) shall comply with the
requirements of Section 260.140.41(f) and (k) of the Rules of the California Corporations
Commissioner.

                     (ii) Leave of Absence. The Administrator shall have the discretion to determine
whether and to what extent the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such determination, vesting of Options shall be
tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the
event of military leave, vesting shall toll during any unpaid portion of such leave, provided that,
upon a Participant’s returning from military leave (under conditions that would entitle him or her
to protection upon such return under the Uniform Services Employment and Reemployment Rights Act),
he or she shall be given vesting credit with respect to Options to the same extent as would have
applied had the Participant continued to provide services to the Company throughout the leave on
the same terms as he or she was providing services immediately prior to such leave.

                     (iii) Minimum Exercise Requirements. An Option may not be exercised for a fraction of
a Share. The Administrator may require that an Option be exercised as to a minimum number of
Shares, provided that such requirement shall not prevent an Optionee from exercising the full
number of Shares as to which the Option is then exercisable.

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                    (iv) Procedures for and Results of Exercise. An Option shall be deemed exercised when
written notice of such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and the Company has received full payment for
the Shares with respect to which the Option is exercised. Full payment may, as authorized by the
Administrator, consist of any consideration and method of payment allowable under Section 9(b) of
the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of
consideration at the time of any Option exercise.

     Exercise of an Option in any manner shall result in a decrease in the number of Shares that
thereafter may be available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.

                     (v) Rights as Stockholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will
be made for a dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 14 of the Plan.

          (b) Termination of Employment or Consulting Relationship. Except as otherwise set
forth in this Section 10(b), the Administrator shall establish and set forth in the applicable
Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all,
following termination of an Optionee’s Continuous Service Status, which provisions may be waived or
modified by the Administrator at any time. Unless the Administrator otherwise provides in the
Option Agreement, to the extent that the Optionee is not vested in Optioned Stock at the date of
termination of his or her Continuous Service Status, or if the Optionee (or other person entitled
to exercise the Option) does not exercise the Option to the extent so entitled within the time
specified in the Option Agreement or below (as applicable), the Option shall terminate and the
Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no
event may any Option be exercised after the expiration of the Option term as set forth in the
Option Agreement (and subject to Section 7).

          The following provisions (1) shall apply to the extent an Option Agreement does not specify
the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s
Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may
be set forth in an Option Agreement:

                    (i) Termination other than Upon Disability or Death. In the event of termination of
Optionee’s Continuous Service Status other than under the circumstances set forth in subsections
(ii) and (iii) below, such Optionee may exercise an Option for thirty (30) days following such
termination to the extent the Optionee was vested in the Optioned Stock as of the date of such
termination. No termination shall be deemed to occur and this Section 10(b)(i) shall not apply if
(i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an Employee who
becomes a Consultant.

                     (ii) Disability of Optionee. In the event of termination of an Optionee’s Continuous
Service Status as a result of his or her disability (including a disability

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within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at
any time within six (6) months following such termination to the extent the Optionee was vested in
the Optioned Stock as of the date of such termination.

                    (iii) Death of Optionee. In the event of the death of an Optionee during the period
of Continuous Service Status since the date of grant of the Option, or within thirty (30) days
following termination of Optionee’s Continuous Service Status, the Option may be exercised by
Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or
inheritance at any time within twelve (12) months following the date of death, but only to the
extent the Optionee was vested in the Optioned Stock as of the date of death or, if earlier, the
date the Optionee’s Continuous Service Status terminated.

          (c) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares an Option previously granted under the Plan based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time that
such offer is made.

     11. Stock Purchase Rights.

          (a) Rights to Purchase. When the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such person must accept such
offer. In the case of a Stock Purchase Right granted prior to the date, if any, on which the
Common Stock becomes a Listed Security and if required by the Applicable Laws at that time, the
purchase price of Shares subject to such Stock Purchase Rights shall not be less than eighty-five
percent (85%) of the Fair Market Value of the Shares as of the date of the offer, or, in the case
of a Ten Percent Holder, the price shall not be less than one hundred percent (100%) of the Fair
Market Value of the Shares as of the date of the offer. If the Applicable Laws do not impose the
requirements set forth in the preceding sentence and with respect to any Stock Purchase Rights
granted after the date, if any, on which the Common Stock becomes a Listed Security, the purchase
price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator. The
offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the Administrator.

          (b) Repurchase Option.

                    (i) General. Unless the Administrator determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser’s Continuous Service Status with the Company for any
reason (including death or disability). Subject to any requirements of the Applicable Laws
(including without limitation Section 260.140.42(h) of the Rules of the California Corporations
Commissioner), the terms of the Company’s repurchase option (including without limitation the price
at which, and the consideration for which, it may be exercised, and the events upon which it shall
lapse) shall be as determined by the Administrator in its sole discretion and reflected in the
Restricted Stock Purchase Agreement.

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                (ii) Leave of Absence. The Administrator shall have the discretion to determine
whether and to what extent the lapsing of Company repurchase rights shall be tolled during any
unpaid leave of absence; provided, however, that in the absence of such determination, such lapsing
shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws).
In the event of military leave, the lapsing of Company repurchase rights shall toll during any
unpaid portion of such leave, provided that, upon a Participant’s returning from military leave
(under conditions that would entitle him or her to protection upon such return under the Uniform
Services Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with
respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent
as would have applied had the Participant continued to provide services to the Company throughout
the leave on the same terms as he or she was providing services immediately prior to such leave.

          (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.

          (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder
when his or her purchase is entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the
Plan.

     12. Taxes.

          (a) As a condition of the grant, vesting or exercise of an Option or Stock Purchase Right
granted under the Plan, the Participant (or in the case of the Participant’s death, the person
exercising the Option or Stock Purchase Right) shall make such arrangements as the Administrator
may require for the satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with such grant, vesting or exercise of the Option or
Stock Purchase Right or the issuance of Shares. The Company shall not be required to issue any
Shares under the Plan until such obligations are satisfied. If the Administrator allows the
withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under
this Section 12 (whether pursuant to Section 12(c), (d) or (e), or otherwise), the Administrator
shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes.

          (b) In the case of an Employee and in the absence of any other arrangement, the Employee shall
be deemed to have directed the Company to withhold or collect from his or her compensation an
amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable
after the date of an exercise of the Option or Stock Purchase Right.

          (c) This Section 12(c) shall apply only after the date, if any, upon which the Common Stock
becomes a Listed Security. In the case of a Participant other than an Employee (or in the case of
an Employee where the next payroll payment is not sufficient to satisfy such

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tax obligations, with respect to any remaining tax obligations), in the absence of any other
arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed
to have elected to have the Company withhold from the Shares to be issued upon exercise of the
Option or Stock Purchase Right that number of Shares having a Fair Market Value determined as of
the applicable Tax Date (as defined below) equal to the amount required to be withheld. For
purposes of this Section 12, the Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined under the Applicable Laws
(the “Tax Date”).

          (d) If permitted by the Administrator, in its discretion, a Participant may satisfy his or her
tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to
the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to
the amount required to be withheld. In the case of shares previously acquired from the Company
that are surrendered under this Section 12(d), such Shares must have been owned by the Participant
for more than six (6) months on the date of surrender (or such other period of time as is required
for the Company to avoid adverse accounting charges).

          (e) Any election or deemed election by a Participant to have Shares withheld to satisfy tax
withholding obligations under Section 12(c) or (d) above shall be irrevocable as to the particular
Shares as to which the election is made and shall be subject to the consent or disapproval of the
Administrator. Any election by a Participant under Section 12(d) above must be made on or prior to
the applicable Tax Date.

          (f) In the event an election to have Shares withheld is made by a Participant and the Tax Date
is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the
Code, the Participant shall receive the full number of Shares with respect to which the Option or
Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender
back to the Company the proper number of Shares on the Tax Date.

13. Non-Transferability of Options and Stock Purchase Rights.

          (a) General. Except as set forth in this Section 13, Options and Stock Purchase
Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution. The designation of a beneficiary by
an Optionee will not constitute a transfer. An Option or Stock Purchase Right may be exercised,
during the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a
transferee permitted by this Section 13.

          (b) Limited Transferability Rights. Notwithstanding anything else in this Section 13,
the Administrator may in its discretion grant Nonstatutory Stock Options that may be transferred by
instrument to an inter vivos or testamentary trust in which the Options are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift or pursuant to domestic relations
orders to “Immediate Family Members” (as defined below) of the Optionee. “Immediate Family
Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-

 -12- 

 

law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), a
trust in which these persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Optionee) control the management of assets, and any other
entity in which these persons (or the Optionee) own more than fifty percent (50%) of the voting
interests.

     14. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

          (a) Changes in Capitalization. Subject to any action required under Applicable Laws
by the stockholders of the Company, the number of Shares of Common Stock covered by each
outstanding award and the number of Shares of Common Stock that have been authorized for issuance
under the Plan but as to which no awards have yet been granted or that have been returned to the
Plan upon cancellation or expiration of an award, as well as the price per Share of Common Stock
covered by each such outstanding award, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or
any other increase or decrease in the number of issued Shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares of Common Stock subject to an award.

          (b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the
Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation
of such action, unless otherwise determined by the Administrator.

          (c) Corporate Transaction. In the event of a Corporate Transaction (including without
limitation a Change of Control), each outstanding Option or Stock Purchase Right shall be assumed
or an equivalent option or right shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation (the “Successor Corporation”), unless the
Successor Corporation does not agree to assume the award or to substitute an equivalent option or
right, in which case such Option or Stock Purchase Right shall terminate upon the consummation of
the transaction.

          For purposes of this Section 14(c), an Option or a Stock Purchase Right shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a
Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or Stock
Purchase Right would be entitled to receive upon exercise of the award the same number and kind of
shares of stock or the same amount of property, cash or securities as such holder would have been
entitled to receive upon the occurrence of the transaction if the holder had been, immediately
prior to such transaction, the holder of the number of Shares of Common Stock covered by the award
at such time (after giving effect to any adjustments in the number of Shares covered by the Option
or Stock Purchase Right as

 -13- 

 

provided for in this Section 14); provided that if such consideration received in the
transaction is not solely common stock of the Successor Corporation, the Administrator may, with
the consent of the Successor Corporation, provide for the consideration to be received upon
exercise of the award to be solely common stock of the Successor Corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock in the transaction.

          (d) Certain Distributions. In the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (other than dividends payable in
cash or stock of the Company) without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

     15. Time of Granting Options and Stock Purchase Rights. The date of grant of an
Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such other date as is
determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant
date shall be the later of the date on which the Administrator makes the determination granting
such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship
with the Company. Notice of the determination shall be given to each Employee or Consultant to
whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of
such grant.

     16. Amendment and Termination of the Plan.

          (a) Authority to Amend or Terminate. The Board may at any time amend, alter, suspend
or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an
adjustment pursuant to Section 14 above) shall be made that would materially and adversely affect
the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without
his or her consent. In addition, to the extent necessary and desirable to comply with the
Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required.

          (b) Effect of Amendment or Termination. Except as to amendments which the
Administrator has the authority under the Plan to make unilaterally, no amendment or termination of
the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted,
unless mutually agreed otherwise between the Optionee or holder of the Stock Purchase Rights and
the Administrator, which agreement must be in writing and signed by the Optionee or holder and the
Company.

     17. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the
Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be
obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan
unless such issuance or delivery would comply with the Applicable Laws, with such compliance
determined by the Company in consultation with its legal counsel. As a condition to the exercise
of an Option or Stock Purchase Right, the Company may require the person exercising the award to
represent and warrant at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such

 -14- 

 

Shares if, in the opinion of counsel for the Company, such a representation is required by
law. Shares issued upon exercise of awards granted prior to the date on which the Common Stock
becomes a Listed Security shall be subject to a right of first refusal in favor of the Company
pursuant to which the Participant will be required to offer Shares to the Company before selling or
transferring them to any third party on such terms and subject to such conditions as is reflected
in the applicable Option Agreement or Restricted Stock Purchase Agreement.

     18. Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     19. Agreements. Options and Stock Purchase Rights shall be evidenced by Option
Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the
Administrator shall from time to time approve.

     20. Stockholder Approval. If required by the Applicable Laws, continuance of the Plan
shall be subject to approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and
to the degree required under the Applicable Laws.

     21. Information and Documents to Optionees and Purchasers. Prior to the date, if any,
upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the
Company shall provide financial statements at least annually to each Optionee and to each
individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who
acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The
Company shall not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information.

 -15- 

 

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

«Optionee»:

     You have been granted an option to purchase Common Stock of Orexigen Therapeutics, Inc. (the
“Company”) as follows:

	 	 	 
	Date of Grant:

	 	«GrantDate»
	 
	 	 
	Exercise Price per Share:

	 	«ExercisePrice»
	 
	 	 
	Total Number of Shares Granted:

	 	«NoofShares»
	 
	 	 
	Total Exercise Price:

	 	«TotalExercisePrice»
	 
	 	 
	Type of Option:

	 	«ISO»«NSO»
	 
	 	 
	Expiration Date:

	 	«ExpirDate10_years_from_grant»
	 
	 	 
	Vesting Commencement Date:

	 	«VestingCommencementDate»
	 
	 	 
	 
	 	 
	Vesting Schedule:

	 	So long as your Continuous Service Status with the Company continues, the
Shares underlying this Option shall vest and become exerciseable in accordance with the
following schedule: twenty-five percent (25%) of the total number of Shares subject to
the Option shall vest on the 1st anniversary of the Vesting Commencement Date and
1/36th of the total remaining number of Shares subject to the Option shall
vest on the same day of each month thereafter.
	 
	 	 
	Termination Period:

	 	This Option may be exercised for ninety (90) days after termination of
Optionee’s Continuous Service Status except as set out in Section 5 of the Stock Option
Agreement (but in no event later than the Expiration Date). Optionee is responsible
for keeping track of these exercise periods following termination for any reason of his
or her service relationship with the Company. The Company will not provide further
notice of such periods.
	 
	 	 
	Transferability:

	 	This Option may not be transferred.

 

 

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Orexigen
Therapeutics, Inc. 2004 Stock Plan and the Stock Option Agreement, both of which are attached and
made a part of this document.

     In addition, you agree and acknowledge that your rights to any Shares underlying the Option
will be earned only as you provide services to the Company over time, that the grant of the Option
is not as consideration for services you rendered to the Company prior to your Vesting Commencement
Date, and that nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any period of time, nor
does it interfere in any way with your right or the Company’s right to terminate that relationship
at any time, for any reason, with or without cause.

	 	 	 	 	 	 	 
	Dated: «GrantDate»	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

«Optionee»

	 	 	 	 

Graham Cooper
	 	 
	 

	 	 	 	Chief Financial Officer, Treasurer and
Secretary	 	 

 -2- 

 

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

STOCK OPTION AGREEMENT

     1. Grant of Option. Orexigen Therapeutics, Inc., a Delaware corporation (the
“Company”), hereby grants to «Optionee» (“Optionee”), an option (the
“Option”) to purchase the total number of shares of Common Stock (the “Shares”) set
forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share
set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and
provisions of the Orexigen Therapeutics, Inc. 2004 Stock Plan (the “Plan”) adopted by the
Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this
Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

     2. Designation of Option. This Option is intended to be an Incentive Stock Option as
defined in Section 422 of the Code only to the extent so designated in the Notice, and to the
extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock
Option, it is intended to be a Nonstatutory Stock Option.

     Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the
Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the
Company or any Parent or Subsidiary, including under other plans of the Company) that first become
exercisable in any calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess
of $100,000 shall be treated as subject to a Nonstatutory Stock Option, in accordance with Section
5(c) of the Plan.

     3. Exercise of Option. This Option shall become exercisable during its term in
accordance with the Vesting Schedule set out in the Notice and with the provisions of Section 10 of
the Plan as follows:

          (a) Right to Exercise.

                (i) The Option may only be exercised to the extent it has become vested.

               (ii) This Option may not be exercised for a fraction of a share.

               (iii) In the event of Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Section 5 below, subject to the limitations contained
in this Section 3.

                (iv) In no event may this Option be exercised after the Expiration Date of the Option as set
forth in the Notice.

 -1- 

 

          (b) Method of Exercise.

                (i) This Option shall be exercisable by execution and delivery of the Exercise Notice and
Restricted Stock Purchase Agreement attached hereto as Exhibit A, or any other form of
written notice approved for such purpose by the Company which shall state Optionee’s election to
exercise the Option, the number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder’s investment intent with respect to such
Shares as may be required by the Company pursuant to the provisions of the Plan. Such written
notice shall be signed by Optionee and shall be delivered to the Company by such means as are
determined by the Plan Administrator in its discretion to constitute adequate delivery. The
written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed
to be exercised upon receipt by the Company of such written notice accompanied by the Exercise
Price.

                (ii) As a condition to the exercise of this Option and as further set forth in Section 12 of
the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of
Shares, whether by withholding, direct payment to the Company, or otherwise.

                (iii) The Company is not obligated, and will have no liability for failure, to issue or
deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with
the Applicable Laws, with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any applicable federal or
state securities or other law or regulation, including any rule under Part 221 of Title 12 of the
Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination of the following, at the election of Optionee:

          (a) cash or check;

          (b) cancellation of indebtedness;

          (c) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by
surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value
on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being
exercised. In the case of shares acquired directly or indirectly from the Company, such shares
must have been owned by Optionee for more than six (6) months on the date of surrender (or such
other period of time as is necessary to avoid the Company’s incurring adverse accounting charges);
or

 -2- 

 

          (d) following the date, if any, upon which the Common Stock is a Listed Security, and if the
Company is at such time permitting “same day sale” cashless brokered exercises, delivery of a
properly executed exercise notice together with irrevocable instructions to a broker participating
in such cashless brokered exercise program to deliver promptly to the Company the amount required
to pay the exercise price (and applicable withholding taxes).

     5. Termination of Relationship. Following the date of termination of Optionee’s
Continuous Service Status for any reason (the “Termination Date”), Optionee may exercise
the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not
entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this
Option within the Termination Period set forth in the Notice or the termination periods set forth
below, the Option shall terminate in its entirety. In no event may any Option be exercised after
the Expiration Date of the Option as set forth in the Notice.

          (a) Termination. In the event of termination of Optionee’s Continuous Service Status
other than as a result of Optionee’s disability or death, Optionee may, to the extent Optionee is
vested in the Option Shares at the date of such termination (the “Termination Date”),
exercise this Option during the Termination Period set forth in the Notice.

          (b) Other Terminations. In connection with any termination other than a termination
covered by Section 5(a), Optionee may exercise the Option only as described below:

               (i) Termination upon Disability of Optionee. In the event of termination of
Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only
within six (6) months from the Termination Date, exercise this Option to the extent Optionee was
vested in the Option Shares as of such Termination Date.

                (ii) Death of Optionee. In the event of the death of Optionee (a) during the term of
this Option and while an Employee or Consultant of the Company and having been in Continuous
Service Status since the date of grant of the Option, or (b) within thirty (30) days after
Optionee’s Termination Date, the Option may be exercised at any time within twelve (12) months
following the date of death by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was vested in the Option as
of the Termination Date.

     6. Non-Transferability of Option. Except as otherwise set forth in the Notice, this
Option may not be transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of
this Option shall be binding upon the executors, administrators, heirs, successors and assigns of
Optionee.

     7. Tax Consequences. Below is a brief summary as of the date of this Option of
certain of the federal tax consequences of exercise of this Option and disposition of the Shares
under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

 -3- 

 

          (a) Incentive Stock Option.

                (i) Tax Treatment upon Exercise and Sale of Shares. If this Option qualifies as an
Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of
the Option, although the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of
exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one
(1) year after exercise and are disposed of at least two (2) years after the Option grant date, any
gain realized on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are
disposed of within such one (1)-year period or within two (2) years after the Option grant date,
any gain realized on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the
Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares.

                (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon
exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or
before the later of (i) the date two (2) years after the Option grant date, or (ii) the date one
(1) year after the date of exercise, Optionee shall immediately notify the Company in writing of
such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax
withholding by the Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

          (b) Nonstatutory Stock Option. If this Option does not qualify as an Incentive Stock
Option, there may be a regular federal (and state) income tax liability upon the exercise of the
Option. Optionee will be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to
withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the time of exercise.
If Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one (1) year,
any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.

     8. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any securities of the Company however
and whenever acquired (other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period of time (not to
exceed one hundred eighty (180) days) from the effective date of such registration as may be
requested by the Company or such managing underwriters and to execute an agreement reflecting the
foregoing as may be requested by the underwriters at the time of the public offering.

 -4- 

 

     9. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof (and has had an
opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and
agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby
agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a conflict between
the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement,
the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the
entire agreement between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties relating to such
subject matter.

[Signature Page Follows]

 -5- 

 

     This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed
an original and all of which together shall constitute one document.

Dated: «GrantDate»

	 	 	 	 	 	 	 	 	 
	 	 	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

«Optionee»

	 	 	 	 	 	 

Graham Cooper
	 	 
	 

	 	 	 	 	 	Chief Financial Officer, Treasurer and	 	 
	Address for Notice:

	 	 	 	 	 	Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	«Address»
	 	 	 	 	 	 	 	 

 -6- 

 

EXHIBIT A

OREXIGEN THERAPEUTICS, INC.

2004 STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement (“Agreement”) is made as of ___, by and between Orexigen
Therapeutics, Inc., a Delaware corporation (the “Company”), and «Optionee»
(“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined,
they shall have the meaning ascribed to them in the Company’s 2004 Stock Plan (the “Plan”).

     1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby
elects to exercise his or her option to purchase «NoofShares» shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the Plan and the Stock Option Agreement
granted «GrantDate», (the “Option Agreement”). Of these Shares, Purchaser has elected to
purchase ___ of those Shares which have become vested as of the date hereof under the
Vesting Schedule set forth in the Notice of Stock Option Grant. The purchase price for the Shares
shall be «ExercisePrice» per Share for a total purchase price of $___. The term
“Shares” refers to the purchased Shares and all securities received in replacement of the
Shares or as stock dividends or splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new, substituted or
additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s
ownership of the Shares.

     2. Time and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

     3. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in
the Shares except in compliance with the provisions below and applicable securities laws.

          (a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of
Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the Company or its
assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section 3(a) (the “Right of First Refusal”).

               (i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide

 -7- 

 

intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser
or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred
to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer.
The Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same
terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

                (ii) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

                (iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

                (iv) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness, or by any combination thereof within thirty (30) days after receipt of
the Notice or in the manner and at the times set forth in the Notice.

                (v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within sixty (60) days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any applicable
securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3
shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares
described in the Notice are not transferred to the Proposed Transferee within such period, or if
the Holder proposes to change the price or other terms to make them more favorable to the Proposed
Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall
again be offered the Right of First Refusal before any Shares held by the Holder may be sold or
otherwise transferred.

                (vi) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust
for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section
3(a). “Immediate Family” as used herein shall mean any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships). In such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and

 -8- 

 

there shall be no further transfer of such Shares except in accordance with the terms of this
Section 3.

          (b) Involuntary Transfer.

               (i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time
after the date of this Agreement, of any transfer by operation of law or other involuntary transfer
(including death or divorce, but excluding a transfer to Immediate Family as set forth in Section
3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall
have an option to purchase all of the Shares transferred. Upon such a transfer, the person
acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The
right to purchase such Shares shall be provided to the Company for a period of thirty (30) days
following receipt by the Company of written notice by the person acquiring the Shares.

                (ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within thirty (30) days after receipt by it of written notice of the transfer
or proposed transfer of Shares. However, if the Purchaser or his or her executor does not agree
with the valuation as determined by the Board of Directors of the Company, the Purchaser or the
executor shall be entitled to have the valuation determined by an independent appraiser to be
mutually agreed upon by the Company and the Purchaser or the executor and whose fees shall be borne
equally by the Company and the Purchaser or the Purchaser’s estate.

          (c) Assignment. The right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any stockholder or stockholders of the Company or other persons or
organizations.

          (e) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement.
Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement
are satisfied.

          (f) Termination of Rights. The right of first refusal granted the Company by Section
3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted
the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”). Upon termination of the right of first refusal described in
Section 3(a) above, a new certificate or certificates representing the Shares not repurchased shall
be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to
Purchaser.

 -9- 

 

     4. Investment and Taxation Representations. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act or under any applicable provision of state law. Purchaser
does not have any present intention to transfer the Shares to any person or entity.

          (b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser further acknowledges and understands that the Company is
under no obligation to register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in the opinion of
counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will be able to resell
any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things,
that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended, that resales of securities take place only after the holder of the Shares has held the
Shares for certain specified time periods, and under certain circumstances, that resales of
securities be limited in volume and take place only pursuant to brokered transactions.
Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth
in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the applicable requirements of Rule
144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales,
and that such persons and their respective brokers who participate in such transactions do so at
their own risk.

 -10- 

 

          (f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of
Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has
consulted any tax consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.

          (a) Legends. The certificate or certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and federal corporate and
securities laws):

	 	(i)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
	 
	 	(ii)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

          (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

     6. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent or Subsidiary of the

 -11- 

 

Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with
or without cause.

     7. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the Company however or
whenever acquired (other than those included in the registration) without the prior written consent
of the Company or such underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the foregoing as may
be requested by the underwriters at the time of the public offering.

8. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to principles of
conflicts of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance
of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

          (d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.

 -12- 

 

          (f) Counterparts. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one
instrument.

          (g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

          (h) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE
OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS
EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.
THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

 -13- 

 

     The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of
the date first set forth above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	«Optionee»	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

I,                                         , spouse of «Optionee», have read and hereby approve the foregoing
Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares
as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or other such interest shall hereby by similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Spouse of «Optionee»
	 	 

 -14- 

 

RECEIPT

     The undersigned hereby acknowledges receipt of Certificate No.                      for                      shares of
Common Stock of Orexigen Therapeutics, Inc.

	 	 	 	 	 
	Dated:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	 

«Optionee»
	 	 

 -15- 

 

RECEIPT

     Orexigen Therapeutics, Inc. (the “Company”) hereby acknowledges receipt of a check in
the amount of $                     given by «Optionee» as consideration for Certificate No.                      for
                     shares of Common Stock of the Company.

	 	 	 	 	 
	Dated:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(print)	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

 -16-exv10w6

 

EXHIBIT 10.6

HIGH BLUFF RIDGE AT DEL MAR

OFFICE LEASE

LANDLORD:

PRENTISS/COLLINS DEL MAR HEIGHTS LLC,

a Delaware limited liability company

TENANT:

OREXIGEN THERAPEUTICS, INC.,

a Delaware corporation

 

 

	 	 	 	 	 	 	 	 	 
	1.	 	Premises	 	 	1	 
	 
	 	1.1	 	Premises	 	 	1	 
	 
	 	1.2	 	Landlord’s Reservation of Rights	 	 	1	 
	 
	 	1.3	 	Measurement of Premises, Building
and/or the Project	 	 	1	 
	 
	 	1.4	 	Project	 	 	1	 
	2.	 	Term; Extension Option; Early Access	 	 	1	 
	 
	 	2.1	 	Term	 	 	1	 
	 
	 	2.2	 	Option to Extend	 	 	2	 
	 
	 	2.3	 	Early Access	 	 	3	 
	3.	 	Rent	 	 	3	 
	 
	 	3.1	 	Basic Rent	 	 	3	 
	 
	 	3.2	 	Additional Rent	 	 	3	 
	4.	 	Common Areas; Operating Expenses	 	 	3	 
	 
	 	4.1	 	Definitions; Tenant’s Rights	 	 	3	 
	 
	 	4.2	 	Landlord’s Reserved Rights	 	 	4	 
	 
	 	4.3	 	Excess Expenses	 	 	4	 
	 
	 	4.4	 	Definition of Operating Expenses	 	 	4	 
	 
	 	4.5	 	Definition of Real Property Taxes and Assessments	 	 	6	 
	 
	 	4.6	 	Estimate Statement	 	 	7	 
	 
	 	4.7	 	Actual Statement	 	 	7	 
	 
	 	4.8	 	No Release	 	 	7	 
	 
	 	4.9	 	Audit Rights	 	 	7	 
	5.	 	Security Deposit	 	 	8	 
	6.	 	Use	 	 	8	 
	 
	 	6.1	 	General	 	 	8	 
	 
	 	6.2	 	Parking	 	 	9	 
	 
	 	6.3	 	Signs and Auctions	 	 	9	 
	 
	 	6.4	 	Hazardous Materials	 	 	9	 
	7.	 	Payments and Notices	 	 	10	 
	8.	 	Brokers	 	 	10	 
	9.	 	Surrender; Holding Over	 	 	10	 
	 
	 	9.1	 	Surrender of Premises	 	 	10	 
	 
	 	9.2	 	Hold Over With Landlord’s Consent	 	 	11	 
	 
	 	9.3	 	Hold Over Without Landlord’s Consent	 	 	11	 
	 
	 	9.4	 	No Effect on Landlord’s Rights	 	 	11	 
	10.	 	Taxes on Tenant’s Property	 	 	11	 
	11.	 	Condition of Premises; Repairs	 	 	11	 
	 
	 	11.1	 	Condition of Premises	 	 	11	 
	 
	 	11.2	 	Landlord’s Repair Obligations	 	 	11	 
	 
	 	11.3	 	Tenant’s Repair Obligations	 	 	12	 
	 
	 	11.4	 	Landlord Work	 	 	12	 
	12.	 	Alterations	 	 	13	 
	 
	 	12.1	 	Tenant Changes; Conditions	 	 	13	 
	 
	 	12.2	 	Removal of Tenant Changes and Tenant Improvements	 	 	14	 
	 
	 	12.3	 	Removal of Personal Property	 	 	14	 
	 
	 	12.4	 	Tenant’s Failure to Remove	 	 	14	 
	13.	 	Liens	 	 	14	 
	14.	 	Assignment and Subletting	 	 	14	 
	 
	 	14.1	 	Restriction on Transfer	 	 	14	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	14.2	 	Permitted Controlled Transfers	 	 	15	 
	 
	 	14.3	 	Landlord’s Options	 	 	15	 
	 
	 	14.4	 	Additional Conditions; Excess Rent	 	 	15	 
	 
	 	14.5	 	Reasonable Disapproval	 	 	16	 
	 
	 	14.6	 	No Release	 	 	16	 
	 
	 	14.7	 	Administrative and Attorneys’ Fees	 	 	16	 
	 
	 	14.8	 	Material Inducement	 	 	16	 
	15.	 	Entry by Landlord	 	 	16	 
	16.	 	Utilities and Services	 	 	17	 
	 
	 	16.1	 	Standard Utilities and Services	 	 	17	 
	 
	 	16.2	 	Tenant’s Obligations	 	 	17	 
	 
	 	16.3	 	Failure to Provide Services

	 	 	18	 
	 
	 
	 	16.4	 	Abatement of Rent When Tenant is Prevented From Using Premises.
If Tenant is prevented from using, and does not use, the Premises or any portion thereof, for five (5) consecutive
business days (the "Eligibility Period") as a result of (i) any repair, maintenance or alteration performed by Landlord after
the Commencement Date, or (ii) any failure to provide to the Premises any of the essential utilities and services required to
be provided in Sections 16.1(a), 16.1(b), or 16.1(c) above, (iii) any failure to provide access to the Premises, or (iv)
Landlord’s exercise of its rights in Section 4.2 of this Lease, then Tenant’s obligation to pay Monthly Basic Rent and Operating
Expenses shall be abated or reduced, as the case may be, from and after the first (1st) day following the Eligibility Period
and continuing until such time that Tenant continues to be so prevented from using, and does not use, the Premises or a
portion thereof, in the proportion that the rentable square feet of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable square feet of the Premises; provided, however, that Tenant shall only be
entitled to such abatement of rent if the matter described in clauses (i) (i.e, the matter giving rise to the repair,
maintenance or alteration), (ii) or (iii) of this sentence is caused by the gross negligence or willful misconduct of
Landlord or Landlord’s contractors or agents	 	 	18	 
	 
	17.	 	Indemnification and Exculpation	 	 	18	 
	 
	 	17.1	 	Tenant’s Assumption of Risk and Waiver	 	 	18	 
	 
	 	17.2	 	Indemnification	 	 	18	 
	 
	 	17.3	 	Survival; No Release of Insurers	 	 	19	 
	18.	 	Damage or Destruction	 	 	19	 
	 
	 	18.1	 	Landlord’s Rights and Obligations	 	 	19	 
	 
	 	18.2	 	Abatement of Rent	 	 	19	 
	 
	 	18.3	 	Inability to Complete	 	 	19	 
	 
	 	18.4	 	Damage Near End of Term	 	 	19	 
	 
	 	18.5	 	Waiver of Termination Right	 	 	19	 
	 
	 	18.6	 	Termination by Tenant	 	 	19	 
	19.	 	Eminent Domain	 	 	20	 
	 
	 	19.1	 	Substantial Taking	 	 	20	 
	 
	 	19.2	 	Partial Taking; Abatement of Rent	 	 	20	 
	 
	 	19.3	 	Condemnation Award	 	 	20	 
	 
	 	19.4	 	Temporary Taking	 	 	20	 
	 
	 	19.5	 	Waiver of Termination Right	 	 	20	 
	20.	 	Tenant’s Insurance	 	 	20	 
	 
	 	20.1	 	Types of Insurance	 	 	20	 
	 
	 	20.2	 	Requirements	 	 	21	 
	 
	 	20.3	 	Effect on Insurance	 	 	21	 
	21.	 	Landlord’s Insurance	 	 	21	 
	22.	 	Waiver of Claims; Waiver of Subrogation	 	 	22	 
	 
	 	22.1	 	Mutual Waiver of Parties	 	 	22	 
	 
	 	22.2	 	Waiver of Insurers	 	 	22	 
	23.	 	Tenant’s Default and Landlord’s Remedies	 	 	22	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	23.1	 	Tenant’s Default	 	 	22	 
	 
	 	23.2	 	Landlord’s Remedies; Termination	 	 	22	 
	 
	 	23.3	 	Landlord’s Remedies; Re-Entry Rights	 	 	23	 
	 
	 	23.4	 	Continuation of Lease	 	 	23	 
	 
	 	23.5	 	Landlord’s Right to Perform	 	 	23	 
	 
	 	23.6	 	Interest	 	 	23	 
	 
	 	23.7	 	Late Charges	 	 	23	 
	 
	 	23.8	 	Intentionally Omitted	 	 	23	 
	 
	 	23.9	 	Rights and Remedies Cumulative	 	 	23	 
	 
	 	23.10	 	Tenant’s Waiver of Redemption	 	 	24	 
	 
	 	23.11	 	Costs Upon Default and Litigation	 	 	24	 
	24.	 	Landlord’s Default	 	 	24	 
	25.	 	Subordination	 	 	24	 
	26.	 	Estoppel Certificate	 	 	24	 
	 
	 	26.1	 	Tenant’s Obligations	 	 	24	 
	 
	 	26.2	 	Tenant’s Failure to Deliver	 	 	24	 
	27.	 	Intentionally Omitted	 	 	25	 
	28.	 	Modification and Cure Rights of Landlord’s Mortgagees and Lessors	 	 	25	 
	 
	 	28.1	 	Modifications	 	 	25	 
	 
	 	28.2	 	Cure Rights	 	 	25	 
	29.	 	Quiet Enjoyment	 	 	25	 
	30.	 	Transfer of Landlord’s Interest	 	 	25	 
	31.	 	Limitation on Landlord’s Liability	 	 	25	 
	32.	 	Miscellaneous	 	 	25	 
	 
	 	32.1	 	Governing Law	 	 	25	 
	 
	 	32.2	 	Successors and Assigns	 	 	25	 
	 
	 	32.3	 	No Merger	 	 	25	 
	 
	 	32.4	 	Professional Fees	 	 	25	 
	 
	 	32.5	 	Waiver	 	 	26	 
	 
	 	32.6	 	Terms and Headings	 	 	26	 
	 
	 	32.7	 	Time	 	 	26	 
	 
	 	32.8	 	Prior Agreements; Amendments	 	 	26	 
	 
	 	32.9	 	Severability	 	 	26	 
	 
	 	32.10	 	Recording	 	 	26	 
	 
	 	32.11	 	Exhibits	 	 	26	 
	 
	 	32.12	 	Accord and Satisfaction	 	 	26	 
	 
	 	32.13	 	Financial Statements	 	 	26	 
	 
	 	32.14	 	No Partnership	 	 	26	 
	 
	 	32.15	 	Force Majeure	 	 	26	 
	 
	 	32.16	 	Counterparts	 	 	27	 
	 
	 	32.17	 	Nondisclosure of Lease Terms	 	 	27	 
	 
	 	32.18	 	Independent Covenants	 	 	27	 
	33.	 	Lease Execution	 	 	27	 
	 
	 	33.1	 	Tenant’s Authority	 	 	27	 
	 
	 	33.2	 	Joint and Several Liability	 	 	27	 
	 
	 	33.3	 	Building Name and Signage	 	 	27	 
	 
	 	33.4	 	Landlord’s Title; Air Rights	 	 	27	 
	 
	 	33.5	 	Time of Essence	 	 	27	 
	 
	 	33.6	 	Intentionally Omitted	 	 	27	 

 

 

	 	 	 	 	 	 	 	 	 
	 
	 	33.7	 	No Option	 	 	27	 
	34.	 	Waiver of Jury Trial	 	 	27	 
	35.	 	Consent to Judicial Reference	 	 	28	 
	36.	 	ERISA	 	 	28	 

 

 

SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS

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

	 	 	 	 	 
	1.1

	 	Landlord’s Address:	 	 
	 
	 	 	 	 
	 

	 	For Notice:
	 	Prentiss/Collins Del Mar Heights LLC
	 

	 	 	 	Prudential Real Estate Investors
	 

	 	 	 	4 Embarcadero Center, Suite 2700
	 

	 	 	 	San Francisco, California 94111-4180
	 

	 	 	 	Attn: Asset Management, PRISA II Portfolio
	 

	 	 	 	Facsimile: (415) 398-1025
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Prentiss/Collins Del Mar Heights LLC
	 

	 	 	 	c/o Prudential Real Estate Investors
	 

	 	 	 	8 Campus Drive, 4th Floor
	 

	 	 	 	Parsippany, New Jersey 07054
	 

	 	 	 	Attention: Gregory D. Shanklin, Law Department
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Prentiss/Collins Del Mar Heights LLC
	 

	 	 	 	c/o Brandywine Operating Partnership, LP
	 

	 	 	 	705 Palomar Airport Road, Suite 320
	 

	 	 	 	Carlsbad, California 92011
	 

	 	 	 	Attention: Deborah Street
	 

	 	 	 	Telephone: (760) 438-4242
	 

	 	 	 	Facsimile: (760) 438-0046
	 
	 	 	 	 
	 

	 	For Payment:
	 	Prentiss/Collins Del Mar Heights LLC
	 

	 	 	 	P.O. Box 100125
	 

	 	 	 	Pasadena, California 91189-0125
	 
	 	 	 	 
	1.2

	 	Tenant’s Address:
	 	(Prior to Commencement Date)
	 
	 	 	 	 
	 

	 	 	 	Orexigen Therapeutics, Inc.
	 

	 	 	 	c/o Scot Ginsburg
	 

	 	 	 	11988 El Camino Real, Suite 150
	 

	 	 	 	San Diego, CA 92130
	 

	 	 	 	Telephone: (858) 523-2100
	 

	 	 	 	Facsimile: (858) 523-2101
	 
	 	 	 	 
	 

	 	 	 	(After Commencement Date)
	 
	 	 	 	 
	 

	 	 	 	Orexigen Therapeutics
	 

	 	 	 	12481 High Bluff Drive, Suite 160
	 

	 	 	 	San Diego, California 92130
	 

	 	 	 	Attn: Graham Cooper
	 

	 	 	 	Telephone: (___)                    
	 

	 	 	 	Facsimile: (___)                    
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Latham & Watkins LLP
	 

	 	 	 	12636 High Bluff Drive, Suite 400
	 

	 	 	 	San Diego, California
	 

	 	 	 	Attn: Cheston Larson
	 

	 	 	 	Telephone: (858) 523-5400
	 

	 	 	 	Facsimile: (858) 523-5450

	1.3	 	Site; Project: The Site consists of the parcel(s) of real property in that certain Project
commonly known as High Bluff Ridge at Del Mar located at 12481-12531 High Bluff Drive, City of
San Diego, County of San Diego, State of California, as shown on the site plan attached hereto
as Exhibit “A” as such area may be expanded or reduced from time to time. The Project
includes the Site and all buildings, improvements and facilities, now or subsequently located
on the Site from time to time, including, without limitation, the two (2) buildings on the
Site (including the Building), as depicted on the site plan attached hereto as Exhibit
“A”. The aggregate rentable square feet of all buildings (including the Building) located
within the Project shall be approximately 157,567 rentable square feet.

	1.4	 	Building: A three (3) story office building located on the Site, containing approximately
68,038 rentable square feet, the address of which is 12481 High Bluff Drive, San Diego,
California 92130-2040.

Summary and Definitions, Page 1

 

	1.5	 	Premises: Those certain premises known as Suite 160 as generally shown on the plan attached
hereto as Exhibit “B”, located on the ground floor of the Building, and containing
approximately 4,369 rentable square feet (3,829 usable square feet).
	 
	1.6	 	Term: Five (5) years.

	1.7	 	Commencement Date: The earlier of (i) the date Tenant commences business operations in the
Premises, or (ii) the date of Substantial Completion (as defined in Section 11.4(b))
of the Premises, which date of Substantial Completion is anticipated to be November 1, 2006.

2. Monthly Basic Rent: Starting on the Commencement Date (but subject to the sixty (60) day rent
abatement provision set forth in Section 3.1), and on the first day of each month
thereafter during the Term of this Lease, Tenant shall pay to Landlord, in advance and without
offset, as Monthly Basic Rent for the Premises the following monthly payments:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly Basic Rent
	Months of Term	 	Monthly Basic Rent	 	per Rentable Square Foot
	*1-12
	 	$	16,383.75	 	 	$	3.75	 
	13-24
	 	$	16,951.72	 	 	$	3.88	 
	25-36
	 	$	17,563.38	 	 	$	4.02	 
	37-48
	 	$	18,175.04	 	 	$	4.16	 
	49-60
	 	$	18,786.70	 	 	$	4.30	 

 

			
	*	 	Including any partial month at the beginning of the Term if the Commencement Date does not fall on
the first day of the month.

	2.1	 	Tenant’s Percentage: 2.77%, which is the ratio that the rentable square footage of the
Premises bears to the rentable square footage of the Project. Accordingly, as more
particularly set forth in Sections 4.3 and 4.4, Tenant shall pay to Landlord
2.77% of the “Operating Expenses” (as defined in Section 4.4) in excess of “Landlord’s
Contribution to Operating Expenses” as defined in Section 1.10 of the Summary.
Tenant’s Percentage is subject to adjustment in accordance with Section 1.3 of the
Lease.
	 
	2.2	 	Landlord’s Contribution to Operating Expenses: Tenant’s Percentage of Operating Expenses
incurred by Landlord during calendar year 2007 (the “Base Year”), adjusted to reflect an
assumption that the Project is fully assessed for real property tax purposes as a completed
Project ready for occupancy and that the Project is ninety-five percent (95%) occupied during
such year.
	 
	2.3	 	Security Deposit: $125,000 (subject to reduction to $70,000 pursuant to Section 5).
	 
	2.4	 	Permitted Use: General office purposes only consistent with the character of the Building as
a first class office building and for no other purpose or purposes whatsoever.
	 
	2.5	 	Brokers: Grubb & Ellis/BRE Commercial representing Landlord and The Staubach Company-San
Deigo, Inc., representing Tenant.
	 
	2.6	 	Interest Rate: The lesser of: (a) the rate announced from time to time by Wells Fargo Bank
or, if Wells Fargo Bank ceases to exist or ceases to publish such rate, then the rate
announced from time to time by the largest (as measured by deposits) chartered bank operating
in California, as its “prime rate” or “reference rate”, plus five percent (5%); or (b) the
maximum rate permitted by law.
	 
	2.7	 	Tenant Improvements: The tenant improvements installed or to be installed in the Premises as
described in the Work Letter Agreement attached hereto as Exhibit “C”.
	 
	2.8	 	Parking: A total of sixteen (16) unreserved, uncovered parking privileges at no additional
cost to Tenant, which parking privileges shall be subject to the provisions set forth in
Section 6.2 of this Lease. Notwithstanding the foregoing, five (5) of such sixteen
(16) spaces shall be covered, reserved spaces at the rate of $100 per month per space.
	 
	2.9	 	Business Hours for the Building. 7:00 a.m. to 6:00 p.m., Mondays through Fridays (except
Building Holidays) and 8:00 a.m. to 12:00 p.m. on Saturdays (except Building Holidays).
“Building Holidays” shall mean New Year’s Day, Labor Day, Presidents’ Day, Thanksgiving Day,
Memorial Day, Independence Day and Christmas Day and such other national holidays as are
adopted by Landlord as holidays for the Building.
	 
	2.10	 	Guarantor(s): None.

Summary and Definitions, Page 2

 

OFFICE LEASE

This LEASE, which includes the preceding Summary of Basic Lease Information and Definitions
(“Summary”) attached hereto and incorporated herein by this reference (“Lease”), is made as of the
___day of August, 2006, by and between PRENTISS/COLLINS DEL MAR HEIGHTS LLC, a Delaware limited
liability company (“Landlord”), and OREXIGEN THERAPEUTICS, INC., a Delaware corporation (“Tenant”).

1. Premises.

	1.1	 	Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises described in Section 1.5 of the Summary above, improved or to be improved
with the Tenant Improvements. Such lease is upon, and subject to, the terms, covenants and
conditions herein set forth and each party covenants, as a material part of the consideration
for this Lease, to keep and perform their respective obligations under this Lease. Subject to
casualty, emergency, condemnation, Landlord’s repair and maintenance of the Project and the
testing of the life safety and building systems of the Project, Tenant shall have access to
the Premises twenty-four hours a day, seven days a week during the Lease Term.
	 
	1.2	 	Landlord’s Reservation of Rights. Provided Tenant’s use of and access to the Premises is not
materially interfered with in an unreasonable manner, and subject to the terms of this Lease,
Landlord reserves for itself the right from time to time to install, use, maintain, repair,
replace and relocate pipes, ducts, conduits, wires and appurtenant meters and equipment above
the ceiling surfaces, below the floor surfaces and within the walls of the Building and the
Premises.
	 
	1.3	 	Measurement of Premises, Building and/or the Project. Landlord reserves the right to
re-measure the Premises, the Building and/or the Project and adjust all provisions of this
Lease which are based upon the area of the Premises, the Building and/or the Project such as
Tenant’s Percentage, Monthly Basic Rent, and the Allowance, if any. As used in this Lease,
the following terms have the meanings indicated:
	 
	(a)	 	The term “usable area” means the usable area as determined, in Landlord’s reasonable
discretion, in substantial accordance with the Standard Method for Measuring Floor Area in
Office Buildings, ANSI/BOMA Z65.1 — 1996 (the “BOMA Standard”); and
	 
	(b)	 	The term “rentable area” or “rentable square footage” means the rentable area measured, in
Landlord’s reasonable discretion, in substantial accordance with the BOMA Standard.
	 
	1.4	 	Project. The term “Project,” as used in this Lease, shall include, collectively, (i) the
Building, (ii) the other building in the Project (and additional buildings if and when
constructed), (iii) any outside plaza areas, walkways, driveways, courtyards, public and
private streets, transportation facilitation areas and other improvements and facilities now
or hereafter constructed surrounding and/or servicing the Building and the other buildings in
the Project (and additional buildings if and when constructed), including parking structures
and surface parking facilities now or hereafter servicing the Building and the other building
in the Project (and additional buildings if and when constructed) (collectively, the “Parking
Facilities”), which are designated from time to time by Landlord as common areas (or parking
facilities, as the case may be) appurtenant to or servicing the Building and the other
building in the Project; (iv) any additional buildings, improvements, facilities, parking
areas and structures and common areas which Landlord (and/or any common area association
formed by Landlord or Landlord’s assignee for the Project) may add thereto from time to time
within or as part of the Project; and (v) the land upon which any of the foregoing are
situated. The site plan depicting the current configuration of the proposed Project is set
forth in Exhibit “A” attached hereto (the “Site”). Notwithstanding the foregoing or
anything contained in this Lease to the contrary, (1) Landlord has no obligation to expand or
otherwise make any improvements within the Project, including, without limitation, any of the
outside plaza areas, walkways, driveways, courtyards, public and private streets,
transportation facilitation areas and other improvements and facilities which may be depicted
on Exhibit “A” attached hereto (as the same may be modified by Landlord from time to
time without notice to Tenant), other than Landlord’s obligations set forth in the Work Letter
Agreement to construct the Base, Shell and Core of the Building, and (2) Landlord shall have
the right from time to time to include or exclude any improvements or facilities within the
Project, at Landlord’s sole election.

2. Term; Extension Option; Early Access.

	2.1	 	Term. The Term of this Lease shall be for the period designated in Section 1.6 of
the Summary commencing on the Commencement Date, and ending on the expiration of such period,
unless the Term is sooner terminated as provided in this Lease. Notwithstanding the
foregoing, if the Commencement Date falls on any day other than the first day of a calendar
month then the term of this Lease will be measured from the first day of the month following
the month in which the Commencement Date occurs so that the Term will end on the last day of a
month. By written instrument substantially in the form of Exhibit “D” attached
hereto, Landlord shall notify Tenant of the Commencement Date, the rentable and usable square
feet of the Premises, Tenant’s Percentage and all other matters stated therein, and Tenant
shall, within ten (10) days following delivery of such Commencement Notice, either (i)
acknowledge and agree to all matters set forth in the Commencement Notice by executing the
same and delivering the fully executed Commencement Notice to Landlord (in which case the
Commencement Notice shall be conclusive and binding on Tenant as to all matters set forth
therein), or (ii) deliver written notice to Landlord of any objections to matters contained in
the Commencement Notice. The foregoing notwithstanding, Landlord’s failure to deliver any
Commencement Notice to Tenant shall not affect Landlord’s determination of the Commencement
Date. If for any reason Landlord cannot deliver possession of the Premises to Tenant on the
anticipated Commencement Date, Landlord shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease or the obligations of Tenant hereunder or
extend the term hereof, but in such case,

 

 

	 	 	Tenant shall not be obligated to pay rent
or perform any other obligation of Tenant
under the terms of this Lease, except as
may be otherwise provided in this Lease,
until possession of the Premises is
tendered to Tenant.
	 
	2.2	 	Option to Extend.
	 
	(a)	 	Subject to the terms hereof, Landlord hereby grants to Tenant one (1) option (the “Extension
Option”) to extend the Term of this Lease with respect to the entire Premises for three (3)
years (“Option Term”), on the same terms, covenants and conditions as provided for in this
Lease during the initial Lease Term, except that all economic terms such as, without
limitation, Monthly Basic Rent, a new Base Year for Operating Expenses, if appropriate,
parking charges, etc., shall be established based on the “fair market rental rate” for the
Premises for the Option Term as defined and determined in accordance with the provisions of
this Section 2.2 and except that the Tenant shall have no further right to extend the
Lease Term.
	 
	(b)	 	The Extension Option must be exercised, if at all, by written notice (“Extension Notice”)
delivered by Tenant to Landlord (and actually received by Landlord) no earlier than the date
which is twelve (12) months, and no later than the date which is nine (9) months, prior to the
expiration of the then current Term of this Lease. If the Extension Notice is not so given
and received, the Extension Option shall automatically expire. As a condition to the
extension of the Lease Term pursuant to the Extension Option, any prior Tenant that has not
been expressly released from liability under this Lease, and any guarantor of the Tenant’s
performance hereunder, must expressly reaffirm in writing the extension of their liability for
the Option Term.
	 
	(c)	 	The term “fair market rental rate” as used herein shall mean the annual amount per rentable
square foot, projected during the relevant period, that a willing, comparable, non-equity
renewal tenant (excluding sublease, assignment and new tenant transactions) would pay, and a
willing, comparable landlord of a comparable quality building located in the vicinity of the
Building would accept, at arm’s length (what Landlord is accepting in current transactions for
the Project may be considered), for space unencumbered by any other tenant’s expansion rights
and comparable in size, quality and floor height as the leased area at issue taking into
account the age, quality and layout of the existing improvements in the leased area at issue
(with consideration given to the fact that the improvements existing in the Premises are
specifically suitable to Tenant) and taking into account items that professional real estate
brokers customarily consider in renewal transactions, including, but not limited to, rental
rates, office space availability, tenant size, refurbishment allowances, operating expenses
and allowance, parking charges, and any other amounts then being charged by Landlord or the
lessors of such similar office buildings but specifically disregarding concessions then being
granted by comparable landlords to new tenants in comparable buildings located in the vicinity
of the Building. Notwithstanding anything to the contrary contained herein, the Monthly Basic
Rent during the Option Term shall in no event be less than the Monthly Basic Rent scheduled to
be paid during the month prior to the commencement of the Option Term.
	 
	(d)	 	Landlord’s determination of fair market rental rate shall be delivered to Tenant in writing
not later than thirty (30) days following Landlord’s receipt of Tenant’s Extension Notice.
Tenant will have five (5) days (“Tenant’s Review Period”) after receipt of Landlord’s notice
of the fair market rental rate within which to accept such fair market rental rate or to
object thereto in writing. Tenant’s failure to accept or reject the fair market rental rate
submitted by Landlord in writing within Tenant’s Review Period will conclusively be deemed
Tenant’s approval thereof. If Tenant objects to the fair market rental rate submitted by
Landlord within Tenant’s Review Period, then Landlord and Tenant will attempt in good faith to
agree upon such fair market rental rate. If Landlord and Tenant fail to reach agreement on
such fair market rental rate within ten (10) days following the expiration of Tenant’s Review
Period, the Extension Option shall void and the Lease shall expire at the end of the original
Lease Term.
	 
	(e)	 	Notwithstanding anything above to the contrary, the Extension Option is personal to the
original Tenant executing this Lease (“Original Tenant”) and may be exercised only by the
Original Tenant (and not any sublessee or other Transferee of Original Tenant’s interest in
this Lease) while occupying the entire Premises and may not be exercised or be assigned,
voluntarily or involuntarily, by any person or entity other than the Original Tenant executing
this Lease. The Extension Option is not assignable separate and apart from this Lease, nor
may the Extension Option be separated from this Lease in any manner, either by reservation or
otherwise.
	 
	(f)	 	Tenant shall have no right to exercise the Extension Option, notwithstanding any provision of
the grant of the Extension Option to the contrary, (i) during the time that Landlord has given
Tenant a notice of default under the terms of this Lease until the default identified in such
notice is cured, (ii) during the period of time commencing on the day after a monetary
obligation to Landlord is due from Tenant and unpaid (without any necessity for notice thereof
to Tenant) continuing until the obligation is paid, (iii) at any time after an event of
default described in Sections 23.1(a), 23.1(d), 23.1(e) or
23.1(f) (without any necessity of Landlord to give notice of such default to Tenant),
or (iv) in the event that Landlord has given to Tenant three or more notices of default under
Paragraph 23.1(b), where a late charge has become payable under Paragraph 23.7
for each of such defaults, or three or more valid notices of default under Paragraph
23.1(c), whether or not the defaults are cured, during the twelve (12) month period prior
to the time that Tenant intends to exercise the Extension Option. The period of time within
which the Extension Option may be exercised shall not be extended or enlarged by reason of
Tenant’s inability to exercise the Extension Option because of the provisions of Section
2.2(f). If Landlord desires to contend that clause (ii) of this Section 2.2(g)
applies to negate Tenant’s exercise of the Extension Option, then, unless Landlord has given
Tenant written notice of Tenant’s failure to satisfy such monetary obligation, Landlord must
do so by providing Tenant with a notice of such contention that specifies the basis thereof
within thirty (30) days after Tenant’s delivery of the Extension Notice. Failure of Landlord
to deliver such a notice (unless Landlord has given Tenant written notice of Tenant’s failure
to satisfy such monetary obligation) within said thirty (30) day period shall be deemed a
waiver of Landlord’s right to contend that clause (ii) of this Section 2.2(g) applies
to negate Tenant’s exercise of the Extension Option.

2

 

	(g)	 	The Extension Option may, at Landlord’s option, be nullified by Landlord and deemed of no
further force or effect, if (i) Tenant fails to pay to Landlord a monetary obligation of
Tenant for a period of thirty (30) days after such obligation becomes due where Landlord has
notified Tenant of such monetary obligation, or (ii) Tenant fails to commence to cure a
default specified in Section 23.1(c) within 30 days after the date that Landlord gives
notice to Tenant of such default and/or Tenant fails thereafter to diligently prosecute said
cure to completion, or (iii) Tenant commits a default described in Section 23.1(a),
23.1(d), 23.1(e) or 23.1(f) (without any necessity of Landlord to give
notice of such default to Tenant), or (iv) Landlord gives to Tenant three or more notices of
default under Paragraph 23.1(b), where a late charge becomes payable under
Paragraph 23.7 for each such default, or three or more notices of default under
Paragraph 23.1(c), whether or not the defaults are cured.
	 
	2.3	 	Early Access. Tenant shall be permitted to enter the Premises prior to the Commencement Date
(the “Early Access Period”) for purposes of installing Tenant’s cabling, security system,
furniture, fixtures and equipment; provided, however, that Tenant’s entry into
the Premises during the Early Access Period shall be subject to and conditioned upon (i)
Tenant’s coordination of such entry with Landlord and Landlord’s general contractor(s) so as
not to delay Substantial Completion, (ii) Tenant providing Landlord with copies of
certificates of insurance, complying in all respects with the terms of this Lease for all
insurance required to be provided hereunder prior to entering the Premises, (iii) Tenant
having obtained any and all governmental approvals required for such access, and (iv) Tenant
complying with such restrictions and conditions on such access which Landlord deems reasonably
necessary (and Tenant acknowledges and agrees that any restrictions and conditions imposed by
Landlord with the purpose of attempting to avoid any delay in the Commencement Date shall be
deemed reasonable). Such access and the installation of such cabling, security
system, furniture, fixtures and equipment shall also be subject to all of the terms and
conditions of this Lease, including, without limitation, the provisions of Sections
17, 20 and 22; provided, however, that so long as Tenant does not commence
the operation of business from the Premises, Tenant will not be obligated to pay Monthly Basic
Rent or Excess Rent during the Early Access Period,. In no event shall Tenant or Tenant’s
employees, agents, consultants, contractors or invitees interfere with any construction being
undertaken by or on behalf of Landlord, nor with any inspections or issuance of final
approvals by any applicable governmental authority, and if Tenant fails to cease such
interference promptly after notice from Landlord specifying the nature of such interference,
Landlord shall have the right to terminate Tenant’s access. Such access shall not advance the
Termination Date. Other than with respect to the gross negligence of Landlord or Landlord’s
contractors or agents (but in no event shall Landlord be liable for any loss of business, loss
of profits or other consequential damages), Tenant hereby releases and discharges Landlord and
Landlord’s employees, agents, consultants, contractors and manager from and against any and
all claims of loss, damage or injury to persons or property, including without limitation any
product inventory, which is alleged to have occurred during the Early Access Period. Landlord
makes no representation or warranty about safety of the Premises during the Early Access
Period, as construction and other activities may be ongoing.

3. Rent.

	3.1	 	Basic Rent. Tenant agrees to pay Landlord, as basic rent for the Premises, the Monthly Basic
Rent in the amounts designated in Section 1.8 of the Summary. The Monthly Basic Rent
shall be paid by Tenant in monthly installments in the amounts designated in Section
1.8 of the Summary in advance on the first day of each and every calendar month during the
Term, without demand, notice, deduction or offset except that the first full month’s Monthly
Basic Rent shall be paid upon Tenant’s execution and delivery of this Lease to Landlord.
Monthly Basic Rent for any partial month shall be prorated in the proportion that the number
of days this Lease is in effect during such month bears to a thirty (30) day month.
Notwithstanding the foregoing, so long as a default by Tenant (after the giving of any
required notice and the expiration of any applicable cure period) has not occurred, the
Monthly Basic Rent for the first sixty (60) days of the Lease Term shall be abated.
	 
	3.2	 	Additional Rent. All amounts and charges payable by Tenant under this Lease in addition to
the Monthly Basic Rent described in Section 3.1 above (including, without limitation,
payments for insurance, repairs and parking, and Excess Expenses, as defined in Section
4.3) shall be considered additional rent for the purposes of this Lease, and the word
“rent “ in this Lease shall include such additional rent unless the context specifically or
clearly implies that only the Monthly Basic Rent is referenced. The Monthly Basic Rent and
additional rent shall be paid to Landlord as provided in Section 7, without any prior
notice or demand therefor and without any deduction or offset whatever, in lawful money of the
United States of America (except for any rent abatement described in the last sentence of
Section 3.1).

4. Common Areas; Operating Expenses.

	4.1	 	Definitions; Tenant’s Rights. During the Term of this Lease, Tenant shall have the
non-exclusive right to use, in common with other tenants in the Project, and subject to the
Rules and Regulations referred to in Section 6 below, those portions of the Project
(the “Project Common Areas “) not leased or designated for lease to tenants that are provided
for use in common by Landlord, Tenant and any other tenants of the Project (or by the
sublessees (agents, employees, customers invitees, guests or licensees of any such party),
whether or not those areas are open to the general public. The Project Common Areas shall
include, without limitation, any fixtures, systems, decor, facilities and landscaping
contained, maintained or used in connection with those areas, and shall be deemed to include
any city sidewalks adjacent to the Project, any pedestrian walkway system, park or other
facilities located on the Site and open to the general public. The common areas appurtenant
to the Building shall be referred to herein as the “Building Common Areas” and shall include,
without limitation, the following areas:
	 
	(a)	 	the common entrances, lobbies, restrooms on multi-tenant floors, elevators, stairways and
accessways, loading docks, ramps, drives and platforms and any passageways and serviceways
thereto to the extent not exclusively serving another tenant or contained within another
tenant’s premises, and the common pipes, conduits, wires and appurtenant equipment serving the
Premises; and

3

 

	(b)	 	the parking structure and parking areas (subject to Section 6.2 below), loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and
landscaped areas appurtenant to the Building.

The Building Common Areas and the Project Common Areas shall be referred to herein collectively as
the “Common Areas.”

	4.2	 	Landlord’s Reserved Rights. Landlord reserves the right from time to time to use any of the
Common Areas and to do any of the following, as long as such acts do not unreasonably
interfere with Tenant’s use of or access to the Premises or the Parking Facilities:
	 
	(a)	 	expand the Building and construct or alter other buildings or improvements on the Site;
	 
	(b)	 	make any changes, additions, improvements, repairs or replacements in or to the Project, the
Site, the Common Areas and/or the Building (including the Premises if required to do so by any
law or regulation) and the fixtures and equipment thereof, including, without limitation: (i)
maintenance, replacement and relocation of pipes, ducts, conduits, wires and meters; and (ii)
changes in the location, size, shape and number of driveways, entrances, stairways, elevators,
loading and unloading areas, ingress, egress, direction of traffic, landscaped areas and
walkways and, subject to Section 6.2, parking spaces and parking areas;
	 
	(c)	 	close temporarily any of the Common Areas while engaged in making repairs, improvements or
alterations to the Project, Site and/or Building;
	 
	(d)	 	perform such other acts and make such other changes with respect to the Project, Site, Common
Areas and Building, as Landlord may, in the exercise of its good faith business judgment, deem
to be appropriate;
	 
	(e)	 	form a common area association or associations under covenants, conditions and restrictions
to own, manage, operate, maintain, repair and/or replace all or any portion of the
landscaping, driveways, walkways, parking areas, public and private streets, plazas,
courtyards, transportation facilitation areas and/or other common areas located outside of the
Building and, subject to Section 4.4 below, include the common area assessments, fees
and taxes charged by the association(s) and the cost of maintaining, managing, administering
and operating the association(s), in Operating Expenses; and
	 
	(f)	 	perform such other acts and make such other changes with respect to the Project as Landlord
may, in the exercise of good faith business judgment, deem to be appropriate.

     Tenant hereby agrees that Landlord’s actions pursuant to this Section 4.2 shall in no
way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of rent unless
arising from Landlord’s gross negligence (but in no event shall Landlord be liable for any loss of
business, loss of profits or other consequential damages). Except with respect to the gross
negligence of Landlord or Landlord’s contractors or agents (but in no event shall Landlord be
liable for any loss of business, loss of profits or other consequential damages), Landlord shall
have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to
or interference with Tenant’s business arising from Landlord’s actions with respect to this
Section 4.2, nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant’s personal property or
improvements resulting from Landlord’s actions with respect to this Section 4.2, or for any
inconvenience or annoyance occasioned by Landlord’s actions with respect to this Section
4.2.

	4.3	 	Excess Expenses. In addition to the Monthly Basic Rent required to be paid by Tenant
pursuant to Section 3.1 above, during each month during the Term of this Lease (after
the Base Year noted in Section 1.10 of the Summary), Tenant shall pay to Landlord the
amount by which Tenant’s Percentage of Operating Expenses for such calendar year exceeds
Landlord’s Contribution to Operating Expenses (such amount shall be referred to in this
Section 4 as the “Excess Expenses “), in the manner and at the times set forth in the
following provisions of this Section 4.

	4.4	 	Definition of Operating Expenses. As used in this Lease, the term “Operating Expenses “
shall consist of all costs and expenses of operation, maintenance, repair and replacement of
the Project and the Common Areas as determined by Landlord utilizing standard accounting
practices calculated assuming the Project is 95% occupied. Operating Expenses shall include
the following costs by way of illustration but not limitation: (a) Real Property Taxes and
Assessments (as defined in Section 4.5) and any taxes or assessments imposed in lieu
thereof; (b) any and all assessments imposed with respect to the Project, Common Areas, and/or
Site pursuant to any covenants, conditions and restrictions affecting the Site, Common Areas
or Project; (c) except to the extent paid by Tenant as part of Electricity Utility Charges (as
defined in Section 16.2), water and sewer charges and the costs of electricity,
heating, ventilating, air conditioning and other utilities; (d) except to the extent paid by
Tenant as part of Electricity Utility Charges, utilities surcharges and any other costs,
levies or assessments resulting from statutes or regulations promulgated by any government
authority in connection with the use or occupancy of the Site, Project, the Premises, or the
Parking Facilities; (e) costs of insurance obtained by Landlord pursuant to Section 21
of this Lease; (f) except to the extent paid by Tenant as part of Electricity Utility Charges,
waste disposal and janitorial services; (g) security; (h) costs incurred in the management of
the Site, Project and Common Areas, including, without limitation: (1) supplies, (2) wages,
salaries, benefits, pension payments, fringe benefits, uniforms and dry-cleaning thereof (and
payroll taxes, insurance and similar governmental charges related thereto) of employees used
in the operation and maintenance of the Site, Project and Common Areas, (3) the rental of
personal property used by Landlord’s personnel in the maintenance, repair and operation of the
Project, (4) management office expenses including rent and operating costs, (5) accounting
fees, legal fees and real estate consultant’s fees, and (6) a management/administrative fee
not to exceed five percent (5%) of the annual gross revenues of the Project; (i) supplies,
materials, equipment and tools; (j) repair, replacement and

4

 

	 	 	maintenance of the elevators and the structural portions of the Project, including the
plumbing, heating, ventilating, air-conditioning, electrical and other utility systems
installed or furnished by Landlord; (k) maintenance, costs and upkeep of all parking and
Common Areas; (l) amortization on a straight-line basis over the useful life (as determined
in accordance with generally accepted accounting principles in effect from time to time in
the United States), together with interest at the Interest Rate (as defined in Section
1.14 of the Summary of this Lease) on the unamortized balance of all costs of a capital
nature (including, without limitation, capital improvements, capital replacements, capital
repairs, capital equipment and capital tools): (1) intended to produce a reduction in
operating charges or energy consumption or effect other economies in the operation or
maintenance of the Project; or (2) required after the date of this Lease under any
governmental law or regulation; (3) for repair or replacement of any equipment or
improvements needed to operate and/or maintain the Project, the Common Areas and/or the Site
at the same quality levels as prior to the repair or replacement; or (4) which are reasonably
determined by Landlord to be in the best interests of the Project; (m) costs and expenses of
gardening and landscaping; (n) maintenance of signs (other than signs of other tenants of the
Project); (o) personal property taxes levied on or attributable to personal property used in
connection with the Project, the Common Areas and/or the Site; and (p) costs and expenses of
repairs, resurfacing, repairing, maintenance, painting, lighting, cleaning, refuse removal,
security and similar items, including appropriate reserves. For purposes of determining
Landlord’s Contribution to Operating Expenses, Operating Expenses shall not include (i)
one-time special assessments, charges, costs or fees or extraordinary charges or costs
incurred in the Base Year only, (ii) market-wide labor-rate increases due to extraordinary
circumstances including, but not limited to, boycotts and strikes, (iii) utility rate
increases due to extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, and (iv) amortization of any capital
items including, but not limited to, capital improvements, capital repairs and capital
replacements (including such amortized costs where the actual improvement, repair or
replacement was made in prior years). In no event shall costs for any item of utilities
included in Operating Expenses for any year subsequent to the Base Year be less than the
amount included in Operating Expenses for the Base Year for such utility item. In addition,
if in any calendar year subsequent to the Base Year, the amount of Operating Expenses
decreases due to a reduction in the cost of providing utilities, security and/or other
services to the Project for any reason, including without limitation, because of deregulation
of the utility industry and/or reduction in rates achieved in contracts with utilities and/or
service providers, then for purposes of the calendar year in which such decrease in Operating
Expenses occurred and all subsequent calendar years, the Operating Expenses for the Base Year
shall be decreased by an amount equal to such decrease.

Notwithstanding anything in the definition of Operating Expenses set forth above, Operating
Expenses shall not include the following:

	(a)	 	costs incurred in correcting construction defects in the original construction of the
Project;

	(b)	 	the following costs incurred with respect to the tenant leases at the Project: (i) the legal
expenses and brokerage fees incurred in connection with negotiating and documenting such
leases, (ii) the cost with respect to tenant improvements to the premises demised by such
leases, (iii) free rent and tenant allowance concessions provided by Landlord to tenants under
such leases, and (iv) the expenses of advertising the Project to prospective tenants;

	(c)	 	costs for which the Landlord is reimbursed, or would have been reimbursed, if Landlord had
carried the insurance Landlord is required to carry pursuant to this Lease;

	(d)	 	any bad debt loss, rent loss, or reserves for bad debts or rent loss or any reserves of any
kind (but Operating Expenses may include reasonable reserves imposed upon the Project as part
of the assessments under any covenants, conditions and restrictions recorded against the
Project and other real property, not owned by Landlord or an affiliate of Landlord, in
addition to the Project);

	(e)	 	the wages and benefits of any employee who does not devote substantially all of his or her
employed time to the Project unless such wages and benefits are prorated to reflect time spent
on operating and managing the Project vis-à-vis time spent on matters unrelated to operating
and managing the Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the level of Project
general manager unless those personnel are acting in the capacity of their respective
positions and the amount of salary being charged to the Project is comparable to Comparable
Buildings in the area;

(f) amount paid by Landlord as ground rental for the Project;

	(g)	 	costs of capital improvements (including rentals which would constitute a capital improvement
if purchased), alterations and repairs except as set forth above in this Section 4.4;

	(h)	 	any amount paid by Landlord or to the parent organization or a subsidiary or affiliate of the
Landlord for supplies and/or services in the Project to the extent the same exceeds the costs
of such supplies and/or services rendered by qualified, first-class unaffiliated third parties
on a competitive basis;

	(i)	 	the cost of all items and services for which Tenant or any other tenant in the Project is
obligated to reimburse Landlord such cost, or the cost of such items and services for which
Landlord provides selectively to one or more tenants (other than Tenant) without
reimbursement;

	(j)	 	costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings
or other objects of art not constituting fixtures;

5

 

	(k)	 	costs incurred to comply with applicable laws with respect to Hazardous Materials (as such
term is defined in Section 6.4) in, on or under the Project and/or the Building to the
extent such Hazardous Materials are: (1) in existence as of the Commencement Date and in
violation of any applicable Environmental Law (as defined in Section 6.4) in effect as
of the Commencement Date, and were of such a nature that a federal, state or municipal
governmental or quasi-governmental authority, if it had then had knowledge of the presence of
such Hazardous Materials, in the state and under the conditions that the same existed in the
Building or on the Project, would have then required removal, remediation or other action with
respect to such Hazardous Materials; or (2) introduced onto the Project and/or the Building
after the Commencement Date by Landlord or other tenants of the Project in violation of
applicable laws in effect at the date of introduction, and were of such a nature that a
federal, state or municipal governmental or quasi-governmental authority, if it had then had
knowledge of the presence of such Hazardous Materials, in the state and under the conditions
that the same existed in the Building or on the Project, would have then required removal,
remediation or other action with respect to such Hazardous Materials;

	(l)	 	cost incurred to correct violations of Title III of the Americans with Disabilities Act of
1990 existing as of the Commencement Date, which violations were of such a nature that a
federal, state or municipal governmental or quasi-governmental authority, if it had then had
knowledge of the existence of such violations would have then required the correction of such
violations; and

     (m) costs arising from Landlord’s charitable or political contributions.

Landlord shall have the right, from time to time, to equitably allocate some or all of the
Operating Expenses between the Building and/or among different tenants of the Project and/or
different buildings of the Project as and when such different buildings are constructed and added
to (and/or excluded from) the Project or otherwise (the “Cost Pools”). Such Cost Pools may
include, without limitation, the office space tenants and industrial space tenants of the Project
or of a building or buildings in the Project. Such Cost Pools may also include an allocation of
certain Operating Expenses within or under covenants, conditions and restrictions affecting the
Project. In addition, Landlord shall have the right from time to time, in its reasonable
discretion, to include or exclude existing or future buildings in the Project for purposes of
determining Operating Expenses and/or the provision of various services and amenities thereto,
including allocation of Operating Expenses in any such Cost Pools.

	4.5	 	Definition of Real Property Taxes and Assessments. All Real Property Taxes and Assessments
shall be adjusted to reflect an assumption that the Project is fully assessed for real
property tax purposes as a completed building(s) ready for occupancy. As used in this Lease,
the term “Real Property Taxes and Assessments” shall mean: any form of assessment, license
fee, license tax, business license fee, commercial rental tax, levy, charge, improvement bond,
tax, water and sewer rents and charges, utilities and communications taxes and charges or
similar or dissimilar imposition imposed by any authority having the direct power to tax,
including any city, county, state or federal government, or any school, agricultural,
lighting, drainage or other improvement or special assessment district thereof, or any other
governmental charge, general and special, ordinary and extraordinary, foreseen and unforeseen,
which may be assessed against any legal or equitable interest of Landlord in the Premises,
Building, Common Areas, Site or Project, including the following by way of illustration but
not limitation:

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

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

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

	(d)	 	any assessment, tax, fee, levy or charge upon this transaction or any document to which
Tenant is a party, creating or transferring an interest or an estate in the Premises; and/or

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

Notwithstanding the foregoing, if after the Commencement Date Real Property Taxes and Assessments
are reduced, then for purposes of all subsequent calendar years including the calendar year in
which the reduction occurs, Landlord’s Contribution to Operating Expenses shall be proportionately
reduced. Notwithstanding the foregoing provisions of this Section 4.5 above to the
contrary, “Real Property Taxes and Assessments“ shall not include Landlord’s federal or state
income, franchise, inheritance or estate taxes.

6

 

	4.6	 	Estimate Statement. By the first day of April of each calendar year during the Term of this
Lease (after the Base Year noted in Section 1.10 of the Summary) or as soon thereafter
as reasonably possible, Landlord shall endeavor to deliver to Tenant a statement (“Estimate
Statement”) estimating the Operating Expenses for the current calendar year and the estimated
amount of Excess Expenses payable by Tenant. Landlord shall have the right no more than three
(3) times in any calendar year to deliver a revised Estimate Statement showing the Excess
Expenses for such calendar year if Landlord determines that the Excess Expenses are greater
than those set forth in the original Estimate Statement (or previously delivered revised
Estimate Statement) for such calendar year. The Excess Expenses shown on the Estimate
Statement (or revised Estimate Statement, as applicable) shall be divided into twelve (12)
equal monthly installments, and Tenant shall pay to Landlord, concurrently with the regular
Monthly Basic Rent payment next due following the receipt of the Estimate Statement (or
revised Estimate Statement, as applicable), an amount equal to one (1) monthly installment of
such Excess Expenses multiplied by the number of months from January in the calendar year in
which such statement is submitted to the month of such payment, both months inclusive (less
any amounts previously paid by Tenant with respect to any previously delivered Estimate
Statement or revised Estimate Statement for such calendar year). Subsequent installments
shall be paid concurrently with the regular monthly rent payments for the balance of the
calendar year and shall continue until the next calendar year’s Estimate Statement (or current
calendar year’s revised Estimate Statement) is received.

	4.7	 	Actual Statement. By the first day of April of each succeeding calendar year during the Term
of this Lease (after the Base Year, as defined in Section 1.10 of the Summary) or as
soon thereafter as reasonably possible, Landlord shall endeavor to deliver to Tenant a
statement (“Actual Statement”) of the actual Operating Expenses and Excess Expenses for the
immediately preceding calendar year. If the Actual Statement reveals that Excess Expenses
were over-stated or under-stated in any Estimate Statement (or revised Estimate Statement)
previously delivered by Landlord pursuant to Section 4.6 above, then within thirty
(30) days after delivery of the Actual Statement, Tenant shall pay to Landlord the amount of
any such under-payment, or, Landlord shall credit Tenant against the next monthly rent falling
due, the amount of such over-payment, as the case may be. Such obligation will be a
continuing one which will survive the expiration or earlier termination of this Lease. Prior
to the expiration or sooner termination of the Lease Term and Landlord’s acceptance of
Tenant’s surrender of the Premises, Landlord will have the right to estimate the actual
Operating Expenses for the then current calendar year and to collect from Tenant prior to
Tenant’s surrender of the Premises, Tenant’s Percentage of any excess of such actual Operating
Expenses over the estimated Operating Expenses paid by Tenant in such calendar year.

	4.8	 	No Release. Any delay or failure by Landlord in delivering any Estimate or Actual Statement
pursuant to this Section 4 shall not constitute a waiver of its right to receive
Tenant’s payment of Excess Expenses, nor shall it relieve Tenant of its obligations to pay
Excess Expenses pursuant to this Section 4, except that Tenant shall not be obligated
to make any payments based on such Estimate or Actual Statement until ten (10) business days
after receipt of such statement.

	4.9	 	Audit Rights. In the event Tenant disputes the amount of the Operating Expenses set forth in
the Actual Statement for the particular calendar year delivered by Landlord to Tenant pursuant
to Section 4.7 above, Tenant shall have the right, at Tenant’s cost, after reasonable
notice to Landlord, to have Tenant’s authorized employees or agents inspect, at Landlord’s
office during normal business hours, Landlord’s books, records and supporting documents
concerning the Operating Expenses set forth in such Actual Statement; provided, however,
Tenant shall have no right to conduct such inspection, have an audit performed by the
Accountant as described below, or object to or otherwise dispute the amount of the Operating
Expenses set forth in any such Actual Statement, unless Tenant notifies Landlord of such
objection and dispute, completes such inspection, and has the Accountant commence and complete
such audit within six (6) months immediately following Landlord’s delivery of the particular
Actual Statement in question (the “Review Period”); provided, further, that notwithstanding
any such timely objection, dispute, inspection, and/or audit, and as a condition precedent to
Tenant’s exercise of its right of objection, dispute, inspection and/or audit as set forth in
this Section 4.9, Tenant shall not be permitted to withhold payment of, and Tenant
shall timely pay to Landlord, the full amounts as required by the provisions of this
Section 4 in accordance with such Actual Statement. However, such payment may be made
under protest pending the outcome of any audit which may be performed by the Accountant as
described below. In connection with any such inspection by Tenant, Landlord and Tenant shall
reasonably cooperate with each other so that such inspection can be performed pursuant to a
mutually acceptable schedule, in an expeditious manner and without interference with
Landlord’s operation and management of the Building. If after such inspection and/or request
for documentation, Tenant still disputes the amount of the Operating Expenses set forth in the
Actual Statement, Tenant shall have the right, within the Review Period, to cause an
independent certified public accountant which is not paid on a contingency basis, which is
mutually approved by Landlord and Tenant, and which is not representing or performing auditing
work for any other tenant of the Project (the “Accountant”) to complete an audit of Landlord’s
books and records pertaining to Operating Expenses to determine the proper amount of the
Operating Expenses incurred and amounts payable by Tenant for the calendar year which is the
subject of such Actual Statement. Such audit by the Accountant shall be final and binding
upon Landlord and Tenant. If Landlord and Tenant cannot mutually agree as to the identity of
the Accountant within thirty (30) days after Tenant notifies Landlord that Tenant desires an
audit to be performed, then the Accountant shall be one of the “Big 4” accounting firms, which
is not paid on a contingency basis and which is selected by Tenant and reasonably approved by
Landlord. If such audit reveals that Landlord has over-charged Tenant, then within thirty
(30) days after the results of such audit are made available to Landlord, Landlord shall
reimburse to Tenant the amount of such over-charge. If the audit reveals that the Tenant was
under-charged, then within thirty (30) days after the results of such audit are made available
to Tenant, Tenant shall reimburse to Landlord the amount of such under-charge. Tenant agrees
to pay the cost of such audit unless it is subsequently determined that Landlord’s original
Actual Statement which was the subject of such audit was in error to Tenant’s disadvantage by
five percent (5%) or more of the total Operating Expenses which was the subject of such audit.
The payment by Tenant of any amounts pursuant to this Section 4 shall not preclude
Tenant from questioning the correctness of any Actual Statement provided by Landlord at any
time during the Review Period, but the failure of Tenant to object thereto, conduct

7

 

	 	 	and complete its inspection and have the Accountant conduct and complete the audit as
described above prior to the expiration of the Review Period shall be conclusively deemed
Tenant’s approval of the Actual Statement in question and the amount of Operating Expenses
shown thereon. In connection with any inspection and/or audit conducted by Tenant pursuant
to this Section 4.9, Tenant agrees to keep, and to cause all of Tenant’s employees
and consultants and the Accountant to keep, all of Landlord’s books and records and the
audit, and all information pertaining thereto and the results thereof, strictly confidential,
and in connection therewith, Tenant shall cause such employees, consultants and the
Accountant to execute such commercially reasonable confidentiality agreements as Landlord may
require prior to conducting any such inspections and/or audits.

5. Security Deposit. Tenant shall deposit with Landlord, upon delivery of an executed copy
of this Lease to Landlord, a security deposit (the “Security Deposit”) for the performance of all
of Tenant’s obligations hereunder in the amount set forth in Section 1.11 of the Summary;
provided, however, that if no default under this Lease by Tenant shall exist and be continuing as
of the thirtieth (30th) month of the Lease Term, the Security Deposit shall be reduced
to Seventy Thousand Dollars ($70,000) at the beginning of the thirtieth (30th) month of
the Lease Term and Landlord shall cooperate, at no expense to Landlord, in connection with an
amendment to the Letter of Credit to effectuate such reduction. The Security Deposit shall be in
the form of an unconditional and irrevocable letter of credit (the “Letter of Credit”): (i) in
form and substance satisfactory to Landlord, (ii) naming Landlord as beneficiary, (iii) expressly
allowing Landlord to draw upon it at any time from time to time, in whole or in part, by delivering
to the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by an FDIC-insured
financial institution satisfactory to Landlord, and (v) redeemable by presentation of a sight draft
in the State of Landlord’s choice. At least ten (10) days before the stated expiration date of
any then current Letter of Credit, Tenant shall provide Landlord with a substitute Letter of Credit
complying with all of the requirements hereof. If Tenant does not provide Landlord with a
substitute Letter of Credit complying with all of the requirements hereof at least ten (10) days
before the stated expiration date of any then current Letter of Credit, Landlord shall have the
right to draw the full amount of the current Letter of Credit and hold the funds drawn in cash
without obligation for interest thereon as the Security Deposit. The Security Deposit shall be
held by Landlord as security for the performance of Tenant’s obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of
Tenant’s default. Upon each occurrence of a default under this Lease by Tenant, Landlord may use
all or any part of the Security Deposit to pay delinquent payments due under this Lease, and the
cost of any damage, injury, expense or liability caused by such default, without prejudice to any
other remedy provided herein or provided by law. Upon any such use of all or any portion of the
Security Deposit, Tenant shall pay Landlord on demand the amount that will restore the Security
Deposit to the amount set forth on Page 1 of this Lease. Upon bankruptcy or other debtor-creditor
proceedings against Tenant, (y) Landlord shall have the right to draw the full amount of the
current Letter of Credit and hold the funds drawn in cash without obligation for interest thereon
as the Security Deposit, and (z) the Security Deposit shall be deemed to be applied first to the
payment of Rent and other charges due Landlord for periods prior to the filing of such proceedings.
If the credit rating assigned to the long term unsecured debt of issuer of the Letter of Credit by
Standard & Poor’s rating services or Moody’s Investors Service, Inc. has been reduced to BBB-/Baa3
or worse and Tenant has not provided Landlord with a substitute Letter of Credit satisfying the
conditions of this Section 5 and issued by an FDIC-insured financial institution
satisfactory to Landlord within fifteen (15) days thereafter, Landlord shall have the right to draw
the full amount of the current Letter of Credit and hold the funds drawn in cash without obligation
for interest thereon as the Security Deposit. Upon any such use of all or any portion of the
Security Deposit, Tenant shall, within 5 days after demand from Landlord, restore the Security
Deposit to its original amount. If Te
nant shall fully perform every provision of this Lease to be
performed by Tenant, the Security Deposit, or any balance thereof (i.e., after deducting therefrom
all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to
Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within sixty
(60) days after the expiration or earlier termination of this Lease; provided that Landlord may
retain the Security Deposit until such time as any amount due from Tenant in accordance with this
Lease has been determined and paid in full. If Landlord transfers its interest in the Project or
this Lease, Landlord shall either (a) transfer any Security Deposit then held by Landlord to a
person or entity assuming Landlord’s obligations under this Section 5, or (b) return to
Tenant any Security Deposit then held by Landlord and remaining after the deductions permitted
herein. Upon such transfer to such transferee or the return of the Security Deposit to Tenant,
Landlord shall have no further obligation with respect to the Security Deposit, and Tenant’s right
to the return of the Security Deposit shall apply solely against Landlord’s transferee. Landlord’s
obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest
shall accrue thereon. Tenant hereby waives the provisions of Section 1950.7 of the California
Civil Code. Tenant also waives the provisions of any law, now or hereafter in force, which provide
that Landlord may claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of Rent, to repair damage caused by Tenant or to clean the Premises, it
being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission
of Tenant or any officer, employee, agent or invitee of Tenant.

6. Use.

	6.1	 	General. Tenant shall use the Premises solely for the Permitted Use specified in Section
1.12 of the Summary, and shall not use or permit the Premises to be used for any other use
or purpose whatsoever. Tenant shall observe and comply with the “Rules and Regulations”
attached hereto as Exhibit “E”, and all reasonable, non-discriminatory modifications
thereof and additions thereto from time to time put into effect and furnished to Tenant by
Landlord. Landlord shall use commercially reasonable efforts to enforce the Rules and
Regulations, but shall have no liability to Tenant for the violation or non-performance by
any other tenant or occupant of the Project or the Building of any such Rules and Regulations.
Tenant shall, at its sole cost and expense, observe and comply with all requirements of any
board of fire underwriters or similar body relating to the Premises, all recorded covenants,
conditions and restrictions now or hereafter affecting the Premises and all laws, statutes,
codes, rules and regulations now or hereafter in force relating to or affecting the condition,
use, occupancy, alteration or improvement of the Premises, including, without limitation, the
provisions of Title III of the Americans with Disabilities Act of 1990 as it pertains to
Tenant’s use, occupancy, improvement and alteration of the Premises (whether, except as
otherwise expressly provided herein, structural or nonstructural, including unforeseen and/or
extraordinary alterations and/or improvements to the Premises, regardless of the period of
time remaining in the

8

 

	 	 	Lease Term); provided, however,
that the foregoing will not
require Tenant to effectuate
capital improvements where the
requirement for such capital
improvements is not caused by
Tenant’s particular use or Tenant
Changes (as defined in Section
12.1). Tenant shall not use or
allow the Premises to be used (a)
in violation of any recorded
covenants, conditions and
restrictions affecting the Site
or of any law or governmental
rule or regulation, or of any
certificate of occupancy issued
for the Premises or Building, or
(b) for any improper, immoral,
unlawful or reasonably
objectionable purpose. Tenant
shall not do or permit to be done
anything which will obstruct or
interfere with the rights of
other tenants or occupants of the
Project or the Building, or
injure or annoy them. Tenant
shall not cause, maintain or
permit any nuisance in, on or
about the Premises, the Building,
the Project or the Site, nor
commit or suffer to be committed
any waste in, on or about the
Premises.
	 
	6.2	 	Parking.
	 
	(a)	 	Tenant’s Parking Privileges. During the Term of this Lease, Landlord shall lease to
Tenant, and Tenant shall lease from Landlord, the number of parking privileges specified in
Section 1.16 of the Summary hereof for use by Tenant’s employees in the common parking
areas for the Building within the Project, as designated by Landlord from time to time.
Landlord shall at all times have the right to establish and modify the nature and extent of
the parking areas for the Building and Project (including whether such areas shall be surface,
underground and/or other structures) as long as Tenant is provided the number of parking
privileges designated in Section 1.16 of the Summary in the Parking Facilities,
subject to casualty and condemnation and restoration. In addition, Landlord may, in its sole
discretion, assign any unreserved and unassigned parking privileges, and/or make all or a
portion of such privileges reserved.

	(b)	 	Visitor Parking. In addition to such parking privileges for use by Tenant’s
employees, Landlord shall permit access to the parking areas for Tenant’s visitors, subject to
availability of spaces.

	(c)	 	Parking Rules. The use of the parking areas shall be subject to the Parking Rules
and Regulations contained in Exhibit “E” attached hereto and any other reasonable,
non-discriminatory rules and regulations adopted by Landlord and/or Landlord’s parking
operators from time to time, including any system for controlled ingress and egress and
charging visitors and invitees, with appropriate provision for validation of such charges.
Tenant shall not use more parking privileges than its allotment and shall not use any parking
spaces specifically assigned by Landlord to other tenants of the Building or Project or for
such other uses as visitor parking. Tenant’s parking privileges shall be used only for
parking by vehicles no larger than normally sized passenger automobiles (including passenger
sport utility vehicles) or pick-up trucks. Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or
invitees to be loaded, unloaded, or parked in areas other than those designated by Landlord
for such activities. If Tenant permits or allows any of the prohibited activities described
herein, then Landlord shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove or tow away the vehicle involved and charge the cost
thereof to Tenant, which cost shall be immediately payable by Tenant upon demand by Landlord.

	6.3	 	Signs and Auctions. Tenant shall be entitled, at Landlord’s sole cost and expense, to one
(1) identification sign on or near the entry doors of the Premises. Such sign shall be
installed by a signage contractor designated by Landlord. The location, quality, design,
style, lighting and size of such signs shall be consistent with the Landlord’s Building
standard signage program and shall be subject to Landlord’s prior written approval, in its
reasonable discretion. Except for such identification sign, Tenant may not install any signs
on the exterior or roof of the Building or the common areas of the Building or the Project.
Any signs, window coverings, or blinds (even if the same are located behind the Landlord
approved window coverings for the Building), or other items visible from the exterior of the
Premises or Building are subject to the prior approval of Landlord, in its sole and absolute
discretion. Tenant shall have no right to conduct any auction in, on or about the Premises,
the Building or Site. Tenant shall be entitled to one (1) line on the Building directory to
display Tenant’s name and suite number, at Landlord’s expense.

	6.4	 	Hazardous Materials. Tenant will (i) obtain and maintain in full force and effect all
Environmental Permits (as defined below) that may be required from time to time under any
Environmental Laws (as defined below) applicable to Tenant or the Premises and (ii) be and
remain in compliance in all respects with all terms and conditions of all such Environmental
Permits and with all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in all Environmental Laws
applicable to Tenant or the Premises. As used in this Lease, the term “Environmental Law”
means any past, present or future federal, state, local or foreign statutory or common law, or
any regulation, ordinance, code, plan, order, permit, grant, franchise, concession,
restriction or agreement issued, entered, promulgated or approved thereunder, relating to (a)
the environment, human health or safety, including, without limitation, emissions, discharges,
releases or threatened releases of Hazardous Materials (as defined below) into the environment
(including, without limitation, air, surface water, groundwater or land), or (b) the
manufacture, generation, refining, processing, distribution, use, sale, treatment, receipt,
storage, disposal, transport, arranging for transport, or handling of Hazardous Materials.
“Environmental Permits” means, collectively, any and all permits, consents, licenses,
approvals and registrations of any nature at any time required pursuant to, or in order to
comply with, any Environmental Law. Except for ordinary and general office supplies, such as
copier toner, liquid paper, glue, ink and common household cleaning materials (some or all of
which may constitute “Hazardous Materials” as defined in this Lease), Tenant agrees not to
cause or permit any Hazardous Materials to be brought upon, stored, used, handled, generated,
released or disposed of on, in, under or about the Premises, the Building, the Common Areas or
any other portion of the Project by Tenant, its agents, employees, subtenants, assignees,
licensees, contractors or invitees (collectively, “Tenant’s Parties”), without the prior
written consent of Landlord, which consent Landlord may withhold in its sole and absolute
discretion. Upon the expiration or earlier termination of this Lease, Tenant agrees to
promptly remove from the Premises, the Building and the Project, at its sole cost

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	 	 	and expense, any and all Hazardous Materials, including any equipment or systems containing
Hazardous Materials which are installed, brought upon, stored, used, generated or released
upon, in, under or about the Premises, the Building and/or the Project or any portion thereof
by Tenant or any of Tenant’s Parties. To the fullest extent permitted by law, Tenant agrees
to promptly indemnify, protect, defend and hold harmless Landlord and Landlord’s partners,
officers, directors, employees, agents, successors and assigns (collectively, “Landlord
Indemnified Parties”) from and against any and all claims, damages, judgments, suits, causes
of action, losses, liabilities, penalties, fines, expenses and costs (including, without
limitation, clean-up, removal, remediation and restoration costs, sums paid in settlement of
claims, attorneys’ fees, consultant fees and expert fees and court costs) which arise or
result from the presence of Hazardous Materials on, in, under or about the Premises, the
Building or any other portion of the Project and which are caused by Tenant or any of
Tenant’s Parties. Tenant agrees to promptly notify Landlord of any release of Hazardous
Materials in the Premises, the Building or any other portion of the Project which Tenant
becomes aware of during the Term of this Lease, whether caused by Tenant or any other persons
or entities. In the event of any release of Hazardous Materials caused by Tenant or any of
Tenant’s Parties, Landlord shall have the right, but not the obligation, to cause Tenant , at
Tenant’s sole cost and expense, to immediately take all steps Landlord deems necessary or
appropriate to remediate such release and prevent any similar future release to the
satisfaction of Landlord and Landlord’s mortgagee(s). At all times during the Term of this
Lease, at Tenant’s expense, Landlord will have the right, but not the obligation, to enter
upon the Premises to inspect, investigate, sample and/or monitor the Premises to determine if
Tenant is in compliance with the terms of this Lease regarding Hazardous Materials. If
Tenant has violated the provisions of this Section 6.4 or if there is a reasonable
basis to believe that Tenant may have violated the provisions of this Section 6.4,
Tenant will, upon the request of Landlord or any mortgagee at any time during which Tenant is
in default under this Lease, cause to be performed an environmental audit of the Premises at
Tenant’s expense by an established environmental consulting firm reasonably acceptable to
Landlord and Landlord’s mortgagee(s). As used in this Lease, the term “Hazardous Materials”
shall mean and include any hazardous or toxic materials, substances or wastes as now or
hereafter designated under any Environmental Laws, including, without limitation, asbestos,
petroleum, petroleum hydrocarbons and petroleum based products, urea formaldehyde foam
insulation, polychlorinated biphenyls (“PCBs”), and freon and other chlorofluorocarbons. The
provisions of this Section 6.4 will survive the expiration or earlier termination of
this Lease.

7. Payments and Notices. All rent and other sums payable by Tenant to Landlord hereunder
shall be paid to Landlord at the address designated in Section 1.1 of the Summary, or to
such other persons and/or at such other places as Landlord may hereafter designate in writing. Any
notice required or permitted to be given hereunder must be in writing and may be given by personal
delivery (including delivery by nationally recognized overnight courier or express mailing
service), facsimile transmission sent by a machine capable of confirming transmission receipt, with
a hard copy of such notice delivered no later than one (1) business day after facsimile
transmission by another method specified in this Section 7, or by registered or certified
mail, postage prepaid, return receipt requested, addressed to Tenant at the address(es) designated
in Section 1.2 of the Summary, or to Landlord at the address designated in Section
1.1 of the Summary. Either party may, by prior written notice to the other, specify a
different address for notice purposes. Notice given in the foregoing manner shall be deemed given
(i) upon confirmed transmission if sent by facsimile transmission, provided such transmission is
prior to 5:00 p.m. on a business day (if such transmission is after 5:00 p.m. on a business day or
is on a non-business day, such notice will be deemed given on the following business day), (ii)
when actually received or refused by the party to whom sent if delivered by a carrier or personally
served or (iii) if mailed, on the day of actual delivery or refusal as shown by the certified mail
return receipt or the expiration of three (3) business days after the day of mailing, whichever
first occurs. For purposes of this Section 7, a “business day” is Monday through Friday,
excluding holidays observed by the United States Postal Service.

8. Brokers. Landlord has entered into an agreement with the real estate broker specified
in Section 1.13 of the Summary as representing Landlord (“Landlord’s Broker “), and
Landlord shall pay any commissions or fees that are payable to Landlord’s Broker with respect to
this Lease in accordance with the provisions of a separate commission contract. Landlord shall
have no further or separate obligation for payment of commissions or fees to any other real estate
broker, finder or intermediary. Tenant represents that it has not had any dealings with any real
estate broker, finder or intermediary with respect to this Lease, other than Landlord’s Broker and
the broker specified in Section 1.13 of the Summary as representing Tenant (“Tenant’s
Broker”). Any commissions or fees payable to Tenant’s Broker with respect to this Lease shall be
paid exclusively by Landlord’s Broker. Each party represents and warrants to the other, that, to
its knowledge, no other broker, agent or finder (a) negotiated or was instrumental in negotiating
or consummating this Lease on its behalf, and (b) is or might be entitled to a commission or
compensation in connection with this Lease. Tenant shall indemnify, protect, defend (by counsel
reasonably approved in writing by Landlord) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and expenses (including
attorneys’ fees and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted against Landlord by
any broker, agent or finder undisclosed by Tenant herein. Landlord shall indemnify, protect,
defend (by counsel reasonably approved in writing by Tenant) and hold Tenant harmless from and
against any and all claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys’ fees and court costs) resulting from any breach by Landlord of the
foregoing representation, including, without limitation, any claims that may be asserted against
Tenant by any broker, agent or finder undisclosed by Landlord herein. The foregoing indemnities
shall survive the expiration or earlier termination of this Lease.

9. Surrender; Holding Over.

	9.1	 	Surrender of Premises. Upon the expiration or sooner termination of this Lease, Tenant shall
surrender all keys for the Premises to Landlord, and exclusive possession of the Premises to
Landlord broom clean and in first-class condition and repair, reasonable wear and tear
excepted, with all of Tenant’s personal property (and those items, if any, of Tenant
Improvements and Tenant Changes identified by Landlord pursuant to Section 12.2 below)
removed therefrom and all damage caused by such removal repaired, as required pursuant to
Sections 12.2 and 12.3 below. If, for any reason, Tenant fails to surrender
the Premises on the expiration or earlier termination of

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	 	 	this Lease (including upon the expiration of any subsequent month-to-month tenancy consented
to by Landlord pursuant to Section 9.2 below), with such removal and repair
obligations completed, then, in addition to the provisions of Section 9.3 below and
Landlord’s rights and remedies under Section 12.4 and the other provisions of this
Lease, Tenant shall indemnify, protect, defend (by counsel approved in writing by Landlord)
and hold Landlord harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys’ fees and court costs)
resulting from such failure to surrender, including, without limitation, any claim made by
any succeeding tenant based thereon. The foregoing indemnity shall survive the expiration or
earlier termination of this Lease.

	9.2	 	Hold Over With Landlord’s Consent. If, with Landlord’s express written consent, Tenant
remains in possession of the Premises after the expiration or earlier termination of the Lease
Term, Tenant shall become a tenant from month-to-month upon the terms and conditions set forth
in this Lease (including Tenant’s obligation to pay all Excess Expenses and any other
additional rent under this Lease), but at a Monthly Basic Rent equal to the one hundred fifty
percent (150%) of the Monthly Basic Rent applicable to the Premises immediately prior to the
date of such expiration or earlier termination. Tenant shall pay an entire month’s Monthly
Basic Rent calculated in accordance with this Section 9.2 for any portion of a month
it holds over and remains in possession of the Premises pursuant to this Section 9.2.
This Section 9.2 shall not be construed to create any expressed or implied right to
holdover beyond the expiration of the Lease Term or any extension thereof.

	9.3	 	Hold Over Without Landlord’s Consent. If Tenant holds over after the expiration or earlier
termination of the Lease Term without the express written consent of Landlord, then, in
addition to all other remedies available to Landlord, Tenant shall become a tenant at
sufferance only, upon the terms and conditions set forth in this Lease so far as applicable
(including Tenant’s obligation to pay all Excess Expenses and any other additional rent under
this Lease), but at a Monthly Basic Rent equal to one hundred fifty percent (150%) of the
Monthly Basic Rent applicable to the Premises immediately prior to the date of such expiration
or earlier termination. Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a hold over hereunder or result in an extension
of this Lease. Tenant shall pay an entire month’s Monthly Basic Rent calculated in accordance
with this Section 9.3 for any portion of a month it holds over and remains in
possession of the Premises pursuant to this Section 9.3.

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

10. Taxes on Tenant’s Property. To the extent not otherwise included in Operating
Expenses, Tenant shall be liable for, and shall pay before delinquency, all taxes and assessments
(real and personal) levied against (a) any personal property or trade fixtures placed by Tenant in
or about the Premises (including any increase in the assessed value of the Premises based upon the
value of any such personal property or trade fixtures); and (b) any Tenant Improvements or
alterations in the Premises (whether installed and/or paid for by Landlord or Tenant) to the extent
such items are assessed at a valuation higher than the valuation at which tenant improvements
conforming to the Building’s standard tenant improvements are assessed. If any such taxes or
assessments are levied against Landlord or Landlord’s property, Landlord may, after written notice
to Tenant, pay such taxes and assessments, and Tenant shall reimburse Landlord therefor within ten
(10) days after demand by Landlord.

11. Condition of Premises; Repairs.

	11.1	 	Condition of Premises. Tenant acknowledges and agrees that it has had an opportunity to
inspect the Premises, the Building, the Site and the Project, and finds the same in
satisfactory condition and repair. Tenant accepts the Premises, the Building, the Site and
the Project in their “then as-is” condition as of the date hereof. Tenant also acknowledges
that, except as otherwise expressly set forth in this Lease, neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises, the Building,
the Site or the Project or their condition, or with respect to the suitability thereof for the
conduct of Tenant’s business. The taking of possession of the Premises by Tenant shall
conclusively establish that the Project, the Site, the Premises, the Tenant Improvements
therein, the Building and the Common Areas were at such time complete and in good, sanitary
and satisfactory condition and repair with all work required to be performed by Landlord, if
any, pursuant to Exhibit “C” completed and without any obligation on Landlord’s part
to make any alterations, upgrades or improvements thereto; provided, however, Landlord
acknowledges that Tenant’s entry into the Premises during the Early Access Period as set forth
in Section 2.3 shall not constitute taking of possession of the Premises for purposes
of this Section with respect to the condition of the Tenant Improvements or the satisfaction
of Landlord’s obligations set forth in Exhibit “C.” Nothing contained in this
Section 11.1 shall limit or affect Landlord’s warranties set forth in Section
11.2.

	11.2	 	Landlord’s Repair Obligations. Subject to Sections 18 and 19 of this Lease, Landlord
shall, as part of the Operating Expenses, repair, maintain and replace, as necessary (a) the
Building shell and other structural portions of the Building (including the roof and
foundations), (b) the basic heating, ventilating, air conditioning (“HVAC”), sprinkler and
electrical systems within the Building core and standard conduits, connections and
distribution systems thereof within the Premises (but not any above standard improvements
installed in the Premises such as, for example, but by way of limitation, custom lighting,
special or supplementary HVAC or plumbing systems or distribution extensions, special or
supplemental electrical panels or distribution systems, or kitchen or restroom facilities and
appliances to the extent such facilities and appliances are intended for the exclusive use of
Tenant), and (c) the Common Areas; provided, however, to the extent such maintenance, repairs
or replacements are required as a result of any act, neglect, fault or omission of Tenant or
any of Tenant’s agents, employees, contractors, licensees or invitees, Tenant shall pay to
Landlord, as additional rent, the costs of such maintenance, repairs and replacements.
Landlord shall not be liable to Tenant for failure to perform any such maintenance, repairs or
replacements, unless Landlord shall fail to make such maintenance, repairs or

11

 

	 	 	replacements and such failure shall continue for an unreasonable time following written
notice from Tenant to Landlord of the need therefor. Without limiting the foregoing, Tenant
waives the right to make repairs at Landlord’s expense under any law, statute or ordinance
now or hereafter in effect (including the provisions of California Civil Code Section 1942
and any successive sections or statutes of a similar nature). Landlord shall not be liable
under any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant’s business, including, without limitation, loss of profits, however
occurring. Landlord warrants to Tenant to Landlord’s actual knowledge that (i) the Premises,
in the state existing on the Commencement Date, but without regard to alterations by Tenant
or to the use for which Tenant will occupy the Premises, does not violate any covenants or
restrictions of record, or any applicable building code, regulation or ordinance in effect on
the Commencement Date and (ii) the building systems of the Project serving the Premises,
including, without limitation, the HVAC, are in good operating condition as of the
Commencement Date. In the event it is determined that the foregoing warranties has been
violated, then, as Tenant’s sole and exclusive remedy, it shall be the obligation of the
Landlord, after written notice from Tenant, to promptly, at Landlord’s sole cost and expense,
rectify any such violation or condition; provided, however, that if Tenant does not give to
Landlord written notice of the violation of these warranties within thirty (30) from the
Commencement Date, such warranties shall be deemed to have been waived by the Tenant, Tenant
shall have no right to assert any claim, demand or defense against Landlord or the
enforcement of this Lease against Tenant as a result of the conditions giving rise to such
violation and the correction of same shall be the obligation of Tenant at Tenant’s sole cost;
provided, however, without limitation upon Tenant’s obligations to pay Excess Expenses,
Tenant shall only be responsible for the costs to correct the warranty regarding building
systems which serve the Premises exclusively.

	11.3	 	Tenant’s Repair Obligations. Except for Landlord’s obligations specifically set forth in
Sections 11.1, 11.2, 16.1, 18.1 and 19.2 hereof,
Tenant shall at all times and at Tenant’s sole cost and expense, keep, maintain, clean,
repair, preserve and replace, as necessary, the Premises and all parts thereof including,
without limitation, all Tenant Improvements, Tenant Changes, utility meters, all special or
supplemental HVAC systems, electrical systems, pipes and conduits, located within the
Premises, all fixtures, furniture and equipment, Tenant’s signs, locks, closing devices,
security devices, windows, window sashes, casements and frames, floors and floor coverings,
shelving, kitchen and/or restroom facilities and appliances located within the Premises to the
extent such facilities and appliances are intended for the exclusive use of Tenant, if any,
custom lighting, and any alterations, additions and other property located within the Premises
in first-class condition and repair, reasonable wear and tear excepted. Tenant shall replace,
at its expense, any and all plate and other glass in and about the Premises which is damaged
or broken from any cause whatsoever except due to the gross negligence or willful misconduct
of Landlord, its agents or employees and not covered by insurance maintained, or required to
be maintained, by Tenant hereunder. Such maintenance and repairs shall be performed with due
diligence, lien-free and in a first-class and workmanlike manner, by licensed contractor(s)
which are selected by Tenant and approved by Landlord, which approval Landlord shall not
unreasonably withhold or delay. Except as otherwise expressly provided in this Lease,
Landlord shall have no obligation to alter, remodel, improve, repair, renovate, redecorate or
paint all or any part of the Premises.

	11.4	 	Landlord Work.

	(a)	 	Landlord has constructed, through its contractor, the base, shell and core of the Premises
and the Building (collectively, the “Base, Shell and Core”), and, without limitation on
Landlord’s warranties set forth in Section 11.2, Tenant shall accept the Base, Shell
and Core in its current “As-Is” condition existing as of the date of the Lease and the
Commencement Date. Landlord shall install in the Premises the improvements described on
Exhibit C attached hereto (the “Tenant Improvements”). Except for the Tenant
Improvements and except as otherwise expressly provided in this Lease, Landlord shall not be
obligated to make or pay for any alterations or improvements to the Premises, the Building or
the Project.

	(b)	 	For purposes of the Lease, including for purposes of determining the Commencement Date (as
set forth in Section 1.7 of the Summary to the Lease), “Substantial Completion” of the
Premises shall occur upon the completion of construction of the Tenant Improvements in the
Premises, with the exception of any punchlist items and any tenant fixtures, work-stations,
built-in furniture, or equipment to be installed by Tenant. If, other than as a result of
Tenant Delays, Substantial Completion of the Premises has not occurred by January 1, 2007,
Tenant may terminate this Lease, by providing Landlord with notice of such termination prior
to January 15, 2007.

	(c)	 	If there shall be a delay or there are delays in the Substantial Completion of the Premises
as a direct, indirect, partial, or total result of any acts or omissions of Tenant, or its
agents, or employees (collectively, “Tenant Delays”) then, notwithstanding anything to the
contrary set forth in the Lease and regardless of the actual date of the Substantial
Completion of the Premises, the Commencement Date (as set forth in Section 1.7 of the Summary)
shall be deemed to be the date the Commencement Date would have occurred if no Tenant Delays,
as set forth above, had occurred.

	(d)	 	Notwithstanding any provision to the contrary contained in the Lease, if an event of default
by Tenant of this Lease has occurred at any time on or before the Substantial Completion of
the Premises, then (i) in addition to all other rights and remedies granted to Landlord
pursuant to this Lease, at law and/or in equity, Landlord may cease the construction of the
Tenant Improvements (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Tenant Improvements caused by such work stoppage as set forth in
(c) above, and (ii) all other obligations of Landlord under the terms of this Section 11.4
shall be forgiven until such time as such default is cured pursuant to the terms of this Lease
(in which case, Tenant shall be responsible for any delay in the Substantial Completion of the
Premises caused by such inaction by Landlord). In addition, if the Lease is terminated prior
to the Commencement Date, for any reason due to a default by Tenant of this Lease, in addition
to any other remedies available to Landlord under this Lease, at law and/or in equity, Tenant
shall pay to Landlord, as additional rent under the Lease, within five (5) days of receipt of
a statement therefor, any and all

12

 

	 	 	costs incurred by Landlord and not reimbursed or otherwise paid by Tenant through the date of
such termination in connection with the Tenant Improvements to the extent planned, installed
and/or constructed as of such date of termination, but only to the extent that such Tenant
Improvements exceed building standard, including, but not limited to, any costs related to
the removal of all or any portion of the Tenant Improvements and restoration costs related
thereto.

12. Alterations.

	12.1	 	Tenant Changes; Conditions. After installation of the Tenant Improvements for the Premises
pursuant to Exhibit “C”, Tenant may, at its sole cost and expense, make alterations,
additions, improvements and decorations to the Premises (collectively, “Tenant Changes”)
subject to and upon the following terms and conditions:

	(a)	 	Notwithstanding any provision in this Section 12 to the contrary, Tenant is
absolutely prohibited from making any alterations, additions, improvements or decorations
which: (i) affect any area outside the Premises; (ii) affect the Building’s structure,
equipment, services or systems, or the proper functioning thereof, or Landlord’s access
thereto; (iii) affect the outside appearance, character or use of the Project, the Building or
the Common Areas; (iv) weaken or impair the structural strength of the Building; (v) in the
reasonable opinion of Landlord, lessen the value of the Project or Building; or (vi) will
violate or require a change in any occupancy certificate applicable to the Premises.

	(b)	 	Before proceeding with any Tenant Change which is not otherwise prohibited in Section
12.1(a), Tenant must first obtain Landlord’s written approval thereof (including approval
of all plans, specifications and working drawings for such Tenant Change), which approval
shall not be unreasonably withheld, conditioned or delayed. However, Landlord’s prior
approval shall not be required for any Tenant Change which satisfies the following conditions
(hereinafter a “Pre-Approved Change”): (i) the costs of such Tenant Change does not exceed
Five Thousand Dollars ($5,000) individually; (ii) the costs of such Tenant Change when
aggregated with the costs of all other Tenant Changes made by Tenant during the Term of this
Lease do not exceed Fifteen Thousand Dollars ($15,000); (iii) Tenant delivers to Landlord
final plans, specifications and working drawings for such Tenant Change at least ten (10) days
prior to commencement of the work thereof; (iv) the Tenant Change is not prohibited in
Section 12.1(a) above; (v) the Tenant Change does not require a building permit; and
(v) Tenant and such Tenant Change otherwise satisfy all other conditions set forth in this
Section 12.1.

	(c)	 	After Landlord has approved the Tenant Changes and the plans, specifications and working
drawings therefor (or is deemed to have approved the Pre-Approved Changes as set forth in
Section 12.1(b) above), Tenant shall: (i) enter into an agreement for the performance
of such Tenant Changes with such contractors and subcontractors selected by Tenant and
approved by Landlord, which approval shall not be unreasonably withheld or delayed; (ii)
before proceeding with any Tenant Change (including any Pre-Approved Change), provide Landlord
with ten (10) days’ prior written notice thereof; and (iii) pay to Landlord, within ten (10)
days after written demand, the costs of any increased insurance premiums incurred by Landlord
to include such Tenant Changes in the fire and extended coverage insurance obtained by
Landlord pursuant to Section 21 below, if Landlord elects in writing to insure such
Tenant Changes. Landlord shall not be required to include the Tenant Changes under such
insurance. If such Tenant Changes are not included in Landlord’s insurance, Tenant shall
insure the Tenant Changes under its casualty insurance pursuant to Section 20.1(a)
below. In addition, before proceeding with any Tenant Change, Tenant’s contractors shall
obtain, on behalf of Tenant and at Tenant’s sole cost and expense, all necessary governmental
permits and approvals for the commencement and completion of such Tenant Change. Landlord’s
approval of any contractor(s) and subcontractor(s) of Tenant shall not release Tenant or any
such contractor(s) and/or subcontractor(s) from any liability for any conduct or acts of such
contractor(s) and/or subcontractor(s).

	(d)	 	Tenant shall pay to Landlord, as additional rent, the reasonable costs of Landlord’s
engineers and other consultants (but not Landlord’s on-site management personnel) for review
of all plans, specifications and working drawings for the Tenant Changes and for the
incorporation of such Tenant Changes in the Landlord’s master Building drawings, within ten
(10) business days after Tenant’s receipt of invoices either from Landlord or such consultants
together with (in any event) an administrative charge of ten percent (10%) of the actual costs
of such work; provided, however, that Tenant shall not be required to pay such administrative
charge in connection with the Tenant Improvements unless the Lease is terminated prior to the
Commencement Date for any reason due to a default by Tenant of this Lease. In addition to
such costs, Tenant shall pay to Landlord, within ten (10) business days after completion of
any Tenant Change, the actual, reasonable costs incurred by Landlord for services rendered by
Landlord’s management personnel and engineers to coordinate and/or supervise any of the Tenant
Changes to the extent such services are provided in excess of or after the normal on-site
hours of such engineers and management personnel.

	(e)	 	All Tenant Changes shall be performed: (i) in accordance with the approved plans,
specifications and working drawings; (ii) lien-free and in a first-class workmanlike manner;
(iii) in compliance with all laws, rules, regulations of all governmental agencies and
authorities including, without limitation, the provisions of Title III of the Americans with
Disabilities Act of 1990; (iv) in such a manner so as not to interfere with the occupancy of
any other tenant in the Project or Building, nor impose any additional expense upon nor delay
Landlord in the maintenance and operation of the Project or Building; and (v) at such times,
in such manner and subject to such rules and regulations as Landlord may from time to time
reasonably designate.

	(f)	 	Throughout the performance of the Tenant Changes, Tenant shall obtain, or cause its
contractors to obtain, workers compensation insurance and general liability insurance in
compliance with the provisions of Section 20 of this Lease.

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	12.2	 	Removal of Tenant Changes and Tenant Improvements. Subject to Section 12.3, all
Tenant Changes and the Tenant Improvements in the Premises (whether installed or paid for by
Landlord or Tenant), shall become the property of Landlord and shall remain upon and be
surrendered with the Premises at the end of the Term of this Lease; provided, however,
Landlord may, by written notice delivered to Tenant at any time prior to the date which is
thirty (30) days before the expiration of the Lease Term (or immediately upon any sooner
termination of this Lease) identify those items of the Tenant Changes (including, but not
limited to, any voice and data cabling or other wiring and any pipes installed by Tenant in
the Building) which Landlord shall require Tenant to remove at the end of the Term of this
Lease; provided, however, that in connection with Tenant’s request for Landlord’s approval of
a Tenant Change, Tenant may request that Landlord inform Tenant whether the Tenant Change must
be removed at the end of the Term of this Lease and if Landlord notifies Tenant that the
Tenant Change need not be removed at the end of the Term of this Lease, then Tenant shall not
be required to remove such Tenant Change at the end of the Term of this Lease. If Landlord
requires Tenant to remove any such items as described above, Tenant shall, at its sole cost,
remove the identified items on or before the expiration or sooner termination of this Lease
and repair any damage to the Premises caused by such removal (or, at Landlord’s option, shall
pay to Landlord all of Landlord’s costs of such removal and repair).

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

	12.4	 	Tenant’s Failure to Remove. If Tenant fails to remove by the expiration or sooner
termination of this Lease all of its personal property, or any items of Tenant Improvements or
Tenant Changes identified by Landlord for removal pursuant to Section 12.2 above, or
if Tenant fails to comply with its obligations under Section 12.3, Landlord may, at
its option, treat such failure as a hold over pursuant to Section 9.3 above, and/or
may (without liability to Tenant for loss thereof, at Tenant’s sole cost and in addition to
Landlord’s other rights and remedies under this Lease, at law or in equity: (a) remove and
store such items in accordance with applicable law; and/or (b) upon ten (10) days’ prior
notice to Tenant, sell all or any such items at private or public sale for such price as
Landlord may obtain as permitted under applicable law. Landlord shall apply the proceeds of
any such sale to any amounts due to Landlord under this Lease from Tenant (including
Landlord’s attorneys’ fees and other costs incurred in the removal, storage and/or sale of
such items), with any remainder to be paid to Tenant.

13. Liens. Tenant shall not permit any mechanic’s, materialmen’s or other liens to be
filed against all or any part of the Project, the Site, the Building or the Premises, nor against
Tenant’s leasehold interest in the Premises, by reason of or in connection with any repairs,
alterations, improvements or other work contracted for or undertaken by Tenant or any other act or
omission of Tenant or any Tenant Parties. Tenant shall, at Landlord’s request, provide Landlord
with enforceable, unconditional and final lien releases (and other evidence reasonably requested by
Landlord to demonstrate protection from liens) from all persons furnishing labor and/or materials
with respect to the Premises. Landlord shall have the right at all reasonable times to post on the
Premises and record any notices of non-responsibility which it deems necessary for protection from
such liens. If any such liens are filed, Tenant shall, at its sole cost, promptly cause such lien
to be released of record or bonded to Landlord’s reasonable satisfaction so that it no longer
affects title to the Project, the Site, the Building or the Premises. If Tenant fails to cause
such lien to be so released or bonded within twenty (20) days after filing thereof, Landlord may,
without waiving its rights and remedies based on such breach, and without releasing Tenant from any
of its obligations, cause such lien to be released by any means it shall deem proper, including
payment in satisfaction of the claim giving rise to such lien. Tenant shall pay to Landlord within
five (5) days after receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such payment by Landlord.
NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING THE PREMISES THROUGH OR UNDER TENANT,
AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR
AFFECT THE INTEREST OF LANDLORD IN THE PREMISES.

14. Assignment and Subletting.

	14.1	 	Restriction on Transfer. Except as otherwise expressly provided in this Section 14,
Tenant shall not, without the prior written consent of Landlord, which consent Landlord will
not unreasonably withhold, condition or delay, assign this Lease or any interest herein or
sublet the Premises or any part thereof, or permit the use or occupancy of the Premises by any
party other than Tenant (any such assignment, encumbrance, sublease, license or the like shall
sometimes be referred to as a “Transfer”). In no event may Tenant encumber or hypothecate
this Lease. Any Transfer without Landlord’s consent (except for a Permitted Transfer pursuant
to Section 14.2 below) shall constitute a default by Tenant under this Lease, without
the benefit of any additional notice or cure period specified in Section 23.1 below,
and in addition to all of Landlord’s other remedies at law, in equity or under this Lease,
such Transfer shall be voidable at Landlord’s election. In addition, this Lease shall not,
nor shall any interest of Tenant herein, be assignable by operation of law without the written
consent of Landlord. For purposes of this Section 14, other than with respect to a
Permitted Transfer under Section 14.2 and transfers of stock of Tenant if Tenant is
(now or hereafter) a publicly-held corporation and such stock is transferred publicly over a
recognized security exchange or over-the-counter market (neither of which shall be considered
a Transfer), if Tenant is a corporation, partnership or other entity, any direct or indirect
transfer, assignment, encumbrance or hypothecation of forty-nine percent (49%) or more
(individually or in the aggregate) of any stock or other ownership interest in such entity,
and/or any transfer, assignment, hypothecation or encumbrance of any controlling ownership or
voting interest in such entity, shall be deemed a Transfer and shall be subject to all of the
restrictions and provisions contained in this Section 14. Notwithstanding anything to
the contrary contained herein, a public offering or offerings of stock in Tenant
over a recognized security exchange or over-the-counter

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	 	 	market shall not constitute a Transfer requiring Landlord’s consent or subject Tenant to the
provisions of Subsection 14.3 or Subsection 14.4.

	14.2	 	Permitted Controlled Transfers. Notwithstanding the provisions of Section 14.1 above
to the contrary, Tenant may assign this Lease or sublet the Premises or any portion thereof
(herein, a “Permitted Transfer”), without Landlord’s consent and without extending any
sublease or termination option to Landlord, to any corporation which controls, is controlled
by or is under common control with Tenant, or to any corporation resulting from a merger or
consolidation with Tenant, or to any person or entity which acquires all the assets of
Tenant’s business as a going concern, provided that: (a) at least twenty (20) days prior to
such assignment or sublease, Tenant delivers to Landlord the financial statements and other
financial and background information of the assignee or sublessee described in Section
14; (b) if an assignment, the assignee assumes, in full, the obligations of Tenant under
this Lease (or if a sublease, the sublessee of a portion of the Premises or Term assumes, in
full, the obligations of Tenant with respect to such portion); (c) the financial net worth of
the assignee or sublessee equals or exceeds that of Tenant as of the date of execution of this
Lease; (d) Tenant remains fully liable under this Lease; (e) the use of the Premises under
Section 6 remains unchanged; and (f) such transaction is not entered into as a
subterfuge to avoid the restrictions and provisions of this Lease.

	14.3	 	Landlord’s Options. If at any time or from time to time during the Term Tenant desires to
effect a Transfer, Tenant shall deliver to Landlord, at least thirty (30) days prior to the
date Tenant desires the Transfer to be effective (“Transfer Date”), written notice (“Transfer
Notice”) setting forth the Transfer Date, the terms and provisions of the proposed Transfer,
the identity of the proposed assignee, sublessee or other transferee (sometimes referred to
hereinafter as a “Transferee”), and any ownership or commercial relationship between Tenant
and the proposed Transferee. Tenant shall also deliver to Landlord with the Transfer Notice,
a current financial statement and financial statements for the preceding two (2) years of the
Transferee which have been certified or audited by a reputable independent accounting firm
acceptable to Landlord, and such other information concerning the business background and
financial condition of the proposed Transferee as Landlord may reasonably request. Except
with respect to a Permitted Transfer, Landlord shall have the option, exercisable by written
notice delivered to Tenant within thirty (30) days after Landlord’s receipt of the Transfer
Notice, such financial statements and other information requested by Landlord, either to:

	(a)	 	approve or disapprove such Transfer, which approval shall not be unreasonably withheld,
unconditioned or delayed; or

	(b)	 	sublet from Tenant that portion of the Premises which Tenant has requested to sublease at the
rental and on the other terms set forth in this Lease prorated for the portion of the Premises
to be sublet and for the term set forth in Tenant’s Notice, or, in the case of an assignment
or encumbrance, terminate this Lease with respect to the entire Premises and recapture the
Premises, which termination shall be effective thirty (30) days after Tenant’s receipt of
Landlord’s notice; provided, however, that the foregoing shall not apply to a Permitted
Transfer or a Transfer which does not require Landlord’s consent and Tenant may void such
termination and recapture by withdrawing such request for assignment or encumbrance by
notifying Landlord of its irrevocable election to withdraw such request within ten (10) days
after Tenant’s receipt of Landlord’s notice.

If Landlord exercises its option to sublease any such space from Tenant following Tenant’s request
for Landlord’s approval of the proposed sublease of such space, (i) Landlord shall be responsible
for the construction of any partitions which Landlord reasonably deems necessary to separate such
space from the remainder of the Premises, and (ii) Landlord and any sub-subtenant or assignee of
Landlord with respect to such subleased space shall have the right to use in common with Tenant all
lavatories, corridors and lobbies which are within the Premises and which are reasonably required
for the use of such space. Landlord may sub-sublease such space or lease the Premises to any
person, including, without limitation, Tenant’s proposed sublessee or assignee.

	14.4	 	Additional Conditions; Excess Rent. If for a Transfer other than a Permitted Transfer
Landlord does not exercise its sublease or termination option and instead approves of the
proposed Transfer pursuant to Section 14.3(a) above, Tenant may enter into the
proposed Transfer with such proposed Transferee subject to the following further conditions:

	(a)	 	the Transfer shall be on the same terms set forth in the Transfer Notice delivered to
Landlord (if the terms have changed, Tenant must submit a revised Transfer Notice to Landlord
and Landlord shall have another twenty (20) days after receipt thereof to make the election in
Sections 14.3(a) or 14.3(b) above);

	(b)	 	no Transfer shall be valid and no Transferee shall take possession of the Premises until an
executed counterpart of the assignment, sublease or other instrument affecting the Transfer
has been delivered to Landlord pursuant to which the Transferee shall expressly assume all of
Tenant’s obligations under this Lease (or with respect to a sublease of a portion of the
Premises or for a portion of the Term, all of Tenant’s obligations applicable to such portion)
and the Transferee shall have executed Landlord’s standard form of consent;

	(c)	 	no Transferee shall have a further right to assign, encumber or sublet, except on the terms
herein contained; and

	(d)	 	fifty percent (50%) of any rent or other economic consideration to the extent received by
Tenant as a result of such Transfer which exceeds, in the aggregate, (i) the total rent which
Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations
allocable to any portion of the Premises subleased, but excluding any amortized tenant
improvement costs, if any), plus (ii) any reasonable brokerage commissions, attorneys’ fees
and moving costs actually paid by Tenant in connection with such Transfer and any other
customary, reasonable and market based out-of-pocket tenant concessions paid by Tenant, shall
be paid to Landlord within ten (10) days after receipt thereof as additional rental under this
Lease, without affecting or reducing any other obligations of

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	 	 	Tenant hereunder. The foregoing is not intended to permit Landlord to share in proceeds of
the sale of Tenant’s business, except to the extent that such proceeds are attributable to
the value of the leasehold created hereby, or to permit Tenant to deduct expenses
attributable to such sale from such proceeds attributable to the value of the leasehold
created hereby.

	14.5	 	Reasonable Disapproval. Landlord and Tenant hereby acknowledge that Landlord’s disapproval
of any proposed Transfer (other than a Permitted Transfer) pursuant to Section 14.3(a)
shall be deemed reasonably withheld if based upon any reasonable factor, including, without
limitation, any or all of the following factors: (a) the proposed Transfer would result in
more than two subleases of portions of the Premises being in effect at any one time during the
Term; (b) the net effective rent payable by the Transferee (adjusted on a rentable square foot
basis) is less than the net effective rent then being quoted by Landlord for new leases in the
Building for comparable size space for a comparable period of time; (c) the proposed
Transferee is an existing tenant of the Project or is negotiating with Landlord (or has
negotiated with Landlord in the last six (6) months) for space in the Project; (d) the
proposed Transferee is a governmental entity; (e) the portion of the Premises to be sublet or
assigned is irregular in shape with inadequate means of ingress and egress; (f) the use of the
Premises by the Transferee (i) is not permitted by the use provisions in Section 6
hereof, or (ii) violates any exclusive use granted by Landlord to another tenant in the
Building; (g) the Transfer would likely result in significant increase in the use of the
parking areas or Common Areas by the Transferee’s employees or visitors, and/or significantly
increase the demand upon utilities and services to be provided by Landlord to the Premises;
(h) in Landlord’s reasonable judgment, the Transferee does not have the financial capability
to fulfill the obligations imposed by the Transfer; or (i) the Transferee is not in Landlord’s
reasonable opinion of reputable or good character or consistent with Landlord’s desired tenant
mix. Notwithstanding any contrary provision of this Lease, if Tenant or any proposed
Transferee claims that Landlord has unreasonably withheld or delayed its consent to a proposed
Transfer or otherwise has breached its obligations under this Section 14, Tenant’s and
such Transferee’s only remedy shall be to seek a declaratory judgment and/or injunctive
relief, and Tenant, on behalf of itself and, to the extent permitted by law, such proposed
Transferee waives all other remedies against Landlord, including, without limitation, the
right to seek monetary damages or to terminate this Lease.

	14.6	 	No Release. No Transfer shall release Tenant of Tenant’s obligations under this Lease or
alter the primary liability of Tenant to pay the rent and to perform all other obligations to
be performed by Tenant hereunder. Landlord may require that any Transferee remit directly to
Landlord on a monthly basis, all monies due Tenant by said Transferee, and each sublease shall
provide that if Landlord gives said sublessee written notice that Tenant is in default under
this Lease, said sublessee will thereafter make all payments due under the sublease directly
to or as directed by Landlord, which payments will be credited against any payments due under
this Lease. Tenant hereby irrevocably and unconditionally assigns to Landlord all rents and
other sums payable under any sublease of the Premises; provided, however, that Landlord hereby
grants Tenant a license to collect all such rents and other sums so long as Tenant is not in
default under this Lease. Tenant shall, within ten (10) days after the execution and delivery
of any assignment or sublease, deliver a duplicate original copy there of to Landlord.
However, the acceptance of rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent by Landlord to one Transfer shall not be
deemed consent to any subsequent Transfer. In the event of default by any Transferee of
Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies against such
Transferee or successor. Landlord may consent to subsequent assignments of the Lease or
sublettings or amendments or modifications to the Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and any such actions shall not relieve Tenant of liability under this Lease.

	14.7	 	Administrative and Attorneys’ Fees. If Tenant effects a Transfer or requests the consent of
Landlord to any Transfer, then Tenant shall, upon demand, pay Landlord a non-refundable
administrative fee of One Thousand Five Hundred Dollars ($1,500.00), plus any reasonable
attorneys’ and paralegal fees and costs incurred by Landlord in connection with such Transfer
or request for consent (whether attributable to Landlord’s in-house attorneys or paralegals or
otherwise). Acceptance of the One Thousand Five Hundred Dollar ($1,500.00) administrative fee
and/or reimbursement of Landlord’s attorneys’ and paralegal fees shall in no event obligate
Landlord to consent to any proposed Transfer.

	14.8	 	Material Inducement. Tenant understands, acknowledges and agrees that (a) Landlord’s option
to sublease from Tenant any space which Tenant proposes to sublease or terminate this Lease
upon any proposed assignment or encumbrance of this Lease by Tenant as provided in Section
14.3(b) above rather than approve the proposed sublease, assignment or encumbrance, and
(b) Landlord’s right to receive any excess consideration paid by a Transferee in connection
with an approved Transfer as provided in Section 14.4(d) above, are a material
inducement for Landlord’s agreement to lease the Premises to Tenant upon the terms and
conditions herein set forth.

15. Entry by Landlord. Landlord and its employees and agents shall at all reasonable times
have the right to enter the Premises to inspect the same, to supply janitorial service and any
other service required to be provided by Landlord to Tenant under this Lease, to exhibit the
Premises to prospective lenders or purchasers (or during the last year of the Term, to prospective
tenants), to post notices of non-responsibility, and/or to alter, improve or repair the Premises or
any other portion of the Building or Project, all without being deemed guilty of or liable for any
breach of Landlord’s covenant of quiet enjoyment or any eviction of Tenant, and without abatement
of rent. In exercising such entry rights, Landlord shall endeavor to minimize, as reasonably
practicable, the interference with Tenant’s business, and shall provide Tenant with reasonable
advance written notice of such entry (except in emergency situations and for scheduled services).
For each of the foregoing purposes, Landlord shall at all times have and retain a key with which to
unlock all of the doors in, upon and about the Premises, excluding Tenant’s vaults and safes, and
Landlord shall have the means which Landlord may deem proper to open said doors in an emergency in
order to obtain entry to the Premises. Any entry to the Premises obtained

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by Landlord by any of said means or otherwise shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of
Tenant from the Premises or any portion thereof, or grounds for any abatement or reduction of rent
and Landlord shall not have any liability to Tenant for any damages or losses on account of any
such entry by Landlord except, subject to the provisions of Section 22.1, to the extent of
Landlord’s gross negligence or willful misconduct.

16. Utilities and Services.

	16.1	 	Standard Utilities and Services. Subject to the terms and conditions of this Lease, and the
obligations of Tenant as set forth hereinbelow, Landlord shall furnish or cause to be
furnished to the Premises the following utilities and services, the costs of which shall be
included in Operating Expenses, unless otherwise specified below (Landlord reserves the right
to adopt reasonable, non-discriminatory modifications and additions to the following
provisions from time to time):

	(a)	 	Landlord shall make the elevator of the Building available for Tenant’s non-exclusive use,
twenty-four (24) hours per day.

	(b)	 	Landlord shall furnish during the Business Hours for the Building specified in Section
1.17 of the Summary (which Business Hours shall be subject to change from time to time by
Landlord, in Landlord’s reasonable discretion), HVAC for the Premises as required in
Landlord’s reasonable judgment for the comfortable and normal occupancy of the Premises. The
cost of maintenance and service calls to adjust and regulate the HVAC system shall be charged
to Tenant if the need for maintenance work results from either Tenant’s adjustment of room
thermostats or Tenant’s failure to comply with its obligations under this Section 16,
including keeping window coverings closed as needed. Such work shall be charged at hourly
rates equal to then-current journeyman’s wages for HVAC mechanics. If Tenant desires HVAC at
any time other than during the Business Hours for the Building, Landlord shall provide such
“after-hours” usage after advance reasonable request by Tenant, and Tenant shall pay to
Landlord, as additional rent (and not as part of the Operating Expenses) the cost, as fairly
determined by Landlord, of such after-hours usage (as well as the cost of any HVAC used by
Tenant in excess of what Landlord considers reasonable or normal), including any minimum hour
charges for after-hours requests and any special start-up costs for after-hours services which
requires a special start-up (such as late evenings, weekends and holidays) together with an
administrative fee of fifteen percent (15%) of the cost of such after-hours usage, which
administrative fee shall also be payable by Tenant to Landlord for the cost of any other
services provided by Landlord to Tenant that are not otherwise required to be provided by
Landlord to Tenant hereunder.

	(c)	 	Landlord shall furnish janitorial services to the Premises five (5) days per week pursuant to
janitorial and cleaning specifications as may be adopted by Landlord from time to time. No
person(s) other than those persons approved by Landlord shall be permitted to enter the
Premises for such purposes. Janitorial service shall include ordinary dusting and cleaning by
the janitor assigned to do such work and shall not include cleaning of carpets or rugs, except
normal vacuuming, or moving of furniture, interior window cleaning, coffee or eating area
cleaning and other special services. Such additional services may be rendered by Landlord
pursuant to written agreement with Tenant as to the extent of such services and the payment of
the cost thereof. Janitorial service will not be furnished on nights when rooms are occupied
after 7:30 p.m. or to rooms which are locked unless a key is furnished to the Landlord for use
by the janitorial contractor. Window cleaning shall be done only by Landlord, at such time
and frequency as determined by Landlord at Landlord’s sole discretion. Tenant shall pay to
Landlord the cost of removal of any of Tenant’s refuse and rubbish to the extent that the same
exceeds the refuse and rubbish usually attendant upon the use of the Premises as offices.

	(d)	 	Landlord may, in Landlord’s sole discretion, provide security service or protection in the
Building and/or the Project, in any manner deemed reasonable by Landlord at Landlord’s sole
discretion, from the Commencement Date throughout the Term.

	16.2	 	Tenant’s Obligations. Tenant shall control and be separately metered for the electricity,
gas, water and telephone service for the Premises or other services which are metered
(collectively, the “Electricity Utility Charges”), chargeable or provided to the Premises, at
Tenant’s sole cost and expense. Tenant shall make all such payments directly to the utility
provider as and when bills are rendered. Should Tenant fail to pay such amounts, Landlord
shall have the right to pay the same on Tenant’s behalf and Tenant shall reimburse Landlord
for all costs and expenses incurred by Landlord in conjunction with such payment within ten
(10) days after demand therefor. All such costs and expenses incurred by Landlord on Tenant’s
behalf shall be deemed additional rent payable by Tenant and collectible by Landlord as such.
At no time shall use of electricity in the Premises exceed the capacity of existing feeders
and risers to or wiring in the Premises. Any risers or wiring to meet Tenant’s excess
electrical requirements shall, upon Tenant’s written request, be installed by Landlord, at
Tenant’s sole cost, if, in Landlord’s reasonable judgment, the same are necessary and shall
not (i) cause permanent damage or injury to the Project, the Building or the Premises, (ii)
cause or create a dangerous or hazardous condition, (iii) entail excessive or unreasonable
alterations, repairs or expenses, or (iv) interfere with or disturb other tenants or occupants
of the Building. Tenant shall cooperate fully at all times with Landlord, and abide by all
reasonable regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the Building’s services and systems. Tenant shall not use any
apparatus or device in, upon or about the Premises which may in any way increase the amount of
services or utilities usually furnished or supplied to the Premises or other premises in the
Building. In addition, Tenant shall not connect any conduit, pipe, apparatus or other device
to the Building’s water, waste or other supply lines or systems for any purpose. Neither
Tenant nor its employees, agents, contractors, licensees or invitees shall at any time enter,
adjust, tamper with, touch or otherwise in any manner affect the mechanical installations or
facilities of the Building.

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	16.3	 	Failure to Provide Services. Landlord’s failure to furnish or delay in furnishing any of the
services described in Section 16.1 above when such failure is caused by all or any of
the following shall not result in any liability of Landlord: (a) casualty, accident, breakage
or repairs; (b) acts of terrorism, strikes, lockouts or other labor disturbances or labor
disputes of any such character; (c) governmental regulation, moratorium or other governmental
action; (d) inability, despite the exercise of reasonable diligence, to obtain electricity,
water or fuel, including due to shortages, blackouts or any other cause; or (e) any other
cause beyond Landlord’s reasonable control. In addition, in the event of the failure of any
said utilities or services, Tenant shall not be entitled to any abatement or reduction of rent
(except as expressly provided in Sections 18.3 and 19.2 if such failure is a
result of a damage or taking described therein), no eviction of Tenant shall result, and
Tenant shall not be relieved from the performance of any covenant or agreement in this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of, or injury to,
property or for injury to, or interference with, Tenant’s business, including, without
limitation, loss of profits, however occurring, through or in connection with or incidental to
a failure to furnish any of the services as set forth in this Section 16. In the
event of any stoppage or interruption of services or utilities, Landlord shall diligently
attempt to resume such services or utilities as promptly as practicable. Tenant hereby waives
the provisions of California Civil Code Section 1932(1) or any other applicable existing or
future law, ordinance or governmental regulation permitting the termination of this Lease due
to an interruption, failure or inability to provide any services.

	16.4	 	Abatement of Rent When Tenant is Prevented From Using Premises. If Tenant is prevented from
using, and does not use, the Premises or any portion thereof, for five (5) consecutive
business days (the “Eligibility Period”) as a result of (i) any repair, maintenance or
alteration performed by Landlord after the Commencement Date, or (ii) any failure to provide
to the Premises any of the essential utilities and services required to be provided in
Sections 16.1(a), 16.1(b), or 16.1(c) above, (iii) any failure to
provide access to the Premises, or (iv) Landlord’s exercise of its rights in Section
4.2 of this Lease, then Tenant’s obligation to pay Monthly Basic Rent and Operating
Expenses shall be abated or reduced, as the case may be, from and after the first (1st) day
following the Eligibility Period and continuing until such time that Tenant continues to be so
prevented from using, and does not use, the Premises or a portion thereof, in the proportion
that the rentable square feet of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable square feet of the Premises; provided,
however, that Tenant shall only be entitled to such abatement of rent if the matter described
in clauses (i) (i.e, the matter giving rise to the repair, maintenance or alteration), (ii) or
(iii) of this sentence is caused by the gross negligence or willful misconduct of Landlord or
Landlord’s contractors or agents. To the extent Tenant shall be entitled to abatement of rent
because of a damage or destruction pursuant to Section 18 or a taking pursuant to Section 19,
then the Eligibility Period shall not be applicable.

17. Indemnification and Exculpation.

	17.1	 	Tenant’s Assumption of Risk and Waiver. Except to the extent such matter is not covered by
the insurance required to be maintained by Tenant under this Lease and such matter is
attributable to the gross negligence or willful misconduct of Landlord, Landlord shall not be
liable to Tenant, Tenant’s employees, agents or invitees for: (i) any damage to property of
Tenant, or of others, located in, on or about the Premises, nor for (ii) the loss of or damage
to any property of Tenant or of others by theft or otherwise, (iii) any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity,
water, rain or leaks from any part of the Premises or from the pipes, plumbing works or from
the roof, street or subsurface or from any other places or by dampness or by any other cause
of whatsoever nature, or (iv) any such damage caused by other tenants or persons in the
Project, occupants of adjacent property of the Project, or the public, or caused by operations
in construction of any private, public or quasi-public work. Landlord shall in no event be
liable to Tenant for any consequential damages or for loss of revenue or income and Tenant
waives any and all claims for any such damages. Notwithstanding anything to the contrary
contained in this Section 17.1, all property of Tenant, its agents, employees and
invitees kept or stored on the Premises, whether leased or owned by any such parties, shall be
so kept or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless from any
claims arising out of damage to the same, including subrogation claims by Tenant’s insurance
carriers.

	17.2	 	Indemnification. Tenant shall be liable for, and shall indemnify, defend, protect and hold
Landlord and Landlord’s partners, officers, directors, employees, agents, property manager,
successors and assigns (collectively, “Landlord Indemnified Parties”) harmless from and
against, any and all claims, damages, judgments, suits, causes of action, losses, liabilities
and expenses, including attorneys’ fees and court costs (collectively, “Indemnified Claims”),
arising or resulting from (a) any occurrence at the Premises, unless caused by the gross
negligence or willful misconduct of Landlord or its agents, employees or contractors and not
covered by the insurance required to be maintained by Tenant under this Lease, (b) any act or
omission of Tenant or any of Tenant’s agents, employees, contractors, subtenants, assignees,
licensees or invitees (collectively, “Tenant Parties”); (c) the use of the Premises and Common
Areas and conduct of Tenant’s business by Tenant or any Tenant Parties, or any other activity,
work or thing done, permitted or suffered by Tenant or any Tenant Parties, in or about the
Premises, the Building or elsewhere on the Project; and/or (d) any default by Tenant of any
obligations on Tenant’s part to be performed under the terms of this Lease or the terms of any
contract or agreement to which Tenant is a party or by which it is bound, affecting this Lease
or the Premises. The foregoing indemnification shall include, but not be limited to, any
injury to, or death of, any person, or any loss of, or damage to, any property on the
Premises, or on adjoining sidewalks, streets or ways, or connected with the use, condition or
occupancy thereof, whether or not Landlord or its mortgagee has or should have knowledge or
notice of the defect or conditions causing or contributing to such injury, death, loss or
damage. In case any action or proceeding is brought against Landlord or any Landlord
Indemnified Parties by reason of any such Indemnified Claims, Tenant, upon notice from
Landlord, shall defend the same at Tenant’s expense by counsel approved in writing by
Landlord, which approval shall not be unreasonably withheld. Landlord shall indemnify and
hold Tenant harmless from and against, any and all claims, damages, judgments, suits, causes
of action, losses, liabilities and expenses, including attorneys’ fees and court costs (but
not including any loss of business, loss of profits or other

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	 	 	 consequential damages) arising or resulting from the gross negligence or willful misconduct
of Landlord at the Project.

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

18. Damage or Destruction.

	18.1	 	Landlord’s Rights and Obligations. In the event the Premises or any part of the Building is
damaged by fire or other casualty to an extent not exceeding twenty-five percent (25%) of the
full replacement cost thereof, and Landlord’s contractor estimates in a writing delivered to
the parties that the damage thereto is such that the Building and/or Premises may be repaired,
reconstructed or restored to substantially its condition immediately prior to such damage
within one hundred twenty (120) days from the date of such casualty, and Landlord will receive
insurance proceeds sufficient to cover the costs of such repairs, reconstruction and
restoration, then Landlord shall commence and proceed diligently with the work of repair,
reconstruction and restoration and this Lease shall continue in full force and effect. If,
however, the Premises or any other part of the Building is damaged to an extent exceeding
twenty-five percent (25%) of the full replacement cost thereof, or Landlord’s contractor
estimates that such work of repair, reconstruction and restoration will require longer than
one hundred twenty (120) days to complete, or Landlord will not receive insurance proceeds
(and/or proceeds from Tenant, as applicable) sufficient to cover the costs of such repairs,
reconstruction and restoration, then Landlord may elect to either:

	(a)	 	repair, reconstruct and restore the portion of the Building and Premises damaged by such
casualty (including the, to the extent of insurance proceeds received from Tenant, the Tenant
Improvements and the Tenant Changes), in which case this Lease shall continue in full force
and effect; or

	(b)	 	terminate this Lease effective as of the date which is thirty (30) days after Tenant’s
receipt of Landlord’s election to so terminate.

Under any of the conditions of this Section 18.1, Landlord shall give written notice to
Tenant of its intention to repair or terminate within the later of sixty (60) days after the
occurrence of such casualty, or fifteen (15) days after Landlord’s receipt of said estimate from
Landlord’s contractor.

	18.2	 	Abatement of Rent. In the event that as a result of any such damage, repair, reconstruction
and/or restoration of the Premises or the Building, Tenant is prevented from using, and does
not use, the Premises or any portion thereof, then the Monthly Basic Rent shall be abated or
reduced, as the case may be, during the period that Tenant continues to be so prevented from
using and does not use the Premises or portion thereof, in the proportion that the rentable
square feet of the portion of the Premises that Tenant is prevented from using, and does not
use, bears to the total rentable square feet of the Premises. Notwithstanding the foregoing
to the contrary, if the damage is due to the negligence or willful misconduct of Tenant or any
Tenant Parties, there shall be no abatement of Monthly Basic Rent, except to the extent that
Landlord receives business interruption insurance attributable to the Lease and such damage.
Except for abatement of Monthly Basic Rent as provided hereinabove, Tenant shall not be
entitled to any compensation or damages for loss of, or interference with, Tenant’s business
or use or access of all or any part of the Premises resulting from any such damage, repair,
reconstruction or restoration.

	18.3	 	Inability to Complete. Notwithstanding anything to the contrary contained in this
Section 18, in the event Landlord is obligated or elects to repair, reconstruct and/or
restore the damaged portion of the Building or Premises pursuant to Section 18.1, but
is delayed from completing such repair, reconstruction and/or restoration beyond the date
which is six (6) months after the date estimated by Landlord’s contractor for completion
thereof pursuant to Section 18.1, by reason of any causes beyond the reasonable
control of Landlord (including, without limitation, delays due to Force Majeure events as
defined in Section 32.15, and delays caused by Tenant or any Tenant Parties), then
Landlord may elect to terminate this Lease upon thirty (30) days’ prior written notice to
Tenant.

	18.4	 	Damage Near End of Term. In addition to the termination rights in Sections 18.1 and
18.4, Landlord shall have the right to terminate this Lease if any damage to the
Building or Premises, and, in addition to the termination rights set forth in Section
18.6, Tenant shall have the right to terminate this Lease if any damage to the Premises,
occurs during the last twelve (12) months of the Term of this Lease and Landlord’s contractor
estimates in a writing delivered to the parties that the repair, reconstruction or restoration
of such damage cannot be completed within the earlier of (a) the scheduled expiration date of
the Lease Term, or (b) one hundred twenty (120) days after the date of such casualty.

	18.5	 	Waiver of Termination Right. This Lease sets forth the terms and conditions upon which this
Lease may terminate in the event of any damage or destruction. Accordingly, the parties
hereby waive the provisions of California Civil Code Section 1932, Subsection 2, and Section
1933, Subsection 4 (and any successor statutes thereof permitting the parties to terminate
this Lease as a result of any damage or destruction).

	18.6	 	Termination by Tenant. In the event the Premises is damaged by fire or other casualty, and
Landlord’s contractor estimates in a writing delivered to the parties that the damage thereto
is such that the repair, reconstruction or restoration of the Premises to substantially its
condition immediately prior to such damage will take longer than one two hundred seventy (270)
days to effectuate, Tenant may terminate this Lease by giving

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	 	 	Landlord notice of such termination within ten (10) days of receipt by Tenant of Landlord’s
contractor’s notice. In addition, if Landlord undertakes the repair, reconstruction or
restoration of the Premises and fails to complete such repair, reconstruction or restoration
within two hundred seventy (270) days thereafter, Tenant may terminate this Lease by giving
Landlord notice of such termination prior to the completion of such repair, reconstruction or
restoration.

19. Eminent Domain.

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

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

	19.3	 	Condemnation Award. Subject to the provisions of Section 19.4 below, in connection
with any taking of the Premises or Building, Landlord shall be entitled to receive the entire
amount of any award which may be made or given in such taking or condemnation, without
deduction or apportionment for any estate or interest of Tenant, it being expressly understood
and agreed by Tenant that no portion of any such award shall be allowed or paid to Tenant for
any so-called bonus or excess value of this Lease, and such bonus or excess value shall be the
sole property of Landlord. Tenant shall not assert any claim against Landlord or the taking
authority for any compensation because of such taking (including any claim for bonus or excess
value of this Lease); provided, however, if any portion of the Premises is taken, Tenant shall
be granted the right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the taking of Tenant’s
furniture, fixtures, equipment and other personal property within the Premises and for
Tenant’s relocation expenses.

	19.4	 	Temporary Taking. In the event of a taking of the Premises or any part thereof for temporary
use, (a) this Lease shall be and remain unaffected thereby and rent shall not abate, and (b)
Tenant shall be entitled to receive for itself such portion or portions of any award made for
such use with respect to the period of the taking which is within the Term, provided that if
such taking shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall perform its obligations under Section 9 with respect to surrender of the
Premises and shall pay to Landlord the portion of any award which is attributable to any
period of time beyond the Term expiration date. For purpose of this Section 19.4, a
temporary taking shall be defined as a taking for a period of two hundred seventy (270) days
or less.

	19.5	 	Waiver of Termination Right. This Lease sets forth the terms and conditions upon which this
Lease may terminate in the event of a taking. Accordingly, the parties waive the provisions
of the California Code of Civil Procedure Section 1265.130 and any successor or similar
statutes permitting the parties to terminate this Lease as a result of a taking.

20. Tenant’s Insurance.

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

	(a)	 	Special Form (fka All Risk) insurance, including fire and extended coverage, sprinkler
leakage, vandalism and malicious mischief upon property of every description and kind owned by
Tenant and located in the Premises or Building, or for which Tenant is legally liable
including, without limitation, furniture, equipment and any other personal property, in an
amount not less then the full replacement cost thereof. In the event that there shall be a
dispute as to the amount which comprises full replacement cost, the decision of Landlord or
the mortgagees of Landlord shall be conclusive.

	(b)	 	Commercial general liability insurance coverage, on an occurrence basis (except for products
and completed operations insurance, which may be on a claims made basis), including personal
injury, bodily injury (including wrongful death), broad form property damage, operations
hazard, owner’s protective coverage, contractual liability (including Tenant’s indemnification
obligations under this Lease, including Section 17 hereof), liquor liability (if
Tenant serves alcohol on the Premises), products and completed operations liability, and
owned/non-owned auto liability, with an initial combined single limit of liability of not less
than Three Million Dollars ($3,000,000.00) (which may be obtained through a single policy or a
combination of primary and umbrella policies). The limits of liability of such commercial
general liability insurance shall be increased every five (5) years during the Term of this
Lease to an amount reasonably required by Landlord.

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	(c)	 	Worker’s compensation and employer’s liability insurance, with limits no less than One
Million Dollars ($1,000,000.00) per occurrence, covering all persons employed in connection
with any work done on or about the Premises for which claims for death or bodily injury could
be asserted against Landlord, Tenant or the Premises.

	(d)	 	Loss of income, extra expense and business interruption insurance in such amounts as will
reimburse Tenant for direct or indirect loss of earnings attributable to all perils commonly
insured against by prudent tenants or attributable to prevention of access to the Premises,
Tenant’s parking areas or to the Building as a result of such perils.

	(e)	 	Any other form or forms of insurance as Tenant or Landlord or the mortgagees of Landlord may
reasonably require from time to time, in form, amounts and for insurance risks against which a
prudent tenant would protect itself, but only to the extent such risks and amounts are
available in the insurance market at commercially reasonable costs.

	20.2	 	Requirements. Each policy required to be obtained by Tenant hereunder shall: (a) be issued
by insurers which are approved by Landlord and/or Landlord’s mortgagees and are authorized to
do business in the state in which the Building is located and are rated not less than
financial class VII, and not less than policyholder rating A- in the most recent version of
Best’s Key Rating Guide (provided that, in any event, the same insurance company shall provide
the coverages described in Sections 20.1(a) and 20.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named insured
thereunder and shall name Landlord and, at Landlord’s request, Landlord’s mortgagees, ground
lessors (if any) and managers of which Tenant has been informed in writing, as additional
insureds thereunder, all as their respective interests may appear; (d) not have a deductible
amount exceeding Ten Thousand Dollars ($10,000.00), which amount shall be deemed self-insured
with full waiver of subrogation); (e) specifically provide that the insurance afforded by such
policy for the benefit of Landlord and Landlord’s mortgagees and ground lessors shall be
primary, and any insurance carried by Landlord or Landlord’s mortgagees and ground lessors
shall be excess and non-contributing; (f) contain an endorsement that the insurer waives its
right to subrogation as described in Section 22 below; (g) contain an undertaking by
the insurer to notify Landlord (and the mortgagees and ground lessors of Landlord who are
named as additional insureds) in writing not less than thirty (30) days prior to any
cancellation or other termination thereof; (h) contain a cross liability or severability of
interest endorsement; and (i) be in amounts sufficient at all times to satisfy any coinsurance
requirements thereof. Each such policy shall also provide that any loss otherwise payable
thereunder shall be payable notwithstanding (i) any act or omission of Landlord or Landlord
Indemnified Parties or Tenant which might, absent such provision, result in a forfeiture of
all or a part of such insurance payment, (ii) the occupation or use of the Premises for
purposes more hazardous than permitted by the provisions of such policy, (iii) any foreclosure
or other action or proceeding taken by any mortgagee pursuant to any provision of the mortgage
upon the happening of a default thereunder, or (iv) any change in title or ownership of the
Premises. Tenant agrees to deliver to Landlord, in no event later than the earlier of (i) the
Commencement Date or (ii) the date Tenant takes possession of all or any part of the Premises,
certificates from the insurance company evidencing the existence of such insurance and
Tenant’s compliance with the foregoing provisions of this Section 20. Tenant shall
cause replacement policies or certificates to be delivered to Landlord not less than ten (10)
business days prior to the expiration of any such policy or policies. If any such initial or
replacement certificates are not furnished within the time(s) specified herein, Tenant shall
be deemed to be in material default under this Lease without the benefit of any additional
notice or cure period provided in Section 23.1 below, and Landlord shall have the
right, but not the obligation, to procure such policies and certificates at Tenant’s expense.

	20.3	 	Effect on Insurance. Tenant shall not do or permit to be done anything which will (a)
violate or invalidate any insurance policy maintained by Landlord or Tenant hereunder, or (b)
increase the costs of any insurance policy maintained by Landlord pursuant to Section
21 or otherwise with respect to the Building or the Project. If Tenant’s occupancy or
conduct of its business in, on or about the Premises results in any increase in premiums for
any insurance carried by Landlord with respect to the Building or the Project, Tenant shall
pay such increase as additional rent within ten (10) days after being billed therefor by
Landlord. If any insurance coverage carried by Landlord pursuant to Section 21 or
otherwise with respect to the Building or the Project shall be cancelled or reduced (or
cancellation or reduction thereof shall be threatened) by reason of the use or occupancy of
the Premises by Tenant or by anyone permitted by Tenant to be upon the Premises, and if Tenant
fails to remedy such condition within five (5) days after notice thereof, Tenant shall be
deemed to be in default under this Lease, without the benefit of any additional notice or cure
period specified in Section 23.1 below, and Landlord shall have all remedies provided
in this Lease, at law or in equity, including, without limitation, the right (but not the
obligation) to enter upon the Premises and attempt to remedy such condition at Tenant’s cost.

21. Landlord’s Insurance. During the Term, Landlord shall insure the Building and the
Premises (excluding, however, Tenant’s furniture, equipment and other personal property against
damage by fire and standard extended coverage perils and with vandalism and malicious mischief
endorsements, rental loss coverage, at Landlord’s option, earthquake damage coverage, and such
additional coverage as Landlord deems appropriate. Landlord shall also carry commercial general
liability insurance, in such reasonable amounts and with such reasonable deductibles as would be
carried by a prudent owner of a similar building in the State of California. At Landlord’s option,
all such insurance may be carried under any blanket or umbrella policies which Landlord has in
force for other buildings and projects. In addition, at Landlord’s option, Landlord may elect to
self-insure all or any part of such required insurance coverage. Landlord may, but shall not be
obligated to, carry any other form or forms of insurance as Landlord or the mortgagees or ground
lessors of Landlord may reasonably determine is advisable. The cost of insurance obtained by
Landlord pursuant to this Section 21 (including self-insured amounts and deductibles) shall
be included in Operating Expenses.

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22. Waiver of Claims; Waiver of Subrogation.

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

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

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

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

	(a)	 	the abandonment of the Premises by Tenant. “Abandonment” is herein defined to include, but
is not limited to, any absence by Tenant from the Premises for five (5) business days or
longer while in default of any other provision of this Lease;

	(b)	 	the failure by Tenant to make any payment of rent or additional rent or any other payment
required to be made by Tenant hereunder, where such failure continues for three (3) days after
written notice thereof from Landlord that such payment was not received;

	(c)	 	the failure by Tenant to observe or perform any of the express or implied covenants or
provisions of this Lease to be observed or performed by Tenant, other than as specified in
Sections 23.1(a) or (b) above, where such failure shall continue for a period
of ten (10) days after written notice thereof from Landlord to Tenant; provided, however, that
if the nature of Tenant’s default is such that more than ten (10) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant shall commence such
cure within said ten (10) day period and thereafter diligently prosecute such cure to
completion, which completion shall occur not later than sixty (60) days from the date of such
notice from Landlord;

	(d)	 	(i) the making by Tenant or any guarantor hereof of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant or any guarantor hereof of a petition to have
Tenant or any guarantor hereof adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant or any guarantor hereof, the same is dismissed within sixty (60) days), (iii)
the appointment of a trustee or receiver to take possession of substantially all of Tenant’s
assets located at the Premises or of Tenant’s interest in this Lease or of substantially all
of guarantor’s assets, where possession is not restored to Tenant or guarantor within sixty
(60) days, or (iv) the attachment, execution or other judicial seizure of substantially all of
Tenant’s assets located at the Premises or of substantially all of guarantor’s assets or of
Tenant’s interest in this Lease where such seizure is not discharged within sixty (60) days;

	(e)	 	any material representation or warranty made by Tenant or guarantor in this Lease or any
other document delivered in connection with the execution and delivery of this Lease or
pursuant to this Lease proves to be incorrect in any material respect; and

	(f)	 	Tenant or guarantor shall be liquidated or dissolved or shall begin proceedings towards its
liquidation or dissolution.

Any notice sent by Landlord to Tenant pursuant to this Section 23.1 shall be in lieu of,
and not in addition to, any notice required under California Code of Civil Procedure Section 1161.

	23.2	 	Landlord’s Remedies; Termination. In the event of any default by Tenant, in addition to any
other remedies available to Landlord under this Lease, at law or in equity, Landlord shall
have the immediate option to terminate this Lease and all rights of Tenant hereunder. In the
event that Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:

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

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

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

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

As used in Sections 23.2(a) and 23.2(b) above, the “worth at the time of award “ is
computed by allowing interest at the Interest Rate set forth in Section 1.14 of the
Summary. As used in Section 23.2(c) above, the “worth at the time of award” is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).

	23.3	 	Landlord’s Remedies; Re-Entry Rights. In the event of any such default by Tenant, in
addition to any other remedies available to Landlord under this Lease, at law or in equity,
Landlord shall also have the right, with or without terminating this Lease, to re-enter the
Premises and remove all persons and property from the Premises; such property may be removed,
stored and/or disposed of pursuant to Section 12.4 of this Lease or any other
procedures permitted by applicable law. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section 23.3, and no acceptance of surrender of the Premises
or other action on Landlord’s part, shall be construed as an election to terminate this Lease
unless a written notice of such intention be given to Tenant or unless the termination thereof
be decreed by a court of competent jurisdiction.

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

	23.5	 	Landlord’s Right to Perform. Except as specifically provided otherwise in this Lease, all
covenants and agreements by Tenant under this Lease shall be performed by Tenant at Tenant’s
sole cost and expense and without any abatement or offset of rent. If Tenant shall fail to
pay any sum of money (other than Monthly Basic Rent) or perform any other act on its part to
be paid or performed hereunder and such failure shall continue for three (3) days with respect
to monetary obligations (or ten (10) days with respect to non-monetary obligations, except in
case of emergencies, in which such case, such shorter period of time as is reasonable under
the circumstances) after Tenant’s receipt of written notice thereof from Landlord, Landlord
may, without waiving or releasing Tenant from any of Tenant’s obligations, make such payment
or perform such other act on behalf of Tenant. All sums so paid by Landlord and all necessary
incidental costs incurred by Landlord in performing such other acts shall be payable by Tenant
to Landlord within five (5) days after demand therefor as additional rent.

	23.6	 	Interest. If any monthly installment of Rent or Operating Expenses, or any other amount
payable by Tenant hereunder is not received by Landlord by the date when due, it shall bear
interest at the Interest Rate set forth in Section 1.14 of the Summary from the date
due until paid. All interest, and any late charges imposed pursuant to Section 23.7
below, shall be considered additional rent due from Tenant to Landlord under the terms of this
Lease.

	23.7	 	Late Charges. Tenant acknowledges that, in addition to interest costs, the late payments by
Tenant to Landlord of any Monthly Basic Rent or other sums due under this Lease will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such other costs include, without limitation,
processing, administrative and accounting charges and late charges that may be imposed on
Landlord by the terms of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Project. Accordingly, if any monthly installment of Monthly
Basic Rent or Operating Expenses or any other amount payable by Tenant hereunder is not
received by Landlord by the due date thereof, Tenant shall pay to Landlord an additional sum
of ten percent (10%) of the overdue amount as a late charge, but in no event more than the
maximum late charge allowed by law. The parties agree that such late charge represents a fair
and reasonable estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest are distinct
and separate in that the payment of interest is to compensate Landlord for the use of
Landlord’s money by Tenant, while the payment of late charges is to compensate Landlord for
Landlord’s processing, administrative and other costs incurred by Landlord as a result of
Tenant’s delinquent payments. Acceptance of a late charge or interest shall not constitute a
waiver of Tenant’s default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this Lease or at
law or in equity now or hereafter in effect.
	 
	23.8	 	Intentionally Omitted.

	23.9	 	Rights and Remedies Cumulative. All rights, options and remedies of Landlord contained in
this Section 23 and elsewhere in this Lease (including Section 28 below) shall
be construed and held to be cumulative, and no one of them shall be exclusive of the other,
and Landlord shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law or in equity, whether or not stated in this
Lease. Nothing in this Section 23 shall be deemed to limit or otherwise affect
Tenant’s indemnification of Landlord pursuant to any provision of this Lease.

23

 

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

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

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

25. Subordination. Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of Landlord or any
mortgagee of a mortgage or a beneficiary of a deed of trust now or hereafter encumbering all or any
portion of the Building or Site, or any lessor of any ground or master lease now or hereafter
affecting all or any portion of the Building or Site, this Lease shall be subject and subordinate
at all times to such ground or master leases (and such extensions and modifications thereof), and
to the lien of such mortgages and deeds of trust (as well as to any advances made thereunder and to
all renewals, replacements, modifications and extensions thereof). Notwithstanding the foregoing,
Landlord and any mortgagee and/or ground lessor of Landlord (“Holder”), as applicable, shall have
the right to subordinate or cause to be subordinated any or all ground or master leases or the
lien of any or all mortgages or deeds of trust to this Lease. In the event that any ground or
master lease terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, at the election of Landlord’s successor
in interest, Tenant shall attorn to and become the tenant of such successor. Tenant hereby waives
its rights under any current or future law which gives or purports to give Tenant any right to
terminate or otherwise adversely affect this Lease and the obligations of Tenant hereunder in the
event of any such foreclosure proceeding or sale. Tenant covenants and agrees to execute and
deliver to Landlord within ten (10) days after receipt of written demand by Landlord and in the
form reasonably required by Landlord, any additional documents evidencing the priority or
subordination of this Lease with respect to any such Holder or the lien of any such mortgage or
deed of trust or Tenant’s agreement to attorn. Such documents may include commercially reasonable
provisions in favor of such Holder, including, without limitation, additional time on behalf of
such Holder to cure defaults of the Landlord and provide that (a) neither Holder nor any
successor-in-interest shall be bound by (i) any payment of the rent, additional rent, or other sum
due under this Lease for more than 1 month in advance or (ii) any amendment or modification of the
Lease made without the express written consent of Holder or any successor-in-interest; (b) neither
Holder nor any successor-in-interest will be liable for (i) any act or omission or warranties of
any prior landlord (including Landlord), (ii) the breach of any warranties or obligations relating
to construction of improvements on the Project or any tenant finish work performed or to have been
performed by any prior landlord (including Landlord), or (iii) the return of any security deposit,
except to the extent such deposits have been received by Holder; and (c) neither Holder nor any
successor-in-interest shall be subject to any offsets or defenses which Tenant might have against
any prior landlord (including Landlord). Should Tenant fail to sign and return any such documents
within said ten day period, Tenant shall be in default hereunder without the benefit of any
additional notice or cure periods specified in Section 23.1 above. Tenant shall indemnify,
defend (with counsel reasonably approved by Landlord in writing) and hold Landlord harmless from
and against any and all claims, judgments, suits, causes of action, damages, losses, liabilities
and expenses (including attorneys’ fees and court costs) attributable to any failure by Tenant to
timely deliver any such documents to Landlord.

26. Estoppel Certificate.

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

	26.2	 	Tenant’s Failure to Deliver. Tenant’s failure to deliver such estoppel certificate within
such time shall constitute a default hereunder without the applicability of the notice and
cure periods specified in Section 23.1 above and

24

 

	 	 	shall be conclusive upon Tenant that: (a) this Lease is in full force and effect without
modification, except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord’s or Tenant’s performance (other than Tenant’s failure to deliver the estoppel
certificate); and (c) not more than one (1) month’s rental has been paid in advance. Tenant
shall indemnify, defend (with counsel reasonably approved by Landlord in writing) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes of action,
damages, losses, liabilities and expenses (including attorneys’ fees and court costs)
attributable to any failure by Tenant to timely deliver any such estoppel certificate to
Landlord pursuant to Section 26.1 above.

27. Intentionally Omitted.

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

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

	28.2	 	Cure Rights. In the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgagee covering the
Premises or ground lessor of Landlord whose address shall have been furnished to Tenant, and
shall offer such beneficiary, mortgagee or ground lessor a reasonable opportunity to cure the
default (including with respect to any such beneficiary or mortgagee, time to obtain
possession of the Premises, subject to this Lease and Tenant’s rights hereunder, by power of
sale or a judicial foreclosure, if such should prove necessary to effect a cure).

29. Quiet Enjoyment. Landlord covenants and agrees with Tenant that, upon Tenant
performing all of the covenants and provisions on Tenant’s part to be observed and performed under
this Lease (including payment of rent hereunder), Tenant shall have the right to use and occupy the
Premises in accordance with and subject to the terms and conditions of this Lease as against all
persons claiming by, through or under Landlord.

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

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

32. Miscellaneous.

	32.1	 	Governing Law. This Lease shall be governed by, and construed pursuant to, the laws of the
State of California.

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

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

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

25

 

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

	32.6	 	Terms and Headings. The words “Landlord” and “Tenant” as used herein shall include the
plural as well as the singular. Words used in any gender include other genders. The Section
headings of this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof. Any deletion of language from this Lease
prior to its execution by Landlord and Tenant shall not be construed to raise any presumption,
canon of construction or implication, including, without limitation, any implication that the
parties intended thereby to state the converse of the deleted language.

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

	32.8	 	Prior Agreements; Amendments. This Lease (and the Exhibits attached hereto) contain all of
the covenants, provisions, agreements, conditions and understandings between Landlord and
Tenant concerning the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied, pertaining to the
Premises or any such other matter shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest. The parties acknowledge that all prior
agreements, representations and negotiations are deemed superseded by the execution of this
Lease to the extent they are not expressly incorporated herein.

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

	32.10	 	Recording. Except as otherwise provided in this Lease, neither this Lease, nor any
memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by
anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of
this provision shall make this Lease null and void at Landlord’s election.

	32.11	 	Exhibits. All Exhibits attached to this Lease are hereby incorporated in this Lease as
though set forth at length herein.

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

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

	32.14	 	No Partnership. Landlord does not, in any way or for any purpose, become a partner of
Tenant in the conduct of its business, or otherwise, or joint venturer or a member of a joint
enterprise with Tenant by reason of this Lease.

	32.15	 	Force Majeure. In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any act required hereunder by reason of strikes, lock-outs,
labor troubles, inability to procure materials, failure of power, governmental moratorium or
other governmental action or inaction (including failure, refusal or delay in issuing permits,
approvals and/or authorizations), injunction or court order, riots, insurrection, war, fire,
earthquake, flood or other natural disaster or other reason of a like nature not the fault of
the party delaying in performing work or doing acts required under the terms of this Lease
(but excluding delays due to financial inability) (herein collectively, “Force Majeure
Delays”), then performance of such act shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Section 32.15 shall not apply to nor
operate to

26

 

	 	 	excuse Tenant from the payment of Monthly Basic Rent, Operating Expenses, additional rent or
any other payments strictly in accordance with the terms of this Lease.
	 
	32.16	 	Counterparts. This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement.

	32.17	 	Nondisclosure of Lease Terms. Tenant acknowledges and agrees that the terms of this Lease
are confidential and constitute proprietary information of Landlord. Disclosure of the terms
could adversely affect the ability of Landlord to negotiate other leases and impair Landlord’s
relationship with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other publication or any
other person, including without limitation, any other tenant or apparent prospective tenant of
the Building or other portion of the Project, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, which Landlord may withhold in its
sole discretion, provided, however, that Tenant may disclose the terms (i) to its attorneys,
consultants, or prospective subtenants or assignees under this Lease, provided that Tenant
advises such parties of the obligation to keep such terms confidential, and (ii) to the extent
required under applicable law or by any court of law, provided that Tenant has allowed
Landlord the reasonable opportunity to seek relief against such disclosure.

	32.18	 	Independent Covenants. This Lease shall be construed as though the covenants herein between
Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the
benefit of any statute to the contrary and agrees that if Landlord fails to perform its
obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any
acts hereunder at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord; provided, however, that the foregoing shall in no way impair the
right of Tenant to commence a separate action against Landlord for any violation by Landlord
of the provisions hereof so long as notice is first given to Landlord and any holder of a
mortgage or deed of trust covering the Building, Project or any portion thereof, of whose
address Tenant has theretofore been notified, and an opportunity is granted to Landlord and
such holder to correct such violations as provided above.

33. Lease Execution.

	33.1	 	Tenant’s Authority. If Tenant executes this Lease as a limited liability company,
partnership or corporation, then Tenant and the persons and/or entities executing this Lease
on behalf of Tenant represent and warrant that: (a) Tenant is a duly organized and validly
existing limited liability company, partnership or corporation, as the case may be, and is
qualified to do business in the state in which the Premises are located; (b) such persons
and/or entities executing this Lease are duly authorized to execute and deliver this Lease on
Tenant’s behalf in accordance with the Tenant’s operating agreement (if Tenant is a limited
liability company), Tenant’s partnership agreement (if Tenant is a partnership), or a duly
adopted resolution of Tenant’s board of directors and Tenant’s by-laws (if Tenant is a
corporation); and (c) this Lease is binding upon Tenant in accordance with its terms.
Concurrently with Tenant’s execution and delivery of this Lease to Landlord and/or at any time
during the Lease Term within ten (10) days of Landlord’s request, Tenant shall provide to
Landlord a copy of any documents reasonably requested by Landlord evidencing Tenant’s
representations and warranties hereunder.

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

	33.3	 	Building Name and Signage. Landlord shall have the right at any time to designate and/or
change the name and/or address of the Project, the Building and/or any other building in the
Project, and to install, affix and maintain any and all signs on the exterior and on the
interior of the Project, the Building and/or any other building in the Project, as Landlord
may, in Landlord’s sole discretion, desire. Tenant shall not use the name of the Project, the
Building or any other building in the Project, or use pictures or illustrations of the
Project, the Building or any other building in the Project, in advertising or other publicity,
without the prior written consent of Landlord, which Landlord may withhold in its sole
discretion.

	33.4	 	Landlord’s Title; Air Rights. Landlord’s title is and always shall be paramount to the title
of Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or
may encumber the title of Landlord. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to Tenant by this
Lease.
	 
	33.5	 	Time of Essence. Time is of the essence of this Lease and each of its provisions.
	 
	33.6	 	Intentionally Omitted.

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

34. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES FOR ANY BREACH

27

 

UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR REMEDY HEREUNDER (EACH A
“DISPUTE” AND COLLECTIVELY, THE “DISPUTES”).

35. Consent to Judicial Reference. If and to the extent that Section 34
immediately above is determined by a court of competent jurisdiction to be unenforceable or is
otherwise not applied by any such court, each of Landlord and Tenant hereby consents and agrees
that (a) any and all Disputes shall be heard by a referee in accordance with the general reference
provisions of California Code of Civil Procedure Section 638, sitting without a jury in the County
of San Diego, California, (b) such referee shall hear and determine all of the issues in any
Dispute (whether of fact or of law), including issues pertaining to a “provisional remedy” as
defined in California Code of Civil Procedure Section 1281.8, including without limitation,
entering restraining orders, entering temporary restraining orders, issuing temporary and permanent
injunctions and appointing receivers, and shall report a statement of decision; provided that, if
during the course of any Dispute, any party desires to seek such a “provisional remedy” at a time
when a referee has not yet been appointed or is otherwise unavailable to hear the request for such
provisional remedy, then such party may apply to the San Diego County Superior Court for such
provisional relief, and (c) pursuant to California Code of Civil Procedure Section 640(a), judgment
may be entered upon the decision of such referee in the same manner as if the Dispute had been
tried directly by a court. The parties shall use their respective commercially reasonable and good
faith efforts to agree upon and select such referee, provided that such referee must be a retired
California state or federal judge, and further provided that if the parties cannot agree upon a
referee, the referee shall be appointed by the Presiding Judge of the San Diego County Superior
Court. Each party hereto acknowledges that this consent and agreement is a material inducement to
enter into this Agreement, the Loan Documents and all other agreements and instruments provided for
herein or therein, and that each will continue to be bound by and to rely on this consent and
agreement in their related future dealings. The parties shall share the cost of the referee and
reference proceedings equally; provided that, the referee may award attorneys’ fees
and reimbursement of the referee and reference proceeding fees and costs to the prevailing party,
whereupon all referee and reference proceeding fees and charges will be payable by the
non-prevailing party (as so determined by the referee). Each party hereto further warrants and
represents that it has reviewed this consent and agreement with legal counsel of its own choosing,
or has had an opportunity to do so, and that it knowingly and voluntarily gives this consent and
enters into this agreement having had the opportunity to consult with legal counsel. This consent
and agreement is irrevocable, meaning that it may not be modified either orally or in writing, and
this consent and agreement shall apply to any subsequent amendments, renewals, supplements, or
modifications to this Agreement or any other agreement or document entered into between the parties
in connection with this Agreement. In the event of litigation, this Agreement may be filed as
evidence of either or both parties’ consent and agreement to have any and all Disputes heard and
determined by a referee under California Code of Civil Procedure Section 638.

36. ERISA. Tenant represents and warrants to Landlord that: (i) Tenant is not an employee
pension benefit plan subject to the provisions of Title IV of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or subject to the minimum funding standards under Part
3, Subtitle B, Title I of ERISA or Section 412 of the Internal Revenue Code or Section 302 of
ERISA, and none of its assets constitutes or will constitute assets of any such employee benefit
plan subject to Part 4, Subtitle B, Title I of ERISA; (ii) Tenant is not a “governmental plan”
within the meaning of Section 3(32) of ERISA and the funds used by Tenant to satisfy its
obligations under the Lease are not subject to State statutes regulating investments of and
fiduciary obligations with respect to governmental plans; (iii) The assets of Tenant do no
constitute plan assets of one or more employee benefit plans within the meaning of 29 C.F.R.
2510.3-101; and (iv) Tenant is not The Prudential Insurance Company of America, a separate account
of Prudential or an “affiliate” of Prudential as defined in Section IV(b) of Prohibited Transaction
Exemption 90-1 granted by the U.S. Department of Labor.

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OREXIGEN THERAPEUTICS, INC.	 	 	 	 	 	 	 	 	 	 	 	 
	a Delaware corporation	 	 	 	PRENTISS/COLLINS DEL MAR HEIGHTS LLC, a
	 	 	 	 	 	 	Delaware limited liability company
	*By:

	 	/s/ Graham Cooper
 

	 	 	 	 	 	 	 	 	 	 	 	 
	Print Name: Graham Cooper	 	 	 	 	 	 	 	 	 	 	 	 
	Print Title: Chief Financial Officer	 	 	 	By	 	Cognac High Bluffs LLC, a Delaware limited liability company,
its managing member
	*By:

	 	/s/ Anthony McKinney
 

	 	 	 	 	 	 	 	 	 	 	 	 
	Print Name: Anthony McKinney	 	 	 	 	 	 	 	 	 	 	 	 
	Print Title: Chief Operating Officer	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By	 	The Prudential Insurance Company of America, a New Jersey corporation, 
its sole member
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:
	 	/s/ Darin Bright
 

	 	 
	 	 	 	 	 	 	 	 	 	 	Name: Darin Bright
	 	 	 	 	 	 	 	 	 	 	Title: Vice President

*NOTE:

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

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

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

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

S-1

 

EXHIBIT “A”

PROJECT SITE PLAN

 

 

EXHIBIT “B”

PREMISES

 

 

EXHIBIT “C”

WORK LETTER AGREEMENT

     This Work Letter Agreement (“Work Letter Agreement“) sets forth the terms and conditions
relating to the construction of improvements for the Premises. All references in this Work Letter
Agreement to “the Lease” shall mean the relevant portions of the Lease to which this Work Letter
Agreement is attached as Exhibit ”C”.

SECTION 1.

BASE, SHELL AND CORE

     Landlord has constructed, through its contractor, the base, shell and core of the Premises and
of the Building (collectively, the “Base, Shell and Core”), and Tenant shall accept the Base, Shell
and Core in its current “As-Is” condition existing as of the date of the Lease and the Commencement
Date. Landlord shall install in the Premises certain “Tenant Improvements” (as defined below)
pursuant to the provisions of this Work Letter Agreement. Except for the Tenant Improvement work
described in this Work Letter Agreement and Landlord’s maintenance and repair obligations expressly
set forth in the Lease, Landlord shall not be obligated to make or pay for any alterations or
improvements to the Premises, the Building or the Project.

SECTION 2.

CONSTRUCTION DRAWINGS FOR THE PREMISES

     Prior to the execution of this Lease, Landlord and Tenant have approved a detailed space plan
for the construction of certain improvements in the Premises, which space plan has been prepared by
BPA Architecture Planning Interiors, dated June 22, 2006, attached hereto as Schedule 1 (the “Final
Space Plan”). Based upon and in conformity with the Final Space Plan, Landlord shall cause its
architect and engineers to prepare and deliver to Tenant, for Tenant’s approval, detailed
specifications and engineered working drawings for the tenant improvements shown on the Final Space
Plan (the “Working Drawings”). The Working Drawings shall incorporate modifications to the Final
Space Plan as necessary to comply with the floor load and other structural and system requirements
of the Building. To the extent that the finishes and specifications are not completely set forth
in the Final Space Plan for any portion of the tenant improvements depicted thereon, the actual
specifications and finish work shall be in accordance with the specifications for the Building’s
standard tenant improvement items, as determined by Landlord. Within three (3) business days after
Tenant’s receipt of the Working Drawings, Tenant shall approve or disapprove the same, which
approval shall not be unreasonably withheld; provided, however, that Tenant may only disapprove the
Working Drawings to the extent such Working Drawings are inconsistent with the Final Space Plan and
only if Tenant delivers to Landlord, within such three (3) business days period, specific changes
proposed by Tenant which are consistent with the Final Space Plan and do not constitute changes
which would result in any of the circumstances described in items (i) through (iv) below. If any
such revisions are timely and properly proposed by Tenant, Landlord shall cause its architect and
engineers to revise the Working Drawings to incorporate such revisions and submit the same for
Tenant’s approval in accordance with the foregoing provisions, and the parties shall follow the
foregoing procedures for approving the Working Drawings until the same are finally approved by
Landlord and Tenant. Upon Landlord’s and Tenant’s approval of the Working Drawings, the same shall
be known as the “Approved Working Drawings.” The tenant improvements shown on the Approved Working
Drawings shall be referred to herein as the “Tenant Improvements.” Once the Approved Working
Drawings have been approved by Landlord and Tenant, Tenant shall make no changes, change orders or
modifications thereto without the prior written consent of Landlord, which consent may be withheld
in Landlord’s sole discretion if such change or modification would: (i) directly or indirectly
delay the Substantial Completion of the Premises; (ii) increase the cost of designing or
constructing the Tenant Improvements above the cost of the tenant improvements depicted in the
Final Space Plan; (iii) be of a quality lower than the quality of the standard tenant improvement
items for the Building; and/or (iv) require any changes to the Base, Shell and Core or structural
improvements or systems of the Building. The Final Space Plan, Working Drawings and Approved
Working Drawings shall be collectively referred to herein as, the “Construction Drawings.”

SECTION 3.

CONSTRUCTION AND PAYMENT FOR COSTS OF TENANT IMPROVEMENTS

     Landlord shall cause a contractor designated by Landlord (the “Contractor”) to (i) obtain all
applicable building permits for construction of the Tenant Improvements, and (ii) construct the
Tenant Improvements as depicted on the Approved Working Drawings, in compliance with such building
permits and all applicable laws in effect at the time of construction, and in good workmanlike
manner. Except as otherwise provided in this Work Letter Agreement, Landlord shall pay for the
cost of the design and construction of the Tenant Improvements. The cost of the design and
construction of the Tenant Improvements shall include Landlord’s construction supervision and
management fee in an amount equal to the product of (i) five percent (5%) and (ii) the total cost
of the design and construction of the Tenant Improvements. In the event Tenant requests any
changes, change orders or modifications to the Working Drawings and/or the Approved Working
Drawings (which Landlord approves pursuant to Section 2 above) which increase the cost to
construct the Tenant Improvements above the cost of the tenant improvements as described in the
Final Space Plan, Tenant shall pay such increased cost to Landlord immediately upon Landlord’s
request therefor, and, in any event, prior to the date Landlord causes the Contractor to commence
construction of the changes, change orders or modifications. In no event

C-1

 

shall Landlord be obligated to pay for any of Tenant’s furniture, computer systems, telephone
systems, equipment or other personal property which may be depicted on the Construction Drawings;
such items shall be paid for by Tenant.

SECTION 4.

SUBSTANTIAL COMPLETION

     4.1 Substantial Completion. For purposes of the Lease, including for purposes of
determining the Commencement Date (as set forth in Section 1.7 of the Summary to the
Lease), “Substantial Completion” of the Premises shall occur upon the completion of construction of
the Tenant Improvements in the Premises pursuant to the Approved Working Drawings, with the
exception of any punch list items that do not materially and adversely affect Tenant’s use and
occupancy of the Premises and any tenant fixtures, work-stations, built-in furniture, or equipment
to be installed by Tenant or under the supervision of Contractor.

     4.2 Delay of the Substantial Completion of the Premises. If there shall be a delay or
there are delays in the Substantial Completion of the Premises as a direct, indirect, partial, or
total result of any of the following (collectively, “Tenant Delays”):

          4.2.1 Tenant’s failure to timely approve the Working Drawings or any other matter requiring
Tenant’s approval;

          4.2.2 a breach by Tenant of the terms of this Work Letter Agreement or the Lease;

          4.2.3 Tenant’s request for changes in any of the Construction Drawings;

          4.2.4 Tenant’s requirement for materials, components, finishes or improvements which are not
available in a commercially reasonable time given the anticipated date of Substantial Completion of
the Premises, as set forth in Section 1.7 of the Summary of the Lease, or which are
different from, or not included in, Landlord’s standard tenant improvement items for the Building;

          4.2.5 changes to the Base, Shell and Core, structural components or structural components or
systems of the Building required by the Approved Working Drawings;

          4.2.6 any changes in the Construction Drawings and/or the Tenant Improvements required by
applicable laws if such changes are directly attributable to Tenant’s use of the Premises or
Tenant’s specialized tenant improvement(s) (as determined by Landlord); or

          4.2.7 any other acts or omissions of Tenant, or its agents, or employees;

then, notwithstanding anything to the contrary set forth in the Lease and regardless of the actual
date of Substantial Completion, the Commencement Date (as set forth in Section 1.7 of the
Summary) shall be deemed to be the date the Commencement Date would have occurred if no Tenant
Delays, as set forth above, had occurred.

SECTION 5.

MISCELLANEOUS

     5.1 Tenant’s Entry Into the Premises Prior to Substantial Completion. Subject to the
terms hereof and provided that Tenant and its agents do not interfere with Contractor’s work in the
Building and the Premises, at Landlord’s reasonable discretion, Contractor shall use commercially
reasonable efforts to allow Tenant access to the Premises not less than fourteen (14) days prior to
the anticipated Substantial Completion of the Premises for the purpose of Tenant installing
overstandard equipment or fixtures (including Tenant’s data and telephone equipment) and Tenant’s
furniture in the Premises. Prior to Tenant’s entry into the Premises as permitted by the terms of
this Section 5.1, Tenant shall submit a schedule to Landlord and Contractor, for their
approval, which schedule shall detail the timing and purpose of Tenant’s entry. In connection with
any such entry, Tenant acknowledges and agrees that Tenant’s employees, agents, contractors,
consultants, workmen, mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord’s Contractor, agents or representatives in
performing work in the Building and the Premises, or interfere with the general operation of the
Building and/or the Project. If at any time any such person representing Tenant shall not be
cooperative or shall otherwise cause or threaten to cause any such disharmony or interference,
including, without limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke Tenant’s entry rights
upon twenty-four (24) hours’ prior written notice to Tenant. Tenant acknowledges and agrees that
any such entry into and occupancy of the Premises or any portion thereof by Tenant or any person or
entity working for or on behalf of Tenant shall be deemed to be subject to all of the terms,
covenants, conditions and provisions of the Lease, excluding only the covenant to pay Basic Rent
(until the occurrence of the Commencement Date). Tenant further acknowledges and agrees that
Landlord shall not be liable for any injury, loss or damage which may occur to any of Tenant’s work
made in or about the Premises in connection with such entry or to any property placed therein prior
to the Commencement Date, the same being at Tenant’s sole risk and liability. Tenant shall be
liable to Landlord for any damage to any portion of the Premises, including the Tenant Improvement
work, caused by Tenant or any of Tenant’s employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees. In the event that the performance of Tenant’s work in
connection with such entry causes extra costs to be incurred by Landlord or requires the use of any
Building services, Tenant shall promptly reimburse Landlord for such extra costs and/or shall pay
Landlord for such Building services at Landlord’s standard rates then in effect. In addition,
Tenant shall hold Landlord harmless from and indemnify, protect and defend Landlord against

C-2

 

any loss or damage to the Premises or Project and against injury to any persons caused by
Tenant’s actions pursuant to this Section 5.1.

     5.2 Intentionally Omitted.

     5.3 Tenant’s Representative. Tenant has designated Graham Cooper as its sole
representative with respect to the matters set forth in this Work Letter Agreement, who shall have
full authority and responsibility to act on behalf of the Tenant as required in this Work Letter
Agreement.

     5.4 Landlord’s Representative. Landlord has designated John Couvillion as its sole
representative with respect to the matters set forth in this Work Letter Agreement, who, until
further notice to Tenant, shall have full authority and responsibility to act on behalf of the
Landlord as required in this Work Letter Agreement.

     5.5 Time of the Essence in This Work Letter Agreement. Unless otherwise indicated,
all references herein to a “number of days” shall mean and refer to calendar days. If any item
requiring approval is timely disapproved by Landlord, the procedure for preparation of the document
and approval thereof shall be repeated until the document is approved by Landlord. Both Landlord
and Tenant shall use commercially reasonable, good faith, efforts and all due diligence to
cooperate with each other to complete all phases of the Construction Drawings and the permitting
process and to receive the permits, as soon as possible after the execution of the Lease, and, in
that regard, shall meet on a scheduled basis to be determined by Landlord and Tenant, to discuss
progress in connection with the same.

     5.6 Tenant’s Lease Default. Notwithstanding any provision to the contrary contained
in the Lease, if an event of default by Tenant as described in Section 23 of the Lease or
any default by Tenant under this Work Letter Agreement has occurred at any time on or before the
Substantial Completion of the Premises and remains after the expiration of applicable notice and
cure periods, then (i) in addition to all other rights and remedies granted to Landlord pursuant to
the Lease, at law and/or in equity, Landlord shall have the right to cause Contractor to suspend
the construction of the Premises (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Premises caused by such work stoppage as set forth in Section
4.2 of this Work Letter Agreement), and (ii) all other obligations of Landlord under the terms
of this Work Letter Agreement shall be forgiven until such time as such default is cured pursuant
to the terms of the Lease (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Premises caused by such inaction by Landlord). In addition, if the
Lease is terminated prior to the Commencement Date, for any reason due to a default by Tenant as
described in Section 23 of the Lease or under this Work Letter Agreement, in addition to
any other remedies available to Landlord under the Lease, at law and/or in equity, Tenant shall pay
to Landlord, as additional rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise paid by Tenant
through the date of such termination in connection with the Tenant Improvements to the extent
planned, installed and/or constructed as of such date of termination, including, but not limited
to, any costs related to the removal of all or any portion of the Tenant Improvements and
restoration costs related thereto.

C-3

 

Schedule 1

to

Work Letter Agreement

C-4

 

EXHIBIT “D”

FORM OF COMMENCEMENT NOTICE

     This Commencement Notice is delivered this ___day of                                         , 20___, by
Prentiss/Collins Del Mar Heights LLC, a Delaware limited liability company (“Landlord”) to
                                         (“Tenant”), pursuant to the provisions of Section 2.1 of that certain
Office Lease (the “Lease”) dated ______, 20___, by and between Landlord and Tenant covering
certain space in the Building known as                                         . All terms used herein with their
initial letter capitalized shall have the meaning assigned to such terms in the Lease.

Gentlemen:

In accordance with the above-referenced Lease, we wish to advise and/or confirm as follows:

	1.	 	That the Building, the Premises, the Parking Facilities, and all other improvements required
to be constructed and furnished by Landlord in accordance with the terms of the Lease have
been accepted by Tenant as being substantially complete and that there is no deficiency in
construction.
	 
	2.	 	That Tenant has accepted and is in possession of the Premises, and acknowledges that under
the provisions of the Lease, the Term of the Lease is for                      (___) years, with
                     (___) options to renew for                      (___) years each, and commenced upon
the Commencement Date of                     , 20___and is currently scheduled to expire on
                    , 20___, subject to earlier termination as provided in the Lease.
	 
	3.	 	That in accordance with the Lease, rental payment has commenced (or shall commence) on
                    , 20___.
	 
	4.	 	If the Commencement Date of the Lease is other than the first day of the month, the first
billing will contain a pro rata adjustment. Each billing thereafter, with the exception of
the final billing, shall be for the full amount of the monthly installment as provided for in
the Lease.
	 
	5.	 	Rent is due and payable in advance on the first day of each and every month during the Term
of the Lease. Your rent checks should be made payable to
                                         at                                         
..
	 
	6.	 	The exact number of rentable square feet within the Premises
is                      square feet.
The exact number of usable square feet within the Premises is                      square feet.
	 
	7.	 	Tenant’s Percentage, as adjusted based upon the exact number of Rentable Square Feet within
the Premises, is _________%.

     IN WITNESS WHEREOF, this instrument has been duly executed by Landlord as of the date first
written above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	PRENTISS/COLLINS DEL MAR HEIGHTS LLC,

a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By	 	Cognac High Bluffs LLC, a Delaware
	 	 	 	 	limited liability company,
	 	 	 	 	its managing member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By	 	The Prudential Insurance
	 	 	 	 	 	 	Company of America, a New
	 	 	 	 	 	 	Jersey corporation,
	 	 	 	 	 	 	its sole member
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	:
	 	 	 	Print
	 	 

	 	 
	 	 	Name:	 	 	 	 	 	 	 
	 

	 	
	 	 	 	Print
	 	 

	 	 
	 	 	Title:	 	 	 	 	 	 	 

 

 

ACKNOWLEDGED AND AGREED TO THIS ___DAY

OF                                         , BY TENANT

”TENANT”

	 	 	 	 	 	 	 
	*By:
	 	 	 	 
	Print Name:	 	 	 	 
	Print Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	*By:
	 	 	 	 
	Print Name:	 	 	 	 
	Print Title:	 	 	 	 
	 

	 	 	 	 

	 	 

SAMPLE ONLY [NOT FOR EXECUTION]

 

 

EXHIBIT “E”

RULES AND REGULATIONS

	1.	 	No sign, advertisement, name or notice shall be installed or displayed on any part of the
outside or inside of the Building without the prior written consent of Landlord. Landlord
shall have the right to remove, at Tenant’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 Tenant by a person approved by
Landlord, using materials and in a style and format approved by Landlord.
	 
	2.	 	Tenant shall not place anything or allow anything to be placed near the glass of any window,
door, partition or wall which may appear unsightly from outside the Premises. No awnings or
other projection shall be attached to the outside walls of the Building without the prior
written consent of Landlord. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Premises, other than Building
standard materials, without the prior written consent of Landlord.
	 
	3.	 	Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators,
escalators or stairways of the Building. The halls, passages, exits, entrances, elevators,
escalators and stairways are not for the general public, and Landlord shall in all cases
retain the right to control and prevent access thereto of all persons whose presence in the
judgment of Landlord would be prejudicial to the safety, character, reputation and interests
of the Building and its tenants; provided, that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally deals in the ordinary course of
its business, unless such persons are engaged in illegal activities. Tenant and no employee,
invitee, agent, licensee or contractor of Tenant shall go upon or be entitled to use any
portion of the roof of the Building.
	 
	4.	 	The directory of the Building will be provided exclusively for the display of the name and
location of tenants only, and Landlord reserves the right to exclude any other names
therefrom.
	 
	5.	 	All cleaning and janitorial services for the Building and the Premises shall be provided
exclusively through Landlord or Landlord’s janitorial contractors in accordance with the
provisions of Section 18.1(d) of the Lease. No person or persons other than those
approved by Landlord shall be employed by Tenant or permitted to enter the Building for the
purpose of cleaning the same. Tenant shall not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises. Landlord shall not in any way
be responsible to Tenant for loss of property on the Premises, however occurring, or for any
damage to Tenant’s property by the janitors or any other employee or any other person.
	 
	6.	 	Landlord will furnish Tenant, free of charge, with two keys to each door lock in the
Premises. Landlord may impose a reasonable charge for any additional keys. Tenant may not
make or have made additional keys, and Tenant shall not alter any lock or install a new
additional lock or bolt on any door or window of its Premises. Tenant, upon termination of
its tenancy, shall deliver to Landlord the keys of all doors which have been furnished to, or
otherwise procured by Tenant, and, in the event of loss of any keys, shall pay Landlord the
cost of replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such change.
	 
	7.	 	Electric wires, telephones, telegraphs, burglar alarms or other similar apparatus shall not
be installed in the Premises except with the approval and under the direction of Landlord.
The location of telephones, call boxes and any other equipment affixed to the Premises shall
be subject to the approval of Landlord. Any installation of telephones, telegraphs, electric
wires or other electric apparatus made without permission shall be removed by Tenant at
Tenant’s own expense. No machines other than standard office machines, such as typewriters
and calculators, photo copiers, personal computers and word processors, and vending machines
permitted by the Lease, shall be used in the Premises without the approval of Landlord.
	 
	8.	 	No furniture, freight, or equipment of any kind shall be brought into the Building without
prior notice to Landlord and all moving of the same into or out of the Building shall be done
at such time and in such manner as Landlord shall designate. No furniture, equipment or
merchandise shall be received in the Building or carried up or down in the elevator, except
between such hours as shall be designated by Landlord. Deliveries during normal office hours
shall be limited to normal office supplies and other small items. No deliveries shall be made
which impede or interfere with other tenants or the operation of the Building.
	 
	9.	 	Tenant 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. Landlord
shall have the right to prescribe the weight, size and position of all equipment, materials,
furniture or other property brought into the Building. Heavy objects, if such objects are
considered necessary by Tenant, as determined by Landlord, shall stand on such platforms as
determined by Landlord to be necessary to properly distribute the weight. Business machines
and mechanical equipment 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
Landlord or to any tenants in the Building, shall be placed and maintained by Tenant, at
Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate noise or
vibration. Landlord will not be responsible for loss of, or damage to, any such equipment or
other property from any cause, and all damage done to the Building by maintaining or moving
such equipment or other property shall be repaired at the expense of Tenant.
	 
	10.	 	Tenant 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 office equipment. Tenant shall not use or permit to be used in the Premises
any foul or noxious gas or substance, or permit or allow

E-1

 

	 	 	the Premises to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors or vibrations, nor shall Tenant
bring into or keep in or about the Premises any birds or animals.

	11.	 	Tenant shall not use any method of heating or air-conditioning other than that supplied by
Landlord.
	 
	12.	 	Tenant shall not waste electricity, water or air-conditioning and agrees to cooperate fully
with Landlord 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 Tenant has actual notice, and shall not adjust controls other than room thermostats
installed for Tenant’s use. Tenant shall keep corridor doors closed and shall close window
coverings at the end of each business day.
	 
	13.	 	Landlord reserves the right from time to time, in Landlord’s sole and absolute discretion,
exercisable without prior notice and without liability to Tenant, to: (a) name or change the
name of the Building, Site or Project; (b) change the address of the Building or Project,
and/or (c) install, replace or change any signs in, on or about the Common Areas, the Building
or Site (except for Tenant’s signs, if any, which are expressly permitted by the Lease).
	 
	14.	 	Landlord reserves the right to exclude from the Building between the hours of 6:00 p.m. and
7:00 a.m., or such other hours as may be established from time to time by Landlord, and on
legal holidays, any person unless that person is known to the person or employee in charge of
the Building and has a pass or is properly identified. Landlord shall not be liable for
damages for any error with regard to the admission to or exclusion from the Building of any
person. Tenant shall be responsible for all persons for whom it requests passes and shall be
liable to Landlord for all acts of such persons. Landlord reserves the right to prevent
access to the Building in case of invasion, mob, riot, public excitement or other commotion by
closing the doors or by other appropriate action.
	 
	15.	 	Tenant shall close and lock all doors of its Premises and entirely shut off all water faucets
or other water apparatus, and, except with regard to Tenant’s computers and other equipment
which reasonably require electricity on a 24-hour basis, all electricity, gas or air outlets
before Tenant and its employees leave the Premises. Tenant shall be responsible for any
damage or injuries sustained by other tenants or occupants of the Building or by Landlord for
noncompliance with this rule.
	 
	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 substances of any kind
whatsoever shall be thrown therein.
	 
	17.	 	Tenant 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. Tenant shall not make any room-to-room solicitation of business from other tenants
in the Project. Tenant shall not use the Premises for any business or activity other than
that specifically provided for in the Lease.
	 
	18.	 	Tenant shall not install any radio or television antenna, loudspeaker or other device on the
roof or exterior walls of the Building. Tenant shall not interfere with radio or television
broadcasting or reception from or in the Building or elsewhere.
	 
	19.	 	Except as expressly permitted in the Lease, Tenant shall not mark, drive nails, screw or
drill into the partitions, window mullions, woodwork or plaster, or in any way deface the
Premises or any part thereof, except to install normal wall hangings. Tenant shall repair any
damage resulting from noncompliance under this rule.
	 
	20.	 	Tenant shall not install, maintain or operate upon the Premises any vending machines without
the prior written consent of Landlord, which shall not be unreasonably withheld.
	 
	21.	 	Canvassing, soliciting and distribution of handbills or any other written material, and
peddling in and around the Project or the Building are expressly prohibited, and each tenant
shall cooperate to prevent same.
	 
	22.	 	Landlord reserves the right to exclude or expel from the Project and/or the Building any
person who, in Landlord’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 Project or Building.
	 
	23.	 	Tenant shall store all its trash and garbage within its Premises. Tenant 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 reasonably issued from time to time by Landlord.
	 
	24.	 	The Premises shall not be used for the storage of merchandise held for sale to the general
public, or for lodging or for manufacturing of any kind. No cooking shall be done or
permitted by Tenant on the Premises, except that use by Tenant of Underwriters’
Laboratory-approved equipment for brewing coffee, tea, hot chocolate and similar beverages
shall be permitted and the use of a microwave shall be permitted, provided that such equipment
and use is in accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.
	 
	25.	 	Tenant shall not use in any space, or in the public halls of the Building, any hand trucks
except those equipped with rubber tires and side guards, or such other material-handling
equipment as Landlord may approve. Tenant shall not bring any other vehicles of any kind into
the Building.

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	26.	 	Tenant shall not use the name of the Project or Building in connection with, or in promoting
or advertising, the business of Tenant, except for Tenant’s address.
	 
	27.	 	Tenant agrees that it shall comply with all fire and security regulations that may be issued
from time to time by Landlord, and Tenant also shall provide Landlord with the name of a
designated responsible employee to represent Tenant in all matters pertaining to such fire or
security regulations. Tenant shall cooperate fully with Landlord in all matters concerning
fire and other emergency procedures.
	 
	28.	 	Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and
pilferage. Such responsibility shall include keeping doors locked and other means of entry to
the Premises closed.
	 
	29.	 	Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant
or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such
Rules and Regulations in favor of Tenant or any other such tenant, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any and all of the tenants in the
Building.
	 
	30.	 	These Rules and Regulations are in addition to, and shall not be construed to in any way
modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any
lease of premises in the Project or Building.
	 
	31.	 	Landlord reserves the right to make such other and reasonable Rules and Regulations as, in
its judgment, may from time to time be needed for safety, security, care and cleanliness of
the Project and/or Building and for the preservation of good order therein. Tenant agrees to
abide by all such Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted.
	 
	32.	 	Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s
employees, agents, clients, customers, invitees or guests.
	 
	33.	 	Tenant shall not lay linoleum, tile, carpet or other similar floor covering so that the same
shall be affixed to the floor of the Premises in any manner except by a paste, or other
material which may easily be removed with water, the use of cement or other similar adhesive
materials being expressly prohibited. The method of affixing any such linoleum, tile, carpet
or other similar floor covering shall be subject to the approval of Landlord. The expense of
repairing any damage resulting from a violation of this rule shall be borne by Tenant.

PARKING RULES AND REGULATIONS

In addition to the parking provisions contained in the Lease to which this Exhibit “E” is
attached, the following rules and regulations shall apply with respect to the use of the Building’s
Parking Facilities.

	1.	 	Every parker is required to park and lock his/her own vehicle. All responsibility for damage
to or loss of vehicles is assumed by the parker and Landlord shall not be responsible for any
such damage or loss by water, fire, defective brakes, the act or omissions of others, theft,
or for any other cause.
	 
	2.	 	Tenant shall not park or permit its employees to park in any parking areas designated by
Landlord as areas for parking by visitors to the Project. Tenant shall not leave vehicles in
the parking areas overnight nor park any vehicles in the parking areas other than automobiles,
motorcycles, motor driven or non-motor driven bicycles or four wheeled trucks.
Notwithstanding the foregoing, unless Landlord has provided Tenant with prior notice that it
intends to effectuate repairs or maintenance on or to the parking areas or otherwise make use
of the parking areas during a particular weekend, Tenant may park one passenger vehicle in the
parking areas overnight on the weekends; provided, however, that Tenant agrees that any such
use will be at Tenant’s sole risk and Tenant assumes (and agrees to indemnify Landlord against
any claim arising out of or related to) any loss, theft or damage to such vehicle and the
contents thereof during or with respect to such use.
	 
	3.	 	Parking stickers or any other device or form of identification supplied by Landlord as a
condition of use of the Parking Facilities shall remain the property of Landlord. 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.

	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 directional signs and arrows must be observed.
	 
	7.	 	The speed limit within all parking areas shall be 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; and (f) in reserved
spaces and in such other areas as may be designated by Landlord or Landlord’s parking
operator.
	 
	9.	 	Loss or theft of parking identification devices must be reported to the Management Office
immediately, and a lost or stolen report must be filed by the Tenant or user of such parking
identification device at the time. Landlord has the right to exclude any vehicle from the
Parking Facilities that does not have an identification device.

E-3

 

	10.	 	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.
	 
	11.	 	Washing, waxing, cleaning or servicing of any vehicle in any area not specifically reserved
for such purpose is prohibited.
	 
	12.	 	The parking operators, managers or attendants are not authorized to make or allow any
exceptions to these rules and regulations.
	 
	13.	 	Tenant’s continued right to park in the Parking Facilities is conditioned upon Tenant abiding
by these rules and regulations and those contained in this Lease. Further, if the Lease
terminates for any reason whatsoever, Tenant’s right to park in the Parking Facilities shall
terminate concurrently therewith.
	 
	14.	 	Tenant agrees to sign a parking agreement with Landlord or Landlord’s parking operator within
five (5) days of request, which agreement shall provide the manner of payment of monthly
parking fees and otherwise be consistent with the Lease and these rules and regulations.
	 
	15.	 	Landlord reserves the right to refuse the sale or use of monthly stickers or other parking
identification devices to any tenant or person who willfully refuse to comply with these rules
and regulations and all city, state or federal ordinances, laws or agreements.
	 
	16.	 	Landlord reserves the right to establish and change parking fees, and to modify and/or adopt
such other reasonable and non-discriminatory rules and regulations for the Parking Facilities
as it deems necessary for the operation of the Parking Facilities. Landlord may refuse to
permit any person who violates these rules to park in the Parking Facilities, and any
violation of the rules shall subject the vehicle to removal, at such vehicle owner’s expense.

E-4

 

EXHIBIT “F”

SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE

The undersigned (“Tenant”) hereby certifies to PRENTISS/COLLINS DEL MAR HEIGHTS LLC, a Delaware
limited liability company (“Landlord”), and
                        
                , as follows:

	1.	 	Attached hereto is a true, correct and complete copy of that certain Office Lease dated
                 
   , 20___ between Landlord and Tenant (the “Lease”), which demises
Premises which
are located at              
               
            . The Lease is now in full force and
effect and has not been amended, modified or supplemented, except as set forth in Section
6 below.
	 
	2.	 	The term of the Lease commenced on           
          , 20___.
	 
	3.	 	The term of the Lease is currently scheduled to expire on       
              , 20___.
	 
	4.	 	Tenant has no option to renew or extend the Term of the Lease except:      
                  
                 
                 
               
               
             
                
                
        
	 
	5.	 	Tenant has no preferential right to purchase the Premises or any portion of the Building or
Site upon which the Premises are located, and Tenant has no rights or options to expand into
other space in the Building except:
                 
                
                
                
               
                 
   .
	 
	6.	 	The Lease has: (Initial One)

	 	 	 	( ) not been amended, modified, supplemented, extended, renewed or assigned.	 
	 				
	 	 	 	( ) been amended, modified, supplemented, extended, renewed or assigned by the
following described agreements, copies of which are attached hereto:	.
	 	 	 	 
.	.

	7.	 	Tenant has accepted and is now in possession of the Premises and has not sublet, assigned or
encumbered the Lease, the Premises or any portion thereof except as follows:	.
	 	 	 
.	 
	 
	8.	 	The current Monthly Basic Rent is $           
         ; and current monthly parking charges are
$                 
   .
	 
	9.	 	Tenant’s Percentage is ___%, and Tenant’s Percentage of Operating Expenses currently
payable by Tenant is $               
      per month, which amount is Landlord’s current estimate of
Tenant’s Percentage of Operating Expenses in excess of:
	 
	 	 	(Complete One) $               
      per year (expense stop), or
the Operating Expenses incurred in calendar year            
         .
	 
	10.	 	The amount of security deposit (if any) is $           
         . No other security deposits have
been made.
	 
	11.	 	All rental payments payable by Tenant have been paid in full as of the date hereof. No rent
under the Lease has been paid for more than thirty (30) days in advance of its due date.
	 
	12.	 	All work required to be performed by Landlord under the Lease has been completed and has been
accepted by Tenant, and all tenant improvement allowances have been paid in full.
	 
	13.	 	To the best of Tenant’s knowledge, as of the date hereof, there are no defaults on the part
of Landlord or Tenant under the Lease.
	 
	14.	 	Tenant has no defense as to its obligations under the Lease and claims no set-off or
counterclaim against Landlord.
	 
	15.	 	Tenant has no right to any concession (rental or otherwise) or similar compensation in
connection with renting the space it occupies, except as expressly provided in the Lease.
	 
	16.	 	All insurance required of Tenant under the Lease has been provided by Tenant and all premiums
have been paid.
	 
	17.	 	There has not been filed by or against Tenant a petition in bankruptcy, voluntary or
otherwise, any assignment of creditors, any petition seeking reorganization or arrangement
under the bankruptcy laws of the United States or any state thereof, or any other action
brought pursuant to such bankruptcy laws with respect to Tenant.
	 
	18.	 	Tenant pays rent due Landlord under the Lease to Landlord and does not have any knowledge of
any other person who has any right to such rents by collateral assignment or otherwise.

G-1

 

The foregoing certification is made with the knowledge that is about to [fund a loan to Landlord
or purchase the Building from Landlord], and that is relying upon the representations herein made
in [funding such loan or purchasing the Building].

Dated:          
           _, 20__.

	 	 	 	 	 	 	 	 	 
	 

	 	“TENANT”	 	 	 	 	, 	 
	 	 	 	 	 	 	 
	 

	 	 	 	a
 
	 	 
	 

	 	 	 	By: 
	 	 
	 

	 	 	 	Print
Name: 

	 	 
	 

	 	 	 	Its: 

	 	 
	 

	 	 	 	 	 	 

	 	 

G-2

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